Health Insurance Innovations, Inc. (NASDAQ:HIIQ) (“HIIQ” or “the
Company”), a leading developer, distributor, and cloud based
administrator of affordable health plans, today announced
preliminary results for its third quarter of 2017. The Company also
announced that its Board of Directors has authorized the repurchase
of up to $50 million of the Company’s Class A common stock through
October 2019.
Gavin Southwell, HIIQ’s Chief Executive Officer and President,
said, “The new share repurchase program underscores our confidence
in our business strategy, financial performance, and the long-term
prospects of our company while also allowing us the financial
flexibility to continue to invest in our business. We believe that
in view of our current and anticipated cash position, this buy-back
is both an effective use of our capital at this time and a benefit
to our shareholders. The HIIQ team continues to make significant
progress in executing our strategy to support essential consumer
needs.”
Record Preliminary Third Quarter 2017
Results
The Company today issued certain preliminary results for the
third quarter ended September 30, 2017. HIIQ’s record preliminary
unaudited results from continuing operations indicate that revenue
for the third quarter 2017 is expected to be in the range of $62.3
million to $63.3 million, an increase of approximately 35% to 37%
over the comparable prior year period.
The Company expects to report GAAP net income in the range of
$5.5 million to $6.0 million for the three months ended September
30, 2017, and adjusted net income of $7.3 million to $7.6
million. Additionally, the Company expects to report EBITDA
in the range of $9.4 million to $9.9 million and adjusted EBITDA of
$12.3 million to $12.8 million for the same period. The expected
range in GAAP net income represents an increase of approximately 8%
to 18%, and the expected range in EBITDA represents an increase of
approximately 27% to 34%, over the comparable prior year period.
The expected range in adjusted EBITDA represents an increase of
approximately 52% to 58% over the comparable prior year period.
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. A reconciliation of
net income to EBITDA and adjusted EBITDA for the three months and
nine months ended September 30, 2017 is included within this press
release.
The Company also expects to report GAAP diluted earnings per
share in the range of $0.26 to $0.30 and adjusted earnings per
share in the range of $0.44 to $0.46. The expected range in GAAP
diluted earnings per share represents an increase of approximately
4% to 20% over the comparable prior year period. The expected range
in adjusted earnings per share represents an increase of
approximately 33% to 39% over the comparable prior year period. A
reconciliation of net income to adjusted net income per share for
the three months and nine months ended September 30, 2017, is
included within this press release.
Cash and cash equivalents totaled approximately $43.1 million at
September 30, 2017, an increase of $30.9 million from December 31,
2016 and an increase of $15.5 million from June 30, 2017.
The Company plans to report financial results for its third
quarter ended September 30, 2017 on November 1, 2017. A conference
call is scheduled for November 2, 2017 at 8:30am EDT, during which
the Company will discuss these results and its outlook for the
remainder of fiscal 2017.
$50 Million Share Repurchase Authorization
The new share repurchase authorization permits the Company to
periodically repurchase shares for cash for a period of 24 months
in open market purchases, block transactions and privately
negotiated transactions in accordance with applicable federal
securities laws. The actual timing, number and value of
shares repurchased under the program will be determined by
management at its discretion and will depend on a number of
factors, including the market price of the Company’s common stock,
general market and economic conditions, regulatory requirements,
capital availability and compliance with the terms of the Company’s
credit facility. Repurchases under the program will be funded
from one or a combination of existing cash balances, future free
cash flow, and indebtedness. There is no guarantee as to the number
of shares that will be repurchased, and the repurchase program may
be extended, suspended or discontinued at any time without notice
at the Company’s discretion.
Under the stock repurchase program, the Company may elect to
adopt a Rule 10b5-1 share repurchase plan under the Securities
Exchange Act of 1934 (the “Plan”). The Plan would allow the Company
to repurchase its shares at times when it otherwise might be
prevented from doing so under insider trading laws or because of
self-imposed trading blackout periods. Because repurchases under
the Plan are anticipated to be subject to certain pricing
parameters, there is no guarantee as to the exact number of shares
that will be repurchased under the Plan or that there will be any
repurchases pursuant to the Plan. Subject to applicable
regulations, HIIQ may elect to amend or cancel the Plan at its
discretion.
Update on Florida TPA Application Process
On September 29, 2017, the Company and the Florida Office of
Insurance Regulation (“OIR”) entered into a mutual consent order
relating to the Company’s Third-Party Insurance Administrator
(“TPA”) application in Florida. Pursuant to the consent order, on
October 2, 2017, the Florida Division of Administrative Hearings
granted a motion to dismiss the Company’s petition contesting the
OIR’s prior TPA license denial and cancelling the hearing on the
Company’s appeal of the denial, and on October 4, 2017, the OIR
withdrew its prior denial of the Company’s TPA license application.
