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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Health Insurance Innovations Inc | NASDAQ:HIIQ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 27.39 | 27.30 | 27.75 | 0 | 01:00:00 |
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
46-1282634
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
3450 Buschwood Park Drive, Suite 200, Tampa, FL
|
|
33618
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A Common Stock, $0.001 par value
|
|
BFYT
|
|
Nasdaq Global Market
|
Large accelerated filer
|
[ ]
|
Emerging growth company
|
[ ]
|
Accelerated filer
|
[X]
|
Non-accelerated filer
|
[ ]
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
[ ]
|
|
|
|
|
|
BENEFYTT TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
($ in thousands, except share and per share data)
|
|||||||
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
5,051
|
|
|
$
|
3,771
|
|
Restricted cash
|
16,030
|
|
|
17,788
|
|
||
Accounts receivable, net, prepaid expenses and other current assets
|
7,361
|
|
|
2,911
|
|
||
Income taxes receivable
|
23,018
|
|
|
18,210
|
|
||
Advanced commissions, net
|
40,524
|
|
|
45,250
|
|
||
Contract asset
|
172,554
|
|
|
184,474
|
|
||
Total current assets
|
264,538
|
|
|
272,404
|
|
||
Long-term contract asset
|
207,675
|
|
|
209,239
|
|
||
Property and equipment, net
|
5,494
|
|
|
5,415
|
|
||
Deferred tax asset
|
645
|
|
|
—
|
|
||
Right-of-use assets
|
16,568
|
|
|
496
|
|
||
Goodwill
|
94,814
|
|
|
135,182
|
|
||
Intangible assets, net
|
25,473
|
|
|
28,963
|
|
||
Other assets
|
2,623
|
|
|
159
|
|
||
Total assets
|
$
|
617,830
|
|
|
$
|
651,858
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
45,568
|
|
|
$
|
51,477
|
|
Commissions payable
|
92,833
|
|
|
97,785
|
|
||
Contingent consideration, current
|
1,750
|
|
|
—
|
|
||
Current portion of long-term debt, net
|
9,488
|
|
|
10,684
|
|
||
Operating lease liabilities, current
|
1,466
|
|
|
237
|
|
||
Other current liabilities
|
296
|
|
|
557
|
|
||
Total current liabilities
|
151,401
|
|
|
160,740
|
|
||
Commissions payable, long-term
|
79,287
|
|
|
82,369
|
|
||
Contingent consideration, long-term
|
66,302
|
|
|
65,171
|
|
||
Debt, net, long-term
|
183,470
|
|
|
167,947
|
|
||
Due to member
|
34,142
|
|
|
29,121
|
|
||
Deferred tax liability, net
|
—
|
|
|
5,722
|
|
||
Operating lease liabilities, long-term
|
14,965
|
|
|
224
|
|
||
Other liabilities
|
330
|
|
|
590
|
|
||
Total liabilities
|
529,897
|
|
|
511,884
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Class A common stock (par value $0.001 per share, 100,000,000 shares authorized; 17,119,217 and 16,219,217 shares issued as of March 31, 2020 and December 31, 2019, respectively; 13,203,527 and 12,273,630 shares outstanding as of March 31, 2020 and December 31, 2019, respectively)
|
17
|
|
|
16
|
|
||
Class B common stock (par value $0.001 per share, 20,000,000 shares authorized; 1,016,667 and 1,916,667 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)
|
1
|
|
|
2
|
|
||
Preferred stock (par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
131,943
|
|
|
118,465
|
|
||
Treasury stock, at cost (3,915,690 and 3,945,587 shares as of March 31, 2020 and December 31, 2019, respectively)
|
(125,643
|
)
|
|
(127,400
|
)
|
||
Retained earnings
|
66,152
|
|
|
110,418
|
|
||
Total Benefytt Technologies, Inc. stockholders’ equity
|
72,470
|
|
|
101,501
|
|
||
Noncontrolling interests
|
15,463
|
|
|
38,473
|
|
||
Total stockholders’ equity
|
87,933
|
|
|
139,974
|
|
||
Total liabilities and stockholders' equity
|
$
|
617,830
|
|
|
$
|
651,858
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
$
|
71,561
|
|
|
$
|
87,326
|
|
Operating expenses:
|
|
|
|
||||
Third-party commissions
|
32,770
|
|
|
60,671
|
|
||
Selling, general and administrative
|
27,946
|
|
|
15,597
|
|
||
Marketing and advertising
|
18,453
|
|
|
3,062
|
|
||
Credit card and ACH fees
|
1,417
|
|
|
1,523
|
|
||
Depreciation and amortization
|
4,345
|
|
|
1,132
|
|
||
Loss on impairment
|
41,076
|
|
|
—
|
|
||
Total operating expenses
|
126,007
|
|
|
81,985
|
|
||
(Loss) income from operations
|
(54,446
|
)
|
|
5,341
|
|
||
|
|
|
|
||||
Other expense:
|
|
|
|
|
|
||
Interest expense
|
2,094
|
|
|
345
|
|
||
Fair value adjustment to contingent acquisition consideration
|
2,881
|
|
|
—
|
|
||
Other expense
|
—
|
|
|
17
|
|
||
Net (loss) income before income taxes
|
(59,421
|
)
|
|
4,979
|
|
||
(Benefit) provision for income taxes
|
(9,606
|
)
|
|
2,797
|
|
||
Net (loss) income
|
(49,815
|
)
|
|
2,182
|
|
||
Net (loss) income attributable to noncontrolling interests
|
(5,549
|
)
|
|
851
|
|
||
Net (loss) income attributable to Benefytt Technologies, Inc.
