Ebix Announces Record Results with 76 Cents EPS

November 4, 2009 8:30 AM EST

Company Discusses Impact of EZ DATA & Peak on Future Results

ATLANTA--(BUSINESS WIRE)-- Ebix, Inc. (NASDAQ: EBIX)

Conference call:   Wednesday November 4, 2009 at 11:00 A.M. EDT

Audio Replay URL:  http://www.ebix.com, Click on Investor Home Page

Dial-in numbers:   1-866-293-2557 Conference ID # 38546436

Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today reported record financial results for the third quarter of 2009. The results marked the highest revenue, net income and diluted EPS in any one-quarter that the company has reported in its thirty-three year history.

The company reported total revenue of $23.29 million for the third quarter of 2009, compared to $20.17 million for the third quarter of 2008, marking a 16 percent increase in revenues. These revenues do not include any revenue from the recent acquisitions made by Ebix effective 1st October 2009, of EZDATA Corp. and Peak Performance Solutions Inc.

The company's operating income for the quarter rose 21 percent to $9.78 million, as compared to $8.12 million in the third quarter of 2008. Net income after taxes for the quarter rose 28 percent to $9.43 million, or $0.76 per diluted share, up from $7.40 million, or $0.62 per diluted share, in the third quarter of 2008-- earnings per share growth of 22 percent. The company also reported basic earnings per share in the third quarter of 2009 of $0.91 as compared to $0.77 in the third quarter of 2008.

Currency adjusted revenues in third quarter of 2009 grew to $23.73 million, a 17.6 percent increase over the third quarter of 2008. Currency adjusted net income after taxes in the third quarter of 2009 grew to $ 9.61 million, a 30.0 percent increase over the third quarter of 2008. "Currency Adjusted" is a non-GAAP financial measure that we use solely for comparing numbers from two different periods without the impact of foreign exchange.

The company's operating expenses for the quarter grew by 12 percent to $13.51 million as compared to $12.05 million for the third quarter of 2008. Results for the third quarter of 2009 were based on 12.61 million weighted average diluted shares outstanding, as compared to 12.17 million in the third quarter of 2008.

The company also reported that its cumulative net income at the end of nine months of 2009 grew by 38 percent to $ 26.73 million as compared to cumulative net income of $ 19.40 million at the end of nine months of 2008. The nine-month cumulative diluted EPS for 2009 also grew by 32 percent to $2.17 as compared to cumulative diluted EPS of $1.65 at the end of nine months of 2008.

The company also declared that in the third quarter of 2009, Exchange channel became 61% of Ebix's total revenues while the BPO channel accounted for 15% of its revenues. Broker systems business accounted for 13% and the carrier channel accounted for 11% of Ebix's worldwide revenues.

Robin Raina, president and CEO, Ebix said, "We are pleased that the third quarter results are in line with our expectations. We are especially pleased that net margins after taxes in the third quarter grew to 41% from 37% in the same quarter last year. We feel good about our consistent revenue streams and believe that the company has the ability to continue our growth both organically and through strategic acquisitions."

Robin added, "These are both very strategic acquisitions that allow us cross selling opportunities, as also help us take a giant leap forward in terms of making the dream of end-to-end computing possible. We intend integrating them within Ebix on a war footing and in the most sensible fashion with the aim of leading the industry, accompanied by short term and long term accretiveness for our shareholders "

Robin also said, "In recent times, we have been repeatedly asked by investors, for some guidance on the impact of EZDATA and Peak on our financial results. Clearly we remain focused on getting the same level of net margins from these two deals, as we are used to today. While we are not yet fully prepared to discuss the complete positive impact of the EZ Data and Peak acquisitions on our results, yet we feel comfortable enough to define some floor metrics in terms of revenues and net income from these acquisitions. We expect the two deals to contribute a combined minimum of $26 million in revenues and $7.5 million in net income, over the next 12 months."

Ebix Chief Financial Officer Robert Kerris commented: "During nine months ending September 30, 2009 the Company generated $22.1 million from our operating activities which represents a 14% improvement over the same period a year earlier. Net income for the third quarter of $9.43 million is up $483 thousand or 5% from the second quarter, representing the thirteenth consecutive quarter of sequential quarter over quarter net income growth. Our operating margins remain strong at 42% for the quarter and 41% the nine-month period ending September 30, 2009, respectively. We are also pleased by the fact that to date $26.6 million of the original $35.0 million of convertible debt issued during 2007 and 2008 has been paid or converted into Ebix common stock, leaving a remaining balance due on those obligations of $8.4 million."