The mutual consent order between the Company and the OIR specifies
details regarding the information to be included in the Company’s
new TPA application and certain procedural steps, such as a
pre-submission meeting with the OIR.
About Health Insurance Innovations, Inc.
HIIQ is a market leader in developing innovative health
insurance products that are affordable and meet the needs of
millions 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. HIIQ's data-centric
paperless business model is facilitated by its Consumer Division
that provides real-time data used to identify opportunities and
underserved needs in the health insurance market. HIIQ's Consumer
Division includes AgileHealthInsurance.com, a website for
researching, comparing and purchasing Term Health insurance
products and HealthPocket.com, a separately managed free website
that compares and ranks various health insurance plans and uses
objective data to publish unbiased health insurance market analyses
and other consumer advocacy research. Additional information about
HIIQ can be found at HiiQuote.com.
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.
Investor ContactsMike Hershberger, Health
Insurance Innovations, Inc. 1-877-376-5831 x282John Evans,
Investor Relations, PIR Communications, 415-309-0230,
ir@hiiquote.com
Media ContactsKelly Sullivan or James Golden,
Joele Frank, Wilkinson Brimmer Katcher, (212) 355-4449
Reconciliation of Estimated Net Income to EBITDA and
Adjusted EBITDA(unaudited)($ in thousands) |
|
|
|
Three Months Ended September 30, 2017 |
|
|
Nine Months Ended September 30, 2017 |
|
|
|
Range |
|
|
Range |
|
|
Low |
|
High |
|
Low |
|
High |
Net income |
$ |
5,490 |
|
|
|
$ |
5,990 |
|
|
|
$ |
20,964 |
|
|
|
$ |
21,464 |
|
|
Interest expense |
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
Depreciation and
amortization |
1,028 |
|
|
|
1,028 |
|
|
|
2,958 |
|
|
|
2,958 |
|
|
Provision for income
taxes |
2,889 |
|
|
|
2,889 |
|
|
|
4,220 |
|
|
|
4,220 |
|
|
EBITDA |
9,405 |
|
|
|
9,905 |
|
|
|
28,140 |
|
|
|
28,640 |
|
|
Non-cash stock-based
compensation |
2,653 |
|
|
|
2,653 |
|
|
|
4,437 |
|
|
|
4,437 |
|
|
Transaction costs |
5 |
|
|
|
5 |
|
|
|
761 |
|
|
|
761 |
|
|
Severance,
restructuring and other charges |
237 |
|
|
|
237 |
|
|
|
1,133 |
|
|
|
1,133 |
|
|
Adjusted
EBITDA |
$ |
12,300 |
|
|
|
$ |
12,800 |
|
|
|
$ |
34,471 |
|
|
|
$ |
34,971 |
|
|
Reconciliation of Estimated Net Income to Adjusted Net
Income per Share |
(unaudited)($ in thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,2017Range |
|
Nine Months Ended September 30,2017Range |
|
Low |
|
High |
|
Low |
|
High |
Net income |
$ |
5,490 |
|
|
|
$ |
5,990 |
|
|
|
$ |
20,964 |
|
|
|
$ |
21,464 |
|
|
Interest expense |
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
Amortization |
479 |
|
|
|
479 |
|
|
|
1,502 |
|
|
|
1,502 |
|
|
Provision for income
taxes |
2,889 |
|
|
|
2,889 |
|
|
|
4,220 |
|
|
|
4,220 |
|
|
Non-cash stock-based
compensation |
2,653 |
|
|
|
2,653 |
|
|
|
4,437 |
|
|
|
4,437 |
|
|
Transaction costs |
5 |
|
|
|
5 |
|
|
|
761 |
|
|
|
761 |
|
|
Severance,
restructuring and other charges |
237 |
|
|
|
237 |
|
|
|
1,133 |
|
|
|
1,133 |
|
|
Adjusted
pre-tax income |
11,750 |
|
|
|
12,250 |
|
|
|
33,015 |
|
|
|
33,515 |
|
|
Pro forma income
taxes |
(4,465 |
) |
|
|
(4,655 |
) |
|
|
(12,546 |
) |
|
|
(12,736 |
) |
|
Adjusted
net income |
$ |
7,285 |
|
|
|
$ |
7,595 |
|
|
|
$ |
20,469 |
|
|
|
$ |
20,779 |
|
|
Total weighted average
diluted share count |
16,585 |
|
|
|
16,585 |
|
|
|
16,260 |
|
|
|
16,260 |
|
|
Adjusted net income per
share |
$ |
0.44 |
|
|
|
$ |
0.46 |
|
|
|
$ |
1.26 |
|
|
|
$ |
1.28 |
|
|
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