|
$
|
(44,266
|
)
|
|
$
|
1,331
|
|
|
|
|
|
||||
Per share data:
|
|
|
|
|
|
||
Net (loss) income per share attributable to Benefytt Technologies, Inc.
|
|
|
|
|
|
||
Basic
|
$
|
(3.68
|
)
|
|
$
|
0.12
|
|
Diluted
|
$
|
(3.68
|
)
|
|
$
|
0.11
|
|
Weighted average Class A common shares outstanding
|
|
|
|
|
|
||
Basic
|
12,023,121
|
|
|
11,388,490
|
|
||
Diluted
|
12,023,121
|
|
|
12,472,731
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Total Equity, Beginning of Period
|
$
|
139,974
|
|
|
$
|
143,468
|
|
Class A Share Capital:
|
|
|
|
||||
Beginning balance
|
16
|
|
|
14
|
|
||
Issuance of Class A common stock in a private offering
|
1
|
|
|
1
|
|
||
Ending balance
|
$
|
17
|
|
|
$
|
15
|
|
|
|
|
|
||||
Class B Share Capital:
|
|
|
|
||||
Beginning balance
|
$
|
2
|
|
|
$
|
3
|
|
Exchange of Series B Membership interests and exchange and cancellation of Class B common stock
|
(1
|
)
|
|
(1
|
)
|
||
Ending balance
|
$
|
1
|
|
|
$
|
2
|
|
|
|
|
|
||||
Additional paid-in capital:
|
|
|
|
||||
Beginning balance
|
$
|
118,465
|
|
|
$
|
94,194
|
|
Issuance of Class A common stock in a private offering
|
13,972
|
|
|
1,848
|
|
||
Issuance of Class A common stock from treasury
|
(1,517
|
)
|
|
(7
|
)
|
||
Issuance of restricted shares from treasury
|
(1,766
|
)
|
|
(5,197
|
)
|
||
Forfeitures of restricted stock held in treasury
|
—
|
|
|
587
|
|
||
Stock-based compensation
|
2,704
|
|
|
1,915
|
|
||
Contributions
|
85
|
|
|
—
|
|
||
Ending balance
|
$
|
131,943
|
|
|
$
|
93,340
|
|
|
|
|
|
||||
Treasury Stock:
|
|
|
|
||||
Beginning balance
|
$
|
(127,400
|
)
|
|
$
|
(67,185
|
)
|
Repurchases of Class A common stock
|
—
|
|
|
(45,272
|
)
|
||
Class A common stock withheld in Treasury from restricted share vesting
|
(1,526
|
)
|
|
(918
|
)
|
||
Forfeitures of restricted stock held in treasury
|
—
|
|
|
(587
|
)
|
||
Issuance of restricted shares from treasury
|
1,766
|
|
|
5,197
|
|
||
Issuance of Class A common stock from treasury
|
1,517
|
|
|
7
|
|
||
Ending balance
|
$
|
(125,643
|
)
|
|
$
|
(108,758
|
)
|
|
|
|
|
||||
Retained Earnings:
|
|
|
|
||||
Beginning balance
|
$
|
110,418
|
|
|
$
|
80,804
|
|
Net (loss) income
|
(44,266
|
)
|
|
1,331
|
|
||
Ending balance
|
$
|
66,152
|
|
|
$
|
82,135
|
|
|
|
|
|
||||
Equity Attributable to Non-controlling Interests:
|
|
|
|
||||
Beginning balance
|
$
|
38,473
|
|
|
$
|
35,638
|
|
Net (loss) income attributable to non-controlling interest
|
(5,549
|
)
|
|
851
|
|
||
Exchange of Series B Membership interest and exchange and cancellation of Class B common stock
|
(17,464
|
)
|
|
(1,757
|
)
|
||
Contributions (distributions)
|
3
|
|
|
(2,242
|
)
|
||
Ending balance
|
15,463
|
|
|
32,490
|
|
||
Total Equity, End of Period
|
$
|
87,933
|
|
|
$
|
99,224
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||
Class A Common Shares Outstanding:
|
|
|
|
||
Beginning balance
|
12,273,630
|
|
|
12,387,349
|
|
Repurchases of Class A common stock
|
—
|
|
|
(1,351,241
|
)
|
Issuance of Class A common stock in a private offering
|
900,000
|
|
|
125,000
|
|
Issuance of Class A common stock under equity compensation plan
|
—
|
|
|
250,000
|
|
Issuance of Class A common stock from treasury
|
47,287
|
|
|
218
|
|
Issuance of restricted shares from treasury
|
55,000
|
|
|
157,000
|
|
Class A common stock withheld in treasury from restricted share vesting
|
(72,390
|
)
|
|
(33,700
|
)
|
Forfeitures of restricted stock held in treasury
|
—
|
|
|
(21,939
|
)
|
Ending balance
|
13,203,527
|
|
|
11,512,687
|
|
|
|
|
|
||
Class B Common Shares Outstanding:
|
|
|
|
||
Beginning balance
|
1,916,667
|
|
|
2,541,667
|
|
Exchange of Series B Membership interests and exchange and cancellation of Class B common stock
|
