As used herein, the phrases “Ebix,” “the Firm,” “we,” “our,” and “us” refer
to Ebix, Inc., a Delaware company, and its consolidated subsidiaries as a
mixed entity, besides the place it’s clear that the phrases imply solely Ebix, Inc.
Protected Harbor for Ahead-Wanting Statements – This Type 10-Q and sure
data integrated herein by reference accommodates forward-looking statements
and knowledge inside the “protected harbor” provisions of the Non-public Securities
Litigation Reform Act of 1995, Part 27A of the Securities Act of 1933, and
Part 21E of the Securities Alternate Act of 1934. This data contains
assumptions made by, and knowledge at the moment out there to administration,
together with statements relating to future financial efficiency and monetary
situation, liquidity and capital sources, acceptance of the Firm’s merchandise
by the market, and administration’s plans and targets. As well as, sure
statements included on this and our future filings with the SEC, in press
releases, and in oral and written statements made by us or with our approval,
which aren’t statements of historic truth, are forward-looking statements.
Phrases similar to “could,” “might,” “ought to,” “would,” “imagine,” “anticipate,”
“anticipate,” “estimate,” “intend,” “seeks,” “plan,” “undertaking,” “proceed,”
“predict,” “will,” and different phrases or expressions of comparable that means are
meant by the Firm to establish forward-looking statements, though not all
forward-looking statements include these figuring out phrases. These
forward-looking statements are discovered at numerous locations all through this report
and within the paperwork integrated herein by reference. These statements are
based mostly on our present expectations about future occasions or outcomes and knowledge
that’s at the moment out there to us, contain assumptions, dangers, and
uncertainties, and communicate solely as of the date on which such statements are made.
Our precise outcomes could differ materially from these expressed or implied in
these forward-looking statements. Elements which will trigger such a distinction
embrace, however will not be restricted to, these mentioned in Half I, Merchandise 1A, “Threat
Elements” in our Type 10-Ok for the yr ended December 31, 202 1 which is
integrated by reference herein , and in Half II, Merchandise 1A “Threat Elements” in
this Type 10-Q, together with however not restricted to: the willingness of impartial
insurance coverage businesses to outsource their pc and different processing must
third events; pricing and different aggressive pressures and the Firm’s capacity
to realize or preserve share of gross sales because of actions by opponents and
others; modifications in estimates in vital accounting judgments; modifications in or
failure to adjust to legal guidelines and laws, together with accounting requirements,
taxation necessities (together with tax price modifications, new tax legal guidelines and revised tax
interpretations) in home or international jurisdictions; change price
fluctuations and different dangers related to investments and operations in
international international locations (significantly in India, Australia, Asia, Latin America, and
Europe whereby we now have important and/or rising operations); fluctuations in
the fairness markets, together with market disruptions and important rate of interest
fluctuations, which can impede our entry to, or improve the price of, exterior
financing; the impacts of the COVID-19 international pandemic on our working
efficiency; capacity to safe further financing to help capital
necessities; the flexibility to refinance the Credit score Facility by maturity as nicely
as Credit score Facility provisions that might materially prohibit our enterprise; prices
and results of litigation, investigations, or comparable issues that might have an effect on
our enterprise, working outcomes and monetary situation; and worldwide
battle, together with terrorist acts. The Firm undertakes no obligation to
replace any such components, or to publicly announce the outcomes of, or modifications to
any of the forward-looking statements contained herein to replicate future occasions,
developments, modified circumstances, or for some other cause.
Different vital components that might trigger precise outcomes to vary materially
from these in our particular forward-looking statements included on this Type 10-Q
embrace, however will not be restricted to, the next:
•our future liquidity wants mentioned below “Liquidity and Monetary Situation”
relating to our capacity to generate money from working actions and any
declines in our credit score scores or monetary situation which might prohibit our
entry to the capital markets or materially improve our financing prices (refer
to Word Four of the Condensed Notes to those Condensed Consolidated Monetary
Statements on this Type 10-Q, “Debt”);
•uncertainties pertaining to the precise final price of our authorized contingencies
(discuss with Word 5 of the Condensed Notes to those Condensed Consolidated
Monetary Statements on this Type 10-Q, “Commitments and Contingencies”, and
“Contractual Obligations” in Administration’s Dialogue and Evaluation of Monetary
Situation and Outcomes of Operation (“MD&A”));
•the MD&A and the evaluation of the three-month income traits relating to precise
realized stage of demand for our merchandise through the instantly foreseeable
future, and fluctuations thereof; and
•our capacity to effectively and successfully combine acquired enterprise
operations, as mentioned in Word Three of those Condensed Notes to the Condensed
Consolidated Monetary Statements on this Type 10-Q, pertaining to the enterprise
acquisitions we now have made;
Readers ought to fastidiously evaluation the disclosures and the chance components described
on this and different paperwork we file sometimes with the SEC, together with
future reviews on Kinds 10-Q and 8-Ok, and any amendments thereto. It’s possible you’ll receive
our
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SEC filings at our web site, www.ebix.com below the “Investor Info”
part, or over the Web on the SEC’s web site, www.sec.gov.
