JOHNS CREEK, GA – March 2, 2020 – Ebix, Inc. (NASDAQ: EBIX), ), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries, today reported fiscal 2019 fourth quarter (Q4 2019) and full year results for the periods ended December 31, 2019. Ebix will host a conference call to review its results today, at 11:00 a.m. EST (details below).
“In spite of a number of large acquisitions getting delayed for regulatory reasons, and the delays in the central bank approval for implementing the UAE airport implementation, we still got very close to the $600 million revenue mark in 2019, with 2019 GAAP revenues of $580.6M. This result has clearly established a good foundation for us to pursue higher goals in 2020.” said Robin Raina, chairman and CEO, Ebix, Inc. “With the already announced prospective Yatra and Trimax acquisitions ahead of us, combined with our focus on organic revenue growth, we believe that revenue in the $700M to $750M range, in terms of annualized revenue by Q4 of 2020, is clearly achievable.”
Ebix delivered the following results for its fiscal fourth quarter and full fiscal year 2019:
Revenue: Full year 2019 revenue rose 17% to $580.6 million vs. 2018, and Q4 2019 revenue rose 7% to $146.2 million vs. Q4 2018
On a constant currency basis, Ebix 2019 revenues increased 19% to $590.0 million vs. $497.8 million in 2018. Exchanges including the EbixCash and the remaining insurance exchanges worldwide, continued to be Ebix’s largest channel, accounting for 88% of our Q4 2019 and full year 2019 revenues.
| (dollar amounts in thousands) | |||||||||||||
| Channel | Q4 2019 | Q4 2018 | Change | YTD 2019 | YTD 2018 | Change | |||||||
| EbixCash Exchanges | $ 81,184 | $ 65,851 | +23% | $ 319,953 | $ 217,457 | +47% | |||||||
| Insurance Exchanges | 48,074 | 50,302 | -4% | 190,067 | 192,604 | -1% | |||||||
| RCS - Insurance | 16,925 | 20,174 | -16% | 70,595 | 87,765 | -20% | |||||||
| Total Revenue | $ 146,183 | $ 136,327 | +7% | $ 580,615 | $ 497,826 | +17% | |||||||
| Total Revenue on Constant Currency Basis | $ 146.1M | $ 136.3M | +7% | $ 590.0M | $ 497.8M | +19% | |||||||
Operating Income and Operating Cash: GAAP Operating income for 2019 rose 2% to $155.7 million as compared to $153.0 million in 2018. Non-GAAP operating income for 2019 was at $163.9 million in the year 2019.
Q4 2019 GAAP Operating income decreased 18% to $34.3 million as compared to 2018, primarily because of certain one-time year-end adjustments in Q4, including acquisition related reserves, bad debt reserves, legal costs etc. and the costs associated with certain new organic growth initiatives.
In 2019, the Company generated cash from operations of $64.7 million in spite of payments of $24 million for taxes, $21.1 million for a legal settlement, the cash requirements for EbixCash marketing & IPO and the funding required for the growing gross merchandize value (GMV) associated with EbixCash operations worldwide.
Earnings per Share: For the full fiscal year 2019, GAAP diluted earnings per share grew 7% to $3.16 from $2.95 in 2018. Excluding the one-time non-recurring items, non-GAAP diluted earnings per share for 2019 rose 13% to $4.21 vs. $3.73 in 2018
Q4 2019 GAAP diluted earnings per share grew 159% to $0.71 from $0.27 in Q4 2018 . Excluding the one-time non-recurring items, non-GAAP diluted earnings per share in Q4 2019 was at $1.04 as compared to $1.06 in Q4 2018
Net Income: Full year 2019 GAAP net income increased 4% to $96.7 million compared to $93.1 million in Q4 2018. The Q4 2019 Non-GAAP net income increased 9% to $128.9 million after excluding certain non-recurring items.
Q4 2019 GAAP net income increased 154% to $21.7 million as compared to $8.5 million in Q4 2018. The Q4 2019 Non-GAAP net income was at $31.9 million after excluding certain non-recurring items.
