eHealth, Inc. Announces First Quarter 2012 Results
MOUNTAIN VIEW, CA, Apr 26, 2012 (MARKETWIRE via COMTEX) --eHealth, Inc. (NASDAQ: EHTH), the leading online source of health insurance for individuals, families and small businesses, today announced its financial results for the first quarter ended March 31, 2012.
Gary Lauer, chief executive officer of eHealth, stated, "In the first quarter of 2012, we continued to build momentum in our business reflected by the revenues and earnings we are reporting today. We are very pleased with these results which demonstrate meaningful progress in growing our Medicare plan business and maintaining market leadership in our core individual and family plan business. Based on our first quarter results we are raising our 2012 annual revenue guidance."
First Quarter Results
Revenue -- Revenue for the first quarter of 2012 totaled $37.1 million, a 1% decrease compared to revenue of $37.6 million for the first quarter of 2011. Commission revenue for the first quarter of 2012 totaled $31.5 million, a 2% increase compared to commission revenue of $30.8 million for the first quarter of 2011.
Stuart Huizinga, chief financial officer of eHealth, commented, "First quarter Medicare revenue was $6.5 million, a more than 180% increase year-over-year. Close to 60% of first quarter Medicare revenue came from broker commissions as compared to approximately 20% in the first quarter of 2011 reflecting our progress in transitioning to a direct fulfillment model."
Submitted Applications -- Submitted applications for individual and family products decreased 3% in the first quarter of 2012 to 115,400 applications, compared to 119,000 applications in the first quarter of 2011.
Membership -- Estimated membership at March 31, 2012 totaled 848,600 members, a 6% increase over estimated membership of 801,200 at March 31, 2011. Total approved members, including individual and family plan, Medicare plan and other product members, increased 8% to 151,800 in the first quarter of 2012 compared to 141,000 in the first quarter of 2011.
Operating Income -- Operating income for the first quarter of 2012 was $3.9 million, compared to operating income of $4.0 million for the first quarter of 2011. Operating margins were 11% in each of the first quarters of 2012 and 2011.
Non-GAAP operating income for the first quarter of 2012 was $6.0 million, compared to non-GAAP operating income of $6.3 million for the first quarter of 2011. Non-GAAP operating margins were 16% and 17% in the first quarters of 2012 and 2011, respectively. Non-GAAP operating income and margins in the first quarter of 2012 exclude $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense. Non-GAAP operating income and margins in the first quarter of 2011 exclude $1.9 million of stock- based compensation expense and $0.4 million of intangible asset amortization expense.
EBITDA -- EBITDA for the first quarter of 2012 was $6.6 million, a 5% decrease compared to EBITDA of $6.9 million for the first quarter of 2011. EBITDA is calculated by adding stock-based compensation expense, depreciation and amortization expense, including intangible asset amortization expense, interest and other (income) expense, net and provision for income taxes to GAAP net income.
Pre-tax Income -- Pre-tax income for each of the first quarters of 2012 and 2011 was $3.9 million.
Net Income -- Net income for the first quarter of 2012 was $2.1 million, or $0.10 per diluted share, compared to net income of $2.0 million, or $0.09 per diluted share for the first quarter of 2011. Non-GAAP net income for the first quarter of 2012 was $3.5 million, or $0.17 per diluted share, compared to non-GAAP net income of $3.7 million, or $0.17 per diluted share for the first quarter of 2011. Non-GAAP net income and non-GAAP net income per diluted share in the first quarter of 2012 exclude $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense, less $0.7 million for related income tax benefit. Non-GAAP net income and non-GAAP net income per diluted share in the first quarter of 2011 exclude $1.9 million of stock- based compensation expense and $0.4 million of intangible asset amortization expense, less $0.6 million for related income tax benefit.
Cash Flows and Cash Balance -- Cash flows from operations for the first quarter of 2012 were $5.1 million, compared to cash flows from operations of $6.8 million for the first quarter of 2011.
