ATLANTA, GA - March 13, 2015 - 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 fourth quarter and full year ended December 31, 2014.
Ebix delivered the following results for the fourth quarter and full year of 2014:
Revenue: Total Q4 2014 revenue was $60.6 million, an increase of 19% on a year-over-year basis, as compared to Q4 2013 revenue of $50.8 million and an increase of $9.8 million over Q3 2014 revenues of $50.8 million.
On a year-over-year basis, Ebix's Q4 2014 revenue was affected negatively by approximately $1.1 million due to the strengthening of the US dollar as against the currencies in certain of the foreign jurisdictions in which the Company conducts operations. Also, on a constant currency basis, the Company's Q4 2014 Revenues would have been $1.2 million higher as compared to Q3 2014.
For the full fiscal year of 2014, the Company reported revenue of $214.3 million, an increase of 5% from the prior year revenue of $204.7 million. On a year-over-year basis, Ebix's full year 2014 revenue was affected negatively by approximately $3.2 million due to the strengthening of the US dollar as against the currencies in certain of the foreign jurisdictions in which the Company conducts operations.
Earnings per Share: Q4 2014 diluted earnings per share increased 14% year-over-year to $0.45, as compared to $0.40 in the fourth quarter of 2013. For purposes of the Q4 2014 EPS calculation, there was an average of 36.8 million diluted shares outstanding during the quarter compared to 38.5 million during the same period in 2013.
For the full year of 2014, diluted earnings per share increased 9% year-over-year to $1.67 from $1.53 in 2013. For purposes of the EPS calculation, there was an average of approximately 38.0 million diluted shares outstanding during the year 2014 as compared to an average of 38.6 million diluted shares outstanding in 2013.
Operating Cash: Cash generated from operations for the fiscal fourth quarter was $20.1 million, up 4% year-over-year, and up 106% as compared to $9.7 million in Q3 of 2014. For the full year, operating cash flow totaled $58.5 million in 2014, up 3% year-over-year as compared to $57.1 million in 2013.
Operating Margins: Operating margins for Q4 2014 were consistent with Q4 2013 at 35%. The operating margins for fiscal year 2014 were, also, consistent with the prior year remaining at 37%.
Net Income: Q4 2014 net income was $16.5 million, a 9% increase on a year-over-year basis, as compared to Q4 2013 net income of $15.2 million. During fiscal year 2014, net income increased $4.3 million or 7%, to $63.6 million compared to $59.3 million during 2013.
Channel Revenues: The Exchange channel continued to be the largest channel for Ebix accounting for 79% of the Company's 2014 Revenues.
|(dollar amount in thousands)||Three Months Ended December 31,||Year Ended December 31,|
|Exchanges||$ 44,225||$ 41,184||$ 169,437||$ 163,925|
|Risk Compliance Solutions (“RCS”), fka Business Process Outsourcing (“BPO”)||11,390||3,897||21,813||15,678|
|Total Revenue||$ 60,633||$ 50,847||$ 214,321||$ 204,710|
The quarter-over-quarter Exchange revenue increase is primarily due to the acquisition of Oakstone, stronger growth from existing product lines, partially offset by the considerable strengthening of the US dollar as compared to the Australian dollar and the Brazilian real. The quarter-over-quarter RCS revenue increase is primarily due to the acquisitions of Vertex and i3.
Q1 and Q2 2015 Diluted Share Count: As of March 13, 2015, the Company expects the diluted share count for Q1 2015 and Q2 2015 to be approximately 35.9 and 35.5 million shares, respectively.
Ebix Chairman, President & CEO Robin Raina said, "We are pleased to be closing 2014 on a strong note. Despite the strengthening dollar rate affecting both our top line and bottom line, we have been able to keep our top line and bottom line growing. We are presently focused on growing our top line while keeping our operating margins consistent. Our recent large client wins have given us reason to believe that we have a great year ahead of us."
Robin said, "We intend to grow our business both organically and through accretive acquisitions in 2015 and beyond. Ebix has proven that it is able to acquire niche recurring revenue businesses at cost effective prices, generating accretive returns on investment expeditiously, yielding great operating margins from the acquired business, and using that new asset to pay down its debt while increasing the Company's cash flows."
