Delaware | 0-15946 | 77-0021975 | ||
(State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
of incorporation) | Identification No.) |
1 Ebix Way Johns Creek, GA | 30097 | |
(Address of principal executive offices) | (Zip Code) |
EBIX, INC. | |||
By: | /s/ Sean T. Donaghy | ||
Name: | Sean T. Donaghy | ||
Title: | Chief Financial Officer (principal financial and accounting officer) | ||
(dollar amounts in thousands) | ||||||
Channel | Q4 2016 | Q4 2015 | Change | 2016 | 2015 | Change |
Exchanges | $ 55,003 | $ 51,034 | +8% | $ 206,427 | $ 190,746 | +8% |
Broker Systems | 3,451 | 3,414 | +1% | 14,105 | 14,481 | -3% |
Risk Compliance Solutions (RCS) | 20,707 | 14,699 | +41% | 74,196 | 55,917 | +33% |
Carrier Systems | 885 | 1,057 | -16% | 3,566 | 4,338 | -18% |
Total Revenue | $ 80,046 | $ 70,204 | +14% | $ 298,294 | $ 265,482 | +12% |
Total Revenue on Constant Currency Basis | $ 80.0M | $ 70.2M | +14% | $ 301.6M | $ 265.5M | +14% |
Call Date/Time: | Tuesday, February 28, 2017 at 11:00 a.m. EST |
Call Dial-In: | +1-877-837-3909 or 1-973-409-9690; Call ID #64272751 |
Live Audio Webcast: | www.ebix.com/webcast |
Audio Replay URL: | www.ebix.com/result_15_q4 after 2:00 p.m. EST on Feb 28th |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||
Operating revenue | $ | 80,046 | $ | 70,204 | $ | 298,294 | $ | 265,482 | |||||||||||
Operating expenses: | |||||||||||||||||||
Cost of services provided | 22,522 | 16,444 | 85,128 | 72,437 | |||||||||||||||
Product development | 8,068 | 8,029 | 32,981 | 30,702 | |||||||||||||||
Sales and marketing | 4,467 | 4,122 | 17,469 | 14,917 | |||||||||||||||
General and administrative (net) | 14,670 | 13,083 | 51,689 | 48,078 | |||||||||||||||
Amortization and depreciation | 2,658 | 2,702 | 10,746 | 10,634 | |||||||||||||||
Total operating expenses | 52,385 | 44,380 | 198,013 | 176,768 | |||||||||||||||
Operating income | 27,661 | 25,824 | 100,281 | 88,714 | |||||||||||||||
Interest income | 632 | 64 | 1,851 | 231 | |||||||||||||||
Interest expense | (1,995 | ) | (1,909 | ) | (7,376 | ) | (4,311 | ) | |||||||||||
Non-operating income - (loss) | — | — | 1,162 | — | |||||||||||||||
Foreign currency exchange gain (loss) | (839 | ) | (354 | ) | 13 | 2,005 | |||||||||||||
Income before income taxes | 25,459 | 23,625 | 95,931 | 86,639 | |||||||||||||||
Income tax expense | (516 | ) | (1,696 | ) | (1,637 | ) | (7,106 | ) | |||||||||||
Net income including noncontrolling interest | 24,943 | 21,929 | 94,294 | 79,533 | |||||||||||||||
Net income attributable to noncontrolling interest | 314 | — | 447 | — | |||||||||||||||
Net income attributable to Ebix, Inc. | $ | 24,629 | $ | 21,929 | $ | 93,847 | $ | 79,533 | |||||||||||
Basic earnings per common share | $ | 0.76 | $ | 0.65 | $ | 2.88 | $ | 2.29 | |||||||||||
Diluted earnings per common share | $ | 0.76 | $ | 0.65 | $ | 2.86 | $ | 2.28 | |||||||||||
Basic weighted average shares outstanding | 32,279 | 33,678 | 32,603 | 34,668 | |||||||||||||||
Diluted weighted average shares outstanding | 32,483 | 33,931 | 32,863 | 34,901 |
December 31, 2016 | December 31, 2015 | ||||||||
(In thousands, except share and per share amounts) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 114,118 | $ | 57,179 | |||||
Short-term investments | 3,105 | 1,538 | |||||||
Restricted cash | 17,217 | — | |||||||
Trade accounts receivable, less allowances of $2,833 and $3,388, respectively | 62,713 | 47,171 | |||||||
Other current assets | 12,716 | 10,942 | |||||||
Total current assets | 209,869 | 116,830 | |||||||
Property and equipment, net | 37,061 | 34,088 | |||||||
Goodwill | 441,404 | 402,259 | |||||||
Intangibles, net | 41,336 | 51,848 | |||||||