Cash and cash equivalents as of March 31, 2012 totaled $116.2 million, compared to $123.6 million as of December 31, 2011. The change in cash and cash equivalents reflects $8.4 million used to repurchase 0.6 million shares of our common stock in the first quarter of 2012 as a part of a stock repurchase program. In the first quarter of 2012, eHealth completed a $30 million share repurchase program at an average per share price of $13.78. The change in cash and cash equivalents also reflects $4.4 million of cash consideration paid to a partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies. Partially offsetting these uses of cash was $5.1 million of cash generated by operating activities in the three months ended March 31, 2012.
2012 Guidance
eHealth is raising its total revenue guidance for the full year ending December 31, 2012 based on information currently available:
-- Total revenue is expected to be in the range of $152 million to $158
million
eHealth is reaffirming its guidance for the full year ending December 31, 2012 provided on its last earnings call as follows:
-- Stock-based compensation expense is expected to be in the range of
$6.5 million to $8 million
-- EBITDA* is expected to be in the range of $21 million to $26 million
-- Non-GAAP net income per diluted share** is expected to be in the range
of $0.56 to $0.66 per share
Stuart Huizinga, chief financial officer of eHealth, commented, "Based on the performance of our Medicare business and solid demand trends that we are observing in this market, we are planning to invest more in our Medicare business than we anticipated at the beginning of the year. Specifically, we want to further accelerate our move towards fulfilling 100% of our Medicare plan demand as a broker. This will require an accelerated increase in our customer care resources and related infrastructure. As a result, despite the increase in our revenue guidance range, we are not raising our 2012 EBITDA and EPS guidance ranges."
* EBITDA is calculated by adding stock-based compensation expense, depreciation and amortization expense, including intangible asset amortization expense, interest and other (income) expense, net and provision for income taxes to GAAP net income.
** Non-GAAP net income per diluted share is calculated by excluding stock-based compensation expense, intangible asset amortization expense and the estimated tax benefit relating to these expenses.
Webcast and Conference Call Information A Webcast and conference call will be held today, Thursday, April 26, 2012 at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time. The Webcast will be available live on the Investor Relations section on eHealth's website at http://ir.ehealthinsurance.com. Individuals interested in listening to the conference call may do so by dialing 800-299-7928 for domestic callers and 617-614-3926 for international callers. The participant passcode is 96961827. A telephone replay will be available two hours following the conclusion of the call for a period of 30 days and can be accessed by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers. The call ID for the replay is 11949350. The live and archived webcast of the call will also be available on eHealth's website at http://www.ehealthinsurance.com under the Investor Relations section.
About eHealth, Inc. eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the nation's leading online source of health insurance for individuals, families and small businesses. Through the company's website, http://www.eHealthInsurance.com, consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance. eHealthInsurance offers thousands of individual, family and small business health plans underwritten by more than 180 of the nation's leading health insurance companies. eHealthInsurance is licensed to sell health insurance in all 50 states and the District of Columbia, making it the ideal model of a successful, high-functioning health insurance exchange. Through the company's eHealth Technology solution (www.eHealthTechnology.com), eHealth is also a leading provider of health insurance exchange technology. eHealth Technology's exchange platform provides a suite of hosted e- commerce solutions that enable health plan providers, resellers and government entities to market and distribute products online. eHealth, Inc. also provides powerful online and pharmacy-based tools to help seniors navigate Medicare health insurance options, choose the right plan and enroll in select plans online through its wholly-owned subsidiary, PlanPrescriber.com (www.planprescriber.com), and through its Medicare website www.eHealthMedicare.com. For more health insurance news and information, visit the eHealthInsurance consumer blog: Get Smart -- Get Covered.
