##### 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 June 30, 2008
 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 
organization)
    
    (I.R.S. Employer Identification No.)5 CONCOURSE PARKWAY, SUITE 3200ATLANTA, GEORGIA
    
    30328(Address of principal executive offices)
    
    (Zip Code)
 678-281-2020
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller
reporting company)
 o þ




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##### 



Ebix, Inc. and Subsidiaries
   INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsConsolidated Statements of Income for the Three and Six Months ended June 30, 2008 and
2007 (unaudited)
    
    
    2Consolidated Balance Sheets at June 30, 2008 (unaudited) and December 31, 2007
    
    
    3Consolidated Statement of
Stockholders Equity and Comprehensive Income for the Six
Months ended June 30, 2008 (unaudited)
    
    
    4Consolidated
Statements of Cash Flows for the Six Months ended June 30, 2008
and 2007 (unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    29PART II  OTHER INFORMATIONItem 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 5. Other Information
    
    
    31Item 6. Exhibits
    
    
    31SIGNATURES
    
    
    32INDEX to EXHIBITS
    
    
    33Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1  CONSOLIDATED FINANCIAL STATEMENTS
 Ebix, Inc. and Subsidiaries
 
 Consolidated Statements of Income
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Operating Revenue
    
    $
    17,803
    
    
    $
    9,816
    
    
    $
    34,442
    
    
    $
    18,834Operating expenses:Cost of services provided
    
    
    3,225
    
    
    
    1,718
    
    
    
    6,161
    
    
    
    3,284Product development
    
    
    2,162
    
    
    
    2,198
    
    
    
    4,240
    
    
    
    4,048Sales and marketing
    
    
    818
    
    
    
    1,078
    
    
    
    1,665
    
    
    
    2,030General and administrative
    
    
    3,856
    
    
    
    1,899
    
    
    
    7,672
    
    
    
    3,686Amortization and depreciation
    
    
    837
    
    
    
    625
    
    
    
    1,656
    
    
    
    1,250Total operating expenses
    
    
    10,898
    
    
    
    7,518
    
    
    
    21,394
    
    
    
    14,298Operating income
    
    
    6,905
    
    
    
    2,298
    
    
    
    13,048
    
    
    
    4,536Interest income
    
    
    140
    
    
    
    136
    
    
    
    262
    
    
    
    207Interest expense
    
    
    (394
    )
    
    
    (142
    )
    
    
    (736
    )
    
    
    (370
    )Foreign exchange gain (loss)
    
    
    100
    
    
    
    122
    
    
    
    159
    
    
    
    127Income before income taxes
    
    
    6,751
    
    
    
    2,414
    
    
    
    12,733
    
    
    
    4,500Income tax (expense)/benefit
    
    
    (415
    )
    
    
    99
    
    
    
    (727
    )
    
    
    (25
    )Net income
    
    $
    6,336
    
    
    $
    2,513
    
    
    $
    12,006
    
    
    $
    4,475Basic earnings per common share
    
    $
    1.96
    
    
    $
    0.85
    
    
    $
    3.62
    
    
    $
    1.54Diluted earnings per common share
    
    $
    1.62
    
    
    $
    0.75
    
    
    $
    3.01
    
    
    $
    1.36Basic weighted average shares outstanding
    
    
    3,229
    
    
    
    2,973
    
    
    
    3,318
    
    
    
    2,911Diluted weighted average shares outstanding
    
    
    3,992
    
    
    
    3,366
    
    
    
    4,073
    
    
    
    3,291
   2




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,074
    
    
    $
    49,466Accounts
receivable, less allowance of $325 and $146, respectively
    
    
    13,198
    
    
    
    8,809Other current assets
    
    
    1,113
    
    
    
    1,130Total current assets
    
    
    26,385
    
    
    
    59,405Property and equipment, net
    
    
    3,427
    
    
    
    3,356Goodwill
    
    
    84,731
    
    
    
    36,408Intangible assets, net
    
    
    9,988
    
    
    
    7,318Other assets
    
    
    2,068
    
    
    
    2,023Total assets
    
    $
    126,599
    
    
    $
    108,510LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    
    3,430
    
    
    
    2,231Accrued payroll and related benefits
    
    
    2,629
    
    
    
    1,517Short term debt
    
    
    24,945
    
    
    
