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IBEX Limited Announces Record Fourth Quarter and Fiscal Year 2020 Financial Results

Ibex Limited
·19 mins read

Fiscal Year 2020

  • Revenue increased 10% year-over-year to $405.1 million

  • Net income from continuing operations increased to $7.8 million

  • Adjusted EBITDA increased 49% year-over-year to $54.1 million

  • Strong net cash flow from operating activities of $51.7 million

Q4 Fiscal 2020

  • Revenue increased 14.7% year-over-year to $100.9 million

  • Net loss from continuing operations decreased to $3.8 million

  • Adjusted EBITDA increased 83% to $13.5 million

WASHINGTON, Sept. 24, 2020 (GLOBE NEWSWIRE) -- IBEX Limited (“ibex”), a leading global provider of outsourced CX solutions, today announced financial results for the fourth quarter and fiscal year ended June 30, 2020.

“Fiscal year 2020 was a milestone year for ibex–delivering record revenues surpassing $400 million, growing net income from continuing operations and increasing Adjusted EBITDA to over $50 million,” commented Bob Dechant, chief executive officer of ibex. “We continue to be focused on helping the world’s leading brands connect with their customers in unique and innovative ways, with particular focus on technology-led digital solutions. We also won important new logos with new economy and blue chip clients, and reported 100% client retention. Based on our expected revenue growth and robust pipeline, we are confident in our ability to accelerate additional customer wins, expand geographically and deliver solid cash flow in 2021.”

Fiscal Year 2020 Financial Highlights:

Revenue

  • Revenue increased 10% to $405.1 million, compared to $368.4 million in the prior year.

Net Income / (Loss) From Continuing Operations

  • Net income from continuing operations increased to $7.8 million, compared to a net loss from continuing operations of $4.5 million in the prior year.

  • Net income / (loss) from continuing operations margin increased to 1.9%, compared to (1.2)% in the prior year.

  • Non-GAAP adjusted net income from continuing operations increased to $15.6 million, compared to $1.8 million in the prior year.

Adjusted EBITDA

  • Non-GAAP adjusted EBITDA from continuing operations increased to $54.1 million, compared to $36.3 million in the prior year.

  • Non-GAAP adjusted EBITDA from continuing operations margin increased to 13.4%, compared to 9.9% in the prior year.

Earnings Per Share

  • IFRS fully diluted earnings per share was $0.00 in fiscal years 2020 and 2019.*

  • Non-GAAP pro forma adjusted earnings per share increased to $0.84, compared to $0.10 in the prior year.

Cash Flow, Balance Sheet, and Capital Expenditures

  • Cash flow from operations increased to $51.7 million, compared to $2.2 million in the prior year.

  • Non-GAAP free cash flow increased to $25.6 million, compared to an outflow of $2.5 million in the prior year.

  • Non-GAAP net debt decreased to $84.1 million, compared to $109.4 million in the prior year.

  • Capital expenditures were $16.9 million, or 4.2% of revenue, compared to $9.7 million, or 2.6% of prior year revenue.

Fourth Quarter 2020 Financial Highlights:

Revenue

  • Revenue of $100.9 million was minimally impacted by COVID-19, and increased 14.7% compared to the prior year quarter.

Net Income / (Loss) From Continuing Operations

  • Net loss from continuing operations decreased to $3.8 million, compared to a net loss from continuing operations of $4.6 million in the prior year quarter.

  • Net loss from continuing operations margin decreased to (3.8)%, compared to (5.3)% in the prior year quarter.

  • Non-GAAP adjusted net income from continuing operations increased to $2.6 million, compared to a non-GAAP adjusted net loss from continuing operations of $1.4 million in the prior year quarter.

Adjusted EBITDA

  • Non-GAAP adjusted EBITDA from continuing operations increased to $13.5 million, compared to $7.4 million in the prior year quarter.

  • Non-GAAP adjusted EBITDA from continuing operations margin increased to 13.4%, compared to 8.4% in the prior year quarter.

Earnings Per Share

  • IFRS fully diluted earnings per share was $0.00 in the fourth quarter of fiscal years 2020 and 2019.*

  • Non-GAAP pro forma adjusted earnings per share increased to $0.14, compared to ($0.07) in the prior year quarter.