Share Outstanding and Repurchases: Ebix repurchased 95,000 shares of its common stock for an aggregate amount of $4.2 million in the full year 2019, while making aggregate payment of $13 million in 2019, including share buybacks made towards the end of 2018. Reflecting its repurchase activity, Ebix’s weighted average diluted shares outstanding decreased to 30.6 million in Q4 2019 compared to 31.2 million in Q4 2018 and decreased to 30.6 million in 2019 compared to 31.5 million in 2018.
Q1 & Q2 2020 Diluted Share Counts: Based on share repurchases completed to date, Ebix expects its diluted share count to be approximately 30.8 million in Q1 2020 and Q2 2020.
Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q4 2019 for a total cost of $2.3 million.
“We have a number of high margin revenue and cost synergy initiatives in place, that should serve to improve our bottom line in 2020. The recent MoneyGram contract was an example of that. We are trying to balance our expense reduction initiatives with our various marketing initiatives that are required to make EbixCash a household name in India.” Ebix Chairman, and CEO Robin Raina said. “That said, we are deep into the work that goes into launching the EbixCash IPO in India. In the short term, we will be announcing the addition of a fourth investment banker to our investment banking team.”
“2019 was another year of financial success for Ebix. The Company again achieved double-digit revenue growth, as it has consistently done over the last decade. As we continue to integrate our recent business acquisitions and leverage synergistic top line growth opportunities in our rapidly expanding EbixCash Exchange division, we expect operating margins to improve to the mid 30% range.” Robert Kerris, Ebix EVP and CFO said, “In addition to funding the cash required for business growth in India, during 2019 we invested a total of $110.8 million related to acquisitions, $13.0 million on share buybacks, $9.2 million on dividend payments, $21.1 million on legal settlements, $12.9 million on CapEx and Software Development, $15.1 million on principal payments towards the term loan and $24.0 million on tax payments. We are pleased with the fact that this was achieved while our Net Debt remained flat as of December 31, 2019 as compared to a year earlier at December 31, 2018. Ebix ended the year with cash, cash equivalents and short-term investments of $113 million, which positions the Company well, to continue to fund its organic growth initiatives and certain targeted strategic business acquisitions.”
Reconciliation of EBITDA, GAAP net income and diluted earnings per share to non-GAAP net income and diluted earnings per share. Non-GAAP information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables.
| Net Income | Diluted EPS | |
| 2019 GAAP Net Income | $96,720 | $3.16 |
| 2019 GAAP Operating Income | $155,673 | |
| Non-GAAP Adjustments: | ||
| Impact of net Nonrecurring Bad Debt Reserve for certain accounts receivable in the India e-government business sector, offset by noncontrolling interest for JV Partner | $6,603 | $0.22 |
| Reduction of Acquisition earn out accrual (operating) | ($15,392) | ($0.50) |
| One-time expenses related to synergies and redundancies being implemented (operating) | $7,452 | $0.24 |
| Non-recurring year-end adjustments in Q4, including acquisition related reserves, bad debt reserves, legal costs etc. (operating) | $3,533 | $0.12 |
| Stock based compensation (operating) | $3,398 | $0.11 |
| Non-recurring Legal expense including for yatra acquisition (operating) | $2,610 | $0.09 |
| Short term Finance Fees for GMV Growth Funding (non-operating) | $4,347 | $0.14 |
| Non-recurring intercompany FX loss unrelated to end customers (non-operating) | $2,121 | $0.07 |
| Legal settlement and associated fees (Non-Operating) | $20,452 | $0.67 |