The next data must be learn at the side of the unaudited
condensed consolidated monetary statements and the notes thereto included in
Half 1, Merchandise 1 of this Quarterly Report, and the audited consolidated monetary
statements and notes thereto and MD&A contained within the Firm’s Annual Report
on Type 10-Ok for the yr ended December 31, 2021.
Firm Overview
Ebix is a number one worldwide provider of on-demand infrastructure software program
exchanges and e-commerce companies to the insurance coverage, monetary, journey, money
remittances, and healthcare industries. Within the insurance coverage sector, the Firm’s
important focus is to develop and deploy all kinds of insurance coverage and reinsurance
exchanges on an on-demand foundation utilizing SaaS enterprise options within the areas of
CRM, front-end and back-end techniques, and outsourced administrative and danger
compliance. The Firm’s merchandise function totally customizable and scalable
on-demand software program designed to streamline the way in which insurance coverage and monetary
business professionals handle distribution, advertising, gross sales, customer support,
and accounting actions. With a “Phygital” technique that mixes over 650,000
bodily distribution shops in India and lots of ASEAN international locations, to an
Omni-channel on-line digital platform, the Firm’s EbixCash Monetary change
portfolio of software program and companies encompasses home and worldwide cash
remittance, Foreign exchange, journey, pre-paid reward playing cards, utility funds, lending, and
wealth administration in India and different primarily Southeast Asian Markets. The
Firm has its headquarters in Johns Creek, Georgia and likewise conducts working
actions in Australia, Brazil, Canada, India, Indonesia, New Zealand, the
Philippines, Singapore, Thailand, the United Arab Emirates, and the United
Kingdom. Worldwide income accounted for 86.4% and 86.9% of the Firm’s
whole income for the three months ended March 31, 2022 and 2021, respectively.
Ebix’s objective is to be a number one facilitator of insurance coverage and monetary
transactions on this planet. The Firm’s expertise imaginative and prescient is to deal with the
convergence of all channels, processes and entities in a fashion such that knowledge
seamlessly flows as soon as an information entry has initially been made. Ebix strives to work
collaboratively with purchasers to develop modern expertise methods and
options that deal with particular enterprise challenges and necessities. Ebix
combines the most recent applied sciences with its capabilities in consulting, techniques
design and integration, IT and enterprise course of outsourcing, software
software program, and internet and software internet hosting to fulfill the person wants of
organizations.
Places of work and Geographic Info
The Firm’s company headquarters, together with considerably all of our
company administration capabilities, is positioned in Johns Creek, Georgia, the place we
personal a business workplace constructing and campus facility. Moreover, the Firm
leases workplace house in New Zealand, Australia, Singapore, Dubai, Brazil, Canada,
Indonesia, the Philippines, and the UK for help, operations and
gross sales workplaces. The Firm additionally leases roughly 100 amenities throughout
India, whereas proudly owning six amenities in India.
Results of COVID-19 and Different World Occasions
In December 2019, COVID-19 was reported and unfold globally, together with to
each state within the U.S. On March 11, 2020, the World Well being Group
declared COVID-19 a pandemic, and on March 13, 2020, the U.S. authorities
declared a nationwide emergency with respect to COVID-19.
In response to the COVID-19 pandemic, many state, native, and international
governments applied journey restrictions, quarantines, shelter-in-place
orders, and comparable authorities orders and restrictions, in an try to manage
the unfold of the illness. Such restrictions or orders, or the notion that
such restrictions or orders may very well be applied, resulted in enterprise closures,
work stoppages, slowdowns and delays, work-from-home insurance policies, and the
cancellation or postponement of occasions.
Starting in March 2020, in an effort to guard our staff and adjust to
relevant authorities orders, we restricted non-essential worker journey and
transitioned our staff to a distant work setting. Throughout 2021 and 2022
the Firm transitioned to a hybrid mannequin of distant/on website work at a lot of its
places. The continuing results of the COVID-19 pandemic on our operational and
monetary efficiency will rely upon the period and unfold of COVID-19 and its
variants.
