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Ebix Reports Record Revenues of $994.9 Million, GAAP Diluted EPS of $2.22

·19 min read
Ebix, Inc.
Ebix, Inc.

JOHNS CREEK, Ga., March 09, 2022 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of on-demand software and e-commerce services to the insurance, financial services, travel, healthcare and e-learning industries, today reported fiscal 2021 fourth quarter (“Q4 2021”) and full year results for the periods ended December 31, 2021. Ebix will host a conference call to review its results today at 11:00 a.m. EST (details below).

Ebix Chairman, President and CEO Robin Raina said, “The results of 2021 were impacted adversely by COVID-19 for 12 months, while the results of 2020 were impacted adversely by the pandemic for a period of 10 months. Despite that, the Company is reporting operating income of $119 million with revenues approaching a billion dollars in the year 2021. Q4 2021 revenues grew 39% sequentially as compared to Q3 2021 and 20% year over year as compared to Q4 2020. Q4 2021 operating income grew 15% sequentially as compared to Q3 2021 and 17% year over year as compared to Q4 2020. Q4 2021 operating cash grew 63% sequentially to $29.6 million as compared to Q3 2021 and 4% year over year as compared to Q4 2020. These results speak to the fundamental strengths of our business in terms of our worldwide recurring revenue base, product diversity and customer stickiness.”

Ebix delivered the following results for its fiscal fourth quarter and fiscal year 2021:

Revenue: Fiscal year 2021 revenue increased 59% to $994.9 million as compared to fiscal year 2020. The increase is primarily due to growth in the EbixCash payment solutions business, as well as year-over-year growth in the Company’s core life and annuity exchange platforms, BPO and IT outsourced services originating in India, foreign exchange business, and growth in revenues in four of the Company’s seven major geographies outside of India. The Company continued to experience negative impact from the COVID-19 global pandemic, with particular impact on our travel, remittance, e-learning, financial technologies and global consulting revenues.

Q4 2021 revenue increased 20% year-over-year to $266.8 million versus Q4 2020 and 39% sequentially as compared to Q3 2021. The year-over-year growth is primarily due to continued strength in the EbixCash payment solutions business; however, in Q4 2021 there was year-over-year growth in some key businesses that have been most negatively impacted by the COVID-19 pandemic, including foreign exchange, travel, and e-learning businesses. Additionally, the EbixCash BPO and IT outsourcing services areas both experienced year-over-year growth in Q4 2021.

On a constant currency basis, Ebix 2021 revenues increased 58% to $991.4 million vs. $625.6 million in 2020. Exchanges, including the EbixCash and Insurance Exchanges worldwide, continued to be Ebix’s largest channel, accounting for 93% of our fiscal year 2021 revenues.

(dollar amounts in thousands)

Channel

Q4 2021

Q4 2020

Change

2021

2020

Change

EbixCash Exchanges

$

199,899

$

158,695

+26%

$

749,775

$

386,564

+94%

Insurance Exchanges

46,842

48,770

-4%

174,193

178,111

-2%

RCS – Insurance

20,086

14,650

+37%

70,971

60,934

+16%

Total Revenue

$

266,827

$

222,115

+20%

$

994,938

$

625,609

+59%

Total Revenue on Constant Currency Basis

$

270,069

$

222,115

+22%

$

991,408

$

625,609

+58%

Operating Income and Operating Cash: Q4 2021 GAAP operating income increased 17% to $32.4 million as compared to $27.7 million in Q4 2020. Q4 2021 GAAP operating income increased 15% sequentially as compared to Q3 2021 operating income of $28.1 million.

GAAP operating income for 2021 declined 5% to $119.0 million as compared to $125.8 million in 2020. The decline is primarily due to the adverse effect of COVID-19 for 12 months in 2021 versus 10 months in 2020, increased one-time legal costs of $5 million as compared to $ 1.5 million in 2020, increased personnel expenses (including insurance), and other miscellaneous expenses, offset, in part, by a decrease in bad debt expense and rent expense year-over-year, as well as a non-cash impairment charge taken in Q4 2020. Non-GAAP operating income for 2021 was $139.7 million.

Q4 2021 operating cash flows grew 63% sequentially to $29.6 million as compared to Q3 2021 and 4% year over year as compared to Q4 2020. In 2021, the Company generated cash flows from operations of $69.5 million as compared to $100.4 million in 2020.

Earnings per Share: For the full fiscal year 2021, GAAP diluted earnings per share declined 26% to $2.22 from $3.02 in 2020. Excluding the one-time non-recurring items, non-GAAP diluted earnings per share for 2021 was $2.91.

