Ebix Inc (EBIX) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome on the Ebix 2010 annual investor call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, with instructions following at that time. (Operator Instructions) And as a reminder, this conference is being recorded.

And now, I'll turn it over to Neil van Helden. Please begin, sir.

Welcome, everyone, to Ebix Inc's 2010 annual earnings conference call. Joining me to discuss the quarter is Ebix Chairman, President and CEO, Robin Raina. Following Robin's remarks, we will open up the call for your questions to be addressed by Robin and Ebix CFO, Robert Kerris.

Let me take this time to remind you that the primary purpose of today's call is to provide you with information regarding our full-year fiscal 2010 performance. However, some of our discussions and responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties and assumptions. Should any of these risks and uncertainties materialize, or should our assumptions prove incorrect, actual Company results could differ materially from those forward-looking statements. All these risks, uncertainties and assumptions, as well as other information on potential factors that could affect our financial results, are included in our reports filed with the SEC, including our form 10-K for the year ended the 31st of December of 2010, particularly under the heading risk factors.

At times in our prepared remarks or in response to your questions today we may offer certain additional metrics to provide a greater understanding of our business or quarterly results. Please be advised that we may or may not update these additional metrics in the future calls.

At times in our prepared remarks, or in response to -- our press release announcing the record third-quarter results was issued -- fourth-quarter results was issued a few hours back. The audio of this investor call is also being webcast live on the web on www.ebix.com/webcast. You can look at Ebix's financials beyond what has been provided in the release on our website, www.ebix.com. The audio and the text transcript of this call will be available also on the investor home page of the Ebix website after 3 PM Eastern time.

Robin will open today's call with a few prepared remarks, and then we will open things up to your questions. Because we want to address as many of you as possible, I do ask that you limit yourselves to a single question today.

With that, let me turn the call over to Robin.

Thank you, Neil. Good morning, gentlemen. Thank you for attending Ebix 2010 annual investor conference call. I have also with me today Robert Kerris, Ebix CFO, on this investor conference call.

Our 2010 financial results were announced a few hours back. Let me summarize those results for you. These are record results, the best ever in our 35-year young history. At the outset, let me say that at Ebix we focus a lot on consistency rather than flash-in-the-pan performances. We are pleased with these results as they represent another steady step forward in our growth plan.

To get a better understanding of the results announced today, I will outline a few metrics from the past three years for you. Revenue -- based on Q4 2010 results, Ebix's annualized revenue run rate for 2011 would be $140.4 million; however, this annualized revenue number does not include any revenue from the recent acquisition of A.D.A.M. Inc. Ebix's 2010 fourth-quarter revenue rose 12% to $35.1 million as compared to $31.3 million in the fourth quarter of 2009, 74% as compared to $20.1 million in the fourth quarter of 2008, and 188% as compared to $12.2 million during the fourth quarter of 2007. Ebix's total revenue for the full year of 2010 rose 35% to $132.2 million, compared to $97.7 million in 2009, 77% as compared to 2008, and 209% as compared to 2007. Net income -- Ebix's 2010 fourth-quarter net income rose 32% to $15.9 million as compared to $12.1 million in fourth quarter of 2009, 101% as compared to $7.9 million in fourth quarter of 2008, and 253% as compared to $4.5 million in the fourth quarter of 2007.

Ebix's net income for the full year of 2010 grew 52% to $59 million year-over-year, 116% as compared to 2008, and 365% as compared to 2007. Diluted EPS -- Ebix's 2010 fourth-quarter diluted EPS rose 35% to $0.42 as compared to $0.31 in the fourth quarter of 2009, 91% as compared to $0.22 in fourth quarter of 2008, and 223% as compared to $0.13 during the fourth quarter of 2007. The results for fourth quarter of 2010 and fourth quarter of 2009 were based on 38.4 million and 39.6 million weighted averaged diluted shares outstanding effectively. Ebix's diluted EPS for the full year of 2010 grew 47% year-over-year to $1.51, 99% as compared to 2008, and 277% as compared to 2007. For the purposes of the EPS calculation, there was an average of approximately 39 million diluted shares outstanding during the year 2010, as compared to an average of 38 million diluted shares outstanding in 2009.

