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Ebix's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: EBIX

Looking at expenses and margins year-over-year, the company’s operating margin for Q2 2012 was 37% as compared to 44% in Q2 2011. In Q2 2011, above the operating margin line we recorded a one-time gain of $1.9 million related to the reduction of certain contingent earn out accrued liabilities related to acquisitions made in 2010.

Excluding the gain, our operating margins in Q2 2011 would have been 39.6%. The acquisitions we made in the second quarter added nicely to our revenue, but it takes several months to streamline the operations, which had short-term negative effect on our operating margins until all synergies are fully realized.

Q2 2012 net income grew 14% to $18.1 million as compared to Q2 2011 net income of $13.9 million, after excluding the one-time non-recurring gain items totaling $6.5 million in Q2 of 2011, related to a $4.6 million benefit from the release of valuation allowances held against deferred tax assets, associated with tax net operating loss carry-forwards and the reversal of a $1.9 million contingent earn out liabilities.

Q2 2012 GAAP and net income was $18.1 million as compared to Q2 2011 net income of $22.3 million. Q2 2012 diluted earnings per share rose 24% year-over-year to $0.47, as compared to $0.37 in the second quarter of 2011, after excluding the non-recurring items in Q2 2011 that I just mentioned, amounting to $0.16 of diluted earnings per share. Q2 2012 GAAP diluted earnings per share fell 13% year-over-year to $0.47 as compared to $0.33 in the second quarter of 2011.

I will now turn the call over to Bob.

Robert Kerris

Good morning, all, and welcome to our second quarter investor conference call. The second quarter is concentrated with several major milestones for the company. In Q2, operating cash flow was $21 million, which represents a 7% annual improvement over Q2 2011. Through Q2 all of the company’s net income has been converted into positive operating cash flow. Our sustained strong operating cash flows enabled Ebix to return capital to our shareholders during the quarter with $9.5 million of share repurchases, and a $1.8 million quarterly cash dividend.

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