| One-time tax benefit (non-operating) | ($3,000) | ($0.10) |
| Total Non-GAAP Adjustments | $32,134 | $1.05 |
| Full Year 2019 Non-GAAP Net Income | $128,854 | $4.21 |
| Full Year 2019 Non-GAAP Operating Income | $163,877 |
| Net Income | Diluted EPS | |
| Q4 2019 GAAP Net Income | $21,650 | $0.71 |
| Q4 2019 GAAP Operating Income | $34,253 | |
| Non-GAAP Adjustments: | ||
| Non-recurring year-end adjustments in Q4, including acquisition related reserves, bad debt reserves, legal costs etc. (operating) | $3,533 | $0.12 |
| One-time quarterly expenses related to synergies and redundancies being implemented (operating) | $1,749 | $0.06 |
| Stock based compensation (operating) | $946 | $0.03 |
| Non-recurring Legal Expenses (operating) | $1,035 | $0.03 |
| Short term Finance Fees for GMV Growth Funding (non-operating) | $1,035 | $0.04 |
| Non-recurring intercompany FX loss unrelated to end customers (non-operating) | $ 1,881 | $0.06 |
| Total Non-GAAP Adjustments | $10,245 | $0.33 |
| Fourth Quarter 2019 Non-GAAP Net Income | $31,895 | $1.04 |
| Fourth Quarter 2019 Non-GAAP Operating Income | $41,582 |
| Call Date/Time: | Monday, March 2, 2020 at 11:00 a.m. EST |
| Call Dial-In: | +1-877-837-3909 or 1-973-409-9690; Call ID #8589356 |
| Live Audio Webcast: | www.ebix.com/webcast |
| Audio Replay URL: | www.ebix.com/result_19_Q4 after 2:00 p.m. EST on March 2nd |
With 50+ offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries. In the Insurance sector, Ebix’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis, while also, providing Software-as-a-Service ("SaaS") enterprise solutions in the area of CRM, front-end & back-end systems, outsourced administration and risk compliance services, around the world.
With a "Phygital” strategy that combines 320,000 physical distribution outlets in many Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in areas of domestic & international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, lending, wealth management etc. in India and other markets. EbixCash’s Forex operations have emerged as a leader in India’s airport Foreign Exchange business with operations in 32 international airports including Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata, conducting over $4.8 billion in gross transaction value per year. EbixCash’s inward remittance business in India conducts approx. $5 billion gross annual remittance business, confirming its undisputed leadership position in India. EbixCash, through its travel portfolio of Via and Mercury, is also one of Southeast Asia’s leading travel exchanges with over 2,200+ employees, 212,450+ agent network, 25 branches and over 9,800 corporate clients; processing an estimated $2.5 billion in gross merchandise value per year.
Through its various SaaS-based software platforms, Ebix employs thousands of domain-specific 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 website, www.sec.gov.
Darren Joseph
678 -281-2027 or IR@ebix.com
David Collins, Chris Eddy
Catalyst Global - 212-924-9800 or ebix@catalyst-ir.com
Ebix, Inc. and Subsidiaries
Consolidated Statements of Income
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2019 | 2018 | 2019 | 2018 | |
| Operating revenue | $146,183 | $136,327 | $ 580,615 | $ 497,826 |
| Operating expenses: | ||||
| Cost of services provided | 53,111 | 42,302 | 205,165 | 168,415 |
| Product development | 11,418 | 10,963 | 45,302 | 39,078 |
| Sales and marketing | 4,680 | 4,045 | 19,578 | 17,587 |
| General and administrative (net) | 39,219 | 34,059 | 140,429 | 108,475 |
| Amortization and depreciation | 3,502 | 3,428 | 14,468 | 11,292 |
| Total operating expenses | 111,931 | 94,797 | 424,942 | 344,847 |
| Operating income | 34,253 | 41,530 | 155,673 | 152,979 |
| Interest income | 51 | 127 | 629 | 436 |
| Interest expense | (9,781) | (9,037) | (42,332) | (27,101) |
