Record 2016 Revenue of $184.5 million, up
76% YOYRecord Full Year 2016
Diluted Earnings per Share of $0.57, up 613%
YOYRecord Full Year 2016 Adjusted Earnings per
Share of $1.12, up 315% YOYRecord Policies in
force totaled approximately 290,100, up 49% YOY
Health Insurance Innovations, Inc. (NASDAQ:HIIQ), a leading
developer, distributor, and cloud-based administrator of affordable
health insurance and supplemental plans announced financial results
for the fourth quarter ended December 31, 2016. The Company
will host a live conference call on Thursday, March 2, 2017 at 8:30
A.M. EST.
2016 Consolidated Financial Highlights
- Revenue was $184.5 million, an increase of 76.2% over $104.7
million in 2015.
- Total collections from customers, which our industry refers to
as premium equivalents, of $311.6 million, an increase of
77.3% over $175.8 million in 2015.
- Net Income attributable to Health Insurance Innovations, Inc
was $4.5 million, compared to $0.6 million in 2015.
- Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization) was $27.8 million, compared to $6.6 million in
2015.
- GAAP diluted earnings per share was $0.57, compared to $0.08 in
2015.
- Adjusted earnings per share also referred to as Adjusted Net
Income per Share, was $1.12 in 2016 compared to $0.27 in
2015.
2017 Full Year Guidance
For the full year 2017 we expect Revenue to grow 15% to 20%
year-over-year ($210 million to $220 million), Adjusted EBITDA to
grow 20% to 30% year-over-year ($33 million to $36 million) and
Adjusted EPS to grow 20% to 30% ($1.35 to $1.45).
"We are pleased with record revenue and profit in 2016 and that
we exceeded our annual revenue and adjusted earnings per share
guidance. Sales accelerated in the 2017 open enrollment period,
across all our distribution channels. Record policies in force at
the end of 2016 – 290,100 policies, is a 49% year-over-year
increase,” said Gavin Southwell, HIIQ's Chief Executive
Officer and President.
“We have also invested in our customer service and compliance
functions - both by adding resource and technology solutions. These
market-leading support functions along with our enhanced use of
data and strong carrier relationships, mean we are well positioned
for future growth, whilst succeeding in our mission of providing
affordable health insurance and related products to the consumer,”
said Southwell.
Fourth Quarter 2016 Consolidated Financial
Highlights
- Revenue was $51.4 million, an increase of 53.0% over $33.6
million in the fourth quarter of 2015.
- Premium Equivalents of $85.3 million, an increase of 53.6%
over $55.6 million in the fourth quarter of 2015.
- Net Income attributable to Health Insurance Innovations, Inc
for the fourth quarter was a loss of $0.2 million, compared a
profit of $0.2 million in the fourth quarter of 2015.
- Adjusted EBITDA was $8.9 million, compared to $2.6 million in
the fourth quarter of 2015.
- GAAP diluted earnings per share for the fourth quarter of 2016
was a loss of $0.04, compared to $0.02 of income in the fourth
quarter of 2015; One-time items totaling $0.25 impacted Q4 2016
diluted earnings per share.
- Adjusted earnings per share was $0.35 in the fourth quarter of
2016 compared to $0.10 in the fourth quarter of 2015.
- Policies in force as of December 31, 2016, totaled
approximately 290,100, a 49% increase from 195,100 as of December
31, 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.
2016 Financial Discussion
2016 revenues of $184.5 million increased 76.2%, compared to
2015, driven by increased policies in force. Policies in
force as of December 31, 2016, totaled approximately 290,100, a 49%
increase from 195,100 as of December 31, 2015.
Total selling, general and administrative (“SG&A”) expenses
were $51.5 million (27.9% of revenues) in 2016, compared to $47.3
million (45.2% of revenues) in 2015. Our core SG&A for
the year – total SG&A less marketing leads and advertising,
stock compensation and non-recurring costs – as a percentage of
revenue was 18.5% in 2016, compared to 31.1% in 2015.
Adjusted EBITDA, 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, was $27.8 million in 2016, compared to $6.6 million
in 2015. Adjusted EBITDA as a percentage of revenue was 15.0%
in 2016, compared to 6.3% in 2015. EBITDA was $11.7 million in
2016, compared to $2.5 million in 2015.
GAAP diluted earnings per share for 2016 was $0.57, compared to
$0.08 in 2015. Adjusted EPS for 2016 was $1.12, compared to $0.27
in 2015.
Cash and cash equivalents totaled $12.2 million at December 31,
2016, an increase of $4.5 million from December 31st 2015.