    15,650Current portion of long term debt and capital lease obligations
    
    
    502
    
    
    
    510Deferred revenue
    
    
    6,042
    
    
    
    5,645Other current liabilities
    
    
    207
    
    
    
    149Total current liabilities
    
    
    37,755
    
    
    
    25,702Convertible debt
    
    
    20,000
    
    
    
    20,000Long term debt and capital lease obligation, less current portion
    
    
    4
    
    
    
    486Other liabilities
    
    
    3,140
    
    
    
    1,477Deferred rent
    
    
    656
    
    
    
    719Total liabilities
    
    
    61,555
    
    
    
    48,384Commitments and Contingencies, Note 9Stockholders equity:Convertible Series D Preferred stock, $.10 par value, 500,000
shares authorized, no shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.10 par value, 10,000,000 shares authorized,
3,182,261 issued and 3,173,371 outstanding at June 30, 2008 and
3,406,234 issued and 3,397,344 outstanding at December 31, 2007
    
    
    317
    
    
    
    340Additional paid-in capital
    
    
    104,147
    
    
    
    114,768Treasury stock (8,890 shares repurchased as of June 30, 2008 and
December 31, 2007 respectively)
    
    
    (149
    )
    
    
    (149
    )Accumulated deficit
    
    
    (45,507
    )
    
    
    (57,513
    )Accumulated other comprehensive income
    
    
    6,236
    
    
    
    2,680Total stockholders equity
    
    
    65,044
    
    
    
    60,126Total liabilities and stockholders equity
    
    $
    126,599
    
    
    $
    108,510
   3




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##### Table of Contents



Ebix, Inc. and Subsidiaries
Consolidated Statement of Stockholders Equity and Comprehensive Income
 (Unaudited)
 AccumulatedCommon Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    OtherTreasury
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    ComprehensiveIssued
    
    
    
    
    
    
    Stock
    
    
    Treasury
    
    
    Paid-in
    
    
    Deferred
    
    
    Accumulated
    
    
    (Loss)
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Stock
    
    
    Capital
    
    
    Compensation
    
    
    Deficit
    
    
    Income
    
    
    Total
    
    
    Income(In thousands, except share amounts)Balance, December 31, 2007
    
    
    3,406,234
    
    
    $
    337
    
    
    
    (8,890
    )
    
    $
    (149
    )
    
    $
    114,771
    
    
    $
    
    
    
    $
    (57,513
    )
    
    $
    2,680
    
    
    $
    60,126Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,006
    
    
    
    
    
    
    
    12,006
    
    
    $
    12,006Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,556
    
    
    
    3,556
    
    
    
    3,556Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    15,562Proceeds from issuance of common
stock (net of issuance costs)
    
    
    170,000
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    12,502
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,519Repurchase of common stock
    
    
    (400,000
    )
    
    
    (40
    )
    
    
    
    
    
    
    
    
    
    
    (23,960
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,000
    )Exercise of stock options
    
    
    16,908
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    516
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    519Restricted stock
    
    
    21,513
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254Unvested portion of total
restricted stock
    
    
    (32,394
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation and
amortization related to options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64Balance, June 30, 2008
    
    
    3,182,261
    
    
    $
    317
    
    
    
    (8,890
    )
    
    $
    (149
    )
    
    $
    104,147
    
    
    $
    
    
    
    $
    (45,507
    )
    
    $
    6,236
    
    
    $
    65,044
   4




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 Six Months Ended June 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    12,006
    
    
    $
    4,475Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    1,651
    
    
    
    1,250Stock-based compensation
    
    
    64
    
    
    
    114Restricted stock compensation
    
    
    254
    
    
    
    58Provision for doubtful accounts
    
    
    179
    
    
    
    30Changes in operating assets and liabilities:
    
    
    
    
    
    
    Accounts receivable
    
    
    (2,738
    )
    
    
    (1761
    )Other assets
    
    
    44
    
    
    
    (247
    )Accounts payable and accrued expenses
    
    
    (1,283
    )
    
    
    (378
    )Accrued payroll and related benefits
    
    
    216
    
    
    
    (599
    )Deferred revenue
    
    
    (368
    )
    
    
    766Deferred taxes
    
    
    653
    
    
    
