ATLANTA, Nov. 16, 2004 (PRIMEZONE) -- Ebix, Inc. (Nasdaq:EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today reported its financial results for the 2004 third quarter (Q3 '04) and nine-month periods ended September 30, 2004.
Total revenue for Q3 '04 increased 36% to $5.7 million (approximately 97% coming from the Company's services segment), compared to $4.2 million (91% from services) in the third quarter of 2003 (Q3 '03).
Ebix's Q3 '04 income before income taxes rose 36% to $920,000, compared to $678,000 in Q3' 03. Q3 '04 net income rose to $981,000, or $0.31 per diluted share, versus Q3 '03 net income of $575,000, or $0.24 per diluted share. Weighted average diluted shares outstanding were 3,208,000 and 2,351,000 in the 2004 and 2003 third quarter periods, respectively. The year-over-year increase in the weighted average diluted shares principally reflects shares issued in conjunction with funding the two acquisitions completed in 2004 as well as the increase in the number of exercisable employee options.
For the first nine months of 2004, Ebix's revenue rose 29% to $14.3 million, compared to $11.1 million during the nine-month period ended September 30, 2003. Income before income taxes increased 52% to $2.3 million, versus $1.5 million in the year-earlier period. Ebix's net income for the first nine months of 2004 was $2.1 million, compared to net income of $1.2 million during the comparable 2003 period. Diluted earnings per share for the nine months increased 37% to $0.70, versus $0.51 in the comparable year-ago period. Weighted average diluted shares outstanding were 3,064,000 and 2,304,000 in the corresponding 2004 and 2003 nine-month periods, respectively.
Robin Raina, President and Chief Executive Officer of Ebix, stated, "Ebix extended its strong first half results in the third quarter, achieving sequential and year-over-year revenue and earnings growth during the period."
Ebix Executive Vice President and Chief Financial Officer Dick Baum, said, "Our acquisitions of LifeLink in the first quarter and Heart Consulting in Q3 were both important contributors to the Company's operating gains during the quarter. This represented the first full quarter of benefit from the Heart acquisition, which closed on the first day of Q3."
Mr. Raina concluded, "Over the past few years, we have successfully transitioned Ebix's business to become a 'pure-play' developer and provider of software and e-commerce services focused exclusively on serving the insurance industry. In addition, we have also developed a business process outsourcing (BPO) model through which we provide call center and back office services to insurance and other financial services companies.
"Looking ahead, we are focused on leveraging our substantial industry expertise in insurance, as well as our high quality software development team and BPO capabilities to drive organic growth in our business. We will also continue our strategy of pursuing complementary acquisitions that are accretive to Ebix's financial results."
About Ebix
Founded in 1976, Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the insurance industry. The Company strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges.
Ebix combines the newest technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and Web and application hosting to meet the individual needs of organizations. The Company is in the process of seeking SEI CMM Level 4 certification for its development units in India and has already secured an ISO 9001:2000 certification for both its development and call center units in India.
Ebix provides a series of application software products for the insurance industry ranging from carrier systems, agency systems, exchanges to custom software development for all entities involved in the insurance and financial industries. The Company, with bases in Singapore, Australia, the U.S., New Zealand, India and Canada, employs insurance and technology professionals who provide products, support and consultancy to more than 3,000 customers on six continents. For more information, visit the Company's Web site at www.ebix.com.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release contains various forward-looking statements and information that are based on Ebix management's beliefs, as well as assumptions made by and information currently available to management. Ebix has tried to identify such forward looking statements by use of such words as "will," "expects," "intends," "anticipates," "plans," "believes" and similar expressions, but these words are not the exclusive means of identifying such statements. Such statements are subject to various risks, uncertainties and other factors which could cause actual results to vary materially from those expressed in, or implied by, the forward looking statements. Such risks, uncertainties and other factors include the extent to which the Ebix.com website and other new products and services can be successfully developed and marketed, the risks associated with any future acquisitions, and integrating recently completed acquisitions, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties, possible governmental regulation and/or other adverse consequences resulting from negative perception of the outsourcing of business processes to foreign countries, Ebix's ability to continue to develop new products to effectively address market needs in an industry characterized by rapid technological change, Ebix's ability to raise additional capital to finance future acquisitions and meet other funding needs, Ebix's dependence on a few customers (including one that is Ebix's largest stockholder), Ebix's dependence on the insurance industry, the highly competitive and rapidly changing automation systems market, Ebix's ability to effectively protect its applications software and other proprietary information, Ebix's ability to attract and retain quality management, and software, technical sales and other personnel, the risks of disruption of Ebix's Internet connections or internal service problems, the possible adverse effects of a substantial increase in volume of traffic on Ebix's website, mainframe and other servers, possible security breaches on the Ebix website, the possible effects of insurance regulation on Ebix, the possible effects of the Securities and Exchange Commission's investigation of Ebix's financial reporting, and possible future terrorist attacks or acts of war. Certain of these, as well as other risks, uncertainties and other factors, are described in more detail in Ebix's periodic filings with the Securities and Exchange Commission, including Ebix's quarterly report on Form 10-Q for the quarter ended September 30, 2004. Except as expressly required by the federal securities laws, Ebix undertakes no obligation to update any such factors or any of the forward-looking statements contained herein to reflect changed circumstances or future events or developments or for any other reason.
