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eHealth, Inc. Announces Third Quarter 2008 Results Third Quarter 2008 Overview -- Revenue of $28.5 Million, Up 24% Over the Third Quarter of 2007 -- Growth in Submitted Applications of 20% Over the Third Quarter of 2007 -- Operating Income of $4.5 Million, Down 7% Over the Third Quarter of 2007 -- GAAP Operating Margins of 16% and Non-GAAP Operating Margins of 19% for the Third Quarter of 2008 -- GAAP Net Income of $3.0 Million, or $0.12 per Diluted Share, and Non-GAAP Net Income of $3.7 Million, or $0.14 per Diluted Share, for the Third Quarter of 2008 -- Cash Flow From Operations of $8.3 Million, up 7% Over the Third Quarter of 2007 MOUNTAIN VIEW, CA--(MARKET WIRE)--Oct 30, 2008 -- eHealth, Inc. (NasdaqGM:EHTH - News), the leading
online source of health insurance for individuals, families
and small
businesses, today announced its financial results for the
third quarter
ended September 30, 2008.
Gary Lauer, chief executive officer of eHealth, stated, "Our financial performance, posted during a very challenging and uncertain economic environment, further illustrates eHealth's sound business model and company-wide commitment to execution of our plans. Through our marketing efforts during the quarter, we stressed that health insurance is not a discretionary item, but rather something people need and can afford through eHealth." Third Quarter Results Revenue -- Revenue totaled $28.5 million for the third quarter of 2008, a 24% increase compared to revenue of $23.0 million for the third quarter of 2007. Submitted Applications -- Submitted applications for individual and family products increased 20% in the third quarter of 2008 to 117,300 applications, compared to 97,900 applications in the third quarter of 2007. Membership -- Estimated membership at September 30, 2008 totaled 602,100 members, a 23% increase over estimated membership of 491,300 at September 30, 2007. Operating Income -- Operating income decreased 7% to $4.5 million for the third quarter of 2008, compared to operating income of $4.8 million for the third quarter of 2007. Operating margins were 16% in the third quarter of 2008, compared to 21% in the third quarter of 2007. Non-GAAP operating income increased 5% to $5.4 million for the third quarter of 2008, compared to non-GAAP operating income of $5.2 million for the third quarter of 2007. Non-GAAP operating margins were 19% in the third quarter of 2008, compared to 23% in the third quarter of 2007. Non-GAAP operating income and margins in the third quarters of 2008 and 2007 exclude $955,000 and $350,000 of stock-based compensation expense, respectively. Pre-tax Income -- Pre-tax income for the third quarter of 2008 was $5.4 million, a 13% decrease compared to pre-tax income of $6.2 million for the third quarter of 2007. Non-GAAP pre-tax income was $6.4 million for the third quarter of 2008, a 3% decrease compared to non-GAAP pre-tax income of $6.6 million for the third quarter of 2007. Non-GAAP pre-tax income in the third quarters of 2008 and 2007 exclude $955,000 and $350,000 of stock-based compensation expense, respectively. Net Income -- Net income for the third quarter of 2008 was $3.0 million, or $0.12 per diluted share, compared to net income for the third quarter of 2007 of $3.7 million, or $0.14 per diluted share. Non-GAAP net income for the third quarter of 2008 was $3.7 million, or $0.14 per diluted share, compared to non-GAAP net income of $4.1 million, or $0.15 per diluted share, for the third quarter of 2007. Non-GAAP net income and non-GAAP net income per diluted share are computed excluding stock-based compensation expense and estimated income tax benefit related to stock-based compensation expense. Non-GAAP net income and non-GAAP net income per diluted share in the third quarter of 2008 exclude $955,000 of stock-based compensation expense, adjusted by $300,000 for estimated income tax benefit related to stock-based compensation expense. Non-GAAP net income and non-GAAP net income per diluted share in the third quarter of 2007 exclude $350,000 of stock-based compensation expense, adjusted by $20,000 for estimated income tax benefit related to stock-based compensation expense. Cash Flow and Cash Balance -- Cash flow from operations for the third quarter of 2008 was $8.3 million, compared to $7.7 million for the third quarter of 2007, representing an increase of 7%. Cash, cash equivalents and short-term marketable securities as of September 30, 2008 totaled $143.3 million, compared to $121.5 million as of December 31, 2007. Year-to-Date Results Revenue -- Revenue totaled $82.3 million for the nine months ended September 30, 2008, a 29% increase compared to revenue of $63.6 million for the nine months ended September 30, 2007. Operating Income -- Operating income increased 33% to $15.6 million for the nine months ended September 30, 2008, compared to operating income of $11.7 million for the nine months ended September 30, 2007. Operating margins were 19% in the nine months ended September 30, 2008, up from 18% in the nine months ended September 30, 2007. Pre-tax Income -- Pre-tax income for the nine months ended September 30, 2008 was $18.7 million, a 20% increase compared to pre-tax income of $15.6 million for the nine months ended September 30, 2007. Net Income -- Net income for the nine months ended September 30, 2008 was $10.5 million, or $0.40 per diluted share, compared to net income for the nine months ended September 30, 2007 of $9.2 million, or $0.36 per diluted share. Cash Flow and Cash Balance -- Cash flow from operations for the nine months ended September 30, 2008 was $22.8 million, compared to $18.3 million for the nine months ended September 30, 2007, representing an increase of 24%. 