    Deferred
rent and other liabilities
    
    
    (20
    )
    
    
    98Net cash provided by operating activities
    
    
    10,659
    
    
    
    3,806Cash flows from investing activities:Investment in Telstra eBusiness Services, net of cash acquired
    
    
    (42,968
    )
    
    
    Investment in Finetre, net of cash acquired
    
    
    
    
    
    
    (15
    )Investment in Periculum, net of cash acquired
    
    
    (1,067
    )
    
    
    Deferred Rent
    
    
    
    
    
    
    (5
    )Capital expenditures
    
    
    (382
    )
    
    
    (315
    )Net cash used in investing activities
    
    
    (44,417
    )
    
    
    (335
    )Cash flows from financing activities:Proceeds from (payments on) line of credit
    
    
    9,295
    
    
    
    (10,000
    )Proceeds from the issuance of common stock, net of issuance costs
    
    
    12,518
    
    
    
    13,275Proceeds from the exercise of the stock options
    
    
    514
    
    
    
    37Repurchase of Common Stock
    
    
    (24,000
    )
    
    
    Payments on capital lease obligations
    
    
    (2
    )
    
    
    (2
    )Principal payments of debt obligations
    
    
    (490
    )
    
    
    (423
    )Net cash provided/(used) in financing activities
    
    
    (2,165
    )
    
    
    2,887Effect of foreign exchange rates on cash
    
    
    (1,469
    )
    
    
    269Net change in cash and cash equivalents
    
    
    (37,392
    )
    
    
    6,627Cash and cash equivalents at the beginning of the period
    
    
    49,466
    
    
    
    5,013Cash and cash equivalents at the end of the period
    
    $
    12,074
    
    
    $
    11,640Supplemental disclosures of cash flow information:Interest paid
    
    $
    459
    
    
    $
    320Income taxes paid
    
    $
    327
    
    
    $
    431
 Supplemental Disclosure of noncash investing activities
 Telstra eBusiness Services
 Periculum Services Group 
   5




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 Note 1. Description of Business and Summary of Significant Accounting Policies
 Description of Business
 Summary of Significant Accounting Policies
 Basis of Presentation
 
  Use of Estimates
 Revenue
Recognition and Deferred Revenue
   6




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 1. Description of Business and Summary of Significant Accounting Policies (Continued)
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,(dollar amounts in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Carrier Systems
    
    $
    2,843
    
    
    $
    2,134
    
    
    $
    5,133
    
    
    $
    3,925Exchanges
    
    $
    9,380
    
    
    $
    4,583
    
    
    $
    18,731
    
    
    $
    8,989BPO
    
    $
    1,817
    
    
    $
    25
    
    
    $
    3,514
    
    
    $
    60Broker Systems
    
    $
    3,425
    
    
    $
    2,609
    
    
    $
    6,315
    
    
    $
    4,906Legacy Products
    
    $
    338
    
    
    $
    465
    
    
    $
    749
    
    
    $
    954Totals
    
    $
    17,803
    
    
    $
    9,816
    
    
    $
    34,442
    
    
    $
    18,834
  Software Revenue Recognition
(SOP 97-2) Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions, (SOP 98-9)
     7




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 1. Description of Business and Summary of Significant Accounting Policies (Continued)
   Allowance for doubtful Accounts Receivable
 Segment Reporting
 Cash and Cash Equivalents
 Fair Value of Financial Instruments
 Goodwill and Other Acquired Intangible Assets
  8




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 1. Description of Business and Summary of Significant Accounting Policies (Continued)
  Goodwill (in thousands)
 June 30,
    
    
    December 31,2008
    
    
    2007Beginning balance
    
    $
    36,408
    
    
    $
    23,118Additions
    
    
    43,631
    
    
    
    12,530Foreign currency translation adjustments
    
    
    4,692
    
    
    
    760Ending balance
    
    $
    84,731
    
    
    $
    36,408
 Intangible Assets
consist of the following (in thousands):
 June 30,
    
    
    December 31,2008
    
    
    2007Intangible assets:Customer relationships
    
    $
    10,483
    
    
    $
    7,170Developed technology
    
    
    4,730
    
    
    
    4,103Trademarks
    
    
    728
    
    
    
    706Backlog
    
    
    140
    
    
    
    140Total intangibles
    
    
    16,081
    
    
    