(900,000
|
)
|
|
(125,000
|
)
|
Ending balance
|
1,016,667
|
|
|
2,416,667
|
|
|
|
|
|
||
Treasury Shares Outstanding:
|
|
|
|
||
Beginning balance
|
3,945,587
|
|
|
2,038,475
|
|
Repurchases of Class A common stock
|
—
|
|
|
1,351,241
|
|
Issuance of Class A common stock from treasury
|
(47,287
|
)
|
|
(218
|
)
|
Issuance of restricted shares from treasury
|
(55,000
|
)
|
|
(157,000
|
)
|
Forfeitures of restricted stock held in treasury
|
—
|
|
|
21,939
|
|
Class A common stock withheld in Treasury from restricted share vesting
|
72,390
|
|
|
33,700
|
|
Ending balance
|
3,915,690
|
|
|
3,288,137
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating activities:
|
|
|
|
|
|
||
Net (loss) income
|
$
|
(49,815
|
)
|
|
$
|
2,182
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|
||
Stock-based compensation
|
2,627
|
|
|
1,816
|
|
||
Fair value adjustment to contingent acquisition consideration
|
2,881
|
|
|
—
|
|
||
Loss on disposal of assets
|
73
|
|
|
—
|
|
||
Provision for allowance for doubtful accounts
|
116
|
|
|
13
|
|
||
Impairment of assets
|
41,076
|
|
|
—
|
|
||
Depreciation and amortization
|
4,345
|
|
|
1,132
|
|
||
Deferred financing costs
|
202
|
|
|
—
|
|
||
Deferred income taxes
|
(4,838
|
)
|
|
191
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
(Increase) decrease in accounts receivable, prepaid expenses and other assets
|
(6,914
|
)
|
|
275
|
|
||
Decrease (increase) in advanced commissions
|
4,610
|
|
|
(196
|
)
|
||
Increase in income taxes receivable
|
(4,808
|
)
|
|
—
|
|
||
Increase in right-of-use asset
|
(16,072
|
)
|
|
(639
|
)
|
||
Decrease (increase) in contract asset
|
12,776
|
|
|
(13,327
|
)
|
||
Increase in lease liability
|
15,893
|
|
|
538
|
|
||
Decrease in accounts payable, accrued expenses and other liabilities
|
(5,353
|
)
|
|
(6,568
|
)
|
||
(Decrease) increase in commission payable
|
(8,034
|
)
|
|
6,387
|
|
||
Increase in income taxes payable, net
|
—
|
|
|
2,452
|
|
||
Net cash used in operating activities
|
(11,235
|
)
|
|
(5,744
|
)
|
||
Investing activities:
|
|
|
|
||||
Business acquisition: release of hold-back
|
(1,000
|
)
|
|
—
|
|
||
Capitalized internal-use software and website development costs
|
(501
|
)
|
|
(315
|
)
|
||
Purchases of property and equipment
|
(429
|
)
|
|
(109
|
)
|
||
Net cash used in investing activities
|
(1,930
|
)
|
|
(424
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from borrowings under credit agreement
|
18,000
|
|
|
50,000
|
|
||
Payments on borrowings under credit agreement
|
(3,875
|
)
|
|
—
|
|
||
Payments related to tax withholding for share-based compensation
|
(1,526
|
)
|
|
(918
|
)
|
||
Purchases of Class A common stock pursuant to share repurchase plan
|
—
|
|
|
(45,272
|
)
|
||
Contributions (distributions)
|
88
|
|
|
(677
|
)
|
||
Net cash provided by financing activities
|
12,687
|
|
|
3,133
|
|
||
Net decrease in cash and cash equivalents, and restricted cash
|
(478
|
)
|
|
(3,035
|
)
|
||
Cash and cash equivalents, and restricted cash at beginning of period
|
21,559
|
|
|
25,999
|
|
||
Cash and cash equivalents, and restricted cash at end of period
|
$
|
21,081
|
|
|
$
|
22,964
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Supplemental cash flow information:
|
|
|
|
|
|||
Cash paid during the period for:
|
|
|
|
||||
Income taxes, net
|
$
|
41
|
|
|
$
|
159
|
|
Interest
|
1,883
|
|
|
212
|
|
||
Non-cash investing activities:
|
|
|
|
||||
Capitalized stock-based compensation
|
$
|
77
|
|
|
$
|
99
|
|
Non-cash financing activities:
|
|
|
|
||||
Change in due to member related to Exchange Agreement
|
$
|
5,021
|
|
|
$
|
517
|
|
Change in deferred tax asset related to Exchange Agreement
|
(1,529
|
)
|
|
(609
|
)
|
||