2008 Guidance We are reaffirming the guidance we updated in our last earnings call with the exception of our guidance relating to stock based compensation expense, which we project will be slightly less than the range of $3.8 million to $4.3 million we previously provided. Webcast and Conference Call Information A Webcast and conference call will be held today, Thursday, October 30, 2008 at 5:00 p.m. EDT / 2:00 p.m. PDT. 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 866-314-4483 for domestic callers and 617-213-8049 for international callers. The participant passcode is #41896248. 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 #27048357. The live and archived webcast of the call will also be available on eHealth's website at www.ehealthinsurance.com under the Investor Relations section. 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. eHealth is headquartered in Mountain View, California. Additional information can be found on eHealth'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 estimated income tax benefit related to stock-based compensation expense, eHealth's reaffirmation of guidance for total revenue, GAAP income tax rate, GAAP net earnings per diluted share and cash flow from operations for the year ending December 31, 2008 and projected stock-based compensation for the year ending December 31, 2008 being slightly less than the range previously provided. 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 eHealth's rate of growth, continued acceptance of the Internet as a medium for the purchase of health insurance, consumer awareness of the availability and accessibility of affordable health insurance, eHealth's ability to continue to increase its membership base and maintain or expand its relationships with health insurance carriers and marketing partners, negative publicity experienced by eHealth's carrier partners, changes in products offered on eHealth's ecommerce platform, changes in commission payments or carrier underwriting practices, maintaining and enhancing eHealth's brand identity, changes in member conversion rates and factors affecting conversion, the effectiveness of marketing spending, timing of receipt of commission reports and related impact on estimating membership, payment practices of health insurance carriers, retention of eHealth's members, increased rates of member turnover, success in the sale of sponsorship advertising and the licensing of the use of eHealth's ecommerce platform, success of the health savings account (HSA) platform, system failures, capacity constraints or data loss, dependence upon Internet search engines to attract consumers who visit eHealth's website, the performance, reliability and availability of eHealth's ecommerce platform and underlying network infrastructure, the effectiveness of eHealth'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, changes in the economy and weak economic conditions, eHealth's operations in China and any foreign expansion, ability to attract and retain qualified personnel, management of future growth, seasonality, impact of future acquisitions, impact of employee stock-based compensation expense and provisions for income taxes, costs of obtaining insurance, compliance with insurance and other laws and regulations, changes in laws and regulations, and changes in the structure of the health insurance system in the United States. 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 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, non-GAAP pre-tax income, non-GAAP net income and non-GAAP net income per diluted share.
-- Non-GAAP operating income consists of GAAP operating income excluding
the effects of expensing stock-based compensation related to stock options,
restricted stock and restricted stock units in accordance with SFAS 123R
beginning in 2006 and amortization of deferred stock-based compensation
expense in accordance with APB 25 for grants made prior to 2006.
-- Non-GAAP operating margins are calculated by dividing non-GAAP
operating income by GAAP total revenue.
-- Non-GAAP pre-tax income consists of GAAP pre-tax income excluding the
effects of expensing stock-based compensation.
-- Non-GAAP net income consists of GAAP net income excluding the effects
of expensing stock-based compensation adjusted for estimated income tax
benefit related to stock-based compensation expense.
-- 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 continue to be useful to investors in their assessment of the company's operating performance. Non-GAAP operating income, non-GAAP operating margins, non-GAAP pre-tax income, 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 costs associated with the operations of the company's business and do not reflect all of the 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 operating costs similar to the non-GAAP adjustments described above, and exclusion of these costs, and their related income tax impact, 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 pre-tax income, 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 and the related reconciliations between these financial measures.
EHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, September 30,
2007 (1) 2008
------------ ------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 81,395 $ 90,525
Marketable securities 40,119 52,731
Accounts receivable 1,300 1,560
Deferred income taxes 13,240 6,582
Prepaid expenses and other current assets 2,098 1,482
------------ ------------
Total current assets 138,152 152,880
Property and equipment, net 3,791 4,762
Deferred income taxes 4,535 4,535
Other assets 975 955
------------ ------------
Total assets $ 147,453 $ 163,132
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,495 $ 1,855
Accrued compensation and benefits 4,849 4,003
Accrued marketing expenses 2,454 3,942
Deferred revenue 436 351
Other current liabilities 2,073 2,272
------------ ------------
Total current liabilities 11,307 12,423
Other non-current liabilities 252 432
Stockholders' equity:
Common stock 25 25
Additional paid-in capital 167,847 172,032
Deferred stock-based compensation (104) (40)
Accumulated deficit (32,060) (21,541)
Accumulated other comprehensive income 186 (199)
------------ ------------
Total stockholders' equity 135,894 150,277
------------ ------------
Total liabilities and stockholders' equity $ 147,453 $ 163,132
============ ============
(1) The condensed consolidated balance sheet at December 31, 2007 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 Nine Months Ended
September 30, September 30,
----------------- -----------------
2007 2008 2007 2008
-------- -------- -------- --------
Revenue:
Commission $ 21,313 $ 25,788 $ 59,486 $ 74,663
Sponsorship, licensing and other 1,684 2,687 4,072 7,593
-------- -------- -------- --------
Total revenue 22,997 28,475 63,558 82,256
Operating costs and expenses:
Cost of revenue-sharing 427 469 1,245 1,338
Marketing and advertising (1) 7,309 11,502 21,021 30,633
Customer care and enrollment (1) 3,002 3,722 8,859 10,655
Technology and content (1) 3,108 3,565 9,025 10,548
General and administrative (1) 4,308 4,731 11,698 13,475
-------- -------- -------- --------
Total operating costs and expenses 18,154 23,989 51,848 66,649
-------- -------- -------- --------
Income from operations 4,843 4,486 11,710 15,607
Interest and other income, net 1,403 935 3,849 3,085
-------- -------- -------- --------
Income before income taxes 6,246 5,421 15,559 18,692
Provision for income taxes 2,516 2,400 6,324 8,173
-------- -------- -------- --------
Net income $ 3,730 $ 3,021 $ 9,235 $ 10,519
======== ======== ======== ========
Net income per share:
Basic $ 0.16 $ 0.12 $ 0.41 $ 0.42
Diluted $ 0.14 $ 0.12 $ 0.36 $ 0.40
Weighted-average number of shares used
in per share amounts:
Basic 23,517 25,060 22,643 24,925
Diluted 26,263 25,921 25,746 26,007
(1) Includes stock-based compensation
expense as follows:
Marketing and advertising $ 45 $ 151 $ 113 $ 484
Customer care and enrollment 30 49 86 200
Technology and content 143 203 416 653
General and administrative 132 552 347 1,272
-------- -------- -------- --------
Total $ 350 $ 955 $ 962 $ 2,609
======== ======== ======== ========
EHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
Operating activities
Net income $ 3,730 $ 3,021 $ 9,235 $ 10,519
Adjustments to reconcile net income
to net cash provided by operating
activities:
Deferred income taxes 2,514 1,629 6,109 7,146
Depreciation and amortization 424 467 1,275 1,271
Stock-based compensation expense 350 955 962 2,609
Excess tax benefits from
stock-based compensation -- (216) -- (216)
Deferred rent (24) (8) (22) (43)
Loss on disposal of property and
equipment -- 28 18 39
Changes in operating assets and
liabilities:
Accounts receivable (317) (315) (331) (260)
Prepaid expenses and other
current assets 262 734 184 456
Other assets (296) (11) (523) 21
Accounts payable (186) (13) (302) 357
Accrued compensation and
benefits 280 181 (67) (700)
Accrued marketing expenses 322 1,168 776 1,488
Deferred revenue 70 74 215 (85)
Other current liabilities 582 563 753 148
-------- -------- -------- --------
Net cash provided by operating
activities 7,711 8,257 18,282 22,750
-------- -------- -------- --------
Investing activities
Purchases of property and equipment (300) (933) (1,053) (2,242)
Proceeds from the sale of property
and equipment 14 -- 14 --
Purchases of marketable securities (19,195) (11,143) (36,520) (61,565)
Sales of marketable securities 2,156 2,053 2,156 10,120
Maturities of marketable securities 500 6,786 588 38,379
-------- -------- -------- --------
Net cash used in investing
activities (16,825) (3,237) (34,815) (15,308)
-------- -------- -------- --------
Financing activities
Net proceeds from exercise of
common stock options 2,446 85 5,343 1,426
Excess tax benefits from
stock-based compensation -- 216 -- 216
Principal payments in connection
with capital leases (37) -- (212) --
Costs incurred in connection with
initial public offering -- -- (252) --
-------- -------- -------- --------
Net cash provided by financing
activities 2,409 301 4,879 1,642
-------- -------- -------- --------
Effect of exchange rate changes on
cash and cash equivalents 22 3 64 46
-------- -------- -------- --------
Net (decrease) increase in cash
and cash equivalents (6,683) 5,324 (11,590) 9,130
Cash and cash equivalents at
beginning of period 85,409 85,201 90,316 81,395
-------- -------- -------- --------
Cash and cash equivalents at end of
period $ 78,726 $ 90,525 $ 78,726 $ 90,525
======== ======== ======== ========
EHEALTH, INC.