(financial tables follow)
Ebix, Inc. and Subsidiaries
Consolidated Income Statements
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenue:
Software $ 174 $ 373 $ 734 $ 1,141
Services and other
(Including revenues from
related parties of
$1,004, $1,502, $2,681
and $2,486, respectively) 5,482 3,795 13,532 9,934
-------- -------- -------- --------
Total revenue 5,656 4,168 14,266 11,075
Operating expenses:
Services and other costs 1,450 1,230 3,967 3,008
Product development 781 408 2,202 1,198
Sales and marketing 431 411 1,127 1,371
General and administrative 1,994 1,460 4,678 3,999
-------- -------- -------- --------
Total operating expenses 4,656 3,509 11,974 9,576
-------- -------- -------- --------
Operating income 1,000 659 2,292 1,499
Interest income 28 22 70 57
Interest expense (105) (4) (108) (14)
Foreign exchange gain
(loss) (3) 1 5 (56)
-------- -------- -------- --------
Income before income taxes 920 678 2,259 1,486
Income tax benefit
(expense) 61 (103) (122) (305)
-------- -------- -------- --------
Net income $ 981 $ 575 $ 2,137 $ 1,181
======== ======== ======== ========
Basic earnings per common
share $ 0.34 $ 0.25 $ 0.78 $ 0.52
======== ======== ======== ========
Diluted earnings per
common share $ 0.31 $ 0.24 $ 0.70 $ 0.51
======== ======== ======== ========
Basic weighted average
shares outstanding 2,900 2,291 2,742 2,291
======== ======== ======== ========
Diluted weighted average
shares outstanding 3,208 2,351 3,064 2,304
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Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2004 2003
Cash flows from operating activities:
Net income $ 2,137 $ 1,181
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 814 315
Stock-based compensation 53 27
Provision for doubtful accounts 123 7
Changes in assets and liabilities,
net of effect of acquisition:
Accounts receivable (628) 914
Other assets (505) (133)
Accounts payable and accrued expenses (210) 213
Accrued payroll and related benefits (847) 520
Deferred revenue 340 (330)
------- -------
Net cash provided by operating
activities 1,277 2,714
------- -------
Cash flows from investing activities:
Acquisition of LifeLink, net of cash
acquired (4,763) --
Acquisition of Heart, net of cash
acquired (3,152)
Capital expenditures (170) (454)
------- -------
Net cash used in investing
activities (8,085) (454)
Cash flows from financing activities:
Proceeds from borrowings related to
line of credit 3,500 --
Restricted cash (3,000) --
Proceeds from the issuance of common
stock, net of issuance costs 2,977 --
Proceeds from the exercise of
common stock options 45 --
Principal payments under capital
lease obligations (73) (84)
------- -------
Net cash provided by (used in)
financing activities 3,449 (84)
------- -------
Effect of foreign exchange rates on
cash -- 1
------- -------
Net change in cash and cash
equivalents (3,359) 2,177
Cash and cash equivalents at the
beginning of the period 7,915 4,993
------- -------
Cash and cash equivalents at the
end of the period $ 4,556 $ 7,170
------- -------
Supplemental disclosures of cash
flow information:
Interest paid $ 43 $ 14
Income taxes paid $ 342 $ 40
Supplemental schedule of noncash investing activities:
During the first quarter of 2004, the Company purchased all of the
capital stock of LifeLink Corporation for consideration which
included 200,000 shares of common stock valued at $3,000,000, cash of
$5,000,000, and a note payable of $2,226,000. The Company also
capitalized approximately $128,000 of transaction costs in
conjunction with the acquisition.
During the third quarter of 2004, Ebix Australia acquired the
operating assets of Heart Consulting Pty Ltd. in exchange for an
aggregate purchase price (in Australian dollars) of A$10,175,000
($7,116,000 USD) (based on the exchange rate as published by the
Reserve Bank of Australia on July 1, 2004 of A$0.6994 per United
States Dollar ("USD")) payable as follows: A$5,175,000 ($3,619,000
USD) in cash at closing, A$2,000,000 ($1,399,000 USD) payable under
stand-by letters of credit issued by the Company's lender on the
Company's line of credit in three equal annual installments on each
of the first, second and third anniversaries of the closing (the
"Deferred Payments"), and A$3,000,000 ($2,098,000 USD) payable in
157,728 shares of common stock of Ebix issued at the closing. The
Company also capitalized approximately $37,000 of transaction costs
in conjunction with the acquisition.
Ebix, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
September 30, December 31,
ASSETS 2004 2003
---- ----
Current assets: (Unaudited)
Cash and cash equivalents $ 4,556 $ 7,915
Accounts receivable, less allowance
of $342 and $356, respectively 3,027 1,787
Other current assets 878 364
-------- --------
Total current assets 8,461 10,066
-------- --------
Restricted cash 3,000 --
Property and equipment, net 1,359 1,353
Capitalized software, net 27 109
Goodwill 12,836 123
Intangibles, net 3,574 --
Other assets 411 320
-------- --------
Total assets $ 29,668 $ 11,971
======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 1,620 $ 1,778
Accrued payroll and related
benefits 650 1,287
Current portion of long term debt 925 --
Current portion of capital lease
obligations -- 73
Deferred revenue and deposit
liabilities 3,158 2,141
-------- --------
Total current liabilities 6,353 5,279
-------- --------
Long term debt, less current
portion 2,693 --
Line of credit 3,500 --
Redeemable common stock (357,728
and 0 shares issued and
outstanding at September 30, 2004
and December 31, 2003,
respectively) stated at redemption
price 4,135 --
-------- --------
Stockholders' equity:
Convertible Series D Preferred
stock, $.10 par value, 2,000,000
shares authorized, no shares
issued and outstanding -- --
Common stock, $.10 par value,
40,000,000 shares authorized,
2,904,674 and 2,316,767 shares
issued and outstanding,
respectively 290 232
Additional paid-in capital 92,669 88,706
Deferred compensation (383) (436)
Accumulated deficit (80,114) (82,251)
Accumulated other comprehensive
income 525 441
-------- --------
Total stockholders' equity 12,987 6,692
-------- --------
Total liabilities and stockholders'
equity $ 29,668 $ 11,971
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