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CST: 20/11/2019 05:54:08   

Ebix Q2 Revenues Rose 16% to a Record $144.3M

103 Days ago

  • GAAP Diluted EPS of $0.94, Non-GAAP Diluted EPS of $1.08
  • GAAP Operating Income of $41.3M, Non-GAAP Operating Income of $43.4M

JOHNS CREEK, Ga., Aug. 08, 2019 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-learning and healthcare industries, today reported results for its second quarter ended June 30, 2019. 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 2019:

Revenues: Q2 2019 revenue rose 16% to $144.3 million compared to $124.6 million in Q2 2018 and increased 1% over Q1 2019 revenue of $142.9 million. After excluding the revenues from the discontinued e-governance business, Q2 2019 revenues grew 21% in Q2 2019 as compared to Q2 2018.

On a constant currency basis, Ebix Q2 2019 revenue increased 18% to $147.4 million compared to $124.6 million in Q2 2018. Exchanges cumulatively including the insurance and EbixCash financial exchanges accounted for 87% of Q2 2019 revenues.  Also, on a constant currency basis, year to date revenue increased 27% to $295.4 million as compared to $232.9 million during the same period in 2018.

The year over year revenue improvement reflected 43% growth in the Company’s EbixCash channel. After excluding the revenues from the discontinued e-governance business, EbixCash Q2 2019 revenues grew 58% in Q2 2019 as compared to Q2 2018.

             
(dollar amounts in thousands)            
Channel Q2 2019 Q2 2018 Change YTD
2019
YTD 2018 Change
EbixCash Exchanges $ 78,948 $ 55,257 +43 % $ 156,685 $ 91,265 +72 %
Insurance Exchanges   46,593   47,155 -1 %   94,608   96,318 -2 %
RCS - Insurance   18,734   22,214 -16 %   35,906   45,273 -21 %
Total Revenue $ 144,275 $ 124,626 +16 % $ 287,199 $ 232,856 +23 %
             
Total Revenue on Constant Currency Basis $ 147.4M $ 124.6M +18 % $ 295.4M $ 232.9M +27 %
                     

Net Income and EPS :

Q2 2019 GAAP diluted earnings per share increased 2% to $0.94 compared to $0.92 in Q2 2018. The Non-GAAP diluted earnings per share in Q2 2019 grew 17% to $1.08 as compared to Q2 2018.

GAAP net income decreased 1% to $28.9 million compared to $29.2 million in Q2 2018, in spite of increased operating income principally due to increased non-operating short-term expenses associated with the Company’s recent investments and growth initiatives in India associated with servicing increased Gross merchandise value. The Q2 2019 Non-GAAP net income increased 14% to $33.2 million after excluding certain non-recurring items

Ebix’s weighted average diluted shares outstanding decreased to 30.67 million in Q2 2019 compared to 31.63 million in Q2 2018, and slightly increased from 30.60 million in Q1 2019.

Operating Income and Margins: Q2 2019 GAAP operating margins were at 29% while the GAAP Operating income for Q2 2019 rose 8% to $41.3 million. Non-GAAP operating margins for Q2 2019 were at 30% while non-GAAP operating income grew 13% to $43.4 million in Q2 2019 as compared to $38.3 million in Q2 2018.

Operating Cash: Cash generated from operations was $(253) thousand in Q2 2019 compared to $14.4 million in Q2 2018 and $38.5 million in Q1 2019. The operating cash in Q2 2019 reflected the $20.5 million Derivative Case Legal Settlement and other related legal fees, funding of new growth initiatives  associated with increasing GMV and new receivables from executing certain new contracts in new organic areas like the Bus exchange, Trucking logistics and travel business.

Share Repurchases: In Q2 2019, Ebix had no repurchases of its outstanding common stock.

Q3 2019 Diluted Share Count: As of today, Ebix expects its diluted share count for Q3 2019 to be approximately 30.7 million.

Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q2 2019 for a total cost of $2.3 million.

