MOUNTAIN VIEW, CA -- (Marketwire) -- 02/16/12 -- 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 fiscal year ended December 31, 2011.
Gary Lauer, chief executive officer of eHealth stated, "2011 was a dynamic and productive year for eHealth. In the face of many changes, we generated strong earnings and cash flow, achieved significant progress across key aspects of our Medicare business and are projecting a return to revenue and earnings per share growth for 2012."
Fourth Quarter Results
Revenue -- Revenue for the fourth quarter of 2011 totaled $43.1 million, a 15% decrease compared to revenue of $50.7 million for the fourth quarter of 2010. Revenue for the fourth quarter of 2010 included a one-time revenue item of $6.0 million, reflecting a commission prepayment received from a health insurance carrier on a number of existing policies and members. Revenue for the fourth quarter of 2011 declined 4% compared to revenue of $44.7 million for the fourth quarter of 2010 excluding this one-time revenue item.
Stuart Huizinga, chief financial officer of eHealth commented, "The year-over-year decline in fourth quarter revenue was attributed primarily to a reduction in our individual and family product commission revenue offset by strong results in our emerging Medicare business, including growth in our Medicare commission and referral-based revenue. Fourth quarter 2011 Medicare revenue was approximately $12.5 million."
Submitted Applications -- Submitted applications for individual and family products decreased 7% in the fourth quarter of 2011 to 103,200 applications, compared to 111,200 applications in the fourth quarter of 2010.
Membership -- Estimated membership at December 31, 2011 totaled 815,500 members, a 5% increase over estimated membership of 778,300 at December 31, 2010. Total approved members, including individual and family plan, Medicare plan and other product members, increased 9% to 139,600 in the fourth quarter of 2011 versus 128,300 in the fourth quarter of 2010.
Operating Income -- Operating income for the fourth quarter of 2011 was $4.4 million, compared to operating income of $16.1 million for the fourth quarter of 2010, which included $5.9 million of income associated with the one-time revenue item. Operating margins were 10% and 32% in the fourth quarters of 2011 and 2010, respectively. Operating income for the fourth quarter of 2011 reflected eHealth's strategic investment in the Medicare business, primarily in the areas of marketing and advertising and customer care and enrollment.
Non-GAAP operating income for the fourth quarter of 2011 was $6.6 million, compared to non-GAAP operating income of $12.2 million for the fourth quarter of 2010. Non-GAAP operating margins were 15% and 27% in the fourth quarters of 2011 and 2010, respectively. Non-GAAP operating income and margins in the fourth quarter of 2011 exclude $1.5 million of stock-based compensation expense and $0.8 million of intangible asset amortization expense. Non-GAAP operating income and margins in the fourth quarter of 2010 exclude the one-time revenue item of $6.0 million, $0.1 million of cost of revenue associated with the one-time revenue item, $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense.
EBITDA -- EBITDA for the fourth quarter of 2011 was $7.2 million, a 62% decrease compared to EBITDA of $18.7 million for the fourth quarter of 2010. EBITDA in the fourth quarter of 2010 included $5.9 million of pre-tax income associated with the one-time revenue item.
Pre-tax Income -- Pre-tax income for the fourth quarter of 2011 was $4.4 million, compared to pre-tax income of $16.1 million for the fourth quarter of 2010, which included $5.9 million of pre-tax income associated with the one-time revenue item.
Net Income -- Net income for the fourth quarter of 2011 was $2.3 million, or $0.11 per diluted share, compared to net income of $8.6 million, or $0.38 per diluted share for the fourth quarter of 2010. Net income in the fourth quarter of 2010 included $3.5 million of net income associated with the one-time revenue item. Non-GAAP net income for the fourth quarter of 2011 was $3.7 million, or $0.18 per diluted share, compared to non-GAAP net income of $6.5 million, or $0.28 per diluted share for the fourth quarter of 2010. Non-GAAP net income and non-GAAP net income per diluted share in the fourth quarter of 2011 exclude $1.5 million of stock-based compensation expense and $0.8 million of intangible asset amortization expense, less $0.8 million for related income tax benefit. Non-GAAP net income and non-GAAP net income per diluted share in the fourth quarter of 2010 exclude the one-time revenue item of $6.0 million, $0.1 million of cost of revenue associated with that one-time revenue item, $1.6 million of stock-based compensation expense and $0.4 million of intangible asset amortization expense, less $1.8 million for related income tax expense.
