Market Overview

Ebix Q1 Revenues Rose 36.8% to Record $108.2M, Operating Income Rose 31.9% to $33.9M, EPS Unchanged at $0.83

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JOHNS CREEK, Ga., May 09, 2018 (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 results for its first quarter ended March 31, 2018. 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 first quarter of 2018:

Revenue: Q1 2018 revenue rose 37% to $108.2 million compared to $79.1 million in Q1 2017 and increased 3% over Q4 2017 revenue of $104.7 million. The year over year revenue improvement reflected growth in the Company's Exchange channel as well as higher revenue from the Risk Compliance channel, with the revenues from the EbixCash Financial Exchange reflected in the Exchange channel.

On a constant currency basis, Ebix Q1 2018 revenue increased 35% to $107.2 million compared to $79.1 million in Q1 2017. The Exchange channel continued to be Ebix's largest, accounting for 76% of Q1 2018 revenues.

     
(dollar amounts in thousands)    
Channel Q1 2018 Q1 2017 Change
Exchanges $ 81,858 $ 52,614 +56 %
Risk Compliance Solutions (RCS)   22,267   21,852 +2 %
Broker Solutions   3,610   3,788 -5 %
Carrier Systems   495   849 -42 %
Total Revenue $ 108,230 $ 79,103 +37 %
       
Total Revenue on Constant Currency Basis $ 107.2 $ 79.1M +35 %
           

Operating Income and Margins: Q1 2018 operating margins decreased to 31% as compared to 32% in Q1 2017. Operating income for Q1 2018 rose 32% to $33.9 million compared to $25.7 million in Q1 2017.

Net Income: Q1 2018 net income decreased 1% to $26.2 million compared to $26.4 million in Q1 2017, despite the 32% increase in operating income. The decrease principally reflected an $8.4 million increase in non-operating expenses like foreign exchange loss, net interest charges and tax expense from Q1 2017 to Q1 2018, as follows:

  • a $0.6 million foreign exchange loss in Q1 2018 vs. a gain of $3.5 million in Q1 2017
  • a $3.0 million increase in net interest expense in Q1 2018 vs. Q1 2017
  • a $2.1 million tax expense in Q1 2018 vs. $0.9 million in Q1 2017. The Q1 2018 taxes reflect a provision for the Global Intangible Low- Taxed Income ("GILTI") tax, as per the 2017 Tax Cuts and Jobs Act.

Earnings per Share:  Q1 2018 diluted earnings per share were unchanged from Q1 2017 at $0.83. Ebix's weighted average diluted shares outstanding decreased to 31.7 million in Q1 2018 compared to 32.0 million in Q1 2017 and 31.7 million in Q4 2017, reflecting the benefit of share repurchase activity.

Operating Cash: Cash generated from operations rose $9.7 million or 61% in Q1 2018 to $25.5 million compared to $15.8 million in Q1 2017. Q1 2018 cash flows reflected cumulative cash payment of $11.0 million for bank interest and income tax, including non-recurring advance Minimum Alternate Tax (MAT) payments in India.

Share Repurchases: In Q1 2018, Ebix repurchased 30,000 shares of its outstanding common stock for aggregate cash consideration of $2.2 million that were settled in April 2018.

Q2 2018 Diluted Share Count: As of today, Ebix expects its diluted share count for Q2 2018 to be approximately 31.7 million.

Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q1 2018 for a total cost of $2.4 million.

Ebix Chairman, President and CEO Robin Raina said, "We are pleased to start 2018 with record revenue and operating income and a 61% increase in cash generated from operations. With a worldwide annualized revenue run rate of approximately $433 million as of Q1 2018, we believe that we are well on track to surpass our half a Billion-dollar annualized revenue run rate aspirational goal by year end or perhaps earlier."

Robin said, "From a business development standpoint, Q1 was strong as we secured a few substantial contracts that involve implementations that should contribute to our results over the balance of 2018 and 2019. We faced head winds in Q1 2018 that impacted our sequential revenue comparison with Q4 2017 by $5 million, including a $4 million reduction in our Continuing Education and Health administration exchange segment in Q1 2018, related to seasonal revenue increases in Q4 2017, and approximately $1 million in lower transaction volumes in Q1 2018 because of certain regulatory guidelines associated with the new "Know Your Customer" rule implementation in India. We are pleased that in spite of those factors, Ebix achieved a $3.6 million sequential revenue improvement in Q1 2018 as compared to Q4 2017."

