- Q1 Revenues of
$63.8 million,
up 24% year-over-year
- Q1 Diluted EPS of
$0.51, up 28% year-over-year
Ebix, Inc. (Nasdaq:EBIX), a leading international supplier of
On-Demand software and E-commerce services to the insurance,
financial and healthcare industries, today reported results for the
fiscal first quarter ended March 31, 2015.
Ebix delivered the following results for the first quarter of
2015:
Revenue: Total first quarter 2015 revenue was
$63.8 million, an increase of 24% on a year-over-year basis as
compared to first quarter 2014 revenue of $51.4 million, and an
increase of $3.1 million over fourth quarter 2014 revenues of $60.6
million.
On a constant currency basis, Ebix Q1 2015 revenue increased 28%
year over year to $65.7 million as compared to $51.4 million in Q1
of 2014. Also on a constant currency basis, sequentially the
revenue increased 7% to $64.9 million as compared to $60.6 million
in Q4 2014.
Earnings per Share: First quarter 2015 diluted
earnings per share increased 28% year-over-year to $0.51, as
compared to $0.40 in the first quarter of 2014. For purposes of the
first quarter 2015 earnings per share calculation, there was an
average of 36.0 million diluted shares outstanding during the
quarter compared to 38.6 million during the same period in
2014.
Operating Cash: Cash used by operations for the
fiscal first quarter was $7.3 million, as compared to cash provided
by operations of $10.8 million in first quarter of 2014. First
quarter 2015 was negatively impacted by the one-time cash payment
of $20.5 million (including interest of $1.6 million) stemming from
the resolution of the previously disclosed Internal Revenue
Service's audit of Ebix's income tax returns for the taxable years
2008 through 2012. Operating cash for the quarter before payments
of the IRS settlement and legal fees in connection with the
securities litigation settlement amounts would have been $13.9
million in the first quarter of 2015 as compared to $10.8 million
in the first quarter of 2014.
Operating Margins: Ebix's Exchange business
continued to have strong margins of 35% while the recently started
Ebix Consulting Group had margins of 16%, cumulatively resulting in
32% operating margins in first quarter of 2015. The Company
recently took many steps to improve operational efficiency
including increasing the use of offshore resources in many areas of
the business and thus expects the operating margins to improve.
Net Income: First quarter 2015
net income was $18.3 million, a 19% increase on a year-over-year
basis, as compared to first quarter 2014 net income of $15.4
million.
Channel Revenues: The Exchange channel
continued to be the largest channel for Ebix accounting for 73% of
the Company's first quarter 2015 revenues.
|
(dollar amount in
thousands) |
Three Months Ended
March 31, |
Channel |
2015 |
2014 |
Exchanges |
$ 46,678 |
$ 42,105 |
Broker Systems |
3,736 |
4,486 |
Risk Compliance Solutions ("RCS") |
12,175 |
3,425 |
Carrier Systems |
1,164 |
1,388 |
Total Revenue |
$ 63,753 |
$ 51,404 |
The year-over-year revenues increased as a result of revenue
growth from Life, Annuity, Underwriting, CRM and Health Ecommerce
services in addition to revenue growth generated from the Company's
2014 acquisitions of HealthCare Magic, Vertex, and Oakstone,
partially offset by the drop in revenue from international
locations as a result of the strengthening U.S. dollar and a
decrease in revenues from the company's pharmaceutical and P&C
Carrier backend operations. The adverse impact from the
considerable strengthening of the US dollar as compared to the
Australian dollar and the Brazilian Real, reduced reported revenues
in the aggregate by $1.9 million.
Second Quarter 2015 Diluted Share Count: As of
May 8, 2015, the Company expects the diluted share count for the
second quarter of 2015 to be approximately 35.2 million shares. The
Company re-purchased 994,869 shares of the Company's common stock
in Q1 of 2015 while the Company has re-purchased an additional
289,365 shares of the Company stock since April 1, 2015.
Ebix Chairman, President and CEO Robin Raina said, "As we
anticipated, we are reporting a strong first quarter of 2015. We
are in the midst of multiple initiatives that have the potential to
substantially increase our diluted EPS and operating margins. We
believe that we can significantly grow both our top line and bottom
lines as we execute and deliver on some of our recent large
contract wins."
Robin added, "Ebix thrives on its consistency of revenues and a
sticky client base. Like other multinational companies, we were
exposed to substantial currency exchange rate fluctuations in Q1
2015, which on an annualized basis would mean a drop of $7.6
million in revenues. In spite of that, in the first quarter of
2015, we continued our earnings growth momentum while maintaining
the consistency of our operating margins."
