Reports a Record Fourth Quarter with Net Income
of $7.91 Million
Conference call:
Tuesday, March 17, 2009 at 11:00 A.M. EDT
Webcast / Replay URL: http://www.ebix.com,
Click on Investor Home Page
Dial-in numbers: 1-866-293-2557 Conference ID # 90431313
ATLANTA, GA – March 13, 2009— Ebix,
Inc. (NASDAQ: EBIX), a leading international provider of software services and
IT solutions for the insurance industry, today reported its financial results
for the fourth quarter (Q4 '08) and year ended December 31, 2008.
Ebix's 2008 fourth quarter revenue rose 65% to $20.14 million,
compared to $12.20 million during the fourth quarter of 2007. Q4 ‘08 net
income rose 76% to $7.91 million, or $0.66 per diluted share, versus Q4 ’07
net income of $4.50 million, or $0.40 per diluted share. Results for Q4 2008
and Q4 2007 were based on 12.29 and 11.33 million weighted average diluted shares
outstanding respectively.
Ebix’s total revenue rose 74% to $74.75 million in
2008, compared to $42.84 million in 2007. Ebix's operating income rose 129%
to $29.26 million in fiscal 2008, compared to operating income of $12.80 million
in 2007. In 2008, the Company's net income rose 116% to $27.31 million, or $2.28
per diluted share, compared to net income of $12.67 million, or $1.20 per diluted
share, in 2007.
For the twelve months ended December 31, 2008, the Company
generated $26.79 million of net cash flow from operating activities compared
to $15.0 million for the year ended December 31, 2007, a 78% increase in operating
cash flows year over year.
In 2008, the Company's basic earnings per common share rose
to $2.78 as compared to basic earning per common share of $1.36 in 2007. Results
for 2008 and 2007 were based on 9.84 and 9.31 million weighted average basic
shares outstanding respectively.
Ebix President and Chief Executive Officer Robin Raina,
commented, “We are pleased with these results as they reflect the continued
success of the company in 2008. We look at these results as a step forward towards
establishing Ebix as the dominant infrastructure exchange services player in
the global insurance markets.”
Raina said, “The Q4 2008 results are record results
in terms of both revenue and net income . The diluted EPS of $0.66 for Q4 2008
translates to a pre-split diluted EPS of $ 1.98, which is again a record for
the company. We are quite pleased that we have been able to grow our net margins
to 39% in Q4 of 2008.”
“The year 2008 has seen Ebix become more of an infrastructure
player rather than a services player with our exchange business growing to 59%
of our world-wide revenues. We became the largest insurance certificate origination
and tracking player in the United States. We successfully have entered new markets
like employee benefits and health claims,” Raina added. “As I said
last year, while these results have established a new benchmark in terms of
revenue, income and earnings, we believe that our best is yet to come.”
Raina concluded, “We believe that the present economic
time serves as an opportunity to make some symbiotic accretive acquisitions
at the right costs. We continue to generate strong cash flows and believe that
we can put that cash to good use by reducing our debt and also making some sensible
acquisitions.”
Ebix Chief Financial Officer Robert Kerris commented, “The
4th quarter net income of $7.91 million is a 7% improvement over the 3rd quarter,
and is the third consecutive year of consistent quarter over quarter growth
in net earnings. Our full year operating margins remain strong at 39.1%, an
improvement of 9.2% compared to the prior year, and the Company continues to
produce significant cash flows from ongoing operating activities, generating
$26.8 million during 2008. Both of these favorable key performance indicators
demonstrate the fundamental strengths of Ebix and the Company’s ability
to thrive in the present challenging economic environment. The Company has been
able to effectively deploy cash provided by operations in combination with cash
funded from financing activities to complete significantly accretive acquisitions.”
