Q4 2019 Earnings Call
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Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
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And gentlemen, thank you for standing by and welcome to the Ebix 2019 anyone results conference call. At this time, all participants I noticed and only mode.
After the speaker presentation, there will be a question and answer session.
Ask a question during the session you wanted to start one on your telephone.
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I would now like turn the conference do your speaker today, Dan Jester Ebix corporate Vice President. Please go ahead Sir.
Thank you.
Welcome everyone at University incorporated 2019 annual results earnings Conference call. Joining me this quarter's hubert's, chairman President and CEO Robin Arena.
<unk> insurance services, North America, absolutely and Ebix, SVP and CFO rubber Kerris following our remarks, well open the call for your question.
Now, let me quicker quickly cover the safe Harbor some of the statements. We make today are forward looking including among others statements regarding ericsson's future investments are long term growth innovation expected performance of our businesses and our use of cash.
These statements involve a number of risks and uncertainties that might cause actual results could differ materially from those projected forward looking statement.
Please note that these forward looking statements reflect our opinions only as of the data of this presentation. We undertake no obligation to revise or publicly released the results of any revisions to the its forward looking statements in light of new information or future events.
Additional information concerning factors that could cause actual results may materially differ from those in the forward looking statements made today.
That's contained in our after you see your filings were supposed to more detailed descriptions of risk factors that may affect our results.
Our press release announcing that 2019 full year and Q4 2019 results was issued today more than.
The audio this investor calls also being webcast live.
Www Dot Ebix dot com forward Slash webcast you can look at your mix that's financials beyond what has been provided in the release on our website www Dot Ebix doctrine.
Audio and the text transcript of this call will be available also on the Investor home page of the Ebix website after four PM eastern time today.
Let me now discuss the quarter and a four year.
GAAP revenue in Q4, 2019 increased 7% from a year ago 246.2 million.
The revenue improvements reflected growth in the company's Ebix cashed channel.
In Q4, EBITDA cash was the largest channel for account for Ebix accounting for 56% of the company its revenues and our insurance exchange channel accounted for 32%.
GAAP revenue for the full year up 2019 increased 17% from a year ago to 580.6 million.
On a constant currency basis index 2019 revenues increased 19% by 92.1 million to 590 million versus 497.8 million in 2018.
Exchanges, including into either cash and the remaining insurance exchanges worldwide continued to be Ebix is largest channel accounted for 88% of our Q4 2019 and full year 2019 revenues.
The year over year revenues increased in Q4 2019 are result of revenue growth from the areas of annuities healthy Commerce, Rcs CDMI reinsurance and you just cash financial exchanges aided by revenue growth generated from the company's various in a word remittance forex payments.
Solutions logistics bust exchange financial technology, and travel businesses offset primarily by declines in areas of third Party administration exchange UK E learning CRM health content and the RCR strategic consulting businesses.
Sequentially. Our revenues grew in the early of life exchanges helped it ecommerce health content reinsurance annuities life underwriting ebix cash exchanges in the area for accident remittance payment solutions bus exchange and financial technology is offset by declines in the area PNC.
He CRM health administration travel logistics, Western you're gonna Remittance and E learning.
In numerical terms our year over year, either cash revenues grew 47% well the insurance revenues declined by 1% primarily because of the strengthening of the U.S. dollar against foreign currencies.
Our insurance businesses outside the U.S. are primarily in Australia, Brazil, UK, New Zealand, Singapore in Dubai, which are impacted strongly about in the currency headwinds exhibited by the overall revenue or if it's being higher by 10 million at the end of last years ever just earns you're right.
In key geographies U.S. numbers, a little revenues were essentially flat sequentially well into your revenues grew sequentially.
It's really had a sequential decline of 1.5 million, primarily because of exchange rates and the traditional lower seasonal activity in Q4.
Our growth on the Indian market continued in 2019.
And you'll adventurers, including India, let revenues from Bill fun.
Other bill items, an Asian countries showed 47 <unk> percent you wherever your growth in 2019 by growing to 320 million from 217.5 million at the same period in 2018, and 387% growth when comparing the full year 2019 Indian led revenues of 320 million.
Two 202017 revenues of 65.7 million.
Statutory standalone consolidated basis, and your letter revenues, including transfer pricing revenues earned by India that gets counted in local Indian books accounted for approximately 96.9 million in Q4 2019 translate into an annualized run rate of 388 million.