* IFRS fully diluted earnings per share does not reflect the recapitalization that occurred in connection with ibex’s initial public offering.

Fiscal Year 2020 Business Highlights:

  • Added 24 new customer logos

  • Top three client concentration decreased to 43.7% from 50.6% in the prior year

  • Launched the Wave X Purpose Built Technology Suite enabling highly customized CX solutions

  • Digital business increased to 30% of our overall revenue to $119.6 million

  • New Economy revenue increased by 35% compared to prior year

  • Non-voice revenue increased by 42% compared to prior year

  • Increased our nearshore and offshore footprint by opening three new sites and adding 1,730 workstations in the Philippines and 843 in nearshore sites, boosting our non-US capacity by 35% over prior year

  • Expanded our digital marketing and on-line customer acquisition solutions by adding the Healthcare, Financial Services and Utility industries to our portfolio

2021 Business Outlook

IBEX Limited expects full year 2021 revenue of $431 million to $435 million and Adjusted EBITDA from continuing operations of $59.5 million to $61 million.

Conference Call and Webcast Information

IBEX Limited will host a conference call and live webcast to discuss its fourth quarter and fiscal year 2020 financial results at 4:30 p.m. Eastern Time today, September 24, 2020. To access the conference call, dial (833) 614-1408 for the U.S. or Canada, or for international callers (914) 987-7129 and provide conference ID 5273769. The webcast will be available live on the Investors section of ibex's website at: https://investors.ibex.co/.

An audio replay of the call will also be available to investors beginning at approximately 6:30 p.m. Eastern Time on September 24, 2020, until 7:30 p.m. Eastern Time on October 1, by dialing (855) 859-2056 for the U.S. or Canada, or for international callers, (404) 537-3406 and entering passcode 5273769. In addition, an archived webcast will be available on the Investors section of ibex's website at: https://investors.ibex.co/.

Financial Information

While the financial figures included in this press release have been computed in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to interim periods for the fourth quarter and applicable to financial statements for the fiscal year, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements.” The financial information in this press release has not been audited. Results for the fourth quarter of fiscal year 2020 and 2019 were calculated based on the difference between our unaudited results for fiscal year 2020 and 2019, respectively, and our previously-reported results for the nine months ended March 31, 2020 and 2019, respectively. Our independent registered public accounting firm, BDO LLP, has not audited, reviewed, compiled, or performed any procedures with respect to our results for the fourth quarter of fiscal year 2020 or 2019.

Non-GAAP Financial Measures

We provide non-GAAP financial measures in addition to reported IFRS results prepared in accordance with IFRS. Management believes these measures help illustrate underlying trends in ibex's business and uses the non-GAAP financial measures to establish budgets and operational goals, for managing ibex's business and evaluating its performance. We anticipate that we will continue to report both IFRS and certain non-GAAP financial measures in our financial results. Because ibex's non-GAAP financial measures are not calculated according to IFRS, these measures are not comparable to IFRS and may not necessarily be comparable to similarly described non-GAAP measures reported by other companies within ibex's industry. Consequently, our non-GAAP financial measures should not be evaluated in isolation or replace comparable IFRS measures, but, rather, should be considered together with our unaudited consolidated statements of financial position, unaudited consolidated statements of profit or loss and other comprehensive income, and unaudited consolidated statements of cash flows presented herein and prepared in accordance with IFRS issued by IASB.

In this earnings release, we are introducing “adjusted net income / (loss) from continuing operations,” which we define as net income / (loss) from continuing operations before the effect of the following items: non-recurring expenses (including litigation and settlement expenses, costs related to COVID-19, and expenses related to our initial public offering), impairment, other income, fair value adjustment related to the Amazon warrant, share-based payments, and foreign exchange gains or losses. We believe these items are not reflective of our long-term performance. We use adjusted net income / (loss) from continuing operations internally to understand what we believe to be the recurring nature of our net income / (loss) from continuing operations and as a basis to calculate a pro forma adjusted earnings per share now that our initial public offering has been consummated. We also believe that adjusted net income / (loss) from continuing operations is widely used by investors, securities analysts and other interested parties as a supplemental measure of profitability.

ibex is not providing a quantitative reconciliation of forward-looking non-GAAP adjusted EBITDA from continuing operations to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, non-recurring expenses, fair value adjustments, share-based compensation expense, and impairment of assets. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.