Cash Flows and Cash Balance -- Cash flows from operations for the fourth quarter of 2011 were $2.5 million, compared to cash flows from operations of $3.6 million for the fourth quarter of 2010.
Cash and cash equivalents as of December 31, 2011 totaled $123.6 million, compared to $128.1 million as of December 31, 2011. The change in cash and cash equivalents reflects $25.4 million used to repurchase 1.9 million shares of our common stock related to our stock repurchase program. In January 2012, eHealth completed a $30 million share repurchase program at an average per share price of $13.78.
Fiscal 2011 Results
Revenue -- Revenue totaled $151.6 million for the year ended December 31, 2011, a 5% decrease compared to revenue of $160.4 million for the year ended December 31, 2010. 2011 Medicare revenue was approximately $20 million, consisting primarily of commission and referral-based revenue.
Operating Income -- Operating income for the year ended December 31, 2011 was $13.2 million, a 59% decrease compared to operating income of $32.6 million for the year ended December 31, 2010. Operating margins were 9% and 20% for the years ended December 31, 2011 and 2010, respectively.
EBITDA -- EBITDA for the year ended December 31, 2011 was $24.7 million, a 42% decrease compared to EBITDA of $42.3 million for the year ended December 31, 2010.
Pre-tax Income -- Pre-tax income for the year ended December 31, 2011 was $13.2 million, a 60% decrease compared to pre-tax income of $32.6 million for the year ended December 31, 2010.
Net Income -- Net income for the year ended December 31, 2011 was $6.7 million, or $0.31 per diluted share, compared to net income for the year ended December 31, 2010 of $17.5 million, or $0.73 per diluted share.
Cash Flows -- Cash flows from operations for the year ended December 31, 2011 were $22.5 million, a 10% increase compared to $20.5 million for the year ended December 31, 2010.
2012 Guidance
eHealth is providing guidance for the full year ending December 31, 2012 based on information currently available:
* 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, February 16, 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 866-356-3093 for domestic callers and 617-597-5381 for international callers. The participant passcode is 66571542. 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 90594716. 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
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.
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 revenue and earnings per share growth for 2012 and guidance for total revenue, stock-based compensation expense, EBITDA, and non-GAAP net income per diluted share for the year ending December 31, 2012. 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 and leads for such 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; 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; 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; 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; success in the sale of sponsorship advertising; 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.
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, December 31,
2010 2011
------------- -------------
Assets (1)
Current assets:
Cash and cash equivalents $ 128,074 $ 123,607
Accounts receivable 10,810 8,055
Deferred income taxes 5,347 4,622
Prepaid expenses and other current assets 4,361 3,377
------------- -------------
Total current assets 148,592 139,661
Property and equipment, net 4,528 4,631
Deferred income taxes 3,119 3,390
Other assets 2,937 5,641
Acquired intangible assets, net 12,573 10,526
Goodwill 14,096 14,096
------------- -------------
Total assets $ 185,845 $ 177,945
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 3,573 $ 2,391
Accrued compensation and benefits 7,523 7,904
Accrued marketing expenses 3,644 6,195
Deferred revenue 2,785 314
Other current liabilities 2,672 1,547
------------- -------------
Total current liabilities 20,197 18,351
Other non-current liabilities 3,451 3,920
Stockholders' equity:
Common stock 26 26
Additional paid-in capital 203,231 215,364
Treasury stock, at cost (56,202) (81,557)
Retained earnings 14,937 21,661
Accumulated other comprehensive income 205 180
------------- -------------
Total stockholders' equity 162,197 155,674
------------- -------------
Total liabilities and stockholders' equity $ 185,845 $ 177,945
============= =============
(1) The condensed consolidated balance sheet at December 31, 2010 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 Year Ended
December 31, December 31,
-------------------- -------------------
2010 2011 2010 2011
--------- --------- --------- ---------
