GlobeNewswire Inc | Nov 9, 2020 07:31AM EST

November 09, 2020

Q3 Operating Income of $31.9 million and EBITDA plus stock-based compensation of $36.5 million

Year-to-date operating cash flow of $71.8 million

JOHNS CREEK, Ga., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: EBIX), today announced the following results for the quarter ended September 30, 2020:

-- Diluted EPS (GAAP) of $0.80 and Non-GAAP diluted EPS of $0.93 -- Revenues of $154.3 million and constant currency revenues of $160.2 million -- GAAP operating income of $31.9 million and Non-GAAP operating income of $35.8 million

Ebix will host a conference call to review its results today at 11:00 a.m. EDT (details below).

Ebix Chairman, President and CEO Robin Raina said, In spite of the continued impact of COVID-19 across several major areas of our global operations, we are reporting Q3 2020 revenues of $154.3 million, a 39% increase over Q2 2020 and 5% increase over Q3 2019. The diversity of our revenue sources has allowed Ebix to increase its overall revenues despite continued significant declines in its travel, forex, e-learning and remittance businesses. Our global payment solutions business continues to benefit from strong customer demand for prepaid cards and other payment solutions. The Company continued to generate strong cash flows in the quarter with year-to-date operating cash flows of $71.8 million. I am pleased that our company has a strong foundation of recurring revenues from our on demand insurance and financial businesses around the globe, and continue to be optimistic regarding the long-term investment strategy towards building a unique insurance, financial and business services technology company globally.

Ebix delivered the following results for the third quarter of 2020:

Revenue: Q3 2020 revenue increased 5% to $154.3 million compared to $147.2 million in Q3 2019, and increased 39% over Q2 2020 revenue of $111.3 million, primarily due to a market-leading insurance exchange business and strong demand for our payment solutions in India. Excluding revenues from the foreign exchange, travel, e-learning and remittance businesses that were impacted the most by COVID-19, Q3 2020 revenues grew 55% as compared to Q3 2019.

On a constant currency basis, Ebix Q3 2020 revenues would have been $5.9 million higher, while the year-to-date revenues would have been $15.9 million higher as compared to the GAAP revenues numbers reported. Exchanges, including the EbixCash and our worldwide insurance exchanges, continued to be Ebixs largest channel, accounting for 90% of Q3 2020 revenues.

(dollar amounts in thousands) Channel Q3 2020 Q3 2019 Change YTD YTD Change 2020 2019EbixCash Exchanges $ $ 18% $ $ -5% 96,772 82,085 227,867 238,770Insurance Exchanges 42,382 47,385 -11% 129,342 141,993 -9%RCS ? Insurance 15,151 17,763 -15% 46,284 53,669 -14%Total Revenue $ $ 5% $ $ -7% 154,305 147,233 403,493 434,432 Total Revenue on Constant $ $ 9% $ $ -3%Currency Basis 160,193 147,233 419,348 434,432

Operating Income and Operating Cash: Q3 2020 GAAP operating income increased 23% to $31.9 million as compared to $26.0 million in Q3 2019, due primarily to a $12.1 million bad debt reserve booked in Q3 2019 related to a public sector entity, BSNL, in India offset by the negative impact of COVID-19 on our operating income in the areas of travel, foreign exchange, e-learning and remittance. Non-GAAP operating income for Q3 2020 was $35.8 million.

On a year-to-date basis, cash generated from operations at 30th September 2020 was $71.8 million, which is 18% higher than the full year 2019 operating cash flows of $60.8 million

Earnings per Share: In spite of the impact of COVID-19, Q3 2020 GAAP diluted earnings per share was $0.80 as compared to $0.67 in Q3 2019. Excluding the one-time, non-recurring items, non-GAAP diluted earnings per share for Q3 2020 was $0.93.

Net Income Q3 2020 GAAP net income increased 20% to $24.7 million compared to $20.5 million in Q3 2019. Q3 2020 Non-GAAP net income was $28.5 million after excluding certain non-recurring items.

Shares Outstanding and Repurchases: In Q3 2020, Ebix made no repurchases of its outstanding common stock. Ebixs weighted average diluted shares outstanding was 30.9 million in Q3 2020 compared to 30.6 million in Q3 2019 and 30.7 million in Q2 2020.

Q4 2020 Diluted Share Count: As of today, Ebix expects its diluted share count for Q4 2020 to be approximately 30.9 million.

Dividend: Ebix paid its regular quarterly dividend of $0.075 per share in Q3 2020 for a total cost of $2.3 million.