Fourth Quarter Financial Discussion
Fourth quarter revenues of $51.4 million increased 53.0%,
compared to the fourth quarter of 2015, driven primarily by an
increase in policies in force and accelerating sales in the fourth
quarter through the ACA open enrollment period.
Total SG&A expenses were $16.0 million (31.1% of revenues)
in the fourth quarter of 2016, compared to $15.0 million (44.5% of
revenues) in the same period in 2015. During the fourth
quarter of 2016, we had a one-time severance expense related to our
former President / CEO and our former Chief Operating
Officer. The one-time severance was of approximately $2.9
million for the quarter.
Our core SG&A for the quarter – total SG&A less
marketing leads and advertising, stock compensation and
non-recurring costs – as a percentage of revenue was 16.5% in the
fourth quarter of 2016, compared to 25.6% in the fourth quarter of
2015.
Adjusted EBITDA is calculated as EBITDA adjusted for items that
are not part of regular operating activities, including
restructuring costs, tax receivable adjustments and other non-cash
items such as stock-based compensation. Adjusted EBITDA was
$8.9 million in the fourth quarter of 2016, compared to $2.6
million in the same period in 2015. Adjusted EBITDA as a
percentage of revenue was 17.2% in the fourth quarter of 2016,
compared to 7.6% in the same period in 2015. A reconciliation
of net income to EBITDA and adjusted EBITDA for the three and
twelve months ending December 31, 2016 and 2015 is included within
this press release.
EBITDA was negative $4.9 million in the fourth quarter of 2016,
compared to negative $0.3 million in the same period in 2015.
EBITDA was negatively impacted by several one-time events in the
fourth quarter, including severance related to our former President
/ CEO and former Chief Operating Officer, which had a cumulative
impact of approximately $2.9 million. This expense was a
combination of cash severance of $1.4 million and stock
compensation of $1.5 million. Additionally, we had a one-time
non-cash release of our Valuation Allowance related to deferred tax
assets. The release was triggered, in part, by the Company’s
projections of future taxable income. Due to this release, we
recognized a corresponding liability for our Tax Receivable
Agreement obligation, resulting in a one-time, non-cash, negative
impact of $9.1 million to EBITDA. The cumulative negative
impact to EBITDA of these one-time events in the fourth quarter was
$12.0 million.
GAAP diluted earnings per share for the fourth quarter was a
loss of $0.04, compared to income of $0.02 in the fourth quarter of
2015. GAAP diluted earnings per share was impacted negatively
by one-time events in Q4, including severance of our former
President / CEO and former Chief Operating Officer which had a
cumulative negative impact of $0.12 per diluted share and the
release of the Valuation Allowance had a negative impact of $0.13
per diluted share. The impact of the Valuation Allowance
release includes an $8.1 million tax benefit which offset the $9.1
million Tax Receivable Agreement accrual. The cumulative
impact of these one-time events in the fourth quarter was negative
$0.25 per diluted share.
Adjusted EPS for the fourth quarter of 2016 was $0.35, compared
to $0.10 in the prior year. The Adjusted EPS excluded both the
one-time severance of our former President / CEO and our former
Chief Operating Officer and the impact of releasing our Valuation
Allowance. 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 fourth quarter advanced
commission balance of $37.0 million is an increase of $6.3 million
from the third quarter of 2016. This increase was driven by
accelerating sales by our distributors through the ACA open
enrollment period.
Cash and cash equivalents totaled $12.2 million at December 31,
2016, a decrease of $2.1 million from September 30th 2016. We paid
down $5.0 million of our bank line of credit in the fourth quarter
taking our balance to zero at December 31, 2016.
Regulatory Update
On October 31, 2016, the Internal Revenue Service, the Employee
Benefits Security Administration, and the U.S Department of Health
and Human Services, collectively “HHS,” published Internal Revenue
Bulletin 2016-47 that stated, effective January 1, 2017, all STM
plans must terminate no later than December 31, 2017, and effective
beginning April 1, 2017, set new limits on STM duration to periods
of less than three months but allows for re-applies with the same
or different health insurance carrier. The rule also requires
notification of non-compliance with the minimum essential coverage
standards set forth in the Affordable Care Act.
“We are confident that HIIQ 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,”
said Gavin Southwell, HIIQ's Chief Executive Officer and
President.
