MOUNTAIN VIEW, CA — (Marketwire) — 07/26/11 — eHealth, Inc. (NASDAQ: EHTH), the leading
online source of health insurance for individuals, families and small
businesses, today announced its financial results for the second quarter
ended June 30, 2011.
Gary Lauer, chief executive officer of eHealth, stated, “We are pleased
with our second quarter financial performance in the changing individual
market and we are enthused about our emerging Medicare business in the
senior market.”
— Revenue for the second quarter of 2011 totaled $36.2
million, compared to revenue of $36.3 million for the second quarter of
2010.
— Submitted applications for individual and
family products decreased 13% in the second quarter of 2011 to 101,600
applications, compared to 117,200 applications in the second quarter of
2010.
— Estimated membership at June 30, 2011 totaled 804,100
members, a 7% increase over estimated membership of 754,900 at June 30,
2010.
— Operating income for the second quarter of 2011
was $4.9 million, a 16% decrease compared to operating income of $5.8
million for the second quarter of 2010. Operating margins were 13% and 16%
in the second quarters of 2011 and 2010, respectively. Non-GAAP operating
income for the second quarter of 2011 was $7.2 million, a 5% decrease
compared to non-GAAP operating income of $7.6 million for the second
quarter of 2010. Non-GAAP operating margins were 20% and 21% in the second
quarters of 2011 and 2010, respectively. Non-GAAP operating income and
margins in the second quarter of 2011 exclude $1.9 million of stock-based
compensation expense and $0.4 million of intangible asset amortization
expense associated with the acquisition of PlanPrescriber, Inc. Non-GAAP
operating income and margins in the second quarter of 2010 exclude $1.6
million of stock-based compensation expense and $0.3 million of intangible
asset amortization expense associated with the acquisition of
PlanPrescriber, Inc.
— EBITDA for the second quarter of 2011 was $7.8 million, a
4% decrease compared to EBITDA of $8.2 million for the second quarter of
2010.
— Pre-tax income for the second quarter of 2011 was
$4.8 million, a 16% decrease compared to pre-tax income of $5.7 million for
the second quarter of 2010.
— Net income for the second quarter of 2011 was $2.7
million, or $0.12 per diluted share, compared to net income of $3.0
million, or $0.13 per diluted share for the second quarter of 2010.
Non-GAAP net income for the second quarter of 2011 was $4.2 million, or
$0.19 per diluted share, compared to
non-GAAP net income of $4.2 million, or $0.17 per diluted share for the
second quarter of 2010. Non-GAAP net income and non-GAAP net income per
diluted share in the second quarter of 2011 exclude $1.9 million of
stock-based compensation expense and $0.4 million of intangible asset
amortization expense associated with the acquisition of PlanPrescriber,
Inc., less $0.9 million for related income tax benefit. Non-GAAP net income
and non-GAAP net income per diluted share in the second quarter of 2010
exclude $1.6 million of stock-based compensation expense and $0.3 million
of intangible asset amortization expense associated with the acquisition of
PlanPrescriber, Inc., less $0.7 million for related income tax benefit.
— Cash flow from operations for the
second quarter of 2011 was $7.8 million, compared to $8.2 million for the
second quarter of 2010, representing a decrease of 4%. During the second
quarters of 2011 and 2010, we utilized $1.5 million and $2.6 million,
respectively, of previously unrecognized excess tax benefits related to
share-based payments to reduce our federal and state income taxes payable.
These excess tax benefits are shown in the cash flow statement as an
increase in cash flow from financing activities and a decrease in cash flow
from operating activities. Adjusting cash flow in both periods to reflect
the full benefit from deferred income taxes, including the portion that is
reported in cash flows from financing activities, second quarter 2011 cash
flow from operations would have been $9.3 million as compared to $10.8
million in the second quarter of 2010.
Cash and cash equivalents as of June 30, 2011 totaled $135.9 million,
compared to $141.3 million as of June 30, 2010. The change in cash and cash
equivalents reflects $30.0 million used to repurchase shares of our common
stock during the second half of 2010 and in January 2011 when we completed
our stock repurchase program, having repurchased in the aggregate 2,297,705
shares at an average price of $13.06 per share.
