eHealth, Inc. Announces Fourth Quarter and Full Year 2006 Results
Fourth Quarter Highlights
- Revenue of $17.4 Million, up 49% Year-over-Year
- Operating Income of $2.8 Million, or 16% of Revenue
- Net Income of $11.0 Million, Including a $7.4 Million Tax Benefit, or $0.45 Per Share on a Diluted Basis
- Cash Flow from Operations of $4.9 Million, up 344% Year-over-Year
- Completed Initial Public Offering During October 2006, Resulting in Net Proceeds of Approximately $70.2 Million
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Feb. 15, 2007--eHealth, Inc. (NASDAQ:EHTH), the leading online source of health insurance for individuals, families and small businesses, today announced its financial results for the fourth quarter and full year ended December 31, 2006.
"Our fourth quarter results show the significant market and financial progress we are making as a company," said Gary Lauer, chief executive officer of eHealth. "In particular, our fourth quarter revenue growth, operating margin and cash flow illustrate the power and leverage of our financial model."
Fourth Quarter Results
For the fourth quarter ended December 31, 2006, revenue totaled $17.4 million, representing a 49% increase over revenue of $11.7 million for the fourth quarter of 2005. The increase in revenue was driven primarily by growth in commission revenue received from health insurance carriers.
Operating income increased to $2.8 million for the fourth quarter of 2006, compared to operating income of $0.1 million for the fourth quarter of 2005. Operating margins improved to 16% in the fourth quarter of 2006, up from 12% in the third quarter of 2006 computed on a non-GAAP basis by excluding from the third quarter a $0.7 million revenue item that had previously been deferred and was recognized in a lump-sum in the third quarter. This was also up from 1% in the fourth quarter of 2005.
Net income for the fourth quarter of 2006, which included a $7.4 million income tax benefit from a partial reduction of the valuation allowance against deferred tax assets, was $11.0 million, or $0.45 per share on a diluted basis. Excluding the $7.4 million income tax benefit, non-GAAP net income for the fourth quarter of 2006 was $3.6 million, or $0.15 per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, for the fourth quarter of 2005.
During the fourth quarter of 2006, cash flow from operations increased to $4.9 million, compared to $1.1 million for the same period in 2005. The Company ended the fourth quarter of 2006 with $90.3 million of cash and cash equivalents, compared with $9.4 million as of December 31, 2005.
Full Year Results
For the year ended December 31, 2006, revenue totaled $61.3 million, representing a 47% increase over revenue of $41.8 million for the year ended December 31, 2005.
Operating income increased to $8.0 million during the year ended December 31, 2006, compared to an operating loss of $0.6 million during the year ended December 31, 2005. Operating margins improved to 13% for the year ended December 31, 2006, up from an operating deficit of 2% for the year ended December 31, 2005.
Net income for the year ended December 31, 2006, which included the income tax benefit of $7.4 million, was $16.5 million, or $0.80 per share on a diluted basis. Excluding the $7.4 million income tax benefit, non-GAAP net income for the year ended December 31, 2006 was $9.0 million, or $0.44 per diluted share, compared with a net loss of $0.4 million, or $(0.09) per diluted share, for the year ended December 31, 2005.
During the year ended December 31, 2006, cash flow from operations totaled $11.4 million, representing a 336% increase compared to cash flow from operations of $2.6 million for the year ended December 31, 2005.
Initial Public Offering
In October 2006, the Company completed the initial public offering of 5,750,000 shares of common stock at a price of $14 per share, resulting in cash proceeds of approximately $70.2 million, net of offering expenses and underwriters' discounts and commissions.
Guidance
eHealth is providing guidance for its full year ending December 31, 2007 based on information available as of February 15, 2007:
- Total revenue expected to be in the range of $81 million to $84 million
- Non-GAAP net income, excluding stock-based compensation expense, expected to be in the range of $10.5 million to $12.0 million. The effective tax rate, if it were computed based on pre-tax earnings before stock-based compensation, is expected to range from approximately 39% to 40%.
