Liberty Posted May 10, 2011 Share Posted May 10, 2011 Looks like the thread we had on this company was closed, so here's a new one. They are announcing their Q1 earnings tomorrow morning, for those interested: ATLANTA – May 3, 2011 – Ebix, Inc. (NASDAQ: EBIX) a leading provider of On-Demand software and E-commerce services to the insurance industry, today announced that it plans to release its 2011 first quarter earnings results on Tuesday morning, May 10th and will host a conference call to review the results at 11:00 a.m. EDT the same day (details below). The call is open to the general public. US/Canada Dial-in #: +1(973) 409-9690 Link to comment Share on other sites More sharing options...
Liberty Posted May 10, 2011 Author Share Posted May 10, 2011 ATLANTA--(BUSINESS WIRE)--Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today reported record financial results for the first quarter of 2011 and will host a conference call at 11:00 a.m. EDT (details below). Ebix delivered the following results for its first quarter of fiscal year 2011: Revenue: Total Q1 2011 revenue grew to a record $40.1 million, an increase of 27% on a year-over-year basis, as compared to Q1 2010 revenue of $31.6 million. The Q1 2011 results include financial results from the ADAM acquisition, as of 7th February 2011. Expenses: Ebix’s operating expenses for the quarter grew by 30 percent to $24.4 million as compared to $18.8 million for the first quarter of 2010. The Q1 2011 expenses include a one-time non-recurring charge of $1.79 million associated with the payment of investment banking fees of $1.39 million and severance costs of $0.4 million, related to the A.D.A.M. acquisition. Margins: Reflecting the one-time acquisition related expenses in the quarter, Ebix reported an operating margin of 39% for the three months ending March 31, 2011 as compared to 40% for the same period during 2010. Net Income: Q1 2011 net income rose 22% to $15.2 million, as compared to Q1 2010 net income of $12.4 million. The Q1 2011 net income number includes a non-operating charge of $354 thousand resulting from the increase in the fair value of the put option that was issued to the two former stockholders of E-Z Data who received shares of Ebix common stock as part of the acquisition consideration paid by the Company in October 2009. Earnings per Share: Q1 2011 diluted earnings per share rose 16% to $0.37, as compared to $0.32 in Q1 2010. For purposes of the Q1 2011 EPS calculation, there was an average of 41.5 million diluted shares outstanding in Q1 2011, as compared to 39.3 million diluted shares outstanding in Q1 of 2010. Channel Revenues: The Exchange channel grew 36% year over year to $31.1 million or 78% of the Q1 revenues. The BPO channel grew 4% year over year, to $3.6 million or 9% of the Q1 revenues. The Broker Channel grew 32% year over year, to $3.8 million or 10% of the Q1 revenues. The Carrier channel dropped 35% year over year, to $1.5 million or 3% of the Q1 revenues. Customers: Ebix also announced the signing of new contracts with named accounts like State of Ontario, NFU, QBE Holdings, MetLife, BanCorp Investment Services, AllState, Prudential, Penn Mutual, Guardian Life, Lincoln National, Fireman’s Fund, Hartford, Capital Rock, HSBC, Great American Insurance, Catholic Health Initiatives, CBIZ, American Collectors Insurance Company, Assurant, United Airlines, Hines, Dollar General, Schneider Electric, BNSF Railway, Kroger, Betchel Jacobs, Signature Homes, City of Phoenix, and CB Richard Ellis. This list of names is a sample representation of contracts signed by the Company in the first quarter of 2011. Cash Flows: Ebix generated $10.3 million of net cash flow from ongoing operations in Q1 2011, as compared to $7.8 million in Q1 2010. Ebix’s Q1 2011 net cash flow from operations of $10.3 million was impacted by the early payment of an April payroll amounting to approximately $1.6 million, $1.39 million associated with the payment of investment banking fees for A.D.A.M. acquisition, and approximately $0.7 million payments made by the Company after the closing for A.D.A.M.’s pre-acquisition period expenses. Convertible Debt: The Company announced that the only convertible debt remaining as of 31st March 2011 was for $5 million. Subsequent to the close of Q1 2011, Ebix retired this remaining $5 million in convertible debt for total consideration of $6.8 million. The payment represents the convertible’s principal amount and a conversion gain of $1.8 million related to the appreciation of Ebix’s common stock. Ebix elected to redeem the convertible debt using cash rather than common stock. Share Repurchases: During Q1 2011, the Company repurchased 106,483 shares of our common stock at an average price of $22.49 per share for an aggregate amount of $2.4 million. Year to date, the Company has repurchased 377,573 shares of Ebix common stock in 2011, for an aggregate consideration in the amount of $8.5 million, representing an average price of $22.50 per share. http://www.businesswire.com/news/home/20110510005690/en/Ebix-Q1-Revenue-Rose-27-Record-40.1M Link to comment Share on other sites More sharing options...
