IBEX Limited Announces Second Quarter Fiscal Year 2021 Financial Results
Second Quarter Fiscal Year 2021
- Record revenue of
$117.2 million , representing an increase of 8.7% year-over-year - Net income was
$2.5 million (non-GAAP adjusted net income of$6.2 million ) - Adjusted EBITDA increased 18.7% to
$17.6 million , achieved record adjusted EBITDA margin of 15.0% - Company raises fiscal year 2021 guidance
“In
Dechant continued, “We had full focus on execution this quarter – delivering on the critical seasonal ramps for our clients. As evidenced by our results, we had a stellar quarter of performance. Despite the growing cases of COVID-19 throughout the world, we continued managing all of our centers and kept all of our Work@Home employees operational. In addition, during the quarter we launched a new center in
Second Quarter Fiscal Year 2021 Financial Highlights:
Revenue
- Revenue increased 8.7% to
$117.2 million , compared to$107.8 million in the prior year quarter.
Net Income
- Net income was
$2.5 million , including$1.6 million in non-recurring costs, compared to net income of$4.8 million in the prior year quarter. - Non-GAAP adjusted net income increased to
$6.2 million , compared to$5.6 million in the prior year quarter (see Exhibit 1 for reconciliation). - Net margin was 2.1%, compared to 4.4% in the prior year quarter.
- On a Non-GAAP basis, net margin increased to 5.3%, compared to 5.2% in the prior year quarter (see Exhibit 1 for reconciliation).
Adjusted EBITDA
- Non-GAAP adjusted EBITDA, increased to
$17.6 million , compared to$14.8 million in the prior year quarter (see Exhibit 2 for reconciliation). - Non-GAAP adjusted EBITDA margin increased to 15.0%, compared to 13.8% in the prior year quarter.
Earnings Per Share
- IFRS basic and fully diluted earnings per share was
$0.14 and$0.13 , respectively, compared to IFRS basic and fully diluted earnings per share of$0.00 and$0.00 , respectively, in the prior year quarter.* - Non-GAAP pro forma fully diluted adjusted earnings per share (see Exhibit 1 for reconciliation) increased to
$0.33 , compared to$0.30 in the prior year quarter.
* IFRS fully diluted earnings per share for the three and six months ended
Balance Sheet
- Strong cash position of
$74.6 million compared to$21.9 million atJune 30, 2020 . - Non-GAAP net debt (see Exhibit 4 below) decreased to
$50.7 million , compared to$84.1 million as ofJune 30, 2020 .
Second Quarter of Fiscal Year 2021 Business Highlights:
- Top three client concentration decreased to 36.4% from 45.1% in the prior year quarter
- Won 3 new customer logos across key verticals, including healthcare and utilities
- Opened a new 1,200 seat center in
Jamaica and added 600 seats inthe Philippines - New Economy revenue increased by 10.5% compared to the prior year quarter, and when adjusted for one client that was adversely impacted by the pandemic, New Economy revenue increased by 28.1%.
Raised Fiscal Year 2021 Business Outlook
We are raising our fiscal year 2021 guidance for revenue to between
Adjusted EBITDA is now expected to be between
Conference Call and Webcast Information
An audio replay of the call will also be available to investors beginning at approximately
Financial Information
While the financial figures included in this press release have been computed in accordance with International Financial Reporting Standards (“IFRS”) as issued by the
ibex is not providing a quantitative reconciliation of forward-looking non-GAAP adjusted EBITDA to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, non-recurring expenses, fair value adjustments, share-based compensation expense, and impairment of assets. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period.
Non-GAAP Financial Measures
We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-GAAP financial measures depict the true performance of the business by encompassing only relevant and controllable events, enabling us to evaluate and plan more effectively for the future. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-GAAP financial measures and ratios are not measurements of our performance, financial condition or liquidity under IFRS as issued by the IASB and should not be considered as alternatives to operating profit or net income / (loss) or as alternatives to cash flow from operating, investing or financing activities for the period, or any other performance measures, derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles.
About ibex
ibex helps the world’s preeminent brands more effectively engage their customers with services ranging from customer support, technical support, inbound/outbound sales, business intelligence and analytics, digital demand generation, and CX surveys and feedback analytics.
