ATLANTA, Aug. 7, 2012 (GLOBE NEWSWIRE) -- Ebix, Inc. (Nasdaq:EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today reported its financial results for the second quarter of 2012 and will host a conference call at 11:00 a.m. EDT (details below)
Ebix delivered the following results for its second quarter, fiscal year 2012:
Revenues: Total Q2 2012 revenue was $47.7 million, an increase of 13% on a year-over-year basis, as compared to Q2 2011 revenue of $42.3 million. During the six months ended June 30, 2012 revenue increased $9.2 million or 11%, to $91.5 million compared to $82.3 million during the same period in 2011.
Operating Income: Q2 2012 operating income grew 6% as compared to the operating income of $16.7 million in Q2 2011 after excluding a one-time non-recurring gain of $1.9 million in Q2 2011, from the reversal of contingent earn out accrued liabilities related to certain business acquisitions made in 2010. During the six months ended June 30, 2012 the Company operating income grew 11% to $36.0 million as compared to $32.4 million in the first six months of 2011 after excluding the Q2 2011 one-time non-recurring item. Q2 2012 GAAP operating income was $17.7 million, a decrease of 5% as compared to Q2 2011 GAAP operating income of $18.6 million. Year-to-date GAAP operating income through Q2 2012 was $36.0 million, reflecting an increase of 5% when compared to the $34.2 million for the same six-month period in 2011.
Operating Cash Flow: Net cash provided by the Company's ongoing operations in Q2 2012 was $21.0 million, an increase of 7% year-over-year, compared to $19.6 million in Q2 of 2011. During the six months ended June 30, 2012 the Company generated $34.7 million of net cash flow from operating activities, an increase of 17% as compared to $29.9 million in the first six months of 2011.
Margins: The Company reported an operating margin of 37% for Q2 2012 as compared to 40% for the same period during 2011, after excluding the impact of the one-time non-recurring gain in Q2 of 2011 of $1.9 million. The operating margin for the first six months of 2012 was 39%.
Net Income: Q2 2012 Net income grew 14% to $18.1 million as compared to the Q2 2011 net income of $15.9 million in Q2 2011, after excluding the one-time non-recurring gain items totaling $6.5 million in Q2 of 2011, related to a $4.6 million benefit from the release of valuation allowances held against deferred tax assets associated with tax net operating losses carry forwards and the reversal of $1.9 million contingent earn out liabilities. Q2 2012 GAAP net income was $18.1 million, a decrease of 19% on a year-over-year basis, as compared to Q2 2011 GAAP net income of $22.3 million.
Earnings per Share: Q2 2012 diluted earnings per share rose 24% year-over-year to $0.47, as compared to $0.37 in the second quarter of 2011, after excluding the non-recurring items in Q2 of 2011 (mentioned above) amounting to $0.16 of diluted earnings per share. For purposes of the Q2 2012 EPS calculation, there was an average of 38.8 million diluted shares outstanding during the quarter, as compared to 42.3 million diluted shares outstanding in Q2 of 2011. Q2 2012 GAAP diluted earnings per share was $0.47, a decrease of 12% as compared to Q2 2011 GAAP diluted earnings per share of $0.53.
Channel Revenues: The Exchange channel continued to be the largest channel for Ebix accounting for 80% of the Company's Q2 2012 Revenue as compared to 76% in Q2 of 2011.
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| (dollar amounts in thousands) | 2012 | 2011 | 2012 | 2011 |
| Exchanges | $ 38,182 | $ 32,222 | $ 72,828 | $ 63,287 |
| Broker Systems | 4,422 | 4,824 | 9,176 | 8,666 |
| Business Process Outsourcing ("BPO") | 3,890 | 3,753 | 7,461 | 7,372 |
| Carrier Systems | 1,222 | 1,468 | 2,078 | 2,992 |
| Totals | $ 47,716 | $ 42,267 | $ 91,543 | $ 82,317 |
Share Repurchases: During Q2 2012, the Company repurchased 506,700 shares of our common stock at an average price of $18.54 for an aggregate amount of $9.4 million. Subsequent to June 30, the Company has purchased 280,818 shares of its common stock at an average price of $20.49 for an aggregate amount of $5.8 million. The Company currently has approximately $8.6 million remaining in its share repurchase authorization.
"Ebix produced another successful quarter with record revenues of $47.7 million. Q2 2012 results include only one month of revenue from two of our recent acquisitions Planetsoft and Fintechnix," Ebix Chairman, President & CEO Robin Raina said. "Our sales and marketing management is excited about the future and is committed to ensuring that the Company capitalizes on its market leading products and services."
Robin added, "The year-to-date operating cash flows till 30th June 2012 were the highest for any comparable period in our history. Strategically, the quarter was one of the busiest with the acquisition of a number of companies and a minority investment in another company. We added new business lines and made significant product extensions to our core capabilities in the US and Internationally. As we integrate these acquisitions tightly, we expect increased synergies coming out in terms of improved margins for the Company."
