JOHNS CREEK, Ga., Feb. 19, 2021 (Globe NEWSWIRE) — Ebix, Inc. (NASDAQ: EBIX), a foremost worldwide provider of On-Desire software and E-commerce products and services to the insurance policy, fiscal, health care and e-understanding industries, these days issued a push launch to emphasize a solid existing company outlook even though speaking about the auditor resignation, the earnings materiality of the difficulties highlighted, and the different related actions currently being taken by the Enterprise.
By letter dated February 15, 2021, RSM US LLP (“RSM”) notified the Audit Committee of the Board of Administrators (the “Audit Committee”) of Ebix, Inc. (the “Company”) of its resignation as the Company’s unbiased registered public accounting business, as the Organization described in its Form 8-K submitted these days.
RSM mentioned in its letter that its resignation was the “outcome of remaining not able, in spite of repeated inquiries, to get ample acceptable audit evidence that would enable it to evaluate the business purpose of sizeable unconventional transactions that occurred in the fourth quarter of 2020.” RSM educated the Corporation that the strange transactions similar to the Company’s present card small business in India. RSM also said in its letter that it experienced identified a content weakness because “management did not structure or put into practice the required procedures and controls in excess of the reward or prepaid card earnings transaction cycle adequate to stop or detect a content misstatement.”
RSM also knowledgeable the Organization that there was a disagreement with regard to the classification of $30 million held in a have faith in account for the profit of the Enterprise. In connection with a pending acquisition, in December 2020 the Organization transferred $30 million to a trust account of its outside the house lawful counsel. There had been no constraints on the Company’s capacity to have the cash returned, and in fact, after RSM opined on the situation of classification of these resources, the Corporation had the funds returned on February 2, 2021. RSM educated the Company that it thought that these money should really be categorized on the harmony sheet under the “Other Recent Asset” line merchandise of the financials, alternatively of currently being categorised as dollars as the Company experienced in the beginning labeled it. There ended up communications with RSM on this challenge after which the Business was prepared to classify the $30 million held in the believe in account at December 31, 2020 as a recent asset. The Business deemed this concern to be an first big difference of opinion based on incomplete information or preliminary information fairly than a “disagreement” pursuant to Item 304(a)(1)(iv).
The Company’s unaudited benefits before any one-time abnormal objects or audit adjustments for the fourth quarter of 2020 involves revenues better than $220 million and running money and running hard cash circulation metrics each individual in excess of $32 million. Of these amounts, the Firm’s unaudited gift card business created in excessive of $130 million of revenues in the fourth quarter, representing sequential profits progress in the reward card company of increased than 95% as opposed to the third quarter of 2020. The corresponding Q4 2020 reward card small business working profits was much less than $1 million.
For the total yr 2020, working cash flow from the gift card enterprise was much less than $1.4 million. The progress in the present card business revenues was driven by the increased use of electronic revenue in India during the Covid-19 pandemic and the renewed press by the Enterprise to improve its payment remedies business enterprise.
The Chair of the Audit Committee reviewed with RSM the explanations for its resignation. Although the Firm does not concur with specific statements produced by RSM in its resignation letter dated 2/15/21, the board has engaged outside counsel who, along with accounting authorities, will aid the Company with regard to these issues.
RSM was engaged by the Audit Committee on December 21, 2018 to provide as the Firm’s unbiased auditor for fiscal 12 months ending December 31, 2019 and was engaged once more on June 12, 2020 to serve as the Firm’s impartial auditor for fiscal 12 months ending December 31, 2020. RSM’s previously issued studies on the Company’s consolidated financial statements and the Company’s inner controls in excess of financial reporting for the fiscal 12 months finished December 31, 2019 did not incorporate an adverse feeling or a disclaimer of feeling nor had been they qualified or modified as to uncertainty, audit scope, or accounting ideas. As of February 15, 2021, RSM had not finished its audit techniques or issued any reviews on the Company’s consolidated fiscal statements and internal controls more than financial reporting for the fiscal year finished December 31, 2020.
