Ebix Announces Third Quarter Fiscal Year 2021 Financial Results

JOHNS CREEK, Ga., Nov. 09, 2021 (GLOBE NEWSWIRE) — 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 announced the following results for the quarter ended September 30, 2021:

• Revenues of $191.7 million
• GAAP operating income of $28.1 million and Non-GAAP operating income of $35.3 million
• GAAP Diluted EPS of $0.50 and Non-GAAP diluted EPS of $0.72.

Ebix will host a conference call to review its results today at 11:00 a.m. EDT (details below).

“Prepaid card revenues grew by 53% in Q3 2021 as compared to Q3 2020 while declining 38% sequentially as compared to Q2 2021. Our worldwide revenues excluding prepaid cards grew 5% sequentially and 4% year over year in Q3 2021. US revenues grew 1.5% sequentially while EbixCash revenues excluding the pre-paid cards business grew 12% sequentially. Our RCS revenues grew 8% sequentially and 3% year over year in Q3 2021.” Robin Raina, President & CEO, Ebix Inc. said. “I am pleased that we were able to deliver these numbers while fighting temporary COVID-19 related issues that had a material impact on some of our revenue lines.”

“Our bank interest costs were $0.6 million higher sequentially and $3.7 million higher year over year in Q3 2021, though our bank debt was lower by $42.7 million in Q3 2021 as compared to Q3 2020. We had to take the impact of substantial increases in software developer salaries from the cuts we had put in place last year, while COVID-19 continued to impact our business. We incurred substantially increased legal and professional costs as compared to Q2 2021.” Robin added, “In spite of all that, we are reporting $18.2 million in operating cash flows in Q3 2021 as compared to $13.1 million in Q2 2021 and $28.1 million in Q3 2021 operating income as compared to $27.3 million in Q2 2021. I am pleased with those trends as they speak to the fundamentals of the company.”

Ebix delivered the following results for the third quarter of 2021:

Revenue: Q3 2021 revenue increased 24% to $191.7 million compared to $154.3 million in Q3 2020.

Out of 10 major geographies worldwide, revenues grew year over year in seven regions, while declining in three regions. Despite the impact of COVID-19, specifically on our consulting revenues, insurance revenues worldwide were essentially flat year over year. Sequentially, U.S. insurance revenues grew 1.5% as compared to Q2 2021.

Exchanges, including EbixCash and our worldwide insurance exchanges, continued to be Ebix’s largest channel, accounting for 93% of Q3 2021 revenues.

(1) Overlapping revenue relates to RCS revenues realized within EbixCash during Q321

Operating Income and Operating Cash: GAAP Operating income for Q3 2021 of $28.1 million increased 3% sequentially from $27.3 million in Q2 2021 and decreased 12% year-over-year as compared to $31.9 million in Q3 2020, primarily due to increased legal and professional fees and the increased cost of salaries in Q3 2021. In Q2 2020, the Company reduced compensation levels for many of its employees in the most negatively COVID-19 impacted business areas. The Company reversed the vast majority of 2020’s salary adjustments in Q2 2021 and offered salary increases to all software development staff, resulting in a year-over-year increase of approximately $3 million in personnel-related costs. These steps were taken to retain and motivate our employee base to support the expected growth in business as the effects of COVID-19 subside over the next few months.

Non-GAAP operating income for Q3 2021 was essentially flat at $35.3 million as compared to $35.8 million in Q3 2020.

Cash generated from operations in Q3 2021 was $18.2 million, as compared to $13.4 million in Q3 2020 and $13.1 million in Q2 2021.

Earnings per Share: Q3 2021 GAAP diluted earnings per share was at $0.50 as compared to $0.80 in Q3 2020. The drop was due to a number of extra-ordinary items detailed out in the GAAP to Non-GAAP reconciliation table below (equivalent of $0.22 in diluted earnings per share) and the $3.7 million year over year increase in bank interest expenses (equivalent of $0.12 in diluted earnings per share). Non-GAAP diluted earnings per share for Q3 2021 was $0.72.

