Record Q3 2016 Revenue of $46.1 million,
up 79% YOYRecord Q3 2016 Earnings
per Share of $0.25Record Q3 2016
Adjusted Earnings per Share of $0.33Policies in
force totaled approximately 252,100, up 84%
YOYRevised 2016 guidance upward
Health Insurance Innovations, Inc. (HII) (NASDAQ:HIIQ), a leading
developer, distributor, and virtual administrator of affordable
health insurance and supplemental plans announced financial results
for the third quarter ended September 30, 2016. The Company
will host a live conference call on Thursday, November 3, 2016 at
8:30 A.M. EST.
Third Quarter 2016 Consolidated Financial
Highlights
- Revenue was $46.1 million, an increase of 78.7% over $25.8
million in the third quarter of 2015.
- Total collections from customers, which our industry refers to
as premium equivalents, of $78.5 million, an increase of 81.0%
over $43.4 million in the third quarter of 2015.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) was $8.1 million, compared to $1.9 million in the
third quarter of 2015.
- GAAP Net Income per diluted share for the third quarter of 2016
was $0.25, compared to $0.10 in the third quarter of 2015.
- Adjusted EPS, also referred to as Adjusted Net Income per
Share, was $0.33 in the third quarter of 2016 compared to $0.08 in
the third quarter of 2015.
- Policies in force as of September 30, 2016, totaled
approximately 252,100, an 84% increase from 136,800 as of September
30, 2015.
Premium equivalents, adjusted EBITDA, and adjusted EPS are
non-GAAP financial measures. See the reconciliations of these
measures to their respective most directly comparable GAAP measure
below in this press release.
Revised 2016 Full Year Guidance
For the full year 2016 we expect Revenue to grow between 60% and
70% year-over-year ($170 million to $175 million) and Adjusted EPS
to grow between 210% and 240% ($0.85 to $0.92).
Previously we guided Revenue of $155 million to $165 million and
Adjusted EPS of $0.55 to $0.65.
"Our third quarter performance reflects strong demand for our
affordable health insurance products while we continued to execute
on our plan” said Patrick McNamee, HII's Chief Executive
Officer. “Our strong distribution network, including our e-commerce
division, AgileHealthInsurance.com, and our diverse product
offering continued to drive our sales growth.”
Regulatory Update
On October 31, 2016, the Department of Health and Human Services
(HHS) published their rule that beginning January 1, 2017, limit
short-term, limited-duration insurance is to be effective no more
than three months and require notification of non-compliance with
the minimum essential coverage standards set forth in the
Affordable Care Act (ACA).
“Although we are disappointed that HHS has decided to implement
changes that will further limit consumer options for affordable
health insurance, despite receiving many comments raising concerns
about harmful effects on various consumer groups, we believe strong
demand exists for our other affordable health insurance options,
and we will focus on providing such products” said Patrick
McNamee, HII's Chief Executive Officer. “We are also confident that
HII will continue to develop new and innovative products that will
meet ever-changing consumer needs. We look forward to working with
state and federal insurance regulators to ensure consumers continue
to have access to health insurance products that meet their
personal and financial needs.”
Third Quarter Financial Discussion
Third quarter revenues of $46.1 million increased 78.7%,
compared to the third quarter of 2015, driven by an increase in
policies in force and continued strong demand for our health
insurance and supplemental plans.
Adjusted gross margin in the third quarter, which is defined as
revenue less third-party commissions and credit card or ACH fees,
was up both year-over-year and sequentially to $19.3 million.
Adjusted gross margin as a percentage of revenues in the third
quarter of 2016 was 41.9%, down year-over-year but favorable
sequentially. The year-over-year reduced gross margin
percentage was driven by a revenue mix shift in the quarter towards
non-owned call centers and away from owned call centers due to the
restructuring of two owned call centers in late 2015.
Total selling, general and administrative (“SG&A”) expenses
were $11.9 million (25.7% of revenues) in the third quarter of
2016, compared to $10.8 million (42.0% of revenues) in the same
period in 2015. Our core SGA for the quarter – total SGA less
marketing leads and advertising, stock compensation and
non-recurring costs – as a percentage of revenue was 18.1% in third
quarter of 2016, compared to 30.8% in the third quarter of
2015. Improvements in SG&A for the quarter as a
percentage of revenue, compared to the same period last year, were
the result of continued focus on operational efficiencies and the
restructuring of two owned call centers in late 2015.
