EBIX’s Latest Quarterly Results
A few days ago EBIX’s numbers for its 2010/03 Quarter came out.
Below is a table which contains, IMO, some pertinent numbers and financial ratios.
Here’s my take on them ....
------Quarterly Analysis
-----------EBIX-----------------08/12 09/03 09/06 09/09 09/12 10/03
Revenue---------------------- 20.1 20.7 22.4 23.3 31.3 31.6
CoS---------------------------- 4.1 4.1 4.5 4.5 8 7
SG&A+R&D------------------- 7.1 7.5 7.8 8.1 10 10.4
EBITDA------------------------ 8.9 9.1 10.1 10.7 13.3 14.2
Interest Expense------------ 0.5 0.3 0.3 0.2 0.3 0.3
Pretax Income(TTM)-------- 28.8 31.3 33.9 35.8 39.8 44.3
Net Income------------------ 7.9 8.3 9 9.4 12.1 12.4
Capital Employed----------- 87.3 95.7 120.7 124.23 187.1 223.4
Revenue Increase---------------- 3.0% 8.2% 4.0% 34.3% 1.0%
CoS/Revenue---------------- 20.4% 19.8% 20.1% 19.3% 25.6% 22.2%
SG&A+R&D/Revenue------------ 35.3% 36.2% 34.8% 34.8% 31.9% 32.9%
EBITDA/Revenue------------ 44.3% 44.0% 45.1% 45.9% 42.5% 44.9%
Int.Expense/EBITDA-------- 5.6% 3.3% 3.0% 1.9% 2.3% 2.1%
Pretax Inc./Cap.Employed--- 33.0% 32.7% 28.1% 28.8% 21.3% 19.8%
Net Inc./Revenue----------- 39.3% 40.1% 40.2% 40.3% 38.7% 39.2%
In terms of the company’s “compulsory expenses” of CoS and SG&A (+ R&D), relative to its top line Revenue, we see good consistency over the last 6 Quarters.
We also see a very good, consistent EBITDA Margin in excess of 42%.
We also see a low Interest Expense relative to EBITDA of about 2%, so no problem there.
We also see a good, consistent Bottom Line Margin in excess of 38%.
So far, so good.
There are, however, two areas which have been falling behind .....
Firstly, the Pretax Income to Capital Employed ratio has been declining.
18 Months ago we were seeing about 33%. This has been falling, steadily, to its current value of just under 20%.
Now EBIX’s TTM Pretax Income has increased steadily from about $29mil. to its current $44.3mil. But its Capital Employed has gone up from about $87mil. to its current $223mil.
The main contribution to its Cap. Employed increase has been the issue of more shares, bringing in more capital to the company. I assume this has been used for acquisitions seeing as the Goodwill number has been going up. Goodwill being the “cost in excess” for its acquisitions.
At this stage what EBIX has been “earning”, Pretax, from the Capital that it can “Employ” has been declining.
The second area where EBIX has been falling behind is with regard to its top line Revenue increase. This is down to only 1% relative to its previous 3 month period. That’s probably not too serious as it’s a short term thing. Also 12 months ago there was also hardly any top line increase from about $20.1mil. to $20.7mil.
So, .... we have a decrease in Pretax Inc./Cap. Employed (P.I./C.E.) ratio and a flattening off of Gross Revenue.
What I’d like to see in EBIX’s future results is a reasonable increase in top line Revenue accompanied by an improvement in its P.I./C.E. ratio. This should indicate that EBIX is now reaping the benefit of those acquisitions in which it has invested.
For the rest, EBIX’s ratios show, IMO, that it runs its business well and profitably.
What's your take, TO, on EBIX's latest numbers ? |