Throughout the fiscal yr ended December 31, 2020, significantly starting in
March, we skilled a lower in demand for sure of our options and
companies, significantly these associated to the Firm’s journey, international change,
remittance, e-learning, and consulting enterprise areas, after sure authorities
restrictions have been applied. This decreased demand continued all through 2020
and 2021 in various levels for every enterprise space, and even persists by way of
the date of
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this submitting for the entire above talked about enterprise areas, however most notably in
the journey, remittance, and e-learning companies. We anticipate that demand
variability for our services will proceed because of the
COVID-19 pandemic, and we can’t predict with any certainty when demand for
these options/companies will return to pre-COVID-19 ranges.
We proceed to observe developments associated to COVID-19 and stay versatile in
our response to the challenges offered by the pandemic. Together with the
measures talked about above to guard the well being and security of our staff, we
took steps to strengthen our monetary place in 2020 to mitigate the antagonistic
influence that COVID-19 has had or could have on our enterprise and operations,
together with amending our Credit score Facility, lowering salaries for sure staff,
furloughing staff in essentially the most negatively impacted enterprise areas,
eliminating sure worker positions, and eliminating, lowering, or deferring
non-essential expenditures. In 2021 we largely returned salaries to pre-COVID-19
ranges and, within the case of sure IT professionals, elevated wages in response
to a tightening labor market in India. Moreover, we now have ceased our share
repurchase program till enterprise situations enhance globally.
We additionally proceed to judge the potential results on our enterprise from different
financial situations and international occasions, together with the state of affairs in Ukraine and
Russia that started in February 2022. In response to the invasion of Ukraine by
Russia, financial sanctions have been imposed on people in Russia, together with
monetary establishments, by governments world wide, together with the U.S. and
the European Union. We’ve no staff or operations in both Ukraine or
Russia. Nevertheless, the invasion of Ukraine by Russia and the sanctions and different
measures imposed in response to this case have elevated the extent of
financial and political uncertainty in Russia and different areas of the world. Dangers
related to heightened geopolitical financial instability embrace, amongst
others, discount in client, authorities or company spending, worldwide
sanctions, embargoes, heightened inflation, volatility in international monetary
markets and international foreign money charges, elevated cyber disruptions and better
provide chain prices. The extent to which the results of the invasion of Ukraine
by Russia will have an effect on the worldwide economic system and our operations is tough to
predict right now. Nevertheless, a big escalation or growth of the
scope or of the associated financial disruption might have an antagonistic impact on our
enterprise and monetary outcomes.
Our reported outcomes for the three-month interval ended March 31, 2022 could not
be reflective of present market situations, or of our outcomes for any future
durations, which can be negatively impacted by the COVID-19 pandemic or different
international occasions or financial situations to a higher extent than the reported
interval. The influence of the COVID-19 pandemic and different international occasions talked about
above can also exacerbate different dangers mentioned on this Quarterly Report. Refer
to Merchandise 1A, “Threat Elements” in our Type 10-Ok for the yr ended December 31, 2021
for an entire description of the fabric dangers that the Firm at the moment
faces.
Outcomes of Operations
Working Income
The Firm derives its revenues primarily from subscription and transaction
charges pertaining to services or products delivered over our exchanges or from our
software service supplier (“ASP”) platforms, charges for enterprise course of
outsourcing companies, and charges for software program improvement tasks, together with charges
for consulting, implementation, coaching, and undertaking administration offered to
clients with put in techniques, e-governance options to governmental
businesses within the well being and training sectors, in addition to international change,
remittance (each inward and outward), and journey companies from our monetary
exchanges.
Ebix’s income streams are derived from three product/service channels.