The Company intends to go as speedily as feasible to swap RSM and to complete its 2020 financial audit. The Business believes that the accounting for its present card business enterprise is consistent with GAAP demands. The Business will talk with its community shareholders as correct.
With a “Phygital” approach that brings together 320,000 actual physical distribution outlets in quite a few Southeast Asian Nations (“ASEAN”) international locations, to an Omni-channel on the net digital platform, the Company’s EbixCash Money exchange portfolio encompasses leadership in parts of domestic & global funds remittance, international trade (Forex), vacation, pre-paid & present cards, utility payments, lending, wealth administration and so on. in India and other markets. EbixCash’s Currency trading operations have emerged as a chief in India’s airport Foreign Trade organization with functions in 32 global airports which include Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata, conducting above $4.8 billion in gross transaction benefit for each yr. EbixCash’s inward remittance enterprise in India conducts approx. $6.5 billion gross annual remittance company, confirming its undisputed management position in India. EbixCash, by means of its journey portfolio of By means of and Mercury, is also one particular of Southeast Asia’s leading journey exchanges with about 2,200+ personnel, 212,450+ agent community, 25 branches and around 9,800 corporate purchasers processing an believed $2.5 billion in gross goods value for each year. EbixCash’s Financial Technological know-how options are currently deployed across prestigious financial institutions and Banks in 44 countries. For much more details, visit the Company’s web site at www.ebixcash.com
With 50+ workplaces across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to deliver On-Need software program and E-commerce expert services to the insurance policy, monetary, healthcare and e-discovering industries. In the Insurance sector, Ebix’s key aim is to create and deploy a wide wide range of insurance coverage and reinsurance exchanges on an on-desire basis, although also, furnishing Application-as-a-Assistance (“SaaS”) organization remedies in the area of CRM, front-finish & back-finish devices, outsourced administration and chance compliance products and services, all-around the entire world. For additional information and facts, stop by the Company’s web site at www.ebix.com
Ahead Hunting STATEMENTS
This press release has specified statements that are “forward-looking” statements inside of the meaning of the federal securities rules, which include Area 27A of the Securities Act of 1933, as amended, and Segment 21E of the Securities Exchange Act of 1934, as amended. These forward-hunting statements are dependent upon existing expectations and include all statements that are not historic statements of fact and these about the intent, belief or anticipations, such as, without the need of limitation, statements that are accompanied by words these kinds of as “will,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “seeks,” “may” or other similar text, phrases or expressions and variants or negatives of these terms. Audience of this press launch should really comprehend that these statements are not assures of overall performance or success. Several risks and uncertainties could affect actual results and bring about them to range materially from the expectations contained in the ahead-hunting statements. Actual success could vary materially from those people contemplated by the forward-searching statements as a result of particular factors, which include but not minimal to, these mentioned in our Once-a-year Report on Kind 10-K and subsequent studies filed with the SEC, as effectively as: the likely impacts of RSM’s resignation the ability to, as properly as the capacity to timely, interact a new unbiased registered community accounting firm the threat of litigation or regulatory action arising from these matters, from the failure to timely file the Annual Report on Form 10-K for the fiscal calendar year ended December 31, 2020 (the “Annual Report”) or from the resignation of the RSM the timing of the overview by, and the conclusions of, the Company’s new independent auditor concerning these issues and its impact on the monetary statements achievable default by the Enterprise under its credit score facility the capability of the Company to remediate any content weaknesses in inside handle more than fiscal reporting likely reputational destruction that the Enterprise may perhaps endure as a end result of these matters or the resignation of RSM the impression of these issues and the resignation of RSM on the worth of the Company’s inventory and the danger that the filing of the Annual Report will consider for a longer time than predicted. Audience are cautioned not to spot undue reliance on these ahead-seeking statements. Any forward-searching assertion made by us speaks only as of the day of this report. Except required by regulation, the Organization does not undertake to launch publicly any revisions to these forward-hunting statements to reflect long term functions or instances or to reflect the prevalence of unanticipated events.
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David Collins or Chris Eddy
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