28.3 operating entity.
We expect this growth to continue and have a number of organic and inorganic initiatives targeted at growing or in your revenues continually in a sequential manner.
International revenue was in Q4 2019 accounted for 68% well, India led revenue is accounted for 56% of the Ebix revenues in the quarter exemplifying the tremendous growth we have experienced in our international businesses, primarily due to the EBIT cats financial exchange business.
As we deploy our insurance exchanges, the India through the new B.S.G. Ebix venture. We expect we expect that are insurance business will start to account for substantial revenue streams in India.
During his talk Robyn will go across a number of initiatives that should contribute to our group and 2020.
I'll now turn the call worried about.
Thanks, Darren and thanks to all on a call your interest in it continue falling Ebix is financial and operating performance.
As we close out a successful Tonight. So that's 19 look forward to year of significant top line growth and improved operating profit margin in 2020.
Now I will comment on the fourth quarter and full year 2019 financial results. We continue to grow our core insurance and Ebix you guys businesses in the quarter, where they can find 19% growth needs exchange operations as compared to four year earlier in 2018.
Overall revenues in Q4 to 2019 grew 7% as compared to two for 18 World for your revenues grew 17% on a year over year basis.
She is for 2019 GAAP net income increased 254% to 21.7 million as compared to 8.5 million in Q4 routine.
Interest expenses quarter over acute coronary were were approximately 744000.
Which is associated with additional funding from our bank credit facilities provide funding for our strategic business acquisitions within the company Ebits cash division.
Also foreign exchange headwinds, a 4 million impacted the comparative Nick I'm, a Q4 2019.
Compared to Q4 2018 since Q4 19 had an FX loss, whereas two for 18 had an after tax gain or 2.1 million.
On the flip side to compared to net income in Q4 2018 was adversely impacted by the onetime expense impacts recognize on account of the transition tags, resulting for the next month the T.C.G.A.
In the United States.
[noise] tax cuts in jobs Act.
Full year 2019 cap net income increased 4% to 96.79 compared to 92.1 million.
In 18.
Interest expense in 2019 is up 15.2 million or 56%.
Due to additional funding our bankers parent facilities again necessary to provide funding for our strategic business acquisitions within the Companys either scarce division.
The onetime litigation settlement disclosed in Q1, two does 19 adversely affected on income in the year 19 21.1 night.
During 2019, we use significant portions of our cash reserves and cash generated from our operating.
Activities for the filing.
110.8 million was used for business acquisitions 9.2 million was used for dividend payments 13 million was used to repurchase shares of our common stock.
A 12.9 billion was used for Capex and software development expenditures 13.1 million Houston principal payments as scheduled on our term loan with our regions Bank facility 21 billion was used to pay taxes and 21.1 billion was used for their legal settlement mentioned above.
In spite of this the company's still generated cash from operations and 64.7 million.
Ending the year with cash cash equivalents short term investments unrestricted cash in the aggregate amounting to 113 million.
We're pleased with that as it was achieved while our net debt.
Including which includes our working capital starting short term debt long term debt.
And our bottom line of credit remained essentially flat as of December 13, 31st She does 19 I prepared a two year in 18.
After a key balance sheet metrics, our balance sheet is healthy and our companys financial position as Sam the current ratio 1.55, working capital appreciation condition uninspiring million and again leverage ratio was 3.63.
Ebix is weighted diluted shares outstanding decreased 3.6 million Q4, 19 repaired and 31.4 million it since were 18.
And as of today, the company expects the diluted share count.
For Q2 and to one in Q2 of 2020 will be approximately 30.8 million.
Finally, Ebix is form 10-K annual report.
Five yes, you see later this afternoon I will now pass the call onto cash [laughter].
[laughter].
Thank you Bob and Darren.
I would like to now summarize the key accomplishments in 2019 in North America, and also share our vision and strategy footprint different before the region.
Let me start by saying 2019 was an important deal and establishing a strong foundation for growth in North America. Our focus this past year has been strengthening our insurance exchanges enhancing our products adjusting our pricing and creating a strong leadership team doesn't take ebix in North America owner Progressive.
Journey.
Let me give you specific details on our progress while discussing some of our key insurance exchanges.
Or not on European and exchange, where we already have a dominant position we added nine new carriers in several other distribution partners.
This is more than we have done in any youre in the recent past.
Amongst others companies like USA Centaurus Liberty Bank goes Brighthouse RBC.