Operating margins -- our operating margins for 2010 were at 40%, consistent with Company's operating margins for 2009. Operating cash flows -- for the 12-month ended December 31, 2010, the Company generated $52.8 million of net cash flow from operating activities compared to $33.9 million for the year ended December 31, 2009, a 56% increase over 2009, 97% increase over 2008, and a 252% increase over 2007 operating cash flows. Cash generated from operations for the fiscal fourth quarter was $18.9 million, up 61% year-over-year. Realization of operating income in the form of cash -- the Company's operating income for 2010 was $52.5 million, while the operating cash flow was $52.8 million for 2010. We are pleased to report that the cash inflow from the Company's operating activities in 2010 represented 100% realization of the Company's 2010 operating income.

Cash -- we started the year with $19.2 million of cash. In the year 2010, we continued to generate strong cash flows, and used that cash in a number of ways. One, we invested $15.2 million of cash for business acquisitions. Two, we paid $22.5 million of cash to [settle] outstanding convertible debt. Three, we paid $10.5 million to repurchase shares of our common stock. After using $48.2 million of our cash for the above, we still had $23.4 million of cash as of 31st of December 2010.

Customers -- an estimated 99.5% plus of Ebix's [launch] from 2009 renewed their business with Ebix in the year 2010, meaning that Ebix did not lose a single customer across the world that accounted for more that 0.5% of Ebix's revenues in the year 2010. Diversified revenue base -- Ebix continued to have a highly diversified revenue stream across thousands of clients, with the largest client accounting for only 4% of the Company's 2010 revenue.

New fourth-quarter 2010 contracts -- in the fourth quarter of 2010, the Company signed new exchange contracts with named accounts like Marsh, CUNA Mutual Insurance, Penn Mutual, Pacific Life, AmeriPrice, Bank of America, Knights of Columbus, Guardian, Fidelity, New York Life, (inaudible) Investment Company, American General Life, Stifel Nicolaus Financial Productivity Group, State Automobile, Midland National Life Broker Insurance Services, Forethought Life Insurance, MetLife, John Hancock Financial Services South America, ING North America Life, Protective Life, Vesco's Life, Hartford Life, Mutual of Omaha Insurance Company Motorist Mutual, USI, Group Benefit Administrative, Qvecota Motorist Insurance, Coastal Insurance Risk Prevention Group, Context For Health Care, NFU, Inova Health Systems, Michigan Hospital Association, Fredrick Rule Insurance, NARS, State Farm Mutual Auto Insurance, Arrowpoint, Columbia Insurance Group, Comprehensive Insurance Corporation, Western National Insurance, (inaudible),[Verick Segarof], Berdesco, (inaudible), MetLife Brazil, Mississippi Healthcare Insurance, et cetera.

The Company also announced deals with named VPO clients like Singa Nelson, Stanford University, Gridlow, Orlando Aviation Authority, Office Max, Equity, BBF Holding, (inaudible), LK Plastics, Six Continental Bells, Keystone Automotive, Ultimate Real Estate, Alaska Airline, Eastern Municipal Water District, LaSalle Home Deport Sectre. This list of names is a sample representation of contracts signed by the Company in the fourth quarter of 2010.

Channel revenues -- the exchange channel grew 55% year-over-year to $94.2 million or 71% of 2010 revenues. The BPO channel grew 6% year-over-year to $15.6 million or 12% of 2010 revenue. The broker channel grew 19% year-over-year to $13.8 million or 10% of 2010 revenues. The carrier channel dropped 20% year-over-year to $8.5 million or 7% of 2010 revenues. We believe that the drop in revenues from the sale of back-end systems to property and casualty carriers was directly related to the downturn in the property and casualty industry in 2010. Also responsible for the drop is a conscious change in our revenue model from a licensed-based model to an on-demand recurring-base model. We expect things to improve in 2011, and the carrier channel to start growing again.

