##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 0-15946
 Ebix, Inc.
  DELAWARE
    
    77-0021975(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)5 CONCOURSE PARKWAY, SUITE 3200ATLANTA, GEORGIA
    
    30328(Address of principal executive offices)
    
    (Zip Code)
 678-281-2020
 þ o
 o o þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsCondensed Consolidated Statements of Income for the three and nine months ended
September 30, 2010 and 2009 (unaudited)
    
    
    2Condensed Consolidated Balance Sheets at September 30, 2010 (unaudited) and December 31,
2009
    
    
    3Condensed Consolidated Statement of Stockholders Equity and Comprehensive Income for
the nine months ended September 30, 2010 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended September 30,
2010 and 2009 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Repurchases of Equity Securities
    
    
    32Item 3. Defaults upon Senior Securities
    
    
    32Item 6. Exhibits
    
    
    32SIGNATURES
    
    
    33EXHIBIT INDEX
    
    
    34Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Ebix, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember  30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Operating revenue
    
    $
    33,281
    
    
    $
    23,292
    
    
    $
    97,091
    
    
    $
    66,381Operating expenses:Cost of services provided
    
    
    7,418
    
    
    
    4,465
    
    
    
    21,908
    
    
    
    13,298Product development
    
    
    3,294
    
    
    
    3,000
    
    
    
    10,228
    
    
    
    8,258Sales and marketing
    
    
    1,685
    
    
    
    1,298
    
    
    
    4,759
    
    
    
    3,553General and administrative
    
    
    6,249
    
    
    
    3,803
    
    
    
    16,914
    
    
    
    11,355Amortization and depreciation
    
    
    1,553
    
    
    
    943
    
    
    
    4,433
    
    
    
    2,517Total operating expenses
    
    
    20,199
    
    
    
    13,509
    
    
    
    58,242
    
    
    
    38,981Operating income
    
    
    13,082
    
    
    
    9,783
    
    
    
    38,849
    
    
    
    27,400Interest income
    
    
    163
    
    
    
    56
    
    
    
    378
    
    
    
    147Interest expense
    
    
    (236
    )
    
    
    (234
    )
    
    
    (750
    )
    
    
    (791
    )Other non-operating income
    
    
    3,917
    
    
    
    
    
    
    
    5,678
    
    
    
    Foreign currency exchange gain
    
    
    523
    
    
    
    142
    
    
    
    859
    
    
    
    894Income before income taxes
    
    
    17,449
    
    
    
    9,747
    
    
    
    45,014
    
    
    
    27,650Income tax expense
    
    
    (768
    )
    
    
    (313
    )
    
    
    (1,939
    )
    
    
    (925
    )Net income
    
    $
    16,681
    
    
    $
    9,434
    
    
    $
    43,075
    
    
    $
    26,725Basic earnings per common share
    
    $
    0.48
    
    
    $
    0.30
    
    
    $
    1.24
    
    
    $
    0.88Diluted earnings per common share
    
    $
    0.43
    
    
    $
    0.25
    
    
    $
    1.10
    
    
    $
    0.72Basic weighted average shares outstanding
    
    
    34,592
    
    
    
    31,236
    
    
    
    34,765
    
    
    
    30,531Diluted weighted average shares
outstanding
    
    
    39,020
    
    
    
    37,840
    
    
    
    39,218
    
    
    
    37,470
   2




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Condensed Consolidated Balance Sheets
 September 30
    
    
    December 31,2010
    
    
    2009(Unaudited)
    
    
    (Audited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,263
    
    
    $
    19,227Short-term investments
    
    
    6,751
    
    
    
    1,799Trade accounts receivable, less allowances of $321 and $565, respectively
    
    
    28,816
    
    
    
    22,861Other current assets
    
    
    5,139
    
    
    
    2,628Total current assets
    
    
    51,969
    
    
    
    46,515Property and equipment, net
    
    
    7,991
    
    
    
    7,865Goodwill
    
    
    178,459
    
    
    