And buried in mass mutual and signing on to our new be maintenance Dot com card and in 2019.
We continue to drive forward, our partnerships with other industry, leading financial services technology phones, like investing that Fedex Simon and look forward to bring lives on integrated services platforms with these exciting part doesn't quite differently.
We are currently in discussions with somebody lodge distribute those that can significantly enhanced exchange and twentytwenty.
More become on that.
With the addition of each guardian and distribute a realized multiple revenue streams, including license professional services maintenance and transaction with fees.
In Q4, 2019, we announced a much or we did release so part of analytics tool on the Rins Lex life illustration exchange.
Based on the sheer volume of data that we process.
Robin Flex dock phone, which by the makes seats 18 million illustrations of your.
We have now able to assist stockout isn't distribute doesn't analyzing the performance of their products and to benchmark them against industry peers.
I'd also presently actively involved in creating and depreciation off an illustration exchange in Canada similar to the successful illustration exchange reestablishing the U.S.
We saw steady increase in underwriting exchange revenues starting in Q2 thousand 19, we are engaged in enterprise deals that converge several of our platforms such as order entry illustration quoting an underwriting.
Vojin multiple platforms and getting large financial institutions to adopt them has a strong networking effect as each institution brings its own network of carriers and agents with et cetera.
We are seeing steady business from existing clients and also added new customers like Navy mutual in January.
Pipeline on underwriting a strong and we expect accelerated growth in the second half of Twentytwenty.
We are pleased with the progress of our health exchange, we on boarded the largest asked me customer on the health exchange and they're not doing deployment from enrollment the policy administration and claims.
This gives us great Referenceability and allows us to expand our presence in the voluntary market.
We are engaged with industry subject matter experts and third party I'm less what is assisting us with positioning us in these new markets.
In our risk compliance services group, we added 49, new customers, including names like Domino's Pizza Minneapolis Airport Johnny Dockets.
And see stock just to name a few.
We ought to dominant player in this market surfacing hundreds of customers, including over it de fortune 500 companies.
We upgraded our product in 2019 consolidated operations and adding to the sales team.
With all these initiatives and our already strong presence in the market. We are excited about the prospects for growth.
In our Adam Medical certification business, we had instituting starboard measure was sent an opposition in the market we are focusing more on digital sales.
Repositioning our products and new markets and instituting an outbound sales program. In addition to our traditional direct marketing program.
We are optimistic about the growth of this business and friendly guarantee which have industry, leading products and an amazing brand equity in the market through partnerships with Harvard Medical School, John Hopkins, Cleveland Clinic, Brigham and Women's Hospital just to name a few.
We are seeing a big trend towards redness offerings in the financial services sector.
Therefore in 2019, we repositioned our business assets for tightly aligned.
Insurance offerings.
I'd also expanding our partnerships with large brokerage houses like E on C. bears and several other industry participants.
In all services, an administration business, we have taken an approach movies that are focused and offerings in the market.
Our goal is to play in specific segments of the market doesn't give us high margin margins on a sustained competitive advantage.
Yeah booking I'm getting out of certain market segments like preparing for expansion in others.
So I was segments, maybe wish to expand includes.
Strategy services program management platform outsourcing training and automated testing.
In 2019, <unk> measures to stabilize and streamline our delivery capabilities and the administration business. We also intend to expand in this area through strategic acquisitions and providing platform based outsourcing.
And then shorten segments it was for organic growth.
In 2019, we continue to strengthen the management team. In addition to previously announced traditions. We recently hired Jeff Hey, speed as head of insurance marketing and strategic business development.
Jeff. This is recognized name in the industry with or what type of years experience, including most recently as senior Vice President at LIMRA and Loma renowned industry consortium.
We also recently added an industry veteran Alan back to our enterprise and exchange sales team Alan as an industry veteran who has experience of working both in the insurance and friendly tech industry.
Finally, and importantly, we announced also in 2019 Genie, because our initiative in AI and machine learning.
This initiative is gaining momentum as the apply these tools to our existing platforms guns say take our CTO is leading the initiative and closely working without that speaks Jane just to make them yeah enabler.
These initiatives will provide us incremental revenues.
Going forward.
I would now like to spend a few minutes discussing I'll start to do you envision and Twentytwenty.
In our core life, a new D. and health exchanges Riyadh, writing a tailwind.