Offered within the desk under is the breakout of our revenues for every of these
product/service channels for the three months ended March 31, 2022 and 2021:
Three Months Ended
March 31,
2022 2021
(In 1000’s)
EbixCash Exchanges $ 224,152 $ 230,347
Insurance coverage Exchanges 43,764 42,770
Threat Compliance Options 18,337 16,936
Totals $ 286,253 $ 290,053
The desk under offers an approximation (as a % of whole income) of
subscription-based and software program upkeep income, transaction-based income,
{and professional} companies and consulting charge income:
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Three Months Ended
March 31,
2022 2021
Subscription 13 % 14 %
Transaction-Based mostly 82 % 81 %
Skilled Providers/Consulting/Different 5 % 5 %
Outcomes of Operations – Three Months Ended March 31, 2022 and 2021
Working Income
Throughout the three months ended March 31, 2022, our whole working revenues
decreased $3.Eight million, or 1%, to $286.Three million as in comparison with $290.1 million
through the first quarter of 2021. On March 11, 2020, COVID-19 was declared a
international pandemic by the World Well being Group. Throughout the U.S. and the world,
governments and municipalities instituted measures in an effort to manage the
unfold of COVID-19, together with quarantines, shelter-in-place orders, college
closings, journey restrictions, and the closure of non-essential companies. Our
journey, international change, remittance, e-learning, and monetary applied sciences
companies proceed to be materially negatively impacted by COVID-19. Whole
revenues decreased year-over-year through the first fiscal quarter of 2022 due
primarily to a year-over-year decline within the Firm’s fee options
choices in India (primarily pay as you go reward playing cards), which decreased by
roughly $13.6 million, or 6.7%. The decline in our fee options
enterprise was partially offset by year-over-year will increase in revenues inside our
EbixCash Foreign exchange, journey, and e-learning companies, in addition to will increase inside
Ebix’s U.S. Life and Annuity change companies and persevering with medical
training enterprise. Ebix’s Latin America enterprise additionally generated year-over-year
income progress. Reported revenues have been negatively impacted by the weakening of
international change charges in our working geographies through the first quarter
ended March 31, 2022. The biggest damaging influence on account of change price actions
was within the Indian rupee and Australian greenback. Particularly, the year-over-year
influence from fluctuations of change charges within the international locations that we function, in
the mixture, decreased reported revenues by roughly $7.5 million for the
three months ended March 31, 2022. Worldwide income accounted for 86.4% and
86.9% of the Firm’s whole income for the three months ended March 31, 2022
and 2021, respectively.
Value of Providers Supplied
Prices of companies offered, which incorporates prices related to buyer
help, consulting, implementation, and coaching companies, decreased $9.5
million, or 4%, to $210.Eight million within the first quarter of 2022 as in comparison with
$220.Four million within the first quarter of 2021. For the three months ended
March 31, 2022, price of companies as a share of whole revenues decreased to
73.7% of whole revenues as in comparison with 76.0% for the three months ended
March 31, 2021. The lower within the Firm’s price of companies offered as a
share of whole revenues is primarily on account of income combine modifications yr over
yr, significantly the lower in fee options income inside the EbixCash
operations (primarily reward playing cards). Fee options revenues decreased by
roughly 6.7% year-over-year within the first quarter ended March 31, 2022 and
carry decrease gross margins relative to different options/companies provided by the
Firm.
Product Growth Bills
The Firm’s product improvement efforts are centered on the event of
new applied sciences for insurance coverage carriers, brokers, and brokers, the event of
new knowledge exchanges to be used in home and worldwide insurance coverage markets, as
nicely because the Foreign exchange and journey sectors. Product improvement bills elevated
$0.7 million, or 7%, to $10.Three million through the first quarter of 2022 as
in comparison with $9.5 million through the first quarter of 2021. The year-over-year
improve in product improvement bills within the first quarter of 2022 was pushed
by elevated labor prices primarily in India.
Gross sales and Advertising Bills
Gross sales and advertising bills of $3.Eight million within the first quarter of 2022 have been
flat in comparison with $3.Eight million within the first quarter of 2021. Personnel-related
and overhead allocation prices declined year-over-year, however the discount was
offset by elevated advertising/promoting expenditures.
Common and Administrative Bills
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Common and administrative bills elevated $5.6 million, or 26%, to $26.9
million within the first quarter of 2022 as in comparison with $21.Three million within the first
quarter of 2021. The year-over-year improve is primarily on account of elevated
personnel prices, together with journey bills, of roughly $3.1 million, and
a rise in dangerous debt expense of roughly $1.7 million within the first
quarter of 2022 versus the comparable prior yr interval.
Amortization and Depreciation Bills
Amortization and depreciation bills elevated $564 thousand, or 15%, to
$4.Four million within the first quarter of 2022 as in comparison with $3.Eight million within the
first quarter of 2021, primarily as a result of influence from elevated capital
expenditures over the previous a number of quarters, together with the present quarter, and
sure reclassifications and helpful life changes made by the Firm within the
first quarter of 2022 that weren’t materials to the general monetary situation
of the Firm.
Curiosity Earnings
Curiosity revenue elevated $54 thousand, or 675%, to $62 thousand within the first
quarter of 2022 as in comparison with $Eight thousand within the first quarter of 2021.