SUMMARY OF SELECTED METRICS
(Unaudited)
Three Months Three Months
Ended Ended
September September
Key Metrics: 30, 2007 30, 2008
------------ ------------
Operating cash flows (1) $ 7,711,000 $ 8,257,000
IFP submitted applications (2) 97,900 117,300
IFP approved members (3) 83,600 100,800
Total approved members (4) 125,300 144,400
Total revenue (5) $ 22,997,000 $ 28,475,000
Total revenue per estimated member for the
period (6) $ 48.16 $ 48.19
As of As of
September September
30, 2007 30, 2008
------------ ------------
IFP estimated membership (7) 408,100 506,100
Total estimated membership (8) 491,300 602,100
Three Months Three Months
Ended Ended
September September
30, 2007 30, 2008
------------ ------------
Marketing and advertising expenses (9) $ 7,309,000 $ 11,502,000
Marketing and advertising expenses as a
percentage of total revenue (10) 32% 40%
Marketing and advertising expenses excluding
stock-based compensation (11) $ 7,264,000 $ 11,351,000
Marketing and advertising expenses excluding
stock-based compensation as a percentage of
total revenue (12) 32% 40%
Other Metrics:
Source of IFP submitted applications (as a
percentage of total IFP applications for the
period):
Direct (13) 40% 39%
Marketing partners (14) 31% 33%
Online advertising (15) 29% 28%
------------ ------------
Total 100% 100%
============ ============
Acquisition cost per individual on IFP
submitted applications (16) $ 49.07 $ 65.34
Acquisition cost (excluding stock-based
compensation) per individual on IFP submitted
applications (17) $ 48.76 $ 64.48
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 or student health insurance product offerings.
(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) Total revenue (from all sources) recognized during the period from the
condensed consolidated statements of income.
(6) Calculated as total 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).
(7) Estimated number of members active on IFP insurance policies as of the
date indicated. See our 2007 Annual Report on Form 10-K - 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.
(8) Estimated number of members active on all insurance policies as of the
date indicated. See our 2007 Annual Report on Form 10-K - 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) Marketing and advertising expenses for the period from the condensed
consolidated statements of income.
(10) Calculated as marketing and advertising expenses for the period (see
note (9) above) divided by total revenue for the period (see note (5)
above).
(11) Non-GAAP marketing and advertising expenses excluding stock-based
compensation for the period. See Non-GAAP Financial Information above
and the reconciliation of GAAP to Non-GAAP marketing and advertising
expenses below.
(12) Calculated as non-GAAP marketing and advertising expenses for the
period (see note (11) above) divided by total revenue for the period
(see note (5) above). See Non-GAAP Financial Information above and the
reconciliation of GAAP to Non-GAAP marketing and advertising expenses
below.
(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.
(16) Calculated as marketing and advertising expenses for the period (see
note (9) above) divided by the number of individuals on IFP
applications submitted on eHealth's website during the period. This
metric may not reflect the true acquisition cost.
(17) Calculated as non-GAAP marketing and advertising expenses for the
period (see note (11) above) divided by the number of individuals on
IFP applications submitted on eHealth's website during the period.