Liberty Posted May 10, 2011 Author Share Posted May 10, 2011 Whoa, Mr. Market is in a bad mood wrt Ebix today. Down 9.2% right now, after being up almost 4% in the morning. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted May 10, 2011 Share Posted May 10, 2011 Bad mood indeed. What is the story with this stock? The earnings were pretty spectacular, and the revenue run rate target of 200m by the end of 2011 seems on target. Apparently the market either doesn't believe the earnings report or is taking a harsh view of the acquisitions strategy and associated accounting metrics. I noticed that receivables were up also (not sure why yet), which only contributes to short murmurings... The conference call today was also interesting. Kerris (the CFO) and Raina seemed pretty defensive on a couple of questions, speaking over the analyst asking the question, etc. I think that they are probably just frustrated at being in the sites of some very determined short sellers, but it was not a great call... Link to comment Share on other sites More sharing options...
DCG Posted May 10, 2011 Share Posted May 10, 2011 They announce one great quarter after another and the short sellers continue to beat it. Nice to see that they continue to buy back shares at low prices. Maybe they should just take the company private. Link to comment Share on other sites More sharing options...
Liberty Posted May 10, 2011 Author Share Posted May 10, 2011 I see it as a great buying opportunity. What truly matters to me - unless the story changes a lot - is what the stock will be worth in 5 years, and so far it looks like they have great potential. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted May 10, 2011 Share Posted May 10, 2011 I see it as a great buying opportunity. What truly matters to me - unless the story changes a lot - is what the stock will be worth in 5 years, and so far it looks like they have great potential. Yes I am also a long-term investor, have held this stock since it was at $14, and think that time will be the great scale that weighs the value of this company. I still would like to understand the short term market response to earnings. In the meantime, I'm happy enough to continue accumulating at at a discount... Link to comment Share on other sites More sharing options...
link01 Posted May 10, 2011 Share Posted May 10, 2011 Bad mood indeed. What is the story with this stock? The earnings were pretty spectacular, and the revenue run rate target of 200m by the end of 2011 seems on target. Apparently the market either doesn't believe the earnings report or is taking a harsh view of the acquisitions strategy and associated accounting metrics. I noticed that receivables were up also (not sure why yet), which only contributes to short murmurings... The conference call today was also interesting. Kerris (the CFO) and Raina seemed pretty defensive on a couple of questions, speaking over the analyst asking the question, etc. I think that they are probably just frustrated at being in the sites of some very determined short sellers, but it was not a great call... just looking at the headline no's from the earnings press release, the EPS 'growth' lags net income by quite a bit. not too spectacular. their earnings leverage is negative, all thteir revenue growth is scaling the wrong way: Revenue: Total Q1 2011 revenue grew to a record $40.1 million, an increase of 27% on a year-over-year basis vs Expenses: Ebix’s operating expenses for the quarter grew by 30 percent to $24.4 million? Net Income: Q1 2011 net income rose 22% to $15.2 million vs Earnings per Share: Q1 2011 diluted earnings per share rose 16% to $0.37? is ebix buying all that top line growth too dearly? Link to comment Share on other sites More sharing options...
Liberty Posted May 11, 2011 Author Share Posted May 11, 2011 They had many one-time costs from digesting a big acquisition, but IMO what will matter in the long term is that they're maintaining their high margins (iirc, 39% now, but would've been 43% without the one-timers), they're not losing clients (highly recurring revenues), signing big new ones, and making acquisitions that allow them access to new clients to whom they can cross sell existing products. They're also retiring debt and buying back shares are very low costs... That they're doing this well in a soft insurance market is a good sign. They should do very well in a hard market when insurers have lots of money to throw around to upgrade their back-end systems... Link to comment Share on other sites More sharing options...