— Revenue totaled $73.7 million for the six months ended
June 30, 2011, a 2% increase compared to revenue of $72.2 million for the
six months ended June 30, 2010.
— Operating income for the six months ended June
30, 2011 was $8.8 million, a 24% decrease compared to operating income of
$11.7 million for the six months ended June 30, 2010. Operating margins
were 12% and 16% in the six-month periods ended June 30, 2011 and 2010,
respectively.
— EBITDA for the six months ended June 30, 2011 was $14.7
million, a 9% decrease compared to EBITDA of $16.2 million for the six
months ended June 30, 2010.
— Pre-tax income for the six months ended June 30,
2011 was $8.8 million, a 25% decrease compared to pre-tax income of $11.7
million for the six months ended June 30, 2010.
— Net income for the six months ended June 30, 2011 was
$4.7 million, or $0.21 per diluted share, compared to net income for the
six months ended June 30, 2010 of $6.3 million, or $0.26 per diluted share.
— Cash flow from operations for the six months ended June
30, 2011 was $14.6 million, compared to $11.3 million for the six months
ended June 30, 2010, representing an increase of 30%.
eHealth is reaffirming its guidance for the full year ending December 31,
2011 based on information currently available:
Total revenue is expected to be in the range of $141 million to $149
million
Stock-based compensation expense is expected to be in the range of $7
million to $8 million
EBITDA* is expected to be in the range of $23 million to $28
million
GAAP net income per diluted share is expected to be in the range of
$0.31 to $0.40 per share
* EBITDA is calculated by adding stock-based compensation, depreciation and
amortization expense, including the amortization of acquired intangible
assets, interest and other (income) expense, net and provision for income
taxes to GAAP net income.
A Webcast and conference call will be held today, Tuesday, July 26, 2011 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
. Individuals interested in listening to the
conference call may do so by dialing 866-383-7989 for domestic callers and
617-597-5328 for international callers. The participant passcode is
80260137. 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 33382768. The live and
archived webcast of the call will also be available on eHealth-s website at
under the Investor Relations section.
eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the
nation-s leading online source of for
individuals, families and small businesses. Through the company-s website,
, 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 . Through
the company-s eHealth Technology solution (), 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 ()
and through its Medicare website .
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 GAAP net income per diluted share for the
year ending December 31, 2011. 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 rate of growth; eHealth-s success in
marketing and selling Medicare-related health insurance plans and leads for
such plans and factors affecting such success; the need for health
insurance carrier and regulatory approvals in connection with the marketing
of Medicare related 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 and factors affecting conversion; eHealth-s 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 and the effectiveness of
eHealth-s marketing and public relations efforts; 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; changes in paid
search advertising costs as a result of medical loss ratio requirements;
reliance on marketing partners; timing of receipt and accuracy of
commission reports; payment practices of health insurance carriers;
competition; eHealth-s operations in China and any future foreign
expansion; success in the sale of sponsorship advertising, the licensing of
the use of eHealth-s technology or the performance of services pursuant to
government contracts and the licensing of the use of eHealth-s ecommerce
platform; 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; implementation of internal enterprise
systems and 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 online commerce
security risks; the performance, reliability and availability of eHealth-s
ecommerce platform and underlying network infrastructure; stock market
conditions and the trading price of shares of eHealth-s common stock; and
the concentration of eHealth stock in a small number of stockholders.
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 and on the Securities and
Exchange Commission-s website at . eHealth does not undertake
any obligation to update any forward-looking statement to conform the
statement to actual results or changes in expectations.
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 for the three months ended June 30, 2010 and
2011 consists of GAAP operating income excluding the following items:
the effects of expensing stock-based compensation related to stock
options, restricted stock and restricted stock units in accordance with
FASB ASC Topic 718 and
acquired 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 the amortization of acquired intangible
assets, interest and other (income) expense, net and provision for income
taxes to GAAP net income.
Non-GAAP net income for the three months ended June 30, 2010 and 2011
consists of GAAP net income excluding the following items:
stock-based compensation expense recorded during the quarter,
acquired 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.
Kate Sidorovich, CFA
Director, Investor Relations
440 East Middlefield Road
Mountain View, CA 94043
(650) 210-3111
Brian Mast
Vice President, Communications
440 East Middlefield Road
Mountain View, CA 94043
(650) 210-3149