Ebix, Inc. (NASDAQ:EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today reported record financial results for the third quarter of 2011 and will host a conference call at 11:00 a.m. EST (details below)
Ebix delivered the following results for its third quarter, fiscal year 2011:
Q3 2011 operating income was $18.0 million, an increase of 37% on a year-over-year basis, as compared to Q3 2010 operating income of $13.1 million. The Company’s Operating income excluding any non-recurring gains was $16.8 million for the quarter.
Total Q3 2011 revenue was $42.6 million, an increase of 28% on a year-over-year basis, as compared to Q3 2010 revenue of $33.3 million. During the nine months ended September 30, 2011 revenue increased $27.8 million or 29%, to $124.9 million compared to $97.1 million during the same period in 2010.
The Company’s operating expenses for the quarter grew by 22.0% to $24.6 million as compared to $20.2 million for the third quarter of 2010.
Net cash provided by the Company’s ongoing operations in Q3 2011 was $22.1 million, an increase of 120% year-over-year, compared to $10.0 million in Q3 of 2010. During the nine months ended September 30, 2011 the Company generated $51.9 million of net cash flow from operating activities, as compared to $33.8 million in the first nine months of 2010, an increase of 53%.
The Company reported an operating margin of 42% for Q3 2011 as compared to 39% for the same period during 2010. Excluding one-time gains, the operating margin in Q3 2011 was 39.4% as compared to Q3 2010 operating margin of 39.3%.
Q3 2011 net income was $16.5 million, a decrease of less than 1% on a year-over-year basis, as compared to Q3 2010 net income of $16.7 million.
Q3 2010 net income excluding the one time gain of $3.9 million associated with the E-Z Data puts was $12.8 million.
Earnings per Share:
Q3 2011 diluted earnings per share declined 5% year-over-year to $0.41, as compared to $0.43 in the third quarter of 2010. However, Q3 2010 diluted EPS included a one time EPS gain of 10 cents resulting from the non-operating income of $3.9 million recognized in regards to the decrease in the fair value of the put option that was issued to the two former stockholders of E-Z Data who received shares of Ebix common stock as part of the acquisition consideration paid by the Company. For purposes of the Q3 2011 EPS calculation, there was an average of 40.4 million diluted shares outstanding during the quarter, as compared to 39.0 million diluted shares outstanding in Q3 of 2010.
The Exchange channel grew 40.5% year over year to $33.1 million or 77.5% of the Q3 revenues. The BPO channel decreased 13% year over year, to $3.58 million or 8% of the Q3 revenues. The Broker Channel grew 37% year over year, to $4.73 million or 11 % of the Q3 revenues. The Carrier channel decreased 43% year over year, to $1.27 million or 3% of the Q3 revenues.
During Q3 2011, the Company repurchased 2.01 million shares of our common stock at an average price of $17.28 per share for an aggregate amount of $34.80 million. Subsequent to September 30, 2011, the Company has purchased another 188,000 shares of its common stock at an average price of $14.14 for an aggregate amount of $2.66 million. Through November 7, the Company has repurchased 3.51 million shares of Ebix common stock in 2011, for an aggregate consideration in the amount of $63.66 million, representing an average price of $18.13 per share.
Q4 Diluted Share Count:
Taking into account the share repurchases made by the Company to date, the Company expects the diluted share count for Q4 to be 39.42 million which would be 3% lower than the Q3 diluted share count used for EPS calculation. This diluted share count is likely to be even lower if the Company continues to repurchase its common stock from the market.
“We are very pleased with our record operating cash flow for the quarter, as they show that the company can grow its top line in a difficult industry environment, without sacrificing margins or compromising on price for our valued added Exchange products.” Ebix Chairman, President & CEO Robin Raina said, “Our results for the quarter validate our efforts to add additional sales force leadership and more sales people as we work to create a global institutional account management structure. We feel our greatest opportunity is to maximize the value of our existing relationships and we are making that investment with the rewards to be seen in 2012.”