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þ
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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77-0021975
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(State or other jurisdiction of incorporation or
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(I.R.S. Employer Identification No.)
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organization)
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1 EBIX WAY
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JOHNS CREEK, GEORGIA
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30097
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Exhibit 101
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
Operating revenue
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$
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124,626
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$
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87,387
|
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$
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232,856
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$
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166,490
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||||||||
Operating expenses:
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||||||||
Cost of services provided
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43,559
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30,932
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83,150
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56,119
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||||
Product development
|
8,671
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8,417
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17,105
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16,767
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||||
Sales and marketing
|
4,823
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4,142
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8,821
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8,479
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||||
General and administrative, net (see Note 1)
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26,724
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14,598
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46,228
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27,282
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||||
Amortization and depreciation
|
2,534
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|
2,759
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5,341
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5,614
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||||
Total operating expenses
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86,311
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60,848
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160,645
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114,261
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||||
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||||||||
Operating income
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38,315
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26,539
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72,211
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52,229
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||||
Interest income
|
85
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|
|
465
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|
206
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1,239
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||||
Interest expense
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(5,750
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)
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(3,018
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)
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(10,597
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)
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(5,486
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)
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||||
Non-operating income
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—
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—
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53
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—
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||||
Foreign currency exchange (loss) gain
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(1,357
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)
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(391
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)
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(1,998
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)
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3,105
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||||
Income before income taxes
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31,293
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23,595
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59,875
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51,087
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||||
Income tax benefit (expense)
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(2,222
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)
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302
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(4,348
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)
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(567
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)
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Net income including noncontrolling interest
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29,071
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23,897
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55,527
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50,520
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||||
Net (loss) income attributable to noncontrolling interest (see Note 8)
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(109
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)
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463
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|
139
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|
659
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||||
Net income attributable to Ebix, Inc.
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$
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29,180
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$
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23,434
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$
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55,388
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$
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49,861
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||||||||
Basic earnings per common share attributable to Ebix, Inc.
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$
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0.93
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$
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0.74
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$
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1.76
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$
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1.58
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||||||||
Diluted earnings per common share attributable to Ebix, Inc.
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$
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0.92
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$
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0.74
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$
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1.75
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$
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1.57
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||||||||
Basic weighted average shares outstanding
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31,465
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31,490
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31,474
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31,648
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||||
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||||||||
Diluted weighted average shares outstanding
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31,626
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31,637
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31,643
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31,805
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
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||||||||
Net income including noncontrolling interest
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$
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29,071
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$
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23,897
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$
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55,527
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$
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50,520
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Other comprehensive income:
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||||||||
Foreign currency translation adjustments
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(26,178
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)
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741
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(30,937
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)
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3,258
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||||
Total other comprehensive (loss) income
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(26,178
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)
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741
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(30,937
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)
