GlobeNewswire Inc | Nov 16, 2020 04:05PM EST

November 16, 2020

First Quarter Fiscal Year 2021

-- Record revenue increased 14.1% year-over-year to $108.8 million -- Net loss was $3.4 million (non-GAAP adjusted net income of $5.2 million) -- Adjusted EBITDA increased 41.3% to $15.6 million -- Eight new logos won and two new contact centers opened -- Company raises guidance for fiscal year 2021

WASHINGTON, Nov. 16, 2020 (GLOBE NEWSWIRE) -- IBEX Limited (ibex), a leading global provider of outsourced CX solutions, today announced financial results for its fiscal quarter ended September 30, 2020.

We achieved record first quarter 2021 financial results for our first quarter as a public company driving 14.1% year-over-year revenue growth, and positioning us to raise our fiscal year 2021 guidance, said Bob Dechant, Chief Executive Officer of ibex.Our results are a reflection of our success with New Economy clients and large blue chip clients who are shifting their customer interactions to digital. Our broad differentiated BPO 2.0 solutions are enabling us to rapidly win strategic new logo clients across key verticals, resulting in record growth.

Dechant continued, Our Wave X technologies played a key role in enabling us to win new opportunities as well as had a big impact on our operational performance for our clients. The market is looking for tech-led solutions to enable digital transformation and ibex is well positioned to continue to win.

First Quarter Fiscal Year 2021 Financial Highlights:

Revenue

-- Revenue increased 14.1% to $108.8 million, compared to $95.3 million in the prior year quarter.

Net Income / (Loss)

-- Net loss was $3.4 million, including $4.4 million of non-recurring costs, compared to net income of $2.3 million in the prior year quarter. -- Net margin was (3.1)%, compared to 2.4% in the prior year quarter. -- Non-GAAP adjusted net income increased to $5.2 million, compared to $3.1 million in the prior year quarter.

Adjusted EBITDA

-- Non-GAAP adjusted EBITDA increased to $15.6 million, compared to $11.0 million in the prior year quarter. -- Non-GAAP adjusted EBITDA margin increased to 14.3%, compared to 11.6% in the prior year quarter.

Earnings Per Share

-- IFRS basic and fully diluted loss per share was $(0.21) in the first quarter of fiscal year 2021 compared to IFRS basic and fully diluted earnings per share of $0.00 in the prior year quarter.* -- Non-GAAP pro forma fully diluted adjusted earnings per share increased to $0.31, compared to $0.18 in the prior year quarter.

* IFRS basic and fully diluted earnings per share for the first quarter of fiscal year 2020 does not reflect the recapitalization that occurred in connection with ibexs initial public offering.

Balance Sheet and Cash Flow

-- Net proceeds of $63.1 million received from our initial public offering, significantly strengthening our balance sheet. -- Operating cash flow increased to $5.9 million, compared to $0.8 million in the prior year quarter. -- Non-GAAP net debt decreased to $35.5 million, compared to $84.1 million as of June 30, 2020, primarily driven by funds received from our initial public offering.

First Quarter of Fiscal Year 2021 Business Highlights:

-- Won eight new customer logos across key verticals, including fintech and logistics & delivery -- Launched nine new clients in the quarter -- Opened two new contact centers in Ocho Rios, Jamaica and Managua, Nicaragua, and added a total of approximately 1,000 new nearshore workstations. -- Top three client concentration decreased to 38.1% from 46.2% in the prior year quarter -- New Economy revenue increased by 19% compared to the prior year quarter -- Digital business increased by 5% compared to the prior year quarter -- Non-voice revenue increased by 9% compared to the prior year quarter

Raised Fiscal Year 2021 Business Outlook

We are raising our fiscal year 2021 guidance for revenue to between $440 million and $443 million, an increase of approximately 9% over the prior year, compared to $431 million to $435 million previously provided.

Adjusted EBITDA is now expected to be between $60.5 million and $62 million, an increase of approximately 12% to 14% over the prior year, compared to $59.5 million to $61 million previously provided.