R&D focus -- the Company has a strong focus on retailing insurance knowledge, and continuing to produce cutting-edge products and services. This R&D focus is best exemplified by our employee count in the area of product development, with approximately 71% of our employee force being focused on product development. As a part of our efforts to grow across the world, the Company has centralized its international intellectual property and development operation in Singapore and India, respectively, with over 60% of its R&D staff based in these two countries. Ebix is entitled to a subsidized tax rate of 10% in Singapore, and a 0% tax rate until April 2015 in India.

Convertible debt -- during 2010, our current ratio significantly improved, and was 1.56 at December 31, 2010, as compared to 0.62 a year earlier, and we eliminated all but $5 million of the previous $29.4 million of convertible debt. This convertible debt is at a 0% rate of interest, and will have the effect of not diluting any shareholders, since the Company intends to pay for this $5 million of convert in cash. This $5 million convertible debt today is incurring a non-cash expense of 1.75% in our financials. Our investors are being paid in line with 514-1 guidelines. New bank facility -- on March 8, 2011, Ebix and Bank of America jointly executed a mutually binding commitment letter to amend and expand the Company's existing credit facility. The amended credit facility, which has been expanded to $55 million, and replaces the former $35 million credit facility, carries an interest rate of LIBOR plus 1.5%, and is comprised of a three-year $35 million secured revolving credit facility, and a $20 million secured term loan.

Continued evolution -- the Company size has continued to increase over the years, and the Company has continued to evolve and strengthen its internal controls through the use of quality partners, vendors, tax advisers, and statute re-auditors. In the year 2010, the Company made use of top quality firms like (inaudible), Ernst and Young, [BDO Seekman], HAW, and CBH on a variety of fronts. (Inaudible) restructuring tax advice or statute re-auditing -- we continue to have strong relations with all accounting firms that we have worked for over the last 10 years and still continue to utilize them. For example, our present consolidating auditors, CBH, continue to be our statute re-auditors since the last three fiscal years now. For fiscal 2010, our past US audit firm, HAW, helped us with some tax analysis in addition to helping us on a variety of other issues. In fiscal 2010, one of our past auditor -- [Freedman] continued to function as our auditors in Singapore, Sweden and Australia now for more than six years.

Cash for future acquisitions -- the Company's cash balance as of 31st of December 2010, was approximately $23.4 million, with an additional $25 million of borrowing capacity from our line with BoA, and the continued strong operating cash flows, we believe that we are well positioned to use this cash towards making strategic accretive acquisitions in the exchange arena.

Quality focus -- the Company's vision plan is to always be a few years ahead of its competition, and thus, have a strong focus on research and development. The Company's R&D centers in India have the highest quality rating from Carnegie Mellon, the CMMI 5 rating. In addition, the Company's strong R&D focus can be evidenced from the fact that we have one of the highest ratios in the software industry in terms of percentage of our employees focused in product development, with an estimated 71%-plus of our employees worldwide continuing to maintain that focus.

Understanding the story -- for those of you who are still trying to understand the Ebix story, I'm going to ask you to focus on a few words that will spell out the Ebix story for you. One, convergence; two, airport; three, enterprise; four, change; five, on-demand; six, consistency; seven, cash; eight, humility. Let me explain each one of those for you.

One, convergence -- this word sums up the vision plan for Ebix. Our whole sole focus is convergence between all channels of insurance, convergence between B2C and B2B. Convergence between front-end and back-end processes. This is our vision plan for Ebix. Our goal and effort is to take data across all insurance entities across all product lines seamlessly that have been a long, sought-after dream for the insurance industry.

Two, the word airport -- the word airport is synonymous with exchanges. Airport is an infrastructure-based service, which has little competition. You decide which airline you want to fly by, but you don't necessarily choose your airport. B2B exchanges are an infrastructure-based service, too, that powers transactions across insurance entity while retaining its non-aligned nature and not picking sites. We, today, have 71% of our revenue coming from B2B exchanges.

The word enterprise -- the word enterprise spells out our focus on providing all insurance related services in an enterprise manner. We deploy and sell front-end systems, exchanges, back-end systems across all product lines, while taking complete responsibility of the enterprise level functionality of the end client.

