JOHNS CREEK, GA -- (Marketwired) -- 08/08/17 -- Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries, today reported results for its second quarter ended June 30, 2017. Ebix will host a conference call to review its results today at 11:00 a.m. EDT (details below).
Ebix delivered the following results for the second quarter of 2017:
Revenues: Q2 2017 revenue rose 20.4% to $87.4 million compared to $72.6 million in Q2 2016 and increased 10.5% over Q1 2017 revenue of $79.1 million. The revenue improvement reflected growth in the Company's Exchange and Risk Compliance channels, with the revenues from the acquisition of ItzCash reflected in the Exchange channel.
On a constant currency basis, Ebix Q2 2017 revenue increased 20% to $87.1 million compared to $72.6 million in Q2 2016. The Exchange channel continued to be Ebix's largest, accounting for 69% of Q2 2017 revenues. Also, on a constant currency basis, year to date revenue increased 15% to $165.5 million as compared to $143.6 million during the same period in 2016.
----------------------------------------------------------------------------
(dollar amounts in
thousands)
YTD YTD
Channel Q2 2017 Q2 2016 Change 2017 2016 Change
----------------------------------------------------------------------------
Exchanges $ 60,373 $ 49,322 +22% $ 112,987 $ 99,408 +14%
Risk Compliance Solutions
(RCS) 22,663 18,662 +21% 44,515 35,413 +26%
Broker Solutions 3,595 3,885 -7% 7,383 7,097 4%
Carrier Systems 756 705 +7% 1,605 1,722 -7%
---------------------------------------------------
Total Revenue $ 87,387 $ 72,574 +20% $ 166,490 $ 143,640 +16%
===================================================
===================================================
Total Revenue on Constant
Currency Basis $ 87.1M $ 72.6M +20% $ 165.5M $ 143.6M +15%
===================================================
Earnings per Share: Q2 2017 diluted earnings per share increased 6% to $0.74 compared to $0.70 in Q2 2016 due to higher net income and the benefit of ongoing share repurchase activity. Ebix's weighted average diluted shares outstanding decreased to 31.6 million in Q2 2017 compared to 33.0 million in Q2 2016 and 32.0 million in Q1 2017.
Operating Income and Margins: Q2 2017 operating margins decreased to 30% as compared to 32% in Q2 2016. Excluding the impact of the recent ItzCash acquisition, Q2 2017 operating margins would have been 33%. Operating income for Q2 2017 rose 13% to $26.5 million compared to $23.6 million in Q2 2016.
Net Income: Q2 2017 net income increased by 2% to $23.4 million, compared to $23.0 million in Q2 2016.
Operating Cash: Cash generated from operations was $15.5 million in Q2 2017 compared to $20.4 million in Q2 2016 and $15.7 million in Q1 2017. The operating cash in Q2 2017 reflected the increased receivables associated with some of the contracts in Brazil, US and India that have longer payment terms.
Share Repurchases: In Q2 2017, Ebix repurchased 93,000 shares of its outstanding common stock for aggregate cash consideration of $5.2 million.
Q3 2017 Diluted Share Count: As of today, Ebix expects its diluted share count for Q3 2017 to be approximately 31.5 million.
Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q2 2017 for a total cost of $2.4 million.
Ebix Chairman, President and CEO Robin Raina said, "These are record results for the Company in terms of top line and we are pleased to get there with 30.4% in operating margins. These operating margins are significant considering that they include operating margins of less than 10% from the recently acquired ItzCash business. As we implement some of our synergetic initiatives related to ItzCash, we expect the ItzCash operating margins to approach 25% in the next 6 months. Once that happens, our operating margins will accordingly go up substantially."
"Over the next few quarters, we expect substantial revenue growth from a number of areas -- principal amongst them are the revenues expected to be generated from the execution of a large contract with one of the largest insurers in Brazil, a large e-governance contract with a public sector undertaking in India, continued growth from our financial exchange initiatives in India, and many new insurance exchange related contracts in US and Australia."
Robin added, "We would like to be at a quarterly revenue run rate of $100 million by Q1 of 2018, with at least 30% in operating margins. While there are no guarantees that we will achieve this aspirational goal, you can be sure that we will make a strong endeavor to get there."
Sean Donaghy, Ebix CFO, commented, "Ebix continues to deliver strong operating performance and cash generation. During Q2 2017, we invested a total of $74.2 million related to the ItzCash acquisition, $5.2 million on share buybacks, $2.4 million on dividend payments, $2.3 million on CapEx, $3.1 million on principal payments towards the term loan and $1.2 million on tax payments. We funded these initiatives from existing cash plus operating cash flow of $15.5M during Q2 2017, as well as by drawing $20 million from our Bank credit facilities. Ebix ended the quarter with cash, cash equivalents, and short-term investments of $81.3 million, with available cash reserves of approximately $242 million, including the available borrowing capacity and the accordion available to the Company."