About Ebix
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 the United States, Australia, New Zealand,
Singapore, UK and India, 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 Ebix management's
beliefs, as well as assumptions made by and information currently available
to management. Ebix has tried to identify such forward-looking statements by
use of such words as "will," "expects," "intends,"
"anticipates," "plans," "believes" 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 Ebix.com website and other
new products and services can be successfully developed and marketed, the risks
associated with any future acquisitions, and integrating recently completed
acquisitions, the willingness of independent insurance agencies to outsource
their computer and other processing needs to third parties, possible governmental
regulation and/or other adverse consequences resulting from negative perception
of the outsourcing of business processes to foreign countries, Ebix's ability
to continue to develop new products to effectively address market needs in an
industry characterized by rapid technological change, Ebix's ability to raise
additional capital to finance future acquisitions and meet other funding needs
, Ebix's dependence on the insurance industry, the highly competitive and rapidly
changing automation systems market, Ebix's ability to effectively protect its
applications software and other proprietary information, Ebix's ability to attract
and retain quality management, software developers, technical sales and other
critical personnel, the risks of disruption of Ebix's internet connections or
internal service problems, the possible adverse effects of a substantial increase
in volume of traffic on Ebix's website, mainframe and other servers, possible
security breaches on the Ebix website, the possible effects of insurance regulation
on Ebix, the possible effects of the Securities and Exchange Commission's investigation
of Ebix's financial reporting, and possible future terrorist attacks or acts
of war. 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 Ebix's annual report on Form 10-K for the
year ended December 31, 2007. Except as expressly required by the federal securities
laws, Ebix undertakes no obligation to update any such factors or any of the
forward-looking statements contained herein to reflect changed circumstances
or future events or developments or for any other reason.
(Financial Statements follow)
| |
|
|
|
|
|
|
|
|
| Ebix, Inc. and Subsidiaries |
| Consolidated Statements of Income
|
| (In thousands, except per share data)
|
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
| |
|
|
|
|
|
|
|
|
| Operating Revenue |
|
|
20,143 |
|
|
|
12,201 |
|
|
|
74,752 |
|
|
|
42,841 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| Cost of services provided |
|
|
4,060 |
|
|
|
1,990 |
|
|
|
14,161 |
|
|
|
7,114 |
|
| Product development |
|
|
2,648 |
|
|
|
1,487 |
|
|
|
8,962 |
|
|
|
7,609 |
|
| Sales and marketing |
|
|
1,098 |
|
|
|
987 |
|
|
|
3,634 |
|
|
|
4,116 |
|
| General and administrative |
|
|
3,393 |
|
|
|
2,467 |
|
|
|
15,425 |
|
|
|
8,602 |
|
| Amortization and depreciation |
|
|
846 |
|
|
|
717 |
|
|
|
3,306 |
|
|
|
2,599 |
|
| Total operating expenses |
|
|
12,045 |
|
|
|
7,648 |
|
|
|
45,488 |
|
|
|
30,040 |