- Non-GAAP earnings per diluted share, excluding stock-based compensation expense, expected to be in the range of $0.40 to $0.45 per share
- Cash flow from operations expected to be in the range of $19 million to $21 million
Webcast and Conference Call Information
A Webcast and conference call will be held today, Thursday, February 15, 2007 at 5:00 p.m. (EST) / 2:00 p.m. (PST). The Webcast will be available live on the Investor Relations section on our website at http://ir.ehealthinsurance.com. Individuals interested in listening to the conference call may do so by dialing 866-202-0886 for domestic callers and 617-213-8841 for international callers. The participant passcode is 54330533. 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 19493974. The archived Webcast will also be available on our website.
About eHealth, Inc.
eHealth, Inc. is the parent company of eHealthInsurance, the leading online source of health insurance for individuals, families and small businesses. eHealthInsurance presents complex health insurance information in an objective, user-friendly format, enabling the research, analysis, comparison and purchase of health insurance products that best meet consumers' needs. eHealth and eHealthInsurance are registered trademarks of eHealthInsurance Services, Inc.
eHealth, Inc. was founded in 1997 and its technology was responsible for the nation's first Internet-based sale of a health insurance policy. The Company is headquartered in Mountain View, California. Additional information can be found at the Company's website, www.ehealthinsurance.com.
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 the Company's market and financial progress, the power and leverage of the Company's financial model, total revenue, net income, effective tax rate, earnings per diluted share and cash flow from operations for 2007. 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 acceptance of the internet as a medium for the purchase of health insurance, the Company's ability to increase its membership base and expand its relationships with health insurance carriers and marketing partners, retention of the Company's members, increased rates of member turnover, changes in the Company's relationships with insurance carriers, system failures or capacity constraints, dependence upon Internet search engines to attract consumers who visit the Company's website, the performance, reliability and availability of the Company's ecommerce platform and underlying network infrastructure, the effectiveness of the Company's marketing and public relations efforts, exposure to online commerce security risks, reliance on marketing partners for the sale of health insurance, competition, protection of intellectual property and intellectual property rights claims, regulatory penalties and negative publicity, compliance with insurance and other laws and regulations, and changes in laws and regulations. Other factors that could cause operating, financial and other results to differ are described in the Company's most recent Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission and available on the investor relations page of the Company's website at www.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov. Other risks may be detailed from time to time in reports to be filed with the Securities and Exchange Commission. 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 non-GAAP financial measures, including non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margins, to supplement the consolidated financial statements, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP measures are not in accordance with, or an alternative for, U.S. generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. eHealth believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with eHealth's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate eHealth's results of operations in conjunction with the corresponding GAAP measures.
For internal budgeting and resource allocation, eHealth's management uses non-GAAP financial information that excludes a $7.4 million income tax benefit in the three and twelve month periods ended December 31, 2006 and excludes $0.7 million of revenue, along with the related income tax impact, in the three months ended September 30, 2006. eHealth's management uses these non-GAAP financial measures in making operating decisions, because it believes the measures provide meaningful supplemental information regarding eHealth's operational performance and useful insight into how its business should be managed. Management also uses these non-GAAP financial measures to facilitate internal comparisons to historical operating results.
The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures and the related reconciliations between these financial measures.
EHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2005 2006
------------ ------------
Assets (1) (unaudited)
--------------------------------------------
Current assets:
Cash and cash equivalents $9,415 $90,316
Short-term investments - 158
Accounts receivable 128 717
Deferred income taxes - 2,303
Prepaid expenses and other current assets 908 1,926
------------ ------------
Total current assets 10,451 95,420
Restricted investments 153 -
Property and equipment, net 2,761 3,936
Deferred initial public offering costs 1,391 -
Deferred income taxes - 5,119
Other assets 409 453
------------ ------------
Total assets $15,165 $104,928
============ ============
Liabilities, convertible preferred stock and
stockholders' equity (deficit)
-------------------------------------------- ------------ ------------
Current liabilities:
Accounts payable $1,077 $1,440
Accrued compensation and benefits 3,009 3,743
Accrued marketing expenses 1,027 1,647
Deferred revenue 523 62
Other current liabilities 1,179 1,979
------------ ------------
Total current liabilities 6,815 8,871
Other non-current liabilities 212 317
Convertible preferred stock 86,319 -
Stockholders' equity (deficit):
Common stock 5 22
Additional paid-in capital 1,983 159,576
Deferred stock-based compensation (62) (254)
Accumulated deficit (80,132) (63,655)
Accumulated other comprehensive income 25 51
------------ ------------
Total stockholders' equity (deficit) (78,181) 95,740
------------ ------------
Total liabilities, convertible preferred
stock and stockholders' equity (deficit) $15,165 $104,928
============ ============
(1) The condensed consolidated balance sheet at December 31, 2005 has
been derived from the audited consolidated financial statements at
that date.
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
----------------------- ---------------------
2005 2006 2005 2006
----------- ----------- --------- -----------
(unaudited) (unaudited) (2) (unaudited)
Revenue:
Commission $11,471 $16,520 $41,237 $58,943
Sponsorship, licensing
and other 236 896 515 2,367
----------- ----------- --------- -----------
Total revenue 11,707 17,416 41,752 61,310
Operating costs and
expenses:
Cost of revenue-sharing 173 411 614 1,305
Marketing and
advertising (1) 4,808 5,601 17,786 21,405
Customer care and
enrollment (1) 2,421 2,947 8,822 10,991
Technology and content
(1) 2,138 2,816 8,054 10,137
General and
administrative (1) 2,020 2,880 7,108 9,482
----------- ----------- --------- -----------
Total operating costs and
expenses 11,560 14,655 42,384 53,320
----------- ----------- --------- -----------
Income (loss) from
operations 147 2,761 (632) 7,990
Other income, net 97 969 239 1,326
----------- ----------- --------- -----------
Income (loss) before
income taxes 244 3,730 (393) 9,316
Provision (benefit) for
income taxes 21 (7,315) 21 (7,161)
----------- ----------- --------- -----------
Net income (loss) $223 $11,045 $(414) $16,477
=========== =========== ========= ===========
Net income (loss) per
share:
Basic - common stock $0.05 $0.57 $(0.09) $1.91
Basic - Class A
nonvoting common stock $0.05 $0.57 $(0.09) $1.91
Diluted - common stock $0.01 $0.45 $(0.09) $0.80
Diluted - Class A
nonvoting common stock $0.01 $0.45 $(0.09) $0.80
Net income (loss):
Allocated to common
stock $222 $11,039 $(414) $16,391
Allocated to Class A
nonvoting common stock 1 6 - 86
----------- ----------- --------- -----------
Net income (loss) $223 $11,045 $(414) $16,477
=========== =========== ========= ===========
Weighted-average number
of shares used in per
share amounts:
Basic - common stock 4,781 19,535 4,661 8,590
Basic - Class A
nonvoting common stock 12 10 3 45
Diluted - common stock 18,797 24,771 4,661 20,572
Diluted - Class A
nonvoting common stock 12 10 3 45
(1) Includes stock-based
compensation as follows:
Marketing and
advertising $1 $15 $97 $47
Customer care and
enrollment 1 16 6 42
Technology and content 18 77 62 226
General and
administrative 8 50 26 139
----------- ----------- --------- -----------
Total $28 $158 $191 $454
=========== =========== ========= ===========
(2) The condensed consolidated statement of operations for the year
ended December 31, 2005 has been derived from the audited
consolidated financial statements for that year.