"Our Indian operations continue to grow in terms of top line and bottom line both. Our EbixCash retail outlet count in India is now approaching 260,000 and we have over 500 sales people on the ground committed to organically growing our outlet footprint as well as the customer penetration of our EbixCash business. With India business contributing $32.9 million in revenues in Q1 2018 as compared to $5.6 million in Q1 2017, we are now targeting an annualized revenue run rate of $200 million or more by Q4 2018."

Sean Donaghy, Ebix CFO said, "In Q1 2018 Ebix continued to demonstrate solid cash generation to fund growth and investor friendly initiatives, with cash flow from operations increasing to $25.5 million. During Q1 2018, we spent $9.7 million on dividends, tax payments and building construction. Specifically, in Q1 2018 we paid taxes of $6.8 million; invested $531 thousand on building capex; invested $6.6 million for the purchase of the Transcorp inward remittance assets; and returned $2.4 million in dividends to shareholders, while we drew only $20.0 million from our Bank credit facilities. Ebix ended the quarter with $130.3 million of cash, cash equivalents, and short-term investments, an increase of $40.8 million as compared to December 31, 2017."

Conference Call Details:

Call Date/Time: Wednesday, May 9, 2018 at 11:00 a.m. EDT 

Call Dial-In: +1-877-837-3909 or 1-973-409-9690; Call ID # 7585634 

Live Audio Webcast: www.ebix.com/webcast  

Audio Replay URL: www.ebix.com/result_18_Q1 after 2:00 p.m. EDT on May 9th 

About Ebix, Inc.

With 50+ offices across 5 continents, Ebix, Inc., (NASDAQ:EBIX) endeavors to provide On-Demand software and E-commerce services to the insurance, financial and healthcare industries. In the Insurance sector, the Company'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 administrative and risk compliance, across the world.

With a "Phygital" strategy that combines 260,000 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, travel, pre-paid & gift cards, utility payments, etc., in an emerging country like India. EbixCash, through its travel portal Via.com, is also one of Southeast Asia's leading travel exchanges with over 110,000 distribution outlets and 8,000 corporate clients processing over 24.5 million transactions every year. For further details, visit www.ebixcash.com

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
  March 31,
  2018   2017
Operating revenue $ 108,230     $ 79,103  
       
Operating expenses:      
Cost of services provided 39,591     25,187  
Product development 8,434     8,350  
Sales and marketing 3,998     4,337  
General and administrative, net 19,504     12,684  
Amortization and depreciation 2,807     2,855  
Total operating expenses 74,334     53,413  
       
Operating income 33,896     25,690  
Interest income 121     774  
Interest expense (4,847 )   (2,468 )
Non-operating income 53      
Foreign currency exchange (loss) gain (641 )   3,496  
Income before income taxes 28,582     27,492  
Income tax expense (2,126 )   (869 )
Net income including noncontrolling interest 26,456     26,623  
Net income attributable to noncontrolling interest 248     196  
Net income attributable to Ebix, Inc. $ 26,208     $ 26,427  
       
Basic earnings per common share attributable to Ebix, Inc. $ 0.83     $ 0.83  
       
Diluted earnings per common share attributable to Ebix, Inc. $ 0.83     $ 0.83  
       
Basic weighted average shares outstanding 31,482     31,807  
       
Diluted weighted average shares outstanding 31,659     31,973  
           


 
Ebix, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
 
  March 31,
 2018
  December 31,
 2017
ASSETS (Unaudited)    
Current assets:      
Cash and cash equivalents $ 111,898     $ 63,895  
Short-term investments 18,356     25,592  
Restricted cash 3,992     4,040  
Fiduciary funds- restricted 8,645     8,035  
Trade accounts receivable, less allowances of $5,138 and $4,143, respectively 117,443     117,838  
Other current assets 30,533     33,532  
Total current assets 290,867     252,932  
       