Issuance of Class A common stock in a private offering related to Exchange Agreement
|
13,973
|
|
|
1,849
|
|
||
Exchange of Class B membership interests related to Exchange Agreement
|
(17,465
|
)
|
|
(1,758
|
)
|
||
Declared but unpaid distribution to member of Health Plan Intermediaries Holdings, LLC
|
—
|
|
|
1,565
|
|
Cash consideration(1)
|
$
|
49,852
|
|
Class A common stock, at fair value(2)
|
11,784
|
|
|
Earnout consideration, at fair value(3)
|
49,298
|
|
|
Settlement of intercompany balances
|
(560
|
)
|
|
Total consideration
|
$
|
110,374
|
|
(1)
|
Cash consideration was $50.0 million, of which $2.5 million was withheld by HPIH for the payment of post-closing adjustments. Measurement period adjustments resulted in $148,000 for working capital adjustments.
|
(2)
|
The fair value of the Class A common stock derived from the market price of the stock, adjusted to include a discount for lack of marketability due to the trading restrictions pursuant to the Purchase Agreement.
|
(3)
|
Represents the fair value estimate of income-based contingent consideration, which may be realized by the sellers incrementally over five years after the closing date of the acquisition. The fair value of the contingent consideration arrangement as of the acquisition date was estimated using a risk-adjusted probability analysis. As of June 5th, 2019, management estimated the payments to be approximately $97.6 million over the five years however the maximum cash payout is unlimited.
|
Cash
|
$
|
179
|
|
Accounts receivable and other assets(1)
|
333
|
|
|
Contract asset(1)(2)
|
12,798
|
|
|
Property, plant and equipment(1)
|
34
|
|
|
Intangible asset - brand
|
430
|
|
|
Intangible asset - BPO relationship
|
24,700
|
|
|
Goodwill
|
72,660
|
|
|
Accounts payable, accrued expenses, and other liabilities(1)
|
(760
|
)
|
|
Total
|
$
|
110,374
|
|
(1)
|
The carrying value of accounts receivable, contract asset, property, plant and equipment, accounts payable and accrued expenses approximated fair value; as such, no adjustments to the accounts were recorded in association with the acquisition.
|
(2)
|
Current quarter adjustments of $708,000 were due to revisions of collection estimates of policies in force.
|
|
($ in thousands, except per share data)
Unaudited
|
||||||
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenue
|
$
|
71,561
|
|
|
$
|
97,820
|
|
Net (loss) income before income taxes
|
(59,421
|
)
|
|
7,225
|
|
||
Net (loss) income
|
(49,815
|
)
|
|
3,889
|
|
||
Net (loss) income attributable to Benefytt Technologies, Inc.
|
(44,266
|
)
|
|
2,372
|
|
||
|
|
|
|
||||
Net (loss) income per share - basic
|
(3.68
|
)
|
|
0.20
|
|
||
Net (loss) income per share - diluted
|
(3.68
|
)
|
|
0.18
|
|
||
|
|
|
|
||||
Weighted average Class A common shares outstanding
|
|
|
|
||||
Basic
|
12,023,121
|
|
|
12,018,490
|
|
||
Diluted
|
12,023,121
|
|
|
13,102,731
|
|
|
IFP
|
|
Medicare
|
|
Total
|
||||||
Balance as of December 31, 2019
|
$
|
41,076
|
|
|
$
|
94,106
|
|
|
$
|
135,182
|
|
Purchase accounting measurement period adjustment
|
—
|
|
|
708
|
|
|
708
|
|
|||
Goodwill impairment adjustment
|
(41,076
|
)
|
|
—
|
|
|
(41,076
|
)
|
|||
Balance as of March 31, 2020
|
$
|
—
|
|
|
$
|
94,814
|
|
|
$
|
94,814
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Cash paid within operating cash flows
|
$
|
546
|
|
|
$
|
210
|
|
Remainder of 2020
|
$
|
1,407
|
|
2021
|
2,787
|
|
|
2022
|
2,871
|
|
|
2023
|
2,652
|
|
|
2024
|
2,695
|
|
|
2025
|
2,760
|
|
|
Thereafter
|
3,788
|
|
|
Total lease payments
|
$
|
18,960
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||
Weighted-average remaining lease term
|
6.7 years
|
|
|
1.8 years
|
|
Weighted-average discount rate