Our goal is to Buck need to build on the foundation relayed in 2019, we believe our upgraded products new participants on the exchange.
A new partnerships has positioned us better for growth.
Big focus for us in part due credit that you would've been the idea of direct to consumer and shorten sales. This has the most as one of the hottest fans and in short that and we are pleased that we have been investing in this area or the past several years and have an edge over the competition.
We have been enhancing our schools to harness the opportunity and have successfully partner the funds and implementing industry, leading solutions. These companies and no Metlife John Hancock CUNA mutual cooperate does navy mutual et cetera.
Our offerings will manifest as both exchanges.
We are extremely I'd expect running and also as enterprise solutions for insurance and brokerage times.
We talked near to explore acquisitions and they have never synergistic to our products and offerings that can enhance our footprint to the market.
Synergistic acquisitions ever to enhance our services and administration businesses auto specific interest.
As always these acquisitions and follow what pipe and deliberate stock depot Peter growth.
Yeah, I enablement of all our core platforms, we will be an ongoing effort in twentytwenty <unk> bachner with our clients in specific areas like give meaningful benefit and provide up a couple African whether it be off offerings and the sustained revenue stream.
We will also find I'm used to bring to North America. That's all the assets. We have acquired in Southeast Asia. These include solutions in wealth management and lending we are continuing to pursue abuse by leveraging these platforms and partnering with clients that have a multinational footprint and foster the same grifols <unk> innovation.
As we do here at Ebix.
We find ourselves the mixed up a market that is significant interest from companies that are focused on in short that in North America.
Companies that are at the forefront of digitizing, our traditionally stayed manually intensive industries Rothmans inefficiencies.
Events is uniquely positioned as a major player that is enabling automation in the industry.
We have industry, leading products across all our major market segments, including life has a new days medical risk compliance and rather than us.
Customer base and network includes hundreds of carriers talk banks top brokerage and white houses thousands of distribute does.
Brand name medical institutions, and thousands of employer groups, including many of the top fortune 500 companies.
All of this providing ebix a fantastic opportunity to make an impact in front different dnbi on.
We are excited about the opportunities ahead of us.
With that I'm, not Boston all onto Robin.
Good morning.
I didn't Bob.
And.
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I will talk about key initiative that should contribute to substantially.
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A game changing it can the United States life insurance exchange during one of them.
Distribution in the U.S. that'd be allowed to name at present.
I want to let exchange.
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But assuming that new people see exchange <unk> U.S. that can open up a substantial revenue base for us.
Right, we had also pursuing.
Strategic and shut off in the U.S., that's what how far that complement our children suffering and when I when I say those targets I mean at those acquisitions.
In the field, hoping shown of distribution.
Before the big venture is now light.
And I think the real policies.
We didn't minutes and <unk>.
He will be announcing that details Phil.
We want them off six to eight month, we had been building up a franchisee channel for Ebix gosh it.
Leading hall of Fame it fits together that I'd channel.
Andy Gosh, the old is going to lot if you'd like now in a matter of being it's 75, new branded stores in Indiana.
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We are presently targeting.
New organic business.
Ladies and gentlemen, please standby.
The conference Lavizan momentarily.
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Once again, ladies and gentlemen, P sand by a conference lovers in momentarily.
Hello.
In the field of in children for distribution.
My line for whatever reason when a silent on me if I had a dial back again.
Hopefully I'm being heard loud and clear into feed up in children for distribution, obviously ebix venture I'd now like and writing Leo policy the minute Finlandia it'd be interesting deals soon I talked about the franchisee channel I.
We are presently targeting new organic business contract, what at least $50 million and they do a bus exchanges in 2020, we are the front runner on most of the bus exchange deals and stuff.
Have a high margin opportunity in this area.
Recently, we announced in giggle contract with Moneygram, whereby Moneygram decided to go exclusive enough in India.
That's a 20 to 25 million revenue opportunity for US we are pursuing doogie acquisitions, yup, <unk> and Primex at present between the two the revenue opportunity is approximately $130 million.
Yup Board has already approved the fail to a formal SB, Evan I will still yet.
We have already filed baffled, we definitely see an up and after that it will go for the shareholder vote.
Triumeq fail to Ebix has already been approved.
By their banks and lender through a formal notification <unk> be president be await approval by that element and CLP gold and expect that approval in the next few weeks.
In the ideal foreign exchange, we are pursuing a number of large airport fortyx opportunities in the U.S. UK.