Indefinite-lived intangibles | 30,887 | 30,887 | |||||||
Capitalized software development costs, net | 5,955 | 3,489 | |||||||
Deferred tax asset, net | 31,345 | 23,732 | |||||||
Other assets | 5,898 | 12,856 | |||||||
Total assets | $ | 803,755 | $ | 675,989 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued liabilities | $ | 44,855 | $ | 23,043 | |||||
Accrued payroll and related benefits | 7,474 | 4,932 | |||||||
Short term debt, net of deferred financing costs of $136 and $0, respectively | 12,364 | — | |||||||
Contingent liability for accrued earn-out acquisition consideration | 1,921 | 1,706 | |||||||
Current portion of long term debt and capital lease obligation, net of discount of $0 and $3, respectively | 9 | 606 | |||||||
Deferred revenue | 22,564 | 20,519 | |||||||
Current deferred rent | 281 | 232 | |||||||
Other current liabilities | 244 | 228 | |||||||
Total current liabilities | 89,712 | 51,266 | |||||||
Revolving line of credit | 154,029 | 206,465 | |||||||
Long term debt and capital lease obligation, less current portion, net of deferred financing costs of $452 and $0, respectively | 105,824 | 35 | |||||||
Contingent liability for accrued earn-out acquisition consideration | 6,589 | 2,571 | |||||||
Deferred revenue | 1,886 | 1,968 | |||||||
Long term deferred rent | 1,009 | 1,381 | |||||||
Other liabilities | 6,070 | 3,332 | |||||||
Total liabilities | 365,119 | 267,018 | |||||||
Stockholders’ equity: | |||||||||
Convertible Series D Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2016 and 2015 | — | — | |||||||
Common stock, $.10 par value, 60,000,000 shares authorized, 32,093,294 issued and outstanding at December 31, 2016 and 33,416,110 issued and outstanding at December 31, 2015 | 3,209 | 3,342 | |||||||
Additional paid-in capital | — | 57,120 | |||||||
Treasury stock (no shares as of December 31, 2016 and December 31, 2015) | — | — |
Retained earnings | 457,364 | 378,787 | |||||||
Accumulated other comprehensive loss | (33,677 | ) | (30,278 | ) | |||||
Total Ebix, Inc. stockholders’ equity | 426,896 | 408,971 | |||||||
Noncontrolling interest | 11,740 | — | |||||||
Total stockholders' equity | $ | 438,636 | $ | 408,971 | |||||
Total liabilities andstockholders’ equity | $ | 803,755 | $ | 675,989 |
Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | |||||||||||
(in thousands) | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income attributable to Ebix, Inc. | $ | 93,847 | $ | 79,533 | $ | 63,558 | |||||||
Net income attributable to noncontrolling interest | 447 | — | — | ||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 10,746 | 10,634 | 9,681 | ||||||||||
Provision for doubtful accounts | 1,515 | 3,111 | 1,600 | ||||||||||
Provision for deferred taxes, net of acquisitions and effects of currency translation | (6,410 | ) | (10,143 | ) | (1,966 | ) | |||||||
Unrealized foreign exchange (gain)/losses | 32 | (1,743 | ) | (741 | ) | ||||||||
Gain on investment interest in IHC/Ebix joint venture | (1,162 | ) | — | — | |||||||||
Amortization of capitalized software development costs | 1,116 | — | — | ||||||||||
Unrealized gain on put option | — | — | (296 | ) | |||||||||
Share-based compensation | 2,794 | 1,821 | 1,792 | ||||||||||
Debt discount amortization on convertible debt | — | 17 | 35 | ||||||||||
Reduction of acquisition earn-out contingent liability | (1,344 | ) | (1,533 | ) | (10,237 | ) | |||||||
Changes in current assets and liabilities, net of acquisitions: | |||||||||||||
Accounts receivable | (12,659 | ) | (7,320 | ) | (1,530 | ) | |||||||
Other assets | (1,034 | ) | (3,834 | ) | (4,765 | ) | |||||||