EBITDA was $7.4 million in the third quarter of 2016, compared
to $1.5 million in the same period in 2015. Adjusted EBITDA
is calculated as EBITDA adjusted for items that are not part of
regular operating activities, including restructuring costs and
other non-cash items such as stock-based compensation.
Adjusted EBITDA was $8.1 million in the third quarter of 2016,
compared to $1.9 million in the same period in 2015. Adjusted
EBITDA as a percentage of revenue was 17.6% in the third quarter of
2016, compared to 7.3% in the same period in 2015. A reconciliation
of net income to EBITDA and adjusted EBITDA for the three and nine
months ending September 30, 2016 and 2015 is included within this
press release.
GAAP net income per diluted share for the third quarter was
$0.25, compared to $0.10 in the third quarter of 2015. Adjusted EPS
for the third quarter of 2016 was $0.33, compared to $0.08 in the
prior year. Adjusted EPS is a key measure used by management and
the investment community to understand and evaluate our core
operating performance and trends. A reconciliation of net income to
adjusted net income per share is included within this press
release.
The company makes short-term loans to our distributors, based on
actual sales, that we refer to as advanced commissions. These
advanced commissions assist our distributors with cost-of-lead
acquisition and provide working capital. We recover the loans
from future commissions earned on premiums collected over the
period in which policies renew. The third quarter advanced
commission balance of $30.7 million is a decrease of $2.1 million
from the second quarter of 2016.
Cash and cash equivalents totaled $14.3 million at the end of
the third quarter of 2016. Cash at September 30th 2016 increased by
$5.0 million from June 30th 2016 which includes reductions for
paying down $9.0 million of our bank line of credit.
Conference Call and Webcast
The company will host an earnings conference call on November 3,
2016 at 8:30 A.M. Eastern time. All interested parties can
join the call by dialing (855) 327-6837; or (778) 327-3988;
the conference ID is 10001950. A webcast of the call
may be accessed in the Investor Relations section of Health
Insurance Innovations’ website at
http://investor.hiiquote.com/events.com. An archive of the
call will be available for 30 days through the same website.
About Health Insurance Innovations, Inc.
(HII)
HII is a market leader in developing innovative health insurance
products that are affordable and meet the needs of health insurance
plan shoppers. HII develops insurance products through partnerships
with best-in-class insurance companies and markets them via its
broad distribution network of licensed insurance agents across the
nation, its call center network and its unique online
capability. Additional information about HII can be found at
HiiQuote.com. HII’s Consumer Division includes
AgileHealthInsurance.com, a website for researching, comparing and
purchasing short-term health insurance products online and
HealthPocket.com, a free website that compares and ranks all health
insurance plans, and uses objective data to publish unbiased health
insurance market analyses and other consumer advocacy
research.
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
HII’s current assumptions, expectations and beliefs are generally
identifiable by use of words “may,” “might,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential” or “continue,” or similar expressions 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, our ability to
integrate our acquisitions, competition, changes and developments
in the United States health insurance system and laws, and HII’s
ability to adapt to them, the ability to maintain and enhance our
name recognition, difficulties arising from acquisitions or other
strategic transactions, 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 discussed in HII's most
recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission (SEC) as well as other documents that may be
filed by HII from time to time with the Securities and Exchange