Forward-Looking Statements This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding guidance for total revenue, stock-based compensation expense, EBITDA, and non-GAAP net income per diluted share for the year ending December 31, 2012, our plans to invest more in our Medicare business, our plan to service more Medicare plan demand as a broker, and future increases in our customer care resources and related infrastructure. These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made, including risks associated with the impact of healthcare reform and medical loss ratio requirements; eHealth's ability to maintain its relationship with health insurance carriers; eHealth's success in marketing and selling Medicare-related health insurance plans; eHealth's ability to hire, train and retain licensed health insurance agents for its Medicare business; the need for health insurance carrier and regulatory approvals in connection with the marketing of Medicare-related insurance products; decline in Medicare-related lead referral revenue; government disapproval of our use of marketing material, including call center scripts and our websites, to sell Medicare-related health insurance products; costs of acquiring new members; weak economic conditions; consumer awareness of the availability and accessibility of affordable health insurance; changes in member conversion rates; lack of membership growth and retention rates; changes in products offered on eHealth's ecommerce platform; changes in commission rates or carrier underwriting practices; maintaining and enhancing eHealth's brand identity; system failures, capacity constraints, data loss or online commerce security risks; dependence on acceptance of the Internet as a marketplace for the purchase and sale of health insurance; dependence upon Internet search engines; reliance on marketing partners; timing of receipt and accuracy of commission reports; payment practices of health insurance carriers; competition; our operations in China; success of eHealth's sponsorship advertising business; the licensing of the use of eHealth's technology or our performance of services pursuant to government contracts; protection of intellectual property and defense of intellectual property rights claims; legal liability, regulatory penalties and negative publicity; ability to attract and retain qualified personnel; management of business expansion and diversification; seasonality; impact of acquisitions, including risks associated with not realizing anticipated synergies and opportunities with respect to PlanPrescriber, Inc.; underperformance by PlanPrescriber, Inc.; PlanPrescriber's maintenance of its relationships with its pharmacy and other partners that serve as a source of Medicare-related leads; government approval of marketing material, including websites relating to PlanPrescriber partner Medicare product lead referrals; maintenance of proper and effective internal controls; impact of provisions for income taxes; changes in laws and regulations, including with respect to the marketing and sale of Medicare plans; compliance with insurance and other laws and regulations; exposure to security risks; and the performance, reliability and availability of eHealth's ecommerce platform and underlying network infrastructure. Other factors that could cause operating, financial and other results to differ are described in eHealth's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on the investor relations page of eHealth's website at http://www.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov. eHealth does not undertake any obligation to update any forward-looking statement to conform the statement to actual results or changes in expectations.
Non-GAAP Financial Information This press release includes financial measures that are not in accordance with generally accepted accounting principles in the United States ("GAAP"). To supplement eHealth's condensed consolidated financial statements presented in accordance with GAAP, eHealth presents investors with certain non-GAAP financial measures, including non-GAAP operating income; non-GAAP operating margins; earnings before interest, taxes, depreciation and amortization ("EBITDA"); non-GAAP net income and non-GAAP net income per diluted share.
-- Non-GAAP operating income consists of GAAP
operating income excluding
the following items:
-- the effects of expensing stock-based compensation related to stock
options and restricted stock units in accordance with FASB ASC
Topic 718, and
-- intangible asset amortization expense.
-- Non-GAAP operating margins are calculated by dividing non-GAAP
operating income by GAAP total revenue.
-- EBITDA is calculated by adding stock-based compensation, depreciation
and amortization expense, including intangible asset amortization
expense, interest and other (income) expense, net and provision for
income taxes to GAAP net income.
-- Non-GAAP net income consists of GAAP net income excluding the
following items:
-- the effects of expensing stock-based compensation related to stock
options and restricted stock units in accordance with FASB ASC
Topic 718,
-- intangible asset amortization expense, and
-- the related income tax benefit of these excluded items.
-- Non-GAAP net income per diluted share is calculated by dividing
non-GAAP net income by GAAP weighted average diluted shares
outstanding.
eHealth believes that the presentation of these non-GAAP financial measures provide important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with the Company's past financial reports. Management also believes that the exclusion of the items described above provides an additional measure of the Company's operating results and facilitates comparisons of the Company's core operating performance against prior periods and business model objectives. This information is provided to investors in order to facilitate additional analyses of past, present and future operating performance and as a supplemental means to evaluate the Company's ongoing operations. Externally, the Company believes that these non-GAAP financial measures are useful to investors in their assessment of the Company's operating performance.