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3,258
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||||
Comprehensive income
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2,893
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24,638
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24,590
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53,778
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|
||||
Comprehensive (loss) income attributable to noncontrolling interest (see Note 8)
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(109
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)
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|
463
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|
139
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|
659
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|
||||
Comprehensive income attributable to Ebix, Inc.
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$
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3,002
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$
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24,175
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$
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24,451
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$
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53,119
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June 30,
2018 |
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December 31,
2017 |
||||
ASSETS
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(Unaudited)
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||||
Current assets:
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Cash and cash equivalents
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$
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113,410
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$
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63,895
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Short-term investments
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21,262
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25,592
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Restricted cash
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3,992
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4,040
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Fiduciary funds- restricted
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8,043
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8,035
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Trade accounts receivable, less allowances of $6,069 and $4,143, respectively
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148,317
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117,838
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Other current assets
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33,205
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33,532
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Total current assets
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328,229
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252,932
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||
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|
||||
Property and equipment, net
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41,061
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41,704
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Goodwill
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825,526
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666,863
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Intangibles, net
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42,042
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45,711
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Indefinite-lived intangibles
|
42,055
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42,055
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Capitalized software development costs, net
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9,135
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8,499
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Deferred tax asset, net
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46,819
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43,529
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Other assets
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22,710
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|
|
11,720
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||
Total assets
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$
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1,357,577
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$
|
1,113,013
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
||||
Current liabilities:
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|
||||
Accounts payable and accrued liabilities
|
$
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97,985
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$
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75,073
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Accrued payroll and related benefits
|
8,345
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|
|
8,201
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|
||
Cash overdraft
|
4,283
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|
9,243
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|
||
Fiduciary funds- restricted
|
8,043
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|
8,035
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|
||
Short term debt, net of deferred financing costs of $449 and $136, respectively
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13,824
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14,364
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||
Capital lease obligations
|
113
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|
|
17
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|
||
Deferred rent
|
170
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|
|
278
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|
||
Contingent liability for accrued earn-out acquisition consideration
|
16,392
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|
4,000
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Deferred revenue
|
31,011
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|
22,562
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|
||
Other current liabilities
|
13,911
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|
|
5,159
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|
||
Total current liabilities
|
194,077
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|
|
146,932
|
|
||
|
|
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|
||||
Revolving line of credit
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358,694
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|
|
274,529
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|
||
Long term debt and capital lease obligations, less current portion, net of deferred financing costs of $1,636 and $298, respectively
|
232,950
|
|
|
110,978
|
|
||
Other liabilities
|
11,230
|
|
|
11,658
|
|
||
Contingent liability for accrued earn-out acquisition consideration
|
5,216
|
|
|
33,096
|
|
||
Deferred revenue
|
7,152
|
|
|
1,423
|
|
||
Deferred rent
|
356
|
|
|
638
|
|
||
Total liabilities
|
809,675
|
|
|
579,254
|
|
||
|
|
|
|
||||
Commitments and Contingencies (see Note 5)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at June 30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
Common stock, $0.10 par value, 120,000,000 shares authorized, 31,473,654 issued and outstanding, at June 30, 2018, and 120,000,000 shares authorized, 31,476,428 issued and outstanding at December 31, 2017
|
3,146
|
|
|
3,148
|
|
||
Additional paid-in capital
|
734
|
|
|
1,410
|
|
||
Retained earnings
|
550,480
|
|
|
510,975
|
|
||
Accumulated other comprehensive loss
|
(54,960
|
)
|
|
(24,023
|
)
|
||
Total Ebix, Inc. stockholders’ equity
|
499,400
|
|
|
491,510
|
|
||
Noncontrolling interest (see Note 8)
|
48,502
|
|
|
42,249
|
|
||
Total stockholders' equity
|
547,902
|
|
|
533,759
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,357,577
|
|
|
$
|
1,113,013
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Issued
Shares
|
|
Amount
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive
Loss
|
|
Noncontrolling interest
|
|
Total
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, January 1, 2018
|
31,476,428
|
|
|
$
|
3,148
|
|
|
$
|
1,410
|
|
|
$
|
510,975
|
|
|
$
|
(24,023
|
)
|
|
$
|
42,249
|
|
|
$
|
533,759
|
|
|
Cumulative effect of accounting change (adoption of Topic 606), net of tax effect
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,802
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(8,802
|
)
|
|
|||||
Cumulative effect of accounting change (adoption of ASC 340-40), net of tax effect
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,460
|
)
|
|
—
|
|
|
—
|
|
|
(1,460
|
)
|
|
||||||
Net income attributable to Ebix, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
55,388
|
|
|
—
|
|
|
—
|
|
|
55,388
|
|
|
||||||
Net income attributable to noncontrolling interest (see Note 8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
139
|
|
|
||||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,937
|
)
|
|
—
|
|
|
(30,937
|
)
|
|
||||||
Repurchase and retirement of common stock
|
(30,000
|
)
|
|
(3
|
)
|
|
(1,339
|
)
|
|
(884
|
)
|
|
—
|
|
|
—
|
|
|
(2,226
|
)
|
|
||||||
Vesting of restricted stock
|
25,957
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Exercise of stock options
|
2,283
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
||||||
Share based compensation
|
—
|
|
|
—
|
|
|
1,509
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,509
|
|
|
||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested
|
(1,014
|
)
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
||||||
Recognized noncontrolling ownership of joint venture
|
—
|
|
|
—
|
|
|
(787
|
)
|
|
—
|
|
|
—
|
|
|
6,114
|
|
|
5,327
|
|
|
||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,737
|
)
|
|
—
|
|
|
—
|
|
|
(4,737
|
)
|
|
||||||
Balance, June 30, 2018
|
31,473,654
|
|
|
$
|
3,146
|
|
|
$
|
734
|
|
|
$
|
550,480
|
|
|
$
|
(54,960
|
)
|
|
$
|
48,502
|
|
|
$
|
547,902
|
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income attributable to Ebix, Inc.