    157,245Intangibles, net
    
    
    23,402
    
    
    
    20,505Indefinite-lived intangibles
    
    
    30,238
    
    
    
    29,223Other assets
    
    
    1,058
    
    
    
    814Total assets
    
    $
    293,117
    
    
    $
    262,167LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    15,705
    
    
    $
    11,060Accrued payroll and related benefits
    
    
    3,452
    
    
    
    3,634Short term debt
    
    
    5,000
    
    
    
    23,100Convertible debt, net of discount of $241 and $706, respectively
    
    
    15,259
    
    
    
    28,681Current portion of long term debt and capital lease obligations
    
    
    392
    
    
    
    596Deferred revenue
    
    
    7,709
    
    
    
    7,754Current deferred rent
    
    
    192
    
    
    
    163Other current liabilities
    
    
    129
    
    
    
    109Total current liabilities
    
    
    47,838
    
    
    
    75,097Revolving line of credit
    
    
    21,000
    
    
    
    Long term debt and capital lease obligations, less current portion
    
    
    1,494
    
    
    
    671Other liabilities
    
    
    2,991
    
    
    
    2,965Deferred tax liability, net
    
    
    6,014
    
    
    
    5,147Put option liability
    
    
    1,180
    
    
    
    6,596Deferred revenue
    
    
    113
    
    
    
    269Long term deferred rent
    
    
    609
    
    
    
    679Total liabilities
    
    
    81,239
    
    
    
    91,424Commitments and Contingencies, Note 6Stockholders equity:Preferred stock, $.10 par value, 500,000 shares authorized, no shares issued and outstanding at September 30, 2010 and December 31, 2009
    
    
    
    
    
    
    Common stock, $.10 par value, 60,000,000 shares authorized, 34,628,057 issued and 34,587,548 outstanding at September 30, 2010 and 34,474,608 issued and 34,434,099 outstanding at December 31, 2009
    
    
    3,456
    
    
    
    3,443Additional paid-in capital
    
    
    151,173
    
    
    
    158,404Treasury stock (40,509 shares as of September 30, 2010 and December 31, 2009)
    
    
    (76
    )
    
    
    (76
    )Retained earnings
    
    
    51,698
    
    
    
    8,623Accumulated other comprehensive income
    
    
    5,627
    
    
    
    349Total stockholders equity
    
    
    211,878
    
    
    
    170,743Total liabilities and stockholders equity
    
    $
    293,117
    
    
    $
    262,167
   3




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Condensed Consolidated Statements Stockholders Equity and Comprehensive Income
 Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedTreasury
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    OtherIssued
    
    
    
    
    
    
    Stock
    
    
    Treasury
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Total
    
    
    IncomeBalance, December 31, 2009
    
    
    34,474,608
    
    
    $
    3,443
    
    
    
    (40,509
    )
    
    $
    (76
    )
    
    $
    158,404
    
    
    $
    8,623
    
    
    $
    349
    
    
    $
    170,743Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,075
    
    
    
    
    
    
    
    43,075
    
    
    $
    43,075Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,278
    
    
    
    5,278
    
    
    
    5,278Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    48,353Repurchase and retirement of common stock
    
    
    (669,978
    )
    
    
    (67
    )
    
    
    
    
    
    
    
    
    
    
    (10,582
    )
    
    
    
    
    
    
    
    
    
    
    (10,649
    )Vesting of restricted
stock
    
    
    207,504
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    Settlement on conversion of convertible debt
    
    
    535,019
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    1,771
    
    
    
    
    
    
    
    
    
    
    
    1,824Exercise of stock options
    
    
    80,904
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    223
    
    
    
    
    
    
    
    
    
    
    
    231Deferred compensation and amortization related to options and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,376
    
    
    
    
    
    
    
    
    
    
    
    1,376Balance, September 30, 2010
    
    
    34,628,057
    
    
    $
    3,456
    
    
    
    (40,509
    )
    
    $
    (76
    )
    
    $
    151,173
    
    
    $
    51,698
    
    
    $
    5,627
    
    
    $
    211,878
   4




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
 Nine months Ended September 302010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    43,075
    
