Ebix 2008 net income rises 116% to a record $27.3 Million, or $2.28 per diluted share on a 74% Revenue increase


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

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