|
$
|
55,388
|
|
|
$
|
49,861
|
|
Net income attributable to noncontrolling interest
|
139
|
|
|
659
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization and depreciation
|
5,341
|
|
|
5,614
|
|
||
Benefit for deferred taxes
|
(1,321
|
)
|
|
(5,877
|
)
|
||
Share based compensation
|
1,509
|
|
|
1,243
|
|
||
Provision for doubtful accounts
|
2,098
|
|
|
723
|
|
||
Unrealized foreign exchange loss
|
1,262
|
|
|
365
|
|
||
Amortization of capitalized software development costs
|
1,080
|
|
|
790
|
|
||
Purchase accounting adjustment
|
—
|
|
|
(948
|
)
|
||
Changes in assets and liabilities, net of effects from acquisitions:
|
|
|
|
||||
Accounts receivable
|
(22,907
|
)
|
|
(14,266
|
)
|
||
Other assets
|
(40
|
)
|
|
487
|
|
||
Accounts payable and accrued expenses
|
4,891
|
|
|
(7,254
|
)
|
||
Accrued payroll and related benefits
|
(327
|
)
|
|
(1,694
|
)
|
||
Deferred revenue
|
(5,544
|
)
|
|
(1,622
|
)
|
||
Deferred rent
|
(382
|
)
|
|
(195
|
)
|
||
Reserve for potential uncertain income tax return positions
|
59
|
|
|
3,280
|
|
||
Other liabilities
|
(1,353
|
)
|
|
66
|
|
||
Net cash provided by operating activities
|
39,893
|
|
|
31,232
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition of Transcorp
|
(6,554
|
)
|
|
—
|
|
||
Cash received from Paul Merchants for 10% stake in MTSS combined business
|
4,996
|
|
|
—
|
|
||
Acquisition of beBetter, net of cash acquired
|
—
|
|
|
(1,000
|
)
|
||
Acquisition of ItzCash, net of cash acquired
|
—
|
|
|
(70,184
|
)
|
||
Acquisition of Centrum, net of cash acquired
|
(166,017
|
)
|
|
—
|
|
||
Acquisition of SmartClass, net of cash acquired
|
(7,593
|
)
|
|
—
|
|
||
Capitalized software development costs paid
|
(2,016
|
)
|
|
(1,345
|
)
|
||
Maturities of marketable securities
|
725
|
|
|
1,626
|
|
||
Capital expenditures
|
(1,472
|
)
|
|
(4,956
|
)
|
||
Net cash used in investing activities
|
(177,931
|
)
|
|
(75,859
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
(Repayments of) Proceeds from revolving line of credit, net
|
84,165
|
|
|
60,000
|
|
||
Proceeds from term loan
|
124,250
|
|
|
—
|
|
||
Principal payments of term loan obligation
|
(3,125
|
)
|
|
(6,250
|
)
|
||
Repurchases of common stock
|
(2,226
|
)
|
|
(45,732
|
)
|
||
Proceeds from the exercise of stock options
|
42
|
|
|
52
|
|
||
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested
|
(100
|
)
|
|
(237
|
)
|
||
Dividend payments
|
(4,737
|
)
|
|
(4,800
|
)
|
||
Cash Overdraft
|
(4,554
|
)
|
|
—
|
|
||
Payments of capital lease obligations
|
(6
|
)
|
|
(6
|
)
|
||
Net cash provided by financing activities
|
193,709
|
|
|
3,027
|
|
||
Effect of foreign exchange rates on cash
|
(6,545
|
)
|
|
(39
|
)
|
||
Net change in cash and cash equivalents, and restricted cash
|
49,126
|
|
|
(41,639
|
)
|
||
Cash and cash equivalents, and restricted cash at the beginning of the period
|
70,867
|
|
|
116,941
|
|
||
Cash and cash equivalents, and restricted cash at the end of the period
|
$
|
119,993
|
|
|
$
|
75,302
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
9,714
|
|
|
$
|
5,173
|
|
Income taxes paid
|
$
|
8,357
|
|
|
$
|
7,958
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Exchanges
|
|
$
|
101,581
|
|
|
$
|
60,373
|
|
|
$
|
183,439
|
|
|
$
|
112,987
|
|
Broker Systems
|
|
3,696
|
|
|
3,595
|
|
|
7,306
|
|
|
7,383
|
|
||||
Risk Compliance Solutions (“RCS”)
|
|
19,007
|
|
|
22,663
|
|
|
41,274
|
|
|
44,515
|
|
||||
Carrier Systems
|
|
342
|
|
|
756
|
|
|
837
|
|
|
1,605
|
|
||||
Totals
|
|
$
|
124,626
|
|
|
$
|
87,387
|
|
|
$
|
232,856
|
|
|
$
|
166,490
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
113,410
|
|
|
$
|
68,449
|
|
Restricted cash
|
3,992
|
|
|
3,998
|
|
||
Restricted cash included in other long-term assets
|
2,591
|
|
|
2,855
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
119,993
|
|
|
$
|
75,302
|
|
•
|
Level 1 Inputs
- Unadjusted quoted prices available in active markets for identical investments to the reporting entity at the measurement date.