Commission, which are available at www.sec.gov. 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 any
forward-looking 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 INSURANCE INNOVATIONS,
INC. |
|
Condensed Consolidated Balance
Sheets |
($ in thousands, except share and per share
data) |
|
|
September 30, 2016 |
|
December 31, 2015 |
|
(unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
14,259 |
|
|
$ |
7,695 |
|
Restricted cash |
|
10,457 |
|
|
|
7,906 |
|
Accounts receivable, net, prepaid
expenses and other current assets |
|
1,533 |
|
|
|
1,778 |
|
Advanced commissions, net |
|
30,693 |
|
|
|
24,531 |
|
Income taxes receivable |
|
— |
|
|
|
591 |
|
Total current
assets |
|
56,942 |
|
|
|
42,501 |
|
Property and equipment,
net |
|
3,681 |
|
|
|
2,004 |
|
Goodwill |
|
41,076 |
|
|
|
41,076 |
|
Intangible assets,
net |
|
8,419 |
|
|
|
10,061 |
|
Other assets |
|
257 |
|
|
|
142 |
|
Total assets |
$ |
110,375 |
|
|
$ |
95,784 |
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and accrued
expenses |
$ |
21,251 |
|
|
$ |
17,847 |
|
Deferred revenue |
|
226 |
|
|
|
384 |
|
Current portion of contingent
acquisition consideration |
|
— |
|
|
|
532 |
|
Income taxes payable |
|
1,286 |
|
|
|
— |
|
Due to member |
|
4,287 |
|
|
|
342 |
|
Other current liabilities |
|
177 |
|
|
|
203 |
|
Total current liabilities |
|
27,227 |
|
|
|
19,308 |
|
Revolving line of
credit |
|
5,000 |
|
|
|
7,500 |
|
Deferred tax
liability |
|
82 |
|
|
|
358 |
|
Due to member |
|
361 |
|
|
|
406 |
|
Other liabilities |
|
185 |
|
|
|
158 |
|
Total liabilities |
|
32,855 |
|
|
|
27,730 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Class A common
stock (par value $0.001 per share, 100,000,000 shares authorized;
7,910,086and 7,910,086 shares issued, respectively; and 7,744,497
and 7,759,092 shares outstanding,respectively) |
|
8 |
|
|
|
8 |
|
Class B common stock
(par value $0.001 per share, 20,000,000 shares authorized;
6,841,667shares issued and outstanding, respectively) |
|
7 |
|
|
|
7 |
|
Preferred stock (par
value $0.001 per share, 5,000,000 shares authorized; no shares
issued andoutstanding) |
|
— |
|
|
|
— |
|
Additional paid-in
capital |
|
45,882 |
|
|
|
44,591 |
|
Treasury stock, at cost
(165,588 and 150,993 shares, respectively) |
|
(1,529 |
) |
|
|
(1,542 |
) |
Retained earnings
(accumulated deficit) |
|
1,608 |
|
|
|
(3,093 |
) |
Total Health Insurance Innovations,
Inc. stockholders’ equity |
|
45,976 |
|
|
|
39,971 |
|
Noncontrolling
interests |
|
31,544 |
|
|
|
28,083 |
|
Total stockholders’ equity |
|
77,520 |
|
|
|
68,054 |
|
Total liabilities and stockholders'
equity |
$ |
110,375 |
|
|
$ |
95,784 |
|
HEALTH INSURANCE INNOVATIONS,
INC. |
|
Condensed Consolidated Statements of
Operations (unaudited) |
($ in thousands, except share and per share
data) |
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenues (premium
equivalents of $78,548 and $43,404 for the three monthsended
September 30, 2016 and 2015, respectively and $226,265 and
$120,216for the nine months ended September 30, 2016 and 2015,
respectively) |
|
$ |
46,108 |
|
|
$ |
25,799 |
|
|
$ |
133,092 |
|
|
$ |
71,087 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Third-party commissions |
|
|
25,860 |
|
|
|
13,243 |
|
|
|
77,709 |
|
|
|
35,337 |
|
Credit card and ACH fees |
|
|
921 |
|
|
|
569 |
|
|
|
2,778 |
|
|
|
1,581 |
|
Selling, general and
administrative |
|
|
11,853 |
|
|
|
10,845 |
|
|
|
35,520 |
|
|
|
32,360 |
|
Depreciation and amortization |
|
|
835 |
|
|
|
687 |
|
|
|
2,367 |
|
|
|
2,255 |
|
Total operating expenses |
|
|
39,469 |
|
|
|
25,344 |
|
|
|
118,374 |
|
|
|
71,533 |
|
Income (loss) from operations |
|
|
6,639 |
|
|
|
455 |
|
|
|
14,718 |
|
|
|
(446 |
) |
|
|
|
|
|
|
|
|
|
Other (income)
expense: |
|
|
|
|
|
|
|
|
Interest (income) expense |
|
|
(102 |
) |
|
|
(8 |
) |
|
|
53 |
|
|
|
(25 |
) |
Fair value adjustment to contingent
acquisition consideration |
|
|
— |
|
|
|
(438 |
) |
|
|
15 |
|
|
|
(824 |
) |
Other (income) expense |
|
|
27 |
|
|
|
83 |
|
|
|
459 |
|
|
|
(170 |
) |
Net income before
income taxes |
|
|
6,714 |
|
|
|
818 |
|
|
|
14,191 |
|
|
|
573 |
|
Provision (benefit) for income