|
4.09
|
%
|
|
6.25
|
%
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Carriers and vendors payable
|
$
|
15,706
|
|
|
$
|
17,876
|
|
Marketing and advertising costs
|
6,956
|
|
|
11,732
|
|
||
Professional fees
|
2,731
|
|
|
2,022
|
|
||
Customer care and enrollment costs
|
2,053
|
|
|
4,501
|
|
||
Legal fees and contingencies
|
11,968
|
|
|
5,511
|
|
||
Compensation and benefits
|
3,191
|
|
|
5,905
|
|
||
Acquisition costs
|
143
|
|
|
1,305
|
|
||
Other
|
2,820
|
|
|
2,625
|
|
||
Total accounts payable and accrued expenses
|
$
|
45,568
|
|
|
$
|
51,477
|
|
|
|
|
|
|
As of
|
|
|
|||||||
|
Issuance Date
|
|
Maturity Date
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Rate
|
|||||
Non-current portion of line of credit
|
June 2019
|
|
2022
|
|
$
|
50,000
|
|
|
$
|
32,000
|
|
|
3.52
|
%
|
Non-current portion of term loan
|
June 2019
|
|
2021 - 2022
|
|
134,062
|
|
|
136,875
|
|
|
3.45
|
%
|
||
Non-current portion of unamortized debt issuance costs
|
|
|
|
|
(592
|
)
|
|
(928
|
)
|
|
|
|||
|
|
|
|
|
183,470
|
|
|
167,947
|
|
|
|
|||
Current portion of term loan
|
June 2019
|
|
2020 - 2021
|
|
10,313
|
|
|
9,375
|
|
|
3.45
|
%
|
||
Current portion of line of credit
|
June 2019
|
|
2020
|
|
—
|
|
|
2,000
|
|
|
—
|
%
|
||
Current portion of unamortized debt issuance costs
|
|
|
|
|
(825
|
)
|
|
(691
|
)
|
|
|
|||
|
|
|
|
|
$
|
192,958
|
|
|
$
|
178,631
|
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
||||||||||
Debt repayments
|
$
|
7,500
|
|
|
$
|
13,125
|
|
|
$
|
173,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
March 31, 2020
|
|
March 31, 2019
|
||||||||||||||||||||
|
Sales and Marketing Services
|
|
Member Management
|
|
Total
|
|
Sales and Marketing Services
|
|
Member Management
|
|
Total
|
||||||||||||
Revenue by Source
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commission revenue(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
STM(2)
|
$
|
20,135
|
|
|
$
|
936
|
|
|
$
|
21,071
|
|
|
$
|
32,319
|
|
|
$
|
884
|
|
|
$
|
33,203
|
|
HBIP
|
12,406
|
|
|
1,205
|
|
|
13,611
|
|
|
28,329
|
|
|
1,797
|
|
|
30,126
|
|
||||||
Supplemental(2)
|
15,867
|
|
|
1,030
|
|
|
16,897
|
|
|
21,394
|
|
|
1,112
|
|
|
22,506
|
|
||||||
Medicare
|
16,742
|
|
|
—
|
|
|
16,742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Services revenue
|
—
|
|
|
631
|
|
|
631
|
|
|
—
|
|
|
1,168
|
|
|
1,168
|
|
||||||
Consumer engagement revenue
|
2,281
|
|
|
—
|
|
|
2,281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other revenues
|
328
|
|
|
—
|
|
|
328
|
|
|
323
|
|
|
—
|
|
|
323
|
|
||||||
Total revenue
|
$
|
67,759
|
|
|
$
|
3,802
|
|
|
$
|
71,561
|
|
|
$
|
82,365
|
|
|
$
|
4,961
|
|
|
$
|
87,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transferred at a point in time
|
$
|
67,759
|
|
|
$
|
—
|
|
|
$
|
67,759
|
|
|
$
|
82,365
|
|
|
$
|
—
|
|
|
$
|
82,365
|
|
Transferred over time
|
—
|
|
|
3,802
|
|
|
3,802
|
|
|
—
|
|
|
4,961
|
|
|
4,961
|
|
||||||
Total revenue
|
$
|
67,759
|
|
|
$
|
3,802
|
|
|
$
|
71,561
|
|
|
$
|
82,365
|
|
|
$
|
4,961
|
|
|
$
|
87,326
|
|
(1)
|
For the purposes of disaggregated revenue presentation, when additional Discount Benefit products are sold with an STM, HBIP, or supplemental product, the associated revenue for the Discount Benefit products are reported within the STM, HBIP, or supplemental product category depicted within the table.
|
(2)
|
The Company changed its presentation of brokerage revenue during the fourth quarter of 2019. Previously brokerage revenue was reported as a separate line item with the disaggregated revenue table however the Company has reclassified the revenue into the respective STM or supplemental category that the brokerage sales were associated with.
