Ebix(US:EBIX)2023-08-08 16:00Debt and Financing - As of June 30, 2023, the outstanding balance of the Credit Facility was $616.8 million, classified as a current liability[109]. - The Company expects to address the Credit Facility maturity prior to September 30, 2023, in conjunction with the anticipated IPO of EbixCash[109]. - The outstanding balance on the Revolver was $444.9 million with an interest rate of 11.95% as of June 30, 2023[118]. - The outstanding balance on the Term Loan was $171.9 million, also carrying an interest rate of 11.95% as of June 30, 2023[119]. - The Company made $17.5 million in principal payments on the Term Loan during the six months ended June 30, 2023[119]. - The Company entered into Amendment No. 15 on July 21, 2023, which included a change in the Amendment Fee from 1.50% to 2%[110]. - The Company is required to maintain working capital debt facilities totaling $5.0 million as of June 30, 2023, up from $3.4 million at December 31, 2022[121]. - The Company has $2.3 million of remaining deferred financing costs related to the Credit Facility as of June 30, 2023[117]. - The anticipated IPO of EbixCash could raise up to $787 million, with approximately $360 million proposed for debt reduction[183]. - The Company has a negative working capital position of $(470.4) million as of June 30, 2023[186]. - As of June 30, 2023, the outstanding balance on the Revolver was $444.9 million, with an interest rate of 11.95%[210]. - The outstanding balance on the Term Loan was $171.9 million as of June 30, 2023, also carrying an interest rate of 11.95%[211]. - The Company has a negative working capital position of $470.4 million due to the classification of the Credit Facility as a current liability[201]. - The interest rate on the Company's term loan and revolving line of credit was 11.95% as of June 30, 2023, exposing the Company to potential increases in interest expense[221]. - A hypothetical 30% increase in the SOFR rate would have resulted in a reduction to pre-tax income of approximately $3.7 million for the six months ended June 30, 2023[221]. - The Company's average cash balances during the six months ended June 30, 2023 were approximately $115.9 million, with existing cash balances of $62.2 million as of June 30, 2023[221]. - A hypothetical 20% decrease in interest rates earned on deposited funds would have resulted in a reduction to pre-tax income of approximately $0.1 million for the six months ended June 30, 2023[221]. Revenue and Income - External revenues for North America were $76,590 thousand for the six months ended June 30, 2023, compared to $79,671 thousand for the same period in 2022, reflecting a decrease of approximately 3.4%[132]. - International external revenues decreased to $284,601 thousand for the six months ended June 30, 2023, from $457,363 thousand in the same period of 2022, representing a decline of approximately 37.7%[132]. - Total revenues for the three months ended June 30, 2023, were $118.4 million, a 3% increase from $114.9 million in Q2 2022 on a Non-GAAP basis[168]. - International revenues increased by $5.1 million, or 6.7%, year-over-year for Q2 2023, accounting for 69.3% of total revenue[169]. - Subscription revenue as a percentage of total revenue increased to 33% in Q2 2023 from 16% in Q2 2022[165]. - Transaction-based revenue decreased to 55% of total revenue in Q2 2023 from 78% in Q2 2022[165]. - The Company recorded a net income tax expense of $164 thousand and $787 thousand (12.74%) for the three and six months ended June 30, 2023, with an expected full year effective tax rate of 8% to 10%[129]. Assets and Liabilities - The total long-lived assets as of June 30, 2023, were $1,191,628 thousand, compared to $1,160,637 thousand as of December 31, 2022, indicating an increase of approximately 2.7%[132]. - Total current assets increased to $98,598 thousand as of June 30, 2023, from $87,387 thousand as of December 31, 2022, representing an increase of approximately 12.8%[140]. - The Company has a total of $10,553 thousand in lease liabilities as of June 30, 2023, with a present value of lease liabilities amounting to $9,240 thousand[141]. - The company reported a total of $25,629,000 in other current liabilities as of June 30, 2023, slightly down from $25,783,000 in December 2022[147]. - The carrying value of goodwill increased to $887,101 thousand as of June 30, 2023, from $881,676 thousand at the end of 2022, reflecting a rise of approximately 0.5%[137]. - The Company recognized amortization expense of $3.5 million for acquired intangible assets during the six months ended June 30, 2023, compared to $5.0 million for the same period in 2022[137]. Expenses - General and administrative expenses rose by $4.4 million, or 14%, to $36.1 million in Q2 2023 compared to $31.7 million in Q2 2022[174]. - Interest expense increased by 111% to $24.6 million in Q2 2023 from $11.7 million in Q2 2022 due to higher interest rates[177]. - The total net lease cost for the three months ended June 30, 2023, was $1,100,000, an increase of 8.06% from $1,018,000 in 2022[143]. - Rental expense for office and airport facilities for the six months ended June 30, 2023, was $10.3 million, compared to $18.6 million in 2022, indicating a decrease of 44.4%[144]. Legal and Regulatory Matters - The Company is involved in arbitration regarding a dispute over the purchase of ItzCash, with a partial award issued on June 1, 2023[126]. - The court dismissed the class action against Ebix in its entirety with prejudice on July 17, 2023, for failure to state a claim[227]. - The arbitration proceedings regarding the dispute over the share purchase agreement of ItzCash concluded with a partial award on June 1, 2023, directing nominal damages of SGD 200 to two claimants and SGD 100 to each of 17 other claimants[231]. - The consolidated derivative action related to the RSM resignation is currently stayed by agreement of the parties and order of the Court[228]. - The Company is involved in various other claims and legal actions arising in the ordinary course of business, which management believes will not have a material adverse effect on its consolidated financial position[232]. Operational Insights - The Company continues to monitor the impacts of the COVID-19 pandemic on its operations, with ongoing demand variability expected in certain business areas[161]. - The Company aims to enhance its technology strategies to facilitate seamless data flow across its services, focusing on the convergence of various channels and processes[157]. - The Company has not experienced any material changes to its internal controls over financial reporting despite remote work due to the COVID-19 pandemic[226]. - The Company concluded that its disclosure controls and procedures are effective as of June 30, 2023[226]. - There were no other material changes to the Company's market risk exposure during the six months ended June 30, 2023[222].