EBIX - Ebix stock slumps ~15% as Q4 earnings dip; exploring options to refinance debt

2023-03-15 12:17:18 ET

Ebix ( NASDAQ: EBIX ) stock fell ~15% on Wednesday following its Q4 results.

Q4 Non-GAAP EPS decreased to $0.36, compared to $0.66 in Q4 2021 .

Non-GAAP EPS for 2022 was $2.58. The company said in 2022 it experienced increasing debt service costs due to the rising interest rate environment, combined with an increase in its borrowing spreads under the corporate credit facility.

Revenue declined -4.3% Y/Y to $255.2M, mainly due to the negative effect of the  strengthening of the U.S. dollar, according to Ebix.

Ebix — which provides software solutions to insurance companies — noted that, on a constant currency basis, Q4 revenues grew +5% Y/Y.

"Despite the highest negative impact from foreign exchange movements we have seen in at least five years during Q4 2022 and for the full year 2022, the Company generated Adjusted EBITDA (EBITDA plus non-cash stock compensation expense) of $142.7 million in 2022, which represents a year-over-year increase of $3.2 million, or 2%, as compared to 2021," said Steve Hamil, EVP and Global CFO.

Hamil added that EbixCash operations negatively impacted by COVID-19 continue to rebound. However, it remains 25%+ below pre-COVID-19 operating levels within the business lines.

In addition, Hamil noted that the company was working with the board and outside financial and legal advisors to refinance its credit facility. The company has several options, which it is exploring to largely or wholly refinance the loan as soon as possible, according to Hamil.

The term was extended to May 23 in order to give Ebix time to explore options to refinance the credit facility.

Ebix President and CEO Robin Raina commented , "While our operating income continues to be strong, our net income is getting negatively affected by the high cost of bank interest and associated legal and advisory fees associated with the refinancing and extension exercise."

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