Net Income: Q3 2021 GAAP net income decreased 37.4% to $15.5 million compared to $24.7 million in Q3 2020. Q3 2021 non-GAAP net income was $22.3 million.

Q4 2021 Diluted Share Count: As of today, Ebix expects its diluted share count for Q4 2021 to be approximately 30.8 million.

Dividend: Ebix paid its regular quarterly dividend of $0.075 per share in Q3 2021 for a total cost of $2.3 million.

“We are continuing to work towards a prospective EbixCash IPO. We recently filed the audit report signed by two independent auditors, namely Walker Chandiok (Grant Thornton India) and K G Somani, for our Ebix Payments subsidiary, which includes our prepaid gift card business for the year ended March 31, 2021, along with 9 other EbixCash subsidiary audits. The 3-year audit for the remaining subsidiaries and the EbixCash consolidated entity by the two audit firms, leading to the Draft Red Herring Prospectus (DRHP) is in process at present.” Ebix Chairman, President and CEO Robin Raina said. “The EbixCash independent Board will soon decide the details around the prospective IPO.”

Steve Hamil, EVP and Global CFO added, “The Company continues to produce substantial operating cash flows in the face of COVID-19 headwinds, generating $40 million year-to-date in 2021. Despite the cumulative spending in the 9-month period of approximately $101 million on repayments of debt, cash interest payments, capital expenditures and capitalized software development costs, dividend payments, cash taxes and reduction of outstandings in India working capital facilities, our total cash and cash equivalents, restricted cash and short-term investments was $109.8 million at 9/30/21, as compared to $120.4 million at 09/30/20. As of 09/30/21, our total debt was $50 million lower than total debt on 09/30/20. Also, our working capital was a solid $175.5 million as of 09/30/21 as compared to $148.6 million as of 09/30/20.”

Reconciliation of GAAP operating income, net income and diluted earnings per share to non-GAAP operating income, 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.

Q3 2021

(1) Adjustments related to amortization of acquired intangibles and stock-based compensation recognized during the periods for GAAP purposes.
(2) Non-recurring legal and professional services costs recorded during the period for GAAP purposes.
(3) Non-recurring non-operating expense that is unrelated to any operating activities.
(4) Non-GAAP adjustment is based on the Q3 2021 effective tax rate, which reflects currently available information and could be subject to change.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP net income, non-GAAP operating income and non-GAAP diluted earnings per share. Non-GAAP operating income , non-GAAP net income and non-GAAP diluted earnings per share from operations exclude amortization of intangibles, stock-based compensation, as well as certain non-recurring expenses that are not associated with our ongoing operating business activities.

Ebix believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Ebix’s financial condition and results of operations. The Company’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Ebix urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.

Conference Call Details:

About Ebix, Inc.

With 150+ 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 over 320,000 physical distribution outlets in India and Association of Southeast Asian Nations (“ASEAN”) countries, to an omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in the areas of domestic and international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, software solutions for lending, wealth management, travel, bus exchanges and insurance in India and other markets. EbixCash’s Forex operations have emerged as a leader in India’s airport Foreign Exchange business with operations in 13 international airports, combined conducting over $4.8 billion in gross transaction value per year (pre-COVID-19). EbixCash’s inward remittance business in India processes approximately $5 billion in gross annual remittance volume (pre-COVID-19) and is the clear market leader. EbixCash Travel is also one of Southeast Asia’s leading travel exchanges with over 200,000 agents, 25 branches and over 9,800 corporate clients, combined processing an estimated $2.5 billion in gross merchandise value per year (pre-COVID-19).

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

SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS

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,” 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 ongoing effects of the Covid-19 global pandemic, 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 India, Australia and Asia, Latin America and Europe wherein we have significant and/or growing operations); fluctuations in the equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; ability to secure additional financing to support capital requirements; credit facility provisions that could materially restrict our business; costs and effects of litigation, investigations or similar matters that could affect our business, operating results and financial condition; 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

CONTACT:

Darren Joseph
678 -281-2027 or [email protected]

David Collins or Chris Eddy
Catalyst Global – 212-924-9800 or [email protected]

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