About Ebix

A leading international supplier of On-Demand software and E-commerce services to the insurance industry, Ebix, Inc., (NASDAQ: EBIX) provides end to end solutions ranging from infrastructure Exchanges, carrier systems, agency systems and BPO services to custom software development for all entities involved in the insurance industry.

With 30+ offices across Singapore, Australia, the US, New Zealand, India, China, Japan and Canada, 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 on its platforms. Through its various SaaS based software platforms, Ebix employs hundreds of insurance and technology professionals that provide products, support and consultancy to thousands of customers on six continents. Ebix's focus on quality has enabled it to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute's Capability Maturity Model (CMM). Ebix has also earned ISO 9001:2000 certification for both its development and BPO units in India. For more information, visit the Company's website at www.ebix.com

Safe Harbor for Forward Looking Statements under the Private Securities Litigation Reform Act of 1995 -- This press release contains various forward looking statements and information that are based on management's beliefs, as well as 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. The Company has tried to identify such forward looking statements by use of words such as "expects," "intends," "anticipates," "plans," "believes," "will," "should," and similar expressions, but these words are not the exclusive means of identifying such statements. Such statements are subject to various risks, uncertainties and other factors which could cause actual results to vary materially from those expressed in, or implied by, the forward looking statements. Such risks, uncertainties and other factors include the extent to which the Company's new products and services can be successfully developed and marketed, the integration and other risks associated with recent and future acquisitions, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties, the Company's ability to continue to develop new products to effectively address market needs in an industry characterized by rapid technological change, the Company's dependence on the insurance industry (and in particular independent agents), the highly competitive and rapidly changing automation systems market, the Company's ability to effectively protect its applications software and other proprietary information, the Company's ability to attract and retain quality management, and software, technical sales and other personnel, the potential negative impact on the Company's outsourcing business in India from adverse publicity and possible governmental regulation, the risks of disruption of the Company's Internet connections or internal service problems, the possibly adverse effects of a substantial increase in volume of traffic on the Company's website, mainframe and other servers, possible security breaches on the Company's website and the possible effects of insurance regulation on the Company's business. Certain of these, as well as other, risks, uncertainties and other factors, are described in more detail in Ebix's periodic filings with the Securities and Exchange Commission, including the company's annual report on form 10-K for the year ended December 31, 2008, included under "Item 1. Business--Risk Factors." Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors or to publicly update any of the forward looking statements contained herein to reflect future events or developments or changed circumstances or for any other reason.

(Financial tables follow)

PART I -- FINANCIAL INFORMATION

ITEM 1 -- CONSOLIDATED FINANCIAL STATEMENTS

Ebix, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

                                 Three Months Ended      Nine Months Ended
                                 September 30,
                                                         September 30,

                                 2009        2008        2009        2008

Operating Revenue                $ 23,292    $ 20,168    $ 66,381    $ 54,609

Operating expenses:

Cost of services provided          4,465       3,940       13,298      10,101

Product development                3,000       2,074       8,258       6,314

Sales and marketing                1,298       871         3,553       2,536

General and administrative         3,803       4,360       11,355      12,032

Amortization and depreciation      943         804         2,517       2,460

Total operating expenses           13,509      12,049      38,981      33,443

Operating income                   9,783       8,119       27,400      21,166

Interest income                    56          134         147         396

Interest expense                   (234   )    (440   )    (791   )    (1,176 )

Foreign exchange gain (loss)       142         (24    )    894         135

Income before income taxes         9,747       7,789       27,650      20,521

Income tax (expense)/benefit       (313   )    (391   )    (925   )    (1,118 )

Net income                       $ 9,434     $ 7,398     $ 26,725    $ 19,403

Basic earnings per common share  $ 0.91      $ 0.77      $ 2.63      $ 1.97

Diluted earnings per common      $ 0.76      $ 0.62      $ 2.17      $ 1.65
share

Basic weighted average shares      10,412      9,607       10,177      9,837
outstanding

Diluted weighted average shares    12,613      12,170      12,490      12,040
outstanding

Ebix, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share amounts)

                                                     September 30,  December 31,

                                                     2009           2008

                                                     (Unaudited)

ASSETS

Current assets:

Cash and cash equivalents                            $ 30,857       $ 9,475

Short-term investments                                 1,369          1,536

Accounts receivable, less allowance of $548 and        18,660         13,562
$453, respectively