Forward Looking Statements
In addition to historical information, this release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, and our strategies, priorities and business plans. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could impact our actual results include: developments relating to COVID-19; the Frontier restructuring and its proceedings under Chapter 11 of the United States Bankruptcy Code; our ability to attract new business and retain key clients; our ability to enter into multi-year contracts with our clients at appropriate rates; the potential for our clients or potential clients to consolidate; our clients deciding to enter into or further expand their insourcing activities; our ability to operate as an integrated company under the ibex brand; our ability to manage portions of our business that have long sales cycles and long implementation cycles that require significant resources and working capital; our ability to manage our international operations, particularly in
Media Contact:
IR Contact: Brinlea Johnson,
| Unaudited Consolidated Statements of Financial Position | |||||||
| US$ in thousands | |||||||
| Assets | |||||||
| Non-current assets | |||||||
| $ | 11,832 | $ | 11,832 | ||||
| Other intangible assets | 3,174 | 2,781 | |||||
| Property and equipment | 103,397 | 84,588 | |||||
| Investment in joint venture | 330 | 331 | |||||
| Deferred tax asset | 2,400 | 2,223 | |||||
| Warrant asset | 2,161 | 2,611 | |||||
| Other assets | 5,532 | 4,834 | |||||
| Total non-current assets | $ | 128,826 | $ | 109,200 | |||
| Current assets | |||||||
| Trade and other receivables | 74,056 | 62,579 | |||||
| Due from related parties | 1,922 | 1,587 | |||||
| Cash and cash equivalents | 74,615 | 21,870 | |||||
| Total current assets | $ | 150,593 | $ | 86,036 | |||
| Total assets | $ | 279,419 | $ | 195,236 | |||
| Equity and liabilities | |||||||
| Equity attributable to owners of the parent | |||||||
| Share capital | $ | 2 | $ | 12 | |||
| Additional paid-in capital | 158,008 | 96,207 | |||||
| Other reserves | 31,889 | 29,456 | |||||
| Accumulated deficit | (114,470 | ) | (109,527 | ) | |||
| Total equity | $ | 75,429 | $ | 16,148 | |||
| Non-current liabilities | |||||||
| Deferred revenue | $ | 1,725 | $ | 434 | |||
| Lease liabilities | 72,587 | 62,044 | |||||
| Borrowings | 4,217 | 3,782 | |||||
| Deferred tax liability | 87 | 117 | |||||
| Other non-current liabilities | 13,304 | 7,058 | |||||
| Total non-current liabilities | $ | 91,920 | $ | 73,435 | |||
| Current liabilities | |||||||
| Trade and other payables | $ | 51,158 | $ | 53,213 | |||
| Income tax payables | 3,200 | 3,087 | |||||
| Lease liabilities | 10,858 | 12,668 | |||||
| Borrowings | 37,701 | 27,476 | |||||
| Deferred revenue | 4,825 | 3,470 | |||||
| Due to related parties | 4,328 | 5,739 | |||||
| Total current liabilities | $ | 112,070 | $ | 105,653 | |||
| Total liabilities | $ | 203,990 | $ | 179,088 | |||
| Total equity and liabilities | $ | 279,419 | $ | 195,236 | |||
| Unaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income / (Loss) | |||||||||||||
| Three months ended |
Six months ended |
||||||||||||
| US$ in thousands, except share and per share amounts | 2020 | 2019 | 2020 | 2019 | |||||||||
| Revenue | $ | 117,181 | $ | 107,784 | $ | 225,952 | $ | 203,131 | |||||
| Payroll and related costs | 78,960 | 73,185 | 151,224 | 139,240 | |||||||||
| Share-based payments | 617 | 51 | 2,706 | 93 | |||||||||
| Reseller commission and lead expenses | 3,399 | 4,505 | 7,501 | 9,326 | |||||||||
| Depreciation and amortization | 6,983 | 6,413 | 13,422 | 12,113 | |||||||||
| Other operating costs | 20,888 | 16,017 | 45,678 | 30,153 | |||||||||
| Income from operations | $ | 6,334 | $ | 7,613 | $ | 5,421 | $ | 12,206 | |||||