Non-GAAP operating income, non-GAAP operating margins, EBITDA, non-GAAP net income and non- GAAP net income per diluted share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures used in this press release have limitations in that they do not reflect all of the revenue and costs associated with the operations of the Company's business and do not reflect income tax as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of eHealth's results as reported under GAAP. The Company expects to continue to incur the stock-based compensation costs and purchased intangible asset amortization costs described above, and exclusion of these costs, and their related income tax benefits, from non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. The Company compensates for these limitations by prominently disclosing GAAP operating income, GAAP operating margins, GAAP net income and GAAP net income per diluted share and providing investors with reconciliations from the Company's GAAP operating results to the non-GAAP financial measures for the relevant periods.
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.
EHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
December 31, March 31,
2011 2012
------------ ------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 123,607 $ 116,241
Accounts receivable 8,055 6,240
Deferred income taxes 4,622 4,051
Prepaid expenses and other current assets 3,377 4,003
------------ ------------
Total current assets 139,661 130,535
Property and equipment, net 4,631 4,261
Deferred income taxes 3,390 4,171
Other assets 5,641 9,122
Intangible assets, net 10,526 10,079
Goodwill 14,096 14,096
------------ ------------
Total assets $ 177,945 $ 172,264
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,391 $ 3,233
Accrued compensation and benefits 7,904 5,475
Accrued marketing expenses 6,195 3,665
Deferred revenue 314 1,589
Other current liabilities 1,547 2,808
------------ ------------
Total current liabilities 18,351 16,770
Other non-current liabilities 3,920 3,948
Stockholders' equity:
Common stock 26 26
Additional paid-in capital 215,364 217,554
Treasury stock, at cost (81,557) (89,998)
Retained earnings 21,661 23,786
Accumulated other comprehensive income 180 178
------------ ------------
Total stockholders' equity 155,674 151,546
------------ ------------
Total liabilities and stockholders' equity $ 177,945 $ 172,264
============ ============
(1) The condensed consolidated balance sheet at December 31, 2011 has been
derived from the audited consolidated financial statements at that date.
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts, unaudited)
Three Months Ended
March 31,
------------------------
2011 2012
----------- -----------
Revenue:
Commission $ 30,760 $ 31,464
Other 6,795 5,611
----------- -----------
Total revenue 37,555 37,075
Operating costs and expenses:
Cost of revenue 2,651 1,675
Marketing and advertising (1) 12,909 12,987
Customer care and enrollment (1) 5,410 5,971
Technology and content (1) 5,470 5,482
General and administrative (1) 6,721 6,604
Amortization of acquired intangible assets 427 447
----------- -----------
Total operating costs and expenses 33,588 33,166
----------- -----------
Income from operations 3,967 3,909
Interest and other income (expense), net (19) 21
----------- -----------
Income before provision for income taxes 3,948 3,930
Provision for income taxes 1,967 1,805
----------- -----------
Net income $ 1,981 $ 2,125
=========== ===========
Net income per share:
Basic $ 0.09 $ 0.11
Diluted $ 0.09 $ 0.10
Weighted-average number of shares used in per share
amounts:
Basic 21,351 19,536
Diluted 22,052 20,449
(1) Includes stock-based compensation expense as
follows:
Marketing and advertising $ 246 $ 240
Customer care and enrollment 107 79
Technology and content 455 333
General and administrative 1,053 973
----------- -----------
Total $ 1,861 $ 1,625
=========== ===========
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended March 31,
----------------------------
2011 2012
------------- -------------
Operating activities
Net income $ 1,981 $ 2,125
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred income taxes 1,777 367
Depreciation and amortization 669 576
Amortization of acquired intangible assets 427 447
Stock-based compensation expense 1,861 1,625
Excess tax benefits from stock-based
compensation (1,089) (551)
Deferred rent (9) (10)
Loss on disposal of property and equipment 3 -
Changes in operating assets and liabilities:
Accounts receivable 5,477 1,815
Prepaid expenses and other current assets 307 405