Ebix Chairman, President and CEO Robin Raina said, Ebix has a track record of two decades of consistency in terms of the key financial metrics of top line, operating income, EPS and cash flows, with a strong focus on operating margins. In the last few quarters, we adjusted our strategy to counter the impact of COVID-19 and focused our energies on organic growth in areas that were not impacted materially by COVID-19, while trying to protect operating margins in core business areas. We are pleased that we were successful in our strategy as reflected by our revenue growth, operating income and operating cash flows. We grew our overall revenues 39% sequentially in the quarter, while our core businesses excluding the lower margin payment solutions business generated 40% EBITDA margin in the quarter.

Steve Hamil, EVP and Global CFO added, The Company continues to produce robust operating cash flows, generating $$71.8 million year-to-date in 2020. Despite the cumulative spending of approximately $92 million on investment in acquisitions, capital expenditures and capitalized software development costs, dividend payments, cash taxes and debt service and debt reduction for the year-to-date period, our total cash and short-term investments was $126.5 million at 9/30/20, as compared to $115.8 million at 12/31/19. Likewise, our working capital was a solid $148.6 million as of 09/30/20.

2020 Business Outlook: Given the ongoing market disruption caused by the COVID-19 pandemic, and related uncertainty on timing and extent of recovery, the Company is not providing fiscal 2020 or 2021 revenue and earnings guidance at this time.

Reconciliation of EBITDA, GAAP net income and diluted earnings per share to non-GAAP net income and diluted earnings per share. Non-GAAP information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables.

Q3 2020

(dollar amounts in thousands except EPS) Diluted EPSQ3 2020 GAAP Net Income $24,682 $0.80 Q3 2020 GAAP Operating Income $31,899 Non-GAAP Adjustments: Amortization of Intangibles (1) $2,436 $0.08 Stock-Based Compensation (1) $1,204 $0.04 One-Time Legal Costs (2) $212 $0.01 Income Tax Effects of Non-GAAP adjustments (3) ($8 ) ($0.00 )Total Non-GAAP Adjustments (Operating Income) $3,852 Total Non-GAAP Adjustments (Net Income) $3,860 $0.13 3rd Quarter 2020 Non-GAAP Net Income $28,542 $0.93 3rd Quarter 2020 Non-GAAP Operating Income $35,751

(1) Adjustments relate to amortization of acquired intangibles and stock-based compensation recognized during the periods for GAAP purposes.(2) Adjustments relate to non-recurring items The Company's Non-GAAP tax provision is on the basis of the Q3 2020(3) effective tax rate, which reflects currently available information and could be subject to change.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP net income (loss), non-GAAP operating income and non-GAAP Earnings per share. Non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP EPS from operations exclude amortization of intangibles and stock-based compensation. Non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP EPS from operations can also exclude the effect of any restructuring, acquisition, integration & other expenses, legal expenses associated with such acquisitions or legal expenses associated with non-operating activities, or any one-time tax benefits.

Ebix believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Ebixs financial condition and results of operations. The Companys management uses these non-GAAP measures and other metrics to compare the Companys performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Companys financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Companys financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Ebix urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate the Companys business.

Conference Call Details:

Call Date/Time: Monday, November 9, 2020 at 11:00 a.m. ESTCall Dial-In: +1-877-837-3909 or 1-973-409-9690; Call ID # 6782823

www.ebix.com/webcast orLive Audio Webcast: https://edge.media-server.com/mmc/p/bkzs93gs

Audio Replay URL: www.ebix.com/result_20_Q3 after 2:00 p.m. EST on Nov 9th

About Ebix, Inc.

With 50+ offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries. In the Insurance sector, Ebixs main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis, while also providing Software-as-a-Service ("SaaS") enterprise solutions globally in the area of CRM, front-end & back-end systems, outsourced administration and risk compliance services.

With a "Phygital strategy that combines 320,000 physical distribution outlets in many Southeast Asian Nations (ASEAN) countries, to an Omni-channel online digital platform, the Companys EbixCash Financial exchange portfolio encompasses leadership in the areas of domestic & international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, and lending, wealth and asset management solutions and services in India and other markets. EbixCashs Forex operations have emerged as a leader in Indias airport Foreign Exchange business, with operations in 32 international airports, including Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata. These Forex operations conduct over $4.8 billion in gross transaction value per year. EbixCashs inward remittance business in India conducts approximately $5 billion gross in annual remittance business, confirming its undisputed leadership position in India. EbixCash, through its travel portfolio of Via and Mercury, is also one of Southeast Asias leading travel exchanges, with over 2,200+ employees, a 212,450+ agent network, 25 branches and over 9,800 corporate clients. The EbixCash travel business processes an estimated $2.5 billion in gross merchandise value per year. EbixCashs technology services Division has emerged as a leader in the areas of lending technology, asset & wealth management technology, and travel technology in India and has grown its international expanse to Europe, Middle East, Africa and other ASEAN countries.

