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CST: 23/09/2019 01:45:26   

Ebix Reports 2018 Revenue Rose 37% to a Record $497.8M, With Full Year Operating Income Rising 35% to a Record $153M

205 Days ago

  •  Q4 2018 Revenue Rose 30% to $136.3M
  • Q4 2018 Operating Income Rose 26% to $41.5 M
  • Non-GAAP Q4 EPS of $1.06 Before Effect of One-time Transition Tax

JOHNS CREEK, Ga., March 01, 2019 (GLOBE NEWSWIRE) -- 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 fiscal 2018 fourth quarter (Q4 2018) and full year results for the periods ended December 31, 2018. Ebix will host a conference call to review its results today, at 11:00 a.m. EST (details below).

“We had an outstanding quarter of growth that has set the foundation for Ebix to target over $600 million in revenue in 2019,” said Robin Raina, chairman and CEO, Ebix, Inc. “Ebix’s record Q4 2018 operating income performance translates to an annualized operating income run rate of $166 million. Our relentless focus on customer success through pioneering exchanges in several sectors, continues to strengthen our position as a global leader in insurance and financial exchanges.”

Ebix delivered the following results for its fiscal fourth quarter and full fiscal year 2018:

Revenue: Q4 2018 revenue rose 30% to $136.3 million, compared to $104.7 million in Q4 2017 and increased 6% over Q3 2018 revenue of $128.6 million. Q4 2018 Constant currency revenue increased 34% year-over-year to $140.7 million.

Full year 2018 revenue rose 37% to $497.8 million, compared to $364.0 million in 2017, while 2018 constant currency revenue grew 39% to $504.8 million. Exchanges, including the EbixCash operations in India, continued to be Ebix’s largest channel, accounting for 85% and 80% of the Company's Q4 2018 and full year 2018 revenue, respectively.

(dollar amounts in thousands)  
Channel Q4 2018 Q4 2017 Change 2018 2017 Change
Exchanges $115,349 $82,353 +40% $396,457 $259,470 +53%
Broker Systems   3,659   3,576 +2%   14,379   14,674 -2%
Risk Compliance Solutions (RCS)   15,603   18,052 -14%   79,976   86,832 -8%
Carrier Systems   1,716   700 145%   7,014   2,995 134%
Total Revenue $ 136,327
$ 104,681
+30% $ 497,826 $ 363,971 +37%
    
Total Revenue on Constant Currency Basis $140.7M
$104.7M
+34% $504.8M $364.0M +39%

Earnings per Share:  Fourth quarter GAAP diluted earnings per share were $0.27, reflecting the impact of a one-time tax $24.5 million charge related to the implementation of the 2017 Tax Cuts and Jobs Act transition tax. Excluding the one-time tax impact, non-GAAP diluted earnings per share were $1.06. For the full fiscal year 2018, GAAP diluted earnings per share were $2.95, and excluding the one-time tax impact, non-GAAP diluted earnings were $3.73.

In compliance with the 2017 Tax Cuts and Jobs Act, Ebix will pay the IRS this transition tax charge over a period of 8 years, on an interest free basis.

Operating Income and Cash: Operating income for 2018 rose 35% to $153.0 million as compared to $113.2 million in 2017. Full year 2018 operating margins were at 31%. Cash generated from operations increased 17% to $89.9 million in 2018, compared to $76.8 million in 2017.

Operating income for Q4 2018 rose 26% to $41.5 million compared to $33.1 million in Q4 2017, with operating margins of 30%.

Remediation of Material Weakness: The Company also announced that its consolidated auditors have concluded that the Company has successfully remediated the weakness in its internal control in the areas of income taxes and business combinations as of December 31, 2018. As announced in a press release dated 5th Feb 2019, a renowned third party US firm that specializes in accounting investigations and compliance also came to the same conclusion. These weaknesses were declared by the Company in early 2018, while announcing its 2017 fourth quarter earnings results.
                                                                            
Share Outstanding and Repurchases: Ebix repurchased 966,773 shares of its common stock for an aggregate amount of $47.4 million in Q4 2018, and 996,773 shares of its common stock for an aggregate amount of $49.6 million in the full year 2018. Included in these figures was the repurchase of 200,000 shares for a total of $8.8 million that were not settled until January 2019. Reflecting its repurchase activity, Ebix’s weighted average diluted shares outstanding decreased to 31.2 million in Q4 2018 compared to 31.7 million in Q4 2017 and decreased to 31.5 million in 2018 compared to 31.7 million in 2017.

Q1 & Q2 2019 Diluted Share Counts: Based on share repurchases completed to date, Ebix expects its diluted share count to be approximately 30.7 million in Q1 2019 and Q2 2019.

Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q4 2018 for a total cost of $2.2 million.

Ebix Chairman and CEO Robin Raina said, “Ebix’s Q4 2018 revenues grew 6% sequentially worldwide over Q3 2018, while increasing 3.9% in the United States. Our record 2018 results mark Ebix’s 19th consecutive year of revenue growth which was supported by a strong finish to the year especially from India. Our India-led revenues in Q4 2018 grew 15% sequentially to $69.2 million. Our Australian and Brazilian operations both achieved record revenue quarters in local currency terms. With an annualized constant currency revenue run rate of $562.8 million, Ebix has established a strong foundation from which to conquer new frontiers in terms of revenues, operating margins and EPS.”


Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share
  Q4 2018 Full Year 2018
Diluted EPS $0.27 $2.95
Transition Tax effect $0.79 $0.78
Non-GAAP Diluted EPS $1.06 $3.73


Conference Call Details:

Call Date/Time: Friday, March 1, 2019 at 11:00 a.m. EST

 
Call Dial-In: +1-877-837-3909 or 1-973-409-9690; Call ID #8589356

 
Live Audio Webcast: www.ebix.com/webcast

 
Audio Replay URL: www.ebix.com/result_18_Q4 after 2:00 p.m. EST on March 1st

 

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.

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 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
Consolidated Statements of Income
 
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2018   2017   2018   2017
  (Unaudited)   (Unaudited)   (Unaudited)   (Audited)
Operating revenue $ 136,327     $ 104,681     $ 497,826     $ 363,971  
               
Operating expenses:              
Cost of services provided 42,302     38,438     168,415     129,494  
Product development 10,963     8,551     39,078     33,854  
Sales and marketing 4,045     3,991     17,587     16,303  
General and administrative (net) 34,059     17,820     108,475     59,976  
Amortization and depreciation 3,428     2,800     11,292     11,123  
Total operating expenses 94,797     71,600     344,847     250,750  
               
Operating income 41,530     33,081     152,979     113,221  
Interest income 127     97     436     1,711  
Interest expense (9,037 )   (4,345 )   (27,101 )   (13,383 )
Non-operating income – (loss)         60      
Foreign currency exchange gain (loss) 2,127     (894 )   (792 )   1,811  
Income before income taxes 34,747     27,939     125,582     103,360  
Income tax expense (26,474 )   (414 )   (32,501 )   (777 )
Net income including noncontrolling interest
8,273     27,525     93,081     102,583  
Net income (Loss) attributable to noncontrolling interest (236   952     (58 )   1,965  
Net income attributable to Ebix, Inc. $ 8,509     $ 26,573     $ 93,139     $ 100,618  
               
Basic earnings per common share $ 0.27     $ 0.84     $ 2.97     $ 3.19  
               
Diluted earnings per common share $ 0.27     $ 0.84     $ 2.95     $ 3.17  
               
Basic weighted average shares outstanding 31,133     31,470     31,393     31,552  
               
Diluted weighted average shares outstanding 31,225     31,656     31,534     31,719  



Ebix, Inc. and Subsidiaries
Consolidated Balance Sheets
 
  December 31,
 2018

(Unaudited)
    December 31,
 2017

(Audited)
   
  (In thousands, except share
and per share amounts)
ASSETS      
Current assets:      
Cash and cash equivalents $ 147,766     $ 63,895  
Short-term investments 31,192     25,592  
Restricted cash 8,317     4,040  
Fiduciary funds- restricted 6,491     8,035  
Trade accounts receivable, less allowances of $6,969 and $4,143, respectively 174,340     117,838  
Other current assets 59,274     33,532  
Total current assets 427,380     252,932  
Property and equipment, net 50,294     41,704  
Goodwill 946,68     666,863  
Intangibles, net 51,448     45,711  
Indefinite-lived intangibles 42,055     42,055  
Capitalized software development costs, net 11,742     8,499  
Deferred tax asset, net 54,629     43,529  
Other assets 26,714     11,720  
Total assets $ 1,610,     $ 1,113,013  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable and accrued liabilities $ 130,221     $ 75,073  
Accrued payroll and related benefits 9,227     8,201  
Cash overdraft 17,841     9,243  
Fiduciary funds- restricted 6,491     8,035  
Short term debt 3,990      
Contingent liability for accrued earn-out acquisition consideration 13,767     4,000  
Current portion of long term debt and capital lease obligation, net of deferred financing costs of $575 and $136, respectively 14,603     14,381  
Deferred revenue 35,609     22,562  
Current deferred rent 98     278  
Other current liabilities 85,581     5,159  
Total current liabilities 317,42     146,932  
Revolving line of credit 424,537     274,529  
Long term debt and capital lease obligation, less current portion, net of deferred financing costs of $1,811 and $298, respectively 274,716     110,978  
Contingent liability for accrued earn-out acquisition consideration 11,209     33,096  
Deferred revenue 9,051     1,423  
Long term deferred rent 438     638  
Deferred tax asset, net 1,282      
Other liabilities 27,849     11,658  
Total liabilities 1,066,5     579,254  
Commitments and Contingencies      
       
Stockholders’ equity:      
Convertible Series D Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2018 and 2017      
Common stock, $.10 par value, 120,000,000 shares authorized, 30,567,725 issued and outstanding at December 31, 2018 and 31,476,428 issued and outstanding at December 31, 2017 3,057     3,148  
Additional paid-in capital 3,397     1,410  
Retained earnings 535,118     510,975  
Accumulated other comprehensive loss (63,377 )   (24,023 )
Total Ebix, Inc. stockholders’ equity 478,195     491,510  
Noncontrolling interest 66,242     42,249  
Total stockholders' equity $ 544,437     $ 533,759  
Total liabilities and stockholders’ equity $ 1,610.     $ 1,113,013  