The fourth word, change -- Ebix prefers to keep evolving with the times, rather than tie itself in a rigid manner to anything. We like to keep changing our technology, and not be called a Microsoft shop or a JAVA shop, et cetera. We prefer to build technology around open architecture standards, while allowing even our competitors to interface with our services and even build applications around them. We prefer to keep expanding our functionality, adopting the latest architecture trends to take full advantage of the new advancements. Today, all of our systems are cutting-edge, and we still keep evolving these so-called cutting-edge systems, since what was cutting-edge yesterday might not be cutting-edge today. Also, we want to be always a few years ahead of our competition in terms of technology, as also how we implement that technology.

Another word, on-demand -- all our services today are available in an on-demand manner, charged for in a utility fashion. Next word, consistency -- Ebix's focus has always been on consistency rather than on flash-in-the-pan performances, be it the way we charge for our services, the way we deploy our services, the way we prefer to be seen by our customers, the way we prefer to be seen by our investors, et cetera. We sell our services with a strong focus on recurring revenues. It reflects in our revenue streams today, with more than 75% of our revenues coming from recurring revenue streams. We prefer to build a company that can grow consistently. It reflects in our 11-year financial results, with each year being better than the previous year. It reflects in sequentially improving quarterly results over the last decade or so.

We prefer to deploy our services in a consistent manner across the world. We're a big believer in the [Rate Crop] McDonald approach of making sure that french fries taste the same whether you eat in a McDonald's in the United States or London or Nigeria or Singapore. We deploy each product in a similar manner with the same core base worldwide, implying that we might, for example, provide a broker system to a client in 11 different languages across six continents and 42 countries, while the core base will remain the same across the product. Clearly, our multi-national client base likes that consistency of code.

Over the last decade or so, Ebix has been a story of consistency, and we believe the story's only getting better from here. We like to have a diversified portfolio of customers with little dependence on any one client. Nothing extraordinary happened in fourth quarter of 2010, and we still had a good quarter. We like it that way.

Cash -- the word cash -- Ebix's focus has been on building a strong business where customers use our services on a utilities basis. This results in our customers paying of the bills with lesser follow-up than traditionally required.We focus on creating a business where the top focus has been on cash generation rather than a blind rush for revenues at any cost. We've been consistently generating 40%-plus in operating margins over the last few years. Our focus has never been on building a $1 billion revenue company with $20 million in net income. Our focus is reflected in our 2010 results where we generated $52.8 million in operating cash with $132.2 million in revenues.

Next word, humility. We prefer to be humble and not get carried away by our own vision. We understand that what we delivered yesterday is history, and that we need to focus on today and tomorrow rather than live in the past; we prefer to not issue guidance and then strive to beat that guidance. We prefer to deliver results without worrying about analysts' forecasts for the guidance. We prefer to let our past speak for us, while we focus on the present and the future. This reflects an investor relation effort.

Also, we prefer to have continued interaction and [institution] of shareholders in an organized manner, rather than aggressively travel across the country trying to drive the stock price up. We believe the majority of our time needs to be focused on improving Ebix at a fundamental level. Accordingly, we prefer to do organized analysts' days as the one on 1st of April at the NASDAQ building, wherein many of our key exchange-related senior managers will present the Ebix story along with the Ebix CFO and myself.

Final note, let me finish by saying verbatim what I said in the 2009 annual investor call last year. I started on this journey of building Ebix in 1999 when this Company had reported $19 million in losses. This has been a wonderful journey until now, but I believe Ebix has still a long way to go. With Ebix gaining in size, we're getting a lot more respectability from insurance companies today, and our chances of landing of larger recurring deals have increased now. One of the advantages of having sold a variety of services, namely exchanges, back-end systems, application software, BPS services, et cetera, to thousands of clients across the world is that we now have a ready-made customer base, a customer base that we know well, who respects us, and who has stayed with us, and who now can be targeted for cross-selling by us. That's a lot better than trying to randomly reach out to customers who would not know Ebix.

Let me add that you can visit the investor home page on Ebix's site with a view on analyzing Ebix further. The audio and the text transcript of this call will be available on the investor home page of the Ebix site located on www.ebix.com after 3 PM Eastern Standard time.