Ebix Chairman, President and CEO Robin Raina said, “In Q2 2019, we added many new revenues sources organically while consolidating our revenue base in the traditional insurance and financial exchange areas. In spite of having a very strong Q1 2019, we continued to grow our revenues sequentially.  We grew EbixCash business by 58% in Q2 2019 as compared to Q2 2018, after excluding the revenues from the discontinued e-governance business line and 43% even if we were to include the e-governance business line. We are very pleased with that.”

“Our constant currency year to date revenues are at $295.4 million, and we expect to continue the revenue growth in coming quarters. We have signed a number of new large insurance related contracts in the US and EbixCash related contracts in the international markets, that should provide us the momentum for further growth. We are pleased to say that we have fulfilled all the financial formalities required from EbixCash to execute the multi-million-dollar Foreign exchange contract signed a few months back, for a premier international airport in the Middle East.  We are in the process of securing traditional financial regulatory approvals required by foreign companies from the Central Bank in that country. After Central Bank approval, we will immediately go live at the airport adding a new revenue line to our foreign exchange business.”

Robin added, “We are pursuing a number of other opportunities including the asset purchase of India’s leading Bus exchange company - Trimax from the Indian bankruptcy courts. Trimax is a 35% margin company today with possible revenues of $25 to $30 million a year. Besides Trimax, we are pursuing a number of high margin opportunities in various geographies in the US and abroad. We also look forward to the successful closing of the Yatra acquisition in Q4 2019, which we believe can add $120 million to $150 million in revenues with 30% operating margins to the company once synergies are realized in 6 to 9 months.”

“We will soon be announcing the engagement of 4 to 5 investment banks to lead our EbixCash IPO targeted for Q2 2020. We have made substantial progress in that direction and will be updating our investors soon.”

Reconciliation of GAAP net income and diluted earnings per share to non-GAAP net income and diluted earnings per share. Non-GAAP information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables.

  Net Income Diluted EPS
Second Quarter 2019 GAAP Results $28,851 $0.94
     
Non-GAAP Adjustments:    
One-time quarterly expenses (Operating Expense) $1,235 $0.04
Stock based compensation (Operating Expense) $847 $0.03
Short term Finance Fees for GMV Growth Funding $1,620 $0.05
Non-recurring Legal Expenses (Non-Operating Expense) $688 $0.02
Total Non-GAAP Adjustments $4,390 $0.14
Second Quarter 2019 Non-GAAP Results $33,241 $1.08
     
     

Conference Call Details:

Call Date/Time: Thursday, August 8, 2019 at 11:00 a.m. EDT

Call Dial-In: +1-877-837-3909 or 1-973-409-9690; Call ID # 7368513

Live Audio Webcast: www.ebix.com/webcast

Audio Replay URL: www.ebix.com/result_19_Q2 after 2:00 p.m. EDT on August 8th

About Ebix, Inc.

With 50+ offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries. In the Insurance sector, Ebix’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis, while also, providing Software-as-a-Service ("SaaS") enterprise solutions in the area of CRM, front-end & back-end systems, outsourced administration and risk compliance services, around the world.

With a "Phygital” strategy that combines 320,000 physical distribution outlets in many Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in areas of domestic & international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, lending, wealth management etc. in India and other markets. EbixCash’s Forex operations have emerged as a leader in India’s airport Foreign Exchange business with operations in 32 international airports including Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata, conducting over $4.8 billion in gross transaction value per year. EbixCash’s inward remittance business in India conducts approx. $5 billion gross annual remittance business, confirming its undisputed leadership position in India. EbixCash, through its travel portfolio of Via and Mercury, is also one of Southeast Asia’s leading travel exchanges with over 2,200+ employees, 212,450+ agent network, 25 branches and over 9,800 corporate clients; processing an estimated $2.5 billion in gross merchandise value per year. EbixCash’s technology services Division has emerged as a leader in the areas of lending technology, asset & wealth management technology, travel technology in India; besides having grown its international expanse to Europe, Middle East, Africa and ASEAN countries.