Conference Call and Webcast Information

IBEX Limited will host a conference call and live webcast to discuss its first quarter of fiscal year 2021 financial results at 4:30 p.m. Eastern Time today, November 16, 2020. To access the conference call, dial (833) 614-1408 for the U.S. or Canada, or for international callers (914) 987-7129 and provide conference ID 8594841. The webcast will be available live on the Investors section of ibexs website at: https://investors.ibex.co/.

An audio replay of the call will also be available to investors beginning at approximately 7:30 p.m. Eastern Time on November 16, 2020, until 7:30 p.m. Eastern Time on November 23, 2020, by dialing (855) 859-2056 for the U.S. or Canada, or for international callers, (404) 537-3406 and entering passcode 8594841. In addition, an archived webcast will be available on the Investors section of ibexs website at: https://investors.ibex.co/.

Financial Information

While the financial figures included in this press release have been computed in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, Interim Financial Reporting. The financial information in this press release has not been audited.

Non-GAAP Financial Measures

We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-GAAP financial measures depict the true performance of the business by encompassing only relevant and controllable events, enabling us to evaluate and plan more effectively for the future. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-GAAP financial measures and ratios are not measurements of our performance, financial condition or liquidity under IFRS as issued by the IASB and should not be considered as alternatives to operating profit or net income / (loss) or as alternatives to cash flow from operating, investing or financing activities for the period, or any other performance measures, derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles.

ibex is not providing a quantitative reconciliation of forward-looking non-GAAP adjusted EBITDA to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, non-recurring expenses, fair value adjustments, share-based compensation expense, and impairment of assets. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.

About ibex

ibex helps the worlds preeminent brands more effectively engage their customers with services ranging from customer support, technical support, inbound/outbound sales, business intelligence and analytics, digital demand generation, and CX surveys and feedback analytics.

Forward Looking Statements

In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as believe, may, will, estimate, continue, anticipate, intend, should, plan, expect, predict, potential, or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, and our strategies, priorities and business plans. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could impact our actual results include: developments relating to COVID-19; the Frontier restructuring and its proceedings under Chapter 11 of the United States Bankruptcy Code; our ability to attract new business and retain key clients; our ability to enter into multi-year contracts with our clients at appropriate rates; the potential for our clients or potential clients to consolidate; our clients deciding to enter into or further expand their insourcing activities; our ability to operate as an integrated company under the ibex brand; our ability to manage portions of our business that have long sales cycles and long implementation cycles that require significant resources and working capital; our ability to manage our international operations, particularly in Pakistan and the Philippines and increasingly in Jamaica and Nicaragua; our ability to comply with applicable laws and regulations, including those regarding privacy, data protection and information security; our ability to manage the inelasticity of our labor costs relative to short-term movements in client demand; our ability to realize the anticipated strategic and financial benefits of our relationship with Amazon; our ability to recruit, engage, motivate, manage and retain our global workforce; our ability to anticipate, develop and implement information technology solutions that keep pace with evolving industry standards and changing client demands; our ability to maintain and enhance our reputation and brand; and other factors discussed under the heading Risk Factors in our annual report on Form 20-F filed with the U.S. Securities and Exchange Commission on October 23, 2020 and any other risk factors we include in subsequent reports on Form 6-K. Because of these uncertainties, you should not make any investment decisions based on our estimates and forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise.

Media Contact: Rosemary Hanratty, Senior Director of Marketing, ibex, 412.539.7099, rosemary.hanratty@ibex.co

IR Contact: Brinlea Johnson, The Blueshirt Group, 415.269.2645, brinlea@blueshirtgroup.com