With that, I'm going to hand it over back to the moderator to open the call for questions. Thank you.

Thank you Ladies and Gentlemen.(Operator Instructions)Our first question is from Jeff Van Rhee of Craig-Hallum. Your line is open.

Thank you. Congratulations on the quarter and the year and particularly the cash flow here. I had two questions. First, just on the exchange front, Robin, maybe you could touch on the trends in terms of volume of activity getting pushed through these exchanges and just expand on what -- on what kind of growth you've seen just in terms of volume? And, then the second one, related to selling environment. You went through a lot of win there's. Can you narrow that down to give us a sense of the value of those bookings or 1 or 2 key bookings and describe them in a little more detail?

Sure. I think let me start with the trends in terms of exchanges. I think it depends on what line you're addressing. In the area of life and annuity we have continued to see volume increases. For example, November was one of our best months. It's a record month for us, and so we've continue to see that growth. In terms of specific examples of all the contracts that I've spelled out -- I mentioned a lot of sample contracts and I focused on names, which were named accounts rather than talking about all contracts everywhere signed.

There are -- most of the deals -- everything we've signed is occurring, so then in fact all of the deals will come in. It doesn't happen immediately.You start seeing a continued impact as these customers go live; as they start conducting transactions, you start seeing a continued impact of all of the deals. Now, some of these deals are larger, some of these deals are smaller, and so on, and I'm not in a position to give you individual examples or go on confidentiality not to be shared with you. I can give you an example of exchange deals we signed; for example, a CRO client with thousands of feeds; however, the way revenue gets recognized, it gets recognized over a period of time because we -- all our services are delivered in a utility fashion in an on-demand basis; most of the clients that are being named are on a who's who of the insurance industry or the banking world, so I think we let the future speak for itself rather than go into specifics of individual numbers from individual clients. We're not at liberty anyway to disclose those numbers.

Maybe I could just follow-up on that and ask that somewhat differently. The selling environment -- would you comment or give us a sense of the selling environment, whether it's the sales cycles, the size of deals? Does it feel like you've got a tail wind, headwind or things that stable. Just give us a sense of the blow by blow in the quarter in terms of the selling environment?

Thanks, Jeff. Selling environment from our prospective has improved considerably for Ebix per se. I couldn't say that it will necessarily improve as an industry as a whole. We feel that Ebix has made substantial improvement in terms of our ability to sell the sort of sale cycle in the area of exchanges. Part of it is the network effect. The network effect -- once you signed -- the one pressure point in the industry, it leads to a chain of other companies who come back to us and sign deals because these pressure points.

People who drive transactions -- if you sign, for example, a large distributor. Let's say the second largest distributor on a vertical product line in the industry, the moment you do that, you're going to basically create a network impact by itself because every carrier wants to be now on the platform and every other -- everybody else that they deal with would want to be on the platform and so on, so some of it is the network in fact. What is happening that our selling cycles have considerably reduced in daily op exchanges per se.

Okay, great, thanks. I'll let somebody else jump on.

Thank you our next question is from Mike Latimore of Northland Capital. Your line is open.

Yes. Good morning. Nice job on the cash flow in quarter there. In terms of the sales force, I think you were going to add sales a fair amount over the next 12 months. It looked like your sales and marketing expense was flat are now a little bit sequentially. Can you talk about where you are in the process of adding to sales?

We have actually made a bit of progress in terms of hiring salespeople and marketing people. We continue to do that innocent fourth quarter we hired quite a few people and you will see that our sales and marketing count have gone up to almost 72 if I remember correctly on the 31st December which is clearly a lot higher than where it was earlier. Having said that, we're continuously in the process of hiring that. We're committed to what we said previously, so we're continuing to make improvements in terms of hiring more people. We want to do it in a sensible fashion, but we're absolutely committed to what we said in our previous conference call in terms doubling our sales force worldwide.