Liberty Posted May 16, 2011 Author Share Posted May 16, 2011 http://seekingalpha.com/article/270005-ebix-stands-out-in-the-insurance-software-and-services-industry Link to comment Share on other sites More sharing options...
Liberty Posted May 25, 2011 Author Share Posted May 25, 2011 Here we have a company with highly recurrent revenues spread pretty evenly over many clients around the world, with high potential growth and greenfield infrastructure-like opportunities, low expenses, low taxes thanks to operations in India and Singapore, high margins that seem sustainable, a highly capable owner-manager, a main product segment with a natural moat thanks to the networking effect (exchanges are pretty much winner-takes-all), fragmented competition, lots of cash and very little debt, making opportunistic buybacks, a good track record of not overpaying for acquisitions and integrating them well, and a stock price that is getting ever closer to single digit P/E. On top of this, it has been doing very well even during an historic recession and a soft insurance market, a time when insurance companies aren't investing into their back-end IT (picks and shovels selling well even when there isn't much mining going on...). I'd be backing up the truck to load up on this if it wasn't already such a big part of my portfolio. :-\ Link to comment Share on other sites More sharing options...
mankap Posted May 26, 2011 Share Posted May 26, 2011 I agree with you Liberty I am also buying at this price. With the cashflow on hand Ebix can buy back the entire float in next 3-4 years. In the recession Ebix and with all the turmoil in the Insurance industry had 12-15% organic growth rate Link to comment Share on other sites More sharing options...
biaggio Posted May 26, 2011 Share Posted May 26, 2011 http://sec.gov/Archives/edgar/data/814549/000095012311025942/c14084e10vk.htm I am getting ~$1.62 in owners earnings. How do you mean, that float can be purchased over the next 3-4 years with cash flow? Link to comment Share on other sites More sharing options...
rrockw Posted May 26, 2011 Share Posted May 26, 2011 Can anyone explain to me what this company does? I've looked over the site and read the 10k and still have little more than a foggy idea of what they do. Link to comment Share on other sites More sharing options...
FFHWatcher Posted May 26, 2011 Share Posted May 26, 2011 Can anyone explain to me what this company does? I've looked over the site and read the 10k and still have little more than a foggy idea of what they do. I am looking into the same thing right now. They don't sell hamburgers, so it isn't that easy to understand. In 15 minutes I have some understanding of what they do plus I worked in the insurance (Life and P&C) industry in Canada for almost 15 years which helped me understand what role they play. Our brokerage used similar types of software when I was there but I don't know if it was EBIX. I guess my point is, brokers use a lot of software and technology to help them sell and service insurance policies with multiple carriers. The integration between all parties is quite complex and when I was in the business (I left it almost 4 years ago) the insurance companies were still stuck in 1995. Basically, there was no integration. Mutual Fund companies were light years ahead of insurance carriers. It was extremely frustrating being a broker trying to write insurance. Writing insurance policies for direct writers (not using a broker system, just writing all your business with one company) is pretty straightforward but writing insurance policies for 20 carriers (aka being a real broker) would be a whole heck of a lot easier if there was one (exchange type) system integrating all the functions with all the carriers through a single system. For example, I personally paid $30/mo for software that ran quotes from most carriers in Canada and that's all that system did. Nothing more, just got me a stupid quote. If I wanted an updated full illustration on a Universal Life policy with investment options than I had to have software loaded from every single insurance carrier loaded on my computer and updated regularly. Ebix discusses running the quotes through their system with multiple carriers and then completing an electronic application with your client and then having the client digitally sign the application and electronically send it off to the carrier(s) and monitor the progress as the application moves through the application process. On top of that, paramedicals required for life insurance applications would be automatically ordered with the results being uploaded directly to the carrier(s). I found the company presentation linked below helpful. http://www.ebix.com/pdf/EBIX%20Investor%20Presentation%20web.pdf Link to comment Share on other sites More sharing options...