(3)
Revenue:
Commission $ 39,681 $ 31,276 $ 135,366 $ 120,321
Other 11,027 11,844 25,038 31,327
--------- --------- --------- ---------
Total revenue 50,708 43,120 160,404 151,648
Operating costs and expenses:
Cost of revenue 2,740 1,353 5,499 8,340
Marketing and advertising (1) 15,307 18,474 60,102 56,877
Customer care and enrollment (1) 5,271 6,633 17,810 22,898
Technology and content (1) 5,042 5,224 19,241 21,657
General and administrative (1) 5,855 6,294 24,055 26,593
Amortization of acquired
intangible assets 427 765 1,138 2,046
--------- --------- --------- ---------
Total operating costs and expenses 34,642 38,743 127,845 138,411
--------- --------- --------- ---------
Income from operations 16,066 4,377 32,559 13,237
Interest and other income
(expense), net (4) 8 9 (53)
--------- --------- --------- ---------
Income before provision for income
taxes 16,062 4,385 32,568 13,184
Provision for income taxes 7,452 2,125 15,086 6,460
--------- --------- --------- ---------
Net income $ 8,610 $ 2,260 $ 17,482 $ 6,724
========= ========= ========= =========
Net income per share:
Basic $ 0.39 $ 0.11 $ 0.76 $ 0.32
Diluted $ 0.38 $ 0.11 $ 0.73 $ 0.31
Weighted-average number of shares
used in per share amounts:
Basic 22,061 20,006 23,118 20,947
Diluted 22,849 20,889 23,873 21,703
(1) Includes stock-based
compensation expense as follows:
Marketing and advertising $ 201 $ 188 $ 808 $ 962
Customer care and enrollment 102 80 384 344
Technology and content 383 333 1,622 1,669
General and administrative 892 873 3,581 4,121
--------- --------- --------- ---------
Total $ 1,578 $ 1,474 $ 6,395 $ 7,096
========= ========= ========= =========
(2) The condensed consolidated statement of income for the year ended
December 31, 2010 has been derived from the audited consolidated
financial statements for that year.
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
2010 2011 2010 2011
--------- --------- --------- ---------
Operating activities (2)
Net income $ 8,610 $ 2,260 $ 17,482 $ 6,724
Adjustments to reconcile net
income to net cash provided by
operating activities:
Deferred income taxes 7,464 1,908 14,274 5,604
Depreciation and amortization 629 559 2,209 2,358
Amortization of acquired
intangible assets 427 765 1,138 2,046
Amortization and accretion on
marketable securities, net -- -- 50 --
Stock-based compensation
expense 1,578 1,474 6,395 7,096
Excess tax benefits from
stock-based compensation (5,493) (1,956) (12,853) (4,690)
Deferred rent (6) (10) (11) (3)
Loss on disposal of property
and equipment -- -- 9 38
Changes in operating assets
and liabilities:
Accounts receivable (7,592) (4,315) (8,146) 3,383
Prepaid expenses and other
current assets 783 752 (1,062) 2,628
Other assets 18 112 43 (16)
Accounts payable (3,322) (294) (459) (1,948)
Accrued compensation and
benefits 726 (92) 2,311 363
Accrued marketing expenses (600) 1,860 (235) 2,551
Deferred revenue 2,266 (839) 2,356 (2,471)
Other current liabilities (1,847) 353 (2,992) (1,122)
--------- --------- --------- ---------
Net cash provided by operating
activities 3,641 2,537 20,509 22,541
--------- --------- --------- ---------
Investing activities
Purchases of property and
equipment (465) (475) (2,948) (2,407)
Acquisition of PlanPrescriber,
net of cash acquired -- -- (27,203) --
Purchase of other assets (2,550) (284) (2,550) (4,190)
Maturities of marketable
securities -- -- 22,100 --
--------- --------- --------- ---------
Net cash used in investing
activities (3,015) (759) (10,601) (6,597)
--------- --------- --------- ---------
Financing activities
Proceeds from exercise of common
stock options 346 715 814 899
Cash used to net-share settle
equity awards (11) (4) (586) (552)
Excess tax benefits from stock-
based compensation 5,493 1,956 12,853 4,690
Repurchases of common stock (17,479) (7,322) (26,203) (25,355)
Principal payments in connection
with capital lease (11) (17) (44) (63)
--------- --------- --------- ---------
Net cash used in financing
activities (11,662) (4,672) (13,166) (20,381)
--------- --------- --------- ---------
Effect of exchange rate changes
on cash and cash equivalents (3) -- (7) (30)
--------- --------- --------- ---------
Net decrease in cash and cash
equivalents (11,039) (2,894) (3,265) (4,467)
Cash and cash equivalents at
beginning of period 139,113 126,501 131,339 128,074
--------- --------- --------- ---------
Cash and cash equivalents at end
of period $ 128,074 $ 123,607 $ 128,074 $ 123,607
========= ========= ========= =========
(3) The condensed consolidated statement of cash flows for the year ended
December 31, 2010 has been derived from the audited consolidated
financial statements for that year.
