FOR IMMEDIATE RELEASE   COMPANY CONTACT: Mike Hershberger
November 1, 2017
  Chief Financial Officer
    (813) 397 1187
    mhershberger@hiiquote.com

 

Health Insurance Innovations, Inc. Reports Record Third Quarter 2017

Financial and Operating Results

 

Increases 2017 Full Year Guidance

Record Revenues of $63.3 million, up 37% YOY

Diluted Earnings per Share of $0.30, up 20% YOY

Adjusted Earnings per Share of $0.46, up 39% YOY

Policies in Force totaled approximately 347,900, up 38% YOY

 

Tampa, FLNovember 1, 2017 — (GLOBE NEWSWIRE) — Health Insurance Innovations, Inc. (NASDAQ:HIIQ), a leading developer, distributor, and cloud-based administrator of affordable health insurance and supplemental plans, today announced financial results for the third quarter ended September 30, 2017. The Company will host a live conference call on Thursday, November 2, 2017 at 8:30 A.M. EST.

 

Third Quarter 2017 Consolidated Financial Highlights

 

  Record revenue was $63.3 million, compared to $46.1 million in the third quarter of 2016, an increase of 37.4%.
     
  Record total collections from members (premium equivalents) of $99.4 million, compared to $78.5 million in the third quarter of 2016, an increase of 26.6%.
     
  Net income was $6.0 million, compared to $5.1 million in the third quarter of 2016, an increase of 17.6%.
     
  Record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $12.8 million, compared to $8.1 million in the third quarter of 2016, an increase of 58.0%.
     
  GAAP diluted earnings per share was $0.30, compared to $0.25 in the third quarter of 2016, an increase of 20.0%.
     
  Adjusted earnings per share, also referred to as adjusted net income per share or adjusted EPS, was $0.46 compared to $0.33 in the third quarter of 2016, an increase of 39.4%.
     
  Policies in force as of September 30, 2017, totaled approximately 347,900, compared to 252,100 as of September 30, 2016, an increase of 38.0%.

 

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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.

 

Increasing 2017 Full Year Guidance

 

Given the record financial performance and long-term prospects, the Company is increasing its guidance for the full year 2017. The Company expects revenue to grow 27% to 30% year-over-year (with expected revenue of $235 million to $240 million), adjusted EBITDA to grow 48% to 58% year-over-year (with expected adjusted EBITDA of $41 million to $44 million) and adjusted EPS to grow 34% to 43% (with expected adjusted EPS of $1.50 to $1.60). The Company previously guided to full year revenue of $225 million to $230 million, adjusted EBITDA of $39 million to $42 million and adjusted EPS of $1.45 to $1.55.

 

“We are pleased to continue to deliver record results, which exceeded our revenue and profitability targets, reflecting the strength of our business and the successful execution of our strategy. We believe we are well positioned to continue to succeed and grow in the dynamic individual health insurance marketplace through our differentiated services. We are confident that we can deliver strong results and shareholder value through our successful expansion of innovative products, expansion of our distribution networks - including existing and new distributors, driving revenue growth and margins,” said Gavin Southwell, HIIQ’s Chief Executive Officer and President.

 

Third Quarter 2017 Financial Discussion

 

Third quarter revenues of $63.3 million increased 37.4%, compared to the third quarter of 2016, driven primarily by an increase in policies in force. Further, a sales mix shift to more Health Benefit Plans and favorable carrier negotiations have decreased risk premiums.

 

Total selling, general & administrative expense (“SG&A”) was $15.5 million (24.5% of revenues) in the third quarter of 2017, compared to $11.9 million (25.7% of revenues) in the same period in 2016. Core SG&A, defined as total SG&A adjusted for stock-based compensation, transaction costs, severance, restructuring and other costs, and marketing leads and advertising expense, for the quarter was $10.3 million (16.3% of revenues) in the third quarter of 2017, compared to $8.4 million (18.1% of revenues) in the same period of 2016. A reconciliation of SG&A to core SG&A for the three and nine months ended September 30, 2017 and 2016 is included within this press release.

