HIIQ Announces Extension of Strategic Alternatives Review & Preliminary fourth quarter and fiscal year 2019 financial results
“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
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.
In addition, the Company also announced preliminary financial results and key metrics for fourth quarter and fiscal year 2019:
|($ in millions except per share data)||Fourth Quarter 2019||Fiscal Year 2019|
|Individual and Family Plan Products (“IFP”)||$104 - $108||$313 - $317|
|Medicare||$ 55 - $ 56||$ 67 - $ 68|
|Total Revenues||$159 - $164||$ 380 - $ 385|
|Adjusted EBITDA||$ 44 - $ 48||$ 80 - $ 84|
|Adjusted net income per share||$2.30 - $2.55||$4.10 - $4.35|
|As of 12/31/19|
|Gross Contract Asset |
|Total Gross Contract Asset||$ 396|
|Net Contract Asset |
|Total Net Contract Asset||$ 265|
|Debt Outstanding||$ 179|
|Consolidated Total Leverage||2.3X|
|(Credit Facility Covenant Max: 3.5X)|
 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.
 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
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.
HIIQ is a market leading cloud-based technology platform and distributor of innovative health and life insurance products that are affordable and meet the needs of consumers. HIIQ helps develop insurance products through our relationships with best-in-class insurance companies and markets them via its broad distribution network of third-party licensed insurance agents across the nation, its call center network and its unique online capabilities. Additional information about HIIQ can be found at HIIQ.com.
Non-GAAP Financial Information
The Company uses Adjusted EBITDA and Adjusted net income per share, which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), to understand and evaluate our core operating performance and trends and to make period-to-period comparisons of our business.
To calculate Adjusted EBITDA, we calculate EBITDA, which is then further adjusted for items such as stock-based compensation and related costs, and items that are not generally a part of regular operating activities, including tax receivable adjustments, indemnity and other related legal costs, and severance, restructuring, and acquisition costs. We define EBITDA as net income before interest, income taxes and depreciation and amortization.
Adjusted net income per share is computed by dividing adjusted net income by the total number of weighted-average diluted Class A and weighted-average Class B shares of our common stock for each period. To calculate Adjusted net income, we calculate net income then add back amortization (but not depreciation), interest, tax expense, items such as stock-based compensation and related costs, and other items that are not generally a part of regular operating activities, including, tax receivable adjustments, indemnity and other related legal costs, severance, restructuring, and acquisition costs. From adjusted pre-tax net income, we apply a pro forma tax expense calculated at an assumed rate of 24%, which consists of the maximum federal corporate rate of 21%, with an assumed 3% state tax rate.
The Company has not included a GAAP reconciliation of Adjusted EBITDA and Adjusted net income per share because such reconciliation could not be produced without unreasonable effort.
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 our anticipated fourth quarter and full year 2019 financial results and the strategic alternatives review process and potential transactions that may be identified and explored as a result of such review process, as well as 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
Source: Health Insurance Innovations, Inc.