EHEALTH, INC.
SUMMARY OF SELECTED METRICS
(Unaudited)
Three Months Three Months
Ended December Ended December
Key Metrics: 31, 2010 31, 2011
--------------- ---------------
Operating cash flows (1) $ 3,641,000 $ 2,537,000
IFP submitted applications (2) 111,200 103,200
IFP approved members (3) 94,200 85,500
Total approved members (4) 128,300 139,600
Commission revenue (5) $ 39,681,000 $ 31,276,000
Commission revenue per estimated member
for the period (6) $ 50.97 $ 38.47
Total revenue (7) $ 50,708,000 $ 43,120,000
Total revenue per estimated member for the
period (8) $ 65.13 $ 53.04
As of As of
December 31, December 31,
2010 2011
--------------- ---------------
IFP estimated membership (9) 680,900 675,000
Total estimated membership (10) 778,300 815,500
Three Months Three Months
Ended December Ended December
31, 2010 31, 2011
--------------- ---------------
Marketing and advertising expenses (11) $ 15,307,000 $ 18,474,000
Marketing and advertising expenses as a
percentage of total revenue (12) 30% 43%
Other Metrics:
Source of IFP submitted applications (as a
percentage of total IFP applications for
the period):
Direct (13) 45% 43%
Marketing partners (14) 29% 33%
Online advertising (15) 26% 24%
--------------- ---------------
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, 2010 - 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, 2010 - 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, 2010
- 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, 2010
- 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 DECEMBER 31, 2011
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended December 31, 2011
---------------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Non-GAAP of Total
Reported Revenue Adjustments Results Revenue
--------- -------- ----------- --------- --------
Revenue:
Commission $ 31,276 73% $ -- $ 31,276 73%
Other 11,844 27 -- 11,844 27
--------- -------- ----------- --------- --------
Total revenue 43,120 100 -- 43,120 100
Operating costs and
expenses:
Cost of revenue 1,353 3 -- 1,353 3
Marketing and
advertising (1) 18,474 43 (188) 18,286 42
Customer care and
enrollment (1) 6,633 15 (80) 6,553 15
Technology and
content (1) 5,224 12 (333) 4,891 11
General and
administrative (1) 6,294 15 (873) 5,421 13
Amortization of
acquired intangible
assets (2) 765 2 (765) -- --
--------- -------- ----------- --------- --------
Total operating costs
and expenses 38,743 90 (2,239) 36,504 85
--------- -------- ----------- --------- --------
Income from operations 4,377 10 2,239 6,616 15
Interest and other
income, net 8 0 -- 8 0
--------- -------- ----------- --------- --------
Income before provision
for income taxes 4,385 10 2,239 6,624 15
Provision for income
taxes (3) 2,125 5 773 2,898 7
--------- -------- ----------- --------- --------
Net income (4) $ 2,260 5% $ 1,466 $ 3,726 9%
========= ======== =========== ========= ========
Net income per share:
(4)
Basic $ 0.11 $ 0.08 $ 0.19
Diluted $ 0.11 $ 0.07 $ 0.18
Weighted-average number
of shares used in per
share amounts:
Basic 20,006 20,006 20,006
Diluted 20,889 20,889 20,889
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 $0.8 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 DECEMBER 31, 2010
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended December 31, 2010
-----------------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Non-GAAP of Total
Reported Revenue Adjustments Results Revenue
--------- -------- ----------- --------- --------
Revenue:
Commission (1) $ 39,681 78% $ (6,000) $ 33,681 75%
Other 11,027 22 -- 11,027 25
--------- -------- ----------- --------- --------
Total revenue 50,708 100 (6,000) 44,708 100
Operating costs and
expenses:
Cost of revenue (1) 2,740 5 (100) 2,640 6