 

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Net income was $6.0 million in the third quarter of 2017, compared to $5.1 million in the third quarter of 2016, an increase of 17.6%. EBITDA was $9.9 million in the third quarter of 2017, compared to $7.4 million in the same period in 2016, an increase of 33.2%.

 

Adjusted EBITDA was $12.8 million in the third quarter of 2017, an increase of 58.0% over $8.1 million in the same period in 2016. Adjusted EBITDA as a percentage of revenue was 20.3% in the third quarter of 2017, compared to 17.6% in the same period in 2016. Adjusted EBITDA is calculated by taking EBITDA and adjusting for items that are not part of regular operating activities, including tax receivable adjustments, severance, restructuring costs, and other non-cash items such as stock-based compensation. A reconciliation of net income to EBITDA and adjusted EBITDA for the three and nine months ended September 30, 2017 and 2016 is included within this press release.

 

GAAP diluted earnings per share for the third quarter was $0.30, compared to $0.25 in the third quarter of 2016.

 

Adjusted EPS for the third quarter of 2017 was $0.46, compared to $0.33 in the prior year. A reconciliation of net income to adjusted net income per share is included within this press release.

 

The Company continued to make short-term loans to distributors, based on actual sales, that we refer to as advanced commissions. These advanced commissions assist distributors with working capital. We recover these short-term loans on an ongoing basis from future commissions earned on premiums, which are collected over the period in which policies renew. The third quarter advanced commission balance of $27.0 million is a decrease of $10.0 million from December 31, 2016 and a decrease of $3.7 million sequentially.

 

Cash and cash equivalents totaled $43.1 million at September 30, 2017, an increase of $30.8 million from December 31, 2016 and an increase of $15.5 million sequentially.

 

Customer Service and Compliance

 

Since 2016, HIIQ has invested more than $9 million in enhancing and upholding the highest standards in customer service and compliance. The Company has expanded its customer service team from 26 representatives in 2015 to more than 220 at its peak in response to seasonality in volume from the open enrollment period.

 

Highlights of Customer Service Investment Results

 

The Company has arranged insurance for more than a million people thus far in 2017, experienced a 13.2% growth in member calls over the prior year, and despite this increase in volume, maintained an Average Speed of Answer (“ASA”) of two seconds in the most recent quarter. This compares to an ASA of 1 minute and 55 seconds over the same time period last year and an ASA of 1 minute 17 seconds in 2015. Service levels, defined as the percentage of calls answered within 30 seconds, have also shown significant improvement. Service levels have averaged 99.4% in the third quarter, compared to 55.4% and 63.6% for the same periods in the prior two years.

 

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Compliance

 

In 2016, HIIQ launched the Call Center Quality (“CCQ”) team and a distributor-performance scorecard. The CCQ team visits third-party distributors to provide on-site training as well as online and webinar training. The CCQ team is also responsible for secret shopping to ensure adherence to HIIQ’s best-in-class process and procedures. The distributor scorecard measures key metrics such as member complaints, escalations and chargebacks monthly. HIIQ has improved in these key metrics and continues to enforce the Company’s policies and procedures with third-party distributors. In 2016, the Company terminated two distributors for not meeting compliance metrics and benchmarks. At the time of termination, these distributors represented approximately 16% of IFP sales.

 

Retaining Prominent Regulatory Experts

 

Reinforcing the Company’s compliance department are Ben Nelson, former U.S. Senator (D-NE) and Governor of Nebraska as well as the former Nebraska Director of Insurance and former Chief Executive Officer of the National Association of Insurance Commissioners (“NAIC”), as well as Wayne Goodwin, the former Commissioner of Insurance for North Carolina. Both joined the Company’s team in January to help HIIQ navigate today’s complex regulatory environment.

 

Improved Customer Experience

 

This investment in compliance has generated a measuredly stronger customer experience. Complaints, specific to HIIQ, upheld by the Department of Insurance as a percentage of policies in force was 0.00% in Q3 2017, down from 0.01% in Q3 2016. Additionally, HIIQ-specific Better Business Bureau complaints have reduced by 90% since Q1 2016. In Q3 2017, HIIQ-specific complaints were effectively 0.00% of policies in force. Chargebacks as a percentage of transactions have decreased by more than 50% from Q1 2016.