    12,119Accumulated amortization:
    
    
    (6,093
    )
    
    
    (4,801
    )Intangibles net
    
    $
    9,988
    
    
    $
    7,318
 Intangible Assets
 LifeCategory
    
    (yrs)Customer relationships
    
    
    4-10Developed technology
    
    
    5-7Trademarks
    
    
    5-10Backlog
    
    
    1-2
 Income
Taxes
  9




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##### Table of Contents



Ebix, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Note 1. Description of Business and Summary of Significant Accounting Policies (Continued)
  Foreign Currency Translation
 Recent Accounting Pronouncements Business Combinations
 The Fair Value Option for Financial
Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115
 Note 2. Share Based Compensation
 Non-employee Stock Compensation
  10




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 2. Share Based Compensation (Continued)
 Stock Options
 WeightedAverageWeighted
    
    
    Remaining
    
    
    AggregateWithin Plans
    
    
    
    
    
    
    Average
    
    
    Contractual
    
    
    IntrinsicNonstatutory
    
    
    Incentive
    
    
    Outside
    
    
    Exercise
    
    
    Term
    
    
    Value (*)Options
    
    
    Options
    
    
    Plan
    
    
    Price
    
    
    (Years)
    
    
    (thousands)Outstanding at December 31,
2007
    
    
    479,867
    
    
    
    47,781
    
    
    
    2,500
    
    
    $
    11.92
    
    
    
    4.46
    
    
    $
    32,480Granted
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Exercised
    
    
    (10,191
    )
    
    
    
    
    
    
    
    
    
    $
    26.58
    
    
    
    
    
    
    
    Canceled
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    484,676
    
    
    
    47,781
    
    
    
    2,500
    
    
    $
    11.64
    
    
    
    4.29
    
    
    $
    32,362Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Exercised
    
    
    (6,717
    )
    
    
    
    
    
    
    
    
    
    $
    26.58
    
    
    
    
    
    
    
    Canceled
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Outstanding at June 30, 2008
    
    
    477,959
    
    
    
    47,781
    
    
    
    2,500
    
    
    $
    11.31
    
    
    
    4.06
    
    
    $
    35,078Exercisable at June 30, 2008
    
    
    464,507
    
    
    
    33,700
    
    
    
    1,562
    
    
    $
    10.07
    
    
    
    4.06
    
    
    $
    33,811
 (*)
    
    The aggregate intrinsic value for stock options outstanding and exercisable is defined as the
difference between the market value of the Companys stock as of the end of the period and the
exercise price of the stock options. Restricted Stock
     11




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 2. Share Based Compensation (Continued)
    Note 3. Earnings per Share
  Note 4. Comprehensive Income
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    6,336
    
    
    $
    2,513
    
    
    $
    12,006
    
    
    $
    4,475Other comprehensive income (loss)foreign
currency translation adjustment
    
    
    1,684
    
    
    
    625
    
    
    
    3,556
    
    
    
    832Comprehensive income
    
    $
    8,020
    
    
    $
    3,138
    
    
    $
    15,562
    
    
    $
    5,307
  12




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 5. Related Party Transactions
  Note 6. Business Combinations
 IDS
  (In thousands)Current assets
    
    $
    432Property and equipment
    
    
    139Intangible assets
    
    
    1,283Goodwill
    
    
    9,646Total assets acquired
    
    
    11,500Less: liabilities assumed
    
    
    (180
    )Net assets acquired
    
    $
    11,320
  Estimated Amortization Expenses:
 For the year ended December 31, 2008
    
    $
    142,000For the year ended December 31, 2009
    
    $
    142,000For the year ended December 31, 2010
    
    $
    142,000For the year ended December 31, 2011
    
    $
    142,000For the year ended December 31, 2012
    
    $
    138,000For the years ending after December 31, 2012
    
    $
    553,000
  13




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 6. Business Combinations (Continued)
 Telstra eBusiness Services
  (In thousands)Current assets
    
    $
    3,094Property and equipment
    
    
    170Intangible assets
    
    
    3,367Goodwill
    
    
    41,314Total assets acquired
    
    
    47,945Less: liabilities assumed
    
    
    (3,997
    )Net assets acquired
    
    $
    43,948
  Estimated Amortization Expenses:
 For the year ended December 31, 2008
    