|
•
|
Level 2 Inputs
- Other than quoted prices included in Level 1 inputs, which are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3 Inputs
- Unobservable inputs, which are used to the extent that observable inputs are not available, and used in situations where there is little or no market activity for the asset or liability and wherein the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.
|
•
|
Short-term investments (commercial bank certificates of deposits and mutual funds), for which the fair values are measured as a Level 1 instrument.
|
•
|
Contingent accrued earn-out business acquisition consideration liabilities for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are re-measured quarterly based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3.
|
|
|
|
|
|
|
|
(In thousands)
|
|
Fair Value at June 30, 2018
|
|
Valuation Technique
|
|
Significant Unobservable
Input
|
Contingent acquisition consideration:
(Wdev and ItzCash acquisition)
|
|
$21,608
|
|
Discounted cash flow
|
|
Projected revenue and probability of achievement
|
|
|
|
|
|
|
|
(In thousands)
|
|
Fair Value at December 31, 2017
|
|
Valuation Technique
|
|
Significant Unobservable
Input
|
Contingent acquisition consideration:
(Wdev and ItzCash acquisition)
|
|
$37,096
|
|
Discounted cash flow
|
|
Projected revenue and probability of achievement
|
•
|
identification of the contract, or contracts, with a customer;
|
•
|
identification of the performance obligations in the contract;
|
•
|
determination of the transaction price;
|
•
|
allocation of the transaction price to the performance obligations in the contract; and
|
•
|
recognition of revenue when, or as, we satisfy a performance obligation.
|
|
|
Impact of Change in Accounting Policy
|
||||||||||
(In thousands)
|
|
As Reported December 31, 2017
|
|
Adjustments
|
|
Adjusted January 1, 2018
|
||||||
Other Current Assets
|
|
$
|
33,532
|
|
|
$
|
898
|
|
|
$
|
34,430
|
|
Current Assets
|
|
252,932
|
|
|
898
|
|
|
253,830
|
|
|||
Deferred tax asset, net
|
|
43,529
|
|
|
2,843
|
|
|
46,372
|
|
|||
Other Assets
|
|
11,720
|
|
|
1,502
|
|
|
13,222
|
|
|||
Total Assets
|
|
1,113,013
|
|
|
5,243
|
|
|
1,118,256
|
|
|||
Current Deferred Revenue
|
|
22,562
|
|
|
5,124
|
|
|
27,686
|
|
|||
Current Liabilities
|
|
146,932
|
|
|
5,124
|
|
|
152,056
|
|
|||
Long Term Deferred Revenue
|
|
1,423
|
|
|
8,921
|
|
|
10,344
|
|
|||
Total Liabilities
|
|
579,254
|
|
|
14,045
|
|
|
593,299
|
|
|||
Retained Earnings
|
|
510,975
|
|
|
(8,802
|
)
|
|
502,173
|
|
|
Impact of Change in Accounting Policy
|
||||||||||
|
As Reported Three Months Ended June 30, 2018
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
Condensed Consolidated Statement of Income
|
(In thousands)
|
||||||||||
Operating Revenue
|
$
|
124,626
|
|
|
$
|
(1
|
)
|
|
$
|
124,625
|
|
Costs of Services Provided
|
43,559
|
|
|
19
|
|
|
43,578
|
|
|||
Total Operating Expenses
|
86,311
|
|
|
19
|
|
|
86,330
|
|
|||
Operating Income
|
38,315
|
|
|
(20
|
)
|
|
38,295
|
|
|||
Income before income taxes
|
31,293
|
|
|
(20
|
)
|
|
31,273
|
|
|||
Income tax (expense) benefit
|
(2,222
|
)
|
|
5
|
|
|
(2,217
|
)
|
Net income including non-controlling interest
|
29,071
|
|
|
(15
|
)
|
|
29,056
|
|
|||
Net income attributable to Ebix, Inc.
|
29,180
|
|
|
(15
|
)
|
|
29,165
|
|
|||
Basic earnings per common share attributable to Ebix, Inc.
|
0.93
|
|
|
—
|
|
|
0.93
|
|
|||
Diluted Earnings per common share attributable to Ebix, Inc.