Through its various SaaS-based software platforms, Ebix employs thousands of domain-specific 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,
    2019   2018   2019   2018
Operating revenue   $ 144,275     $ 124,626     $ 287,199     $ 232,856  
                 
Operating expenses:                
Cost of services provided   50,954     43,559     96,883     83,150  
Product development   11,397     8,671     22,639     17,105  
Sales and marketing   4,493     4,823     10,614     8,821  
General and administrative, net   32,866     26,724     54,310     46,228  
Amortization and depreciation   3,283     2,534     7,340     5,341  
Total operating expenses   102,993     86,311     191,786     160,645  
                 
Operating income   41,282     38,315     95,413     72,211  
Interest income   129     85     479     206  
Interest expense   (11,763 )   (5,750 )   (21,581 )   (10,597 )
Non-operating income (loss)   (11 )       (8 )   53  
Non-operating expense - litigation settlement   (688 )       (21,140 )    
Foreign currency exchange gain (loss)   401     (1,357 )   146     (1,998 )
Income before income taxes   29,350     31,293     53,309     59,875  
Income tax benefit (expense)   (1,004 )   (2,222 )   80     (4,348 )
Net income including noncontrolling interest   28,346     29,071     53,389     55,527  
Net income (loss) attributable to noncontrolling interest   (505 )   (109 )   (1,172 )   139  
Net income attributable to Ebix, Inc.   $ 28,851     $ 29,180     $ 54,561     $ 55,388  
                 
Basic earnings per common share attributable to Ebix, Inc.   $ 0.95     $ 0.93     $ 1.79     $ 1.76  
                 
Diluted earnings per common share attributable to Ebix, Inc.   $ 0.94     $ 0.92     $ 1.78     $ 1.75  
                 
Basic weighted average shares outstanding   30,528     31,465     30,526     31,474  
                 
Diluted weighted average shares outstanding   30,668     31,626     30,636     31,643  
                         
                         


Ebix, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
 
  June 30,
 2019
  December 31,
 2018
ASSETS (Unaudited)    
Current assets:      
Cash and cash equivalents $ 102,210     $ 147,766  
Short-term investments 4,860     31,192  
Restricted cash 22,641     8,317  
Fiduciary funds- restricted 4,393     6,491  
Trade accounts receivable, less allowances of $9,985 and $6,969, respectively 175,323     174,340  
Other current assets 60,747     59,274  
Total current assets 370,174     427,380  
       
Property and equipment, net 52,203     50,294  
Right-of-use assets 18,066      
Goodwill 971,929     946,685  
Intangibles, net 46,456     51,448  
Indefinite-lived intangibles 42,055     42,055  
Capitalized software development costs, net 13,141     11,742  
Deferred tax asset, net 60,135     54,629  
Other assets 48,344     26,714  
Total assets $ 1,622,503     $ 1,610,947  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable and accrued liabilities $ 127,202     $ 130,221  
Accrued payroll and related benefits 7,769     9,227  
Working capital facility 59,902     17,841  
Fiduciary funds- restricted 4,393     6,491  
Short-term debt 1,369     3,990  
Current portion of long term debt and financing lease obligation, net of deferred financing
costs of $575
18,258     14,603  
Lease liability 6,035      
Contingent liability for accrued earn-out acquisition consideration 1,315     13,767  
Contract liabilities 30,369     35,609  
Other current liabilities 15,820     85,679  
Total current liabilities 272,432     317,428  
       
Revolving line of credit 438,037     424,537  
Long term debt and financing lease obligations, less current portion, net of deferred
financing costs of $1,523 and $1,811, respectively
265,543     274,716  
Other liabilities 28,123     28,287  
Contingent liability for accrued earn-out acquisition consideration 9,504     11,209  
Contract liabilities 8,161     9,051  
Deferred tax liability, net 1,282     1,282  
Lease liability 11,868      
Total liabilities 1,034,950     1,066,510  
       
Commitments and Contingencies      
       
Stockholders’ equity:      
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and
outstanding at June 30, 2019 and December 31, 2018
     