And the far east besides waiting for a formal fortyx like something approval from the you weigh central bank to launch the you weigh airport politics implementation. Each one of these large value deals with great margins.
We today have a large expanse worldwide and does not feeling a lot of different deals across the world at any time I just focused on taking you through a few of the substantial deals.
That gets me excited.
Over the last few months.
We have taken a strong effort.
In the 80 up margin improvement.
We will have to balance, though that first we then need to market and to put up brand out in front of relevant people, especially keeping our ebix gosh.
I feel in mind.
Our margins.
In the insurance businesses and the Ebix cash benefit for the most spot.
We need to be strong insurance that traditional stronghold and over the last two decades, we have worked hard to grow our margins to where the attorney.
And our volumes grew and cross perpetual levels every new dawn on revenue.
Increased commodity.
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As we have about a relatively clean state slate at present ahead of us in terms of legal or regulatory issue.
Of course any margin improvement efforts have been dealing themselves from what I've watched and marketing got brand and then I like Bill overall I feel good about a margin improvement that but and I am highly committed to improving I'd imagine substantially.
Before I talk about the prospective Ebix gosh I feel let me briefly talk about the gas generation epilepsy.
In 2009 theme.
2019 gas generation buff strong.
We had a number of large operating payments like the 24 million tax payment and the 21.1 million legal settlement payment on top of it.
We paid.
Hundred 10.8 million for acquisitions have been million for share buybacks 9.2 million for dividend payments 12.9 million for Capex on software development 15.1 million purposeful payments dwarfs. The film loan et cetera. This adds to approximately $208 million you know.
But all payments.
At Bill that odd payments to fund out Ebix gosh, GMB growth, while trying to reduce.
Are you the bank line by bringing them down continually.
Add to it.
Fan out expenses on the Ebix gosh I feel.
And the Ebix cash marketing efforts to become a household name et cetera.
We are pleased with the fact.
That all this was achieved without any breathing our net debt in 2019 months since 2018.
Our net debt remained essentially flat.
You know what are you.
Let me lastly talk about the Ebix gosh ideal and its status at present.
Let's first start bike discussing costly why should ebix gosh, I feel just great excitement in the market.
Let me talk about why it seems like an attractive and met investment at but I wonder bankers.
Ebix cash is a fast can do more focused digital on globally, Duff, India, but the highly integrated platform, they strong upselling and cross sell capabilities across multiple areas.
Ebix gosh had the consumer reach next to none in the industry.
And almost no marketing costs eating gosh ranked I'd channel, it's five times larger today than the largest banks network in India.
He'd be Scotch has a Berlin M&A track record.
Ebix got you're the only play out in the industry with no gosh bun.
And walking high margins.
And I want to segment.
In our segment see off on company does collectively lost $1 billion.
Last year.
Eating gosh, you see you know the disruptive force in the industry that is pioneering day the concept of creation off an airport.
Cross media functions in the industry.
Ebix Kashi the Bijan Reid.
Have you have got them itself into we didn't really strategic partnerships with names like Bombay stock exchange Moneygram Western Union immediately, we though Mastercard baby M Ria et cetera.
We have a strong technology focused.
Ebix gosh had a strong b to B revenue base that makes a majority of the revenue to cutting.
It's the only plan from India, who has successfully deployed Indian IP abroad in multiple countries in our industry segment.
Have you might as a leader in most market segments already today.
Already conduct <unk> billion dollar the gross merchandise value.
It today has a unique combination of strong physical footprint.
And our digital platform that offers last mile reach by leveraging the netbook across industries.
It has it had the Cline base, which is strongly blue chip serving to power the blast caught up right and brands just in the radio payment solutions.
1000, plus clients and travel.
Our financial technology footprint, it's already across 40 countries in the 80 off travel technologies lending technology wealth and asset management technology Auto Finance Telecom broken agent stock exchange.
Exactly right Dumbo lending and wealth management.
We have a strong management's trend, but six executive team members, who had been joins in their respective field.
So how has ebix gosh financial performance being.
So let me take good threw some numbers.
The he had already had growth in 2019 for Ebix gosh glop at 47%.
The 2019 growth as compared to 2017, 387%.
If you consider that that could lead revenues that ebix cash report in the local markets up that's going to be important simply because.
When we go for I feel Ebix got stuck to bleed revenue is what is going to be counted from an investor perspective in India.