    $
    403,260For the year ended December 31, 2009
    
    $
    403,260For the year ended December 31, 2010
    
    $
    403,260For the year ended December 31, 2011
    
    $
    403,260For the year ended December 31, 2012
    
    $
    403,260For the years ending after December 31, 2012
    
    $
    1,351,626
  14




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 6. Business Combinations (Continued)
 Periculum Services Group
 (In thousands)Current assets
    
    $
    197Property and equipment
    
    
    Intangible assets
    
    
    140Goodwill
    
    
    890Total assets acquired
    
    
    1,227Less: liabilities assumed
    
    
    (167
    )Net assets acquired
    
    $
    1,060
  Estimated Amortization Expenses:
 For the year ended December 31, 2008
    
    $
    10,333For the year ended December 31, 2009
    
    $
    15,500For the year ended December 31, 2010
    
    $
    15,500For the year ended December 31, 2011
    
    $
    15,500For the year ended December 31, 2012
    
    $
    15,500For the years ending after December 31, 2012
    
    $
    67,667
  15




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 7. Pro Forma Financial Information (related to recent acquisitions)
  Six Months Ended June 30, 2008
    
    
    Six Months Ended June 30, 2007As Reported
    
    
    Pro Forma
    
    
    As Reported
    
    
    Pro FormaRevenue
    
    $
    34,442
    
    
    $
    34,754
    
    
    $
    18,834
    
    
    $
    29,429Net income
    
    $
    12,006
    
    
    $
    11,880
    
    
    $
    4,475
    
    
    $
    5,728Basic earnings per share
    
    $
    3.62
    
    
    $
    3.58
    
    
    $
    1.54
    
    
    $
    1.97Diluted earnings per share
    
    $
    3.01
    
    
    $
    2.99
    
    
    $
    1.36
    
    
    $
    1.74
 Note 8. Line of Credit and Letters of Credit
 Bank Line of Credit
  Letters of Credit
 Note 9. Commitments and Contingencies
  Note 10. Convertible Debt
   16




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 11. Long-term Debt
  Note 12. Stock Repurchase
  Note 13. Sale of Unregistered Common Stock
      17




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 13. Sale of Unregistered Common Stock (continued)
    Note 14. Repurchase of Common Stock from an Affiliate
  Note 15. Income Taxes
     18




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 15. Income Taxes (Continued)
  Effective Tax Rate
 Note 16. Geographic Information
  Six months ended June 30, 2008
 Australia/(dollar amounts in thousands)
    
    Domestic
    
    
    New Zealand
    
    
    India
    
    
    Singapore
    
    
    Canada
    
    
    TotalRevenue
    
    $
    20,247
    
    
    $
    13,204
    
    
    $
    36
    
    
    $
    955
    
    
    $
    
    
    
    $
    34,442Fixed assets
    
    $
    2,111
    
    
    $
    462
    
    
    $
    816
    
    
    $
    38
    
    
    $
    
    
    
    $
    3,427Goodwill
    
    $
    29,983
    
    
    $
    54,748
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    84,731Intangible assets
    
    $
    6,362
    
    
    $
    3,626
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    9,988Employees
    
    
    235
    
    
    
    76
    
    
    
    162
    
    
    
    6
    
    
    
    
    
    
    
    479
 Six months ended June 30, 2007
 Australia/(dollar amounts in thousands)
    
    Domestic
    
    
    New Zealand
    
    
    India
    
    
    Singapore
    
    
    Canada
    
    
    TotalRevenue
    
    $
    13,413
    
    
    $
    4,384
    
    
    $
    30
    
    
    $
    977
    
    
    $
    30
    
    
    $
    18,834Fixed assets
    
    $
    1,102
    
    
    $
    213
    
    
    $
    811
    
    
    $
    43
    
    
    $
    
    
    
    $
    2,169Goodwill
    
    $
    16,542
    
    
    $
    7,122
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    23,664Intangible assets
    
    $
    6,503
    
    
    $
    479
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,982Employees
    
    
    139
    
    
    
    40
    
    
    
    120
    
    
    
    6
    
    
    
    
    
    
    
    305
  19




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##### Table of Contents



Ebix, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 Note 17. Subsequent Events
 Creation of a Direct Financial Obligation
 Completion of business acquisition two-year
  20




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##### Table of Contents



Item 2.

