Health Insurance Innovations (HIIQ) Extends Strategic Alternative Review; Reports Prelim. Q4 & FY19 Financial Results

Health Insurance Innovations, Inc. (NASDAQ: HIIQ) today announced that as a result of its in-progress strategic transformation and successful development and growth of its Medicare business, the Company is extending its process for exploring, reviewing, and evaluating alternative strategies focused on maximizing shareholder value that commenced in July 2019. These alternatives could include, among other things, a sale of the Company or a portion thereof, a strategic business combination, changes in the Company’s operations or strategy, or continuing to execute on the Company’s current business plan.

“The Board of Directors believes that the best path for enhancing value for our shareholders is to allow additional time for potential strategic and financial partners to review the Company’s strategy and recent and projected operating results,” said Paul Gabos, Chairman of the Board. “We are encouraged by our recent Medicare sales volume success and the level of interest that this has garnered in the marketplace. Since the announcement of our Medicare results in early December, we have received additional inquiries from multiple new strategic parties expressing an interest in participating in our process. We believe it is prudent to allow these parties more time to complete their assessment of the Company in light of the business transformation in progress.”

The Company’s Board of Directors has not set a timetable for completing the strategic review nor has it made any decisions related to strategic alternatives at this time, and there can be no assurance that the Board’s exploration of strategic alternatives will result in changes in strategy or any transaction or, if a transaction is undertaken, as to its terms, structure or timing. The Company does not expect to make further public comment regarding these matters unless and until the Board has approved a specific transaction or alternative or otherwise concludes its review of strategic alternatives.

BofA Securities is acting as financial advisor and Weil, Gotshal & Manges LLP is acting as legal advisor to the Company.

In addition, the Company also announced preliminary financial results and key metrics for fourth quarter and fiscal year 2019:

[1] The gross contract asset is inclusive of all future collections from our members, reduced by the amount due to the carriers or discount benefit plan providers.

[2] The net contract asset is the gross asset, less the future commissions due to our third-party distribution partners.

“We are pleased with our preliminary fourth quarter and fiscal year 2019 financial results which reflect annual growth in revenues of approximately 8-10%, growth in Adjusted EBITDA of approximately 34-41%, and growth in Adjusted net income per share of approximately 57-67%. Although revenues were slightly below our forecast for 2019, we benefitted from the successful build-out of our Medicare platform while narrowing our focus on certain IFP products,” said Gavin Southwell, HIIQ’s President and Chief Executive Officer.

The Company has not yet closed and finalized its financial statement review process for the fourth quarter and full year 2019. As a result, the information in this release is preliminary and based upon information available to the Company as of the date of this release, and thus remains subject to completion of normal year-end accounting procedures, adjustments and audit. During the course of the Company’s review process, items may be identified that would require the Company to make adjustments, which could result in changes to our preliminary selected financial information above. As a result, the preliminary selected financial information above is forward-looking information and subject to risks and uncertainties, including possible adjustments to such information. The Company expects to report its fourth quarter and full year 2019 results in March of 2020.

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