March 14, 2011 at 08:30 AM EDT
Ebix Announces Record Fourth Quarter and Full Year 2010 Results

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 fourth quarter and full year ended December 31, 2010.

“These results mark 11 years of continued sequential growth for Ebix in the areas of revenue, net income and diluted EPS,” said Robin Raina, Chairman, President and CEO, Ebix Inc. “We are pleased that these results are in line with our goals for 2010.”

Ebix delivered the following results for the fourth quarter and full year of 2010:

Revenues: Total Q4 2010 revenue was $35.1 million, an increase of 12% on a year-over-year basis, as compared to Q4 2009 revenue of $31.3 million.

For the full fiscal year of 2010, the company reported revenue of $132.2 million, an increase of 35% from the prior year revenues of $97.7 million.

Net Income: Q4 2010 net income was $15.9 million, an increase of 32% on a year-over-year basis, as compared to Q4 2009 net income of $12.1 million.

For the full fiscal year of 2010, the Company reported net income of $59.0 million, an increase of 52% from the prior year net income of $38.8 million.

Earnings per Share: Q4 2010 diluted earnings per share rose 35% year-over-year to $0.42, as compared to $0.31 in the fourth quarter of 2009. For purposes of the Q4 2010 EPS calculation, there was an average of 38.4 million diluted shares outstanding during the quarter, as compared to 39.6 million diluted shares outstanding in Q4 of 2009.

For the full year of 2010, diluted earnings per share rose 47% year-over-year to $1.51. For purposes of the EPS calculation, there was an average of approximately 39.0 million diluted shares outstanding during the year 2010 as compared to an average of 38.0 million diluted shares outstanding in 2009.

Operating Cash: Cash generated from operations for the fiscal fourth quarter was $18.9 million, up 61% from the fourth quarter of 2009. For the full year, operating cash flow totaled $52.8 million, up 56% year-over-year.

The $52.8 million of cash inflow from the Company’s operating activities represents a 100% realization of the 2010 operating income of $52.5 million.

Margins: Operating margins for 2010 were at 40% consistent with the Company’s operating margins for 2009.

Customers: An estimated 99.5% plus of Ebix’s clients from 2009 renewed their business with Ebix in the year 2009, meaning that Ebix did not lose a single customer across the world that accounted for more than 0.5% of Ebix’s revenues in the year 2010.

Diversified Revenue Base: Ebix continued to have highly diversified revenue streams across thousands of clients, with the largest client accounting for only 4% of the Company’s 2010 revenues.

Channel Revenues: The Exchange channel grew 55% year over year to $94.2 million or 71% of the 2010 revenues. The BPO channel grew 6% year over year, to $15.6 million or 12% of the 2010 revenues. The Broker Channel grew 19% year over year, to $13.8 million or 10% of the 2010 revenues. The Carrier channel dropped 20% year over year, to $8.5 million or 7% of the 2010 revenues.

Tax Adjustments: The Q4 and full year results include a net non-recurring tax benefit of $2.3 million from the reversal of valuation allowance that had been held against a portion of our cumulative legacy net operating loss (“NOL”) carryforwards in the United States

Ebix Chairman, President & CEO Robin Raina said, “In the year 2010, Ebix emerged as the largest insurance exchange player worldwide. We intend to launch many new exchange related services in 2011 and beyond. Our ability to deliver end-to-end exchange services while providing enterprise backend solutions in an on-demand manner continues to differentiate us from all our competitors worldwide. In addition, our focus on delivering solutions across the globe with the same code base, while deploying these solutions in multiple languages and currencies continues to hold immense value for our multinational insurance clients.”

Robin added, “In the year 2011, our vision is to focus on three key areas – one, the launch of new exchanges and on-demand backend platforms in various geographies across the world; two, the launch of a mobile utility initiative with applications in diverse insurance areas being deployed on a utilities basis; three, the continued focus on services like Ebix Enterprise targeted at providing a single on-demand platform to a wide variety of insurance entities across all insurance product lines.”

Ebix SVP and Chief Financial Officer, Robert Kerris said, “We are very pleased with the improvements realized during 2010 particularly regarding our operating cash flows and the overall health of our balance sheet. Our recurring operating activities during 2010 produced $19.0 million of additional cash flows above the levels realized in 2009. We closed the year with $23.4 million of cash on hand, an increase of $4.2 million or 22% from a year earlier, in spite of investing $15.2 million for business acquisitions, remitting $22.5 million to settle outstanding convertible debt, and paying $10.5 million to repurchase shares of our common stock. During 2010 our current ratio significantly improved and was 1.56 at December 31st as compared to 0.62 a year earlier, and we eliminated all but $5.0 million of the previous $29.4 million of convertible debt.”