Q4 2021 GAAP diluted earnings per share declined 21% to $0.50 from $0.64 in Q4 2020. Excluding the one-time non-recurring items, non-GAAP diluted earnings per share in Q4 2021 was $0.66.

Net Income: Full year 2021 GAAP net income decreased 26% to $68.2 million as compared to $92.4 million in 2020. Fiscal year 2021 Non-GAAP net income was $89.3 million after excluding certain non-recurring items.

Q4 2021 GAAP net income decreased 21% to $15.4 million as compared to $19.5 million in Q4 2020. Q4 2021 Non-GAAP net income was $20.5 million after excluding certain non-recurring items.

Q1 2022 Diluted Share Counts: Ebix expects its diluted share count to be approximately 30.7 million in Q1 2022.

Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q4 2021 for a total cost of $2.3 million.

Subsequent Event: Pursuant to the approval of its Board of Directors, the Company’s Indian subsidiary, EbixCash Limited intends to file the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India soon, in order to offer its equity shares in an initial public offering. Under the Indian regulatory guidelines, the details of the offering and the use of proceeds will be disclosed, once the DRHP is filed.

Steve Hamil, EVP and Global CFO added, “The Company continues to produce substantial operating cash flows in the face of COVID-19 headwinds, generating $69.5 million in 2021. Despite the cumulative spending of approximately $124 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 $125.2 million at December 31, 2021, as compared to $138.6 million at December 31, 2020. As of December 31, 2021, our total debt was $52.5 million lower than total debt as of December 31, 2020. Additionally, our working capital was a $161.4 million as of December 31, 2021 as compared to $170.5 million as of December 31, 2020.

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.

Full Year 2021

Net Income

Diluted EPS

2021 GAAP Net Income

$68,188

$2.22

2021 GAAP Operating Income

$119,010

Non-GAAP Adjustments:

Amortization of Intangibles (1)

$10,356

$0.34

Stock-Based Compensation (1)

$5,360

$0.17

One-time Legal Costs and Professional Fees (2)

$5,001

$0.16

Non-recurring non-operating expense (3)

$2,514

$0.08

Income Tax Effects of Non–GAAP Adjustments (4)

($2,081

)

($0.07

)

Total Non-GAAP Adjustments (Operating Income)

$20,717

Total Non-GAAP Adjustments (Net Income)

$21,150

$0.69

Full Year 2021 Non-GAAP Net Income

$89,338

$2.91

Full Year 2021 Non-GAAP Operating Income

$139,727

Q4 2021

Net Income

Diluted EPS

Q4 2021 GAAP Net Income

$15,425

$0.50

Q4 2021 GAAP Operating Income

$32,423

Non-GAAP Adjustments:

Amortization of Intangibles (1)

$2,453

$0.08

Stock-Based Compensation (1)

$1,326

$0.04

One-time Legal Costs and Professional Fees (2)

$1,289

$0.04

Non-recurring non-operating expense (3)

$1,252

$0.04

Income Tax Effects of Non–GAAP Adjustments (5)

($1,291

)

($0.04

)

Total Non-GAAP Adjustments (Operating Income)

$5,068

Total Non-GAAP Adjustments (Net Income)

$5,029

$0.16

Fourth Quarter 2021 Non-GAAP Net Income

$20,454

$0.66

Fourth Quarter 2021 Non-GAAP Operating Income

$37,491

(1) Adjustments related to amortization of acquired intangibles and stock-based compensation recognized during the periods for GAAP purposes.
(2) Non-recurring legal costs and professional fees recorded during the periods for GAAP purposes.
(3) Non-recurring non-operating expense that is unrelated to any operating activities.
(4) Non-GAAP adjustment is based on the 2021 effective tax rate, which reflects currently available information and could be subject to change.
(5) Non-GAAP adjustment is based on the Q4 2021 effective tax rate, which reflects currently available information and could be subject to change.

Conference Call Details:

Call Date/Time:

Wednesday, March 9, 2022 at 11:00 a.m. EST

Call Dial-In:

+1 (877) 837-3909 or 1-973-409-9690; Call ID # 9679262

Live Audio Webcast:

https://www.ebix.com/webcast

Audio Replay URL:

http://www.ebix.com/result_21_q4 after 2:00 p.m.

About Ebix, Inc.

