Health Insurance Innovations Reports Fourth Quarter and Full Year 2012 Financial and Operating Results
14 Março 2013 - 8:00AM
- Company to Host Conference
Call and Webcast at 8:30 a.m. EDT, Today, March 14, 2013
-
Health Insurance Innovations, Inc. (Nasdaq:HIIQ) ("HII" or
"Company"), a leading developer and administrator of affordable,
cloud-based individual health insurance plans and ancillary
products, today reported financial and operating results for the
fourth quarter and full year ended December 31, 2012. The results
are for Health Plan Intermediaries, LLC and Subsidiaries, which was
the reporting entity for the business before completion of the
initial public offering. The Company will host a conference call
and webcast at 8:30 a.m. EDT, today.
"2012 has been a year of great success and achievement for HII,"
said Michael Kosloske, Chairman, President and Chief Executive
Officer of HII. "During the year, we set the stage for the
commencement of our initial public offering, which we successfully
completed on February 7, 2013, raising $60.8 million after
underwriters' discount and fees. We used a portion of the proceeds
to repay all of our outstanding debt under our term loan. We expect
to use the remaining proceeds to advance our business by adding
distribution channels to more broadly place our products. We are
optimistic about our growth opportunities and our plans to expand
awareness of our brand in this fast changing and growing market
place for affordable individual health plans and ancillary
products."
2012 Financial Highlights
- Revenue increased 40.1% on a year over year basis to $41.9
million during 2012, compared to $29.9 million in 2011. Revenue in
the fourth quarter of 2012 increased 45.7% to $11.8 million
compared to $8.1 million in the fourth quarter of 2011.
- EBITDA (earnings before interest, taxes, depreciation and
amortization) was $4.5 million for the full year 2012, representing
10.7% of revenue, compared to $2.7 million of EBITDA in 2011,
representing 9.0% of revenue. For the fourth quarter of 2012,
EBITDA was $1.0 million representing 8.5% of revenue compared to
$0.9 million for the same period in 2011. EBITDA as a percentage of
revenue is lower in the fourth quarter of 2012 compared to the year
ended 2012, primarily due to professional fees related to our
reorganization and other actions leading up to our initial public
offering in the first quarter of 2013. A reconciliation of net
income to EBITDA for the three months and years ended December 31,
2012 and 2011 is included in the financial supplement included in
this press release.
- Premium equivalents increased 42.7% to $75.9 million in 2012,
compared to $53.2 million in 2011. Premium equivalents in the
fourth quarter of 2012 increased 43.0% to $21.3 million, compared
to $14.9 million for the same period in 2011. A reconciliation of
premium equivalents to revenues for the three months and years
ended December 31, 2012 and 2011 is included in the financial
supplement included in this press release.
- Net income increased 37.5% to $3.3 million in 2012, compared to
$2.4 million in 2011. Net income in the fourth quarter of 2012
increased 40.0% to $0.7 million, compared to $0.5 million in the
fourth quarter of 2011.
- Operating cash flow increased 140.9% to $5.3 million in 2012,
compared to $2.2 million in 2011. Operating cash flow in the fourth
quarter of 2012 increased 16.7% to $0.7 million, compared to $0.6
million in the fourth quarter of 2011.
Recent Accomplishments and Corporate
Highlights
- Completed initial public offering which consisted of 4,666,667
shares of Class A common stock priced at $14 per share. HII also
granted the underwriters a 30-day option to purchase up to an
additional 700,000 shares of Class A common stock to cover
over-allotments, of which 100,000 shares were exercised on March 8,
2013.
- Policies in force have expanded by 93.7% in 2012 to 58.1
thousand, compared to 30.0 thousand in 2011.
- Initiated Insurance Academy to train call center managers and
establish relationships with new call centers.
- Expanded distribution service to 46 licensed agent call
centers, 262 wholesalers and more than 8,275 licensed brokers.
- Expanded the product offering to include Critical Illness,
Accident Medical Expense, Dental Insurance, and International
Travel Medical.
"There are several factors that we expect to be instrumental to
HII's continued rapid growth in 2013 and 2014," Mr. Kosloske
concluded. These factors include:
- Advancing commissions to our distributors that will assist in
funding their lead generation costs and will provide us with a
competitive advantage in attracting and retaining distributors and
increase sales.
- Expansion of call centers and training call center managers to
successfully selling HII's products. Our goal is to establish
relationships with 10-20 new call centers each year through the
Insurance Academy initiative.
- We expect changes in the Affordable Care Act scheduled for 2014
will make HII short-term medical ("STM") products more appealing,
because these new rules assure members that if they discontinue
STM, another health insurance product will be available to them,
regardless of their health status at that time.
