ibex-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________to______________

Commission File Number: 001-38442

_______________________

IBEX LIMITED

(Exact name of registrant as specified in its charter)

_______________________


Bermuda						00-0000000
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1717 Pennsylvania Avenue NW, Suite 825 Washington, DC						20006

(Address of principal executive offices)						(Zip Code)

(202) 580-6200

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

_______________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common shares, par value $0.0001

IBEX

Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

The number of common shares outstanding of IBEX LIMITED as of October 31, 2023 was 17,938,752.


		Page No.

	CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	1



PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements	2

	C onsolidated Balance Sheets (unaudited)	3

	Consolidated Statements of Comprehensive Income (unaudited)	4

	C onsolidated Statements of Stockholders' Equity (unaudited)	5

	Consolidated Statements of Cash Flows (unaudited)	6

	Note s to the Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	34

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

	Signatures	37


	September 30, 2023		June 30, 2023
Assets
Current assets
Cash and cash equivalents	$	62,029	$	57,429
Accounts receivable, net	90,114		86,364
Prepaid expenses	6,843		6,616
Due from related parties	98		43
Tax advances and receivables	6,201		5,965
Other current assets	2,230		2,190
Total current assets	167,515		158,607

Non-current assets
Property and equipment, net	37,890		41,151
Operating lease assets	67,146		70,919
Goodwill	11,832		11,832
Deferred tax asset, net	4,340		4,585
Other non-current assets	6,757		6,230
Total non-current assets	127,965		134,717
Total assets	$	295,480	$	293,324

Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued liabilities	$	18,240	$	18,705
Accrued payroll and employee-related liabilities	32,913		29,360
Current deferred revenue	5,921		6,413
Current operating lease liabilities	13,014		13,036
Current maturities of long-term debt	396		413
Due to related parties	81		2,314
Income taxes payable	3,161		3,020
Total current liabilities	73,726		73,261

Non-current liabilities
Non-current deferred revenue	1,503		1,383
Non-current operating lease liabilities	61,058		64,854
Long-term debt	581		600
Other non-current liabilities	2,573		3,262
Total non-current liabilities	65,715		70,099
Total liabilities	139,441		143,360

Commitments and contingencies (Note 7)

Stockholders' equity
Common stock: par value $0.0001, 108,057,967 shares authorized, 18,169,329 and 18,280,419 shares outstanding as of September 30, 2023 and June 30, 2023, respectively	2		2
Additional paid-in capital	206,323		204,734
Treasury stock at cost: 379,971 and 245,447 shares as of September 30, 2023 and June 30, 2023, respectively	(5,726)		(3,682)
Accumulated other comprehensive loss	(7,207)		(6,312)
Accumulated deficit	(37,353)		(44,778)
Total stockholders' equity	156,039		149,964
Total liabilities and stockholders' equity	$	295,480	$	293,324


	Three Months Ended September 30,
	2023		2022
Revenue	$	124,609	$	127,805

Cost of services (exclusive of depreciation and amortization presented separately below)	88,196		96,153
Selling, general and administrative	23,040		19,305
Depreciation and amortization	5,042		4,677
Total operating expenses	116,278		120,135

Income from operations	8,331		7,670

Interest income	586		48
Interest expense	(104)		(148)
Income before income taxes	8,813		7,570

Provision for income tax expense	(1,388)		(1,047)
Net income	$	7,425	$	6,523

Other comprehensive income / (loss)
Foreign currency translation adjustments	$	(701)	$	(1,677)
Unrealized loss on cash flow hedging instruments, net of tax	(194)		(261)
Total other comprehensive loss	(895)		(1,938)
Total comprehensive income	$	6,530	$	4,585

Net income per share
Basic	$	0.41	$	0.36
Diluted	$	0.39	$	0.35

Weighted average common shares outstanding
Basic	18,287		18,141
Diluted	18,898		18,641