Marketing and
advertising (2) 15,307 30 (201) 15,106 34
Customer care and
enrollment (2) 5,271 10 (102) 5,169 12
Technology and
content (2) 5,042 10 (383) 4,659 10
General and
administrative (2) 5,855 12 (892) 4,963 11
Amortization of
acquired
intangible assets
(3) 427 1 (427) -- --
--------- -------- ----------- --------- --------
Total operating costs
and expenses 34,642 68 (2,105) 32,537 73
--------- -------- ----------- --------- --------
Income from
operations 16,066 32 (3,895) 12,171 27
Interest and other
income (expense),
net (4) (0) -- (4) (0)
--------- -------- ----------- --------- --------
Income before
provision for income
taxes 16,062 32 (3,895) 12,167 27
Provision for income
taxes (4) 7,452 15 (1,770) 5,682 13
--------- -------- ----------- --------- --------
Net income (5) $ 8,610 17% $ (2,125) $ 6,485 15%
========= ======== =========== ========= ========
Net income per share:
(5)
Basic $ 0.39 $ (0.10) $ 0.29
Diluted $ 0.38 $ (0.10) $ 0.28
Weighted-average
number of shares
used in per share
amounts:
Basic 22,061 22,061 22,061
Diluted 22,849 22,849 22,849
Explanation of adjustments
(1) Non-GAAP results exclude a one-time revenue item received from a carrier
partner and associated cost of revenue.
(2) 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.
(3) Non-GAAP results exclude intangible asset amortization expense.
(4) Non-GAAP provision for income taxes excludes estimated income tax
expense of $2.4 million related to a one-time revenue item and its
associated cost of revenue listed in note (1) above, estimated income
tax benefit of $0.6 million related to both stock-based compensation
expense listed in note (2) above and intangible asset amortization
expense listed in note (3) above.
(5) Non-GAAP net income and non-GAAP net income per share exclude a one-time
revenue item and its associated cost of revenue listed in note (1)
above, stock-based compensation expense listed in note (2) above and
intangible asset amortization expense listed in note (3) above, less the
related income tax impact of these excluded items listed in note (4)
above.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Fiscal Year Ended December 31, 2011
-----------------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Non-GAAP of Total
Reported Revenue Adjustments Results Revenue
--------- -------- ----------- --------- --------
Revenue:
Commission $ 120,321 79% $ -- $ 120,321 79%
Other 31,327 21 -- 31,327 21
--------- -------- ----------- --------- --------
Total revenue 151,648 100 151,648 100
Operating costs and
expenses:
Cost of revenue 8,340 5 -- 8,340 6
Marketing and
advertising (1) 56,877 38 (962) 55,915 37
Customer care and
enrollment (1) 22,898 15 (344) 22,554 15
Technology and
content (1) 21,657 14 (1,669) 19,988 13
General and
administrative (1) 26,593 18 (4,121) 22,472 15
Amortization of
acquired
intangible assets
(2) 2,046 1 (2,046) -- --
--------- -------- ----------- --------- --------
Total operating costs
and expenses 138,411 91 (9,142) 129,269 85
--------- -------- ----------- --------- --------
Income from
operations 13,237 9 9,142 22,379 15
Interest and other
income (expense),
net (53) (0) -- (53) (0)
--------- -------- ----------- --------- --------
Income before income
taxes 13,184 9 9,142 22,326 15
Provision for income
taxes (3) 6,460 4 3,044 9,504 6
--------- -------- ----------- --------- --------
Net income (4) $ 6,724 4% $ 6,098 $ 12,822 8%
========= ======== =========== ========= ========
Net income per share:
(4)
Basic $ 0.32 $ 0.29 $ 0.61
Diluted $ 0.31 $ 0.28 $ 0.59
Weighted-average
number of shares
used in per share
amounts:
Basic 20,947 20,947 20,947
Diluted 21,703 21,703 21,703