    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Safe Harbor for Forward-Looking Statements under the Securities Litigation Reform Act of 1995
  
    
    Regarding Notes 8, 10, and 13 of the Notes to Consolidated Financial Statements, and
our future liquidity needs discussed under Liquidity and Financial Condition, 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 9 of the Notes to Consolidated Financial Statements,
Commitments and Contingencies, and Contractual Obligations and Commercial
Commitments in MD&A, changes in the market value of our assets or the actual cost of
our commitments or contingencies;
 
    
    Regarding Note 6 of the Notes to Consolidated Financial Statements, estimated future
amortization expense related to definite-lived acquired intangible assets at June 30,
2008, and our ability to accurately estimate the fair value of such assets; and,
 
    
    With respect to revenue trends discussed in the six month in MD&A, the actual level
of demand for our products during the remaining quarters of 2008.
  Company Overview
    21




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##### Table of Contents



For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,(dollar amounts in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Carrier Systems
    
    $
    2,843
    
    
    $
    2,134
    
    
    $
    5,133
    
    
    $
    3,925Exchanges
    
    $
    9,380
    
    
    $
    4,583
    
    
    $
    18,731
    
    
    $
    8,989BPO
    
    $
    1,817
    
    
    $
    25
    
    
    $
    3,514
    
    
    $
    60Broker Systems
    
    $
    3,425
    
    
    $
    2,609
    
    
    $
    6,315
    
    
    $
    4,906Legacy Products
    
    $
    338
    
    
    $
    465
    
    
    $
    749
    
    
    $
    954Totals
    
    $
    17,803
    
    
    $
    9,816
    
    
    $
    34,442
    
    
    $
    18,834
    Offices and Geographic Information
  Key Performance Indicators
   22




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##### Table of Contents



For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,(dollar amounts in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    17,803
    
    
    $
    9,816
    
    
    $
    34,442
    
    
    $
    18,834Revenue growth
    
    
    81.4
    %
    
    
    39.6
    %
    
    
    82.9
    %
    
    
    48.5
    %Operating income
    
    $
    6,905
    
    
    $
    2,298
    
    
    $
    13,048
    
    
    $
    4,536Operating margin
    
    
    38.8
    %
    
    
    23.4
    %
    
    
    37.9
    %
    
    
    24.1
    %Net income
    
    $
    6,336
    
    
    $
    2,513
    
    
    $
    12,006
    
    
    $
    4,475Diluted earnings per share
    
    $
    1.62
    
    
    $
    0.75
    
    
    $
    3.01
    
    
    $
    1.36Cash provided by operating activities
    
    $
    7,043
    
    
    $
    1,780
    
    
    $
    10,659
    
    
    $
    3,806
 Results of OperationsThree Month Period Ended June 30, 2008 and 2007
 Operating Revenue
 Total
revenue
 Services revenue
 Software revenue
 Cost of Services Provided
  Product Development Expenses
   23




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##### Table of Contents



Sales and Marketing Expenses
  General and Administrative Expenses
  Amortization and Depreciation Expenses
  Income Taxes
  Results of OperationsSix-Months Ended June 30, 2008 and 2007
 Operating Revenue
 Total
revenue
 Services revenue
 Software revenue
 Cost of Services Provided
   24




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##### Table of Contents



Product Development expenses
  Sales and Marketing Expenses
  General and Administrative Expenses
  Amortization and Depreciation Expenses
  Income Taxes
  Liquidity and Capital Resources
    25




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##### Table of Contents



Operating Activities
   Investing Activities
   Financing Activities
    Revolving Credit Facility
  Off-Balance Sheet Arrangements
   26




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##### Table of Contents



Contractual Obligations and Commercial Commitments
  Payment Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1 - 3 Years
    
    
    3 - 5 Years
    
    
    5 years(in thousands)Long-term debt (1)
    
    $
    45,445
    
    
    $
    500
    
    
    $
    44,945
    
    
    $
    
    
    
    $
    Operating leases
    
    $
    5,626
    
    
    $
    1,584
    
    
    $
    2,097
    
    
    $
    1,362
    
    
    $
    583Capital leases
    
    $
    8
    
    
    $
    4
    
    
    $
    4
    
    
    $
    
    
    