The Company received notification in July 2016 from the Indiana
Department of Insurance that a multistate examination had been
commenced providing for the review of HCC Life Insurance Company’s
(“HCC”) short-term medical plans, Affordable Care Act compliance,
marketing, and rate and form filing for all products. As the
Company was a distributor of HCC products, the notification
indicated that the multistate examination will include a review of
the activities of the Company and a review of whether the Company’s
practices are in compliance with Indiana insurance law and the
similar laws of other states participating in the examination.
The Indiana Department of Insurance is serving as the
managing participant of the multistate examination. In addition to
the multistate examination led by Indiana, we are aware that
several other states, including Arkansas, Florida, Kansas,
Massachusetts, Montana, Ohio, South Dakota, and Texas are reviewing
alleged non-compliance with sales practices, non-compliance with
insurance laws, and/or unlicensed sale of insurance by third-party
distributor call centers utilized by the Company.
The Company is proactively communicating and cooperating with
all applicable regulatory agencies, and has provided a detailed
action plan to regulators that summarizes the Company’s newly
developed and enhanced compliance and control mechanisms. It
is too early to determine whether any of these regulatory
examinations will have a material impact on the
Company. Additional information regarding these regulatory
matters will be included in the Company’s Annual Report on Form
10-K for the 2016 fiscal year.
Conference Call and Webcast
The Company will host an earnings conference call on March 2,
2017 at 8:30 A.M. Eastern time. All interested parties can
join the call by dialing (877) 407-9039; or (201) 689-8470;
the conference ID is 13652666. A webcast of the call
may be accessed in the Investor Relations section of Health
Insurance Innovations’ website at
http://investor.hiiquote.com/events.cfm. An archive of the
call will be available for 30 days through the same website.
About Health Insurance Innovations, Inc.
(HIIQ)
HIIQ is a market leader in developing innovative health
insurance products that are affordable and meet the needs of health
insurance plan shoppers. HIIQ 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 HIIQ can be
found at HiiQuote.com. HIIQ’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
HIIQ’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 HIIQ’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 HIIQ'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 HIIQ 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) |
|
|
December 31, |
|
2016 |
|
2015 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
12,214 |
|
|
$ |
7,695 |
|
Restricted cash |
|
11,938 |
|
|
|
7,906 |
|
Accounts
receivable, net, prepaid expenses and other current assets |
|
2,815 |
|
|
|
1,778 |
|
Advanced
commissions, net |
|
37,001 |
|
|
|
24,531 |
|
Income
taxes receivable |
|
— |
|
|
|
591 |
|
Total
current assets |
|
63,968 |
|
|
|
42,501 |
|
Property and equipment,
net |
|
4,022 |
|
|
|
2,004 |
|
Goodwill |
|
41,076 |
|
|
|
41,076 |
|
Intangible assets,
net |
|
7,907 |
|
|
|
10,061 |
|
Deferred tax asset |
|
8,181 |
|
|
|
— |
|
Other assets |
|
193 |
|
|
|
142 |
|
Total
assets |
$ |
125,347 |
|
|
$ |
95,784 |
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
29,680 |
|
|
$ |
17,847 |
|
Deferred
revenue |
|
430 |
|
|
|
384 |
|
Current
portion of contingent acquisition consideration |
|
— |
|
|
|
532 |
|
Income
taxes payable |
|
2,121 |
|
|
|
— |
|
Due to
member |
|
3,282 |
|
|
|
342 |
|
Other
current liabilities |
|
126 |
|
|
|
203 |
|
Total
current liabilities |
|
35,639 |
|
|
|
19,308 |
|
Revolving line of
credit |
|
— |
|
|
|
7,500 |
|
Deferred tax
liability |