Conference Call Details:
----------------------------------------------------------------------------
Call Date/Time: Tuesday, August 8, 2017 at 11:00 a.m. EDT
----------------------------------------------------------------------------
Call Dial-In: +1-877-837-3909 or 1-973-409-9690; Call ID # 13609854
----------------------------------------------------------------------------
Live Audio Webcast: www.ebix.com/webcast
----------------------------------------------------------------------------
Audio Replay URL: www.ebix.com/result_17_Q2 after 2:00 p.m. EDT on August
8th
----------------------------------------------------------------------------
About Ebix, Inc.
A leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries, Ebix, Inc. provides end-to-end on-Demand solutions ranging from infrastructure exchanges, front end & back end enterprise systems, outsourced administrative & custom software development solutions, and risk compliance solutions for various entities involved in these industries.
With 40+ offices across Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK, Ebix powers multiple exchanges across the world in the field of life, annuity, health and property & casualty insurance while conducting in excess of $100 billion in insurance premiums annually on its platforms. Through its various SaaS-based software platforms, Ebix employs hundreds of domain specific business and technology professionals to provide products, support and consultancy to thousands of customers on six continents. For more information, visit the Company's website at www.ebix.com
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
As used herein, the terms "Ebix," "the Company," "we," "our" and "us" refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Ebix, Inc.
The information contained in this Press Release contains forward-looking statements and information within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. This information includes assumptions made by, and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, acceptance of the Company's products by the market, and management's plans and objectives. In addition, certain statements included in this and our future filings with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements. Words such as "may," "could," "should," "would," "believe," "expect," "anticipate," "estimate," "intend," "seeks," "plan," "project," "continue," "predict," "will," "should," and other words or expressions of similar meaning are intended by the Company to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are found at various places throughout this report and in the documents incorporated herein by reference. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.
Our actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference, include, but are not limited to those discussed in our Annual Report on Form 10-K and subsequent reports filed with the SEC, as well as: the risk of an unfavorable outcome of the pending governmental investigations or shareholder class action lawsuits, reputational harm caused by such investigations and lawsuits, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties; pricing and other competitive pressures and the Company's ability to gain or maintain share of sales as a result of actions by competitors and others; changes in estimates in critical accounting judgments; changes in or failure to comply with laws and regulations, including accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax interpretations) in domestic or foreign jurisdictions; exchange rate fluctuations and other risks associated with investments and operations in foreign countries (particularly in Australia, UK and India wherein we have significant operations); equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; and international conflict, including terrorist acts.
Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein to reflect future events, developments, changed circumstances, or for any other reason.
Readers should carefully review the disclosures and the risk factors described in the documents we file from time to time with the SEC, including future reports on Forms 10-Q and 8-K, and any amendments thereto.
You may obtain our SEC filings at our website, www.ebix.com under the "Investor Information" section, or over the Internet at the SEC's web site, www.sec.gov.
Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2017 2016 2017 2016
--------- --------- --------- ---------
Operating revenue $ 87,387 $ 72,574 $ 166,490 $ 143,640
Operating expenses:
Cost of services provided 30,932 20,579 56,119 40,181
Product development 8,417 8,285 16,767 16,350
Sales and marketing 4,142 4,206 8,479 8,539
General and administrative, net 14,598 13,310 27,282 24,893
Amortization and depreciation 2,759 2,630 5,614 5,350
--------- --------- --------- ---------
Total operating expenses 60,848 49,010 114,261 95,313
--------- --------- --------- ---------
Operating income 26,539 23,564 52,229 48,327
Interest income 465 441 1,239 584
Interest expense (3,018) (2,185) (5,486) (3,459)
Foreign currency exchange gain
(loss) (391) (195) 3,105 274
--------- --------- --------- ---------
Income before income taxes 23,595 21,625 51,087 45,726
Income tax (expense) benefit 302 1,418 (567) (332)
--------- --------- --------- ---------
Net income including noncontrolling
interest 23,897 23,043 50,520 45,394
Net income attributable to
noncontrolling interest (see Note
8) 463 51 659 243
Net income attributable to Ebix,
Inc. $ 23,434 $ 22,992 $ 49,861 $ 45,151
========= ========= ========= =========
Basic earnings per common share