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended Year Ended
December 31, December 31,
----------------------- --------------------
2005 2006 2005 2006
----------- ----------- -------- -----------
(unaudited) (unaudited) (1) (unaudited)
Operating activities
Net income (loss) $223 $11,045 $(414) $16,477
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Deferred income taxes - (7,422) - (7,422)
Depreciation and
amortization 259 429 1,136 1,546
Stock-based compensation
expense 28 158 191 454
Deferred rent (3) 82 168 122
Loss on disposal of
property and equipment 17 - 17 -
Changes in operating
assets and liabilities:
Accounts receivable (56) 84 (96) (589)
Prepaid expenses and
other current assets 96 (730) 15 (954)
Other assets (2) (15) 13 (44)
Accounts payable 215 11 163 209
Accrued compensation
and benefits 646 932 649 740
Accrued marketing
expenses (594) (81) 104 620
Deferred revenue 302 3 520 (461)
Other current
liabilities (26) 408 151 700
----------- ----------- -------- -----------
Net cash provided by
operating activities 1,105 4,904 2,617 11,398
----------- ----------- -------- -----------
Investing activities
Purchases of property and
equipment (259) (529) (1,337) (2,268)
Changes in restricted cash - - 101 -
Changes in restricted
investments (1) (2) (3) (5)
----------- ----------- -------- -----------
Net cash used in investing
activities (260) (531) (1,239) (2,273)
----------- ----------- -------- -----------
Financing activities
Proceeds from initial
public offering - 74,752 - 74,752
Costs incurred in
connection with initial
public offering (656) (1,400) (1,022) (3,309)
Net proceeds from exercise
of common stock options 25 37 362 476
Principal payments in
connection with capital
leases (5) (100) (22) (172)
----------- ----------- -------- -----------
Net cash provided by (used
in) financing activities (636) 73,289 (682) 71,747
----------- ----------- -------- -----------
Effect of exchange rate
changes on cash and cash
equivalents (5) 13 12 29
----------- ----------- -------- -----------
Net increase in cash and
cash equivalents 204 77,675 708 80,901
Cash and cash equivalents
at beginning of period 9,211 12,641 8,707 9,415
----------- ----------- -------- -----------
Cash and cash equivalents
at end of period $9,415 $90,316 $9,415 $90,316
=========== =========== ======== ===========
(1) The condensed consolidated statement of cash flows for the year
ended December 31, 2005 has been derived from the audited
consolidated financial statements for that year.
EHEALTH, INC.
SUMMARY OF KEY METRICS
(Unaudited)
Three Months Three Months
Ended Ended
December 31, December 31,
Metric 2005 2006
------------------------------------------------------- -------------
IFP submitted applications (1) 61,000 76,300
Source of IFP submitted applications (as a
percentage of total IFP applications for
the period):
Direct (2) 39 % 40 %
Marketing partners (3) 36 % 33 %
Online advertising (4) 25 % 27 %
------------- -------------
Total 100 % 100 %
============= =============
IFP new members (5) 48,300 68,300
Total new members (6) 68,000 97,200
Total revenue (7) $11,707,000 $17,416,000
Total revenue per estimated member for the
period (8) $44 $46
Marketing and advertising expenses (9) $4,808,000 $5,601,000
Acquisition cost per individual on IFP
submitted applications (10) $50 $47
As of As of
December 31, December 31,
2005 2006
------------- -------------
IFP estimated membership (11) 225,000 319,000
Total estimated membership (12) 277,600 393,900
(1) Individual and Family Product ("IFP") applications completed on
eHealth's website during the period.
(2) Percentage of submitted applications from applicants who came
directly to the eHealth website through unpaid search engine results
or otherwise.
(3) Percentage of submitted applications from applicants sourced
through eHealth's network of marketing partners.
(4) Percentage of submitted applications from applicants sourced
through paid search, portals and related sites.
(5) 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.
(6) 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.
(7) Total revenue recognized during the period (all sources) from the
condensed consolidated statements of operations.
(8) Calculated as total revenue recognized during the period (see note
(7)) divided by average estimated membership for the period
(calculated as beginning and ending estimated membership for all
products for the period, divided by two).
(9) Marketing and advertising expenses for the period from the
condensed consolidated statements of operations.
(10) Calculated as marketing and advertising expenses for the period
(see note (9)) divided by the number of individuals on IFP
applications completed on eHealth's website during the period.
(11) Estimated number of members active on IFP insurance policies as
of the date indicated.