Having said that, from a marketing perspective we have always been very innovative in our marketing techniques. We're in a B-to-B market; we are exchanging the rely on network impact. It's not a -- you don't have to go out and do all the -- throw money in terms of magazine ads and so on and wait for the carrier to call you. We would rather have salespeople pick up the phone and call these folks as also the network impact of making a distributor call to carrier. Making one carrier call other distributors and so on has a much better impact, so we focus on that kind of marketing. It's a person-to-person marketing rather than trying the media way or the direct marketing way. We do a fair amount of that, but we don't aggressively target that, as per se.

So what's should we use as a tax rate for 2011?

I lost you. I didn't hear that question

Your question was what do you expect the effective tax rate to be for 2011? As we're given previous information on this topic and in earlier calls in. We expect the effective tax rate to follow a worldwide basis and rise steadily. Probably up into 10% -- maybe 10% to 12%.

10% to 12% in fiscal 2011. Okay, thank you.

Thank you.(Operator Instructions) We have a question from Mark Rye of Singular Research. Your line is open.

Good morning, Robin and Robert, and congratulations on a strong quarter. Wondered if you could comment at all on the A.D.A.M. acquisition you recently completed and the Q4 results of that business?

Well, we have been in the process of implementing the changes, the structural changes that we've wanted. I am pleased to tell you that we have basically done with everything we had in terms of structural changes that we wanted in terms of the formal changes, in terms of trying to integrate some of the key functions that we wanted to. A.D.A.M. integration is a lot more easier for us, because of many reasons -- one, it's based in Atlanta where we are. Two, they're in a business which is -- even if we were 2 separate companies it's made a lot of sense for us to be interfacing with their technology and for them to be interfacing with us, it really was absolutely perfect. It's going on very well until now. We've inherited a very solid professional bunch of people; we're very pleased with the quality of the folk and so on. Having said that, it's like any other acquisition where you have to -- you make some changes and gradually have to get the value out of those changes.

In terms of the Q4 results, meaning I couldn't tell you what the Q4 results are, frankly, because we will be getting an audit done for the whole year. We're bound by rules to get a full-year audit done. Once we get a full-year audit done, we will be able to file that, and it will be mid to late April that we will be filing that so if I, right now, speak out a number it would be a guess -- rather than -- we would rather be absolutely correct. And that audit we finish in the mid- to late April and we will disclose to everybody.

Okay, thank you for that. Just one follow-up on the PNC exchange that you're developing in the US. Can you comment on the progress there?

We have actually started making a decent amount of progress there. We have been -- initially when we talked about entering the PNC exchange area, we had talked about a large carrier that we believe we can get pretty quickly. Unfortunately, that one got delayed for a bit, but the good news is in the first quarter, it's a subsequent event. We have signed that last carrier and we believe that deal is a very good deal for us simply because it sends a message out to the remaining carriers that change is possible and as they were tied in with different vendors, different exchanges as you know, which has been the leader, and Ebix has not broke off from trying to beat them in the market. And we believe we have taken a major step forward by landing of that one large carrier. I'm not at liberty right now to speak their -- talk about their name simply because again we are bound by confidentiality. Once we get the right approval from them we'll probably disclose it in the market through a Press Release.

Thank you for that answer, I'll get back in queue.

Thank you.

Thank you, our next question is from Mark Giovanniello of Copeland. Your line is open.

Thanks. Just a question about the organic growth trends, particularly in the Exchange business. I know you've had some successful acquisitions over the -- certainly this year and last year. Could you speak to the trend, what you might have done in Q4 in 2010 and what you might expect going forward? Thanks.

I normally -- this is a question I normally refer to our analysts. Simply because we hate to talk about organic growth in terms of specific numbers. Having said that, I'll try to address that. We know that an overall numbers -- when we publish our K, when the K comes out in a few days, the 10-K, you're going to see a pretty good chop in here which basically clearly spells it out in terms of what that organic growth is, because it will tell you what our revenue with all these acquisitions would have been in 2009, and what it would have been in 2011 with our current growth rate, so it basically comes out to 11% that we have.