Through its various SaaS-based software platforms, Ebix employs thousands of domain-specific technology professionals to provide products, support and consultancy to thousands of customers on six continents. For more information, visit the Companys website at www.ebix.com

SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS

As used herein, the terms Ebix, the Company, we, our and us refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Ebix, Inc.

The information contained in this Press Release contains forward-looking statements and information within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. This information includes 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. In addition, certain statements included in this and our future filings with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements. Words such as "may," "could," "should," "would," "believe," "expect," "anticipate," "estimate," "intend," "seeks," "plan," "project," "continue," "predict," "will," "should," and other words or expressions of similar meaning are intended by the Company to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are found at various places throughout this report and in the documents incorporated herein by reference. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.

Our actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference, include, but are not limited to those discussed in our Annual Report on Form 10-K and subsequent reports filed with the SEC, as well as: the ongoing effects of the Covid-19 global pandemic, the risk of an unfavorable outcome of the pending governmental investigations or shareholder class action lawsuits, reputational harm caused by such investigations and lawsuits, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties; pricing and other competitive pressures and the Company's ability to gain or maintain share of sales as a result of actions by competitors and others; changes in estimates in critical accounting judgments; changes in or failure to comply with laws and regulations, including accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax interpretations) in domestic or foreign jurisdictions; exchange rate fluctuations and other risks associated with investments and operations in foreign countries (particularly in Australia, UK and India wherein we have significant operations); equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; and international conflict, including terrorist acts.

Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein to reflect future events, developments, changed circumstances, or for any other reason.

Readers should carefully review the disclosures and the risk factors described in the documents we file from time to time with the SEC, including future reports on Forms 10-Q and 8-K, and any amendments thereto.

You may obtain our SEC filings at our website, www.ebix.com under the "Investor Information" section, or over the Internet at the SEC's web site, www.sec.gov.

CONTACT:

Darren Joseph 678 -281-2027 or IR@ebix.com

David Collins or Chris Eddy Catalyst Global - 212-924-9800 or ebix@catalyst-ir.com



Ebix, Inc. and SubsidiariesCondensed Consolidated Statements of Income(In thousands, except per share data)(Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Operating revenue $ 154,305 $ 147,233 $ 403,493 $ 434,432 Operating expenses: Cost of services 85,976 55,171 192,526 152,054 providedProduct development 8,775 11,245 26,530 33,884 Sales and marketing 3,375 4,284 10,637 14,898 General and 20,888 46,900 65,596 101,210 administrative, netAmortization and 3,392 3,626 10,142 10,966 depreciationTotal operating 122,406 121,226 305,431 313,012 expenses Operating income 31,899 26,007 98,062 121,420 Interest income 29 99 112 578 Interest expense (7,495 ) (10,970 ) (23,879 ) (32,551 )Non-operating (loss) (4 ) 352 95 344 incomeNon-operating expense ? ? ? (21,140 )Foreign currency (597 ) (641 ) 112 (495 )exchange gainIncome before income 23,832 14,847 74,502 68,156 taxesIncome tax (expense) 152 217 (2,809 ) 297 benefitNet income including 23,984 15,064 71,693 68,453 noncontrolling interestNet loss attributableto noncontrolling (698 ) (5,445 ) (1,187 ) (6,617 )interestNet income attributable $ 24,682 $ 20,509 $ 72,880 $ 75,070 to Ebix, Inc. Basic earnings percommon share $ 0.81 $ 0.67 $ 2.39 $ 2.46 attributable to Ebix,Inc. Diluted earnings percommon share $ 0.80 $ 0.67 $ 2.37 $ 2.45 attributable to Ebix,Inc. Basic weighted average 30,525 30,501 30,502 30,517 shares outstanding Diluted weightedaverage shares 30,853 30,633 30,748 30,598 outstanding

Ebix, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(In thousands, except share amounts)

