| Ebix Announces Record Results. |
| Net Income Rises 100 percent to $7.40 Million in Q3 of 2008
ATLANTA, GA – November 6, 2008 – Ebix, Inc. (NASDAQ: EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today reported record financial results for the third quarter of 2008. The results marked the highest EPS, net income, and revenue numbers in any one quarter that the company has reported in its thirty-two year history. The company reported total revenue of $20.17 million for the third quarter of 2008, compared to $11.81 million for the third quarter of 2007, marking a 71 percent increase in revenues. Net income after taxes for the quarter rose 100 percent to $7.40 million, or $0.62 per post-split diluted share up from $3.69 million, or $0.33 per post-split diluted share, in the third quarter of 2007 – an earnings per share growth of 88 percent. Results for the third quarter of 2008 were based on 12.17 million post-split weighted average diluted shares outstanding, as compared to 11.04 million post-split weighted average diluted shares in the third quarter of 2007. The company also reported basic earnings per share in the third quarter of 2008 of $0.77 as compared to $0.38 in the third quarter of 2007. The company’s operating expenses for the quarter grew by 49 percent to $12.05 million as compared to $8.09 million for the third quarter of 2007. The company attributed the increase primarily to the acquisition of IDS in November 2007, Telstra eBusiness in January 2008, Periculum in June 2008, and Acclamation in August 2008. The company also reported that its cumulative net income at the end of nine months of 2008 grew by 137 percent to $19.40 million as compared to cumulative net income of $8.17 million at the end of nine months of 2007. The nine-month cumulative post split diluted EPS for 2008 also grew by 106 percent to $1.65 as compared to cumulative post split diluted EPS of $0.80 at the end of nine months of 2008. Robin Raina, Ebix president and CEO, said, “We are pleased that the third quarter results are in line with our expectations. We are especially pleased that net margins in the quarter grew to 37% from 31% in the same quarter last year.” Raina added, “The third quarter saw the exchange channel become 59% of our total revenues while the BPO channel accounted for 9% of our revenues. Broker systems business accounted for 17% and the carrier channel accounted for 14% of our worldwide revenues.” Raina summarized, “We believe that this quarter was a good test of our financial model, as like other companies in the United States, we had to endure the turmoil in the financial markets. The fundamentals of our business remain strong with revenues split across thousands of customers. In the year 2008, no one customer is expected to account for more than 3.5% of our revenues. That fact coupled with our position as an infrastructure player with high recurring revenue streams, insulated us to a large extent in the third quarter from the fallout of these events.” Robert Kerris, the chief financial officer of Ebix, said, “During the third quarter the company’s revenues grew $2.37 million or 13% and operating income grew $1.21 million or 18% over the second quarter. Our year to date operating margin of 39% represents a significant improvement compared to the 27% operating margin experienced during the comparable nine month period in 2007. Furthermore, during the nine months ended September 30, 2008 the company generated $19.36 million of cash flow from operating activities which represents a 119% increase as compared the $8.85 million generated in same period a year earlier. At September 30, 2008 our consolidated cash balances stood at $13.25 million. We believe that anticipated cash flows from our operating activities, together with current cash balances and access to our credit facilities will be sufficient to support our operations and planned business growth for the foreseeable future.”
A CMMI 5 Company, Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the insurance industry. Ebix provides a series of application software products for the insurance industry ranging from carrier systems, agency systems and exchanges to custom software development for all entities involved in the insurance and financial industries. Ebix strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges. Ebix combines the newest technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and Web and application hosting to meet the individual needs of organizations. With bases in Singapore, Australia, the US, New Zealand, India and Canada, Ebix employs insurance and technology professionals who provide products, support and consultancy to more than 3,000 customers on six continents. Ebix’s focus on quality has enabled its development unit in India to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model Integrated (CMMI). Ebix has also earned ISO 9001:2000 certification for both its development and call center units in India. For more information, visit the Company’s Web site 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, 2007, 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.