    
    $
    26,725Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    4,433
    
    
    
    2,517Stock option compensation
    
    
    326
    
    
    
    148Restricted stock compensation
    
    
    1,050
    
    
    
    833Provision for doubtful accounts
    
    
    341
    
    
    
    90Debt discount amortization on convertible debt
    
    
    303
    
    
    
    Unrealized foreign exchange gain on forward contracts
    
    
    (1,270
    )
    
    
    (141
    )Unrealized foreign exchange gain
    
    
    (277
    )
    
    
    Gain on put option
    
    
    (5,416
    )
    
    
    Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable
    
    
    (5,020
    )
    
    
    (4,644
    )Other assets
    
    
    (1,219
    )
    
    
    (622
    )Accounts payable and accrued expenses
    
    
    (1,140
    )
    
    
    (214
    )Accrued payroll and related benefits
    
    
    (369
    )
    
    
    (591
    )Deferred revenue
    
    
    (859
    )
    
    
    (29
    )Deferred rent
    
    
    (70
    )
    
    
    Deferred taxes
    
    
    (89
    )
    
    
    (2,197
    )Other current liabilities
    
    
    41
    
    
    
    252Net cash provided by operating activities
    
    
    33,840
    
    
    
    22,127Cash flows from investing activities:Acquisition of MCN, net of cash acquired
    
    
    (2,931
    )
    
    
    Acquisition of Trades Monitor, net of cash acquired
    
    
    (2,749
    )
    
    
    Acquisition of Connective Technologies, net of cash acquired
    
    
    (1,337
    )
    
    
    Acquisition of E-Trek, net of cash acquired
    
    
    (1,011
    )
    
    
    Acquisition of USIX, net of cash acquired
    
    
    (6,844
    )
    
    
    Investment in ConfirmNet
    
    
    (2,975
    )
    
    
    (3,279
    )Investment in IDS
    
    
    
    
    
    
    (1,000
    )Investment in Acclamation
    
    
    
    
    
    
    (85
    )Acquisition of Facts, net of cash acquired
    
    
    
    
    
    
    (6,215
    )Investment in Facts
    
    
    (11
    )
    
    
    Investment in Periculum
    
    
    (4
    )
    
    
    (200
    )Advance deposit on acquisition of Peak
    
    
    
    
    
    
    (3,800
    )Advance deposit on acquisitions of E-Z Data
    
    
    
    
    
    
    (8,080
    )(Purchases)maturities of marketable securities, net
    
    
    (4,952
    )
    
    
    167Capital expenditures
    
    
    (1,325
    )
    
    
    (1,941
    )Net cash used in investing activities
    
    
    (24,139
    )
    
    
    (24,433
    )Cash flows from financing activities:Repayments on revolving line of credit, (net of proceeds)
    
    
    (2,100
    )
    
    
    (1,095
    )Proceeds from term loan
    
    
    10,000
    
    
    
    Principal payments of term loan obligation
    
    
    (3,751
    )
    
    
    Repurchases of common stock
    
    
    (10,649
    )
    
    
    (505
    )Proceeds from the exercise of stock options
    
    
    231
    
    
    
    1,457Proceeds from the issuance of convertible debt, including equity component
    
    
    
    
    
    
    25,000Payments of capital lease obligations
    
    
    (683
    )
    
    
    (99
    )Principal payments of debt obligations
    
    
    
    
    
    
    (773
    )Settlement on conversion of convertible debt
    
    
    (12,021
    )
    
    
    Net cash provided by/(used in) financing activities
    
    
    (18,973
    )
    
    
    23,985Effect of foreign exchange rates on cash
    
    
    1,308
    
    
    
    (297
    )Net change in cash and cash equivalents
    
    
    (7,964
    )
    
    
    21,382Cash and cash equivalents at the beginning of the period
    
    
    19,227
    
    
    