Other current assets                                   13,740         951

Total current assets                                   64,626         25,524

Property and equipment, net                            5,142          3,774

Goodwill                                               104,339        88,488

Indefinite-lived intangibles                           14,790         11,589

Other intangible assets, net                           12,222         10,235

Other assets                                           700            1,557

Total assets                                         $ 201,819      $ 141,167

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses                $ 4,184        $ 8,245

Accrued payroll and related benefits                   2,408          2,709

Short term debt                                        23,850         24,945

Current portion of convertible debt                    15,693         11,518

Current portion of long term debt and capital lease    181            912
obligations

Deferred revenue                                       6,763          5,383

Other current liabilities                              321            142

Total current liabilities                              53,400         53,854

Convertible debt                                       24,188         15,000

Long term debt and capital lease obligation, less      398            290
current portion

Other liabilities                                      2,204          941

Deferred revenue                                       53             330

Deferred rent                                          702            610

Total liabilities                                      80,945         71,025

Commitments and Contingencies, Note 8

Stockholders' equity:

Convertible Series D Preferred stock, $.10 par
value, 500,000 shares authorized, no shares issued     --             --
and outstanding

Common stock, $.10 par value, 20,000,000 shares
authorized, 10,509,741 issued and 10,496,238
outstanding at September 30, 2009 and 10,006,455       1,049          981
issued and 9,946,710 outstanding at December 31,
2008

Additional paid-in capital                             123,835        111,641

Treasury stock (13,503 and 59,745 shares
repurchased as of September 30, 2009 and December      (76     )      (1,178  )
31, 2008 respectively)

Accumulated deficit                                    (3,474  )      (30,199 )

Accumulated other comprehensive income                 (460    )      (11,103 )

Total stockholders' equity                             120,874        70,142

Total liabilities and stockholders' equity           $ 201,819      $ 141,167

Ebix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

                                                 Nine Months Ended September 30,

                                                 2009         2008

Cash flows from operating activities:

Net income                                       $ 26,725     $ 19,403

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation and amortization                      2,517        2,460

Stock-based compensation                           148          102

Restricted stock compensation                      833          423

Unrealized foreign exchange gain on forward        (141    )    --
contracts

Provision for doubtful accounts                    90           225

Changes in operating assets and liabilities:

Accounts receivable                                (4,644  )    (2,053  )

Other assets                                       (622    )    324

Accounts payable and accrued expenses              (214    )    (392    )

Accrued payroll and related benefits               (591    )    600

Deferred revenue                                   (29     )    (1,220  )

Deferred taxes                                     (2,197  )    (529    )

Deferred rent and other liabilities                252          16

Net cash provided by operating activities          22,127       19,359

Cash flows from investing activities:

Investment in Acclamation, net of cash acquired    (85     )    (21,365 )

Investment in Telstra eBusiness Services, net      --           (42,968 )
of cash acquired

Investment in Periculum, net of cash acquired      (200    )    (1,067  )

Investment in ConfirmNet, net of cash acquired     (3,279  )    --

Investment in IDS, net of cash acquired            (1,000  )    --

Investment in Facts, net of cash acquired          (6,215  )    --

Investment in Infinity, net of cash acquired       --           (500    )

Advanced deposits on future acquisitions           (11,880 )    --

(Purchase) Maturities of marketable securities,    167          (1,496  )
net

Capital expenditures                               (1,941  )    (549    )

Net cash used in investing activities              (24,433 )    (67,945 )

Cash flows from financing activities:

Proceeds from line of credit                       23,850       9,295

Payments on line of credit                         (24,945 )    --

Proceeds from the issuance of common stock, net    --           12,518
of issuance costs

Proceeds from the exercise of the stock options    1,458        1,225

Proceeds from the issuance of convertible debt     25,000       15,000

Repurchase of Common Stock                         (507    )    (24,510 )

Payments on capital lease obligations              (98     )    (3      )

Principal payments of debt obligations             (773    )    (483    )

Net cash provided/(used) in financing              23,985       13,042
activities

Effect of foreign exchange rates on cash           (297    )    (2,172  )

Net change in cash and cash equivalents            21,382       (37,716 )

Cash and cash equivalents at the beginning of      9,475        48,437
the period

Cash and cash equivalents at the end of the      $ 30,857     $ 10,721
period

Supplemental disclosures of cash flow
information:

Interest paid                                    $ 910        $ 759

Income taxes paid                                $ 3,706      $ 478

    Source: Ebix, Inc.

Related Categories

Press Releases

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?