Curiosity Expense
Curiosity expense of $10.Three million within the first quarter of 2022 elevated 27%
as in comparison with $8.1 million within the first quarter of 2021. Whereas the typical
excellent stability below the Firm’s company credit score amenities decreased
year-over-year by roughly $43 million from $695.Zero million to $652.0
million, the Firm’s rate of interest elevated by roughly 2.0%
year-over-year, leading to elevated curiosity expense year-over-year of
higher than $3.Four million. Offsetting the elevated curiosity expense from the
company credit score amenities was a yr over yr lower in curiosity expense
from the Firm’s working capital amenities in India. The typical stability of
our working capital amenities declined year-over-year by over $10 million,
leading to a year-over-year lower in curiosity expense of over $1.2 million.
Non-Working (Loss)/Earnings
Non-operating loss within the first quarter of 2022 elevated to $0.7 million as
in comparison with $1 thousand within the prior yr. These 2022 losses are attributable to
non-operating bills in our India operations, primarily associated to company
social duty packages which can be meant to profit the welfare of the
Indian society as a complete.
Overseas Foreign money Alternate Acquire (Loss)
The Firm recorded a web international foreign money change achieve for the three months
ended March 31, 2022 within the quantity of $894 thousand which consisted of web positive factors
realized and unrealized upon the settlement of receivables or payables and
re-measurement of money balances denominated in currencies apart from the
practical foreign money of the respective working division recording the
instrument.
Earnings Taxes
The Firm recorded web revenue tax expense of $1.7 million (8.49%) through the
three months ended March 31, 2022, which included tax expense of $309 thousand
from sure discrete objects associated to inventory compensation and unsure tax
positions. The revenue tax expense, unique of discrete objects, was $1.Four million
(6.95%) through the three months ended March 31, 2022. The Firm expects its
full yr efficient tax price to be within the vary of 9% to 12%.
Liquidity and Capital Assets
Our principal sources of liquidity are the money flows offered by our
working actions and money and money equivalents available. The Firm’s Credit score
Facility is because of mature in February 2023 and, in consequence, at March 31, 2022
the excellent stability of the Credit score Facility, $643.9 million, was labeled
as a present legal responsibility. The Firm has a damaging working capital place of
$473.9 as of March 31, 2022. The Firm expects to refinance the Credit score
Facility throughout 2022, and intends to take action after the decision of the
anticipated IPO of EbixCash Restricted described under. The refinancing of the
Credit score Facility would require the Firm to efficiently entry the debt and/or
fairness capital markets within the U.S. or internationally. Nevertheless, there aren’t any
assurances that such financing will probably be out there in quantities or on phrases
acceptable to us, if in any respect, or that the proceeds acquired by Ebix, Inc. from
the IPO described under will probably be within the quantity at the moment anticipated.
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The Firm’s Indian subsidiary, EbixCash Restricted, filed a Draft Crimson Herring
Prospectus (DRHP) with the Securities and Alternate Board of India on March 9,
2022, for an preliminary public providing aggregating as much as ?60,000 million or $787
million (the “IPO”). Of the IPO proceeds, roughly $350 million is proposed
to be utilized in the direction of buy of excellent compulsorily convertible
debentures from Ebix Asia Holdings Inc, Mauritius and in flip fee to Ebix,
Inc., which is proposed for use in the direction of discount of Ebix Inc.’s excellent
debt. Roughly $130 million is proposed to be utilized for working capital
necessities of EbixCash Restricted and its subsidiaries. The remaining proceeds
can be utilized in the direction of, inter alia, growth-related initiatives of EbixCash
Restricted, together with acquisitions and different investments. No assurances might be
given when the IPO will probably be accomplished, if in any respect, or if it will likely be accomplished on
phrases acceptable to the Firm.
Our present ratio decreased to 0.42 at March 31, 2022 from 1.79 at December 31,
2021 and our working capital place decreased to $(473.9) million at March 31,
2022 from $161.Four million at December 31, 2021 as a result of classification of the
Credit score Facility as a present legal responsibility at March 31, 2022. Our present ratio and
working capital place, web of the influence of the classification of debt as
present liabilities and assuming comparable present maturities of debt as at
December 31, 2021, would have been roughly 1.7 and $141.9 million,
respectively.
We imagine that the anticipated money flows offered by our working actions,
along with present money balances, will probably be adequate to fulfill our projected
money necessities by way of January 2023. Nevertheless, there might be no assurance that
further capital won’t be required sooner. Any projections of future money
wants, money flows, and the final market situations for debt and fairness
securities is topic to substantial uncertainty.