mankap Posted May 31, 2011 Share Posted May 31, 2011 Hi Biaggio Insiders hold 25% of the shares and Insiders+Institutions hold 67% of shares.The public holding is around 33% shares.( around 10m).At today's market price it is around 200m.Ebix has cashflow of 60m and growing.Ebix can buy entire float with public with 3 year's worth of cashflow at today's price. Link to comment Share on other sites More sharing options...
biaggio Posted June 1, 2011 Share Posted June 1, 2011 Hi Biaggio Insiders hold 25% of the shares and Insiders+Institutions hold 67% of shares.The public holding is around 33% shares.( around 10m).At today's market price it is around 200m.Ebix has cashflow of 60m and growing.Ebix can buy entire float with public with 3 year's worth of cashflow at today's price. Thanks Mankap. I would have never thought of looking it that way. Would this be a good thing if you are one of the 33% public share holders that will sellout on the cheap? Being able to buy out entire float in 3 years made EBIX sound dirt cheap (something close to 3-5 x earnings) but it is still trading at ~ 12 x owners earnings. This might still turn out to be a great price especially if it continue to grow 15-20%. I am still watching + learning on this one. Link to comment Share on other sites More sharing options...
Liberty Posted June 1, 2011 Author Share Posted June 1, 2011 Would this be a good thing if you are one of the 33% public share holders that will sellout on the cheap? Not a good thing if you decide to sell at that price and the company then keeps growing profitably and is eventually repriced by the market at a higher multiple, but it's great if you are a shareholder who keeps holding shares since you'll own a bigger % of the company via the buybacks. Link to comment Share on other sites More sharing options...
beerbaron Posted June 1, 2011 Share Posted June 1, 2011 One question, I have been scratching my head over this one for a while. I'm trying to evaluate if the stated advantages are sustainable and if I can understand the business. At the current price it could be a homerun or a zero depending on how the research is made. My goal on this one is to take each argument of the seeking alpha article and see if I can kill them. If we can then we would have a Fisher at Graham prices. BeerBaron Link to comment Share on other sites More sharing options...
Liberty Posted June 1, 2011 Author Share Posted June 1, 2011 My goal on this one is to take each argument of the seeking alpha article and see if I can kill them. If we can then we would have a Fisher at Graham prices. BeerBaron Have you seen this? http://seekingalpha.com/article/260820-craig-hallum-research-report-provides-counterpoint-to-copperfield-claims Good starting point. Link to comment Share on other sites More sharing options...
twacowfca Posted June 2, 2011 Share Posted June 2, 2011 One question, I have been scratching my head over this one for a while. I'm trying to evaluate if the stated advantages are sustainable and if I can understand the business. At the current price it could be a homerun or a zero depending on how the research is made. My goal on this one is to take each argument of the seeking alpha article and see if I can kill them. If we can then we would have a Fisher at Graham prices. BeerBaron "The mind is a marvelous thing. It can think of a reason to do anything it has a mind to do." Link to comment Share on other sites More sharing options...
beerbaron Posted June 2, 2011 Share Posted June 2, 2011 "The mind is a marvelous thing. It can think of a reason to do anything it has a mind to do." My mid is not that marvelous, I got stuck at understanding the competitive advantage and finding informations on user/insurance appreciation. Still scratching my head. Link to comment Share on other sites More sharing options...
Liberty Posted June 3, 2011 Author Share Posted June 3, 2011 http://www.fool.com/investing/general/2011/06/03/ebix-posts-strong-first-quarter-results-market-act.aspx http://online.wsj.com/article/BT-CO-20110401-704628.html With a $45 million buyback plan, if they use it all, at current prices they could be buying back over 20% of their float. Not bad, though they might not use the whole 45 if they do more acquisitions.. Link to comment Share on other sites More sharing options...
tombgrt Posted June 3, 2011 Share Posted June 3, 2011 This is starting to draw my attention... In short, what is happening here? Link to comment Share on other sites More sharing options...
tombgrt Posted June 3, 2011 Share Posted June 3, 2011 This is starting to draw my attention... In short, what is happening here? And 5min later we drop another 7%? ??? Link to comment Share on other sites More sharing options...
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