Health Insurance Innovations (NASDAQ: HIIQ) reported Q1 EPS of $0.01, $0.07 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $22.5 million versus the consensus estimate of $27 million.

Press Releases

Health Insurance Innovations, Inc. Reports First Quarter 2015 Results

Revenue Up 25.7% Over Q1 2014

May 13, 2015 4:05 PM EDT Send to a Friend

TAMPA, Fla., May 13, 2015 (GLOBE NEWSWIRE) -- Health Insurance Innovations, Inc. (HII) (Nasdaq: HIIQ), a leading developer, distributor, and virtual administrator of affordable health plans today announced financial results for the first quarter ended March 31, 2015. The Company will host a live conference call today, Wednesday, May 13, 2015 at 5:00 p.m. EDT.

First Quarter 2015 Consolidated Financial Highlights

• Revenue was $22.5 million, an increase of 25.7% over $17.9 million in the first quarter of 2014.
• Total collections from customers, which our industry refers to as premium equivalents, was $38.3 million, an increase of 23.5% over $31.0 million in the first quarter of 2014.
• EPS per diluted share was $0.01, compared to a net loss of $0.01 in the first quarter of 2014.
• Adjusted EBITDA was $0.3 million, compared to $1.4 million in the first quarter of 2014.
• Adjusted EPS was $0.01, compared to $0.06 in the first quarter of 2014.

See Reconciliations for collections from customers, Adjusted EBITDA and Adjusted EPS within this press release.

"We are pleased with our year-over-year revenue growth of 25.7% during the first quarter," said Michael Kosloske, HII's Chief Executive Officer and President. "As expected, our short term medical sales were unfavorably impacted during the first quarter by the government's annual enrollment and the one-time special tax enrollment period for ACA plans, which just ended on April 30th. We are excited to have now entered our stronger selling season when the vast majority of health insurance shoppers are locked out of buying ACA plans. Looking forward, we believe that our leadership position in the growing ACA alternative and supplement market, the new term medical products we are bringing to market, as well as our strategic assets of HealthPocket.com and AgileHealthInsurance.com, all position us for sustained growth and market leadership."

HealthPocket.com and AgileHealthInsurance.com Update

Headquartered in Mountain View, CA, HealthPocket, Inc. was acquired by HII in July 2014. HealthPocket provides consumers with access to its leading health insurance information as well as search and comparison technology through www.healthpocket.com. This free website allows consumers to easily compare and rank all health insurance plans available.

HealthPocket's key metrics for the first quarter were as follows:

• Health Plan Queries of approximately 667,000, representing 133% growth in the number of queries over the first quarter of 2014. A Health Plan Query is registered for each consumer that receives a health insurance quote on healthpocket.com.
• Client Referrals of approximately 128,000, representing 146% growth over the number of referrals in the first quarter of 2014. Client Referrals are targeted phone and online referrals sold by HealthPocket to fulfillment partners or handled in-house by one of HII's owned distributors.
• Referral Mix of approximately 87%. Referral Mix is the percentage of Client Referrals that are core to HII's business and available for purchase from HealthPocket by HII and its strategic partners.

See HealthPocket key metrics, within this press release.

"We were very pleased with HealthPocket's strong growth in user adoption, which we measure by health plan queries and referrals. We well exceeded our goal of fulfilling more than 50% of HealthPocket's Client Referrals thru HII and its key distribution partners, and we are making good progress leveraging HealthPocket's data to bring to market new and affordable health insurance options for consumers," said Bruce Telkamp, CEO of HealthPocket, Inc. and HII's Direct to Consumer Division. "During the first quarter, we also made substantial technology and marketing investments into HII's new direct to consumer business, AgileHealthInsurance.com, which we launched on May 5th. We are very excited about Agile and believe online sales will swiftly become a significant and incremental sales channel for HII," continued Telkamp.

First Quarter Financial Discussion

Comparability between the quarters ended March 31, 2015 and 2014 is affected by two acquisitions made during the third quarter of 2014. For the quarter ended March 31, 2015, we operated as two operating segments: 1) Insurance Plan Development and Distribution ("IPD") and 2) HealthPocket. For the quarter ended March 31, 2014, we operated as a single operating segment: IPD. The IPD segment comprises our business activities in designing, implementing and administering STM and other products and the distribution of those products to consumers via our distribution network or online purchases. The HealthPocket segment comprises the business activities of HealthPocket, including the development of HealthPocket.com and the generation of referral-based and other revenues. The financial discussion below is made at a consolidated level. Refer to the table that shows the financial results of our operating segments for the three months ended March 31, 2015 in this press release.

First quarter revenues of $22.5 million and premium equivalents of $38.3 million increased by 25.7% and 23.5%, respectively, over the same metrics for the first quarter of 2014. The increases were primarily due to the increase in the total number of policies in force as a result of our continuing expansion of our distribution network and attachment of ancillary products to our core medical products. A reconciliation of premium equivalents to revenues for the three months ended March 31, 2015, and 2014, is in the financial supplement included in this press release. By policy type, the 2015 first quarter mix of revenues was as follows: 54% short-term medical, 18% hospital indemnity, and 28% ancillary products, compared to 61% short-term medical, 17% hospital indemnity, and 22% ancillary products for the first quarter of 2014.

Adjusted gross margin, which is calculated starting with revenues and then adjusted for third party commissions, and credit card and ACH fees, increased to $11.2 million or 29.2% of premium equivalents for the first quarter of 2015, compared to $8.7 million of adjusted gross margin and 28.1% of premium equivalents in the same period in 2014. A reconciliation of premium equivalents to revenues and adjusted gross margin for the three months ended March 31, 2015 and 2014 is included within this press release.

Selling, general and administrative ("SG&A") expenses were $11.2 million in the first quarter of 2015, compared to $7.9 million in 2014. The increase in SG&A expense was primarily driven by the impact of acquisitions and investments in growth initiatives to drive sustainable growth in 2015 and beyond.

EBITDA was $0.7 million in the first quarter of 2015, compared to $0.1 million in the same period in 2014. Adjusted EBITDA is calculated starting with 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 stock-based compensation. Adjusted EBITDA was $0.3 million in the first quarter of 2015, compared to $1.4 million in the same period in 2014. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the first quarter of 2015 and 2014 is included within this press release.

Cash and short term investments totaled $10.5 million at the end of the first quarter of 2015, and the Company has no debt. In December 2014, HII entered into a three year revolving line of credit for $15 million with SunTrust Bank, N.A. The establishment of this credit facility is consistent with the Company's strategy of ensuring that the company has more than ample liquidity to fund operations.

2015 Outlook

HII expects year-over-year revenue growth and profitability in 2015

"We will continue our record of profitable growth, while making key investments to capitalize on the large market opportunity in front of us. Our top investment areas are launching new affordable alternatives and supplements to ACA Marketplace plans and a scalable online distribution platform for our proprietary health plans. We expect substantial sales contribution from these investments in the second half of this year. Most importantly, we believe these investments will drive market leadership, long term growth and value for HII," stated Kosloske.

Our focus for 2015 continues to build on our four key business model strengths:

1) Affordable products that are alternatives and supplements to ACA Marketplace plans 2) Year-round Product Availability 3) Data-driven Product Development 4) Our newly launched Direct-to-Consumer Channel

For earnings history and earnings-related data on Health Insurance Innovations (HIIQ) click here.

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