    9,475Cash and cash equivalents at the end of the period
    
    $
    11,263
    
    
    $
    30,857Supplemental disclosures of cash flow information:Interest paid
    
    $
    410
    
    
    $
    910Income taxes paid
    
    $
    1,589
    
    
    $
    3,706
   5




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##### Table of Contents



Supplemental schedule of noncash financing activities:
     6




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements
 Note 1: Description of Business and Summary of Significant Accounting Policies
 Description of Business
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September  30,(dollar amounts in thousands)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Carrier Systems
    
    $
    2,228
    
    
    $
    2,587
    
    
    $
    6,718
    
    
    $
    8,112Exchanges
    
    
    23,505
    
    
    
    14,151
    
    
    
    69,125
    
    
    
    39,346BPO
    
    
    4,096
    
    
    
    3,617
    
    
    
    11,574
    
    
    
    10,692Broker Systems
    
    
    3,452
    
    
    
    2,937
    
    
    
    9,674
    
    
    
    8,231Totals
    
    $
    33,281
    
    
    $
    23,292
    
    
    $
    97,091
    
    
    $
    66,381
 Summary of Significant Accounting Policies
 Basis of Presentation
 Fair Value of Financial Instruments
 Revenue Recognition and Deferred Revenue
  7




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##### Table of Contents



Accounts Receivable
and the Allowance for Doubtful Accounts Receivable
 Goodwill and Other Indefinite-Lived Intangible Assets
  (In thousands)Beginning Balance (December 31, 2009)
    
    $
    157,245Additions
    
    
    18,284Foreign currency translation adjustments
    
    
    2,930Ending Balance (September 30, 2010)
    
    $
    178,459
 Finite-lived Intangible Assets
 LifeCategory
    
    (yrs)Customer relationships
    
    420Developed technology
    
    37Trademarks
    
    510Non-compete agreements
    
    5
  8




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##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009(In thousands)Finite-lived intangible assets:Customer relationships
    
    $
    24,038
    
    
    $
    19,773Developed technology
    
    
    9,311
    
    
    
    7,935Trademarks
    
    
    218
    
    
    
    218Non-compete agreements
    
    
    418
    
    
    
    418Backlog
    
    
    140
    
    
    
    140Total intangibles
    
    
    34,125
    
    
    
    28,484Accumulated amortization
    
    
    (10,723
    )
    
    
    (7,979
    )Finite-lived intangibles, net
    
    $
    23,402
    
    
    $
    20,505Indefinite-lived intangibles:Customer/territorial relationships
    
    $
    30,238
    
    
    $
    29,223
  Income Taxes
  Recent Relevant Accounting Pronouncements
 Note 2: Earnings per Share
   9




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##### Table of Contents



For the Three months
    
    
    For the Nine monthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share data)Net income
    
    $
    16,681
    
    
    $
    9,434
    
    
    $
    43,075
    
    
    $
    26,725Convertible debt interest (excludes imputed interest)
    
    
    
    
    
    
    116
    
    
    
    10
    
    
    
    414Net income for diluted earnings per share purposes
    
    $
    16,681
    
    
    $
    9,550
    
    
    $
    43,085
    
    
    $
    27,139Diluted shares outstanding
    
    
    39,020
    
    
    
    37,840
    
    
    
    39,218
    
    
    
    37,470Diluted earnings per common share
    
    $
    0.43
    
    
    $
    0.25
    
    
    $
    1.10
    
    
    $
    0.72
  For the Three months
    
    
    For the Nine monthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands)Basic Weighted Average Shares Outstanding
    
    
    34,592
    
    
    
    31,236
    
    
    
    34,765
    
    
    
    30,531Incremental Shares
    
    
    4,428
    
    
    
    6,604
    
    
    
    4,453
    
    
    
    6,939Diluted Shares Outstanding
    
    
    39,020
    
    
    
    37,840
    
    
    
    39,218
    
    
    
    37,470
 Note 3: Business Combinations
       10




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##### Table of Contents



Note 4: Debt with Commercial Bank
    Note 5: Convertible Debt
   11




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##### Table of Contents



Note 6: Commitments and Contingencies
 Lease Commitments
 Contingencies
 Self Insurance
  12