| Finance expenses | (2,374 | ) | (2,507 | ) | (4,613 | ) | (4,814 | ) | |||||
| Income before taxation | $ | 3,960 | $ | 5,106 | $ | 808 | $ | 7,392 | |||||
| Income tax expense | (1,472 | ) | (349 | ) | (1,743 | ) | (299 | ) | |||||
| Net income / (loss) | $ | 2,488 | $ | 4,757 | $ | (935 | ) | $ | 7,093 | ||||
| Other comprehensive income / (loss) | |||||||||||||
| Items that will be subsequently reclassified to profit or loss | |||||||||||||
| Foreign currency translation adjustment | $ | (77 | ) | $ | (62 | ) | $ | (113 | ) | $ | (32 | ) | |
| Cash flow hedge - changes in fair value | 52 | - | 85 | - | |||||||||
| $ | (25 | ) | $ | (62 | ) | $ | (28 | ) | $ | (32 | ) | ||
| Total comprehensive income / (loss) | $ | 2,463 | $ | 4,695 | $ | (963 | ) | $ | 7,061 | ||||
| Earnings per share attributable to the ordinary equity holders of the parent | |||||||||||||
| Basic | $ | 0.14 | $ | - | $ | (0.05 | ) | $ | - | ||||
| Diluted | $ | 0.13 | $ | - | $ | (0.05 | ) | $ | - | ||||
| Weighted average shares outstanding | |||||||||||||
| Basic | 17,988,508 | 12,556,972 | 17,183,501 | 12,556,972 | |||||||||
| Diluted | 18,719,169 | 12,755,131 | 17,931,867 | 12,755,131 | |||||||||
| Unaudited Consolidated Statements of Cash Flows | ||||||||||||||||
| Three months ended |
Six months ended |
|||||||||||||||
| US$ in thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
| Income before taxation | $ | 3,960 | $ | 5,105 | $ | 808 | $ | 7,391 | ||||||||
| Adjustments to reconcile income before taxation to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 6,983 | 6,413 | 13,422 | 12,113 | ||||||||||||
| Amortization of warrant asset | 243 | 300 | 448 | 535 | ||||||||||||
| (Gain) / loss on disposal of fixed assets | - | 16 | (192 | ) | 16 | |||||||||||
| Foreign currency translation loss | 55 | 206 | 203 | 359 | ||||||||||||
| Fair value adjustment | 2,159 | 133 | 5,745 | 882 | ||||||||||||
| Phantom expense | 129 | 15 | 254 | 28 | ||||||||||||
| Share-based payments | 488 | 36 | 2,452 | 65 | ||||||||||||
| Provision for retirement benefit expense | 66 | 108 | 144 | 134 | ||||||||||||
| Allowance of expected credit losses | 209 | 157 | 452 | 97 | ||||||||||||
| Share of profit from investment in joint venture | (103 | ) | (175 | ) | (226 | ) | (339 | ) | ||||||||
| Finance costs | 2,374 | 2,507 | 4,613 | 4,814 | ||||||||||||
| (Increase) / decrease in trade and other receivables | (257 | ) | 7,860 | (10,984 | ) | 3,197 | ||||||||||
| Increase in prepayments and other assets | (381 | ) | (63 | ) | (697 | ) | (536 | ) | ||||||||
| (Decrease) / increase in trade and other payables and other liabilities | (8,101 | ) | (879 | ) | 1,052 | (3,817 | ) | |||||||||
| Cash generated from operations | 7,824 | 21,739 | 17,494 | 24,939 | ||||||||||||
| Interest paid | (2,374 | ) | (2,507 | ) | (4,613 | ) | (4,814 | ) | ||||||||
| Income taxes paid | (1,163 | ) | (657 | ) | (2,655 | ) | (763 | ) | ||||||||
| Net cash inflow from operating activities | $ | 4,287 | $ | 18,575 | $ | 10,226 | $ | 19,362 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
| Purchase of property and equipment | $ | (5,804 | ) | $ | (2,039 | ) | $ | (8,705 | ) | $ | (2,239 | ) | ||||
| Purchase of other intangible assets | (557 | ) | (17 | ) | (867 | ) | (165 | ) | ||||||||
| Capital repayment from joint venture | 112 | 124 | 227 | 195 | ||||||||||||
| Net cash outflow from investing activities | $ | (6,249 | ) | $ | (1,932 | ) | $ | (9,345 | ) | $ | (2,209 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
| Proceeds from line of credit | $ | 34,231 | $ | 43,419 | $ | 66,575 | $ | 78,211 | ||||||||
| Repayments of line of credit | (23,908 | ) | (54,320 | ) | (55,296 | ) | (81,018 | ) | ||||||||
| Proceeds from borrowings | - | - | 1,714 | 1,000 | ||||||||||||
| Repayment of borrowings | (3,031 | ) | (1,690 | ) | (5,827 | ) | (3,389 | ) | ||||||||