| Non-operating income – (loss) | (7) | — | 337 | 60 |
| Non-operating expense – litigation settlement | ---- | ---- | (21,140) | --- |
| Foreign currency exchange gain (loss) | (1,881) | 2,127 | (2,376) | (792) |
| Income before income taxes | 22,635 | 34,747 | 90,791 | 125,582 |
| Income tax expense | (517) | (26,474) | (220) | (32,501) |
| Net income including noncontrolling interest | 22,118 | 8,273 | 90,571 | 93,081 |
| Net income (Loss) attributable to noncontrolling interest | 468 | (236) | (6,149) | (58) |
| Net income attributable to Ebix, Inc. | $21,650 | $8,509 | $96,720 | $93,139 |
| Basic earnings per common share | $0.71 | $0.27 | $3.17 | $2.97 |
| Diluted earnings per common share | $0.71 | $0.27 | $3.16 | $2.95 |
| Basic weighted average shares outstanding | 30,495 | 31,133 | 31,511 | 31,393 |
| Diluted weighted average shares outstanding | 30,618 | 31,225 | 30,594 | 31,534 |
Ebix, Inc. and Subsidiaries
Consolidated Balance Sheets
| December 31, | ||
| 2019 | 2018 | |
| (In thousands, except share and per share amounts) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $73,228 | $133,907 |
| Receivables from service providers | 25,607 | 33,439 |
| Short-term investments | 4,443 | 31,192 |
| Restricted cash | 35,051 | 8,317 |
| Fiduciary funds - restricted | 4,966 | 6,491 |
| Trade accounts receivable, less allowances of $20,044 and $6,969, respectively | 153,565 | 154,760 |
| Other current assets | 67,074 | 59,274 |
| Total current assets | 363,934 | 427,380 |
| Property and equipment, net | 48,421 | 47,960 |
| Right-of-use assets | 19,544 | — |
| Goodwill | 952,404 | 946,685 |
| Intangibles, net | 46,955 | 51,448 |
| Indefinite-lived intangibles | 42,055 | 42,055 |
| Capitalized software development costs, net | 19,183 | 14,076 |
| Deferred tax assets, net | 69,227 | 54,629 |
| Other assets | 29,896 | 26,714 |
| Total assets | $1,591,619 | $1,610,947 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $84,735 | $111,895 |
| Payables to service agents | 12,196 | 25,651 |
| Accrued payroll and related benefits | 8,755 | 9,227 |
| Working capital facility | 28,352 | 10,516 |
| Fiduciary funds - restricted | 4,966 | 6,491 |
| Short-term debt | 1,167 | 3,990 |
| Contingent liability for accrued earn-out acquisition consideration | 8,621 | 13,767 |
| Current portion of long-term debt, net of deferred financing costs of $575 and $575, respectively | 22,091 | 14,603 |
| Contract liabilities | 28,712 | 35,609 |
| Lease liability | 5,955 | — |
| Other current liabilities | 29,335 | 85,679 |
| Total current liabilities | 234,885 | 317,428 |
| Revolving line of credit | 438,037 | 424,537 |
| Long-term debt, less current portion, net of deferred financing costs of $1,534 and $1,811, respectively | 254,467 | 274,716 |
| Contingent liability for accrued earn-out acquisition consideration | 1,474 | 11,209 |
| Contract liabilities | 8,541 | 9,051 |
| Lease liability | 13,196 | 438 |
| Deferred tax liability, net | 1,235 | 1,282 |
| Other liabilities | 40,339 | 27,849 |
| Total liabilities | 992,174 | 1,066,510 |
| Commitments and Contingencies, | ||
| Stockholders’ equity: | ||
| Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2019 and 2018 | — | — |
| Series Y Convertible preferred stock, $0.10 par value, 350,000 shares authorized, no shares issued and outstanding at December 31, 2019 and no shares authorized, issued and outstanding at December 31, 2018 | — | — |
| Common stock, $.10 par value, 220,000,000 shares authorized, 30,492,044 issued and outstanding at December 31, 2019 and 30,567,725 issued and outstanding at December 31, 2018 | 3,049 | 3,057 |
| Additional paid-in capital | 6,960 | 3,397 |
| Retained earnings | 618,503 | 535,118 |
| Accumulated other comprehensive loss | (78,398) | (63,377) |
| Total Ebix, Inc. stockholders’ equity | 550,114 | 478,195 |
| Noncontrolling interest | 49,331 | 66,242 |