About ibex

ibex helps the world’s preeminent brands more effectively engage their customers with services ranging from customer support, technical support, inbound/outbound sales, business intelligence and analytics, digital demand generation, and CX surveys and feedback analytics.

Forward Looking Statements

In addition to historical information, this release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, and our strategies, priorities and business plans. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could impact our actual results include: developments relating to COVID-19; the Frontier restructuring and its proceedings under Chapter 11 of the United States Bankruptcy Code; our ability to attract new business and retain key clients; our ability to enter into multi-year contracts with our clients at appropriate rates; the potential for our clients or potential clients to consolidate; our clients deciding to enter into or further expand their insourcing activities; our ability to operate as an integrated company under the IBEX brand; our ability to manage portions of our business that have long sales cycles and long implementation cycles that require significant resources and working capital; our ability to manage our international operations, particularly in Pakistan and the Philippines and increasingly in Jamaica and Nicaragua; our ability to comply with applicable laws and regulations, including those regarding privacy, data protection and information security; our ability to manage the inelasticity of our labor costs relative to short-term movements in client demand; our ability to realize the anticipated strategic and financial benefits of our relationship with Amazon; our ability to recruit, engage, motivate, manage and retain our global workforce; our ability to anticipate, develop and implement information technology solutions that keep pace with evolving industry standards and changing client demands; our ability to maintain and enhance our reputation and brand; and other factors discussed under the heading “Risk Factors” in our final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 10, 2020, our annual report on Form 20-F to be filed with the SEC and any other risk factors we include in subsequent reports on Form 6-K. Because of these uncertainties, you should not make any investment decisions based on our estimates and forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise.

Media Contact: Rosemary Hanratty, Senior Director of Marketing, ibex, 412.539.7099, rosemary.hanratty@ibex.co

IR Contact: Brinlea Johnson, The Blueshirt Group, 415.269.2645, brinlea@blueshirtgroup.com


IBEX Limited
Unaudited Consolidated Statements of Financial Position

US$ in thousands

June 30, 2020

June 30, 2019

Assets

Non-current assets

Goodwill

$

11,832

$

11,832

Other intangible assets

2,781

2,928

Property and equipment

84,588

82,309

Investment in joint venture

331

227

Deferred tax asset

2,223

2,517

Warrant asset

2,611

3,316

Other assets

4,834

3,398

Total non-current assets

$

109,200

$

106,527

Current assets

Trade and other receivables

62,579

71,134

Due from related parties

1,587

1,768

Cash and cash equivalents

21,870

8,873

Total current assets

$

86,036

$

81,775

Total assets

$

195,236

$

188,302

Equity and liabilities

Equity attributable to owners of the parent

Share capital

$

12

$

12

Additional paid-in capital

96,207

96,207

Other reserves

29,456

29,585

Accumulated deficit

(109,527

)

(117,176

)

Total equity

$

16,148

$

8,628

Non-current liabilities

Deferred revenue

$

434

$

753

Lease liabilities

62,044

58,602

Borrowings

3,782

7,184

Deferred tax liability

117

147

Other non-current liabilities

7,058

1,607

Total non-current liabilities

$

73,435

$

68,293

Current liabilities

Trade and other payables

$

53,213

$

46,890

Income tax payables

3,087

1,467

Lease liabilities

12,668

10,632

Borrowings

27,476

41,835

Deferred revenue

3,470

4,388

Due to related parties

5,739

6,169

Total current liabilities

$

105,653

$

111,381

Total liabilities

$

179,088

$

179,674

Total equity and liabilities

$

195,236

$

188,302


IBEX Limited
Unaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income

Quarter ended

Year ended

US$ in thousands

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Revenue

$

100,880

$

87,915

$

405,135

$

368,380

Payroll and related costs

69,009

63,098

276,255

254,592

Share-based payments

478

48

359

4,087

Reseller commission and lead expenses

3,724

4,839

17,328

27,877

Depreciation and amortization

6,012

5,203

24,472

20,895

Other operating costs

22,391

17,004

67,208

54,124

Income / (loss) from operations

(734

)

(2,277

)