With approximately 200 offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide on-demand software and e-commerce services to the insurance, financial services, travel, 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 650,000 physical distribution outlets in many Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange (Forex), travel, pre-paid gift cards, utility payments, lending and wealth management across 75+ countries including India. EbixCash’s Forex operations is a leader in India’s airport Forex business, with operations in approximately 16 international airports, including Delhi, Mumbai, Mumbai, Hyderabad, Chennai and Kolkata, combined conducting over $4.8 billion in gross transaction value per year (pre-COVID-19). EbixCash’s inward remittance business in India processed approximately $5 billion in gross annual remittance volume (pre-COVID-19) and is the clear market leader. EbixCash, through its travel portfolio of Via and Mercury, is also one of Southeast Asia’s leading travel exchanges with over 517,000 agents and approximately 17,900 registered corporate clients, combined having processed an estimated $2.5 billion in gross merchandise value per year (pre-COVID-19). EbixCash's financial technologies business offers software solutions at the enterprise level for banks, asset and wealth management companies and trust companies within India, Southeast Asia, the Middle East and Africa. The EbixCash's e-learning solutions are provided to schools across the breadth of India via high quality 2-D and 3-D animation and multimedia learning. EbixCash's business process outsourcing services provide information technology and call center services to a variety of industries.

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,” “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 ongoing effects of the COVID-19 global pandemic, 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, UK 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.

CONTACT:
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

Year Ended December 31,

2021

2020

2019

(In thousands, except per share amounts)

Operating revenue:

$

994,938

$

625,609

$

580,615

Operating expenses:

Costs of services provided

705,390

343,262

205,165

Product development

40,015

35,267

45,302

Sales and marketing

14,434

13,835

19,578

General and administrative, net

100,911

87,537

140,429

Amortization and depreciation

15,178

13,738

14,468

Impairment of intangible asset

6,168

Total operating expenses

875,928

499,807

424,942

Operating income

119,010

125,802

155,673

Interest income

83

167

629

Interest expense

(41,370

)

(31,578

)

(42,332

)

Non-operating (loss) income

(3,766

)

153

337

Non-operating expense - litigation settlement

(21,140

)

Foreign currency exchange loss, net

(434

)

(387

)

(2,376

)

Income before income taxes

73,523

94,157

90,791

Income tax provision

(6,584

)

(5,330

)

(220

)

Net income including noncontrolling interest

$

66,939

$

88,827

$

90,571

Net loss attributable to noncontrolling interest

(1,249

)

(3,550

)

(6,149

)

Net income attributable to Ebix, Inc.

$

68,188

$

92,377

$

96,720

Basic earnings per common share

$

2.23

$

3.03

$

3.17

Diluted earnings per common share

$

2.22

$

3.02

$

3.16

Basic weighted average shares outstanding

30,625

30,510

30,511

Diluted weighted average shares outstanding

30,664

30,571

30,594

See accompanying notes to the consolidated financial statements.


Ebix, Inc. and Subsidiaries

Consolidated Balance Sheets

December 31,

2021

2020

(In thousands, except share and per share amounts)

ASSETS

Current assets:

Cash and cash equivalents

$

99,625

$

105,035

Receivables from service providers

1,352

4,711

Short-term investments

16,463

25,019

Restricted cash

9,080

8,519

Fiduciary funds - restricted

2,046

4,106

Trade accounts receivable, less allowances of $19,874 and $22,691, respectively

153,609

142,847

Other current assets

84,389

71,661

Total current assets

366,564

361,898

Property and equipment, net

54,359

52,521

Right-of-use assets

10,051

12,372

Goodwill

939,249

949,037

Intangibles, net

46,795

50,880

Indefinite-lived intangibles

16,647

21,647

Capitalized software development costs, net

21,565

19,389

Deferred tax assets, net

84,514

63,402

Other assets

33,505

38,707

Total assets

$

1,573,249

$

1,569,853

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

86,181

$

64,764

Payables to service agents

6,296

5,281

Accrued payroll and related benefits

11,360

11,792

Working capital facilities

5,607

16,643

Fiduciary funds - restricted

2,046

4,106

Short-term debt

1,954

894

Current portion of long-term debt, net of deferred financing costs of $1,635 and $920, respectively

28,577

23,621

Contract liabilities

33,164

32,898

Lease liability

3,173

3,905

Other current liabilities

26,837

27,486

Total current liabilities

205,195

191,390

Revolving line of credit

439,402

439,402

Long-term debt, less current portion, net of deferred financing costs of $261 and $1,062, respectively

184,676

232,140

Contingent liability for earn-out acquisition consideration

2,557

Contract liabilities

8,193

8,033

Lease liability

7,139

8,540

Deferred tax liability, net

1,150

1,235

Other liabilities

25,383

29,009

Total liabilities

873,695

909,749

Stockholders’ equity:

Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2021 and 2020

Series Y Convertible preferred stock, $0.10 par value, 350,000 shares authorized, no shares issued and outstanding at December 31, 2021 and 2020

Common stock, $0.10 par value, 220,000,000 shares authorized, 30,683,393 issued and outstanding at December 31, 2021 and 30,515,334 issued and outstanding at December 31, 2020

3,068

3,052

Additional paid-in capital

15,068

11,126

Retained earnings

759,208

700,304

Accumulated other comprehensive loss

(122,022

)

(101,503

)

Total Ebix, Inc. stockholders’ equity

655,322

612,979

Noncontrolling interest

44,232

47,125

Total stockholders' equity

699,554

660,104

Total liabilities and stockholders’ equity

$

1,573,249

$

1,569,853

See accompanying notes to the consolidated financial statements.


Ebix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31,

2021

2020

2019

(In thousands)

Cash flows from operating activities:

Net income attributable to Ebix, Inc.

$

68,188

$

92,377

$

96,720

Net loss attributable to noncontrolling interest

(1,249

)

(3,550

)

(6,149

)

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

15,178

13,738

14,468

(Benefit) provision for doubtful accounts

(2,334

)

1,749

12,325

(Benefit) provision for deferred taxes, net of acquisitions and effects of currency translation

(11,104

)

5,114

(15,525

)

Unrealized foreign exchange losses

1,104

Amortization of right-of-use assets

4,294

6,100

7,144

Amortization of capitalized software development costs

3,317

3,367

2,696

Share-based compensation

5,360

4,792

3,397

Reduction of acquisition earn-out contingent liability

(3,105

)

(16,543

)

Cash paid for acquisition earn-out

(6,453

)

Intangible asset impairment

6,168

Changes in assets and liabilities, net of effects from acquisitions:

Accounts receivable

(10,866

)

3,258

(22,977

)

Receivables from service providers

3,359

20,896

10,950

Payables to service agents

1,015

(6,915

)

(13,455

)

Other assets

(17,305

)

(10,487

)

(8,351

)

Accounts payable and accrued expenses

18,545

(14,569

)

(19,624

)

Accrued payroll and related benefits

(143

)

2,100

(661

)

Lease liabilities

(3,951

)

(5,700

)

(6,878

)

Reserve for potential uncertain income tax return positions

(2,071

)

(95

)

Contract liabilities

694

3,680

(8,149

)

Other liabilities

(1,456

)

(12,204

)

30,396

Net cash provided by operating activities

69,471

100,356

60,793

Cash flows from investing activities:

Cash paid for acquisitions, net of cash acquired

(14,276

)

(105,466

)

Cash paid to Paul Merchants for 10% stake in MTSS combined business and other investment

(5,348

)

Maturities (purchases) of unrestricted marketable securities, net

8,567

(20,964

)

27,015

Capitalized software development costs

(5,700

)

(4,229

)

(7,989

)

Capital expenditures

(7,465

)

(5,337

)

(4,908

)

Net cash used in investing activities

(4,598

)

(44,806

)

(96,696

)

Cash flows from financing activities:

Proceeds from revolving line of credit, net

1,364

13,500

Principal payments of term loan obligation

(42,594

)

(20,711

)

(15,063

)

Payments of short-term notes, net

6,450

Working capital facilities

(10,913

)

(10,927

)

19,079

Repurchase of common stock

(12,952

)

Proceeds (payments) of short-term debt, net

1,075

(271

)

(686

)

Payments of finance lease obligations, net

(100

)

(210

)

Proceeds from exercise of common stock options

636

Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested

(1,402

)

(2,589

)

(230

)

Dividend payments

(9,284

)

(9,245

)

(9,193

)

Net cash (used in) provided by financing activities

(63,218

)

(41,953

)

905

Effect of foreign exchange rates on cash and cash equivalents

(7,104

)

(4,753

)

(3,314

)

Net change in cash and cash equivalents, and restricted cash

(5,449

)

8,844

(38,312

)

Cash and cash equivalents, and restricted cash at the beginning of the year

120,213

111,369

149,681

Cash and cash equivalents, and restricted cash at the end of the year

$

114,764

$

120,213

$

111,369

Supplemental disclosures of cash flow information:

Interest paid

$

30,369

$

29,498

$

41,143

Income taxes paid

$

17,675

$

21,321

$

24,041

See accompanying notes to the consolidated financial statements.