Common stock, $0.10 par value, 220,000,000 shares authorized, 30,529,840 issued and
outstanding, at June 30, 2019, and 30,567,725 issued and outstanding at December 31, 2018
3,053     3,057  
Additional paid-in capital 5,189     3,397  
Retained earnings 582,913     535,118  
Accumulated other comprehensive loss (55,484 )   (63,377 )
Total Ebix, Inc. stockholders’ equity 535,671     478,195  
Noncontrolling interest 51,882     66,242  
Total stockholders’ equity 587,553     544,437  
Total liabilities and stockholders’ equity $ 1,622,503     $ 1,610,947  
               
               


Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Six Months Ended
  June 30,
  2019   2018
Cash flows from operating activities:      
Net income attributable to Ebix, Inc. $ 54,561     $ 55,388  
Net income (loss) attributable to noncontrolling interest (1,172 )   139  
Adjustments to reconcile net income to net cash provided by operating activities:      
Amortization and depreciation 7,340     5,341  
Benefit for deferred taxes (5,374 )   (1,321 )
Share based compensation 1,422     1,509  
Provision for doubtful accounts (1,310 )   2,098  
Amortization of right-of-use assets 3,517      
Unrealized foreign exchange loss 81     1,262  
Amortization of capitalized software development costs 1,243     1,080  
Reduction of acquisition accruals (17,124 )    
Changes in assets and liabilities, net of effects from acquisitions:      
Accounts receivable (2,166 )   (22,907 )
Other assets (758 )   (40 )
Accounts payable and accrued expenses 2,824     4,891  
Accrued payroll and related benefits (1,808 )   (327 )
Contract liabilities (6,192 )   (5,544 )
Lease liabilities (3,460 )   (382 )
Reserve for potential uncertain income tax return positions     59  
Other liabilities 6,618     (1,353 )
Net cash provided by operating activities 38,242     39,893  
       
Cash flows from investing activities:      
Acquisition of Transcorp     (6,554 )
Cash (paid to) received from Paul Merchants for 10% stake in MTSS combined business (4,925 )   4,996  
Acquisition of Weizmann, net of cash acquired (77,350 )    
Acquisition of Pearl (3,372 )    
Acquisition of Lawson (2,726 )    
Acquisition of Miles (982 )    
Acquisition of Business Travels (689 )    
Cash paid for acquisition of Wahh taxis (214 )    
Cash paid for acquisition of Zillious, net of cash acquired (9,816 )    
Cash paid for acquisition of Essel Forex (7,935 )    
Cash paid for acquisition of Centrum, net of cash acquired     (166,017 )
Cash paid for acquisition of Smartclass, net of cash acquired

    (7,593 )
Capitalized software development costs paid (2,588 )   (2,016 )
Maturities of marketable securities 14,488     725  
Capital expenditures (4,721 )   (1,472 )
Net cash used in investing activities (100,830 )   (177,931 )
       
Cash flows from financing activities:      
Proceeds from revolving line of credit, net 13,500     84,165  
Proceeds from term loan     124,250  
Principal payments of term loan obligation (7,532 )   (3,125 )
Repurchases of common stock (10,972 )   (2,226 )
Proceeds from the exercise of stock options     42  
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options
exercised and restricted stock vested
(27 )   (100 )
Dividend payments (4,599 )   (4,737 )
Other 5,081      
Principal payments of debt obligations (846 )    
Working capital facility 41,588     (4,554 )
Payments of financing lease obligations (129 )   (6 )
Net cash provided by financing activities 36,064     193,709  
Effect of foreign exchange rates on cash 521     (6,545 )
Net change in cash and cash equivalents, and restricted cash (26,003 )   49,126  
Cash and cash equivalents, and restricted cash at the beginning of the period 159,589     70,867  
Cash and cash equivalents, and restricted cash at the end of the period $ 133,586     $ 119,993  
Supplemental disclosures of cash flow information:      
Interest paid $ 20,984     $ 9,714  
Income taxes paid $ 6,528     $ 8,357  

 

CONTACT:

Darren Joseph
678 -281-2027 or IR@ebix.com

David Collins or Chris Eddy
Catalyst Global - 212-924-9800 or ebix@catalyst-ir.com

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