Exhibit 99.1
Conference call: Monday, November 5, 2007 at 11:00 A.M. EST
Webcast / Replay URL: http://www.ebix.com, Click on Investor Home Page
Dial-in numbers: 1-888-687-3295 Dial pass code 22975618
EBIX ANNOUNCES RECORD RESULTS WITH $1 DILUTED EPS
Revenue Rises Sixty Two Percent to $11.81 Million in Q3 of 2007
ATLANTA, GA — October 31, 2007 — Ebix, Inc. (NASDAQ: EBIX), a leading international developer and supplier of software and e-commerce solutions to the insurance industry, today reported record financial results for the third quarter of 2007. The results marked the highest EPS in any one quarter that the company has reported in its thirty one year history.
The company reported total revenue of $11.81 million for the third quarter of 2007, compared to $7.30 million for the third quarter of 2006, marking a sixty two percent increase in revenues.
Net income after taxes for the quarter rose one hundred twenty three percent to $3.69 million, or $1 per diluted share, up from $1.66 million, or $0.53 per diluted share, in the third quarter of 2006— an earnings per share growth of eighty nine percent. Results for the third quarter of 2007 were based on 3.68 million weighted average diluted shares outstanding, as compared to 3.12 million in the third quarter of 2006. The company also reported basic earnings per share in the third quarter of 2007 of $1.13 as compared to $0.60 in the third quarter of 2006.
The company’s operating expenses for the quarter grew by forty eight percent to $8.09 million as compared to $5.47 million for the third quarter of 2006. The company attributed the increase primarily to the acquisition of Finetre in October 2006.
The company also reported that its year-to-date net income thru September 2007 grew by 90 percent to $ 8.17 million as compared to $ 4.29 million for the same period in 2006. The nine month cumulative diluted EPS for 2007 grew by seventy four percent to $2.39 as compared to cumulative diluted EPS of $1.37 for the same period in 2006.
Robin Raina, president and CEO of Ebix, said, “We are pleased with the direction and momentum that the company has gained today in terms of its growth plans. We are especially pleased that the net margins in our business have grown in this quarter to 32%.”
Robin added: “With approximately $ 16 million in the bank, a $15 million credit line with LaSalle Bank and no other bank debt, the company is well poised financially to invest in its future. We intend to use this money effectively towards looking to fund accretive acquisitions in the near and long term future.”
Robert Kerris, Chief Financial Officer of Ebix, commented that “the $11.81 of third quarter revenue represents a twenty percent increase over the second quarter and generated an additional $1.41 million of operating income. Our operating margins continue to show significant improvement increasing 8.1% to 31.5% for the nine months
ended September 30, 2007 compared to the same period in 2006. The improved operating results during this nine period provided $8.85 million of cash flow from operating activities which is a $6.57 million increase compared to a year earlier.”
About Ebix
A CMMI 5 Company, Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the insurance industry. Ebix provides a series of application software products for the insurance industry ranging from carrier systems, agency systems and exchanges to custom software development for all entities involved in the insurance and financial industries.
Ebix 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.
With bases in Singapore, Australia, the US, New Zealand, India and Canada, Ebix employs insurance and technology professionals who provide products, support and consultancy to more than 3,000 customers on six continents. Ebix’s focus on quality has enabled its development unit in India to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model Integrated (CMMI). Ebix has also earned ISO 9001:2000 certification for both its development and call center units in India. For more information, visit the Company’s Web site at www.ebix.com.