 

$50 Million Share Repurchase Authorization

 

As announced on October 16, 2017, the HIIQ Board of Directors has authorized up to $50 million in a new share repurchase program through October 2019.

 

Conference Call and Webcast

 

The Company will host an earnings conference call on November 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 13672449. 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.

 

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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 our relationships 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, state regulatory oversight and examinations of us and our carriers and distributors, legal and regulatory compliance by our carriers and distributors, the amount of commissions paid to us or changes in health insurance plan pricing practices, 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.

 

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Non-GAAP Financial Information

 

To supplement HIIQ’s financial information presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, HIIQ presents certain financial measures that are not prepared in accordance with GAAP, including premium equivalents, adjusted EBITDA, and adjusted EPS. These non-GAAP financial measures, which are defined below, should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies.

 

HIIQ is presenting these non-GAAP financial measures to assist investors in seeing HIIQ’s operating results through the eyes of management and because HIIQ’s believes that these measures provide a useful tool for investors to use in assessing HIIQ’s operating performance against prior period operating results and against business objectives. HIIQ uses the non-GAAP financial measures in evaluating its operating results and for financial and operational decision-making purposes.

 

The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures. HIIQ has not reconciled adjusted EBITDA guidance or adjusted EPS guidance to GAAP net income or GAAP net income per diluted share, respectively, because HIIQ does not provide guidance for the reconciling items between these measures and GAAP net income or GAAP net income per diluted share, respectively. As certain of the items that impact GAAP net income and/or GAAP net income per diluted share cannot be reasonably predicted at this time, HIIQ is unable to provide such guidance. Accordingly, a reconciliation to net income is not available without unreasonable effort.

 

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HEALTH INSURANCE INNOVATIONS, INC.

Condensed Consolidated Balance Sheets

($ in thousands, except share and per share data)

 

   September 30, 2017   December 31, 2016 
   (unaudited)     
Assets          
Current assets:          
Cash and cash equivalents  $43,060   $12,214 
Restricted cash   13,747    11,938 
Accounts receivable, net, prepaid expenses and other current assets  $2,585    2,815 
Advanced commissions, net   27,010    37,001 
Total current assets   86,402    63,968 
Property and equipment, net   4,909    4,022 
Goodwill   41,076    41,076 
Intangible assets, net   6,405    7,907 
Deferred tax assets   27,834    8,181 
Other assets   110    193 
Total assets  $166,736   $125,347 
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable and accrued expenses  $31,516   $29,680 
Deferred revenue   257    430 
Income taxes payable   1,186    2,121 
Due to member   521    3,282 
Other current liabilities   3    126 
Total current liabilities   33,483    35,639 
Due to member   28,078    9,460 
Other liabilities   43    170 
Total liabilities   61,604    45,269 
Commitments and contingencies          
Stockholders’ equity:          
Class A common stock (par value $0.001 per share, 100,000,000 shares authorized; 12,700,986 and 8,156,249 shares issued as of September 30, 2017 and December 31, 2016, respectively; and 12,559,552 and 8,036,705 shares outstanding as of September 30, 2017 and December 31, 2016, respectively)   13    8 
Class B common stock (par value $0.001 per share, 20,000,000 shares authorized; 3,841,667 and 6,841,667 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively)   4    7 
Preferred stock (par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2017 and December 31, 2016)        
Additional paid-in capital   68,802    47,849 
Treasury stock, at cost (141,434 and 119,544 shares as of September 30, 2017 and December 31, 2016, respectively)   (1,570)   (1,122)
Retained earnings   15,522    1,420 
Total Health Insurance Innovations, Inc. stockholders’ equity   82,771    48,162 
Noncontrolling interests   22,361    31,916 
Total stockholders’ equity   105,132    80,078 
Total liabilities and stockholders’ equity  $166,736   $125,347 

 

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HEALTH INSURANCE INNOVATIONS, INC.