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##### Table of Contents



Note 7: Income Taxes
 Effective Tax Rate
  Accounting for Uncertainty in Income Taxes
 (in thousands)Balance at January 1, 2009
    
    $
    2,954Additions for tax positions related to current year
    
    $
    262Additions for tax positions of prior years
    
    $
    696Reductions for tax position of prior years
    
    $
    (931
    )Balance at December 31, 2009
    
    $
    2,981
   Note 8: Derivative Instruments
   13




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Note 9: Geographic Information
  Nine months ended September 30, 2010
 TheAmericas
    
    
    Australia
    
    
    New Zealand
    
    
    India
    
    
    Singapore
    
    
    TotalRevenue
    
    $
    73,161
    
    
    $
    19,932
    
    
    $
    1,048
    
    
    $
    
    
    
    $
    2,950
    
    
    $
    97,091Fixed assets
    
    $
    3,982
    
    
    $
    808
    
    
    $
    43
    
    
    $
    2,946
    
    
    $
    212
    
    
    $
    7,991Goodwill and intangible assets
    
    $
    164,303
    
    
    $
    3,832
    
    
    $
    
    
    
    $
    
    
    
    $
    63,964
    
    
    $
    232,099
 Nine months ended September 30, 2009
 TheAmericas
    
    
    Australia
    
    
    New Zealand
    
    
    India
    
    
    Singapore
    
    
    TotalRevenue
    
    $
    48,925
    
    
    $
    15,262
    
    
    $
    851
    
    
    $
    
    
    
    $
    1,343
    
    
    $
    66,381Fixed assets
    
    $
    2,500
    
    
    $
    910
    
    
    $
    41
    
    
    $
    1,646
    
    
    $
    45
    
    
    $
    5,142Goodwill and intangible assets
    
    $
    75,006
    
    
    $
    56,345
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    131,351
  14




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Note 10: Subsequent Events thru November 9, 2010
 Conversions of Portions of Outstanding Debt
    15




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Item 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 As used herein, the terms Ebix, the Company, we, our and us refer to Ebix, Inc., a
Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is
clear that the terms mean only Ebix, Inc.
 Safe Harbor for Forward-Looking Statements
   
    
    Regarding Notes 4 and 5 of the Condensed Notes to the Condensed Consolidated Financial
Statements, and our future liquidity needs discussed under Liquidity and Financial
Condition, as pertaining to our ability to generate cash from operating activities and any
declines in our credit ratings or financial condition which could restrict our access to
the capital markets or materially increase our financing costs;
 
    
    With respect to Note 6 of the Condensed Notes to the Condensed Consolidated Financial
Statements, Commitments and Contingencies, and Contractual Obligations and Commercial
Commitments in MD&A, as regarding changes in the market value of our assets or the
ultimate actual cost of our commitments and contingencies;
 
    
    With respect Note 3 of the Condensed Notes to the Condensed Consolidated Financial
Statements as pertaining to the business acquisitions we have made and our ability to
efficiently and effectively integrate acquired business operations, and our ability to
accurately estimate the fair value of tangible and intangible assets; and,
    
    With respect this Management Discussion & Analysis of Financial Condition and Results
of Operation and the analysis of the three and nine month revenue trends including the
actual realized level of demand for our products during the immediately foreseeable future.
  16




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www.ebix.com www.sec.gov
  Company Overview
    Offices and Geographic Information
   17




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Results of Operations  Three-Months Ended September 30, 2010 and 2009
 Operating Revenue
   For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September  30,(dollar amounts in thousands)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Carrier Systems
    
    $
    2,228
    
    
    $
    2,587
    
    
    $
    6,718
    
    
    $
    8,112Exchanges
    
    
    23,505
    
    
    
    14,151
    
    
    
    69,125
    
    
    
    39,346BPO
    
    
    4,096
    
    
    
    3,617
    
    
    
    11,574
    
    
    
    10,692Broker Systems
    
    
    3,452
    
    
    