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Restricted shares
|
55
|
|
|
260
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Restricted shares
|
$
|
2,547
|
|
|
$
|
1,766
|
|
SARs
|
157
|
|
|
149
|
|
||
Less amounts capitalized for internal-use software(1)
|
(77
|
)
|
|
(99
|
)
|
||
Total
|
$
|
2,627
|
|
|
$
|
1,816
|
|
(1)
|
See Property and Equipment, in Note 1 of our Annual Report on Form 10-K for the year ended December 31, 2019 for further information on internal use software.
|
|
Unrecognized Expense
|
|
Weighted Average Remaining Years
|
||
Restricted shares
|
$
|
12,927
|
|
|
2.1
|
SARs
|
930
|
|
|
1.8
|
|
Total
|
$
|
13,857
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Basic net (loss) income attributable to Benefytt Technologies, Inc.
|
$
|
(44,266
|
)
|
|
$
|
1,331
|
|
Weighted average shares—basic
|
12,023,121
|
|
|
11,388,490
|
|
||
Effect of dilutive securities:
|
|
|
|
|
|
||
Restricted shares
|
—
|
|
|
557,142
|
|
||
SARs
|
—
|
|
|
524,762
|
|
||
Stock options
|
—
|
|
|
2,337
|
|
||
Weighted average shares—diluted
|
12,023,121
|
|
|
12,472,731
|
|
||
Basic net (loss) income per share attributable to Benefytt Technologies, Inc.
|
$
|
(3.68
|
)
|
|
$
|
0.12
|
|
Diluted net (loss) income per share attributable to Benefytt Technologies, Inc.
|
$
|
(3.68
|
)
|
|
$
|
0.11
|
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Restricted shares
|
719
|
|
|
38
|
|
SARs
|
334
|
|
|
7
|
|
Stock options
|
4
|
|
|
—
|
|
|
Carrying Value
|
|
Fair Value Measurement as of March 31, 2020
|
||||||||||||
|
as of
March 31, 2020 |
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent acquisition consideration
|
$
|
68,052
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68,052
|
|
|
$
|
68,052
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68,052
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning balance
|
$
|
65,171
|
|
|
$
|
—
|
|
Fair value adjustment
|
2,881
|
|
|
—
|
|
||
Ending balance
|
$
|
68,052
|
|
|
$
|
—
|
|
|
Three Months Ended March 31, 2020
|
||
Revenue
|
|
||
Medicare revenue
|
$
|
18,896
|
|
IFP revenue
|
52,665
|
|
|
Total revenue
|
71,561
|
|
|
|
|
||
Segment Profit
|
|
||
Medicare loss
|
(1,643
|
)
|
|
IFP profit
|
8,328
|
|
|
Total segment profit
|
6,685
|
|
|
|
|
||
Corporate
|
(5,752
|
)
|
|
Interest expense
|
(2,094
|
)
|
|
Depreciation and amortization
|
(4,345
|
)
|
|
Provision for income taxes
|
9,606
|
|
|
Loss on impairment
|
(41,076
|
)
|
|
Stock-based compensation and related costs
|
(2,707
|
)
|
|
Fair value adjustment to contingent consideration
|
(2,881
|
)
|
|
Transaction costs
|
(129
|
)
|
|
Indemnity and other legal costs
|
(7,092
|
)
|
|
Severance, restructuring and other
|
(30
|
)
|
|
Net loss
|
$
|
(49,815
|
)
|
•
|
First quarter revenue from our Medicare segment was $18.9 million.
|
•
|
First quarter loss for the Medicare segment was $1.6 million.
|
•
|
Expected duration units submitted for Medicare were 826,100 for the three months ended March 31, 2020.
|
•
|
First quarter revenue from our IFP segment was $52.7 million, a decrease of 39.7%.
|
•
|
First quarter profit for the IFP segment was $8.3 million, a decrease of 10.1%.
|
•
|
Expected duration units of submitted IFPs were 867,900 and 1.3 million, respectively for the three months ended March 31, 2020 and 2019, a decrease of 33.0%.
|
•
|
Revenue was $71.6 million, compared to revenue of $87.3 million in 2019, a decrease of 18.1%.
|
•
|
Net loss was $44.3 million, compared to net income of $1.3 million in 2019, a decrease of 3,426%.
|
•
|
Adjusted EBITDA was $933,000, compared to $9.3 million in 2019, a decrease of 89.9%.
|
•
|
GAAP diluted loss per share was $3.68, compared to earnings per share of $0.11 in 2019, a decrease of 3,445%.
|
•
|
Adjusted earnings per share was $0.01 compared to adjusted earnings per share of $0.43 in 2019, a decrease of 97.7%.