(12) Estimated number of members active on all insurance policies as
of the date indicated.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED DECEMBER 31, 2006
(In thousands, except per share amounts, unaudited)
Statement of Operations Reconciliation
--------------------------------------
Three Months Ended
December 31, 2006
--------------------------------
GAAP Non-GAAP
Reported Adjustments Results
--------- ----------- ----------
Revenue:
Commission $16,520 $- $16,520
Sponsorship, licensing and other 896 - 896
--------- ----------- ----------
Total revenue 17,416 - 17,416
Operating costs and expenses:
Cost of revenue-sharing 411 - 411
Marketing and advertising 5,601 - 5,601
Customer care and enrollment 2,947 - 2,947
Technology and content 2,816 - 2,816
General and administrative 2,880 - 2,880
--------- ----------- ----------
Total operating costs and expenses 14,655 - 14,655
--------- ----------- ----------
Income from operations 2,761 - 2,761
Other income, net 969 - 969
--------- ----------- ----------
Income before income taxes 3,730 - 3,730
Provision (benefit) for income taxes
(1) (7,315) 7,422 107
--------- ----------- ----------
Net income (loss) $11,045 $(7,422) $3,623
========= =========== ==========
Net income (loss) per share:
Basic - common stock $0.57 $(0.38) $0.19
Basic - Class A nonvoting common
stock $0.57 $(0.38) $0.19
Diluted - common stock $0.45 $(0.30) $0.15
Diluted - Class A nonvoting common
stock $0.45 $(0.30) $0.15
Net income (loss):
Allocated to common stock $11,039 $(7,418) $3,621
Allocated to Class A nonvoting
common stock 6 (4) 2
--------- ----------- ----------
Net income (loss) $11,045 $(7,422) $3,623
========= =========== ==========
Weighted-average number of shares used
in per share amounts:
Basic - common stock 19,535 19,535 19,535
Basic - Class A nonvoting common
stock 10 10 10
Diluted - common stock 24,771 24,771 24,771
Diluted - Class A nonvoting common
stock 10 10 10
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
(In thousands, except per share amounts, unaudited)
Statement of
Operations
Reconciliation
---------------------
Three Months Ended September 30, 2006
-------------------------------------------------
GAAP Percent Adjustments Non-GAAP Percent
Reported of Results of
Total Total
Revenue Revenue
--------- -------- ----------- -------- --------
Revenue:
Commission (2) $15,867 95 % $(720) $15,147 95 %
Sponsorship,
licensing and
other 795 5 - 795 5
--------- -------- ----------- -------- --------
Total revenue 16,662 100 (720) 15,942 100
Operating costs and
expenses:
Cost of revenue-
sharing 411 3 - 411 3
Marketing and
advertising 5,798 35 - 5,798 36
Customer care and
enrollment 2,740 16 - 2,740 17
Technology and
content 2,668 16 - 2,668 17
General and
administrative 2,370 14 - 2,370 15
--------- -------- ----------- -------- --------
Total operating costs
and expenses 13,987 84 - 13,987 88
--------- -------- ----------- -------- --------
Income (loss) from
operations 2,675 16 (720) 1,955 12
Other income, net 145 1 - 145 1
--------- -------- ----------- -------- --------
Income (loss) before
income taxes 2,820 17 (720) 2,100 13
Provision (benefit)
for income taxes (3) 82 1 (19) 63 -
--------- -------- ----------- -------- --------
Net income (loss) $2,738 16 % $(701) $2,037 13 %
========= ======== =========== ======== ========
Net income (loss) per
share:
Basic - common
stock $0.54 $(0.14) $0.40
Basic - Class A
nonvoting common
stock $0.54 $(0.14) $0.40
Diluted - common
stock $0.14 $(0.03) $0.11
Diluted - Class A
nonvoting common
stock $0.14 $(0.03) $0.11
Net income (loss):
Allocated to common
stock $2,705 $(693) $2,012
Allocated to Class
A nonvoting common
stock 33 (8) 25
--------- ----------- --------
Net income (loss) $2,738 $(701) $2,037
========= =========== ========
Weighted-average
number of shares
used in per share
amounts:
Basic - common