Other assets (30) (139)
Accounts payable (1,380) 842
Accrued compensation and benefits (2,183) (2,432)
Accrued marketing expenses 105 (2,531)
Deferred revenue (884) 1,275
Other current liabilities (257) 1,279
------------- -------------
Net cash provided by operating activities 6,775 5,093
------------- -------------
Investing activities
Purchases of property and equipment (505) (203)
Book of business transfers (765) (4,373)
------------- -------------
Net cash used in investing activities (1,270) (4,576)
------------- -------------
Financing activities
Proceeds from exercise of common stock options 26 994
Cash used to net-share settle equity awards (542) (980)
Excess tax benefits from stock-based
compensation 1,089 551
Repurchases of common stock (3,796) (8,441)
Principal payments in connection with capital
lease (14) (6)
------------- -------------
Net cash used in financing activities (3,237) (7,882)
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents (8) (1)
------------- -------------
Net increase (decrease) in cash and cash
equivalents 2,260 (7,366)
Cash and cash equivalents at beginning of
period 128,074 123,607
------------- -------------
Cash and cash equivalents at end of period $ 130,334 $ 116,241
============= =============
EHEALTH, INC.
SUMMARY OF SELECTED METRICS
(Unaudited)
Three Months Three Months
Ended March 31, Ended March 31,
Key Metrics: 2011 2012
---------------- -----------------
Operating cash flows (1) $ 6,775,000 $ 5,093,000
IFP submitted applications (2) 119,000 115,400
IFP approved members (3) 101,800 100,500
Total approved members (4) 141,000 151,800
Commission revenue (5) $ 30,760,000 $ 31,464,000
Commission revenue per estimated member
for the period (6) $ 38.95 $ 37.82
Total revenue (7) $ 37,555,000 $ 37,075,000
Total revenue per estimated member for
the period (8) $ 47.55 $ 44.56
As of As of
March 31, 2011 March 31, 2012
--------------- ----------------
IFP estimated membership (9) 693,400 686,800
Total estimated membership (10) 801,200 848,600
Three Months Three Months
Ended March 31, Ended March 31,
2011 2012
---------------- ----------------
Marketing and advertising expenses (11) $ 12,909,000 $ 12,987,000
Marketing and advertising expenses as a
percentage of total revenue (12) 34% 35%
Other Metrics:
Source of IFP submitted applications (as
a percentage of total IFP applications
for the period):
Direct (13) 43% 44%
Marketing partners (14) 32% 33%
Online advertising (15) 25% 23%
---------------- ----------------
Total 100% 100%
================ ================
Notes:
(1) Net cash provided by operating activities for the period from the
condensed consolidated statements of cash flows.
(2) IFP applications submitted on eHealth's website during the period.
Applications are counted as submitted when the applicant completes the
application, provides a method for payment and clicks the submit button
on our website and submits the application to us. The applicant
generally has additional actions to take before the application will be
reviewed by the insurance carrier, such as providing additional
information and providing an electronic signature. In addition, an
applicant may submit more than one application. We include applications
for IFP products for which we receive commissions as well as other forms
of payment. We define our "IFP" offerings as major medical individual
and family health insurance plans, which does not include small
business, short-term major medical, stand-alone dental, life, student or
Medicare-related health insurance plans.
(3) New IFP members reported to eHealth as approved during the period. Some
members that are approved by a carrier do not accept the approval and
therefore do not become paying members.
(4) New members for all products reported to eHealth as approved during the
period. Some members that are approved by a carrier do not accept the
approval and therefore do not become paying members.
(5) Commission revenue (from all sources) recognized during the period from
the condensed consolidated statements of income.
(6) Calculated as commission revenue recognized during the period (see note
(5) above) divided by average estimated membership for the period
(calculated as beginning and ending estimated membership for all
products for the period, divided by two). See our Form 10-K for the year
ended December 31, 2011 - Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations - Summary of Selected
Metrics for additional information regarding our calculation of
estimated membership.