|
— |
|
|
|
358 |
|
Due to member |
|
9,460 |
|
|
|
406 |
|
Other liabilities |
|
170 |
|
|
|
158 |
|
Total
liabilities |
|
45,269 |
|
|
|
27,730 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Class A common
stock (par value $0.001 per share, 100,000,000 shares authorized;
8,156,249 and 7,910,085 shares issued as of December 31, 2016 and
2015, respectively; and 8,036,705 and 7,759,092 shares outstanding
as of December 31, 2016 and 2015, respectively) |
|
8 |
|
|
|
8 |
|
Class B common stock
(par value $0.001 per share, 20,000,000 shares authorized;
6,841,667 shares issued and outstanding as of December 31, 2016 and
2015, respectively) |
|
7 |
|
|
|
7 |
|
Preferred stock (par
value $0.001 per share, 5,000,000 shares authorized; no shares
issued and outstanding as of December 31, 2016 and 2015,
respectively) |
|
— |
|
|
|
— |
|
Additional paid-in
capital |
|
47,849 |
|
|
|
44,591 |
|
Treasury stock, at cost
(119,544 and 150,993 shares as of December 31, 2016 and 2015,
respectively) |
|
(1,122 |
) |
|
|
(1,542 |
) |
Retained earnings
(accumulated deficit) |
|
1,420 |
|
|
|
(3,093 |
) |
Total
Health Insurance Innovations, Inc. stockholders’ equity |
|
48,162 |
|
|
|
39,971 |
|
Noncontrolling
interests |
|
31,916 |
|
|
|
28,083 |
|
Total
stockholders’ equity |
|
80,078 |
|
|
|
68,054 |
|
Total
liabilities and stockholders' equity |
$ |
125,347 |
|
|
$ |
95,784 |
|
|
|
|
|
|
|
|
|
|
HEALTH INSURANCE INNOVATIONS,
INC. |
|
Condensed Consolidated Statements of Operations
(unaudited) |
($ in thousands, except share and per share
data) |
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Revenues (premium
equivalents of $311,590 and $175,768 for the years ended December
31, 2016 and 2015, respectively) |
$ |
184,516 |
|
|
$ |
104,704 |
|
Operating
expenses: |
|
|
|
Third-party commissions |
|
107,663 |
|
|
|
53,700 |
|
Credit
card and ACH fees |
|
3,960 |
|
|
|
2,287 |
|
Selling,
general and administrative |
|
51,527 |
|
|
|
47,324 |
|
Depreciation and amortization |
|
3,249 |
|
|
|
2,954 |
|
Total
operating expenses |
|
166,399 |
|
|
|
106,265 |
|
Income (loss) from operations |
|
18,117 |
|
|
|
(1,561 |
) |
|
|
|
|
Other expense
(income): |
|
|
|
Interest
expense (income) |
|
61 |
|
|
|
(22 |
) |
Fair
value adjustment to contingent acquisition consideration |
|
15 |
|
|
|
(1,265 |
) |
TRA
expense |
|
9,678 |
|
|
|
361 |
|
Other
expense (income) |
|
5 |
|
|
|
(178 |
) |
Net income (loss)
before income taxes |
|
8,358 |
|
|
|
(457 |
) |
Benefit
for income taxes |
|
(4,751 |
) |
|
|
(1,922 |
) |
Net income |
|
13,109 |
|
|
|
1,465 |
|
Net
income attributable to noncontrolling interests |
|
8,596 |
|
|
|
864 |
|
Net income attributable
to Health Insurance Innovations, Inc. |
$ |
4,513 |
|
|
$ |
601 |
|
|
|
|
|
Per share
data: |
|
|
|
Net income per
share attributable to Health Insurance Innovations,
Inc. |
|
|
|
Basic |
$ |
0.59 |
|
|
$ |
0.08 |
|
Diluted |
$ |
0.57 |
|
|
$ |
0.08 |
|
Weighted
average Class A common shares outstanding |
|
|
|
Basic |
|
7,599,533 |
|
|
|
7,524,566 |
|
Diluted |
|
7,909,235 |
|
|
|
7,601,789 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to EBITDA and
Adjusted EBITDA |
(unaudited) |
($ in thousands) |
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Net income |
$ |
13,109 |
|
|
$ |
1,465 |
|
Interest (income)
expense |
|
61 |
|
|
|
(22 |
) |
Depreciation and
amortization |
|
3,249 |
|
|
|
2,954 |
|
Benefit for income
taxes |
|
(4,751 |
) |
|
|
(1,922 |
) |
EBITDA |
|
11,668 |
|
|
|
2,475 |
|
Non-cash stock-based
compensation |
|
3,792 |
|
|
|
1,364 |
|
Fair value adjustment
to contingent consideration |
|
15 |
|
|
|
(1,265 |
) |
Transaction costs |
|
— |
|
|
|
24 |
|
Tax receivable
agreement liability adjustment |
|
9,678 |
|
|
|
361 |
|
Other non-recurring
charges |
|
2,609 |
|
|
|
3,623 |
|
Adjusted
EBITDA |
$ |
27,762 |
|
|
$ |
