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During the course of this call we may reference historical non-GAAP financial measures to provide a greater understanding of our business or financial results. Management at times may review certain non-GAAP financial information and metrics in evaluating the company’s historical and projected financial performance, and believe it may assist investors in assessing it’s ongoing operations.The presentation of this additional information is not meant to be considered in isolation or as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Please be advised we may or may not update these metrics in future calls. Our press release announcing the second quarter 2012 results was issued a few hours ago. The audio of this investor call is also being webcast live on the web at www.ebix.com/webcast. You can also look at Ebix’s financials beyond what has been provided in the release, on our website, www.ebix.com. The audio and text transcript of this call will be available also on the Investor homepage after 3 pm today. We reported today significant revenue and strong cash flow growth for the second quarter, following Ebix’ strong performance in 2011. Bob and I will talk about the company from a financial perspective, and Robin will address the business in the quarter, and our recent acquisitions and our contract pipeline. Revenue in Q2 increased by 13% from a year ago to $47.7 million. There were several drivers of revenue growth in Q2, most notably our exchange business in Q2 of 2012 grew 18.5% over Q2 of 2011 to become 80% of our total revenue this quarter, compared to 76% in Q2 of 2011. The Broker channel decreased revenue by 8% and our BPO channel was up 4%. This is the first increase in our year-over-year BPO revenue since 1Q 2011. Sequentially, carrier system revenue was up 43% over 1Q 2012. The Carrier Channel was down 17% as compared to a year ago.
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. Read the rest of this transcript for free on seekingalpha.com