|
0.92
|
|
|
—
|
|
|
0.92
|
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
As Reported Six Months Ended June 30, 2018
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
Condensed Consolidated Statement of Income
|
(In thousands)
|
||||||||||
Operating Revenue
|
$
|
232,856
|
|
|
$
|
(624
|
)
|
|
$
|
232,232
|
|
Costs of Services Provided
|
83,150
|
|
|
(120
|
)
|
|
83,030
|
|
|||
Total Operating Expenses
|
160,645
|
|
|
(120
|
)
|
|
160,525
|
|
|||
Operating Income
|
72,211
|
|
|
(504
|
)
|
|
71,707
|
|
|||
Income before income taxes
|
59,875
|
|
|
(504
|
)
|
|
59,371
|
|
|||
Income tax (expense) benefit
|
(4,348
|
)
|
|
123
|
|
|
(4,225
|
)
|
|||
Net income including non-controlling interest
|
55,527
|
|
|
(381
|
)
|
|
55,146
|
|
|||
Net income attributable to Ebix, Inc.
|
55,388
|
|
|
(381
|
)
|
|
55,007
|
|
|||
Basic earnings per common share attributable to Ebix, Inc.
|
1.76
|
|
|
(0.01
|
)
|
|
1.75
|
|
|||
Diluted Earnings per common share attributable to Ebix, Inc.
|
1.75
|
|
|
(0.01
|
)
|
|
1.74
|
|
|||
|
|
|
|
|
|
||||||
|
As Reported June 30, 2018
|
|
Adjustments
|
|
Balances
without
adoption of
Topic 606
|
||||||
Condensed Consolidated Balance Sheet
|
(In thousands)
|
||||||||||
Other current assets
|
$
|
33,205
|
|
|
$
|
(848
|
)
|
|
$
|
32,357
|
|
Total current assets
|
328,229
|
|
|
(848
|
)
|
|
327,381
|
|
|||
Deferred tax asset, net
|
46,819
|
|
|
(2,309
|
)
|
|
44,510
|
|
|||
Other assets
|
22,710
|
|
|
(1,312
|
)
|
|
21,398
|
|
|||
Total assets
|
1,357,577
|
|
|
(4,469
|
)
|
|
1,353,108
|
|
|||
Current Deferred Revenue
|
31,011
|
|
|
(4,618
|
)
|
|
26,393
|
|
|||
Total current liabilities
|
194,077
|
|
|
(4,618
|
)
|
|
189,459
|
|
|||
Long Term Deferred Revenue
|
7,152
|
|
|
(6,951
|
)
|
|
201
|
|
|||
Total liabilities
|
809,675
|
|
|
(11,569
|
)
|
|
798,106
|
|
|||
Retained earnings
|
550,480
|
|
|
7,100
|
|
|
557,580
|
|
|||
|
|
|
|
|
|
||||||
|
As Reported Six Months Ended June 30, 2018
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
Condensed Consolidated Statement of Cash Flows
|
(In thousands)
|
||||||||||
Net income attributable to Ebix, Inc.
|
$
|
55,388
|
|
|
$
|
(381
|
)
|
|
$
|
55,007
|
|
Other assets
|
(40
|
)
|
|
(120
|
)
|
|
(160
|
)
|
|||
Deferred Revenue
|
(5,544
|
)
|
|
2,476
|
|
|
(3,068
|
)
|
|||
Net cash provided by operating activities
|
39,893
|
|
|
1,975
|
|
|
41,868
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Revenue:
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
(1)
|
||||||||
United States
|
48,400
|
|
|
52,900
|
|
|
$
|
98,302
|
|
|
$
|
105,079
|
|
||
Canada
|
1,456
|
|
|
2,034
|
|
|
3,056
|
|
|
4,142
|
|
||||
Latin America
|
5,161
|
|
|
4,319
|
|
|
10,555
|
|
|
8,218
|
|
||||
Australia
|
8,740
|
|
|
7,617
|
|
|
18,227
|
|
|
16,516
|
|
||||
Singapore
|
1,924
|
|
|
1,394
|
|
|
4,140
|
|
|
3,125
|
|
||||
New Zealand
|
526
|
|
|
543
|
|
|
1,013
|
|
|
1,023
|
|
||||
India
|
51,351
|
|
|
14,379
|
|
|
83,354
|
|
|
19,999
|
|
||||
Europe
|
3,841
|
|
|
4,201
|
|
|
7,872
|
|
