Ebix Reaffirms Business Outlook for 2021 and Beyond
February 22 2021 - 8:43AM
Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of
On-Demand software and E-commerce services to the insurance,
financial, healthcare and e-learning industries, today reaffirmed a
positive outlook for the year 2021 and beyond.
The Company decided to issue this release in
response to investor questions over the weekend. The Company
asserted the following in response to specific questions –
- How is the Company’s financial health? - The
Company’s financial health is in better shape than ever, as
reflected in our operating cash flows through the end of 2020. The
Company continues to generate strong cash flows. As of 15th
February 2020, the Company’s cash and cash equivalents (including
any restricted cash) amounted to greater than $140 million,
including the $30 million earmarked for a new US acquisition that
is back in Ebix’s operating bank account.
- When is the EbixCash IPO targeted for? The
Company is targeting the EbixCash IPO towards the end of 2021, in
consultation with its investment bankers.
- Does the Company suspect any fraud or wrongdoing? Has
any such aspersion been made by anyone? No one has made
any such aspersion in any manner whatsoever. The Company is not
aware of any wrongdoing in any manner nor is aware of any such
aspersion being made by anyone.
- What is the income materiality of the Gift card
business? As elaborated in our previous press release, the
unaudited operating income from our gift card business was less
than $1.4 million for the full year 2020 and less than $1 million
for Q4 2020. The Company believes that the accounting, including
for our gift card business, is consistent with GAAP.
- Does the gift card business involve extending payment
terms to EbixCash customers? Over 95% of the sales of gift
cards do not involve extending payment terms to EbixCash’s
corporate customers. Payments are collected concurrently with the
issuance of the gift cards and the gift cards are not activated
until the upfront payment for the cards is received. There are a
small number of corporate customers that are multi-solution or
multi-service partners of EbixCash that the Company has extended
payment terms to related to gift card purchases, but those sales
represent a small percentage of overall gift card sales (less than
5%).
- Was the $30 million amount earmarked for a past
acquisition or a new acquisition? What geography was the
acquisition targeted in? Does the classification of the $30 million
in any way have any impact on operating cash flows? The
$30 million amount was earmarked for a new software industry
acquisition in the United States. The treatment of the cash amount
is a balance sheet classification determination and has no impact
on the operating cash flow of the Company.
- Is the 95% growth in gift card business in Q4 2020
“unusual”? The term "significant unusual transactions" is
an accounting term, defined as "a transaction that is outside the
normal course of business for the company or that otherwise appears
to be unusual due to its timing, size, or nature." In this regard,
we note that our gift card business revenues grew substantially in
Q4 2020. The increase in gift card revenues was driven by the
increased use of digital money in India during the Covid-19
pandemic and the renewed push by the Company to grow its payment
solutions business.
About Ebix
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. $6.5 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 Financial
Technology solutions are today deployed across prestigious
financial institutions and Banks in 44 countries. For more
information, visit the Company’s website at www.ebixcash.com
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. For more
information, visit the Company’s website at www.ebix.com
FORWARD LOOKING STATEMENTS
This press release contains certain statements
that are “forward-looking” statements within the meaning of the
federal securities laws, including Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements are based
upon current expectations and include all statements that are not
historical statements of fact and those regarding the intent,
belief or expectations, including, without limitation, statements
that are accompanied by words such as “will,” “believes,”
“anticipates,” “plans,” “expects,” “intends,” “estimates,” “seeks,”
“may” or other similar words, phrases or expressions and variations
or negatives of these words. Readers of this press release should
understand that these statements are not guarantees of performance
or results. Many risks and uncertainties could affect actual
results and cause them to vary materially from the expectations
contained in the forward-looking statements. Actual results could
differ materially from those contemplated by the forward-looking
statements as a result of certain factors, including but not
limited to, those discussed in our Annual Report on Form 10-K and
subsequent reports filed with the SEC, as well as: the potential
impacts of RSM’s resignation; the ability to, as well as the
ability to timely, engage a new independent registered public
accounting firm; the risk of litigation or regulatory action
arising from these matters, from the failure to timely file the
Annual Report on Form 10-K for the fiscal year ended December 31,
2020 (the “Annual Report”) or from the resignation of the RSM; the
timing of the review by, and the conclusions of, the Company’s new
independent auditor regarding these matters and its impact on the
financial statements; possible default by the Company under its
credit facility; the ability of the Company to remediate any
material weaknesses in internal control over financial reporting;
potential reputational damage that the Company may suffer as a
result of these matters or the resignation of RSM; the impact of
these matters and the resignation of RSM on the value of the
Company’s stock; and the risk that the filing of the Annual Report
will take longer than anticipated. Readers are cautioned not to
place undue reliance on these forward-looking statements. Any
forward-looking statement made by us speaks only as of the date of
this report. Unless required by law, the Company does not undertake
to release publicly any revisions to these forward-looking
statements to reflect future events or circumstances or to reflect
the occurrence of unanticipated events.
Contact:
Darren Joseph
IR@ebix.com or +1 678 281 2027
David Collins or Chris Eddy
Catalyst Global + 1 212-924-9800 or
ebix@catalyst-ir.com
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