	Common shares			Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount		Amount
Balance, June 30, 2022	18,247	$	2	$	(3,406)	$	197,785	$	(4,562)	$	(76,360)	$	113,459
Net income	—	—		—		—		—		6,523		6,523
Foreign currency translation adjustment	—	—		—		—		(1,677)		—		(1,677)
Changes in fair value of cash flow hedges	—	—		—		—		(261)		—		(261)
Purchase of treasury shares	(19)	—		(276)		—		—		—		(276)
Provision for common stock warrants	—	—		—		286		—		—		286
Issuance of common shares	2	—		—		21		—		—		21
Stock based compensation expense	—	—		—		806		—		—		806
Balance, September 30, 2022	18,230	$	2	$	(3,682)	$	198,898	$	(6,500)	$	(69,837)	$	118,881


	Three months ended September 30,
($000s)	2023		2022
Revenue
United States	$	121,184	$	123,913
Other countries	3,425		3,892
Total	$	124,609	$	127,805


	September 30,		June 30,
($000s)	2023		2023
Accounts receivable	$	90,245	$	86,484
Less: Allowance for credit losses	(131)		(120)
Accounts receivable, net	$	90,114	$	86,364


($000s)	Operating Leases		Finance Leases
2024-remainder of year	$	14,148	$	408
2025	17,243		480
2026	15,822		270
2027	15,578		41
2028	12,700		—
Thereafter	19,485		—
Total undiscounted lease payments	94,976		1,199
Less: liability accretion	(20,904)		(222)
Total lease liabilities	$	74,072	$	977


Settlement date	Hedged currency	Foreign currency rate	Notional amount ($000s)		Fair Value ($000s)
Foreign currency option contracts - liabilities
October 5, 2023 through September 23, 2024	PHP	52.50 - 57.90	$	34,251
Fair value as of June 30, 2023					$	100
Fair value as of September 30, 2023					$	316


	Three Months Ended September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	7,425	$	6,523
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,042		4,677
Noncash lease expense	3,225		3,554
Warrant contra revenue	287		286
Deferred income tax	244		292
Share-based compensation expense	848		1,122
Allowance of expected credit losses	11		2
Change in assets and liabilities:
Increase in accounts receivable	(3,792)		(6,891)
Increase in prepaid expenses and other current assets	(1,256)		(143)
Increase in accounts payable and accrued liabilities	206		869
Decrease in deferred revenue	(372)		(1,265)
Decrease in operating lease liabilities	(3,184)		(3,464)
Net cash inflow from operating activities	8,684		5,562

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(2,052)		(3,558)
Net cash outflow from investing activities	(2,052)		(3,558)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit	37		9,355
Repayments of line of credit	(89)		(14,000)
Repayment of debt	—		(2,686)
Proceeds from the exercise of options	5		21
Principal payments on finance leases	(88)		(80)
Purchase of treasury shares	(1,832)		(276)
Net cash outflow from financing activities	(1,967)		(7,666)
Effects of exchange rate difference on cash and cash equivalents	(65)		(318)
Net increase / (decrease) in cash and cash equivalents	4,600		(5,980)
Cash and cash equivalents, beginning	57,429		48,831
Cash and cash equivalents, ending	$	62,029	$	42,851

Supplemental cash flow disclosures
Cash paid for interest	$	104	$	148
Cash paid for income taxes	$	1,086	$	121


	Three months ended September 30,
($000s)	2023		2022
Revenue
Onshore (United States)	$	31,536	$	38,177
Offshore (Philippines, Pakistan)	57,359		51,156
Nearshore (Jamaica, Nicaragua, Honduras)	35,714		38,472
Total	$	124,609	$	127,805


	Three months ended September 30,
($000s)	2023		2022
Pattern of Revenue recognition
Services transferred over time	$	115,338	$	118,354
Services transferred at a point in time	9,271		9,451
Total	$	124,609	$	127,805


	Three months ended September 30,
($000s)	2023		2022
Beginning balance	$	7,796	$	12,593
Revenue recognized	(2,672)		(3,948)
Revenue deferred	2,300		2,684
Ending balance	$	7,424	$	11,329

SEC Form 10-Q filed by IBEX Limited