Ebix cash statutory revenue in 2019 <unk>.
It's approximately $376.2 million. This in due course that drop up pricing revenue plus services provided by India to other ebix companies.
The president statutory operating margin.
He is approximately 28.3%.
The President annual revenue run rate approximately 388 million, if I annualize the president quarter, the Q4 of 2019.
The targeted revenue run rate by the time I feel like launched we are targeting hundred and $25 million want though on annualized revenue run rate of 500 $540 million Yep.
Yes, but I'll try Mac moneygram and a few large organic initiatives like the bus exchange deals should.
Should give us the hundred 50 million bridge that yes, striving for between our President Ebix cash numbers and the 540 million dollar targeted number.
Targeted operating margin by the time diabetes launched we would like to be at how do you put a thin film the EBITDA when we launch all right Bill.
So weird I'll leave it IPO at present.
We presently have see up India stopped banks and that investment bank of <unk> access bank and other life.
We have already hired I didn't know big for fall as an industry analysts for the creation of the IPO prospectus to be filed with the Securities and exchange Board of India.
We have a point they see legal farms to handled ideal to domestic and money, but I'm actually going from.
We have already appointed that's that's certainly audit farm to handle that see yet ebix catch audit, we filed with the odd.
Filing document fought IPO, but this would say be the securities and exchange Board of India.
So what's next to be an ideal.
We are presently getting ready to announce the fourth and Nashville banker.
To be to add to our IPO investment banking theme it will be done soon and people who declaring the name soon.
We are contemplating adding a joint big name on it to do that Ebix gosh audit from affected many prospective.
Simply to bring more credibility and more support to what I feel from a marketing perspective in the international markets.
Once the audit is complete we will file the DHR be documents.
With baby.
Do you mean got that I feel the timing at present will depend on the regulatory process in Walt and the time taken by Sabby to approve that'd be a choppy, but we continue to dog in a timeline of some bad around August for like deal with that I'll close the call and.
Open it up for questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
I would try your question press the pound <unk>.
Please standby will become part of the candy roster.
Our first question comes from Jeff Van Rhee with Craig Hallum. Your line is now open.
Great. Thanks for taking my questions couple from me the maybe starting with the the core legacy business.
I think previously you were talking about 8% to 10% growth. It sounds like I think actually went through a bunch of the growth initiatives in some of the.
Some of the recent signings yeah. I think you commented the de acceleration happens in the second half just to be clear is that 8% to 10% for that business still your way of thinking it or is it more backend loaded than you thought.
Actually it's still Oh, sorry, Jeff, we're still targeting eight or 10% growth I think we you have to also keep in mind that a lot of fighting children's business a lot of based in international markets and what is happening is that'd be helpful. Obviously had big hit from the effect on foreign exchange if you feel good.
<unk> got them feed revenue you see a big difference between out of revenues that you reported and constant currency revenue simply because a lot of the lump of insurance businesses that we run in various parts of the world. So that's one factor. The second fact that is we did take somebody heavy hits in areas like the Health Administration exchange.
And the other Odyssey has now those had fab have reduced confidently and so we feel we attained a barton bottoming out in those 80 up and with all these new deals that I stopped about and some of that I referenced the large play into that friends.
Everything is a function of time ads for example, though the particular play into that I talked about the large financial institution that I've gone name at by then or it's a household name in the U.S. and once they come in they'll David we are what we believe it will happen is as they deploy many of our product across multiple platforms. It.
He'll bring a net well <unk> no.
Broke and how do you asked a lot of platform engine, great new audit fees in many many in yet and that by itself becomes a little fuel for the growth. So we we have still standing by we believe that 8% to 10% growth is still possible in insurance business.
Okay, and then along those lines I think and again you may want to post a transcript because a lot of what you're saying broke up a Mike I missed a big pieces, but I think sequentially. You commented on declines in PNC I think gearing did a PNC CRM health had been travel. It just takes what's your new you learn without going through all of those what were the top two in terms of.
Dollar headwinds.
Well frankly some of those already you know these are not big decline, but then would decline the biggest one body in Australia.
But that's a fairly traditional decline we get in Q4 in Australia, mainly because of professional services because they have the holidays tend to be ended up at a prolonged in December and January. So you know they go on put a bit longer in Australia, but then Australia bounces back always in Q1, you can at least not leafy that so that well.
