Company Update (NASDAQ:EBIX): Ebix Inc Reports 2015 Fiscal Third Quarter Results

Ebix Inc (NASDAQ:EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial and healthcare industries, today reported results for the fiscal third quarter ended September 30, 2015 (Q3 2015). Ebix will host a conference call to review its results today at 11:00 a.m. EST (details below).

Ebix delivered the following results for the third quarter of 2015:

Revenues: Total Q3 2015 revenue was $66.8 million, an increase of 32% on a year-over-year basis, as compared to Q3 2014 revenue of $50.8 million and a 3.2% sequential increase over Q2 2015 revenue of $64.7 million.

On a constant currency basis, Ebix Q3 2015 revenue increased 38% year over year to $70.2 million as compared to $50.8 million in Q3 of 2014. Year to date revenue increased 32% on a constant currency basis to $203.3 million as compared to $153.7 million in 2014.

Ebix’s insurance exchange channel remained the company’s largest segment, accounting for 69% of Q3 2015 revenue and 72% of year-to-date revenue.

(dollar amounts in thousands) Three Months Ended
September 30,
Nine Months Ended
September 30,
Channel   2015     2014     2015     2014  
Exchanges $ 46,209   $ 41,757   $ 139,712   $ 125,212  
Broker Systems   3,812     4,511     11,067     13,862  
Risk Compliance Solutions (RCS)   15,754     3,346     41,218     10,423  
Carrier Systems   1,038     1,194     3,281     4,191  
Total Revenue $ 66,813   $ 50,808   $ 195,278   $ 153,688  

The continued strengthening of the US dollar, year over year, as compared to the Australian dollar and the Brazilian real reduced Q3 2015 revenue by $3.4 million and year-to-date revenue by $8.0 million across the Exchange and Broker Systems Channels.

Earnings per Share:  Q3 2015 diluted earnings per share of $0.59 were up 24% as compared to $0.47 in the third quarter of 2014. For purposes of the Q3 2015 EPS calculation, there was an average of 34.5 million diluted shares outstanding during the quarter, as compared to 38.3 million diluted shares outstanding in Q3 2014.

Operating Cash: Cash generated from operations in Q3 2015 was $15.5 million up 58% as compared to $9.8 million in Q3 2014.

Operating Income and Margins: Operating margins for the quarter were strong at 33%. Consulting margins improved to 28% from 24% in Q2 of 2015. The remaining business’s operating margins came out at 34%. Operating income for Q3 2015 was slightly up at 1% at $22.0 million as compared to $21.7 million of operating income in Q3 2014.

Net Income: Q3 2015 net income was $20.2 million, up 12% as compared to Q3 2014 net income of $18.0 million. During the nine months ended September 30, 2015, net income increased $10.6 million or 23%, to $57.6 million compared to $47.0 million during the same period in 2014.

Q4 2015 Diluted Share Count: As of today, the Company expects the diluted share count for Q4 2015 to be approximately 34.0 million.

Share Repurchases: Since June 30, 2015 and through September 30, 2015 the Company repurchased 1.17 million shares of its outstanding common stock for aggregate cash consideration in the amount of $33.3 million. Subsequent to September 30th and through November 5, 2015 the Company has repurchased an additional 20 thousand shares in the amount of $500 thousand.

Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q3 2015 for a total of $2.6 million.

Ebix Chairman, President and CEO Robin Raina said, “We are extremely pleased with the results. On a constant currency basis, our revenues for Q3 2015 would have been $70.2 million as compared to $50.8 million in Q3 of 2014. Our nine-month results for 2015 would have been $8 million higher on a constant currency basis as compared to the actual results in 2015. We have many large contracts in implementation now which are expected to have the effect of not only increasing our margins but also resulting in continued sequential growth of our top line.”

Robin added, “With continued momentum on our side, the deals in hand, a strong pipeline of large contracts at various stages of negotiation, we expect 2016 to be the best year in history for Ebix. We are also exploring a number of acquisitions that are all expected to be accretive from the outset.”

“We intend to continue returning cash to our shareholders through Dividends as also repurchasing our stock in the open markets.” Robin said. “We believe that purchase of our stock is the most accretive use of our cash though we intend to balance it with acquisitions also to ensure that we continue to grow Ebix’s expanse in emerging and niche markets where Ebix may not have a presence at present.”

Robert Kerris, Ebix’s EVP and CFO said “Ebix continues to deliver solid top line growth, improving operating margins and strong cash flow performance. As of November 5th, Ebix had $45 million in available cash and equivalents plus $54 million in available borrowing capacity, providing nearly $100 million to support organic growth, accretive acquisitions and opportunistic share repurchases.”

Robert added, “With the support of our ongoing operating cash flow generation, Ebix is well positioned to continue to fund its growth along with initiatives to drive long term shareholder value. Ebix utilized $44.3 million of cash during Q3 2015, consisting of $33.3 million to re-purchase 1.17 million shares of Ebix common stock, a $6.0 million investment in the IHC joint venture, $2.6 million in quarterly dividends, and $2.4 million for the purchase a building for our expanding operations in India and the build out of our new headquarters campus in Johns Creek, Georgia.” (Original Source)

Shares of Ebix closed yesterday at $30.40. EBIX has a 1-year high of $38.04 and a 1-year low of $14.46. The stock’s 50-day moving average is $27.10 and its 200-day moving average is $30.27.

Ebix Inc provides a series of application software products for the insurance industry from carrier systems, agency systems and exchanges to custom software development for all entities involved in the insurance and financial industries.


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