(7) Total revenue (from all sources) recognized during the period from the
condensed consolidated statements of income.
(8) Calculated as total revenue recognized during the period (see note (7)
above) divided by average estimated membership for the period
(calculated as beginning and ending estimated membership for all
products for the period, divided by two). See our Form 10-K for the year
ended December 31, 2011 - Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations - Summary of Selected
Metrics for additional information regarding our calculation of
estimated membership.
(9) Estimated number of members active on IFP insurance policies as of the
date indicated. See our Form 10-K for the year ended December 31, 2011 -
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations - Summary of Selected Metrics for additional
information regarding our calculation of estimated membership.
(10 Estimated number of members active on all insurance policies as of the ) date indicated. See our Form 10
-K for the year ended December 31, 2011 -
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations - Summary of Selected Metrics for additional
information regarding our calculation of estimated membership.
(11 Marketing and advertising expenses for the period from the condensed ) consolidated statements of
income.
(12 Calculated as marketing and advertising expenses for the period (see ) note (11) above) divided by total
revenue for the period (see note (7)
above).
(13 Percentage of IFP submitted applications from applicants who came ) directly to the eHealth website
through algorithmic search engine
results or otherwise. See note (2) above for further information as to
what constitutes a submitted application.
(14 Percentage of IFP submitted applications from applicants sourced through) eHealth's network of marketing
partners. See note (2) above for further
information as to what constitutes a submitted application.
(15 Percentage of IFP submitted applications from applicants sourced through) paid search and other online
advertising activities. See note (2) above
for further information as to what constitutes a submitted application.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED MARCH 31, 2012
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended March 31, 2012
---------------------------------------------------------
GAAP Non-GAAP
Percent of Percent of
GAAP Total Non-GAAP Total
Reported Revenue Adjustments Results Revenue
---------- ---------- ----------- ---------- ----------
Revenue:
Commission $ 31,464 85% $ - $ 31,464 85%
Other 5,611 15 - 5,611 15
---------- ---------- ----------- ---------- ----------
Total revenue 37,075 100 - 37,075 100
Operating costs
and expenses:
Cost of revenue 1,675 5 - 1,675 5
Marketing and
advertising
(1) 12,987 35 (240) 12,747 34
Customer care
and enrollment
(1) 5,971 16 (79) 5,892 16
Technology and
content (1) 5,482 15 (333) 5,149 14
General and
administrative
(1) 6,604 18 (973) 5,631 15
Amortization of
acquired
intangible
assets (2) 447 1 (447) - -
---------- ---------- ----------- ---------- ----------
Total operating
costs and
expenses 33,166 89 (2,072) 31,094 84
---------- ---------- ----------- ---------- ----------
Income from
operations 3,909 11 2,072 5,981 16
Interest and
other income,
net 21 0 - 21 0
---------- ---------- ----------- ---------- ----------
Income before
provision for
income taxes 3,930 11 2,072 6,002 16
Provision for
income taxes (3) 1,805 5 734 2,539 7
---------- ---------- ----------- ---------- ----------
Net income (4) $ 2,125 6% $ 1,338 $ 3,463 9%
========== ========== =========== ========== ==========
Net income per
share: (4)
Basic $ 0.11 $ 0.07 $ 0.18
Diluted $ 0.10 $ 0.07 $ 0.17
Weighted-average
number of shares
used in per
share amounts:
Basic 19,536 19,536 19,536
Diluted 20,449 20,449 20,449
Explanation of adjustments
(1) Non-GAAP results exclude the effect of expensing stock-based
compensation related to stock options and restricted stock units in
accordance with FASB ASC Topic 718.
(2) Non-GAAP results exclude intangible asset amortization expense.
(3) Non-GAAP provision for income taxes excludes estimated income tax
benefit of $0.7 million related to stock-based compensation expense
listed in note (1) above and intangible asset amortization expense
listed in note (2) above.