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 $3.0 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 FISCAL YEAR ENDED DECEMBER 31, 2010
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Fiscal Year Ended December 31, 2010
---------------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Non-GAAP of Total
Reported Revenue Adjustments Results Revenue
--------- -------- ----------- --------- --------
Revenue:
Commission (1) $ 135,366 84% $ (6,000) $ 129,366 84%
Other 25,038 16 -- 25,038 16
--------- -------- ----------- --------- --------
Total revenue 160,404 100 (6,000) 154,404 100
Operating costs and
expenses:
Cost of revenue (1) 5,499 3 (100) 5,399 3
Marketing and
advertising (2) 60,102 37 (808) 59,294 38
Customer care and
enrollment (2) 17,810 11 (384) 17,426 11
Technology and
content (2) 19,241 12 (1,622) 17,619 11
General and
administrative (2) 24,055 15 (3,581) 20,474 13
Amortization of
acquired intangible
assets (3) 1,138 1 (1,138) -- --
--------- -------- ----------- --------- --------
Total operating costs
and expenses 127,845 80 (7,633) 120,212 78
--------- -------- ----------- --------- --------
Income from operations 32,559 20 1,633 34,192 22
Interest and other
income, net 9 0 -- 9 0
--------- -------- ----------- --------- --------
Income before income
taxes 32,568 20 1,633 34,201 22
Provision for income
taxes (4) 15,086 9 193 15,279 10
--------- -------- ----------- --------- --------
Net income (5) $ 17,482 11% $ 1,440 $ 18,922 12%
========= ======== =========== ========= ========
Net income per share:
(5)
Basic $ 0.76 $ 0.06 $ 0.82
Diluted $ 0.73 $ 0.06 $ 0.79
Weighted-average number
of shares used in per
share amounts:
Basic 23,118 23,118 23,118
Diluted 23,873 23,873 23,873
Explanation of adjustments
(1) Non-GAAP results exclude a one-time revenue item received from a carrier
partner and associated cost of revenue.
(2) 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.
(3) Non-GAAP results exclude intangible asset amortization expense.
(4) Non-GAAP provision for income taxes excludes estimated income tax
expense of $2.4 million related to a one-time revenue item and its
associated cost of revenue listed in note (1) above, estimated income
tax benefit of $2.6 million related to both stock-based compensation
expense listed in note (2) above and intangible asset amortization
expense listed in note (3) above.
(5) Non-GAAP net income and non-GAAP net income per share exclude a one-time
revenue item and its associated cost of revenue listed in note (1)
above, stock-based compensation expense listed in note (2) above and
intangible asset amortization expense listed in note (3) above, less the
related income tax impact of these excluded items listed in note (4)
above.
EHEALTH, INC.
GAAP NET INCOME TO NON-GAAP EBITDA RECONCILIATION
FOR THE THREE MONTHS AND FISCAL YEARS ENDED DECEMBER 31, 2010 AND 2011
(In thousands, unaudited)
EBITDA Reconciliation
Three Months Ended Year Ended
December 31, December 31,
----------------------- ------------------------
2010 2011 2010 2011
----------- ----------- ----------- -----------
Net income $ 8,610 $ 2,260 $ 17,482 $ 6,724
Stock-based compensation
expense (1) 1,578 1,474 6,395 7,096
Depreciation and
amortization (2) 629 559 2,209 2,358
Amortization of acquired
intangible assets (2) 427 765 1,138 2,046
Interest and other
(income) expense, net (3) 4 (8) (9) 53
Provision for income taxes
(4) 7,452 2,125 15,086 6,460
----------- ----------- ----------- -----------
EBITDA $ 18,700 $ 7,175 $ 42,301 $ 24,737
=========== =========== =========== ===========
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.
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Investor Relations Contact:
Kate Sidorovich
Director, 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