Condensed Consolidated Statements of Income (unaudited)

($ in thousands, except share and per share data)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2017   2016   2017   2016 
Revenues (premium equivalents of $99,407 and $78,548 for the three months ended September 30, 2017 and 2016, respectively and $289,243 and $226,265 for the nine months ended September 30, 2017 and 2016, respectively)  $63,335   $46,108   $180,986   $133,092 
Operating expenses:                    
Third-party commissions   36,603    25,860    103,146    77,709 
Credit card and ACH fees   1,289    921    3,704    2,778 
Selling, general and administrative   15,503    11,853    45,457    35,520 
Depreciation and amortization   1,028    835    2,958    2,367 
Total operating expenses   54,423    39,469    155,265    118,374 
Income from operations   8,912    6,639    25,721    14,718 
                     
Other expense:                    
Interest (income) expense   (2)   (102)   (2)   53 
Tax Receivable Agreement expense               429 
Fair value adjustment to contingent acquisition consideration               15 
Other expense   23    27    27    30 
Income before income taxes   8,891    6,714    25,696    14,191 
Provision for income taxes   2,889    1,580    4,220    2,501 
Net income   6,002    5,134    21,476    11,690 
Net income attributable to noncontrolling interests   2,117    3,195    7,374    6,989 
Net income attributable to Health Insurance Innovations, Inc.  $3,885   $1,939   $14,102   $4,701 
                     
Per share data:                    
Net income per share attributable to Health Insurance Innovations, Inc.                    
Basic  $0.33   $0.25   $1.31   $0.62 
Diluted  $0.30   $0.25   $1.21   $0.61 
Weighted average Class A common shares outstanding                    
Basic   11,700,941    7,614,252    10,724,750    7,590,347 
Diluted   12,742,952    7,723,196    11,692,755    7,724,168 

 

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HEALTH INSURANCE INNOVATIONS, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

($ in thousands, except share and per share data)

 

   Three Months Ended September 30, 2017   Nine Months Ended September 30, 2017 
Operating activities:          
Net income  $6,002   $21,476 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:          
Stock-based compensation   2,682    4,437 
Depreciation and amortization   1,028    2,958 
Deferred income taxes   317    1,079 
Changes in operating assets and liabilities:          
Decrease (Increase) in restricted cash   415    (1,809)
(Increase) Decrease in accounts receivable, prepaid expenses and other assets   (460)   313 
Decrease in advanced commissions   3,696    9,991 
Decrease in income taxes receivable   1,282     
Increase (Decrease) in income taxes payable   1,186    (935)
Increase in accounts payable, accrued expenses and other liabilities   1,385    1,682 
Decrease in deferred revenue   (41)   (173)
Net cash provided by operating activities   17,492    39,019 
Investing activities:          
Capitalized internal-use software and website development costs   (694)   (2,104)
Purchases of property and equipment   (192)   (239)
Net cash used in investing activities   (886)   (2,343)
Financing activities:          
Payments for noncompete obligation       (96)
Class A common stock withheld in treasury from restricted share vesting   (263)   (448)
Issuances of Class A common stock under equity compensation plans   12    32 
Distributions to member   (824)   (5,318)
Net cash used in provided by financing activities   (1,075)   (5,830)
Net increase in cash and cash equivalents   15,531    30,846 
Cash and cash equivalents at beginning of period   27,529    12,214 
Cash and cash equivalents at end of period  $43,060   $43,060 
           
Supplemental disclosure of non-cash financing activities:          
Change in due to member related to Exchange Agreement  $18,619   $18,619 
Change in deferred tax asset related to Exchange Agreement   (20,732)   (20,732)
Issuance of Class A common stock in a private offering related to Exchange Agreement   16,487    16,487 
Exchange of Class B membership interests related to Exchange Agreement   (14,374)   (14,374)
Declared but unpaid distribution to member of Health Plan Intermediaries Holdings, LLC         

 

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Reconciliation of Net Income to EBITDA and Adjusted EBITDA

(unaudited)

