RADNOR, Pa., April 1, 2008 (PRIME NEWSWIRE) -- Health Benefits Direct Corporation (OTCBB:HBDT), a leading technology innovator in the direct marketing and distribution of a wide range of health and life insurance and related products for individuals and families, today announced its results of operations for the fourth quarter and fiscal year ended December 31, 2007.
Fourth Quarter Operational Highlights * Revenues increased 16% compared to the fourth quarter of 2006. * The Company closed the acquisition of Atiam Technologies, a provider of comprehensive, web-based insurance administration software applications that support individual and group insurance products. Fiscal Year 2007 Highlights * Total revenues increased nearly 70% to $20.7 million compared to fiscal 2006. * Health Benefits further expanded its network of high-quality carriers by adding Aetna and PacifiCare. * The Company closed on an $11.25 million private placement, providing capital to pursue additional growth opportunities. * Health Benefits launched Insurint(tm), its proprietary, professional-grade, web-based quoting technology platform for its Contact Center sales force.
Alvin H. Clemens, Co-Chairman, stated, "Fiscal 2007 was a groundbreaking year for Health Benefits Direct. Not only did annual revenue hit an all-time high, but we also positioned the Company for long-term growth through expanded product offerings, further development of leading edge technology solutions, strengthened industry relationships and several key strategic initiatives such as the acquisition of Atiam and launch of Insurint(tm). We now have the complete technology platform to fully service all tiers of the insurance market -- the customer, agent and carrier, and are poised to capitalize on the large and growing demand for individual healthcare coverage."
Fourth Quarter 2007 Financial Results
Revenues for the fourth quarter of 2007 increased 16% to $6,005,203 as compared to $5,157,688 for the fourth quarter of 2006.
Operating expenses for the fourth quarter ended December 31, 2007, totaled $10,608,979 as compared to $8,829,792, a 20% increase compared to the fourth quarter ended December 31, 2006. Operating expenses increased primarily due to higher lead expense and an increased number of employees associated with the increased sales activity in the Telesales business segment.
Net loss for the fourth quarter of 2007 was $(4,667,881), or $(0.13) per basic and diluted share, as compared to a net loss of $(3,629,504), or $(0.13) per basic and diluted share for the fourth quarter of 2006.
Fiscal Year 2007 Results
Revenues for the twelve months ended December 31, 2007 increased 69% to $20,709,750 as compared to $12,240,101 for twelve months ended December 31, 2006. Operating expenses for the twelve months ended December 31, 2007, totaled $35,037,791 as compared to $26,551,476 for the twelve months ended December 31, 2006. Net loss for the twelve months ended December 31, 2007, was $(14,136,599), or $(0.43) per basic and diluted share, as compared to a net loss of $(13,967,824), or $(0.51) per basic and diluted share, for the twelve months ended December 31, 2006.
At December 31, 2007, Health Benefits Direct had a cash balance of $5,787,585, total assets of $16,294,654 and total shareholders' equity of $4,500,503.
Health Benefits Direct reported a net increase in cash of $3,475,804 for the twelve months ended December 31, 2007, as compared to a decrease in cash of $(4,121,645) for the twelve months ended December 31, 2006. The increase in cash in 2007 was the result of proceeds of $10,863,708 from financing activities, less $5,500,884 of cash used in operations and $1,887,020 of cash used in investing activities.
Recent Developments
On March 31, 2008, the Company announced that it closed on a private placement of common stock and warrants to a group of accredited investors led by The Co-Investment Fund II LP, which raised aggregate gross proceeds of $5.0 million. In conjunction with the financing, the Company also announced the appointment of Donald Caldwell as Co-Chairman, Dick Arenschield as Interim Chief Executive Officer, and Edmond Walters as a Director. Alvin Clemens has resigned as CEO and has assumed the role of Health Benefits' Co-Chairman. All management appointments were effective April 1, 2008.
Clemens continued, "We are thrilled to find a partner that has a sincere interest in helping us take Health Benefits to the next level. Donald, Richard and Edmond are strong additions to our team and their valuable expertise and perspective will significantly contribute to the Company's long-term success."
As part of an overall strategic initiative to reduce operating costs, during the first quarter of 2008, Health Benefits closed its sales office located in New York, and as a result, the Company terminated 47 employees including 34 sales agents. The Company continues to offer more insurance products via its tele-sales insurance agency, as well as continued growth in the Company's Insurint(tm) platform and InsPro solution.