IBEX LimitedUnaudited Consolidated Statements of Financial Position

US$ in thousands September 30, June 30, 2020 2020Assets Non-current assets Goodwill $ 11,832 $ 11,832Other intangible assets 2,862 2,781Property and equipment 92,548 84,588Investment in joint venture 338 331Deferred tax asset 2,946 2,223Warrant asset 2,406 2,611Other assets 5,150 4,834Total non-current assets $ 118,082 $ 109,200 Current assets Trade and other receivables 73,840 62,579Due from related parties 1,857 1,587Cash and cash equivalents 79,779 21,870Total current assets $ 155,476 $ 86,036Total assets $ 273,558 $ 195,236 Equity and liabilities Equity attributable to owners of the parent Share capital $ 2 $ 12Additional paid-in capital 158,009 96,207Other reserves 31,417 29,456Accumulated deficit (116,950 ) (109,527Total equity $ 72,478 $ 16,148 Non-current liabilities Deferred revenue $ 1,057 $ 434Lease liabilities 68,029 62,044Borrowings 4,535 3,782Deferred tax liability 114 117Other non-current liabilities 12,347 7,058Total non-current liabilities $ 86,082 $ 73,435 Current liabilities Trade and other payables $ 59,603 $ 53,213Income tax payables 2,747 3,087Lease liabilities 13,460 12,668Borrowings 29,302 27,476Deferred revenue 4,206 3,470Due to related parties 5,680 5,739Total current liabilities $ 114,998 $ 105,653Total liabilities $ 201,080 $ 179,088Total equity and liabilities $ 273,558 $ 195,236

IBEX LimitedUnaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income (Loss)

Quarter ended September 30, US$ in thousands, except share and per share 2020 2019 amountsRevenue $ 108,771 $ 95,347 Payroll and related costs 72,264 66,055 Share-based payments 2,089 42 Reseller commission and lead expenses 4,102 4,821 Depreciation and amortization 6,439 5,700 Other operating costs 24,790 14,136 (Loss) / income from operations $ (913 ) $ 4,593 Finance expenses (2,239 ) (2,307 )(Loss) / income before taxation $ (3,152 ) $ 2,286 Income tax (expense) / benefit (271 ) 50 Net (loss) / income $ (3,423 ) $ 2,336 Other comprehensive (loss) / income Item that will be subsequently reclassified to profit or lossForeign currency translation adjustment $ (36 ) $ 30 Cash flow hedge - changes in fair value 33 - $ (3 ) $ 30 Total comprehensive (loss) / income $ (3,426 ) $ 2,366 (Loss) / earnings per share attributable to the ordinary equity holders of the parentBasic $ (0.21 ) $ - Diluted $ (0.21 ) $ - Weighted average shares outstanding Basic 16,368,143 12,387,658 Diluted 16,368,143 12,594,993

IBEX LimitedUnaudited Consolidated Statements of Cash Flows

Quarter ended September 30, US$ in thousands 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES (Loss) / income before taxation $ (3,152 ) $ 2,286 Adjustments to reconcile net (loss) / income to net cash provided by operating activities:Depreciation and amortization 6,439 5,700 Amortization of warrant asset 205 235 Gain on disposal of fixed assets (192 ) - Foreign currency translation loss 148 153 Share warrants 3,586 749 Phantom expense 125 13 Share-based payments 1,964 29 Provision for retirement benefit expense 78 26 Allowance for expected credit losses 243 (60 )Share of profit from investment in joint (123 ) (164 )ventureFinance expenses 2,239 2,307 Increase in trade and other receivables (10,727 ) (4,663 )Increase in prepayments and other assets (316 ) (473 )Increase / (decrease) in trade and other 9,153 (2,938 )payables and other liabilitiesCash generated from operations 9,670 3,200 Interest paid (2,239 ) (2,307 )Income taxes paid (1,492 ) (106 )Net cash provided by operating activities $ 5,939 $ 787 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment $ (2,901 ) $ (200 )Purchase of other intangible assets (310 ) (148 )Capital repayment from joint venture 115 71 Net cash used in investing activities $ (3,096 ) $ (277 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit $ 32,344 $ 34,792 Repayments of line of credit (31,388 ) (26,698 )Proceeds from borrowings 1,714 1,000 Repayment of borrowings (2,796 ) (1,699 )Net proceeds from initial public offering 63,107 - Payment of listing related expenses (825 ) - Principal payments on lease obligations (3,055 ) (3,000 )Dividends paid (4,000 ) - Net cash provided by financing activities $ 55,101 $ 4,395 Effects of exchange rate difference on cash (35 ) 29 and cash equivalentsNet increase in cash and cash equivalents $ 57,909 $ 4,934 Cash and cash equivalents at beginning of the $ 21,870 $ 8,873 periodCash and cash equivalents at end of the $ 79,779 $ 13,807 period