|
8,388
|
|
||||
Dubai
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Indonesia
|
1,828
|
|
|
—
|
|
|
3,369
|
|
|
—
|
|
||||
Philippines
|
1,245
|
|
|
—
|
|
|
2,593
|
|
|
—
|
|
||||
United Arab Emirates
|
154
|
|
|
—
|
|
|
371
|
|
|
—
|
|
||||
|
$
|
124,626
|
|
|
$
|
87,387
|
|
|
$
|
232,856
|
|
|
$
|
166,490
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
|
June 30
|
|
June 30
|
||||||||||||
(In thousands)
|
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
|
||||||||
Exchanges
|
|
$
|
101,581
|
|
|
$
|
60,373
|
|
|
$
|
183,439
|
|
|
$
|
112,987
|
|
Broker Systems
|
|
3,696
|
|
|
3,595
|
|
|
7,306
|
|
|
7,383
|
|
||||
RCS
|
|
19,007
|
|
|
22,663
|
|
|
41,274
|
|
|
44,515
|
|
||||
Carrier Systems
|
|
342
|
|
|
756
|
|
|
837
|
|
|
1,605
|
|
||||
Totals
|
|
$
|
124,626
|
|
|
$
|
87,387
|
|
|
$
|
232,856
|
|
|
$
|
166,490
|
|
(In thousands)
|
|
June 30, 2018
|
||
Balance, beginning of period
|
|
$
|
—
|
|
Topic 606 adjustment
|
|
2,401
|
|
|
Adjusted beginning balance
|
|
$
|
2,401
|
|
Costs recognized from adjusted beginning balance
|
|
(469
|
)
|
|
Additions, net of costs recognized
|
|
228
|
|
|
Balance, end of period
|
|
$
|
2,160
|
|
(In thousands)
|
|
June 30, 2018
|
||
Balance, beginning of period
|
|
$
|
23,985
|
|
Topic 606 adjustment
|
|
14,045
|
|
|
Adjusted beginning balance
|
|
$
|
38,030
|
|
Revenue recognized from adjusted beginning balance
|
|
(22,887
|
)
|
|
Additions from business acquisitions
|
|
6,366
|
|
|
Additions, net of revenue recognized and currency translation
|
|
16,654
|
|
|
Balance, end of period
|
|
$
|
38,163
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
|
(In thousands)
|
||||||
Beginning Balance
|
$
|
666,863
|
|
|
$
|
441,404
|
|
Additions (see Note 3)
|
192,271
|
|
|
233,095
|
|
||
Purchase accounting adjustments
|
(13,071
|
)
|
|
(12,158
|
)
|
||
Foreign currency translation adjustments
|
(20,537
|
)
|
|
4,522
|
|
||
Ending Balance
|
$
|
825,526
|
|
|
$
|
666,863
|
|
Category
|
|
Life (yrs)
|
Customer relationships
|
|
7–20
|
Developed technology
|
|
3–12
|
Dealer networks
|
|
15-20
|
Trademarks
|
|
3–15
|
Non-compete agreements
|
|
5
|
Backlog
|
|
1.2
|
Database
|
|
10
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(Unaudited)
|
|
|
||||
|
(In thousands)
|
||||||
Finite-lived intangible assets:
|
|
|
|
||||
Customer relationships
|
$
|
72,870
|
|
|
$
|
73,725
|
|
Developed technology
|
16,157
|
|
|
15,076
|
|
||
Dealer network
|
9,871
|
|
|
10,581
|
|
||
Trademarks
|
2,690
|
|
|
2,698
|
|
||
Non-compete agreements
|
764
|
|
|
764
|
|
||
Backlog
|
140
|
|
|
140
|
|
||
Database
|
212
|
|
|
212
|
|
||
Total intangibles
|
102,704
|
|
|
103,196
|
|
||
Accumulated amortization
|
(60,662
|
)
|
|
(57,485
|
)
|
||
Finite-lived intangibles, net
|
$
|
42,042
|
|
|
$
|
45,711
|
|
|
|
|
|
||||
Indefinite-lived intangibles:
|
|
|
|
||||
Customer/territorial relationships
|
$
|
42,055
|
|
|
$
|
42,055
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Net income attributable to Ebix, Inc.