Ebix, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
 
  Year Ended
December 31,
2018
(Unaudited)
  Year Ended
December 31,
2017
(Audited)
  Year Ended
December 31,
2016
(Audited)
   
  (in thousands)
Cash flows from operating activities:          
Net income attributable to Ebix, Inc. $ 93,139     $ 100,618     $ 93,847  
Net income (loss) attributable to noncontrolling interest (58 )   1,965     447  
Adjustments to reconcile net income to cash provided by operating activities:          
Depreciation and amortization 11,292     11,123     10,746  
Provision for doubtful accounts 3,571     1,713     1,515  
Provision for deferred taxes, net of acquisitions and effects of currency translation (13,043 )   (13,667 )   (6,410 )
Unrealized foreign exchange losses 606     1,387     32  
Gain on investment interest in IHC/Ebix joint venture         (1,162 )
Amortization of capitalized software development costs 2,233     2,175     1,116  
Share-based compensation 2,811     2,818     2,794  
Reduction of acquisition earn-out contingent liability (1,391 )   (164 )   (1,344 )
Reduction of rent expense as a result of purchase accounting adjustment     (948 )    
Changes in current assets and liabilities, net of acquisitions:          
Accounts receivable (10,810 )   (34,245 )   (12,659 )
Other assets (8,486 )   (2,133 )   1,789  
Accounts payable and accrued expenses 6,539     8,906     (3,703 )
Accrued payroll and related benefits (788 )   (3,979 )   170  
Deferred rent (360 )   (413 )   (234 )
Reserve for potential uncertain income tax return positions 149     5,879     490  
Other liabilities 13,205     252     (3,039 )
Deferred revenue (8,740 )   (4,480 )   2,176  
Net cash provided by operating activities 89,869     76,807     86,571  
Cash flows from investing activities:          
Investment in Transcorp, net of cash acquired (6,554 )        
Investment in Centrum, net of cash acquired (176,137 )        
Investment in SmartClass, net of cash acquired (7,593 )        
Cash received from Paul Merchants for 10% stake in MTSS 4,996          
Investment in Indus, net of cash acquired (24,261 )        
Investment in Mercury, net of cash acquired (11,356 )        
Investment in Miles, net of cash acquired (17,721 )        
Investment in Leisure, net of cash acquired (1,304 )        
Investment in AHA Taxis, net of cash acquired (71 )        
Investment in Routier, net of cash acquired (413 )        
Investment in Weizmann, net of cash acquired 12,886          
Investment in Lawson, net of cash acquired 381          
Investment in Business Travels, net of cash acquired (414 )        
Payment of acquisition earn-out contingency, ItzCash (3,831 )        
Investment in Paul Merchants     (37,398 )    
Investment in Via, net of cash acquired     (67,835 )    
Investment in Wall Street     (6,970 )    
Investment in YouFirst, net of cash acquired     (9,657 )    
Investment in beBetter     (1,000 )    
Investment in ItzCash, net of cash acquired     (69,301 )    
Payment of acquisition earn-out contingency, Qatarlyst     (1,921 )    
Investment in Hope Health         (1,643 )
Investment in Wdev, net of cash acquired         (6,320 )
Investment in EbixHealth JV, net of cash acquired         (696 )
Maturities (purchases) of marketable securities (087 )   1,201     (2,115 )
Capitalized software development costs (5,745 )   (2,805 )   (3,988 )
Capital expenditures (10,366 )   (7,385 )   (5,977 )
Net cash used in investing activities (251,5 )   (203,071 )   (20,739 )
Cash flows from financing activities:          
Proceeds from / (Repayment) to line of credit, net 150,008     120,500     (52,436 )
Proceeds from term loan 175,500     20,000     125,000  
Principal payments on term loan obligation (10,016 )   (13,000 )   (6,250 )
Short term loan to a third party (8,341 )        
Cash overdraft (769 )   6,162      
Repurchase of common stock (40,820 )   (45,732 )   (59,784 )
Payments of long term debt (80 )       (600 )
Payments for capital lease obligations (6 )   (11 )   (5 )
Proceeds from exercise of common stock options 439     52     824  
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (467 )   (398 )   (998 )
Dividends paid (9,316 )   (9,545 )   (9,829 )
Net cash provided (used) by financing activities 256,132     78,028     (4,078 )
Effect of foreign exchange rates on cash and cash equivalents $ (5,689 )   $ 2,162     $ (1,992 )
Net change in cash and cash equivalents, and restricted cash 88,722     (46,074 )   59,762  
Cash and cash equivalents, and restricted cash at the beginning of the year $ 70,867     $ 116,941     $ 57,179  
Cash and cash equivalents, and restricted cash at the end of the year $ 159,5     $ 70,867     $ 116,941  
Supplemental disclosures of cash flow information:          
Interest paid 25,690     12,552     7,219  
Income taxes paid 10,149     10,426     16,634  

 

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

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

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