    $
    Total
    
    $
    51,079
    
    
    $
    2,088
    
    
    $
    47,046
    
    
    $
    1,362
    
    
    $
    583
 
 (1)
    
    Includes interest at an imputed interest rate of 4% for the February 2004 LifeLink
acquisition which represents the effective interest rate at the date of acquisition. Related Party Transactions
  Recent Accounting Pronouncements
  Application of Critical Accounting Policies
  Revenue Recognition and Deferred Revenue
   27




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##### Table of Contents



Software Revenue Recognition
(SOP 97-2) Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions, (SOP 98-9)
    Allowance for doubtful Accounts Receivable
 Income Taxes
  Goodwill and Other Acquired Intangible Assets
  28




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##### Table of Contents



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
 Item 4. CONTROLS AND PROCEDURES
    29




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##### Table of Contents



Part II  OTHER INFORMATION
 
 Item 1A. RISK FACTORS
  
    
    Changes in U.S. and global economic conditions and significant
movements in interest rates;
    
    Changes in market demand for our products and services;
    
    Our ability to successfully develop and market new products and
services, incorporate new technology and adapt to technological change and
customer demand;
    
    Our inability to protect our intellectual property;
    
    Pricing strategies, new product introductions and other pressures
from existing or emerging competitors which could result in a loss of customers
or a rate of increase or decrease in prices for our services different than past
experience;
    
    Changes in laws and regulations governing our business and the
application of existing laws, including international, federal or state
regulations effecting the insurance industry;
    
    Disruptions in our business-critical systems and operations which
could interfere with our ability to deliver products and services to our
customers;
    
    Risks associated with our integration of IDS, Telstra, and
Periculum, and other acquired technologies, businesses and investments;
    
    Significant concentration of the ownership of our common stock
which will limit an investors ability to influence corporate actions; and,
    
    Risks associated with financing including the willingness of credit
institutions to provide financing to us.
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
     30




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##### Table of Contents



Use of Proceeds from the Recent Sale of Unregistered Securities
  
 Item 5. OTHER INFORMATION
   
 Item 6. EXHIBITS
   31




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##### Table of Contents



Ebix, Inc.Date: August 11, 2008
    By:
/s/ Robin RainaRobin RainaChief  Executive Officer(Principal Executive Officer)Date: August 11, 2008
    By:

/s/ Robert F. KerrisRobert F. KerrisSenior Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)  32




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##### Table of Contents



EXHIBIT INDEX
 EXHIBITNO.
    
    DESCRIPTION2.1
    
    
    Share Sale Agreement by and among Ebix, Inc., Ebix Australia (vic) Pty Ltd, and Telstra Services
Solutions Holdings Limited dated December 22, 2007 (incorporated
by reference to Exhibit 2.1 to the Companys Current Report
on Form 8-K filed March 18, 2008 and incorporated herein by
reference)3.1
    
    
    Certificates of Incorporation of the Company, as amended (including Certificates of Designations)
(incorporated by reference to Exhibit 3.1 to the Companys Quarterly Report on Form 10-Q for the
period ended March 31, 2005 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)10.29
    
    
    Share Purchase Agreement made and entered into as of April 2, 2008 by and among Ebix, Inc and
Rennes Foundation (incorporated by reference to Exhibit 10.29 to
the Companys Current Report on Form 8-K filed on
April 14, 2008 and incorporated herein by reference)10.30
    
    
    Share Purchase Agreement made and entered into as of April 7, 2008 by and among Ebix, Inc and
Ashford Capital Management, Inc. (incorporated by reference to
Exhibit 10.30 to
the Companys Current Report on Form 8-K filed on
April 14, 2008 and incorporated herein by reference)10.31
    
    
    Stock Purchase Agreement made and entered into as of April 16, 2008 by and among Ebix, Inc and
Brit Insurance, Holdings, Inc. (incorporated by reference to
Exhibit 10.31 to the Companys Current Report on
Form 8-K filed April 17, 2008 and incorporated herein by
reference)31.1
    
    
    Certification of Chief Executive Officer Pursuant to 13a-14(a) (Section 302 of the Sarbanes-Oxley
Act of 2002).31.2
    
    
    Certification of Chief Financial Officer Pursuant to 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 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  33