Ebix(US:EBIX)2022-11-08 16:00Financial Position - As of September 30, 2022, the outstanding balance of the Credit Facility was $628.8 million, classified as a current liability due to its maturity in February 2023 [121]. - The outstanding balance on the Revolver was $439.4 million with an interest rate of 8.56% as of September 30, 2022, compared to 5.50% at December 31, 2021 [125]. - The outstanding balance on the Term Loan was $189.4 million, with $23.5 million in principal payments made during the nine months ended September 30, 2022 [126]. - The total of working capital facilities was $6.1 million as of September 30, 2022, compared to $5.6 million at December 31, 2021 [129]. - The Company maintains working capital debt facilities with banks in India, typically carrying interest rates of 9.00% to 10% [127]. - The Company has $3.0 million of remaining deferred financing costs related to the Credit Facility as of September 30, 2022 [124]. - The Company anticipates addressing the Credit Facility maturity prior to the maturity date, potentially in conjunction with the IPO of EbixCash Limited [121]. - The company has a total of $19.4 million in commitments related to leases, with $3.9 million due in 2022 and $15.5 million in 2023 [159]. - The company's current ratio decreased to 0.42 at September 30, 2022, from 1.79 at December 31, 2021, due to the classification of the Credit Facility as a current liability [212]. - The existing cash balances as of September 30, 2022, were $71.0 million [242]. Revenue and Growth - External revenues for the nine months ended September 30, 2022, totaled $794.9 million, an increase from $728.1 million for the same period in 2021, representing a growth of approximately 9.2% [144]. - Revenue from India led businesses was $621.7 million for the nine months ended September 30, 2022, compared to $557.8 million for the same period in 2021, indicating a growth of about 11.5% [144]. - Total operating revenues for the three months ended September 30, 2022, increased by $66.2 million, or 35%, to $257.9 million compared to $191.7 million in the same period of 2021 [182]. - For the nine months ended September 30, 2022, total operating revenues increased by $66.8 million to $794.9 million compared to $728.1 million in the same period of 2021 [194]. - International revenue accounted for 85.6% of total revenue for the nine months ended September 30, 2022, up from 84.3% in the same period of 2021 [169]. - International revenue accounted for 85.4% of total revenue for the three months ended September 30, 2022, compared to 80.0% in the same period of 2021 [182]. - The company's payment solutions revenues in India increased approximately $40 million year-over-year, or 39%, during the third quarter of 2022 [182]. Expenses and Costs - Cost of services provided increased by $53.5 million, or 44%, to $174.3 million in the third quarter of 2022, representing 67.6% of total revenues [183]. - General and administrative expenses increased by $23.0 million, or 33%, to $93.0 million for the nine months ended September 30, 2022, compared to $70.1 million for the same period in 2021 [199]. - Amortization and depreciation expenses rose by $2.0 million, or 18%, to $13.7 million for the nine months ended September 30, 2022, from $11.6 million in the comparable period of 2021 [200]. - Interest expense increased by 41% to $15.5 million in the third quarter of 2022 compared to $11.0 million in the same period of 2021 [190]. - Interest expense increased by 27% to $37.4 million for the nine months ended September 30, 2022, from $29.5 million in the same period in 2021 [203]. - Sales and marketing expenses increased to $4.0 million in the third quarter of 2022 from $3.4 million in the same period of 2021 [185]. - Product development expenses increased by $0.3 million, or 3%, to $10.5 million during the third quarter of 2022 compared to $10.2 million in the same period of 2021 [184]. - Rental expense for office and airport facilities for the nine months ended September 30, 2022, was $11.9 million, compared to $7.3 million for the same period in 2021, reflecting a 63% increase [159]. Taxation - The Company recorded a net income tax expense of $1.9 million (9.90%) for the three months ended September 30, 2022, and $6.1 million (10.04%) for the nine months ended September 30, 2022 [140]. - The Company expects its full year effective tax rate to be in the range of 7% to 10% [140]. - The effective tax rate for the company is expected to be in the range of 7% to 10% for the full year [193]. Assets and Liabilities - The total long-term lease liabilities amounted to $10.2 million as of September 30, 2022, after accounting for present value discounts [156]. - The carrying value of goodwill decreased to $887.3 million as of September 30, 2022, down from $939.2 million at the end of 2021, a reduction of approximately 5.5% [149]. - Accounts receivable from Vayam amounted to $12.2 million as of September 30, 2022, down from $17.0 million as of December 31, 2021, a decrease of approximately 28.2% [145]. - Total other current assets were reported at $78.0 million as of September 30, 2022, compared to $84.4 million at the end of 2021, indicating a decline of about 7.6% [153]. - The company recognized $2.2 million in amortization expense for capitalized software development costs during the nine months ended September 30, 2022, compared to $2.5 million in the same period of 2021, a decline of approximately 12% [152]. Foreign Currency and Interest Rates - The net change in the cumulative foreign currency translation account for the nine months ended September 30, 2022, was an unrealized loss of $90.1 million, compared to a loss of $16.6 million for the same period in 2021 [241]. - The company recorded a net foreign currency exchange gain of $4.9 million for the three months ended September 30, 2022 [192]. - The company recorded a net foreign currency exchange gain of $9.1 million for the nine months ended September 30, 2022, compared to a loss of $(0.8) million in the prior year [205]. - A hypothetical 30% increase in the LIBOR rate would have resulted in a reduction to pre-tax income of approximately $1.8 million for the nine months ended September 30, 2022 [242]. - The Company is exposed to a potential loss of interest income from a hypothetical 20% decrease in interest rates, estimated to reduce pre-tax income by approximately $0.1 million for the nine months ended September 30, 2022 [242]. COVID-19 Impact - The company has implemented measures to strengthen its financial position in response to COVID-19, including amending its Credit Facility and reducing non-essential expenditures [176]. - The ongoing effects of COVID-19 have led to decreased demand in certain business areas, particularly travel and remittance services, with uncertainty regarding the return to pre-COVID-19 demand levels [174]. - Continuous monitoring of COVID-19's impact on the operating effectiveness of internal controls is being conducted [247]. Internal Controls - There were no significant changes to the Company's critical accounting policies and estimates from the previous fiscal year [239]. - The company's disclosure controls and procedures were evaluated as effective as of September 30, 2022 [247]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2022 [247]. - The company has not experienced any material changes to internal controls despite remote work due to the COVID-19 pandemic [247].