|
| Operating income |
|
|
8,098 |
|
|
|
4,553 |
|
|
|
29,264 |
|
|
|
12,801 |
|
| Interest income |
|
|
79 |
|
|
|
121 |
|
|
|
475 |
|
|
|
509 |
|
| Interest expense |
|
|
(450 |
) |
|
|
19 |
|
|
|
(1,626 |
) |
|
|
(358 |
) |
| Foreign exchange gain (loss) |
|
|
451 |
|
|
|
(55 |
) |
|
|
586 |
|
|
|
247 |
|
| Income before income taxes |
|
|
8,178 |
|
|
|
4,638 |
|
|
|
28,699 |
|
|
|
13,199 |
|
| Income tax (expense) |
|
|
(267 |
) |
|
|
(140 |
) |
|
|
(1,385 |
) |
|
|
(533 |
) |
| Net income |
|
$ |
7,911 |
|
|
$ |
4,498 |
|
|
$ |
27,314 |
|
|
$ |
12,666 |
|
| |
|
|
|
|
|
|
|
|
| Basic earnings per common share * |
|
$ |
0.80 |
|
|
$ |
0.45 |
|
|
$ |
2.78 |
|
|
$ |
1.36 |
|
| |
|
|
|
|
|
|
|
|
| Diluted earnings per common share * |
|
$ |
0.66 |
|
|
$ |
0.40 |
|
|
$ |
2.28 |
|
|
$ |
1.20 |
|
| |
|
|
|
|
|
|
|
|
| Basic weighted average shares outstanding *
|
|
|
9,842 |
|
|
|
9,922 |
|
|
|
9,838 |
|
|
|
9,306 |
|
| |
|
|
|
|
|
|
|
|
| Diluted weighted average shares outstanding
* |
|
|
12,290 |
|
|
|
11,334 |
|
|
|
12,260 |
|
|
|
10,535 |
|
| |
|
|
|
|
|
|
|
|
|
* 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) |
| |
|
|
|
|
| |
|
December 31,
2008 |
|
December 31,
2007 |
| |
|
(Unaudited) |
|
|
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
11,011 |
|
|
$ |
49,466 |
|
| Accounts receivable, less allowance of $454
and $146, respectively |
|
|
13,562 |
|
|
|
8,809 |
|
| Other current assets |
|
|
1,694 |
|
|
|
1,130 |
|
| Total current assets |
|
|
26,267 |
|
|
|
59,405 |
|
| |
|
|
|
|
| Property and equipment, net |
|
|
3,774 |
|
|
|
3,356 |
|
| Goodwill |
|
|
99,865 |
|
|
|
36,408 |
|
| Intangible assets, net |
|
|
10,447 |
|
|
|
7,318 |
|
| Other assets |
|
|
3,239 |
|
|
|
2,023 |
|
| |
|
|
|
|
|
Total assets |
|
$ |
143,592 |
|
|
$ |
108,510 |
|
| |
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable and accrued expenses |
|
|
8,195 |
|
|
|
2,231 |
|
| Accrued payroll and related benefits |
|
|
2,709 |
|
|
|
1,517 |
|
| Short term debt |
|
|
24,945 |
|
|
|
15,650 |
|
| Convertible debt, short term portion |
|
|
11,518 |
|
|
|
— |
|
| Current portion of long term debt and capital
lease obligations |
|
|
912 |
|
|
|
510 |
|
| Deferred revenue |
|
|
5,713 |
|
|
|
5,645 |
|
| Other current liabilities |
|
|
225 |
|
|
|
149 |
|
| |
|
|
|
|
| Total current liabilities |
|
|
54,217 |
|
|
|
25,702 |
|
| |
|
|
|
|
| Convertible debt, long term portion |
|
|
15,000 |
|
|
|
20,000 |
|
| Long term debt and capital lease obligation,
less current portion |
|
|
290 |
|
|
|
486 |
|
| Other liabilities |
|
|
3,293 |
|
|
|
1,477 |
|
| Deferred Rent |
|
|
610 |
|
|
|
719 |
|
| |
|
|
|
|
| Total liabilities |
|
|
73,410 |
|
|
|
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,
10,006,455 issued and 9,946,710 outstanding at December 31, 2008
and 10,218,702 issued and 10,192,032 outstanding at December 31, 2007
* |
|
|
981 |
|
|
|
337 |
|
| Additional paid-in capital |
|
|
111,642 |
|
|
|
114,771 |
|
| Treasury stock (59,745 and 26,670 shares repurchased
as of December 31, 2008 and December 31, 2007) |
|
|
(1,178 |
) |
|
|
(149 |
) |
| Accumulated deficit |
|
|
(30,200 |
) |
|
|
(57,513 |
) |
| Accumulated other comprehensive income |
|
|
(11,063 |
) |
|
|
2,680 |
|
| Total stockholders' equity |
|
|
70,182 |
|
|
|
60,126 |
|
| |
|
|
|
|