IBEX LimitedReconciliation of IFRS Financial Measures to Non-GAAP Financial Measures

Adjusted net income and pro forma fully diluted adjusted earnings per share:

We define Adjusted net income as net income / (loss) before the effect of the following items: non-recurring expenses (including litigation and settlement expenses, costs related to COVID-19, and expenses related to our initial public offering), other income, fair value adjustment related to the Amazon warrant, share-based payments, foreign exchange gains or losses, and impairment losses, as applicable, net of the tax effect of such adjustments. We define pro forma fully diluted adjusted earnings per share as Adjusted net income for the period divided by the weighted average fully diluted shares outstanding for the current period.

Quarter ended September 30, US$ in thousands, except share and per 2020 2019 share amountsNet (loss) / income $ (3,423 ) $ 2,336 Non-recurring expenses 4,398 - Other income (151 ) (199 )Fair value adjustment 3,586 749 Share-based payments 2,089 42 Foreign exchange losses 148 153 Total adjustments $ 10,070 $ 745 Tax impact of adjustments (1,446 ) 63 Adjusted net income $ 5,201 $ 3,144 Weighted average fully diluted sharesoutstanding, quarter ended September 17,034,939 17,034,939 30, 2020^(1)Pro forma fully diluted adjusted $ 0.31 $ 0.18 earnings per share^(^2)

(1)Fully diluted shares outstanding as of September 30, 2020 were 18,510,094.(2)We provide pro forma fully diluted adjusted earnings per share because the share structure for the prior year quarter does not reflect the recapitalization that occurred in connection with ibexs initial public offering which occurred on August 7, 2020. For purposes of this calculation, we have included 17,034,939 shares, the weighted average fully diluted shares outstanding for the quarter ended September 30, 2020, in both periods in order to enhance comparability between such periods. Beginning with the first quarter of fiscal year 2022, our share structure will be comparable year over year, and this measure will reflect the respective periods weighted average fully diluted shares outstanding.

EBITDA and Adjusted EBITDA:

We define EBITDA as net (loss) / income before the effect of the following items: finance expenses (including finance costs related to lease liabilities), income tax expense / (benefit), and depreciation and amortization (including depreciation of right-of-use assets). We define Adjusted EBITDA as EBITDA before the effect of the following items: non-recurring expenses (including litigation and settlement expenses, costs related to COVID-19, and expenses related to our initial public offering), other income, fair value adjustment related to the Amazon warrant, share-based payments, foreign exchange gains or losses, and impairment losses, as applicable.

Quarter ended September 30,US$ in thousands 2020 2019 Net (loss) / income $ (3,423 ) $ 2,336 Finance expenses 2,239 2,307 Income tax expense / (benefit) 271 (50 )Depreciation and amortization 6,439 5,700 EBITDA $ 5,526 $ 10,293 Non-recurring expenses 4,398 - Other income (151 ) (199 )Fair value adjustment 3,586 749 Share-based payments 2,089 42 Foreign exchange losses 148 153 Adjusted EBITDA $ 15,596 $ 11,038

Free cash flow:

We define free cash flow as net cash provided by operating activities less capital expenditures and lease payments on right-of-use assets.

Quarter ended September 30,US$ in thousands 2020 2019 Net cash provided by operating activities $ 5,939 $ 787 Less: Capital expenditures 4,525 9,338 Lease payments on right-of-use assets 2,328 2,389 Free cash flow $ (914 ) $ (10,940 )

Net debt:We define net debt as total borrowings less cash and cash equivalents.

US$ in thousands September 30, June 30, 2020 2020Borrowings Non-current $ 4,535 $ 3,782Current 29,302 27,476 $ 33,837 $ 31,258Leases Non-current $ 68,029 $ 62,044Current 13,460 12,668 $ 81,489 $ 74,712Total Debt $ 115,326 $ 105,970Cash and cash equivalents 79,779 21,870Net debt $ 35,547 $ 84,100