stock 4,974 4,974 4,974
Basic - Class A
nonvoting common
stock 61 61 61
Diluted - common
stock 19,334 19,334 19,334
Diluted - Class A
nonvoting common
stock 61 61 61
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE YEAR ENDED DECEMBER 31, 2006
(In thousands, except per share amounts, unaudited)
Statement of Operations Reconciliation
----------------------------------------
Year Ended December 31, 2006
------------------------------
GAAP Non-GAAP
Reported Adjustments Results
--------- ----------- --------
Revenue:
Commission $58,943 $- $58,943
Sponsorship, licensing and other 2,367 - 2,367
--------- ----------- --------
Total revenue 61,310 - 61,310
Operating costs and expenses:
Cost of revenue-sharing 1,305 - 1,305
Marketing and advertising 21,405 - 21,405
Customer care and enrollment 10,991 - 10,991
Technology and content 10,137 - 10,137
General and administrative 9,482 - 9,482
--------- ----------- --------
Total operating costs and expenses 53,320 - 53,320
--------- ----------- --------
Income from operations 7,990 - 7,990
Other income, net 1,326 - 1,326
--------- ----------- --------
Income before income taxes 9,316 - 9,316
Provision (benefit) for income taxes (1) (7,161) 7,422 261
--------- ----------- --------
Net income (loss) $16,477 $(7,422) $9,055
========= =========== ========
Net income (loss) per share:
Basic - common stock $1.91 $(0.86) $1.05
Basic - Class A nonvoting common stock $1.91 $(0.86) $1.05
Diluted - common stock $0.80 $(0.36) $0.44
Diluted - Class A nonvoting common
stock $0.80 $(0.36) $0.44
Net income (loss):
Allocated to common stock $16,391 $(7,383) $9,008
Allocated to Class A nonvoting common
stock 86 (39) 47
--------- ----------- --------
Net income $16,477 $(7,422) $9,055
========= =========== ========
Weighted-average number of shares used
in per share amounts:
Basic - common stock 8,590 8,590 8,590
Basic - Class A nonvoting common stock 45 45 45
Diluted - common stock 20,572 20,572 20,572
Diluted - Class A nonvoting common
stock 45 45 45
Explanation of adjustments
----------------------------------------------------------------------
(1) In the fourth quarter of 2006, management concluded that it is
more likely than not that eHealth will realize sufficient
earnings to utilize a portion of its deferred tax assets.
Accordingly, eHealth reduced the valuation allowance against
deferred tax assets and recorded a tax benefit of $7.4 million in
the fourth quarter of 2006.
(2) Deferred revenue at June 30, 2006 included commission amounts
reported and paid by a single health insurance carrier that,
effective January 2005, changed its basis for calculating and
reporting commission amounts from a percentage of the premium it
collected to a percentage of the premium it billed. Since this
was the first carrier to calculate and report commission amounts
on this basis, eHealth initially did not have sufficient
historical forfeiture experience to estimate and record an
appropriate allowance for forfeitures as commission amounts were
reported by the carrier. Accordingly, all commission amounts
reported by the carrier in 2005 and through the first six months
of 2006 were deferred.
During the three months ended September 30, 2006, eHealth
determined that it had sufficient experience to estimate an
allowance for forfeitures for this health insurance carrier.
Accordingly, during the three and nine months ended September 30,
2006, eHealth recognized $720,000 of commission revenue, which
had been previously deferred.
(3) Includes a $19,000 income tax expense reduction due to the
$720,000 reduction of income (loss) before income taxes.
CONTACT: eHealth, Inc.
Robert Hurley, 1-916-608-6101 (Media)
VP Corporate Communications
robert.hurley@ehealth.com
www.ehealthinsurance.com
or
Ashton Partners
Trisha Dill, 1-415-869-5757 (Investors)
tdill@ashtonpartners.com
www.ashtonpartners.com
SOURCE: eHealth, Inc.