Safe Harbor for Forward Looking Statements under the Private Securities Litigation Reform Act of 1995 — This press release contains various forward looking statements and information that are based on management’s beliefs, as well as 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. The Company has tried to identify such forward looking statements by use of words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “will,” “should,” 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 Company’s new products and services can be successfully developed and marketed, the integration and other risks associated with recent and future acquisitions, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties, the Company’s ability to continue to develop new products to effectively address market needs in an industry characterized by rapid technological change, the Company’s dependence on the insurance industry (and in particular independent agents), the highly competitive and rapidly changing automation systems market, the Company’s ability to effectively protect its applications software and other proprietary information, the Company’s ability to attract and retain quality management, and software, technical sales and other personnel, the potential negative impact on the Company’s outsourcing business in India from adverse publicity and possible governmental regulation, the risks of disruption of the Company’s Internet connections or internal service problems, the possibly adverse effects of a substantial increase in volume of traffic on the Company’s website, mainframe and other servers, possible security breaches on the Company’s website and the possible effects of insurance regulation on the Company’s business.
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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 the company’s annual report on form 10-K for the year ended December 31, 2006, included under “Item 1. Business—Risk Factors.” Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors or to publicly update any of the forward looking statements contained herein to reflect future events or developments or changed circumstances or for any other reason.
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(Financial tables follow)
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Ebix, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except for share and per share amounts)
| | Sept 30, 2007 | | December 31,
2006 | |
| | (Unaudited | ) | | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 15,874 | | $ | 5,013 | |
Accounts receivable, less allowance of $505 and $36, respectively | | 9,658 | | 7,973 | |
Other current assets | | 1,028 | | 913 | |
Total current assets | | 26,560 | | 13,899 | |
Property and equipment, net | | 2,201 | | 2,183 | |
Goodwill | | 23,632 | | 23,118 | |
Intangible assets, net | | 6,493 | | 7,867 | |
Other assets | | 408 | | 285 | |
Total assets | | $ | 59,294 | | $ | 47,352 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
| | | | | |
Accounts payable and accrued expenses | | $ | 1,792 | | $ | 1,854 | |
Accrued payroll and related benefits | | 1,286 | | 1,549 | |
Short term debt | | — | | 10,000 | |
Current portion of long term debt and capital lease obligation | | 463 | | 1,009 | |
Deferred revenue | | 6,174 | | 5,552 | |
Other current liabilities | | 205 | | 44 | |
Total current liabilities | | 9,920 | | 20,008 | |
Long term debt and capital lease obligation, less current portion | | 471 | | 943 | |
Deferred rent | | 218 | | 235 | |
Total current liabilities | | 10,609 | | 21,186 | |
Stockholders’ equity: | | | | | |
Convertible Series D Preferred stock, $.10 par value, 500 shares authorized, no shares issued and outstanding | | — | | — | |
Common stock, $.10 par value, 10,000 shares authorized, 3,291 issued and 3,282 outstanding at Sept 30, 2007 and December 31, 2006 | | 325 | | 286 | |
Additional paid-in capital | | 108,650 | | 94,914 | |
Treasury stock 9 shares repurchased as of Sept 30, 2007 and December 31, 2006 | | (149 | ) | (149 | ) |
Accumulated deficit | | (61,556 | ) | (69,724 | ) |
Accumulated other comprehensive income | | 1,415 | | 839 | |
Total stockholders’ equity | | 48,685 | | 26,166 | |
