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ozzfan1317 (70.51)

The Real Truth About Ebix's Tax Situation



March 28, 2011 – Comments (8) | RELATED TICKERS: EBIX

The Company’s consolidated effective tax rate is reduced because of the blend of reduced tax rates in foreign
jurisdictions where a significant portion of our income resides. Furthermore, the Company’s world-wide product
development operations and intellectual property ownership has been centralized into our India and Singapore
subsidiaries, respectively. Our operations in India benefit from a tax holiday which will continue thru 2015; as such
local India taxable income, other than passive interest and rental income, is not taxed. After the tax holiday expires
taxable income generated by our India operations will be taxed at 50% of the normal 33.99% corporate tax rate for a
period of five years. This tax holiday had the effect of reducing tax expense by $11.5 million.


The Above is from the company's 10k you see if make believe research companies read these things instead of writing anonymous blogs our time would be alot less wasted.

Basically until 2015 they  have a tax holiday on foreign income and then they will pay a more normal rate on it. Also they have Tax loss carry overs which will last another year or so.

Furthermore the other statements said blog made were about situations at least 4 to 5 years ago.

If you read the blog on seeking Alpha it was nothing more than a short sellers desperation post disguised as research.


Disclosure Author is Long Ebix



8 Comments – Post Your Own

#1) On March 28, 2011 at 6:15 PM, MegaEurope (< 20) wrote:

$11.5M is a lot of money for a small company like EBIX.

Are you comfortable with EBIX earnings falling 19%+ when this tax change takes effect?

Plus if they ever want to get the cash out of India and Singapore (to pay a dividend, buy back shares or acquire other companies), they will need to pay more US taxes.

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#2) On March 28, 2011 at 6:56 PM, ozzfan1317 (70.51) wrote:

The hit will be 4 years from now that will be a much smaller percentage hit by then. Not saying it isn't a cause for concern but if my biggest worries are the expiration of Tax benefits in 4 years then I love the risk reward from here.

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#3) On March 28, 2011 at 8:33 PM, HarryCaraysGhost (64.53) wrote:

+ 1 rec

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#4) On March 28, 2011 at 11:26 PM, pedroaf (39.52) wrote:

Good writing,

Demystifying all this nonsense that has surrounded the supposed problem with taxes, the recent sale of shares must be seen as a huge buying opportunity for all.

The upside potential in the very short term is very high. In February EBIX made ​​the biggest acquisition in its history by buying ADAM, paying 89 million through the issue of 3.650M shares and the numbers of these acquisitions will appear in Q1/11. The company also made in Q4/10 its best sales quarter in history, the numbers will appear throughout the year 2011 because they are all recurring contracts.

In 2010 the company had a 52% increase in net profit compared with 2009. 32% increase in revenues and a drastic decrease in short-term debt of 52 million to 10 million only.

Cash-generating company, with solid financial position and with 99% of its revenues obtained from license-based revenue model (recurring) so it is clear to me as a huge buying opportunity which the market is providing.

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#5) On March 29, 2011 at 12:10 PM, ButterflyOne (< 20) wrote:

A lot can change in five years considering the acquistions that the company has made once they get them all up and running according to their business model.  The article linked below is interesting.  It just proves one can't make wise choices with only part of the facts - gotta have the facts man, gotta have the facts!

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#6) On March 29, 2011 at 3:48 PM, TMoney101 (58.81) wrote:

Good post.  To refute another of Copperfield's claims regarding "low deferred revenues" compared to other random SaaS providers, here is an excerpt from the 10-K:

"Transaction services fee revenue for the use of our exchanges or ASP platforms is recognized as the transactions occur and are generally billed in arrears."

The reason the Company has lower deferred revenues is because they generally bill in arrears.  You only get deferred revenues by billing in advance - you can't compare deferred revenue amounts between varying business models.

 The Copperfield "research report" was at a minimum poorly informed scare tactics and in my opinion criminal share price manipulation.  Though I was personally happy to have a better entry price...

-TMoney101 (long EBIX)

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#7) On March 29, 2011 at 5:27 PM, OptionMasta (< 20) wrote:

The CEO "Robin Raina" is a total moron.  This video is great he has a hard time answering simple questions about where his revenue comes from!  LOL Maybe the alpha article is not so far off.



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#8) On March 29, 2011 at 6:31 PM, ozzfan1317 (70.51) wrote:

I don't see where you draw your opinion from. Since English is his second language I think he did a solid job myself. You are entitled to your opinion however.

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