($ in thousands)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2017   2016   2017   2016 
Net income  $6,002   $5,134   $21,476   $11,690 
Interest (income) expense   (2)   (102)   (2)   53 
Depreciation and amortization   1,028    835    2,958    2,367 
Provision for income taxes   2,889    1,580    4,220    2,501 
EBITDA (1)   9,917    7,447    28,652    16,611 
Non-cash stock-based compensation   2,682    393    4,437    1,362 
Fair value adjustment to contingent consideration               15 
Transaction costs   5        761     
Tax receivable agreement liability adjustment       29        458 
Severance, restructuring and other charges   238    224    1,133    446 
Adjusted EBITDA (2)  $12,842   $8,093   $34,983   $18,892 

 

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, 
   2017   2016   2017   2016 
Net income  $6,002   $5,134   $21,476   $11,690 
Interest (income) expense   (2)   (102)   (2)   53 
Amortization   479    527    1,502    1,642 
Provision for income taxes   2,889    1,580    4,220    2,501 
Non-cash stock-based compensation   2,682    393    4,437    1,362 
Fair value adjustment to contingent consideration               15 
Transaction costs   5        761     
Tax receivable agreement liability adjustment       29        458 
Severance, restructuring and other charges   238    224    1,133    446 
Adjusted pre-tax income   12,293    7,785    33,527    18,167 
Pro forma income taxes   (4,671)   (2,958)   (12,740)   (6,903)
Adjusted net income (3)  $7,622   $4,827   $20,787   $11,264 
Total weighted average diluted share count   16,585    14,565    16,260    14,566 
Adjusted net income per share (4)  $0.46   $0.33   $1.28   $0.77 

 

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(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)

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2017   2016   2017   2016 
Premium equivalents (1)  $99,407   $78,548   $289,243   $226,265 
Less risk premium   34,502    31,056    103,545    88,880 
Less amounts earned by third party obligors   1,570    1,384    4,712    4,293 
Revenues  $63,335   $46,108   $180,986   $133,092 

 

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(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     
   Three Months Ended September 30,     
   2017   2016   Change (%) 
IFP   93,100    66,800    39.4%
Supplemental products   60,800    59,500    2.2%
Total   153,900    126,300    21.9%

 

   Policies in Force     
   As of September 30,     
   2017   2016   Change (%) 
IFP   176,088    120,901    45.6%
Supplemental products   171,838    131,241    30.9%
Total   347,926    252,142    38.0%

 

   Submitted IFP Applications by Channel 
   Q3’16   Q4’16   Q1’17   Q2’17   Q3’17 
Agile   21,100    22,400    31,800    13,500    20,600 
All Others   45,700    62,900    85,300    82,400    72,500 
Total   66,800    85,300    117,100    95,900    93,100 

 

  12 

 

 

   Core SG&A as a Percentage of Revenue 
   Q3’16   Q4’16   Q1’17   Q2’17   Q3’17 
Total SG&A  $11,853   $16,007    $15,257   $14,697   $15,503 
Less: Stock-based compensation   393    2,430    821    934    2,682 
Less: Transaction costs           306    450    5 
Less: Severance, restructuring and other charges   224    2,163    533    363    238 
Less: Marketing and Advertising   2,875    2,912    3,787    1,800    2,249 
Core SG&A (1)  $8,361   $8,502   $9,810   $11,150   $10,329 
% of Revenue   18.1%   16.5%   17.6%   18.0%   16.3%

 

(1) Core SG&A is defined as total SG&A adjusted for stock-based compensation, transaction costs, severance, restructuring and other costs, and marketing leads and advertising expense.

 

  13 

 

 

Contacts:

 

Health Insurance Innovations, Inc.:

Michael Hershberger

Chief Financial Officer

(813) 397-1187

mhershberger@hiiquote.com

 

Investor Contact:

John Evans

PIR Communications

(415) 309-0230

IR@hiiquote.com

 

Media Contact for AgileHealthInsurance.com & HealthPocket.com:

Amy Fletcher

(720) 350-3144

info@afmcommunications.com

 

  14 

 

 

 


The following information was filed by Health Insurance Innovations, Inc. (HIIQ) on Thursday, November 2, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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