Ebix(US:EBIX)2020-11-09 21:00Revenue Performance - Total operating revenues for the three months ended September 30, 2020, increased by $7.1 million, or 5%, to $154.3 million compared to $147.2 million in the same period of 2019[202]. - International revenue accounted for 74.0% of total revenue for the three months ended September 30, 2020, compared to 69.4% in the same period of 2019[202]. - Revenue from EbixCash exchanges for the three months ended September 30, 2020, was $96.8 million, up from $82.1 million in the same period of 2019[200]. - Revenue from insurance exchanges decreased to $42.4 million for the three months ended September 30, 2020, down from $47.4 million in the same period of 2019[200]. - The company's transaction-based revenue increased to 63% of total revenue for the three months ended September 30, 2020, compared to 53% in the same period of 2019[200]. - For the nine months ended September 30, 2020, total revenues were $403.5 million, compared to $434.4 million for the same period in 2019[200]. - Pro forma combined revenues increased by 2.1% for the three months ending September 30, 2020, compared to the same period in 2019, considering business acquisitions[203]. Impact of COVID-19 - The company experienced a decrease in demand for certain solutions related to travel and foreign exchange due to COVID-19, which is expected to continue[192]. - Payment solutions revenues increased by over 350% year-over-year for the year-to-date period ended September 30, 2020, driven by increased demand for online payment solutions due to COVID-19[219]. Financial Position and Expenses - The company has implemented measures to strengthen its financial position, including amending its credit facility and reducing non-essential expenditures[195]. - Cost of services increased by $40.5 million, or 27%, to $192.5 million during the nine months ended September 30, 2020, with cost of services as a percentage of total revenues rising to 47.7% from 35.0% year-over-year[219]. - General and administrative expenses decreased by $35.6 million, or 35%, to $65.6 million during the nine months ended September 30, 2020, primarily due to reduced personnel costs and rent expenses[223]. - Interest expense decreased by $8.7 million, or 27%, to $23.9 million during the nine months ended September 30, 2020, attributed to lower LIBOR rates and a decrease in working capital facilities[226]. - Product development expenses decreased by $7.4 million, or 22%, to $26.5 million during the nine months ended September 30, 2020, primarily due to reduced employee-related costs[220]. - Sales and marketing expenses decreased by $4.3 million, or 29%, to $10.6 million during the nine months ended September 30, 2020, reflecting a reduction in business promotion expenses[221]. Cash and Debt Management - Cash and cash equivalents increased to $88.0 million at September 30, 2020, up from $73.2 million at December 31, 2019[232]. - As of November 3, 2020, the total cash, cash equivalents, short-term investments, and restricted cash held by the company amounted to $124.7 million, with significant balances in India ($72.5 million) and the United States ($17.8 million)[233]. - The current ratio improved to 1.75 as of September 30, 2020, up from 1.55 at the end of 2019, indicating a stronger liquidity position[234]. - The outstanding balance on the revolving line of credit was $439.4 million as of September 30, 2020, with an interest rate of 3.50%[252]. - The outstanding balance on the term loan was $261.1 million as of September 30, 2020, with $22.6 million due within the next twelve months[253]. - The Company had $700.5 million in outstanding debt obligations as of September 30, 2020, consisting of a $261.1 million term loan and a $439.4 million balance drawn on its commercial banking revolving line of credit[294]. Foreign Currency and Interest Rate Exposure - The company reported unrealized foreign currency translation losses of $(35.9) million for the nine months ended September 30, 2020, compared to gains of $10.9 million in 2019[293]. - A hypothetical 30 basis point increase in the LIBOR rate could reduce pre-tax income by approximately $1.5 million for the nine months ended September 30, 2020[294]. - A 20% adverse change in foreign currency exchange rates could have resulted in a reduction to pre-tax income of approximately $15.9 million for the nine months ended September 30, 2020[293]. - A hypothetical 20 basis point decrease in interest rates earned on deposited funds would have resulted in a reduction to pre-tax income of approximately $223 thousand for the nine months ended September 30, 2020[294]. Business Acquisitions and Strategy - The company completed one business acquisition during the nine months ending September 30, 2020, acquiring India-based Trimax for approximately $9.9 million[236][237]. - The company is actively pursuing accretive business acquisitions as part of its growth strategy, focusing on businesses complementary to its existing products and services[235]. Internal Controls and Reporting - The Company has not experienced any material changes to its internal controls over financial reporting despite the COVID-19 pandemic[299]. - The Company's disclosure controls and procedures were evaluated as effective as of September 30, 2020, with no material changes affecting internal control over financial reporting[299]. - The Company is continually monitoring the impact of COVID-19 on the operating effectiveness of its internal control over financial reporting[299].