|
$
|
29,180
|
|
|
$
|
23,434
|
|
|
$
|
55,388
|
|
|
$
|
49,861
|
|
Basic Weighted Average Shares Outstanding
|
31,465
|
|
|
31,490
|
|
|
31,474
|
|
|
31,648
|
|
||||
Dilutive effect of stock options and restricted stock awards
|
161
|
|
|
147
|
|
|
169
|
|
|
157
|
|
||||
Diluted weighted average shares outstanding
|
31,626
|
|
|
31,637
|
|
|
31,643
|
|
|
31,805
|
|
||||
Basic earnings per common share
|
$
|
0.93
|
|
|
$
|
0.74
|
|
|
$
|
1.76
|
|
|
$
|
1.58
|
|
Diluted earnings per common share
|
$
|
0.92
|
|
|
$
|
0.74
|
|
|
$
|
1.75
|
|
|
$
|
1.57
|
|
|
Three Months Ended June 30, 2018
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||||
|
As Reported
|
Pro Forma
|
|
As Reported
|
Pro Forma
|
|
As Reported
|
Pro Forma
|
|
As Reported
|
Pro Forma
|
||||||||||||||||
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
||||||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||
Revenue
|
$
|
124,626
|
|
$
|
124,626
|
|
|
$
|
87,387
|
|
$
|
123,996
|
|
|
$
|
232,856
|
|
$
|
248,614
|
|
|
$
|
166,490
|
|
$
|
253,945
|
|
Net Income attributable to Ebix, Inc.
|
$
|
29,180
|
|
$
|
29,180
|
|
|
$
|
23,434
|
|
$
|
26,291
|
|
|
$
|
55,388
|
|
$
|
57,140
|
|
|
$
|
49,861
|
|
$
|
57,535
|
|
Basic EPS
|
$
|
0.93
|
|
$
|
0.93
|
|
|
$
|
0.74
|
|
$
|
0.83
|
|
|
$
|
1.76
|
|
$
|
1.82
|
|
|
$
|
1.58
|
|
$
|
1.82
|
|
Diluted EPS
|
$
|
0.92
|
|
$
|
0.92
|
|
|
$
|
0.74
|
|
$
|
0.83
|
|
|
$
|
1.75
|
|
$
|
1.81
|
|
|
$
|
1.57
|
|
$
|
1.81
|
|
|
|
As of and for the Six Months Ended June 30, 2018
|
|
As of and for the Six Months Ended June 30, 2017
|
||||||||||||
|
|
External Revenues
|
|
Long-lived assets
|
|
External Revenues
|
|
Long-lived assets
|
||||||||
|
|
(In thousands)
|
||||||||||||||
United States
|
|
$
|
98,302
|
|
|
$
|
395,748
|
|
|
$
|
105,079
|
|
|
$
|
391,308
|
|
Canada
|
|
3,056
|
|
|
6,210
|
|
|
4,142
|
|
|
6,484
|
|
||||
Latin America
|
|
10,555
|
|
|
19,179
|
|
|
8,218
|
|
|
23,283
|
|
||||
Australia
|
|
18,227
|
|
|
1,640
|
|
|
16,516
|
|
|
1,261
|
|
||||
Singapore
|
|
4,140
|
|
|
17,926
|
|
|
3,125
|
|
|
17,441
|
|
||||
New Zealand
|
|
1,013
|
|
|
272
|
|
|
1,023
|
|
|
257
|
|
||||
India
|
|
83,354
|
|
|
507,404
|
|
|
19,999
|
|
|
213,135
|
|
||||
Europe
|
|
7,872
|
|
|
25,555
|
|
|
8,388
|
|
|
22,254
|
|
||||
Dubai
|
|
4
|
|
|
54,375
|
|
|
—
|
|
|
53,786
|
|
||||
Indonesia
|
|
3,369
|
|
|
97
|
|
|
—
|
|
|
—
|
|
||||
Philippines
|
|
2,593
|
|
|
912
|
|
|
—
|
|
|
—
|
|
||||
United Arab Emirates
|
|
371
|
|
|
30
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
232,856
|
|
|
$
|
1,029,348
|
|
|
$
|
166,490
|
|
|
$
|
729,209
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
|
(In thousands)
|
||||||
Prepaid expenses
|
$
|
27,063
|
|
|
$
|
29,347
|
|
Sales taxes receivable from customers
|
—
|
|
|
2,218
|
|
||
Due from prior owners of acquired businesses for working capital settlements, etc...