|
|
Expected Duration Units by Product Type
|
|||||||
|
Three Months Ended March 31,
|
|||||||
|
2020
|
|
2019
|
|
Change (%)
|
|||
Medicare(1)
|
|
|
|
|
|
|||
Medicare Advantage
|
774,600
|
|
|
—
|
|
|
—
|
|
Medicare Supplement
|
15,400
|
|
|
—
|
|
|
—
|
|
Medicare Part D
|
9,100
|
|
|
—
|
|
|
—
|
|
Supplementals
|
27,000
|
|
|
—
|
|
|
—
|
|
Total Medicare
|
826,100
|
|
|
—
|
|
|
—
|
|
IFP
|
|
|
|
|
|
|||
STM <12 Months
|
22,100
|
|
|
45,000
|
|
|
(50.9
|
)%
|
STM ≥ 12 Months
|
243,000
|
|
|
298,300
|
|
|
(18.5
|
)%
|
Total STM
|
265,100
|
|
|
343,300
|
|
|
(22.8
|
)%
|
Health Benefit Plans
|
171,200
|
|
|
336,700
|
|
|
(49.2
|
)%
|
Supplementals
|
431,600
|
|
|
615,500
|
|
|
(29.9
|
)%
|
Total IFP
|
867,900
|
|
|
1,295,500
|
|
|
(33.0
|
)%
|
Total Expected Duration Units
|
1,694,000
|
|
|
1,295,500
|
|
|
30.8
|
%
|
(1)
|
The Company did not begin selling Medicare products until the second quarter of 2019 which was marked by the acquisition of TogetherHealth on June 5, 2019.
|
|
Submitted Applications by Product Type
|
|||||||
|
Three Months Ended March 31,
|
|||||||
|
2020
|
|
2019
|
|
Change (%)
|
|||
Medicare
|
|
|
|
|
|
|||
Medicare Advantage
|
20,000
|
|
|
—
|
|
|
—
|
|
Medicare Supplement
|
400
|
|
|
—
|
|
|
—
|
|
Medicare Part D
|
200
|
|
|
—
|
|
|
—
|
|
Supplementals
|
700
|
|
|
—
|
|
|
—
|
|
Total Medicare
|
21,300
|
|
|
—
|
|
|
—
|
|
IFP
|
|
|
|
|
|
|||
STM <12 Months
|
5,300
|
|
|
11,200
|
|
|
(52.7
|
)%
|
STM ≥ 12 Months
|
23,100
|
|
|
29,200
|
|
|
(20.9
|
)%
|
Total STM
|
28,400
|
|
|
40,400
|
|
|
(29.7
|
)%
|
Health Benefit Plans
|
17,800
|
|
|
35,300
|
|
|
(49.6
|
)%
|
Supplementals
|
47,400
|
|
|
67,700
|
|
|
(30.0
|
)%
|
Total IFP
|
93,600
|
|
|
143,400
|
|
|
(34.7
|
)%
|
Total Submitted Applications
|
114,900
|
|
|
143,400
|
|
|
(19.9
|
)%
|
|
Approved Applications by Product Type
|
|||||||
|
Three Months Ended March 31,
|
|||||||
|
2020
|
|
2019
|
|
Change (%)
|
|||
Medicare
|
|
|
|
|
|
|||
Medicare Advantage
|
18,400
|
|
|
—
|
|
|
—
|
|
Medicare Supplement
|
400
|
|
|
—
|
|
|
—
|
|
Medicare Part D
|
200
|
|
|
—
|
|
|
—
|
|
Supplementals
|
600
|
|
|
—
|
|
|
—
|
|
Total Medicare
|
19,600
|
|
|
—
|
|
|
—
|
|
IFP
|
|
|
|
|
|
|||
STM <12 Months
|
5,300
|
|
|
11,200
|
|
|
(52.7
|
)%
|
STM ≥ 12 Months
|
23,100
|
|
|
29,200
|
|
|
(20.9
|
)%
|
Total STM
|
28,400
|
|
|
40,400
|
|
|
(29.7
|
)%
|
Health Benefit Plans
|
17,800
|
|
|
35,300
|
|
|
(49.6
|
)%
|
Supplementals
|
47,400
|
|
|
67,700
|
|
|
(30.0
|
)%
|
Total IFP
|
93,600
|
|
|
143,400
|
|
|
(34.7
|
)%
|
Total Approved Applications
|
113,200
|
|
|
143,400
|
|
|
(21.1
|
)%
|
|
Three Months Ended March 31,
|
|||||||||
|
2020
|
|
2019
|
|
Change (%)
|
|||||
Medicare(1)
|
$
|
1,065
|
|
|
$
|
—
|
|
|
—
|
%
|
Short Term Medical<12 months
|
352
|
|
|
354
|
|
|
(0.6
|
)%
|
||
Short Term Medical ≥12 months
|
832
|
|
|
1,019
|
|
|
(18.4
|
)%
|
||
Total STM
|
746
|
|
|
843
|
|
|
(11.5
|
)%
|
||
Health Benefit Plans
|
908
|
|
|
865
|
|
|
5.0
|
%
|
||
Supplemental
|
329
|
|
|
329
|
|
|
—
|
%
|
(1)
|
CLTV per approved application for Medicare is presented gross of customer care and enrollment expenses ("CC&E"). Including CC&E, Medicare CLTV per submitted application for the three months ended March 31, 2020 was $893.