Our money and money equivalents have been $75.9 million and $99.6 million at March 31,
2022 and December 31, 2021, respectively. The Firm holds materials money and
money equal balances abroad in international jurisdictions. The free movement of
money from sure international locations the place we maintain such balances could also be topic to
repatriation tax results and different restrictions. Moreover, the repatriation
of earnings from a few of our international subsidiaries would end result within the
software of withholding taxes on the international supply and taxation on the U.S.
mother or father stage upon receipt of the repatriation quantities.
The approximate money, money equivalents, restricted money and short-term
investments balances held in our home U.S. operations and every of our
international subsidiaries as of Might 2, 2022 are offered within the desk under:
Nation/Area Money, Restricted Money and Quick-Time period Investments
(In 1000’s)
India $ 56,912
United States 9,513
Philippines 6,309
Australia 3,862
Indonesia 3,083
Latin America 2,626
Singapore 2,707
New Zealand 885
United Arab Emirates 576
Canada 490
Europe 229
Mauritius 13
Whole $ 87,205
To the extent we now have out there capital, we intend to proceed to make the most of money
flows generated by our ongoing working actions and the refinancing of our
Credit score Facility, in combos with the potential issuance of further debt
or fairness, to fund natural progress initiatives and capital expenditures, to make
strategic enterprise acquisitions, to retire excellent indebtedness, and to
repurchase shares of our frequent inventory if and as market and working situations
warrant. Nevertheless, the maturity of the Credit score Facility in addition to the covenants
in that Credit score Facility might adversely have an effect on our capacity to make strategic
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acquisitions, fund investments, repurchase shares of our frequent inventory, or interact
in different enterprise actions that may very well be within the Firm’s curiosity.
Enterprise Combos
The Firm seeks to execute accretive enterprise acquisitions together
with natural progress initiatives as a part of its complete enterprise progress and
growth technique. The Firm appears to be like to amass companies which can be
complementary to Ebix’s current services.
Throughout the three months ending March 31, 2022, the Firm accomplished no
enterprise acquisitions.
Throughout the twelve months ended December 31, 2021, the Firm accomplished no
enterprise acquisitions.
A significant factor of the acquisition value consideration for most of the
Firm’s enterprise acquisitions is a possible subsequent money earn-out fee
based mostly on reaching sure specified future income targets. The phrases for the
contingent earn out funds in a lot of the Firm’s enterprise acquisitions
sometimes deal with the GAAP recognizable revenues achieved by the acquired entity
over a one-, two-, and/or three-year interval subsequent to the efficient date of
their acquisition by Ebix. These phrases sometimes set up a minimal threshold
income goal to attain over the agreed upon interval submit acquisition to earn
the required money earn out fee. The Firm applies these phrases in its
calculation and dedication of the honest worth of contingent earn out
liabilities for bought companies as a part of the associated valuation and
buy value allocation train for the corresponding acquired belongings and
liabilities. The Firm acknowledges these potential obligations as contingent
liabilities and are reported as such on its condensed consolidated stability
sheets. As mentioned in additional element in Word 1 of the Condensed Notes to the
Condensed Consolidated Monetary Statements on this Type 10-Q, these contingent
consideration liabilities are recorded at honest worth on the acquisition date and
are remeasured quarterly based mostly on the then assessed honest worth and adjusted if
mandatory. As of March 31, 2022, the overall of those contingent liabilities was
$2.5 million, whereas at December 31, 2021, the overall of those contingent
consideration liabilities was $2.6 million.
Working Actions
Internet money offered by our working actions was $5.6 million for the three
months ended March 31, 2022. The first parts of the money offered by our
working actions through the three-month interval consisted of web revenue of
$19.2 million, $4.Four million of depreciation and amortization, $1.Zero million of
non-cash share-based compensation, $0.9 million of right-of-use belongings
amortization, $0.Eight million of amortization of capitalized software program improvement
prices, $9.Eight million of working capital necessities, primarily on account of decreased
accounts payable, $8.Four million improve in contract liabilities, and a
$17.6 million profit for deferred taxes. Throughout the three months ended
March 31, 2022, the Firm made $15.Four million of tax funds.
Internet money offered by our working actions was $8.6 million for the three
months ended March 31, 2021. The first parts of the money offered by our
working actions through the three-month interval consisted of web revenue of
$21.6 million, $3.Eight million of depreciation and amortization, $1.Four million of
non-cash share-based compensation, $1.Three million of right-of-use belongings
amortization, $0.Eight million of amortization of capitalized software program improvement
prices, and $20.5 million of working capital necessities, primarily on account of
decreased accounts payable and accrued bills, payables to service brokers, and
different present liabilities, in addition to a rise in accounts receivable. Throughout
the three months ended March 31, 2021, the Firm made $9.7 million of tax
funds.