September 30, December 31, 2020 2019ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 88,023 $ 73,228 Receivables from service providers 19,758 25,607 Short-term investments 24,522 4,443 Restricted cash 7,902 35,051 Fiduciary funds - restricted 4,757 4,966 Trade accounts receivable, less allowances of 132,089 153,565 $21,908 and $21,696, respectivelyOther current assets 69,917 67,074 Total current assets 346,968 363,934 Property and equipment, net 48,525 48,421 Right-of-use assets 13,604 19,544 Goodwill 938,680 952,404 Intangibles, net 52,864 46,955 Indefinite-lived intangibles 27,815 42,055 Capitalized software development costs, net 20,420 19,183 Deferred tax asset, net 66,992 69,227 Other assets 34,682 29,896 Total assets $ 1,550,550 $ 1,591,619 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable and accrued liabilities $ 68,941 $ 84,735 Payables to service agents 8,224 12,196 Accrued payroll and related benefits 12,079 8,755 Working capital facility 7,546 28,352 Fiduciary funds - restricted 4,757 4,966 Short-term debt 8,349 1,167 Contingent liability for accrued earn-out 3,352 8,621 acquisition considerationCurrent portion of long term debt and financinglease obligations, net of deferred 23,620 22,091 financing costs of $920 and $575, respectivelyContract liabilities 27,807 28,712 Lease liability 4,392 5,955 Other current liabilities 29,341 29,335 Total current liabilities 198,408 234,885 Revolving line of credit 439,402 438,037 Long term debt and financing lease obligations,less current portion, net of deferred 237,608 254,467 financing costs of $1,293 and $1,534,respectivelyContingent liability for accrued earn-out ? 1,474 acquisition considerationContract liabilities 7,474 8,541 Lease liability 9,128 13,196 Deferred tax liability, net 1,235 1,235 Other liabilities 26,725 40,339 Total liabilities 919,980 992,174 Stockholders? equity: Preferred stock, $0.10 par value, 500,000 sharesauthorized, no shares issued and ? ? outstanding at June September 30, 2020 andDecember31, 2019Series Y Convertible preferred stock, $0.10 parvalue, 350,000 shares authorized, no sharesissued and outstanding at September 30, 2020 and ? ? no shares authorized, issue andoutstanding at December31, 2019Common stock, $0.10 par value, 220,000,000 sharesauthorized, 30,526,793 issued andoutstanding, at September 30, 2020, and 3,053 3,049 30,492,044 issued and outstanding atDecember31, 2019Additional paid-in capital 10,537 6,960 Retained earnings 683,131 618,503 Accumulated other comprehensive loss (114,295 ) (78,398 )Total Ebix, Inc. stockholders? equity 582,426 550,114 Noncontrolling interest 48,144 49,331 Total stockholders? equity 630,570 599,445 Total liabilities and stockholders? equity $ 1,550,550 $ 1,591,619

Ebix, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(In thousands)(Unaudited)

Nine Months Ended September 30, 2020 2019Cash flows from operating activities: Net income attributable to Ebix, Inc. $ 72,880 $ 75,070 Net loss attributable to noncontrolling interest (1,187 ) (6,617 )Adjustments to reconcile net income to net cash provided by operating activities:Amortization and depreciation 10,142 10,966 Provision (benefit) for deferred taxes 987 (5,880 )Share based compensation 3,457 2,451 Benefit for doubtful accounts 424 10,580 Amortization of right-of-use assets 4,644 5,167 Unrealized foreign exchange loss ? 321 Amortization of capitalized software development 2,493 1,931 costsReduction of acquisition accruals (3,308 ) (17,124 )Cash paid for acquisition earn-out (2,881 ) ? Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable 13,999 (22,052 )Receivables from service providers 5,849 9,012 Payables to service agents (3,972 ) (12,688 )Other assets (7,988 ) (5,947 )Accounts payable and accrued expenses (10,620 ) (4,062 )Accrued payroll and related benefits 3,316 (607 )Contract liabilities (1,591 ) (9,126 )Lease liabilities (4,317 ) (5,056 )Other liabilities (10,563 ) 33,844 Net cash provided by operating activities 71,764 60,183 Cash flows from investing activities: Cash paid for acquisitions, net of cash acquired (12,480 ) (104,026 )Cash paid to from Paul Merchants for 10% stake in ? (4,925 )MTSS combined businessCapitalized software development costs (4,617 ) (4,126 )(Purchases) maturities of marketable securities (20,609 ) 25,686 Capital expenditures (1,464 ) (5,869 )Net cash used in investing activities (39,170 ) (93,260 ) Cash flows from financing activities: Proceeds from revolving line of credit, net 1,364 13,500 Principal payments of term loan obligation (15,063 ) (11,298 )Repurchases of common stock ? (12,952 )Proceeds from the exercise of stock options 636 ? Forfeiture of certain shares to satisfy exercisecosts and the recipients' income tax obligations (1,841 ) (36 )related to stock optionsexercised and restricted stock vestedDividend payments (6,923 ) (6,898 )Payments on short-term notes, net ? 6,023 of debt obligations 7,187 (962 )(Payments) proceeds of working capital facility, net (19,945 ) 31,120 Payments of financing lease obligations (158 ) (200 )Net cash (used) provided by financing activities (34,743 ) 18,297 Effect of foreign exchange rates on cash (7,222 ) (2,397 )Net change in cash and cash equivalents, and (9,371 ) (17,177 )restricted cashCash and cash equivalents, and restricted cash at the 111,369 149,681 beginning of the periodCash and cash equivalents, and restricted cash at the $ 101,998 $ 132,504 end of the periodSupplemental disclosures of cash flow information: Interest paid $ 22,237 $ 31,787 Income taxes paid $ 8,019 $ 7,406