attributable to Ebix, Inc. $ 0.74 $ 0.70 $ 1.58 $ 1.37
Diluted earnings per common share
attributable to Ebix, Inc. $ 0.74 $ 0.70 $ 1.57 $ 1.36
Basic weighted average shares
outstanding 31,490 32,688 31,648 32,866
Diluted weighted average shares
outstanding 31,637 32,969 31,805 33,140
Ebix, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
June 30, December 31,
2017 2016
----------- ------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 68,449 $ 114,118
Short-term investments 12,861 3,105
Restricted cash 14,266 14,394
Trade accounts receivable, less allowances of
$3,356 and $2,833, respectively 83,345 62,713
Other current assets 15,199 12,716
----------- ------------
Total current assets 194,120 207,046
----------- ------------
Property and equipment, net 40,939 37,061
Goodwill 557,502 441,404
Intangibles, net 49,076 41,336
Indefinite-lived intangibles 30,887 30,887
Capitalized software development costs, net 6,602 5,955
Deferred tax asset, net 35,328 31,345
Other assets 8,875 8,721
----------- ------------
Total assets $ 923,329 $ 803,755
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 39,665 $ 44,855
Accrued payroll and related benefits 6,123 7,474
Short term debt, net of deferred financing costs of
$136, respectively 12,364 12,364
Capital lease obligations 9 9
Current deferred rent 286 281
Contingent liability for accrued earn-out
acquisition consideration 6,022 1,921
Deferred revenue 21,731 22,564
Other current liabilities 244 244
----------- ------------
Total current liabilities 86,444 89,712
----------- ------------
Revolving line of credit 214,029 154,029
Long term debt and capital lease obligations, less
current portion, net of deferred financing costs
of $401 and $452, respectively 99,619 105,824
Other liabilities 9,188 6,070
Contingent liability for accrued earn-out
acquisition consideration 33,438 6,589
Deferred revenue 1,338 1,886
Long term deferred rent 834 1,009
----------- ------------
Total liabilities 444,890 365,119
----------- ------------
Stockholders' equity:
Preferred stock, $0.10 par value, 500,000 shares
authorized, no shares issued and outstanding at
June 30, 2017 and December 31, 2016 -- --
Common stock, $0.10 par value, 120,000,000 shares
authorized, 31,443,622 issued and outstanding, at
June 30, 2017 and 60,000,000 shares authorized,
32,093,294 issued and outstanding at December 31,
2016 3,144 3,209
Retained earnings 464,963 457,364
Accumulated other comprehensive loss (30,419) (33,677)
----------- ------------
Total Ebix, Inc. stockholders' equity 437,688 426,896
Noncontrolling interest 40,751 11,740
----------- ------------
Total stockholders' equity 478,439 438,636
----------- ------------
Total liabilities and stockholders' equity $ 923,329 $ 803,755
=========== ============
Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
---------------------
2017 2016
---------- ----------
Cash flows from operating activities:
Net income attributable to Ebix, Inc. $ 49,861 $ 45,151
Net income attributable to noncontrolling interest 659 243
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 5,614 5,350
Benefit for deferred taxes (5,877) (6,635)
Share based compensation 1,243 1,331
Provision for doubtful accounts 723 457
Unrealized foreign exchange (gain) loss 365 (187)
Amortization of capitalized software development
costs 790 654
Reduction of acquisition earnout accruals -- (511)
Purchase accounting adjustment (948) --
Changes in assets and liabilities, net of effects
from acquisitions:
Accounts receivable (14,266) (6,065)
Other assets 455 (2,417)
Accounts payable and accrued expenses (7,254) (4,189)
Accrued payroll and related benefits (1,694) (931)
Deferred revenue (1,622) (1,136)
Deferred rent (195) (83)
Reserve for potential uncertain income tax return
positions 3,280 50
Other liabilities 66 (106)
---------- ----------
Net cash provided by operating activities 31,200 30,976
---------- ----------
Cash flows from investing activities:
Acquisition of beBetter, net of cash acquired (1,000) --
Acquisition of ItzCash, net of cash acquired (70,184) --
Funding of escrow account for possible future
contingent earn-out payment related to business
acquisition (3,998) --
Capitalized software development costs (1,345) (694)
Maturities (Purchases) of marketable securities 1,626 (994)
Capital expenditures (4,956) (2,190)
---------- ----------
Net cash used in investing activities (79,857) (3,878)
---------- ----------
Cash flows from financing activities:
Proceeds from revolving line of credit, net 60,000 (87,427)
Proceeds from term loan -- 125,000
Principal payments of term loan obligation (6,250) --
Repurchases of common stock (45,732) (37,657)
Proceeds from the exercise of stock options 52 29
Forfeiture of certain shares to satisfy exercise
costs and the recipients income tax obligations
related to stock options exercised and restricted
stock vested (237) (77)
Dividend payments (4,800) (4,911)
Principal payments of debt obligations -- (600)
Payments of capital lease obligations (6) --
---------- ----------
Net cash provided by (used in) financing activities 3,027 (5,643)
---------- ----------
Effect of foreign exchange rates on cash (39) (620)
---------- ----------
Net change in cash and cash equivalents (45,669) 20,835
Cash and cash equivalents at the beginning of the
period 114,118 57,179
---------- ----------
Cash and cash equivalents at the end of the period $ 68,449 $ 78,014
========== ==========
Supplemental disclosures of cash flow information:
Interest paid $ 5,173 $ 3,115
Income taxes paid $ 7,958 $ 10,869
CONTACT:
Darren Joseph
678-281-2027
Email Contact
David Collins or Chris Eddy
Catalyst Global
212-924-9800
Email Contact