19,513

6,805

Finance expenses

(2,238

)

(2,251

)

(9,428

)

(7,709

)

Income / (loss) before taxation

(2,972

)

(4,528

)

10,085

(904

)

Income tax expense

(833

)

(119

)

(2,315

)

(3,615

)

Net income / (loss) from continuing operations

(3,805

)

(4,647

)

7,770

(4,519

)

Net income on discontinued operation, net of tax

-

8,568

-

15,484

Net income / (loss) for the year

(3,805

)

3,921

7,770

10,965

Other comprehensive income / (loss)

Item that will not be subsequently reclassified to profit or loss

Actuarial (loss) / gain on retirement benefits

(184

)

109

(184

)

109

Item that will be subsequently reclassified to profit or loss

Foreign currency translation adjustment

(211

)

(64

)

(248

)

(316

)

Cash flow hedge - changes in fair value

(518

)

-

(518

)

-

(913

)

45

(950

)

(207

)

Total comprehensive income / (loss)

$

(4,718

)

$

3,966

$

6,820

$

10,758

Loss per share from continuing operations attributable to the ordinary equity holders of the parent

Basic loss per share

$

-

$

-

$

-

$

-

Diluted loss per share

$

(0.29

)

$

(0.37

)

$

-

$

(0.36

)

Loss per share attributable to the ordinary equity holders of the parent

Basic loss per share

$

-

$

-

$

-

$

-

Diluted loss per share

$

-

$

-

$

-

$

-


IBEX Limited
Unaudited Consolidated Statements of Cash Flows

Quarter ended

Year ended

US$ in thousands

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES

Income / (loss) before taxation

$

(2,972

)

$

5,325

$

10,085

$

19,410

Adjustments for:

Depreciation and amortization

6,012

5,498

24,472

21,805

Amortization of warrant asset

154

178

705

643

Foreign currency translation loss

(444

)

(602

)

(195

)

78

Share warrants

2,506

1

3,138

(364

)

Phantom expense

166

33

(31

)

(300

)

Share-based payments

312

30

390

5,262

Allowance of expected credit losses

123

184

224

343

Share of profit from investment in joint venture

(119

)

(39

)

(533

)

(351

)

(Gain) / loss on disposal of fixed assets

63

(99

)

(10

)

(140

)

Provision for defined benefit scheme

(13

)

129

121

129

Impairment on intangibles

777

-

777

163

Finance costs

2,239

3,747

9,429

13,383

Decrease / (Increase) in trade and other receivables

888

(1,992

)

9,042

(18,019

)

Increase in renewal receivables

-

(15,290

)

-

(35,022

)

Increase in prepayments and other assets

(35

)

(167

)

(1,435

)

(173

)

Increase in trade and other payables and other liabilities

12,027

13,130

7,106

8,997

Cash generated from operations

21,684

10,066

63,285

15,844

Interest paid

(2,239

)

(3,784

)

(9,429

)

(13,054

)

Income taxes paid

(1,379

)

(260

)

(2,137

)

(588

)

Net cash inflow from operating activities

$

18,066

$

6,022

$

51,719

$

2,202

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

$

(264

)

$

(2,910

)

$

(4,283

)

$

(5,612

)

Purchase of other intangible assets

(497

)

(78

)

(982

)

(622

)

Return on investment from joint venture

(309

)

-

-

96

Proceed from sale of assets

-

109

-

188

Cash adjustment from sale of subsidiary to parent company

-

(3,554

)

-

(3,554

)

Capital repayment from joint venture

430

144

430

420

Net cash outflow from investing activities

$

(640

)

$

(6,289

)

$

(4,835

)

$

(9,084

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from line of credit

$

20,042

$

36,515

$

127,567

$

168,674

Repayments of line of credit

(24,633

)

(36,349

)

(142,118

)

(162,851

)

Proceeds from borrowings

-

2,284

1,000

36,617

Repayment of borrowings

(3,227

)

(2,192

)

(8,033

)

(6,081

)

Repayment of related party loans

-

-

-

(1,200

)

Principal payments on lease obligations

(3,227

)

(2,895

)

(12,162

)

(10,535

)

Repayment private placement notes

-

-

-

(14,500

)

Dividend distribution

-

(1,600

)