"Our sustained strong operating cash flows enabled Ebix to return capital to shareholders during the quarter with $9.4 million of shares repurchases, and a $1.8 million quarterly cash dividend, Ebix SVP and CFO Robert Kerris said. "Furthermore, during the quarter the Company continued to invest in the growth of the business with $46.7 million of accretive business acquisitions and strategic investments, and $402 thousand of capital expenditures." Our balance sheet remains strong with aggregate cash, cash equivalents, and short term cash deposit investments of $26.8 million as of June 30, 2012, and working capital of $11.2 million. With our combined aggregated cash reserves and the available financing capacity from our $100 million syndicated bank financing facility, the Company presently has access to approximately $49.0 million of readily available cash resources. Our accounts receivable DSO stood at 57 days as of June 30, 2012, continuing an improving trend as this reflects a reduction of 7 days from year-end 2011, and 14 days from a year earlier at June 30, 2011."
Investor Conference Call
Ebix will host a conference call to discuss its second quarter 2012 results at 11:00 a.m. Eastern Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations home page at http://www.ebix.com. In addition, an archive of the webcast can be accessed through www.ebix.com/webcast. Participants who choose to call in to the conference call can do so by dialing 1-(973) 409-9690, Passcode: 5770340. A replay of the audio and text of the investor call will be available through the company's Investor Relations home page at http://www.ebix.com
About Ebix, Inc.
A leading international supplier of On-Demand software and E-commerce services to the insurance industry, Ebix, Inc., (Nasdaq:EBIX) provides end-to-end solutions ranging from infrastructure exchanges, carrier systems, agency systems and BPO services to custom software development for all entities involved in the insurance industry.
With 30+ offices across Brazil, Singapore, Australia, the US, 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. Ebix's focus on quality has enabled it to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute's Capability Maturity Model (CMM). With a recent ISO 27001-security certification, the Company also has a ISO 9001:2000 certification for both its development and BPO units in India. For more information, visit the Company's website at www.ebix.com
The Ebix, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12133
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, 2011, included under "Item 1A. 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.
(Financial tables follow)
| Ebix, Inc. and Subsidiaries | ||||
| Condensed Consolidated Statements of Income | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Operating revenue | $ 47,716 | $ 42,267 | $ 91,543 | $ 82,317 |
| Operating expenses: | ||||
| Cost of services provided | 9,157 | 8,914 | 18,186 | 16,221 |
| Product development | 5,814 | 4,802 | 10,086 | 9,421 |
| Sales and marketing | 4,296 | 3,261 | 8,108 | 6,113 |
| General and administrative | 8,577 | 4,694 | 15,021 | 12,455 |
| Amortization and depreciation | 2,161 | 1,991 | 4,102 | 3,868 |
| Total operating expenses | 30,005 | 23,662 | 55,503 | 48,078 |
| Operating income | 17,711 | 18,605 | 36,040 | 34,239 |
| Interest income | 110 | 129 | 277 | 329 |
| Interest expense | (312) | (159) | (565) | (374) |
| Other non-operating income (loss) | 262 | (464) | 262 | (818) |
| Foreign currency exchange gain | 2,591 | 1,397 | 2,295 | 2,865 |
| Income before income taxes | 20,362 | 19,508 | 38,309 | 36,241 |
| Income tax benefit (expense) | (2,295) | 2,840 | (4,557) | 1,271 |
| Net income | $ 18,067 | $ 22,348 | $ 33,752 | $ 37,512 |
| Basic earnings per common share | $ 0.49 | $ 0.57 | $ 0.92 | $ 0.97 |
| Diluted earnings per common share | $ 0.47 | $ 0.53 | $ 0.86 | $ 0.90 |
| Basic weighted average shares outstanding | 36,908 | 39,159 | 36,679 | 38,658 |
| Diluted weighted average shares outstanding | 38,827 | 42,344 | 39,175 | 41,882 |
| Ebix, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| (In thousands, except share amounts) | ||
| June 30, | December 31, | |
| 2012 | 2011 | |
| ASSETS | (Unaudited) | |
| Current assets: | ||
| Cash and cash equivalents | $ 25,313 | $ 23,696 |
| Short-term investments | 1,458 | 1,505 |
| Trade accounts receivable, less allowances of $1,195 as of June 30, 2012 and $1,719 as of December 31, 2011 | 33,096 | 31,133 |
| Deferred tax asset, net | 2,632 | 2,981 |
| Other current assets | 6,102 | 4,502 |
| Total current assets | 68,601 | 63,817 |
| Property and equipment, net | 10,319 | 8,834 |
| Goodwill | 320,238 | 259,218 |
| Intangibles, net | 50,852 | 38,386 |
| Indefinite-lived intangibles | 30,798 | 30,453 |