    2,937
    
    
    
    9,674
    
    
    
    8,231Totals
    
    $
    33,281
    
    
    $
    23,292
    
    
    $
    97,091
    
    
    $
    66,381
  Cost of Services Provided
  Product Development expenses
  Sales and Marketing Expenses
   18




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General and Administrative Expenses
  Amortization and Depreciation Expenses
  Other Non-Operating Income
  Income Taxes
  Results of Operations  Nine-Month Periods Ended September 30, 2010 and 2009
 Operating Revenue
  Cost of Services Provided
  Product Development Expenses
   19




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Sales and Marketing Expenses
  General and Administrative Expenses
  Amortization and Depreciation Expenses
  Other Non-Operating Income
  Income Taxes
  Dividends, Liquidity and Capital Resources
   20




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Operating Activities
    21




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Investing Activities
   Financing Activities
   Commercial Bank Financing Facility
     22




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Convertible Debt
    Off-Balance Sheet Arrangements
  Contractual Obligations and Commercial Commitments
  Payment Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 years(in thousands)Revolving line of credit
    
    $
    21,000
    
    
    $
    
    
    
    $
    21,000
    
    
    $
    
    
    
    $
    Convertible debt (1)
    
    $
    15,500
    
    
    $
    15,500
    
    
    $
    
    
    
    $
    
    
    
    $
    Long-term debt
    
    $
    6,250
    
    
    $
    5,000
    
    
    $
    1,250
    
    
    $
    
    
    
    $
    Operating leases
    
    $
    8,817
    
    
    $
    2,970
    
    
    $
    4,078
    
    
    $
    1,763
    
    
    $
    6Capital leases
    
    $
    636
    
    
    $
    392
    
    
    $
    210
    
    
    $
    34
    
    
    $
    Total
    
    $
    52,203
    
    
    $
    23,862
    
    
    $
    26,538
    
    
    $
    1,797
    
    
    $
    6
 (1)
    
    In August 2009 the Company issued three convertible promissory notes raising a total of
$25.0 million. The notes are payable in full at their maturity date in August 2011. In
accordance with the terms of the notes upon a conversion election by the holder the Company
must satisfy the related principal balance in cash and may satisfy the conversion spread (that
being the excess of the conversion value over the related original principal component) in
either cash or stock at option of the Company. Therefore since these notes are effectively
callable, the Company has classified them as a current liability in the accompanying Condensed
Consolidated Balance Sheet. The total remaining amount of convertible
debt was $5.0 million as
of November 9, 2010, consisting of $5.0 million with the Rennes Foundation.  23




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Recent Accounting Pronouncements
  Application of Critical Accounting Policies
  Revenue Recognition
     24




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Allowance for Doubtful Accounts Receivable
  Valuation of Goodwill
   Income Taxes
   
 Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   25




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26




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Item 4: CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures:
 Internal Control over Financial Reporting:
 
 Part II  OTHER INFORMATION
 
 Item 1: LEGAL PROCEEDINGS
  
 Item 1A: RISK FACTORS
   Because the market price of Ebix common stock will fluctuate, ADAM shareholders cannot be sure of
the market value of the Ebix common stock that they will receive.
    27




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The exchange ratio is subject to change, and the exact exchange ratio is not determinable at this
time.
  
    
    its bank debt;
    
    any expenses of its financial advisor in excess of $650,000; or
    
    ADAMs legal expenses related to the preparation of this Proxy Statement/Prospectus.
   The opinion obtained by ADAM from its financial advisor does not and will not reflect subsequent
changes.
  The merger may fail to qualify as a reorganization for federal income tax purposes, resulting in
your recognition of taxable gain or loss in respect of all of your ADAM common stock.
  Uncertainty about the merger and diversion of management could harm Ebix and ADAM, whether or not
the merger is completed.
   28