Investing Actions
Internet money used for investing actions through the three months ended March 31,
2022 was $11.5 million, and consisted primarily of $9.Three million for capital
expenditures and $2.7 million for software program improvement prices that have been
capitalized.
Internet money offered by investing actions through the three months ended
March 31, 2021 was $0.Four million, and consisted primarily of $1.7 million for
software program improvement prices that have been capitalized, $0.Three million for capital
expenditures, and reduces in marketable securities of $2.Three million
(particularly financial institution certificates of deposit).
Financing Actions
Throughout the three months ended March 31, 2022, web money utilized in financing
actions was $15.Three million, which consisted primarily of $8.Four million used to
make principal funds on the present time period mortgage, a $3.7 million discount in
EbixCash working capital amenities in India, and $2.Three million of quarterly
dividends to our frequent stockholders.
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Throughout the three months ended March 31, 2021, web money utilized in financing
actions was $12.7 million, which consisted primarily of a $4.6 million
discount in EbixCash working capital amenities in India, $5.6 million used to
make scheduled funds on the present time period mortgage and $2.Three million of quarterly
dividends to our frequent stockholders.
Credit score Facility
The Firm maintains a senior secured syndicated credit score facility, dated August
5, 2014, amongst Ebix, Inc., as borrower, its subsidiaries celebration thereto from time
to time as guarantors, Areas Financial institution (as administrative agent and collateral
agent) and the lenders celebration thereto sometimes (as amended from time to
time, the “Credit score Facility”) that gives a $450 million revolving line of
credit score (the “Revolver”) in addition to a time period mortgage (the “Time period Mortgage”), which at
March 31, 2022 had a stability of $204.5 million. The Credit score Facility matures in
February 2023. On account of the approaching maturity inside the subsequent twelve
months from the March 31, 2022 monetary statements date herein, the excellent
stability of the Credit score Facility, $643.9 million, is assessed as a present
legal responsibility inside the Condensed Consolidated Stability Sheets. Due to this
classification of the Credit score Facility as a present legal responsibility, the Firm has a
damaging working capital place of $458.7 million.
On April 9, 2021, The Firm entered into Modification No. 12 to its Credit score
Facility. Modification No. 12 offered for, amongst different issues, a waiver of any
potential occasion of default arising below the Credit score Facility from the failure to
well timed ship the Firm’s audited monetary consolidated monetary statements
and associated compliance certificates for the yr ended December 31, 2020,
offered that there isn’t a good religion dedication by the requisite lenders
below the Credit score Facility of a “Materials Circumstance” (as outlined and additional
described in Modification No. 12), which dedication (if any) could solely be made
inside a specified interval described in Modification No. 12 and is topic to
sure treatment rights of the Firm. Modification No. 12 additionally modified the
relevant margin that applies from the date of the modification ahead, modified
sure obligatory prepayment provisions, in addition to sure different covenants
associated to restricted funds, investments and sure reporting necessities.
On March 31, 2021, Ebix entered into Modification No. 11 to the Credit score Facility.
Modification No. 11 offered, for, amongst different issues, a restricted waiver by way of
April 10, 2021, of any potential occasion of default arising below the Credit score
Facility from failure to ship the Firm’s audited consolidated monetary
statements and associated compliance certificates for the yr ended December 31,
2020. Modification No. 11 additionally modified sure covenants contained within the Credit score
Facility, together with with respect to sure permitted restricted funds and
investments.
On Might 7, 2020, Ebix entered into Modification No. 10 to the Credit score Facility.
Modification No. 10 offered for, amongst different issues, elevated flexibility below
monetary upkeep covenants, which the Firm sought partly as a result of
unexpected damaging results of the COVID-19 pandemic.
On March 30, 2020, the Firm and sure of its subsidiaries entered right into a
waiver associated to the Credit score Facility (the “Waiver”). The Waiver offered that
as long as the Firm’s leverage ratio is under 5.Zero to 1.Zero for the Firm’s
fiscal quarter ending March 31, 2020 pursuant to the phrases of its compliance
certificates required by the Credit score Facility, the present leverage ratio
requirement of three.5 to 1.Zero was waived.
At March 31, 2022, the excellent stability on the Revolver was $439.Four million
and the ability carried an rate of interest of 5.50% at March 31, 2022. The
stability on the Revolver is included within the present liabilities part of the
condensed consolidated stability sheets. Throughout the three months ended March 31,
2022, the typical and most excellent balances of the revolving line of
credit score part of the credit score facility have been $439.Four million and $439.Four million,
respectively. At December 31, 2021, the excellent stability on the revolving
line of credit score with Areas was $439.Four million and the ability carried an
rate of interest of 5.5%. This stability was included within the long-term liabilities
part of the condensed consolidated stability sheets. Throughout 2021, the typical
and most excellent balances on the revolving line of credit score have been $439.4
million and $439.Four million, respectively.