6,582 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted Net
Income per Share |
(unaudited) |
($ in thousands except per share
data) |
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Net income |
$ |
13,109 |
|
|
$ |
1,465 |
|
Interest (income)
expense |
|
61 |
|
|
|
(22 |
) |
Amortization |
|
2,154 |
|
|
|
2,626 |
|
Provision (benefit) for
income taxes |
|
(4,751 |
) |
|
|
(1,922 |
) |
Non-cash stock-based
compensation |
|
3,792 |
|
|
|
1,364 |
|
Fair value adjustment
to contingent consideration |
|
15 |
|
|
|
(1,265 |
) |
Transaction costs |
|
— |
|
|
|
24 |
|
Tax receivable
agreement liability adjustment |
|
9,678 |
|
|
|
361 |
|
Other non-recurring
charges |
|
2,609 |
|
|
|
3,623 |
|
Adjusted
pre-tax income |
|
26,667 |
|
|
|
6,254 |
|
Pro forma income
taxes |
|
(10,133 |
) |
|
|
(2,377 |
) |
Adjusted
net income |
$ |
16,534 |
|
|
$ |
3,877 |
|
Total weighted average
diluted share count |
|
14,751 |
|
|
|
14,444 |
|
Adjusted net income per
share |
$ |
1.12 |
|
|
$ |
0.27 |
|
(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 |
(unaudited) |
($ in thousands) |
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Premium
equivalents |
$ |
311,590 |
|
$ |
175,768 |
Less risk
premium |
|
121,436 |
|
|
67,445 |
Less
amounts earned by third party obligors |
|
5,638 |
|
|
3,619 |
Revenues |
$ |
184,516 |
|
$ |
104,704 |
(1) Premium equivalents is defined as our total collections,
including the combination of premiums, fees for discount benefit
plans, enrollment fees, and third-party commissions and referral
fees. All amounts not paid out as risk premium to carriers or paid
out to other third-party obligors are considered to be revenues for
financial reporting purposes. 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 generally accepted accounting principles in the
United States of America (“GAAP”) and should not be used as, and is
not an alternative to, revenues as a measure of our operating
performance.
|
Summary of selected metrics |
(unaudited) |
($ in thousands) |
|
|
Submitted Applications during Three
Months Ended December 31, |
|
Submitted Applications during Year Ended
December 31, |
|
2016 |
|
2015 |
|
Change (%) |
|
2016 |
|
2015 |
|
Change (%) |
IFP |
85,300 |
|
69,200 |
|
23% |
|
312,500 |
|
176,900 |
|
77% |
Supplemental products
|
93,600 |
|
84,100 |
|
11% |
|
312,500 |
|
186,700 |
|
67% |
Total |
178,900 |
|
153,300 |
|
17% |
|
625,000 |
|
363,600 |
|
72% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policies in Force as of December
31, |
|
|
|
|
2016 |
|
|
2015 |
|
|
Change (%) |
|
IFP |
|
133,600 |
|
|
|
84,500 |
|
|
58% |
|
Supplemental products
|
|
156,500 |
|
|
|
110,600 |
|
|
42% |
|
Total |
|
290,100 |
|
|
|
195,100 |
|
|
49% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Submitted IFP Applications by
Channel |
|
Q4'15 |
|
Q1'16 |
|
Q2'16 |
|
Q3’16 |
|
Q4’16 |
Agile |
11,300 |
|
23,100 |
|
16,000 |
|
21,100 |
|
22,400 |
All Others |
57,900 |
|
72,300 |
|
49,000 |
|
45,700 |
|
62,900 |
Total |
69,200 |
|
95,400 |
|
65,000 |
|
66,800 |
|
85,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core SG&A as a Percentage of
Revenue |
|
Q4'15 |
|
Q1'16 |
|
Q2’16 |
|
Q3’16 |
|
Q4’16 |
Total
SG&A |
$ |
14,964 |
|
|
$ |
11,970 |
|
|
$ |
11,697 |
|
|
$ |
11,853 |
|
|
$ |
16,007 |
|
Less:
Stock-based compensation |
|
363 |
|
|
|
486 |
|
|
|
482 |
|
|
|
393 |
|
|
|
2,430 |
|
Less:
Other non-recurring charges |
|
2,952 |
|
|
|
119 |
|
|
|
103 |
|
|
|
224 |
|
|
|
2,163 |
|
Less:
Marketing and Advertising |
|
3,046 |
|
|
|
2,820 |
|
|
|
2,449 |
|
|
|
2,875 |
|
|
|
2,912 |
|
Core
SG&A |
$ |
8,603 |
|
|
$ |
8,545 |
|
|
$ |
8,663 |
|
|
$ |
8,361 |
|
|
$ |
8,503 |
|
% of
Revenue |
|
25.6 |
% |
|
|
20.1 |
% |
|
|
19.5 |
% |
|
|
18.1 |
% |
|
|
16.5 |
% |
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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