taxes |
|
|
1,580 |
|
|
|
(701 |
) |
|
|
2,501 |
|
|
|
(664 |
) |
Net income |
|
|
5,134 |
|
|
|
1,519 |
|
|
|
11,690 |
|
|
|
1,237 |
|
Net income attributable to
noncontrolling interests |
|
|
3,195 |
|
|
|
788 |
|
|
|
6,989 |
|
|
|
779 |
|
Net income attributable
to Health Insurance Innovations, Inc. |
|
$ |
1,939 |
|
|
$ |
731 |
|
|
$ |
4,701 |
|
|
$ |
458 |
|
|
|
|
|
|
|
|
|
|
Per share
data: |
|
|
|
|
|
|
|
|
Net income per
share attributable to Health Insurance Innovations,
Inc. |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
|
$ |
0.10 |
|
|
$ |
0.62 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
0.25 |
|
|
$ |
0.10 |
|
|
$ |
0.61 |
|
|
$ |
0.06 |
|
Weighted
average Class A common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
7,614,252 |
|
|
|
7,531,827 |
|
|
|
7,590,347 |
|
|
|
7,521,124 |
|
Diluted |
|
|
7,723,196 |
|
|
|
7,571,464 |
|
|
|
7,724,168 |
|
|
|
7,613,433 |
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA |
(unaudited) |
($ in
thousands) |
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net income |
$ |
5,134 |
|
|
$ |
1,519 |
|
|
$ |
11,690 |
|
|
$ |
1,237 |
|
Interest (income) expense |
|
(102 |
) |
|
|
(8 |
) |
|
|
53 |
|
|
|
(25 |
) |
Depreciation and amortization |
|
835 |
|
|
|
687 |
|
|
|
2,367 |
|
|
|
2,255 |
|
Provision (benefit) for income taxes |
|
1,580 |
|
|
|
(701 |
) |
|
|
2,501 |
|
|
|
(664 |
) |
EBITDA |
|
7,447 |
|
|
|
1,497 |
|
|
|
16,611 |
|
|
|
2,803 |
|
Non-cash stock-based compensation |
|
393 |
|
|
|
314 |
|
|
|
1,362 |
|
|
|
1,001 |
|
Fair value adjustment to contingent
consideration |
|
— |
|
|
|
(438 |
) |
|
|
15 |
|
|
|
(824 |
) |
Transaction costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
Tax receivable agreement liability
adjustment |
|
29 |
|
|
|
239 |
|
|
|
458 |
|
|
|
345 |
|
Other non-recurring charges |
|
224 |
|
|
|
273 |
|
|
|
446 |
|
|
|
671 |
|
Adjusted EBITDA |
$ |
8,093 |
|
|
$ |
1,885 |
|
|
$ |
18,892 |
|
|
$ |
4,020 |
|
Reconciliation of Net Income to Adjusted Net Income per
Share |
(unaudited) |
($
in thousands except per share data) |
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net income |
$ |
5,134 |
|
|
$ |
1,519 |
|
|
$ |
11,690 |
|
|
$ |
1,237 |
|
Interest (income)
expense |
|
(102 |
) |
|
|
(8 |
) |
|
|
53 |
|
|
|
(25 |
) |
Amortization |
|
527 |
|
|
|
592 |
|
|
|
1,642 |
|
|
|
2,064 |
|
Provision (benefit) for
income taxes |
|
1,580 |
|
|
|
(701 |
) |
|
|
2,501 |
|
|
|
(664 |
) |
Non-cash stock-based
compensation |
|
393 |
|
|
|
314 |
|
|
|
1,362 |
|
|
|
1,001 |
|
Fair value adjustment
to contingent consideration |
|
— |
|
|
|
(438 |
) |
|
|
15 |
|
|
|
(824 |
) |
Transaction costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
Tax receivable
agreement liability adjustment |
|
29 |
|
|
|
239 |
|
|
|
458 |
|
|
|
345 |
|
Other non-recurring
charges |
|
224 |
|
|
|
273 |
|
|
|
446 |
|
|
|
671 |
|
Adjusted pre-tax income |
|
7,785 |
|
|
|
1,790 |
|
|
|
18,167 |
|
|
|
3,829 |
|
Pro forma income
taxes |
|
(2,958 |
) |
|
|
(680 |
) |
|
|
(6,903 |
) |
|
|
(1,455 |
) |
Adjusted net income |
$ |
4,827 |
|
|
$ |
1,110 |
|
|
$ |
11,264 |
|
|
$ |
2,374 |
|
Total weighted average
diluted share count |
|
14,565 |
|
|
|
14,413 |
|
|
|
14,566 |
|
|
|
14,455 |
|
Adjusted net income per
share |
$ |
0.33 |
|
|
$ |
0.08 |
|
|
$ |
0.77 |
|
|
$ |
0.16 |
|
|
(1) EBITDA is defined as net income before interest expense,
income taxes and depreciation and amortization. We have included
EBITDA in this report because it is a key measure used by our
management and Board of Directors 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 exclusion of certain expenses in
calculating EBITDA can provide a useful measure for
period-to-period comparisons of our business. However, 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 generally accepted accounting principles in the
United States of America (“GAAP”). 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
GAAP.
(2) To calculate adjusted EBITDA, we calculate EBITDA, which is
then further adjusted for items that are not part of regular
operating activities, including acquisition costs, and other