Q1 2013 Activity
- HII entered into an agreement to terminate certain contract
rights with TSG Agency, LLC ("TSG") for an aggregate cash price of
$5.5 million. Additionally, there will be approximately $0.3
million of costs related to the transaction. Due to the structure
of the transaction, the full amount plus transaction costs will be
expensed in the first quarter of 2013 under U.S. generally accepted
accounting principles ("U.S. GAAP"), which we believe will result
in a net loss for the quarter. Ivan Spinner, founder and owner of
TSG Agency, LLC, a managing general agent of HII, will join HII as
an employee. HII expects the transaction to reduce third party
commissions otherwise payable to TSG on a quarterly basis beginning
in the second quarter of 2013 and forward, which we believe will
positively impact our bottom line. We do not expect to incur any
material amount of future expense associated with the
transaction.
- We incurred additional professional fees and other costs of
approximately $0.6 million associated with the IPO, which will
impact our earnings in the first quarter of 2013.
- Equity grants were awarded to certain employees and members of
our Board of Directors, including a restricted stock grant of
400,000 shares to Michael Hershberger, our Chief Financial
Officer. The anticipated charges related to this non-cash
equity-based compensation will be recorded on an accelerated basis,
resulting in approximately $0.8 million recognized in the first
quarter of 2013 and approximately $4.9 million recognized during
the year ending December 31, 2013.
Conference Call and Webcast
The conference call may be accessed by dialing
877-312-8797 for domestic callers and 678-825-8236 for
international callers. Please specify to the operator that you
would like to join the "Health Insurance Innovations Fourth Quarter
and Full Year 2012 Financial Results Call, conference ID#:
20505988." The conference call will be webcast live under the
investor relations section of HII's website at www.hiiquote.com,
and will be archived there for 30 days following the call. Please
visit HII's website 15 minutes prior to the start of the broadcast
to ensure adequate time for any software download that may be
necessary.
About Health Insurance Innovations,
Inc.
Headquartered in Tampa, Florida, Health Insurance
Innovations, Inc. is a leading developer and administrator of
affordable, cloud-based, individual health insurance plans and
ancillary products. We are an industry leader in the sale of
12-month short-term medical insurance plans, which provide an
economical alternative to Individual Major Medical plans, while
offering similar benefits. Our highly- scalable,
proprietary, cloud-based technology platform allows for mass
distribution of and online enrollment in our large and diverse
portfolio of affordable health insurance offerings, providing
customers immediate access to our products through our distribution
partners. Anywhere. Anytime. Additional information about HII
can be found at www.hiiquote.com. The reference to our website is
not intended to incorporate our website into this press
release.
The Health Insurance Innovations logo is available
at http://www.globenewswire.com/newsroom/prs/?pkgid=17247
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are statements other than
historical fact, and may include statements relating to goals,
plans and projections regarding new markets, products, services,
growth strategies, anticipated trends in our business and
anticipated changes and developments in the United States health
insurance system and laws. Forward-looking statements are based on
management's current expectations and beliefs and involve
significant risks and uncertainties that could cause actual
results, developments and business decisions to differ materially
from those contemplated by these statements. These risks and
uncertainties include, among other things, our ability to maintain
relationships and develop new relationships with health insurance
carriers and distributors, our ability to retain our members, the
demand for our products, the amount of commissions paid to us or
changes in health insurance plan pricing practices, changes and
developments in the United States health insurance system and
laws, the ability to maintain and enhance our name recognition and
our ability to build the necessary infrastructure and processes to
maintain effective controls over financial reporting. These and
other risk factors that could cause actual results to differ
materially from those expressed or implied in our forward-looking
statements are and will be discussed in HII's most recent S-1/A
filed with the Securities and Exchange Commission as well as other
documents that may be filed by HII from time to time with the
Securities and Exchange Commission.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. You should not rely on the
statement as representing our views in the future. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Health Plan
Intermediaries, LLC and Subsidiaries |
d/b/a Health Insurance
Innovations |
Consolidated Balance
Sheet |
(in
thousands) |
Unaudited |
|
|
|
December 31, |
|
2012 |
|
|
Assets |
|
Current assets: |
|
Cash |
$ 750 |
Cash held on behalf of others |
3,839 |
Credit card transactions
receivable |
104 |
Credit card transactions receivable for
others |
484 |