Now, this 11%, however, it doesn't really give you the true story of the growth in exchanges because exchange growth has been a lot higher. The number goes down a bit purely because we had drops in the revenues in the Carrier segment, and the Carrier segment,-- benefit Carrier segment that's the PNC back-end Carrier segment. That's clearly taken a bit of a hit in the last few years, especially in the year 2010. PNC industry has been in the doldrums in the year 2010 and that has also effected us.

Also what has effected us is earlier and earlier days we were very -- we used to go out and sign all these large License-based deals. We decided that the -- when you look at our recurring versus non-recurring business, the main non-recurring part of our business was the Carrier Back-end system business. Everything else had become more or less recurring, baring professional services required to customize the system, which is incidentally a small portion of our business. So when we looked at the Carrier business we said we have to change our revenue model. And, in 2010, we made an honest effort to change our revenue model.

Today, Ebix does not send out a proposal on the Carrier Back-end business with the license-based revenue model. We sell everything on a recurring business, but when you do business on a recurring basis, you're not going to get those multi-million deals. What I mean by that if you were signing earlier a Carrier with $5 million initial license revenues or today, we are rather happier to sign a Carrier who gives us $1 million a year or a couple $1.5 million a year, but continuously keeps doing that through the life cycle of the Carrier. Because in the earlier model you have a lot of revenue earlier, but in subsequent years you were dependent on only the support revenue, and we felt that's the model where we have to dig a well every year and get the water out. And so we wanted to convert it into a recurring business, but then you cannot try to convert it into a recurring business, you have to make initial sacrifices and that's what we did in the last quarter, in the last year, but overall the number that you will see in the K also is around 11% for the year.

Thank you. And going forward do you think that's a reasonable expectation or is something more normal in the single digits, typically, for this business?

Let me put it that way, that we would be disappointed if it was in single digits. We don't have a tendency of issuing guidance and so I'm not going to tell you what we will do or not do, but at the same time if you're asking us if would we be happy with that? No, absolutely not. We would be disappointed if our organic growth today was in single digits.

Thank you.

Thank you.

Thank you next question is from Jeff Van Rhee of Craig-Hallum. Your line is open.

Just two follow-ups, Robin. In terms of the bookings, I understand you don't quantify them on a quarterly basis. Can you may be anecdotally or directionally walk me through the year, how the year progressed as you -- Q1, 2, 3, 4? Did Q4 close out? Is that a record bookings quarter? Was it steady sequential bill-able? Was it lumpy? Any color there you could give would be great.

This is a difficult question, but I'll try to answer it. Yes, Q4 was a record quarter in terms of bookings. We signed more deals than ever. We signed more bigger names than ever, and -- so we're very happy with the Q4 results. The revenue on it happened differently purely because this is like if you can sign a large -- let's say a huge name in the industry and you know you're going to get "X" million of revenue from them, you might not be able to -- you will pick up only a miniscule portion of that revenue possibly in the quarter based on whatever little work you did for them at that time. So, yes, from a sequential perspective, from a bookings perspective, Q4 of 2010 was definitely a record quarter for us.

Okay, and I guess then just my last one. You started to touch on it a little earlier, but maybe you could continue the thought in terms of breaking your business down by the segments; Lifehelp, PNC, and the annuity business. Can you give us a little more color as to which markets are strong, are accelerating, and which are lagging ?

Well, the annuity markets are strong right now, starting to become better now. In between, there was a bit of a lull. The energy market is stating to become stronger. The Life markets are starting to become good. We believe that Health markets are going to be strong in coming days, and I think there's a lot of momentum in the Health insurance market. I think the PNC market, outside of the US are still going strong, for example like in America, it's a big opportunity in those markets to pursue the PNC exchanges, for example, and so on. So I think they have to grow by individual geographies rather than just -- in the United States it is (inaudible) differently than in -- the industry terms are slightly different in the United States sometimes as compared to rest of the world. Yes.

Okay. Great, thank you.

Thank you. This ends the Q&A portion of today's call. I would like to turn the call over to Management for any closing remarks.

Thank you very much. I think it's good to have all of you here and we look forward to having all of you for the first quarter 2011 investor call in the month of May. Thank you, and with that I'll close the call.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program you may now disconnect and have a wonderful day.