(4) Non-GAAP net income and non-GAAP net income per share exclude stock-
based compensation expense listed in note (1) above, intangible asset
amortization expense listed in note (2) above, less the estimated income
tax benefit listed in note (3) above.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED MARCH 31, 2011
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended March 31, 2011
--------------------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Non-GAAP of Total
Reported Revenue Adjustments Results Revenue
--------- --------- ------------ --------- ---------
Revenue:
Commission $ 30,760 82% $ - $ 30,760 82%
Other 6,795 18 - 6,795 18
--------- --------- ------------ --------- ---------
Total revenue 37,555 100 - 37,555 100
Operating costs
and expenses:
Cost of revenue 2,651 7 - 2,651 7
Marketing and
advertising (1) 12,909 34 (246) 12,663 34
Customer care
and enrollment
(1) 5,410 14 (107) 5,303 14
Technology and
content (1) 5,470 15 (455) 5,015 13
General and
administrative
(1) 6,721 18 (1,053) 5,668 15
Amortization of
acquired
intangible
assets (2) 427 1 (427) - -
--------- --------- ------------ --------- ---------
Total operating
costs and
expenses 33,588 89 (2,288) 31,300 83
--------- --------- ------------ --------- ---------
Income from
operations 3,967 11 2,288 6,255 17
Interest and other
income (expense),
net (19) (0) - (19) (0)
--------- --------- ------------ --------- ---------
Income before
provision for
income taxes 3,948 11 2,288 6,236 17
Provision for
income taxes (3) 1,967 5 595 2,562 7
--------- --------- ------------ --------- ---------
Net income (4) $ 1,981 5% $ 1,693 $ 3,674 10%
========= ========= ============ ========= =========
Net income per
share: (4)
Basic $ 0.09 $ 0.08 $ 0.17
Diluted $ 0.09 $ 0.08 $ 0.17
Weighted-average
number of shares
used in per share
amounts:
Basic 21,351 21,351 21,351
Diluted 22,052 22,052 22,052
Explanation of adjustments
(1) Non-GAAP results exclude the effect of expensing stock-based
compensation related to stock options and restricted stock units in
accordance with FASB ASC Topic 718.
(2) Non-GAAP results exclude intangible asset amortization expense.
(3) Non-GAAP provision for income taxes excludes estimated income tax
benefit of $0.6 million related to stock-based compensation expense
listed in note (1) above and intangible asset amortization expense
listed in note (2) above.
(4) Non-GAAP net income and non-GAAP net income per share exclude stock-
based compensation expense listed in note (1) above, intangible asset
amortization expense listed in note (2) above, less the estimated income
tax benefit listed in note (3) above.
EHEALTH, INC.
GAAP NET INCOME TO NON-GAAP EBITDA RECONCILIATION
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2012
(In thousands, unaudited)
EBITDA Reconciliation
Three Months Ended
March 31,
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2011 2012
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Net income $ 1,981 $ 2,125
Stock-based compensation expense (1) 1,861 1,625
Depreciation and amortization (2) 669 576
Amortization of acquired intangible assets (2) 427 447
Interest and other (income) expense, net (3) 19 (21)
Provision for income taxes (4) 1,967 1,805
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EBITDA $ 6,924 $ 6,557
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Explanation of adjustments
(1) Non-GAAP EBITDA excludes the effect of expensing stock-based
compensation related to stock options and restricted stock units in
accordance with FASB ASC Topic 718.
(2) Non-GAAP EBITDA excludes depreciation and amortization expense,
including intangible asset amortization expense.
(3) Non-GAAP EBITDA excludes interest income and other income and expenses.
(4) Non-GAAP EBITDA excludes income tax expense.
Investor Relations Contact: Kate Sidorovich, CFA Vice President, Investor Relations 440 East Middlefield Road Mountain View, CA 94043 (650) 210-3111 kate.sidorovich@ehealth.com http://ir.ehealthinsurance.com Media Contact: Brian Mast Vice President, Communications 440 East Middlefield Road Mountain View, CA 94043 (650) 210-3149 brian.mast@ehealth.com http://www.ehealthinsurance.com/
SOURCE: eHealthInsurance