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Failure to complete the merger could adversely affect Ebixs and ADAMs stock prices and their
future business and financial results.
  Any delay in completion of the merger may significantly reduce the benefits expected to be obtained
from the merger.
  The anticipated benefits of the merger, including anticipated costs savings, may not be realized
fully or at all or may take longer to realize than expected.
   The combined company will incur significant transaction and merger-related costs in connection with
the merger.
   29




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The ability to complete the merger is subject to the receipt of consents and approvals from
government entities, which may impose conditions that could have an adverse effect on Ebix or ADAM
or could cause either party to abandon the merger.
  Because ADAMs directors and executive officers have interests in seeing the merger completed that
are different than those of ADAMs other shareholders, these persons may have conflicts of interest
in recommending that ADAM shareholders vote to adopt and approve the merger agreement.
  ADAM shareholders percentage of ownership of Ebix will be much smaller than their percentage
ownership of ADAM.
  The merger agreement contains provisions that could discourage a potential alternative acquirer
that might be willing to pay more to acquire ADAM.
    30




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Resales of shares of Ebix common stock following the merger, additional obligations to issue shares
of Ebix common stock, and repurchases of common stock by Ebix may cause the market price of Ebix
common stock to fluctuate.
   The trading price of shares of Ebix common stock after the merger may be affected by factors
different from those affecting the price of shares of Ebix common stock or shares of ADAM common
stock before the merger.
  The shares of Ebix common stock to be received by ADAM stockholders as a result of the merger will
have different rights from the shares of ADAM common stock.
   31




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Item 2: REPURCHASES OF EQUITY SECURITIES
  Maximum Number (orTotal Number of Shares
    
    
    
    
    
    
    Approximate Dollar Value) ofPurchased as Part of
    
    
    
    
    
    
    Shares that May Yet BePublicly-Announced
    
    
    Average Price Paid
    
    
    Purchased Under the Plans orPeriod
    
    Plans or Programs
    
    
    Per Share (1)
    
    
    Programs  (2)As of December 31, 2009
    
    
    291,357
    
    
    $
    6.66
    
    
    $
    13,059,000January 1, 2010 to March 31, 2010
    
    
    69,070
    
    
    $
    14.50
    
    
    $
    12,057,000April 1, 2010 to June 30, 2010
    
    
    272,500
    
    
    $
    14.67
    
    
    $
    8,059,000July 1, 2010 to July 31, 2010
    
    
    173,908
    
    
    $
    15.79
    
    
    $
    5,313,000August 1, 2010 to August 31, 2010
    
    
    154,500
    
    
    $
    18.77
    
    
    $
    2,409,000September 1, 2010 to September 30, 2010
    
    
    
    
    
    $
    N/A
    
    
    $
    2,409,000Total
    
    
    961,335
    
    
    
    
    
    
    $
    2,409,000
 (1)
    
    Average price paid per share for shares purchased as part of our publicly-announced plan
(includes brokerage commissions).(2)
    
    Effective June 1, 2010 the Companys Board of Directors unanimously approved an increase in
the size of the Companys authorized share repurchase plan from $5.0 million to $15.0 million.
No share repurchases have been made since August 29, 2010. 
 Item 3: DEFAULTS UPON SENIOR SECURITIES
  
 Item 6: EXHIBITS
   32




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Ebix, Inc.Date: November 9, 2010
    By:
    /s/ Robin RainaRobin RainaChief Executive Officer(Principal Executive Officer)Date: November 9, 2010
    By:
    /s/ Robert F. KerrisRobert F. KerrisChief Financial Officer(Principal Financial and Accounting Officer)  33




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EXHIBIT INDEX
 Exhibits2.1
    
    
    Stock Purchase Agreement dated February 23, 2004 by and
among the Company and the shareholders of LifeLink
Corporation (incorporated herein by reference to Exhibit 2.1
to the Companys Current Report of Form 8-K dated February
23, 2004 (the February 2004 8-K)) and incorporated herein
by reference.2.2
    
    
    Secured Promissory Note, dated February 23, 2004, issued by
the Company (incorporated herein by reference to Exhibit 2.2
of the February 2004 8-K) and incorporated herein by
reference.2.3
    
