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Ebix Announces Second Quarter 2013 Results

Stocks in this article: EBIX

  • Quarterly Revenue of $5 1 . 0 Million, up 7 % Year-Over-Year
  • Q 2 Diluted EPS of $0. 35 , down 25 % Year-Over-Year

ATLANTA, Aug. 9, 2013 (GLOBE NEWSWIRE) -- Ebix, Inc. (Nasdaq:EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today reported results for the fiscal second quarter ended June 30, 2013.

Ebix delivered the following results for the second quarter of 2013:

Revenue: Total Q2 2013 revenue was $51.0 million, an increase of 7% on a year-over-year basis, as compared to Q2 2012 revenue of $47.7 million. During the six months ended June 30, 2013, revenue increased $12.0 million or 13%, to $103.6 million compared to $91.5 million during the same period in 2012.

Earnings per Share: Q2 2013 diluted earnings per share decreased 25% year-over-year to $0.35, as compared to $0.47 in the second quarter of 2012. For purposes of the Q2 2013 EPS calculation, there was an average of 38.8 million diluted shares outstanding during the quarter, which approximately is the same as Q2 2012.

Operating Cash: Cash generated from operations during Q2 2013 was $10.6 million, down 50% year-over-year as compared to $21.0 million in Q2 2012. During the six months ended June 30, 2013, the Company generated $24.8 million of net cash flow from operating activities, a decrease of 28% as compared to $34.7 million in the first six months of 2012.  

Margins:Operating margins for Q2 2013 were higher at 37.8% as compared to 37.1% for Q2 2012, and 36.7% for Q1 2013. The operating margins in Q2 2013 were positively impacted by a $5.8 million gain from the reduction of the earn out accrual relating to our acquisition of PlanetSoft, while being negatively impacted by certain legal and extraordinary operational costs adding up to $4.5 million in Q2 of 2013. The Company was also negatively impacted by the impact of lower initial operating margins from some of the businesses acquired in 2012 and 2013, as compared to our existing operations. The Company expects a portion of the legal costs in Q2 of 2013 to continue for a few more quarters, impacting our operating margins negatively.

Diversified Revenue Base: Ebix continued to have highly diversified revenue streams across thousands of clients, with the largest client accounting for less than 2.5% of the Company's Q2 2013 revenues.

Channel Revenues: The Exchange channel continued to be the largest channel for Ebix accounting for 79% of the Company's Q2 2013 Revenues as compared to 80% in Q2 2012.

  Three Months Ended June 30, Six Months Ended June 30,
(dollar amounts in thousands) 2013 2012 2013 2012
Exchanges $40,501 $38,182 $82,187 $72,828
Broker Systems 4,766 4,422 9,488 9,176
Business Process Outsourcing ("BPO") 4,013 3,890 8,177 7,461
         
Carrier Systems 1,724 1,222 3,718 2,078
Totals $51,004 $42,267 $103,570 $91,543

Net Income : Q2 2013 net income was $13.5 million, a 25% decrease on a year-over-year basis, as compared to Q2 2012 net income of $18.1 million. During the six months ended June 30, 2013, net income decreased $2.9 million or 9%, to $30.9 million compared to $33.8 million during the same period in 2012. The net income in Q2 2013 was impacted negatively by the increase in the a variable stock put option liability of $ 1.6 million associated with the issuance of stock to PlanetSoft shareholders worth $5 million, as also by the company increasing certain tax reserves by $2.5 million in Q2 2013.

Share Repurchases: The Company purchased 250,900 shares of its common stock in June at an average price of $9.93 for an aggregate amount of $2.5 million. No shares have been purchased in Q3 2013. The Company currently has approximately $102.9 million remaining in its share repurchase authorization.

Q3 2013 Diluted Share Count: As of today, the Company expects the diluted share count for Q3 2013 to be approximately 38.6 million.

Debt Payments: In Q2 the Company used $5.6 million to reduce its bank debt, and in the month subsequent to June 30 th, the Company made additional debt payments in the amount of $7.4 million to further reduce its bank debt, thus bringing its total current bank debt down to $ 62.2 million as of August 9, 2013 date. Our current net debt as of August 9, 2013 is $30.8 million.

Tax Payments: In the first 6 months of 2013, the Company paid $11.8 million of cash in taxes vs. $4.8 million for the same period in 2012.

"With a few distractions in the quarter, Ebix grew its revenue 7% year over year to $51.0 million which did not match our goals for the quarter. The entire Ebix team is currently focused on building our sales pipeline and implementing signed contracts" Ebix Chairman, President & CEO Robin Raina said. "We have had good customer wins in late June and July and are in the process of negotiating large customer contracts. We are focused on generating increased subscription and transaction revenue and adding to our net operating cash flow and income over the next few quarters."

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