non-cash items such as non-cash stock-based compensation. Adjusted
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 GAAP. We have presented adjusted
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 adjusted EBITDA
differently than we do. Adjusted 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
GAAP.
(3) To calculate adjusted net income, we calculate net income
then add back amortization (but not depreciation), interest, tax
expense and other items that are not part of regular operating
activities, including acquisition costs, restructuring costs,
contract termination costs, tax receivable agreement liability
adjustments, and other non-cash items such as non-cash stock-based
compensation and fair value adjustment to contingent consideration.
From adjusted pre-tax net income we apply a pro forma tax expense
calculated at an assumed rate of 38%. We believe that when
measuring Company and executive performance against the adjusted
net income measure, applying a pro forma tax rate better reflects
the performance of the Company without regard to the Company’s
organizational tax structure. We have included adjusted net income
in this report because it is a key performance measure used by our
management to understand and evaluate our core operating
performance and trends and because we believe it is frequently used
by analysts, investors and other interested parties in their
evaluation of our company. Other companies may calculate this
measure differently than we do. Adjusted net income has limitations
as an analytical tool, and you should not consider it in isolation
or substitution for earnings per share as reported under GAAP.
(4) Adjusted net income per share is computed by dividing
adjusted net income by the total number of diluted Class A and
Class B shares of our common stock for each period. We have
included adjusted net income per share in this report because it is
a key measure used by our management to understand and evaluate our
core operating performance and trends and because we believe it is
frequently used by analysts, investors and other interested parties
in the evaluation of companies. Other companies may calculate this
measure differently than we do. Adjusted net income per share has
limitations as an analytical tool, and you should not consider it
in isolation or as a substitute for earnings per share as reported
under GAAP.
Reconciliation of Premium Equivalents to Revenues &
Adjusted Gross Margin |
(unaudited) |
($ in
thousands) |
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Premium
equivalents |
|
$ |
78,548 |
|
|
$ |
43,404 |
|
|
$ |
226,265 |
|
|
$ |
120,216 |
|
Less risk premium |
|
|
31,056 |
|
|
|
16,728 |
|
|
|
88,880 |
|
|
|
46,596 |
|
Less amounts earned by third party
obligors |
|
|
1,384 |
|
|
|
877 |
|
|
|
4,293 |
|
|
|
2,533 |
|
Revenues |
|
|
46,108 |
|
|
|
25,799 |
|
|
|
133,092 |
|
|
|
71,087 |
|
Third-party commissions |
|
|
25,860 |
|
|
|
13,243 |
|
|
|
77,709 |
|
|
|
35,337 |
|
Credit card and ACH fees |
|
|
921 |
|
|
|
569 |
|
|
|
2,778 |
|
|
|
1,581 |
|
Adjusted gross
margin |
|
$ |
19,327 |
|
|
$ |
11,987 |
|
|
$ |
52,605 |
|
|
$ |
34,169 |
|
|
(1) Premium equivalents is defined as the combination of
premiums, fees for discount benefit plans (a non-insurance benefit
product that supplements or enhances an insurance product), fees
for distributors, our enrollment fees and third-party commissions
and referral fees. From premium equivalents, we remit risk premium
to carriers and amounts earned by discount benefit plan providers,
who we refer to as third-party obligors, such carriers and
third-party obligors being the ultimate parties responsible for
providing the insurance coverage or discount benefits to the
member. Our revenues consist of the balance of the premium
equivalents. We have included premium equivalents in this report
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. This financial measurement is
considered a non-GAAP financial measure and is not recognized under
GAAP and should not be used as, and is not an alternative to,
revenues as a measure of our operating performance.
