Ebix, Inc. (EBIX)
Q4 2008 Earnings Call Transcript
March 16, 2009 11:00 am ET
Robin Raina – Chairman, President and CEO
Robert Kerris – CFO
Harry Long [ph]
Vincent Capozi [ph]
Mark Rye [ph]
Brian Graham [ph]
Simon Baruch [ph]
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Thank you. I would like to now turn the call over to President of Ebix, Mr. Raina. You may begin your call, sir.
Good morning, gentlemen. Thank you for attending Ebix’s 2008 Annual Investor Conference call. I have also with me today Mr. Robert Kerris, Ebix’s CFO on this investor conference call.
We announced our 2008 financial results on Friday last week and all of you must have seen those numbers by now. I will take a few minutes to summarize these results for you.
Each of the last few years has been a record year for Ebix, in terms of beating all its results in the last 33 years. This year was no different from the last few to the extent that the financial results for the year 2008 are record results again – the best ever in our 33 year young history.
Ebix’s total revenue rose 74% to $74.75 million in 2008, compared to $42.84 million in 2007. Ebix's operating income rose 129% to $29.26 million in fiscal 2008, compared to operating income of $12.8 million in 2007. In 2008, the company's net income rose 116% to $27.31 million, or $2.28 per diluted share, compared to net income of $12.67 million, or $1.20 per diluted share, in 2007.
Our operating margins continued to improve, increasing to 39% for 2008 from 30% in 2007. Net margins for the full year of 2008 grew to 37% vs. 30% in the full year of 2007. For the twelve months ended December 31, 2008, the company generated $26.79 million of net cash flow from operating activities compared to $14.4 million for the year ended December 31, 2007, a 78% increase in operating cash flow year over year.
In 2008, the company's basic earnings per common share rose to $2.78 as compared to basic earning per common share of $1.36 in 2007. Results for 2008 and 2007 were based on 9.81 million and 9.31 million weighted average basic shares outstanding respectively.
Ebix's 2008 fourth quarter revenue rose 65% to $20.14 million, compared to $12.2 million during the fourth quarter of 2007. Q4 ‘08 net income rose 76% to $7.91 million, or $0.66 per diluted share, versus Q4 ’07 net income of $4.5 million, or $0.40 per diluted share. Results for Q4 2008 and Q4 2007 were based on 12.29 million and 11.33 million weighted average diluted shares outstanding respectively.
Our net margins grew to 39% in the fourth quarter of 2008 vs. 37% in the fourth quarter of 2007.
The sudden strengthening of the US dollar had a clear impact on our revenue numbers in Q4 of 2008, since we convert all international results into US dollars for reporting purposes. For example, our Q4 2008 results would have been approximately $2 million higher if the exchange rates had not strengthened so appreciably since June 2008.
Our revenue in 2008 was split across the four channels that we focus on. The largest percentage was in the area of Exchanges with a 57% share, broker channel had 19%, carrier channel had 12%, and the BPO channel had 11% of our 2008 revenues. We expect this composition to change a bit in 2009 with Exchanges and BPO channel constituting a larger percentage of our revenues in 2009.
In the year 2008, US accounted for 65% of the revenues, while international accounted for 35% of the revenues. This was very much on the lines predicted earlier.
I am often asked about our guidance on future quarters and years. We have always believed in letting our past performance and numbers speak for themselves and thus I will abstain from issuing any guidance on numbers. For those of you who have been investors in the Ebix stock for sometime, you have heard me say this many a times earlier. I am not going to depart from that thought process and issue a future guidance. Instead, I will lay out a few metrics from the past three years, as I do every year, for you to discover an answer for yourself.
Let us look at three measures over the last few years – Revenue, Net income and Diluted EPS.
Ebix's 2008 fourth quarter revenue rose 65% to $20.1 million, compared to fourth quarter revenue in 2007 of $12.2 million, fourth quarter revenue in 2006 of $9.28 million, or fourth quarter revenue in 2005 of $6.16 million. Our revenues grew 74% in 2008 as compared to 2007, grew 155% as compared to 2006 and grew 210% as compared to 2005. Ebix net income in 2008 grew 116% over 2007, 358% as compared to 2006, and 532% as compared to 2005. Ebix diluted EPS for 2008 grew 90% year over year to $2.28, 218 % as compared to 2006, and 341% as compared to 2005. If you looked at the year 2008 itself, each sequential quarter was an improvement over the previous quarter in the year.