Property and equipment, net 40,647     41,704  
Goodwill 672,159     666,863  
Intangibles, net 43,679     45,711  
Indefinite-lived intangibles 42,055     42,055  
Capitalized software development costs, net 8,659     8,499  
Deferred tax asset, net 48,489     43,529  
Other assets 15,889     11,720  
Total assets $ 1,162,444     $ 1,113,013  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable and accrued liabilities $ 77,231     $ 75,073  
Accrued payroll and related benefits 7,235     8,201  
Cash overdraft 9,941     9,243  
Fiduciary funds- restricted 8,645     8,035  
Short term debt, net of deferred financing costs of $449 and $136, respectively 13,824     14,364  
Capital lease obligations 17     17  
Deferred rent 205     278  
Contingent liability for accrued earn-out acquisition consideration 4,000     4,000  
Deferred revenue 27,492     22,562  
Other current liabilities 10,085     5,159  
Total current liabilities 158,675     146,932  
       
Revolving line of credit 173,694     274,529  
Long term debt and capital lease obligations, less current portion, net of deferred financing costs of $1,748 and $298, respectively 235,778     110,978  
Other liabilities 11,632     11,658  
Contingent liability for accrued earn-out acquisition consideration 32,511     33,096  
Deferred revenue 8,822     1,423  
Deferred rent 405     638  
Total liabilities 621,517     579,254  
       
       
Stockholders' equity:      
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017      
Common stock, $0.10 par value, 120,000,000 shares authorized, 31,458,976 issued and outstanding, at March 31, 2018, 2017 and 120,000,000 shares authorized, 31,476,428 issued and outstanding at December 31, 2017 3,146     3,148  
Additional paid-in capital     1,410  
Retained earnings 523,668     510,975  
Accumulated other comprehensive loss (28,782 )   (24,023 )
Total Ebix, Inc. stockholders' equity 498,032     491,510  
Noncontrolling interest 42,895     42,249  
Total stockholders' equity 540,927     533,759  
Total liabilities and stockholders' equity $ 1,162,444     $ 1,113,013  
               


 
Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Three Months Ended
  March 31,
  2018   2017
Cash flows from operating activities:      
Net income attributable to Ebix, Inc. $ 26,208     $ 26,427  
Net income attributable to noncontrolling interest 248     196  
Adjustments to reconcile net income to net cash provided by operating activities:      
Amortization and depreciation 2,807     2,855  
Benefit for deferred taxes (1,874 )   (850 )
Share based compensation 753     686  
Provision for doubtful accounts 1,045     407  
Unrealized foreign exchange loss (gain) 419     (860 )
Amortization of capitalized software development costs 525     410  
Purchase accounting adjustment     (948 )
Changes in assets and liabilities, net of effects from acquisitions:      
Accounts receivable (1,401 )   (5,661 )
Other assets (554 )   198  
Accounts payable and accrued expenses 1,438     (7,118 )
Accrued payroll and related benefits (946 )   (1,021 )
Deferred revenue (2,361 )   382  
Deferred rent (317 )   (102 )
Reserve for potential uncertain income tax return positions 30     518  
Other liabilities (527 )   268  
Net cash provided by operating activities 25,493     15,787  
       
Cash flows from investing activities:      
Acquisition of Transcorp (6,554 )    
Cash received from Paul Merchants for 10% stake in MTSS combined business 4,996      
Capitalized software development costs (622 )   (514 )
Maturities (Purchases) of marketable securities 5,198     (1,005 )
Capital expenditures (531 )   (2,705 )
Net cash provided by (used in) investing activities 2,487     (4,224 )
       
Cash flows from financing activities:      
(Repayments of) Proceeds from revolving line of credit, net (100,835 )   40,000  
Proceeds from term loan 124,250      
Principal payments of term loan obligation     (3,125 )
Repurchases of common stock     (40,517 )
Proceeds from the exercise of stock options     52  
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (36 )   (167 )
Dividend payments (2,369 )   (2,428 )
Cash Overdraft 745      
Payments of capital lease obligations     (1 )
Net cash provided by (used in) financing activities 21,755     (6,186 )
Effect of foreign exchange rates on cash (1,723 )   786  
Net change in cash and cash equivalents 48,012     6,163  
Cash and cash equivalents, and restricted cash at the beginning of the period 70,867     116,941  
Cash and cash equivalents, and restricted cash at the end of the period $ 118,879     $ 123,104  
Supplemental disclosures of cash flow information:      
Interest paid $ 4,280     $ 2,289  
Income taxes paid $ 6,751     $ 6,663  
               

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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