"We intend to continue to be opportunistic in selecting
accretive acquisitions in relevant geographies in line with our
strategic plan, and we believe we can continue to secure large
deals. We are currently bidding on multiple sizeable deals that we
believe could favorably contribute substantially to our results in
the future," Robin added. "In addition, we believe that our
operating margin profile can improve even further as we deploy our
recent international Exchange wins."
Robert Kerris, Ebix's Executive Vice President and CFO said, "We
are focused on improving our operational efficiency including
expanding our use of offshore resources, which we believe will
result in an improvement to our operating margins, from our first
quarter level of 32%. We have full access to $104.5 million of
available capacity from the recently expanded line of credit with
Regions Bank for further accretive acquisitions, funding the
integration of our recent acquisitions and fueling organic growth.
Though as previously disclosed we incurred a one-time payment of
$20.5 million for the resolution of the IRS audit, Ebix still has
access to $132 million of cash from its own cash reserves combined
with the available capacity from our bank credit lines.
Furthermore, we returned $25.1 million to shareholders during the
first quarter in the form of $22 million of share buybacks and $3
million through our quarterly dividend of $0.075 per share."
About Ebix, Inc.
A leading international supplier of On-Demand software and
E-commerce services to the insurance, financial and healthcare
industries, Ebix, Inc., (NASDAQ: EBIX) provides end-to-end
solutions ranging from infrastructure exchanges, carrier systems,
agency systems and risk compliance solutions to custom software
development for all entities involved in the insurance
industry.
With 40+ offices across Brazil, Singapore, Australia, the US,
UK, New Zealand, India 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 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 |
Condensed Consolidated
Statements of Income |
(In thousands, except per share
data) |
(Unaudited) |
|
|
Three Months
Ended |
|
March
31, |
|
2015 |
2014 |
Operating revenue |
$63,753 |
$51,404 |
|
|
|
Operating expenses: |
|
|
Cost of services provided |
19,485 |
9,612 |
Product development |
7,047 |
6,693 |
Sales and marketing |
3,379 |
3,301 |
General and administrative, net |
10,746 |
9,841 |
Amortization and depreciation |
2,597 |
2,552 |
Total operating expenses |
43,254 |
31,999 |
|
|
|
Operating income |
20,499 |
19,405 |
Interest income |
61 |
135 |
Interest expense |
(719) |
(247) |
Non-operating (loss)/income - put
options |
— |
454 |
Foreign currency exchange gain (loss) |
892 |
(119) |
Income before income taxes |
20,733 |
19,628 |
Income tax expense |
(2,397) |
(4,211) |
Net income |
$18,336 |
$15,417 |
|
|
|
Basic earnings per common
share |
$0.51 |
$0.40 |
|
|
|
Diluted earnings per common
share |
$0.51 |
$0.40 |
|
|
|
Basic weighted average shares
outstanding |
35,708 |
38,318 |
|
|
|
Diluted weighted average shares
outstanding |
35,954 |
38,600 |
Ebix, Inc. and
Subsidiaries |
Condensed Consolidated
Balance Sheets |
(In thousands, except share
amounts) |
|
|
March 31,
2015 |
December 31,
2014 |
ASSETS |
(Unaudited) |
|
Current assets: |
|
|
Cash and cash equivalents |
$27,197 |
$52,300 |
Short-term investments |
265 |
281 |
Trade accounts receivable, less allowances of
$1,529 and $1,619, respectively |
44,869 |
41,100 |
Deferred tax asset, net |
2,021 |
2,113 |
Other current assets |
8,643 |
8,067 |
Total current
assets |
82,995 |
103,861 |
|
|
|
Property and equipment, net |
28,121 |
24,661 |
Goodwill |
399,408 |
402,220 |
Intangibles, net |
46,875 |
49,371 |
Indefinite-lived intangibles |
30,887 |
30,887 |
Deferred tax asset, net |
19,203 |
18,758 |
Other assets |
5,739 |
4,553 |
Total assets |
$613,228 |
$634,311 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued liabilities |
$18,471 |
$40,121 |
Accrued payroll and related benefits |
4,554 |
5,280 |
Current portion of long term debt and capital
lease obligations, net of discount of $0 and $7, respectively |
631 |
936 |
Current deferred rent |
282 |
268 |
Contingent liability for accrued earn-out