| Payment of related party loan | (1,614 | ) | - | (1,614 | ) | - | ||||||||||
| Net proceeds from initial public offering | - | - | 63,107 | - | ||||||||||||
| Payment of listing related cost | (227 | ) | - | (1,052 | ) | - | ||||||||||
| Principal payments on lease obligations | (8,575 | ) | (3,145 | ) | (11,630 | ) | (6,145 | ) | ||||||||
| Dividends paid | - | (121 | ) | (4,000 | ) | (121 | ) | |||||||||
| Net cash (outflow) / inflow from financing activities | $ | (3,124 | ) | $ | (15,857 | ) | $ | 51,977 | $ | (11,462 | ) | |||||
| Effects of exchange rate difference on cash and cash equivalents | (78 | ) | (62 | ) | (113 | ) | (33 | ) | ||||||||
| Net (decrease) / increase in cash and cash equivalents | $ | (5,164 | ) | $ | 724 | $ | 52,745 | $ | 5,658 | |||||||
| Cash and cash equivalents at beginning of the period | $ | 79,779 | $ | 13,807 | $ | 21,870 | $ | 8,873 | ||||||||
| Cash and cash equivalents at end of the period | $ | 74,615 | $ | 14,531 | $ | 74,615 | $ | 14,531 | ||||||||
Reconciliation of IFRS Financial Measures to Non-GAAP Financial Measures
EXHIBIT 1: Adjusted net income and pro forma fully diluted adjusted earnings per share
We define “Adjusted net income” as net income / (loss) before the effect of the following items: non-recurring expenses (including litigation and settlement expenses, costs related to COVID-19, and expenses related to our initial public offering), other income, fair value adjustment related to the Amazon warrant, share-based payments, foreign exchange gains or losses, and impairment losses, as applicable, net of the tax effect of such adjustments. We define “pro forma fully diluted adjusted earnings per share” as Adjusted net income for the period divided by the weighted average fully diluted shares outstanding for the current periods.
| Three months ended |
Six months ended |
||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
| US$ in thousands, except share and per share amounts | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||||||||
| Net income / (loss) | $ | 2,488 | $ | 0.13 | $ | 4,757 | $ | 0.25 | (3) | $ | (935 | ) | $ | (0.05 | ) | $ | 7,093 | $ | 0.40 | (3) | |||||||
| Non-recurring expenses | 1,593 | $ | 0.09 | 596 | $ | 0.03 | 5,991 | $ | 0.33 | 596 | $ | 0.03 | |||||||||||||||
| Other income | (140 | ) | $ | (0.01 | ) | (188 | ) | $ | (0.01 | ) | (291 | ) | $ | (0.02 | ) | (387 | ) | $ | (0.02 | ) | |||||||
| Fair value adjustment | 2,159 | $ | 0.12 | 133 | $ | 0.01 | 5,745 | $ | 0.32 | 882 | $ | 0.05 | |||||||||||||||
| Share-based payments | 617 | $ | 0.03 | 51 | $ | 0.00 | 2,706 | $ | 0.15 | 93 | $ | 0.01 | |||||||||||||||
| Foreign exchange losses | 55 | $ | 0.00 | 206 | $ | 0.01 | 203 | $ | 0.01 | 359 | $ | 0.02 | |||||||||||||||
| Total adjustments | $ | 4,284 | $ | 0.23 | $ | 798 | $ | 0.04 | $ | 14,354 | $ | 0.80 | $ | 1,543 | $ | 0.09 | |||||||||||
| Tax impact of adjustments(1) | (611 | ) | $ | (0.03 | ) | 38 | $ | 0.00 | (2,057 | ) | $ | (0.11 | ) | 101 | $ | 0.01 | |||||||||||
| Adjusted net income | $ | 6,161 | $ | 0.33 | $ | 5,593 | $ | 0.30 | $ | 11,363 | $ | 0.63 | $ | 8,737 | $ | 0.49 | |||||||||||
| Adjusted net income margin | 5.3 | % | 5.2 | % | 5.0 | % | 4.3 | % | |||||||||||||||||||
| IFRS Weighted average fully diluted shares outstanding | 18,719,169 | 12,755,131 | 17,931,867 | 12,755,131 | |||||||||||||||||||||||
| Adjustment for share re-capitalization on |
- | 5,964,039 | - | 5,176,736 | |||||||||||||||||||||||
| Pro forma fully diluted shares outstanding and pro forma adjusted earnings per share(2) | 18,719,169 | $ | 0.33 | 18,719,169 | $ | 0.30 | 17,931,867 | $ | 0.63 | 17,931,867 | $ | 0.49 | |||||||||||||||
(1) The tax impact of each adjustment is calculated using the effective tax rate in the relevant jurisdiction.