Total liabilities and stockholders’ equity | | $ | 59,294 | | $ | 47,352 | |
| | | | | | | | | | |
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Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
| | Three Months Ended September 30, | | Nine months Ended September 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Revenue: | | | | | | | | | |
Professional and Support Services and other (Including revenues from related parties of $383, $1,062, $1,366, and $2,477, respectively) | | $ | 9,466 | | $ | 6,970 | | $ | 27,602 | | $ | 18,424 | |
Software licensing | | 2,340 | | 326 | | 3,038 | | 1,551 | |
Total revenue | | 11,806 | | 7,296 | | 30,640 | | 19,975 | |
Operating expenses: | | | | | | | | | |
Cost of services provided | | 1,840 | | 1,480 | | 5,124 | | 4,170 | |
Product development | | 2,074 | | 1,297 | | 6,122 | | 3,265 | |
Sales and marketing | | 1,099 | | 730 | | 3,129 | | 1,969 | |
General and administrative | | 2,449 | | 1,530 | | 6,135 | | 4,892 | |
Amortization and depreciation | | 632 | | 435 | | 1,882 | | 1,166 | |
Total operating expenses | | 8,094 | | 5,472 | | 22,392 | | 15,462 | |
Operating income | | 3,712 | | 1,823 | | 8,248 | | 4,513 | |
Interest income, net of interest expense | | 174 | | 31 | | 11 | | 81 | |
Foreign exchange gain (loss) | | 175 | | (73 | ) | 302 | | 16 | |
Income before income taxes | | 4,061 | | 1,783 | | 8,561 | | 4,610 | |
Income tax expense | | (368 | ) | (123 | ) | (393 | ) | (318 | ) |
Net income | | $ | 3,693 | | $ | 1,659 | | $ | 8,168 | | $ | 4,292 | |
| | | | | | | | | |
Basic earnings per common share | | $ | 1.13 | | $ | 0.60 | | $ | 2.69 | | $ | 1.56 | |
| | | | | | | | | |
Diluted earnings per common share | | $ | 1.00 | | $ | 0.53 | | $ | 2.39 | | $ | 1.37 | |
| | | | | | | | | |
Basic weighted average shares outstanding | | 3,272 | | 2,763 | | 3,033 | | 2,757 | |
| | | | | | | | | |
Diluted weighted average shares outstanding | | 3,680 | | 3,119 | | 3,422 | | 3,131 | |
| | | | | | | | | | | | | | | | | |
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Ebix, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | Nine months Ended September 30, | |
| | 2007 | | 2006 | |
Cash flows from operating activities: | | | | | |
Net income | | $ | 8,168 | | $ | 4,292 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 1,882 | | 1,166 | |
Stock-based compensation | | 161 | | 65 | |
Restricted stock compensation | | 102 | | 112 | |
Provision for doubtful accounts | | 469 | | 10 | |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | (2,154 | ) | (1741 | ) |
Other assets | | (238 | ) | (722 | ) |
Accounts payable and accrued expenses | | (62 | ) | (483 | ) |
Accrued payroll and related benefits | | (263 | ) | (138 | ) |
Deferred revenue | | 622 | | (284 | ) |
Customer Deposits | | 161 | | — | |
Net cash provided by operating activities | | 8,848 | | 2,277 | |
Cash flows from investing activities: | | | | | |
Investment in Infinity | | — | | (3,040 | ) |
Investment in Finetre | | (15 | ) | — | |
Deferred Rent | | (17 | ) | 231 | |
Capital expenditures | | (502 | ) | (370 | ) |
Net cash used in investing activities | | (534 | ) | (3,179 | ) |
Cash flows from financing activities: | | | | | |
Payments on line of credit | | (10,000 | ) | — | |
Principal payments under debt obligations | | (1,015 | ) | (966 | ) |
Capital leases | | (2 | ) | 13 | |
Proceeds from the issuance of common stock, net issuance costs | | 13,275 | | 322 | |
Proceeds from the exercise of the stock options | | 237 | | — | |
Repurchase of common stock | | — | | (148 | ) |
Net cash (used)/provided in financing activities | | 2,495 | | (779 | ) |
Effect of foreign exchange rates on cash | | 52 | | 282 | |
Net change in cash and cash equivalents | | 10,861 | | (1,399 | ) |
Cash and cash equivalents at the beginning of the period | | 5,013 | | 6,733 | |
Cash and cash equivalents at the end of the period | | $ | 15,874 | | $ | 5,334 | |
| | | | | |
Supplemental disclosures of cash flow information: | | | | | |
Interest paid | | $ | 277 | | $ | — | |
Income taxes paid | | $ | 107 | | $ | 384 | |
CONTACT:
Jesenia Jurado
Ebix, Inc.
678 - -281-2036 or jjurado@ebix.com
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