| Total liabilities and stockholders'
equity |
|
$ |
143,592 |
|
|
$ |
108,510 |
|
| |
|
|
|
|
|
* 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)
|
| |
|
|
|
|
| |
|
Twelve Months Ended
December 31, |
| |
|
2008 |
|
2007 |
| |
|
|
|
|
| Cash flows from operating activities:
|
|
|
|
|
| Net income |
|
$ |
27,313 |
|
|
$ |
12,666 |
|
| Cumulative effect of adoption of FIN 48 |
|
|
|
|
(455 |
) |
| Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
|
|
| Depreciation and amortization |
|
|
3,306 |
|
|
|
2,599 |
|
| Stock-based compensation |
|
|
107 |
|
|
|
168 |
|
| Restricted stock compensation |
|
|
596 |
|
|
|
149 |
|
| Provision for doubtful accounts |
|
|
298 |
|
|
|
121 |
|
| Changes in assets and liabilities: |
|
|
|
|
| Accounts receivable |
|
|
(163 |
) |
|
|
(803 |
|
| Other assets |
|
|
737 |
|
|
|
(1,952 |
) |
| Accounts payable and accrued expenses |
|
|
(1,335 |
) |
|
|
377 |
|
| Accrued payroll and related benefits |
|
|
84 |
|
|
|
(32 |
) |
| Deferred revenue |
|
|
(2,270 |
) |
|
|
142 |
|
| Deferred taxes |
|
|
(1,835 |
) |
|
|
— |
|
| Deferred rent & Other Liabilities |
|
|
(49 |
) |
|
|
2,059 |
|
| Net cash provided by operating activities
|
|
|
26,789 |
|
|
|
15,039 |
|
| |
|
|
|
|
| Cash flows from investing activities:
|
|
|
|
|
| Investment in Acclamation, net of cash acquired
|
|
|
(21,388 |
) |
|
|
— |
|
| Investment in Periculum, net of cash acquired
|
|
|
(1,067 |
) |
|
|
— |
|
| Investment in Telstra eBusiness Services, net
of cash acquired |
|
|
(42,968 |
) |
|
|
— |
|
| Investment in Confirmnet, net of cash acquired
|
|
|
(7,294 |
) |
|
|
— |
|
| Investment in Finetre |
|
|
— |
|
|
|
(15 |
) |
| Investment in Infinity |
|
|
(500 |
) |
|
|
(2,870 |
) |
| Investment in IDS, net of cash acquired |
|
|
— |
|
|
|
(11,253 |
) |
| Capital expenditures |
|
|
(615 |
) |
|
|
(1,754 |
) |
| Net cash used in investing activities
|
|
|
(73,832 |
) |
|
|
(15,892 |
) |
| |
|
|
|
|
| Cash flows from financing activities:
|
|
|
|
|
| Proceeds from line of credit |
|
|
9,295 |
|
|
|
16,400 |
|
| Payments on line of credit |
|
|
— |
|
|
|
(10,750 |
) |
| Proceeds from the issuance of common stock,
net of issuance costs |
|
|
12,518 |
|
|
|
18,945 |
|
| Repurchase of common stock |
|
|
(24,248 |
) |
|
|
— |
|
| Payments to acquire treasury stock |
|
|
(1,029 |
) |
|
|
— |
|
| Proceeds from the exercise of the stock options
|
|
|
1,239 |
|
|
|
646 |
|
| Proceeds from issuance of convertible promissory
notes |
|
|
15,000 |
|
|
|
20,000 |
|
| Payments on capital lease obligations |
|
|
(3 |
) |
|
|
(3 |
) |
| Principal payments under debt obligations |
|
|
(500 |
) |
|
|
(966 |
) |
| Net cash provided/(used) in financing activities
|
|
|
12,272 |
|
|
|
44,272 |
|
| |
|
|
|
|
| Effect of foreign exchange rates on cash
|
|
|
(3,684 |
) |
|
|
1,034 |
|
| |
|
|
|
|
| Net change in cash and cash equivalents
|
|
|
(38,455 |
) |
|
|
44,453 |
|
| Cash and cash equivalents at the beginning of
the period |
|
|
49,466 |
|
|
|
5,013 |
|
| Cash and cash equivalents at the end of the period
|
|
$ |
11,011 |
|
|
$ |
49,466 |
|
| |
|
|
|
|
| Supplemental disclosures of cash flow information:
|
|
|
|
|
| Interest paid |
|
$ |
1,321 |
|
|
$ |
386 |
|
| Income taxes paid |
|
$ |
806 |
|
|
$ |
7 |
|
| |
|
|
|
|
Contact: Aaron Tikkoo
atikkoo@ebix.com
678-281-2027 |