|
|
Three Months Ended March 31, 2020
|
||
Medicare variable marketing cost per approved application(1)
|
$
|
672
|
|
Medicare variable CC&E cost per approved application(2)
|
305
|
|
|
Total Medicare cost per approved member
|
$
|
977
|
|
(1)
|
Medicare variable marketing cost per approved application includes direct costs incurred in member acquisition for all Medicare products from our direct marketing partners and online advertising channels divided by Medicare approved applications in each period.
|
(2)
|
Medicare CC&E cost per approved application includes compensation and benefits costs for personnel engaged in assistance to applicants during the enrollment process divided by Medicare approved applications in each period. CC&E costs include amounts netted against revenue for certain Medicare BPO relationships.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net (loss) income
|
$
|
(49,815
|
)
|
|
$
|
2,182
|
|
Interest expense
|
2,094
|
|
|
345
|
|
||
Depreciation and amortization
|
4,345
|
|
|
1,132
|
|
||
(Benefit) provision for income taxes
|
(9,606
|
)
|
|
2,797
|
|
||
EBITDA
|
(52,982
|
)
|
|
6,456
|
|
||
Loss on impairment
|
41,076
|
|
|
—
|
|
||
Stock-based compensation and related costs
|
2,707
|
|
|
1,861
|
|
||
Fair value adjustment to contingent consideration
|
2,881
|
|
|
—
|
|
||
Transaction costs
|
129
|
|
|
273
|
|
||
Indemnity and other legal costs
|
7,092
|
|
|
672
|
|
||
Severance, restructuring and other
|
30
|
|
|
3
|
|
||
Adjusted EBITDA
|
$
|
933
|
|
|
$
|
9,265
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net (loss) income
|
$
|
(49,815
|
)
|
|
$
|
2,182
|
|
Interest expense
|
2,094
|
|
|
345
|
|
||
Amortization
|
3,505
|
|
|
335
|
|
||
(Benefit) provision for income taxes
|
(9,606
|
)
|
|
2,797
|
|
||
Loss on impairment
|
41,076
|
|
|
—
|
|
||
Stock-based compensation and related costs
|
2,707
|
|
|
1,861
|
|
||
Fair value adjustment to contingent consideration
|
2,881
|
|
|
—
|
|
||
Transaction costs
|
129
|
|
|
273
|
|
||
Indemnity and other legal costs
|
7,092
|
|
|
672
|
|
||
Severance, restructuring and other charges
|
30
|
|
|
3
|
|
||
Adjusted pre-tax income
|
93
|
|
|
8,468
|
|
||
Pro forma income taxes
|
(22
|
)
|
|
(2,032
|
)
|
||
Adjusted net income
|
$
|
71
|
|
|
$
|
6,436
|
|
Total weighted average diluted share count
|
13,247
|
|
|
15,000
|
|
||
Adjusted net income per share
|
$
|
0.01
|
|
|
$
|
0.43
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash (used in) provided by:
|
|
|
|
||||
Operating activities
|
$
|
(11,235
|
)
|
|
$
|
(5,744
|
)
|
Investing activities
|
(1,930
|
)
|
|
(424
|
)
|
||
Financing activities
|
12,687
|
|
|
3,133
|
|
Periods
|
|
Total Number of Shares Purchased(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
Dollar Value of Shares That May Yet Be Purchased Under the Plan
|
||||||
January 1, 2020 through January 31, 2020
|
|
52,038
|
|
|
$
|
19.29
|
|
|
—
|
|
|
$
|
75,277,082
|
|
February 1, 2020 through February 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
75,277,082
|
|
March 1, 2020 through March 31, 2020
|
|
20,352
|
|
|
$
|
25.67
|
|
|
—
|
|
|
$
|
75,277,082
|
|
Total
|
|
72,390
|
|
|
|
|
—
|
|
|
|
(1)
|
Includes shares that were surrendered by employees to satisfy statutory tax withholding obligations in connection with the vesting or exercise of stock-based compensation awards.
|
Exhibit No.
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32**
|
|
|
100.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Definition Document
|
|
BENEFYTT TECHNOLOGIES, INC.
|
|
|
May 11, 2020
|
/s/ Gavin D. Southwell
|
|
GAVIN D. SOUTHWELL
|
|
PRESIDENT AND CHIEF EXECUTIVE OFFICER
|
|
(PRINCIPAL EXECUTIVE OFFICER)
|
|
|
May 11, 2020
|
/s/ Erik M. Helding
|
|
ERIK M. HELDING
|
|
CHIEF FINANCIAL OFFICER, SECRETARY, AND TREASURER
|
|
(PRINCIPAL FINANCIAL OFFICER)
|
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