(2) We provide “pro forma fully diluted adjusted earnings per share” because the share structure for the prior year does not reflect the re-capitalization that occurred in connection with ibex’s initial public offering on
(3) On an IFRS basis, this amount is
EXHIBIT 2: EBITDA and Adjusted EBITDA
We define “EBITDA” as net (loss) / income before the effect of the following items: finance expenses (including finance costs related to lease liabilities), income tax expense / (benefit), and depreciation and amortization (including depreciation of right-of-use assets). We define “Adjusted EBITDA” as EBITDA before the effect of the following items: non-recurring expenses (including litigation and settlement expenses, costs related to COVID-19, and expenses related to our initial public offering), other income, fair value adjustment related to the Amazon warrant, share-based payments, foreign exchange gains or losses, and impairment losses, as applicable.
| Three months ended |
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|||||||||||||
| US$ in thousands | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Net income / (loss) | $ | 2,488 | $ | 4,757 | $ | (935 | ) | $ | 7,093 | |||||
| Finance expense | 2,374 | 2,507 | 4,613 | 4,814 | ||||||||||
| Income tax expense | 1,472 | 349 | 1,743 | 299 | ||||||||||
| Depreciation and amortization | 6,983 | 6,413 | 13,422 | 12,113 | ||||||||||
| EBITDA | $ | 13,317 | $ | 14,026 | $ | 18,843 | $ | 24,319 | ||||||
| Non-recurring expenses | 1,593 | 596 | 5,991 | 596 | ||||||||||
| Other income | (140 | ) | (188 | ) | (291 | ) | (387 | ) | ||||||
| Fair value adjustment | 2,159 | 133 | 5,745 | 882 | ||||||||||
| Share-based payments | 617 | 51 | 2,706 | 93 | ||||||||||
| Foreign exchange losses | 55 | 206 | 203 | 359 | ||||||||||
| Adjusted EBITDA | $ | 17,601 | $ | 14,824 | $ | 33,197 | $ | 25,862 | ||||||
| Adjusted EBITDA margin | 15.0 | % | 13.8 | % | 14.7 | % | 12.7 | % | ||||||
EXHIBIT 3: Free cash flow
We define “free cash flow” as net cash provided by operating activities less capital expenditures and lease payments on right-of-use assets.
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| US$ in thousands | 2020 | 2019 | 2020 | 2019 | |||||||
| Net cash provided by operating activities | $ | 4,287 | $ | 18,575 | $ | 10,226 | $ | 19,362 | |||
| Less: | |||||||||||
| Capital expenditures | 7,165 | 4,094 | 11,690 | 13,432 | |||||||
| Lease payments on right-of-use assets | 2,843 | 2,338 | 5,171 | 4,727 | |||||||
| Free cash flow | $ | (5,721 | ) | $ | 12,143 | $ | (6,635 | ) | $ | 1,203 | |
EXHIBIT 4: Net debt
We define “net debt” as total borrowings less cash and cash equivalents.
| US$ in thousands | ||||
| Borrowings | ||||
| Non-current | $ | 4,217 | $ | 3,782 |
| Current | 37,701 | 27,476 | ||
| $ | 41,918 | $ | 31,258 | |
| Leases | ||||
| Non-current | 72,587 | 62,044 | ||
| Current | 10,858 | 12,668 | ||
| $ | 83,445 | $ | 74,712 | |
| Total Debt | $ | 125,363 | $ | 105,970 |
| Cash | 74,615 | 21,870 | ||
| Net debt | $ | 50,748 | $ | 84,100 |
Source: Ibex Limited