Accounts receivable |
273 |
Notes receivable |
110 |
Advanced commissions |
297 |
Prepaid expenses and other
assets |
107 |
|
|
Total current assets |
5,964 |
|
|
Property and equipment, net of accumulated
depreciation |
213 |
Deferred financing costs, net |
78 |
Capitalized offering costs |
1,819 |
Deposits |
22 |
Goodwill |
5,906 |
Intangible assets, net of accumulated
amortization |
3,959 |
|
|
Total assets |
$ 17,961 |
|
|
Liabilities and member's
equity |
|
Current liabilities: |
|
Accounts payable and accrued
expenses |
$ 2,062 |
Carriers and vendors payable |
2,790 |
Commissions payable |
1,533 |
Unearned commissions |
259 |
Notes payable |
54 |
Deferred rent |
20 |
Deferred other income |
9 |
Current portion of long-term
debt |
813 |
Current portion of noncompete
obligation |
155 |
Current portion of capital
leases |
3 |
Due to member |
773 |
|
|
Total current liabilities |
8,471 |
|
|
Capital lease obligations, less current
portion |
4 |
Long-term debt, less current
portion |
2,481 |
Noncompete obligation |
626 |
Deferred rent |
41 |
|
|
Total liabilities |
11,623 |
|
|
Member's equity |
6,335 |
Noncontrolling interest in subsidiary |
3 |
|
|
Total equity |
6,338 |
|
|
Total liabilities and equity |
$ 17,961 |
|
|
|
|
Health Plan
Intermediaries, LLC and Subsidiaries |
d/b/a Health Insurance
Innovations |
Consolidated Statements
of Operations |
(in
thousands) |
Unaudited |
|
|
|
Three Months |
Three Months |
|
|
|
Ended |
Ended |
Year ended |
Year ended |
|
December 31, |
December 31, |
December 31, |
December 31, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ 11,838 |
$ 8,090 |
$ 41,940 |
$ 29,878 |
Third-party commissions |
7,765 |
5,601 |
27,858 |
21,704 |
Credit cards and ACH fees |
269 |
197 |
963 |
670 |
General and administrative
expenses |
2,825 |
1,421 |
8,611 |
4,762 |
Depreciation and amortization |
242 |
269 |
1,012 |
298 |
|
|
|
|
|
Total operating costs and expenses |
11,101 |
7,488 |
38,444 |
27,434 |
|
|
|
|
|
Income from operations |
737 |
602 |
3,496 |
2,444 |
Other expenses (income): |
|
|
|
|
Interest expense |
76 |
71 |
271 |
71 |
Other income |
(13) |
— |
(35) |
— |
|
|
|
|
|
Net income |
$ 674 |
$ 531 |
$ 3,260 |
$ 2,373 |
|
|
|
|
|
Net loss attributable to noncontrolling
interest in subsidiary |
(26) |
— |
(89) |
— |
|
|
|
|
|
Net income attributable to Health Plan
Intermediaries, LLC |
$ 700 |
$ 531 |
$ 3,349 |
$ 2,373 |
|
|
|
|
|
|
Reconciliation of Net
Income to EBITDA |
For the Three Months
and the Years Ended December 31, 2012 and 2011 |
(in
thousands) |
Unaudited |
|
|
|
Three Months
Ended December 31, |
Year Ended December 31, |
|
2012 |
2011 |
2012 |
2011 |
|
(in
thousands) |
|
|
|
|
|
Net income |
$ 674 |
$ 531 |
$ 3,260 |
$ 2,373 |
Interest expense |
76 |
71 |
271 |
71 |
Interest income |
— |
— |
— |
— |
Depreciation and amortization |
242 |
269 |
1,012 |
298 |
EBITDA (1) |
$ 992 |
$ 871 |
$ 4,543 |
$ 2,742 |
|
|
|
|
|
(1) "EBITDA" is defined as net
income before interest expense, interest income and depreciation
and amortization. EBITDA does not represent, and should not be
considered as, an alternative to net income or cash flows from
operations, each as determined in accordance with U.S. GAAP. We
have presented EBITDA because we consider it an important
supplemental measure of our performance and believe that it is
frequently used by analysts, investors and other interested parties
in the evaluation of companies. Other companies may calculate
EBITDA differently than we do. EBITDA has limitations as an
analytical tool, and you should not consider it in isolation or as
a substitute for analysis of our results as reported under U.S.
GAAP. |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Premium Equivalents to Revenues |
For the Three Months
and the Years Ended December 31, 2012 and 2011 |
(in
thousands) |
Unaudited |
|
|
|
Three Months
Ended December 31, |
Year Ended December 31, |
|
2012 |
2011 |
2012 |
2011 |
|
(in
thousands) |
|
|
|
|
|
Premium equivalents (1) |
$ 21,323 |
$ 14,949 |
$ 75,872 |
$ 53,206 |
Less risk premium |
(9,050) |
(6,552) |
(32,346) |
(22,108) |
Less amounts earned by third party
obligors |
(435) |
(307) |
(1,586) |
(1,220) |
Revenues |
$ 11,838 |
$ 8,090 |
$ 41,940 |
$ 29,878 |
|
|
|
|
|
(1) "Premium equivalents" is
defined as the combination of premiums, fees for discount benefit
plans, fees for distributors and our enrollment fees. Premium
equivalents does not represent, and should not be considered as, an
alternative to revenues, as determined in accordance with U.S.GAAP.
We have included premium equivalents because it is a key measure
used by our management to understand and evaluate our core
operating performance and trends, to prepare and approve our annual
budget and to develop short- and long-term operational plans. In
particular, the inclusion of premium equivalents can provide a
useful measure for period-to-period comparisons of our business.
Premium equivalents has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under U.S. GAAP. |
CONTACT: Health Insurance Innovations, Inc.:
Bryan Krul
Senior Vice President
(877) 376 5831 ext.179
bkrul@hiiquote.com
Investor Contact:
Susan Noonan
S.A. Noonan Communications, LLC
(212) 966 3650
susan@sanoonan.com
Media Contact:
Andreas Marathovouniotis
Russo Partners, LLC
(212) 845-4235
andreas.marathis@russopartnersllc.com
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