"Our Board is committed to continuing the share buyback over the next few years. We purchased $55.5 million of stock since August 1, 2014, and at the present annualized diluted share count of 35.6 million shares after these buybacks, our non-GAAP earnings for 2014 would have been 7% higher at $1.79." Robin added, "We will continue to review our dividend plan along with the pace of the share buy back plan, with a view towards ensuring that we provide enhanced value to our shareholders."
Robert Kerris, Ebix's EVP & CFO said, "The Company generated $58.5 million of cash from operations during 2014. We intend to grow Ebix's top line while astutely managing operating margins to obtain optimal results. Our balance sheet remains strong with the Company having access to $122 million of cash in the form of available capacity from its bank line, cash & cash equivalents. With the strong support that our syndicated bank group has extended to the Company in terms of the present credit facility and the possibility of an enhanced and expanded credit line, we are in the market looking at making larger accretive acquisitions, as well as financing the Company's continued organic growth initiatives. At year-end 2014, the Company's working capital position was $35.3 million and our net debt position stood at $69.7 million."
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
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
Consolidated Statements of Income
(In thousands, except per share data)
|Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|Operating revenue||$ 60,633||$ 50,847||$ 214,321||$ 204,710|
|Cost of services provided||17,537||10,086||47,388||40,471|
|Sales and marketing||3,196||4,085||13,840||15,848|
|General and administrative||9,963||9,808||36,880||36,480|
|Amortization and depreciation||2,239||2,648||9,681||10,107|
|Total operating expenses||39,565||33,041||134,649||129,704|
|Non-operating income (loss) - put options||-||1,592||296||342|
Non-operating expense - securities litigation
|Foreign currency exchange gain (loss)||297||64||829||(262)|
|Income before income taxes||18,894||19,372||77,452||70,152|
|Income tax expense||(2,347)||(4,127)||(13,894)||(10,878)|
|Net income||$ 16,547||$ 15,245||$ 63,558||$ 59,274|
|Basic earnings per common share||$ 0.45||$ 0.40||$ 1.68||$ 1.58|
|Diluted earnings per common share||$ 0.45||$ 0.40||$ 1.67||$ 1.53|
|Basic weighted average shares outstanding||36,588||38,043||37,809||37,588|
|Diluted weighted average shares outstanding||36,801||38,536||38,040||38,642|
Ebix, Inc. and Subsidiaries Consolidated Balance Sheets
|(In thousands, except share and per share amounts)|
|Cash and cash equivalents||$ 52,300||$ 56,674|
|Trade accounts receivable, less allowances of $1,619 and $1,049, respectively||41,100||39,070|
|Deferred tax asset, net||2,113||256|
|Other current assets||8,067||5,548|
|Total current assets||103,861||102,349|
|Property and equipment, net||24,661||8,528|
|Deferred tax asset, net||18,758||12,194|
|Total assets||$ 634,311||$ 545,442|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Accounts payable and accrued liabilities||$ 40,121||$ 17,818|
|Accrued payroll and related benefits||5,280||6,482|
|Short term debt||-||13,062|
|Liability - securities litigation settlement||-||4,226|
|Contingent liability for accrued earn-out acquisition consideration||-||4,137|
|Current portion of long term debt and capital lease obligation, net of discount of $7 and $10, respectively||636||827|
|Put option liability||-||845|
|Current deferred rent||268||254|
|Other current liabilities||102||106|
|Total current liabilities||68,599||66,675|
|Revolving line of credit||120,465||22,840|
|Other long term debt and capital lease obligation, less current portion, net of discount of $7 and $38, respectively||893||20,124|
|Contingent liability for accrued earn-out acquisition consideration||5,367||10,283|
|Long term deferred rent||2,091||2,185|
|Convertible Series D Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2014 and 2013||-||-|