(121

)

(1,600

)

Payment of senior preferred shares

-

-

-

(5,972

)

Net cash (outflow) / inflow from financing activities

$

(11,045

)

$

(4,237

)

$

(33,867

)

$

2,552

Effects of exchange rate difference on cash and cash equivalents

18

(60

)

(20

)

(316

)

Net increase / (decrease) in cash and cash equivalents

$

6,399

$

(4,564

)

$

12,997

$

(4,646

)

Cash and cash equivalents at beginning of the period

$

15,471

$

13,437

$

8,873

$

13,519

Cash and cash equivalents at end of the period

$

21,870

$

8,873

$

21,870

$

8,873


IBEX Limited
Unaudited Supplemental Non-GAAP Information

Reconciliation of Net Income from continuing operations to Adjusted EBITDA from continuing operations

Quarter ended June 30,

Year ended June 30,

US$ in thousands

2020

2019

2020

2019

Net income / (loss) from continuing operations

$

(3,805

)

$

(4,647

)

$

7,770

$

(4,519

)

Finance expense

2,238

2,251

9,428

7,709

Income tax expense

833

119

2,315

3,615

Depreciation and amortization

6,012

5,203

24,472

20,895

EBITDA from continuing operations

$

5,278

$

2,926

$

43,985

$

27,700

Non-recurring expenses

5,085

4,239

6,482

4,239

Impairment

777

-

777

163

Other income

(227

)

(177

)

(745

)

(804

)

Fair value adjustment

2,506

1

3,138

(364

)

Share-based payments

478

48

359

4,087

Foreign exchange (gain) / loss

(372

)

349

151

1,274

Adjusted EBITDA from continuing operations

$

13,525

$

7,386

$

54,147

$

36,295


Reconciliation of Net income / (loss) from continuing operations to Adjusted net income / (loss) from continuing operations

Quarter ended June 30,

Year ended June 30,

US$ in thousands

2020

2019

2020

2019

Net income / (loss) from continuing operations

$

(3,805

)

$

(4,647

)

$

7,770

$

(4,519

)

Non-recurring expenses

5,085

4,239

6,482

4,239

Impairment

777

-

777

163

Other income

(227

)

(177

)

(745

)

(804

)

Fair value adjustment

2,506

1

3,138

(364

)

Share-based payments

478

48

359

4,087

Foreign exchange (gain) / loss

(372

)

349

151

1,274

Total adjustments

$

8,247

$

4,460

$

10,162

$

8,595

Normalized tax rate*

22.9

%

26.5

%

22.9

%

26.5

%

Tax impact of adjustments

(1,889

)

(1,182

)

(2,327

)

(2,278

)

Adjusted net income / (loss) from continuing operations

$

2,553

$

(1,369

)

$

15,605

$

1,798

* The 2019 tax rate has been adjusted to remove the impact of the cancellation of the legacy ESOP plan.



Calculation of pro forma adjusted earnings per share

Quarter ended June 30,

Year ended June 30,

US$ in thousands

2020

2019

2020

2019

Adjusted net income / (loss) from continuing operations

$

2,553

$

(1,369

)

$

15,605

$

1,798

Pro forma fully diluted shares*

18,680,377

18,680,377

18,680,377

18,680,377

Pro forma adjusted earnings / (loss) per share

$

0.14

$

(0.07

)

$

0.84

$

0.10

* Pro forma fully diluted shares outstanding immediately following our initial public offering in August 2020.


Calculation of free cash flow

Year ended June 30,

US$ in thousands

2020

2019

Net cash inflow from operating activities

$

51,719

$

2,202

Add: Impact of discontinued operations

-

13,396

Less:

Capital expenditures

16,917

9,707

Lease payments on right-of-use assets

9,147

8,411

Free cash flow

$

25,655

$

(2,520

)


Calculation of Net Debt

US$ in thousands

June 30, 2020

June 30, 2019

Borrowings

Current

$

27,476

$

41,835

Non-Current

3,782

7,184

$

31,258

$

49,019

Leases

Current

12,668

10,632

Non-Current

62,044

58,602

$

74,712

$

69,234

Total Debt

$

105,970

$

118,253

Cash

21,870

8,873

Net Debt

$

84,100

$

109,380