180, I'll find decline in the international markets. It was mainly Australia see out of them out all very very close but not a big a big drop the main dropped more than 80 of health administration exchange that'd be Sol and ER and even a few other drops in 80 of though consulting in you know tradition.
No.
Ebix consulting business.
And as it relates to the health business I think you typically get a seasonal pop in Q4, how was the seasonal strength this quarter versus prior years.
Oh, they're healthy Emmy business was I had the head to head of traditional pop again, this quarter, but fairly strong.
But again like I like gosh reference that we're trying to make sure that as we deploy some off a lot of new what efforts in films I was born sale you know, we traditionally selfie a me only through.
Direct marketing and at once we get back and do we also believe that as you go to get more different marketing programs. We can have a more consistent run through the year, but we are presently presently we did have a bit up a pop in though in the fourth quarter, but then again it also got offset by a bit off a nickel.
Line that traditionally happens in many of our business is when we professional services important. Even then you know in many about 80, a then the month or December we just don't block as many odd because our employees go on leave and that by itself. You know leads to a lot lower professional services fees and so that got kind of gone off that.
HM two numbers questions I think as it relates to both the nonrecurring items in the quarter 3.5 million can you clarify what's in there and then also the quarterly cash from operations.
I think though the in the quarter, though the 3.5 million mainly associated with you'll have to go through the whole yet you have to what two legal the whole either in terms of you know these are the though acquisition related receivables bad if you haven't collected up when you go to feel little biodiesel in full date.
We need to kind of pick up you know height and stuff like that full day. Those these are the that all one time much that'd be have taken off. These are not these are not items that have anything to do with though you know for example over the next quarter's business. So build the kind of items that have taken out.
And your next a other question what sorry, you do you talked about cash.
I think you got from calibration operating cash right. So I think I talked about the operating cash on an annual basis I Hope I came out loud and clear on that one that we basically spend in excess of EUR 200, something million that I think I talked about and we still block 64.7 million in operating cash.
And Ah. So we think we did very well on in terms of gas generation in the whole Leo in in the last quarter off 2019, we just had a lot of different payments that we made but do expect do.
I think maybe Bob you can do you have a number in front a few and don't know we made some tax payments. This quarter. We also had a lot of G.M.B. funding that we did in the portal where people get results and though in the longer dumb. It thinks like logistics technology, we have built continuing to fund our bundles kind of businesses.
Also went down into the French I'd channel that I talked about you know the 75, new franchises that we are building. So there is that they did a lot that building and we basically in Q4, we had some of these dnbi related issues. In addition to basically the or some of the onetime payment.
We had to make one of them one of the large ones was back saying we also paid.
We also paid a banks down.
In our we had we had to overdraft facility for weaken cash that we used to take in India, and we took that back down. So you will see that a into fleets that are quite down today, yeah as compared to the last quarter last bought interest what I think that on 1.7 million discord, but it is like.
You know one and one and you will see why why did that happen because we paid back our bank and took God that lines down so that left founded more prudent and so that's what do you have seen a but that both cash that that would have flown through the operating line.
Oh, Yeah. This is that Bob I can just gave you a little more color on our cash uses in this fourth quarter specifically.
We had 8 million was used to pay down or working capital for somebody in India. As Robin was alluded to we added about 200 million wish they use for our dividend payment.
About a 5 million was used for Capex and software development or 4 million was used towards our schedule turnaround payment and we had about 90 I know you used to pay taxes, a big portion that being the minimum alternative tax in India.
Okay. So Jeff when you add to that G.M. leap stuff that I just talked through we have so many new initiative and we are trying to fund those from but then while being our bank lines down but for example, a Bob talked about you know paying the banks 8 million down and we're balancing all of those.
And so that's what why that happened.
Okay, and then Oh, I guess two questions around growth in India.
Excuse me on the sequential basis, it looks like even gosh exchanges is down about <unk> percent for second half I'm just talked about the sequential there and then and then along with those you know obviously you gave it isn't clarity and much appreciated on on what you think that looks like in 2020. So maybe maybe just let me start there I don't want over complicate the question Q4.
For in terms of excess cash so you just being down modestly sequentially and relative to expectations just talk about the revenue revenue performance during Q4.
Well I wouldn't I wouldn't really paid too much attention to that because they literally it was essentially flat.