| Total stockholders' equity | 599,445 | 544,437 |
| Total liabilities and stockholders’ equity | $1,591,619 | $1,610,947 |
Consolidated Statements of Cash Flows
| Year Ended December 31, | |||
| 2019 | 2018 | 2017 | |
| (In thousands) | |||
| Cash flows from operating activities: | |||
| Net income attributable to Ebix, Inc. | $96,720 | $93,139 | $100,618 |
| Net (loss) income attributable to noncontrolling interest | (6,149) | (58) | 1,965 |
| Adjustments to reconcile net income to cash provided by operating activities: | |||
| Depreciation and amortization | 14,468 | 11,292 | 11,123 |
| Provision for doubtful accounts | 12,325 | 3,571 | 1,713 |
| Provision for deferred taxes, net of acquisitions and effects of currency translation | (15,525) | (13,043) | (13,667) |
| Unrealized foreign exchange losses | 1,104 | 606 | 1,387 |
| Amortization of right-of-use assets | 7,144 | — | — |
| Amortization of capitalized software development costs | 2,696 | 2,233 | 2,175 |
| Share-based compensation | 3,397 | 2,811 | 2,818 |
| Reduction of acquisition earn-out contingent liability | (16,543) | (1,391) | (164) |
| Changes in current assets and liabilities, net of acquisitions: | |||
| Accounts receivable | (15,908) | 8,770 | (34,245) |
| Receivables from service providers | 7,832 | (33,439 ) | — |
| Payables to service agents | (13,455) | 25,651 | — |
| Other assets | (8,351) | (8,486) | (2,133) |
| Accounts payable and accrued expenses | (19,624) | (11,787) | 7,958 |
| Accrued payroll and related benefits | (661) | (788) | (3,979) |
| Lease liabilities | (6,878) | (360) | (413) |
| Reserve for potential uncertain income tax return positions | (95) | 149 | 5,879 |
| Other liabilities | 30,396 | 13,205 | 252 |
| Contract liabilities | (8,149) | (8,740) | (4,480) |
| Net cash provided by operating activities | 64,744 | 83,335 | 76,807 |
| Cash flows from investing activities: | |||
| Cash paid for acquisitions, net of cash acquired | (105,466) | (232,557) | (192,161) |
| Cash (paid to) received from Paul Merchants for 10% stake in MTSS combined business and other investment | (5,348) | 4,996 | — |
| Payment of acquisition earn-out contingency | — | (3,831) | (1,921) |
| Maturities (purchases) of marketable securities | 27,015 | (4,087) | 1,201 |
| Capitalized software development costs | (7,989) | (8,079) | (2,805) |
| Capital expenditures | (4,908) | (8,032) | (7,385) |
| Net cash used in investing activities | (96,696) | (251,590) | (203,071) |
| Cash flows from financing activities: | |||
| Proceeds from / (payment) to line of credit, net | 13,500 | 150,008 | 120,500 |
| Proceeds from term loan | — | 175,500 | 20,000 |
| Principal payments on term loan obligation | (15,063) | (10,016) | (13,000) |
| Payments on short-term notes, net | 6,450 | (8,341) | — |
| Working capital facility | 19,079 | (8,094) | 6,162 |
| Repurchase of common stock | (12,952) | (40,820) | (45,732) |
| Payments of long term debt | (686) | (80) | — |
| Payments for capital lease obligations | — | (6) | (11) |
| Proceeds from exercise of common stock options | — | 439 | 52 |
| Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested | (230) | (467) | (398) |
| Dividends paid | (9,193) | (9,316) | (9,545) |
| Net cash (used) provided by financing activities | 905 | 248,807 | 78,028 |
| Effect of foreign exchange rates on cash and cash equivalents | (3,314) | (5,689) | 2,162 |
| Net change in cash and cash equivalents, and restricted cash | (34,361 ) | 74,863 | (46,074) |
| Cash and cash equivalents, and restricted cash at the beginning of the year | 145,730 | 70,867 | 116,941 |
| Cash and cash equivalents, and restricted cash at the end of the year | $111,369 | $145,730 | $70,867 |
| Supplemental disclosures of cash flow information: | |||
| Interest paid | 41,143 | 25,690 | 12,552 |
| Income taxes paid | 24,041 | 10,149 | 10,426 |