This metric may not reflect the true acquisition cost exclusive of the
impact of stock-based compensation allocated to marketing and
advertising expenses.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended September 30, 2008
---------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Adjust- Non-GAAP of Total
Reported Revenue ments Results Revenue
-------- ------- ------- --------- -------
Revenue:
Commission $ 25,788 91% $ -- $ 25,788 91%
Sponsorship, licensing and
other 2,687 9 -- 2,687 9
-------- ------- ------- --------- -------
Total revenue 28,475 100 -- 28,475 100
Operating costs and expenses:
Cost of revenue-sharing 469 2 -- 469 2
Marketing and advertising (1) 11,502 40 (151) 11,351 40
Customer care and enrollment
(1) 3,722 13 (49) 3,673 13
Technology and content (1) 3,565 12 (203) 3,362 12
General and administrative
(1) 4,731 17 (552) 4,179 14
-------- ------- ------- --------- -------
Total operating costs and
expenses 23,989 84 (955) 23,034 81
-------- ------- ------- --------- -------
Income from operations 4,486 16 955 5,441 19
Interest and other income, net 935 3 -- 935 3
-------- ------- ------- --------- -------
Income before income taxes 5,421 19 955 6,376 22
Provision for income taxes (2) 2,400 8 300 2,700 9
-------- ------- ------- --------- -------
Net income $ 3,021 11% $ 655 $ 3,676 13%
======== ======= ======= ========= =======
Net income per share:
Basic $ 0.12 $ 0.03 $ 0.15
Diluted $ 0.12 $ 0.02 $ 0.14
Weighted-average number of
shares used in per share
amounts:
Basic 25,060 25,060 25,060
Diluted 25,921 25,921 25,921
Explanation of adjustments
(1) Non-GAAP results exclude the effect of expensing stock-based
compensation related to stock options, restricted stock and restricted
stock units in accordance with SFAS 123R beginning in 2006, in addition
to the amortization of deferred stock-based compensation expense in
accordance with APB 25 for grants made prior to 2006.
(2) Non-GAAP net income and non-GAAP net income per share exclude
stock-based compensation expense listed in note (1) above, adjusted for
estimated income tax benefit related to stock-based compensation
expense.
EHEALTH, INC.
GAAP TO NON-GAAP RECONCILIATION
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007
(In thousands, except per share amounts, unaudited)
Statement of Income Reconciliation
Three Months Ended September 30, 2007
---------------------------------------------
GAAP Non-GAAP
Percent Percent
GAAP of Total Adjust- Non-GAAP of Total
Reported Revenue ments Results Revenue
-------- ------- ------- --------- -------
Revenue:
Commission $ 21,313 93% $ -- $ 21,313 93%
Sponsorship, licensing and
other 1,684 7 -- 1,684 7
-------- ------- ------- --------- -------
Total revenue 22,997 100 -- 22,997 100
Operating costs and expenses:
Cost of revenue-sharing 427 2 -- 427 2
Marketing and advertising (1) 7,309 32 (45) 7,264 32
Customer care and enrollment
(1) 3,002 13 (30) 2,972 13
Technology and content (1) 3,108 13 (143) 2,965 13
General and administrative
(1) 4,308 19 (132) 4,176 18
-------- ------- ------- --------- -------
Total operating costs and
expenses 18,154 79 (350) 17,804 77
-------- ------- ------- --------- -------
Income from operations 4,843 21 350 5,193 23
Interest and other income, net 1,403 6 -- 1,403 6
-------- ------- ------- --------- -------
Income before income taxes 6,246 27 350 6,596 29
Provision for income taxes (2) 2,516 11 20 2,536 11
-------- ------- ------- --------- -------
Net income $ 3,730 16% $ 330 $ 4,060 18%
======== ======= ======= ========= =======
Net income per share:
Basic $ 0.16 $ 0.01 $ 0.17
Diluted $ 0.14 $ 0.01 $ 0.15
Weighted-average number of
shares used in per share
amounts:
Basic 23,517 23,517 23,517
Diluted 26,263 26,263 26,263
Explanation of adjustments
(1) Non-GAAP results exclude the effect of expensing stock-based
compensation related to stock options, restricted stock and restricted
stock units in accordance with SFAS 123R beginning in 2006, in addition
to the amortization of deferred stock-based compensation expense in
accordance with APB 25 for grants made prior to 2006.
(2) Non-GAAP net income and non-GAAP net income per share exclude
stock-based compensation expense listed in note (1) above, adjusted for
estimated income tax benefit related to stock-based compensation
expense.Contact: 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
Director, Public Relations
440 East Middlefield Road
Mountain View, CA 94043
(650) 210-3149
brian.mast@ehealth.com
http://www.ehealthinsurance.com
Source: eHealth, Inc.
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