PART I – FINANCIAL INFORMATION
Ebix, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2008 2007 2008 2007
Operating Revenue 20,168 11,806 54,609 30,640
Operating expenses:
Cost of services provided 3,940 1,840 10,101 5,124
Product development 2,074 2,074 6,314 6,122
Sales and marketing 871 1,099 2,536 3,129
General and administrative 4,360 2,449 12,032 6,135
Amortization and depreciation 804 632 2,460 1,882
Total operating expenses 12,049 8,094 33,443 22,392
Operating income 8,119 3,712 21,166 8,248
Interest income 134 181 396 388
Interest expense (440 ) (7 ) (1,176 ) (377 )
Foreign exchange gain (loss) (24 ) 175 135 302
Income before income taxes 7,789 4,061 20,521 8,561
Income tax (expense)/benefit (391 ) (368 ) (1,118 ) (393 )
Net income $ 7,398 $ 3,693 $ 19,403 $ 8,168
Basic earnings per common share * $ .77 $ 0.38 $ 1.97 $ 0.90
Diluted earnings per common share * $ .62 $ 0.33 $ 1.65 $ 0.80
Basic weighted average shares outstanding * 9,607 9,816 9,837 9,098
Diluted weighted average shares outstanding * 12,170 11,038 12,040 10,266
* Adjusted for all periods presented to reflect the retroactive effect
of 3-for-1 stock split dated October 9, 2008
Ebix, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share amounts)
September 30, December 31,
2008 2007
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 13,246 $ 49,466
Accounts receivable, less allowance of $505 and $146, respectively 14,314 8,809
Other current assets 1,301 1,130
Total current assets 28,861 59,405
Property and equipment, net 3,539 3,356
Goodwill 96,051 36,408
Intangible assets, net 10,212 7,318
Other assets 2,161 2,023
Total assets $ 140,824 $ 108,510
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 3,685 2,231
Accrued payroll and related benefits 3,196 1,517
Short term debt 24,945 15,650
Current portion of long term debt and capital lease obligations 509 510
Deferred revenue 5,657 5,645
Other current liabilities 275 149
38,267
Total current liabilities 25,702
Convertible debt 31,000 20,000
Long term debt and capital lease obligation, less current portion 3 486
Other liabilities 3,234 1,477
Deferred Rent 624 719
Total liabilities 73,128 48,384
Commitments and Contingencies, see Note 9
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, 324 337
9,775,458 issued and 9,748,788 outstanding at September 30, 2008 and
10,218,702 issued and 10,192,032 outstanding at December 31, 2007 *
Additional paid-in capital 107,285 114,771
Treasury stock (8,890 shares repurchased as of September 30, 2008 (149 ) (149 )
and December 31, 2007)
Accumulated deficit (38,110 ) (57,513 )
Accumulated other comprehensive income (1,653 ) 2,680
Total stockholders' equity 67,697 60,126
Total liabilities and stockholders' $ 140,824 $ 108,510
equity
* Adjusted for all periods presented to reflect retroactive effect of
3-for-1 stock split dated October 9, 2008
Ebix, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2008 2007
Cash flows from operating activities:
Net income $ 19,403 $ 8,168
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 2,460 1,882
Stock-based compensation 102 161
Restricted stock compensation 423 102
Provision for doubtful accounts 225 469
Changes in assets and liabilities:
Accounts receivable (2,053 ) (2,154 )
Other assets 329 (238 )
Accounts payable and accrued expenses (1,175 ) (62 )
Accrued payroll and related benefits 600 (263 )
Deferred revenue (1,220 ) 622
Deferred taxes 249 --
Deferred rent & Other Liabilities 16 161
Net cash provided by operating activities 19,359 8,848
Cash flows from investing activities:
Investment in Acclamation, net of cash acquired (21,365 ) --
Investment in Periculum, net of cash acquired (1,067 ) --
Investment in Telstra eBusiness Services, net of cash acquired (42,968 ) --
Investment in Finetre -- (15 )
Investment in Infinity (500 ) --
Deferred Rent -- (17 )
Capital expenditures (549 ) (502 )
Net cash used in investing activities (66,449 ) (534 )
Cash flows from financing activities:
Proceeds from (payments on) line of credit 9,295 (10,000 )
Proceeds from the issuance of common stock, net of issuance costs 12,518 13,275
Repurchase of common stock (24,510 ) --
Proceeds from the exercise of the stock options 1,225 237
Proceeds from issuance of convertible promissory notes 15,000 --
Payments on capital lease obligations (3 ) (2 )
Principal payments under debt obligations (483 ) (1,015 )
Net cash provided/(used) in financing activities 13,042 2,495
Effect of foreign exchange rates on cash (2,172 ) 52
Net change in cash and cash equivalents (36,220 ) 10,861
Cash and cash equivalents at the beginning of the period 49,466 5,013
Cash and cash equivalents at the end of the period 13,246 $ 15,874
Supplemental disclosures of cash flow information:
Interest paid $ 759 $ 277
Income taxes paid $ 478 $ 107
SOURCE: Ebix, Inc.
Ebix, Inc. Jesenia Jurado, 678-281-2036 jjurado@ebix.com |
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