|Common stock, $.10 par value, 60,000,000 shares authorized, 36,232,074 issued and 36,191,565 outstanding at December 31, 2014 and 38,088,391 issued and 38,047,882 outstanding at December 31, 2013||3,619||3,805|
|Additional paid-in capital||137,101||164,216|
|Treasury stock (40,509 shares as of December 31, 2014 and December 31, 2013)||(76 )||(76 )|
|Accumulated other comprehensive loss||(18,149 )||(12,294 )|
|Total stockholders’ equity||432,221||413,225|
|Total liabilities, temporary equity and stockholders’ equity||$ 634,311||$ 545,442|
Ebix, Inc. and Subsidiaries Consolidated Statements of Cash Flows
|Year Ended December 31, 2014||Year Ended December 31, 2013||Year Ended December 31, 2012|
|Cash flows from operating activities:|
|Adjustments to reconcile net income to cash provided by operating activities:|
|Depreciation and amortization||9,681||10,107||9,155|
|Provision for doubtful accounts||1,600||1,147||442|
|Provision for deferred taxes||(1,966)||(10,368)||(7,505)|
|Unrealized foreign exchange (gain)/losses||(741)||(237)||443|
|Unrealized gain on put option||(296)||(341)||(191)|
|Debt discount amortization on convertible debt||35||42||39|
|Reduction of acquisition earn-out contingent liability||(10,237)||(10,253)||(699)|
|Changes in current assets and liabilities, net of acquisitions:|
|Accounts payable and accrued expenses||14,670||1,135||730|
|Accrued payroll and related benefits||1,811||(1,866)||(594)|
|Reserve for potential uncertain income tax return positions||(9,723)||6,817||2,745|
|Liability – securities litigation settlement||(3,528)||4,226||-|
|Net cash provided by operating activities||58,510||57,062||72,295|
|Cash flows from investing activities:|
|Investment in CurePet, net of cash acquired||3||-||-|
|Investment in Healthcare Magic, net of cash acquired||(5,856)||-||-|
|Investment in Vertex, net of cash acquired||(27,547)||-||-|
|Investment in Oakstone, net of cash acquired||(23,791)||-||-|
|Investment in I3, net of cash acquired||(2,000)||-||-|
|Investment in BSI, net of cash acquired||-||-||(992)|
|Investment in Taimma, net of cash acquired||-||-||(5,003)|
|Investment in Fintechnix, net of cash acquired||-||-||(4,713)|
|Investment in PlanetSoft, net of cash acquired||-||-||(35,078)|
|Investment in TriSystems, net of cash acquired||-||-||(9,277)|
|Investment in CurePet, Inc.||-||-||(2,000)|
|Payment of acquisition earn-out contingency, MCN||-||-||(1,537)|
|Investment in Qatarlyst, net of cash acquired||-||(4,740)||-|
|Payment of acquisition earn-out contingency, USIX||(727)||(1,466)|
|Payment of acquisition earn-out contingency, Taimma||(2,250)||(2,250)||-|
|Payment of acquisition earn-out contingency, Health Connect Systems||-||-||(2,000)|
|Payment of acquisition earn-out contingency, Trisystems||(563)||-||-|
|Purchases of marketable securities||-||-||(785)|
|Maturities of marketable securities||495||107||1,466|
|Investment in Facts||-||-||(25)|
|Net cash used in investing activities||(77,786)||(8,840)||(63,375)|
|Cash flows from financing activities:|
|Proceeds from / (Repayment) to line of credit, net||97,625||(15,000)||6,090|
|Proceeds from term loan||-||-||45,000|
|Proceeds from the issuance of note payable||-||-||161|
|Principal payments on term loan obligation||(31,938)||(8,938)||(19,125)|
|Repurchase of common stock||(31,854)||(2,492)||(18,374)|
|Payments of long term debt||(345)||(665)||(600)|
|Payments for capital lease obligations||(231)||(277)||(284)|
|Excess tax benefit from share-based compensation||(3,200)||3,237||1,044|
|Proceeds from exercise of common stock options||788||2,161||1,020|
|Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested||(41)||(1,681)||(992)|
|Shares reacquired in connection with put option||(3,535)||-||-|
|Net cash provided (used) by financing activities||15,863||(26,449)||6,906|
|Effect of foreign exchange rates on cash and cash equivalents||$(961)||$(1,548)||$(3,073)|
|Net change in cash and cash equivalents||(4,374)||20,225||12,753|
|Cash and cash equivalents at the beginning of the year||$56,674||$36,449||$23,696|
|Cash and cash equivalents at the end of the year||$52,300||$56,674||$36,449|
|Supplemental disclosures of cash flow information:|
|Income taxes paid||11,433||13,779||8,590|