    
    Purchase Agreement, dated June 28, 2004, by and between
Heart Consulting Pty Ltd. And Ebix Australia Pty Ltd.
(incorporated by reference to Exhibit 2.1 to the Companys
Current Report of Form 8-K dated July 14, 2004 (the July
14, 2004 8-K)) and incorporated herein by reference.2.4
    
    
    Agreement, dated July 1, 2004, by and between Heart
Consulting Pty Ltd. and Ebix, Inc. (incorporated by
reference to Exhibit 2.2 to the Companys Current Report of
Form 8-K dated July 14, 2004 (the July 14, 2004 8-K)) and
incorporated herein by reference.2.5
    
    
    Agreement Plan of Merger by and among Ebix, Finetre and
Steven F. Piaker, as shareholders Representative dated
September 22, 2006 (incorporated by reference to Exhibit 2.1
to the Companys Current Report on 8-K/A dated October 2,
2006) and incorporated herein by reference.2.6
    
    
    Asset Purchase Agreement dated May 9, 2006, by and among
Ebix, Inc., Infinity Systems Consulting, Inc. and the
Shareholders of Infinity Systems Consulting, Inc.
(incorporated here by reference to Exhibit 2.1 to the
Companys Current Report on Form 8-K/A dated May 9, 2006)
and incorporated herein by reference.2.7
    
    
    Agreement and Plan of Merger dated October 31, 2007 by and
among Ebix, Inc., Jenquest, Inc. IDS Acquisition Sub. and
Robert M. Ward as Shareholder Representative (incorporated
here by reference to Exhibit 2.1 to the Companys Current
Report on Form 8-K/A dated November 7, 2007) and
incorporated herein by reference.2.8
    
    
    Stock Purchase Agreement by and among Ebix, Inc.,
Acclamation Systems, Inc., and Joseph Ott (incorporated here
by reference to Exhibit 2.1 to the Companys Current Report
on Form 8-K dated August 5, 2008) and incorporated herein by
reference.2.9
    
    
    Stock Purchase Agreement by and amongst Ebix, Inc.,
ConfirmNet Corporation, Ebix Software India Private Limited,
ConfirmNet Acquisition Sub, Inc., and Craig Irving, as
Shareholders Representative (incorporated here by reference
to Exhibit 2.1 to the Companys Current Report on Form 8-K
dated November 12, 2008) and incorporated herein by
reference.2.10
    
    
    Agreement and Plan of Merger, dated September 30, 2009, by
and amongst Ebix, E-Z Data, and Dale Okuno and Dilip
Sontakey, as Sellers (incorporated here by reference to
Exhibit 2.1 to the Companys Current Report on Form 8-K
dated October 6, 2009) and incorporated herein by reference.2.11
    
    
    IP Asset Purchase Agreement, dated September 30, 2009, by
and amongst Ebix Singapore PTE LTD., Ebix, Inc., E-Z Data,
and Dale Okuno and Dilip Sontakey, as Shareholders dated
September 30, 2009 (incorporated here by reference to
Exhibit 2.2 to the Companys Current Report on Form 8-K
dated October 6, 2009) and incorporated herein by reference.10.45
    
    
    Agreement and Plan of Merger, dated August 29, 2010, by and
among Ebix Inc., A.D.A.M., Inc., and Eden Acquisition Sub,
Inc. (incorporated here by reference to Exhibit 2.1 to the
Companys Current Report on Form 8-K dated August 31, 2010)
and incorporated herein by reference.3.1
    
    
    Certificate of Incorporation, as amended, of Ebix, Inc.
(filed as Exhibit 3.1 to the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2009) and
incorporated herein by reference.3.2
    
    
    Bylaws of the Company (filed as Exhibit 3.2 to the Companys
Annual Report on Form 10-K for the fiscal year ended
December 31, 2000) and incorporated herein by reference.31.1
    *
    
    Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).31.2
    *
    
    Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).32.1
    *
    
    Certification of Chief Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2
    *
    
    Certification of Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Filed herewith  34