(2) Adjusted gross margin is defined as revenues less third
party commissions and credit card and ACH fees. Adjusted
gross margin does not represent, and should not be considered as,
an alternative to revenues, as determined in accordance with GAAP.
Adjusted gross margin 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-term
and long-term operational plans. In particular, adjusted gross
margin can provide a useful measure for period-to-period
comparisons of our business. Adjusted gross margin 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
GAAP.
Summary of
selected metrics |
(unaudited) |
($ in
thousands) |
|
|
|
Submitted Applications during ThreeMonths
Ended September 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
Change (%) |
IFP |
|
|
66,800 |
|
|
|
44,900 |
|
|
49 |
% |
|
Supplemental products |
|
|
59,500 |
|
|
|
44,600 |
|
|
33 |
% |
|
Total |
|
|
126,300 |
|
|
|
89,500 |
|
|
41 |
% |
|
|
|
Policies in Force as of September
30, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
Change (%) |
|
IFP |
|
|
120,900 |
|
|
|
60,700 |
|
|
|
|
99 |
% |
|
Supplemental
products |
|
|
131,200 |
|
|
|
76,200 |
|
|
|
|
72 |
% |
|
Total |
|
|
252,100 |
|
|
|
136,900 |
|
|
|
|
84 |
% |
|
|
Submitted IFP Applications by
Channel |
|
|
|
Q3'15 |
|
Q4'15 |
|
Q1'16 |
|
Q2’16 |
|
Q3’16 |
Agile |
5,800 |
|
11,300 |
|
23,100 |
|
16,000 |
|
21,100 |
All Others |
39,100 |
|
57,900 |
|
72,300 |
|
49,000 |
|
45,700 |
Total |
44,900 |
|
69,200 |
|
95,400 |
|
65,000 |
|
66,800 |
|
|
|
|
Core SG&A as a Percentage of Revenue |
|
Q3'15 |
|
Q4'15 |
|
Q1'16 |
|
Q2’16 |
|
Q3’16 |
Total SG&A |
$ |
10,845 |
|
|
$ |
14,964 |
|
|
$ |
11,970 |
|
|
$ |
11,697 |
|
|
$ |
11,853 |
|
Less: Stock-based compensation |
|
313 |
|
|
|
363 |
|
|
|
486 |
|
|
|
482 |
|
|
|
393 |
|
Less: Other non-recurring
charges |
|
273 |
|
|
|
2,952 |
|
|
|
119 |
|
|
|
103 |
|
|
|
224 |
|
Less: Marketing and
Advertising |
|
2,305 |
|
|
|
3,046 |
|
|
|
2,820 |
|
|
|
2,449 |
|
|
|
2,875 |
|
Core SG&A |
$ |
7,954 |
|
|
$ |
8,603 |
|
|
$ |
8,545 |
|
|
$ |
8,663 |
|
|
$ |
8,361 |
|
% of Revenue |
|
30.8 |
% |
|
|
25.6 |
% |
|
|
20.1 |
% |
|
|
19.5 |
% |
|
|
18.1 |
% |
Contacts:
Health Insurance Innovations, Inc.:
Michael Hershberger
Chief Financial Officer
(877) 376-5831 ext. 282
mhershberger@hiiquote.com
Investor Contact:
Investor Relations office
(813) 452-5221
IR@hiiquote.com
Media Contact for AgileHealthInsurance.com & HealthPocket.com:
Amy Fletcher
(720) 350-3144
info@afmcommunications.com
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