|
1,371
|
|
|
284
|
|
||
Accrued interest receivable
|
197
|
|
|
515
|
|
||
Tax refunds receivable
|
2,829
|
|
|
—
|
|
||
Credit card merchant account balance receivable
|
1,283
|
|
|
1,008
|
|
||
Other
|
462
|
|
|
160
|
|
||
Total
|
$
|
33,205
|
|
|
$
|
33,532
|
|
•
|
Our ability to efficiently and effectively integrate acquired business operations, as discussed in Note 3 of the Condensed Notes to the Condensed Consolidated Financial Statements pertaining to the business acquisitions we have made;
|
•
|
Note 4 of the Notes to the Condensed Consolidated Financial Statements, "Debt with Commercial Bank" and our future liquidity needs discussed under “Liquidity and Financial Condition” regarding our ability to generate cash from operating activities and any declines in our credit ratings or financial condition which could restrict our access to the capital markets or materially increase our financing costs;
|
•
|
Note 5 of the Notes to the Condensed Consolidated Financial Statements, “Commitments and Contingencies”, and “Contractual Obligations” in Management's Discussion and Analysis of Financial Condition and Results of Operation ("MD&A") regarding uncertainties pertaining to the actual ultimate cost of our legal contingencies;
|
•
|
MD&A and the analysis of the
six
month revenue trends regarding actual realized level of demand for our products during the immediately foreseeable future, and fluctuations thereof.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(
In thousands
)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Exchanges
|
|
$
|
101,581
|
|
|
$
|
60,373
|
|
|
$
|
183,439
|
|
|
$
|
112,987
|
|
Broker Systems
|
|
3,696
|
|
|
3,595
|
|
|
7,306
|
|
|
7,383
|
|
||||
RCS
|
|
19,007
|
|
|
22,663
|
|
|
41,274
|
|
|
44,515
|
|
||||
Carrier Systems
|
|
342
|
|
|
756
|
|
|
837
|
|
|
1,605
|
|
||||
Totals
|
|
$
|
124,626
|
|
|
$
|
87,387
|
|
|
$
|
232,856
|
|
|
$
|
166,490
|
|
Country/Region
|
|
Cash and ST investments
|
||
United States
|
|
$
|
10,112
|
|
Canada
|
|
6,146
|
|
|
Latin America
|
|
2,770
|
|
|
Australia
|
|
2,606
|
|
|
Singapore
|
|
5,914
|
|
|
New Zealand
|
|
1,035
|
|
|
India
|
|
67,700
|
|
|
Europe
|
|
1,390
|
|
|
Mauritius
|
|
152
|
|
|
Dubai
|
|
91
|
|
|
Philippines
|
|
6,937
|
|
|
Indonesia
|
|
3,967
|
|
|
United Arab Emirates
|
|
740
|
|
|
Total
|
|
$
|
109,560
|
|
•
|
identification of the contract, or contracts, with a customer;
|
•
|
identification of the performance obligations in the contract;
|
•
|
determination of the transaction price;
|
•
|
allocation of the transaction price to the performance obligations in the contract; and
|
•
|
recognition of revenue when, or as, we satisfy a performance obligation.
|
•
|
The engagement of Ernst & Young LLP to assist in the review and analysis of the Company’s interim and annual income tax provision methodology computations and financial reporting;
|
•
|
The strengthening of controls for income taxes in 2018 with the use of additional resources and expanded use of independent third party resources and outside legal tax counsel
|
•
|
Reviewing and revising internal procedures surrounding valuation accounting, including the use of independent third party resources, internal review and documentation processes.
|
Exhibits
|
|
|
10.1
*
|
||
10.2
*
|
||
101*
|
XBRL (Extensible Business Reporting Language) - The following materials from Ebix, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statement of Stockholders' Equity and Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements which were tagged as blocks of text.
|
* Filed herewith
|
|
|
|
|
|
|
|
|
|
|
Ebix, Inc.
|
|
||
Date:
|
August 9, 2018
|
By:
|
/s/ Robin Raina
|
|
|
|
|
|
Robin Raina
|
|
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
||
Date:
|
August 9, 2018
|
By:
|
/s/ Sean T. Donaghy
|
|
|
|
|
|
Sean T. Donaghy
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
Date:
|
August 9, 2018
|
/s/ Robin Raina
|
|
||
|
|
Robin Raina
|
|
||
|
|
Chief Executive Officer
|
|
Date:
|
August 9, 2018
|
/s/ Sean T. Donaghy
|
|
||
|
|
Sean T. Donaghy
|
|
||
|
|
Chief Financial Officer
|
|
(1)
|
|
I am the Chief Executive Officer of Ebix, Inc. (the “Registrant”).
|
(2)
|
|
In connection with the Quarterly Report of the Registrant on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented.
|
By:
|
/s/ Robin Raina
|
|
|
Name: Robin Raina
|
|
|
Chief Executive Officer
|
|
|
August 9, 2018
|
|
(1)
|
|
I am the Chief Financial Officer of Ebix, Inc. (the “Registrant”).
|
|||
(2)
|
|
In connection with the Quarterly Report of the Registrant on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented.
|
By:
|
/s/ Sean T. Donaghy
|
|
|
Name: Sean T. Donaghy
|
|
|
Chief Financial Officer
|
|
|
August 9, 2018
|
|