Mr. Kerris added, “On March 8, 2011 Ebix and Bank of America jointly executed a mutually binding commitment letter to amend and expand the Company’s existing credit facility. The amended credit facility has been expanded to $55 million. It replaces the former $35 million facility, carries an interest rate of LIBOR plus 1.50% and is comprised of a three-year $35 million secured revolving credit facility and a $20 million secured term loan.”

Investor Conference Call

Ebix will host a conference call to discuss its fourth quarter and full fiscal year 2010 results at 11:00 a.m. Eastern Standard Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations home page at http://www.ebix.com. In addition, an archive of the webcast can be accessed through the same link. Participants who choose to call in to the conference call can do so by dialing 1-(973) 409-9690. A replay of the audio and text of the investor call will be available through the company's Investor Relations home page at http://www.ebix.com

About Ebix, Inc.

A leading international supplier of On-Demand software and E-commerce services to the insurance industry, Ebix, Inc., (NASDAQ: EBIX) provides end-to-end solutions ranging from infrastructure exchanges, carrier systems, agency systems and BPO services to custom software development for all entities involved in the insurance industry.

With 30+ offices across Brazil, Singapore, Australia, the US, New Zealand, India and Canada, Ebix powers multiple exchanges across the world in the field of life, annuity, health and property & casualty insurance while conducting in excess of $100 billion in insurance premiums on its platforms. Through its various SaaS-based software platforms, Ebix employs hundreds of insurance and technology professionals to provide products, support and consultancy to thousands of customers on six continents. Ebix’s focus on quality has enabled it to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model (CMM). Ebix has also earned ISO 9001:2000 certification for both its development and BPO units in India. For more information, visit the Company’s website at www.ebix.com

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share data)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2010200920102009

(Unaudited)

(Unaudited)

(Unaudited)

(Audited)

Operating revenue$35,097$31,304$132,188$97,685
Operating expenses:
Cost of services provided 7,691 7,976 29,599 21,274
Product development 3,379 3,104 13,607 11,362
Sales and marketing 1,613 1,487 6,372 5,040
General and administrative 7,151 5,442 24,065 16,798
Amortization and depreciation 1,6051,4396,0383,955
Total operating expenses21,43919,44879,68158,429
Operating income13,65811,85652,50739,256
Interest income 141 52 519 199
Interest expense (152 ) (279 ) (902 ) (1,070 )
Other non-operating income 641 89 6,319 89
Foreign currency exchange gain 3524641,2111,358
Income before income taxes14,64012,18259,65439,832
Income tax expense (benefit) 1,304(85 ) (635 ) (1,010 )
Net income$15,944$12,097$59,019$38,822
Basic earnings per common share*$0.45$0.36$1.69$1.24
Diluted earnings per common share*$0.42$0.31$1.51$1.03
Basic weighted average shares
outstanding* 35,083 33,990 34,845 31,398
Diluted weighted average shares
outstanding* 38,417 39,594 39,018 38,014

* Adjusted for all periods presented to reflect the effect of the 3-for-1 stock split dated January 4, 2010

Ebix, Inc. and Subsidiaries

Consolidated Balance Sheet

December 31,December 31,
20102009
(In thousands,
except share amounts)
ASSETS
Current assets:
Cash and cash equivalents $ 23,397 $ 19,227
Short-term investments 6,300 1,799
Trade accounts receivable, less allowances of $1,126 and $565, respectively 26,028 22,861
Other current assets 5,0572,628
Total current assets60,78246,515
Property and equipment, net 7,806 7,865
Goodwill 180,602 157,245
Intangibles, net 22,574 20,505
Indefinite-lived intangibles 30,552 29,223
Other assets 984814
Total assets$303,300$262,167
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 15,344 $ 11,060
Accrued payroll and related benefits 4,536 3,634
Short term debt 5,000 23,100
Current portion of convertible debt, net of discount of $56
and $706, respectively 4,944 28,681
Current portion of long term debt and capital lease obligation 426 596
Deferred revenue 8,610 7,754
Other current liabilities 225272
Total current liabilities39,08575,097
Revolving line of credit 25,000
Other long term debt and capital lease obligation, less current portion 205 671
Other liabilities 2,991 2,965
Deferred tax liability, net 3,534 5,147
Put option liability 537 6,596
Deferred revenue 126 269
Deferred rent 554679
Total liabilities72,03291,424
Stockholders’ equity:

Convertible Series D Preferred stock, $.10 par value, 500,000

shares authorized, no shares issued and outstanding at
December 31, 2010 and 2009

Common stock*, $.10 par value, 60,000,000 shares authorized,

36,057,791 issued and 36,017,282 outstanding at December 31,

2010 and 34,474,608 issued and 34,434,099 outstanding at

December 31, 2009

3,602 3,443
Additional paid-in capital 153,221 158,404

Treasury stock* (179,235 shares as of December 31, 2010 and

December 31, 2009 respectively)

(76 ) (76 )
Retained earnings (accumulated deficit) 67,642 8,623
Accumulated other comprehensive income (loss) 6,879349
Total stockholders’ equity231,268170,743
Total liabilities and stockholders’ equity$303,300$262,167

* Adjusted for all periods presented to reflect the effect of the 3-for-1 stock split dated January 4, 2010

Ebix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Year EndedYear EndedYear Ended
December 31,December 31,December 31,
201020092008
(In thousands)
Cash flows from operating activities:
Net income $ 59,019 $ 38,822 $ 27,314
Adjustments to reconcile net income to cash provided
by (used in) operating activities:
Depreciation and amortization 6,038 3,955 3,306
Provision for doubtful accounts 1,143 321 298
Provision for deferred taxes (1,752 ) (2,615 ) (1,846 )
Unrealized foreign exchange gain on forward contracts (1,304 ) (500 )
Unrealized foreign exchange gain (598 )
Unrealized gain on put option (6,059 ) (89 )
Share-based compensation 1,850 1,369 698
Debt discount amortization on convertible debt 327
Reduction of acquisition earnout 1,500
Changes in current assets and liabilities, net of acquisitions:
Accounts receivable (3,018 ) (8,619 ) (163 )
Other assets (955 ) (577 ) 737
Accounts payable and accrued expenses (3,356 ) 1,127 (1,284 )
Accrued payroll and related benefits 165 587 84
Deferred rent (125 ) 27 (109 )
Other liabilities (61 ) 109 60
Deferred revenue (35 ) (40 ) (2,270 )
Net cash provided by operating activities52,77933,87726,825
Cash flows from investing activities:
Investment in Infinity, net of cash acquired (500 )
Investment in MCN, net of cash acquired (2,931 )
Investment in Trades Monitor, net of cash acquired (2,749 )
Investment in Connective Technologies, net of cash acquired (1,337 )
Investment in USIX, net of cash acquired (7,131 )
Investment in e-Trek, net of cash acquired (1,011 )
Investment in IDS, net of cash acquired (1,000 )
Investment in Telstra, net of cash acquired (42,942 )
Investment in Periculum, net of cash acquired (6 ) (200 ) (1,067 )
Investment in Acclamation, net of cash acquired (85 ) (21,388 )
Investment in Confirmnet, net of cash acquired (2,975 ) (3,279 ) (7,294 )
(Purchases)/maturities of marketable securities, net (4,501 ) (263 ) (507 )
Investment in Facts, net of cash acquired (11 ) (6,215 )
Investment in Peak Performance, net of cash acquired (7,894 )
Investment in EZ Data, net of cash acquired (25,362 )
Capital expenditures (1,754 ) (3,129 ) (615 )
Net cash used in investing activities(24,406)(47,427)(74,313)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net of issuance costs 12,519
Proceeds from / Repayment to line of credit, net 1,900 (1,846 ) 9,295
Proceeds from term loan 10,157
Proceeds from the issuance of convertible debt 25,000 15,000
Principal payments on term loan obligation (5,000 )
Payments to acquire treasury stock (1,029 )
Repurchase of common stock (10,650 ) (505 ) (24,246 )
Settlement on conversion of convertible debt (22,521 )
Payments of long term debt (742 ) (500 )
Payments for capital lease obligations (804 ) (293 ) (3 )
Proceeds from exercise of common stock options 1,2361,5651,239
Net cash provided by financing activities(25,682)23,17912,275
Effect of foreign exchange rates on cash and cash equivalents 1,479123(3,749 )
Net change in cash and cash equivalents4,1709,752(38,962)
Cash and cash equivalents at the beginning of the year 19,2279,47548,437
Cash and cash equivalents at the end of the year$23,397$19,227$9,475

Contacts:

Ebix, Inc.
Aaron Tikkoo, IR, 678-281-2027
atikkoo@ebix.com
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