And you have to remember this is this a little too one of them in December and it is traditionally in any of these businesses that we are engaged in you know you're going to have up to one of them, but if there are traditionally a little bit down in the financially as of the business. The only business that any ebix cash that would traditionally do better.
In the month of December would have been travel, but unfortunately travel has been under budget pressure I didn't know worldwide for various reasons, even be on Corona light as I travel business had been under pressure when when the economy than doing as well people don't travel as much you know India's growth rate reduced.
A bit to 4.5% from seven and a half a cent this year and what that resulted in as you're now seeing in Q4, there were lots of people traveling than what was typically happening because typically in December you wouldn't normally see a lot more people travel so having said that I wouldn't read much into it because it's a there's a little bit of seasonality.
<unk> in Q4 that comes out.
As it relates to then the the Indian IPO when you get to the IPO window I think you get the revenue Ron and expected margins. How do you think about organic growth at that point Dan.
Well Indian I feel you know, we we have been always stargazing.
Girl trade off between 25% to 30% from an EBITDA cash perspective, and we do believe that's a feasible from I. The deals I talk through for example, you know I don't know when I came out loud and play out on some of those deal that I mentioned for example, when I was speaking.
I spoke about yeah deals in the bus 16 to arena that we believe we are targeting at around $50 million <unk> New revenue just in the bus exchange Arena from New States, where do we have the front runner and not it very advanced stages of the deal. So these are these are the kind of opportunities that we are in the mix.
Well you know you add up the French I'd channel brand new opportunity for us and we've already created family by franchises BSC. He makes that we just went live in a brand new opportunity Moneygram that'd be just brought family. The 20 to 25 million dollar brand new opportunity and so on I could go on so we do believe that it's very feasible.
For us to walk, 25% to 30% kind of organic growth rates.
Okay last one for me then I think as it relates to Corona you know, obviously meaningful portion of your business sitting in travel some domestic some some more exposed internationally I think would release out the other day comedy to a 1% revenue headwind I know things are evolving very quickly just talk about the you.
The latest thinking on what the revenue headwind is likely to be from from those effects.
So let me Jeff as you rightly said things are evolving very quickly. So it does Betty when we estimated the 1% be based it on we basically did an analysis of what the fundamentally happening and what is presently happening in our business Fortunately for us.
Most of our business is not coming through international Air ticketing, that's not out of business. We don't do as much up internationally I think getting a lot of our business outcomes from domestic travel. So when we don't have a go to one of Leidos issue for the back of the business that gets it back pain is big an example mice travel.
Mike's travel is even sabal. So if we're doing an event in India now that doesn't get impacted but yeah. We want to do any event, let's say in Singapore that definitely gets impacted and we've had a few cancellations in the old area. So we took those into account, but as I explained in my call I also talked about the zee.
Let's say the battery how high margin in travel and low margin in travel. So when I fought example talked about mice travel I talked about the fact that I'm audience not in single digits sturdy simply because we we report revenue at the G.M.B. level Floyd won't have as much of an impact and that will even if it had an impact it would have only had an impact for and into.
I'm not sure lever that people are going to handle from Lifestyler perspective, so good or bad news is that good news for assays that we don't want to handle as much on international ticketing majority up all the airline is domestic ticketing majority up out of hotels are within India and so on so the business of travel we had we will get impacted.
Presently is now is <unk> and I'm talking about Ebix before he opt out so I can't speak about yet, but I like no up because yes, but I had though is has a lot more international I believe a lot more international business.
But again I can tell you whether it affects them at all because I.
Don't know the details like nobody out there, but I know about from and Ebix cash perspective majority apart, but nothing travel is domestic and domestic travel. It you know there's it does not nobody is stopping travel within India today, and that's what else is the single biggest insurance policy into El Dorado in Atlanta.
Today that that business isn't as international in terms of travel.
Okay I'll leave it there thank you.
Thank you.
Thank you I sat mind that to ask a question you any tapas style one on your telephone.
I'm not showing any further questions at this time I would now like to turn the call back Oh, that's ever been Rhianna for any further remarks.
I think we're simply I don't know for the questions I'll close the call, but I will say that I think bottom I talked probably broke down from what I hear and vivo. Both the transcript of this call immediately or on the map fill that people can download and read it.
I apologize for any difficulties that you encountered in the line not coming clearly.
At the same time will look both the transcript so immediately.
Thanks, where time and look forward to speaking to you again, and then to the plus quota.
Thank you and with that I close the call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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