| Deferred tax asset, net | 5,432 | 9,412 |
| Other assets | 3,238 | 1,062 |
| Total assets | $ 489,478 | $ 411,182 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $ 21,927 | $ 18,719 |
| Accrued payroll and related benefits | 5,517 | 5,034 |
| Short term debt | 10,656 | 6,667 |
| Current portion of long term debt and capital lease obligations, net of discount of $49 and $0, respectively | 872 | 165 |
| Deferred revenue | 18,060 | 16,460 |
| Current deferred rent | 279 | 266 |
| Other current liabilities | 117 | 2,468 |
| Total current liabilities | 57,428 | 49,779 |
| Revolving line of credit | 32,840 | 31,750 |
| Long term debt and capital lease obligations, less current portion, net of discount of $68 and $0, respectively | 36,380 | 8,468 |
| Other liabilities | 4,313 | 3,803 |
| Contingent liability for accrued earn-out acquisition consideration | 15,066 | — |
| Put option liability | 1,114 | — |
| Deferred revenue | 130 | 328 |
| Long term deferred rent | 1,586 | 939 |
| Total liabilities | 148,857 | 95,067 |
| Commitments and Contingencies, Note 5 | ||
| Stockholders' equity: | ||
| Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at June 30, 2012 and December 31, 2011 | — | — |
| Common stock, $0.10 par value, 60,000,000 shares authorized, 37,431,635 issued and 37,391,126 outstanding at June 30, 2012 and 36,418,385 issued and 36,377,876 outstanding at December 31, 2011 | 3,748 | 3,638 |
| Additional paid-in capital | 176,836 | 179,518 |
| Treasury stock (40,509 shares as of June 30, 2012 and December 31, 2011) | (76) | (76) |
| Retained earnings | 168,015 | 137,559 |
| Accumulated other comprehensive income | (7,902) | (4,524) |
| Total stockholders' equity | 340,621 | 316,115 |
| Total liabilities and stockholders' equity | $ 489,478 | $ 411,182 |
| Ebix, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (In thousands) | ||
| (Unaudited) | ||
| Six Months Ended | ||
| June 30, | ||
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net income | $ 33,752 | $ 37,512 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 4,102 | 3,868 |
| Benefit for deferred taxes | (956) | (2,954) |
| Share based compensation | 1,059 | 1,143 |
| Provision for doubtful accounts | 316 | 337 |
| Debt discount amortization on convertible debt | 13 | 21 |
| Unrealized foreign exchange gain on forward contracts | — | (238) |
| Unrealized foreign exchange gain | (593) | (1,769) |
| (Gain) loss on put option | (263) | 925 |
| Reduction of acquisition earnout accruals | — | (1,868) |
| Changes in assets and liabilities, net of effects from acquisitions: | ||
| Accounts receivable | 2,163 | (3,693) |
| Other assets | (1,009) | 825 |
| Accounts payable and accrued expenses | (858) | (3,482) |
| Accrued payroll and related benefits | (384) | (850) |
| Deferred revenue | (225) | (781) |
| Deferred rent | (56) | (120) |
| Other current liabilities | (2,338) | 867 |
| Net cash provided by operating activities | 34,723 | 29,743 |
| Cash flows from investing activities: | ||
| Acquisition of ADAM, net of cash acquired | — | 3,529 |
| Investment in MCN, net of cash acquired | (1,537) | (381) |
| Acquisition of BSI, net of cash acquired | (992) | — |
| Acquisition of Taimma, net of cash acquired | (5,003) | — |
| Acquisition of Fintechnix, net of cash acquired | (4,713) | — |
| Acquisition of Planetsoft, net of cash acquired | (33,967) | — |
| Investment in Curepet, Inc. | (2,000) | — |
| Investment in ConfirmNet | — | (184) |
| Maturities of marketable securities | 979 | 7,600 |
| Purchases of marketable securities | (785) | (3,080) |
| Capital expenditures | (1,079) | (1,335) |
| Net cash provided by/(used in) investing activities | (49,097) | 6,149 |
| Cash flows from financing activities: | ||
| Repayments on revolving line of credit, (net of proceeds) | 1,090 | (16,250) |
| Proceeds from term loan | 45,000 | 16,250 |
| Principal payments of term loan obligation | (15,000) | (3,074) |
| Repurchases of common stock | (9,396) | (26,198) |
| Settlement on conversion of convertible debt | — | (6,761) |
| Excess tax benefit from share-based compensation | 50 | 127 |
| Proceeds from the exercise of stock options | 714 | 14 |
| Dividend payments | (3,296) | — |
| Principal payments of debt obligations | (600) | — |
| Payments of capital lease obligations | (165) | (186) |
| Net cash provided by/ (used in) financing activities | 18,397 | (36,078) |
| Effect of foreign exchange rates on cash | (2,406) | 416 |
| Net change in cash and cash equivalents | 1,617 | 230 |
| Cash and cash equivalents at the beginning of the period | 23,696 | 23,397 |
| Cash and cash equivalents at the end of the period | $ 25,313 | $ 23,627 |
| Supplemental disclosures of cash flow information: | ||
| Interest paid | $ 567 | $ 361 |
| Income taxes paid | $ 4,842 | $ 1,505 |