At March 31, 2022, the excellent stability on the Time period Mortgage was $204.5
million, of which $204.5 million is due inside the subsequent twelve months. $8.4
million of principal funds have been made through the three months ended March 31,
2022, of which $5.6 million have been scheduled amortization funds. This Time period Mortgage
additionally carried an rate of interest of 5.50% at March 31, 2022, topic to the identical
above talked about improve in rate of interest because the Revolver. The Time period Mortgage is
included within the present liabilities part of the condensed consolidated
stability sheets. At December 31, 2021, the excellent stability on the Time period Mortgage
was $212.9 million, of which $28.2 million was due inside twelve months. The
Time period Mortgage additionally carried an rate of interest of 5.50% through the quarter ended
December 31, 2021.
Contractual Obligations
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For a presentation relating to materials modifications outdoors the extraordinary course of
enterprise to the Firm’s contractual obligations please discuss with Notes Four and 5
of the Condensed Notes to Condensed Consolidated Monetary Statements on this
Type 10-Q.
Off-Stability Sheet Preparations
We don’t interact in off stability sheet financing preparations.
Current Accounting Pronouncements
For details about new accounting pronouncements and the potential influence
on our Consolidated Monetary Statements, see Word 1 of the Condensed Notes to
the Condensed Consolidated Monetary Statements on this Type 10-Q and Word 1 of
the Notes to Consolidated Monetary Statements in our 2021 Type 10-Ok.
Important Accounting Insurance policies and Estimates
The preparation of economic statements in conformity with GAAP, as promulgated
within the U.S., requires our administration to make important estimates and
assumptions that have an effect on the reported quantities of belongings and liabilities, revenues
and bills and associated disclosures in our Condensed Consolidated Monetary
Statements and accompanying notes. We imagine essentially the most complicated and delicate
judgments, due to their significance to the Condensed Consolidated Monetary
Statements, end result primarily from the necessity to make estimates and assumptions
in regards to the results of issues which can be inherently unsure. These accounting
insurance policies contain the usage of “vital accounting estimates” as a result of they’re
significantly depending on estimates and assumptions made by administration about
issues which can be unsure on the time the accounting estimates are made. In
addition, whereas we now have used our greatest estimates based mostly on info and circumstances
out there to us on the time, completely different estimates moderately might have been used
within the present interval, and modifications within the accounting estimates that we used are
moderately prone to happen from interval to interval each of which can have a
materials influence on our monetary situation and outcomes of operations. For
further details about these insurance policies, see Word 1 of the Condensed Notes
to the Condensed Consolidated Monetary Statements on this Type 10-Q. Though
we imagine that our estimates, assumptions and judgments are affordable, they
are restricted based mostly upon data presently out there. Precise outcomes could
differ considerably from these estimates below completely different assumptions, judgments
or situations.
COVID-19 and different international occasions, similar to different international financial situations and
the invasion of Ukraine by Russia starting in February 2022, has created and
could proceed to create important uncertainty in international monetary markets,
which can scale back demand for our companies, influence the productiveness of our
workforce, scale back our entry to capital, and hurt our enterprise and outcomes of
operations. As of the date of our Condensed Consolidated Monetary Statements,
we aren’t conscious of any particular occasion or circumstance that will require us to
replace our estimates or judgments, or to revise the carrying worth of our belongings
or liabilities. Nevertheless, these estimates could change as new occasions happen and
further data is obtained, which can end in modifications being acknowledged
in our consolidated monetary statements in future durations. Whereas we thought-about
the results of COVID-19, different international occasions and financial situations in our
estimates and assumptions, as a result of present stage of uncertainty over the
longevity of the financial and operational impacts of COVID-19 and different international
occasions on our enterprise, there could also be different judgments and assumptions that have been
not at the moment thought-about. Such judgments and assumptions might end in a
significant influence to our monetary statements in future durations. Precise outcomes
might differ from these estimates and any such variations could have a fabric
influence on our monetary statements.
There have been no important modifications to our vital accounting insurance policies and
estimates from the knowledge offered in Merchandise 7, “Administration’s Dialogue and
Evaluation of Monetary Situation and Outcomes of Operations,” included within the
Annual Report on Type 10-Ok for the fiscal yr ended December 31, 2021.
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