Accounts payable and accrued expenses | (3,703 | ) | (19,895 | ) | 14,670 | ||||||||
Accrued payroll and related benefits | 170 | (60 | ) | 1,811 | |||||||||
Deferred rent | (234 | ) | (656 | ) | (324 | ) | |||||||
Reserve for potential uncertain income tax return positions | 490 | 95 | (9,723 | ) | |||||||||
Liability - securities litigation settlement | — | (690 | ) | (3,528 | ) | ||||||||
Other liabilities | (3,039 | ) | 1,111 | (221 | ) | ||||||||
Deferred revenue | 2,176 | (1,762 | ) | (1,306 | ) | ||||||||
Net cash provided by operating activities | 83,748 | 48,686 | 58,510 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Investment in IHAC, Inc., d.b.a Hope Health ("Hope") | (1,643 | ) | — | — | |||||||||
Investment in Wdev Solucoes em Technologia SA, net of cash acquired | (6,320 | ) | — | — | |||||||||
Investment in Via Media Health, net of cash acquired | — | (1,000 | ) | — | |||||||||
Investment in P.B. Systems, net of cash acquired | — | (11,475 | ) | — | |||||||||
Investment in Ebix Health Solutions, LLC Joint Venture, net of cash acquired | (696 | ) | (6,000 | ) | — | ||||||||
Investment in CurePet, net of cash acquired | — | — | 3 | ||||||||||
Investment in Healthcare Magic, net of cash acquired | — | — | (5,856 | ) | |||||||||
Investment in Vertex, net of cash acquired | — | — | (27,547 | ) | |||||||||
Investment in Oakstone, net of cash acquired | — | — | (23,791 | ) | |||||||||
Investment in I3, net of cash acquired | — | — | (2,000 | ) | |||||||||
Payment of acquisition earn-out contingency, Taimma | — | — | (2,250 | ) |
Payment of acquisition earn-out contingency, Trisystems | — | — | (563 | ) | |||||||||
Purchases of marketable securities | (2,115 | ) | (1,435 | ) | — | ||||||||
Maturities of marketable securities | — | — | 495 | ||||||||||
Capitalized software development costs | (3,988 | ) | (3,489 | ) | — | ||||||||
Capital expenditures | (5,977 | ) | (13,994 | ) | (16,277 | ) | |||||||
Net cash used in investing activities | (20,739 | ) | (37,393 | ) | (77,786 | ) | |||||||
Cash flows from financing activities: | |||||||||||||
Proceeds from / (Repayment) to line of credit, net | (52,436 | ) | 86,000 | 97,625 | |||||||||
Proceeds from term loan | 125,000 | — | — | ||||||||||
Principal payments on term loan obligation | (6,250 | ) | (642 | ) | (31,938 | ) | |||||||
Repurchase of common stock | (59,784 | ) | (81,653 | ) | (31,854 | ) | |||||||
Payments of long term debt | (600 | ) | — | (345 | ) | ||||||||
Payments for capital lease obligations | (5 | ) | (10 | ) | (231 | ) | |||||||
Excess tax benefit from share-based compensation | — | 463 | (3,200 | ) | |||||||||
Proceeds from exercise of common stock options | 824 | 2,209 | 788 | ||||||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested | (998 | ) | (2,202 | ) | (41 | ) | |||||||
Shares reacquired in connection with put option | — | — | (3,535 | ) | |||||||||
Dividends paid | (9,829 | ) | (10,472 | ) | (11,406 | ) | |||||||
Net cash provided (used) by financing activities | (4,078 | ) | (6,307 | ) | 15,863 | ||||||||
Effect of foreign exchange rates on cash and cash equivalents | $ | (1,992 | ) | $ | (107 | ) | $ | (961 | ) | ||||
Net change in cash and cash equivalents | 56,939 | 4,879 | (4,374 | ) | |||||||||
Cash and cash equivalents at the beginning of the year | $ | 57,179 | $ | 52,300 | $ | 56,674 | |||||||
Cash and cash equivalents at the end of the year | $ | 114,118 | $ | 57,179 | $ | 52,300 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||||
Interest paid | 7,219 | 5,379 | 1,290 | ||||||||||
Income taxes paid | 16,634 | 28,637 | 11,433 |
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