acquisition consideration |
887 |
887 |
Deferred revenue |
22,858 |
22,192 |
Other current liabilities |
102 |
102 |
Total current
liabilities |
47,785 |
69,786 |
|
|
|
Revolving line of credit |
135,465 |
120,465 |
Long term debt and capital lease obligations,
less current portion, net of discount of $7 |
593 |
593 |
Other liabilities |
2,449 |
2,179 |
Contingent liability for accrued earn-out
acquisition consideration |
4,443 |
4,480 |
Deferred revenue |
1,837 |
2,496 |
Long term deferred rent |
1,962 |
2,091 |
Total liabilities |
194,534 |
202,090 |
|
|
|
Stockholders' equity: |
|
|
Preferred stock, $0.10 par value, 500,000
shares authorized, no shares issued and outstanding at March 31,
2015 and December 31, 2014 |
— |
— |
Common stock, $0.10 par value, 60,000,000
shares authorized, 35,271,413 issued and outstanding, respectively,
at March 31, 2015 and 36,232,074 issued and 36,191,565 outstanding
at December 31, 2014 |
3,527 |
3,619 |
Additional paid-in capital |
113,383 |
137,101 |
Treasury stock (no shares as of March 31,
2015 and 40,509 shares as of December 31, 2014) |
— |
(76) |
Retained earnings |
325,333 |
309,726 |
Accumulated other comprehensive loss |
(23,549) |
(18,149) |
Total stockholders'
equity |
418,694 |
432,221 |
Total liabilities and stockholders'
equity |
$613,228 |
$634,311 |
|
|
Ebix, Inc. and
Subsidiaries |
Condensed
Consolidated Statements of Cash Flows |
(In thousands) |
(Unaudited) |
|
Three Months
Ended |
|
March
31, |
|
2015 |
2014 |
Cash flows from operating activities: |
|
|
Net income |
$18,336 |
$15,417 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
Depreciation and amortization |
2,597 |
2,552 |
Provision (benefit) for deferred taxes |
(161) |
(441) |
Share based compensation |
458 |
395 |
Provision for doubtful accounts |
9 |
353 |
Debt discount amortization on promissory note
payable |
7 |
10 |
Unrealized foreign exchange (gain) |
(672) |
216 |
(Gain) loss on put option |
— |
(454) |
Reduction of acquisition earnout
accruals |
— |
(1,762) |
Changes in assets and liabilities,
net of effects from acquisitions: |
|
|
Accounts receivable |
(4,689) |
(4,716) |
Other assets |
(1,250) |
576 |
Accounts payable and accrued expenses |
(21,215) |
(65) |
Accrued payroll and related benefits |
(564) |
1,029 |
Deferred revenue |
308 |
(2) |
Deferred rent |
(68) |
(163) |
Reserve for potential uncertain income tax
return positions |
87 |
2,133 |
Liability - securities litigation settlement
payment |
(690) |
(4,218) |
Other liabilities |
165 |
(56) |
Net cash provided/(used) by
operating activities |
(7,342) |
10,804 |
|
|
|
Cash flows from investing
activities: |
|
|
Acquisition of Media Health, net of cash
acquired |
(1,000) |
— |
Acquisition of CurePet, Inc., net of cash
acquired |
— |
3 |
Purchases of marketable securities |
— |
(10) |
Capital expenditures |
(5,778) |
(413) |
Net cash used in investing
activities |
(6,778) |
(420) |
|
|
|
Cash flows from financing
activities: |
|
|
Proceeds from / (Repayments) on revolving
line of credit, net |
15,000 |
— |
Principal payments of term loan
obligation |
— |
(2,406) |
Repurchases of common stock |
(22,282) |
(2,234) |
Excess tax benefit from share-based
compensation |
31 |
(3,200) |
Proceeds from the exercise of stock
options |
1,117 |
788 |
Forfeiture of certain shares to satisfy
exercise costs and the recipients income tax obligations related to
stock options exercised and restricted stock vested |
(1,117) |
(25) |
Dividend payments |
(2,729) |
(2,896) |
Principal payments of debt obligations |
(12) |
(9) |
Payments of capital lease obligations |
— |
(56) |
Net cash used in financing
activities |
(9,992) |
(10,038) |
Effect of foreign exchange rates on cash |
(991) |
708 |
Net change in cash and cash
equivalents |
(25,103) |
1,054 |
Cash and cash equivalents at the beginning of
the period |
52,300 |
56,674 |
Cash and cash equivalents at the
end of the period |
$27,197 |
$57,728 |
Supplemental disclosures of cash flow
information: |
|
|
Interest paid |
$2,335 |
$208 |
Income taxes paid |
$20,163 |
$3,087 |
CONTACT: Jacqueline Marcus, Edelman - 212-277-3787 or Jacqueline.Marcus@edelman.com
Aaron Tikkoo, Ebix- 678 -281-2027 or atikkoo@ebix.com
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