On January 17, 2008, the Company announced the anticipated launch of its Insurint platform with America's Healthcare/RX Plan Agency, Inc. ("AHCP"), a subsidiary of Access Plans USA, Inc. AHCP is one of the leading health insurance agencies and the Company's agents submitted $65 million in new annualized major medical premiums in 2007. Under the terms of the agreement, AHCP agents who enroll in the program will have access to Insurint, the proprietary, professional-grade, web-based agent portal that aggregates real-time quotes and underwriting information from multiple highly-rated carriers of health and life insurance and related products. The launch of the Insurint platform offering to AHCP's sales agents is expected to occur in April.
Clemens concluded, "We have a solid foundation in place and look forward to building on the strong momentum from last year. Our partnership with AHCP is a watershed for the Company and should spur the continued growth of Insurint as more agents join the program. In addition, InsPro continues to expand its portfolio of top-tier health insurance carriers and will contribute to the future growth of our Company. Lastly, the cost saving initiatives implemented in the first quarter of this year, combined with the recent financing should enable us to continue positioning the business for long-term success."
About Health Benefits Direct Corporation
Health Benefits Direct Corporation is a technologically innovative contact center based insurance agency that operates an interactive online marketplace enabling consumers to shop for, compare, and apply for health and life insurance and related products for individuals and families. Its streamlined Quick-to-Call sales platform, supported by proprietary online technology, dialing applications and tele-application voice signature process, promotes efficiency for consumers purchasing and carriers underwriting insurance products. Through its subsidiary, Insurint Corporation, Health Benefits Direct provides a proprietary, professional-grade, web-based agent quote engine portal that aggregates accurate real-time quotes from multiple highly-rated carriers of health and life insurance and related products. Insurint's user-friendly platform enables agents to view and share with proposed insureds detailed comparisons of multiple products, policy brochures and other useful information instantly, resulting in highly competitive application processing platform for agents and consumers. Through its subsidiary, Atiam Technologies, Health Benefits Direct offers the InsPro system, an internet-based marketing and administration system used by Insurance carriers and Third Party Administrators. www.healthbenefitsdirect.com
Safe Harbor Statement
In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding the effect of the agreement to offer the Insurint platform to AHCP's agents or the anticipated launch date of this offering to AHCP agents. Forward-looking statements provide Health Benefits Direct's current expectations or forecasts of future events. Moreover, Health Benefits Direct cautions readers that forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially and which are identified from time to time in Health Benefits Direct's reports filed with the U.S. Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Health Benefits Direct undertakes no obligation to update publicly any forward-looking statement.
HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Years Ended
December 31, December 31,
------------ ------------ ------------ ------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenues $ 6,005,203 $ 5,157,688 $ 20,709,750 $ 12,240,101
Operating
Expenses:
Salaries,
commission
and related
taxes 5,214,749 4,423,771 17,544,167 13,879,612
Lead,
advertising
and other
marketing 2,516,253 2,107,523 8,489,695 5,190,342
Depreciation
and
amortization 655,585 661,588 2,286,767 2,146,703
Rent,
utilities,
telephone and
communications 786,436 646,812 2,720,735 1,970,274
Professional
fees 784,762 434,080 2,062,107 1,428,615
Other general
and
administrative 651,194 556,018 1,934,320 1,935,930
------------ ------------ ------------ ------------
10,608,979 8,829,792 35,037,791 26,551,476
------------ ------------ ------------ ------------
Loss from
operations (4,603,776) (3,672,104) (14,328,041) (14,311,375)
------------ ------------ ------------ ------------
Other income
(expense):
Loss on
disposal of
property and
equipment -- -- (2,592) (339)
Loss on
impairment of
intangible
asset (125,000) -- (125,000) --
Registration
rights
penalty
reversal -- -- -- 60,537
Interest
income 70,743 45,137 350,707 303,357
Interest
expense (9,848) (2,537) (31,673) (20,004)
------------ ------------ ------------ ------------
Total other
income
(expense) (64,105) 42,600 191,442 343,551
------------ ------------ ------------ ------------
Net loss $ (4,667,881) $ (3,629,504) $(14,136,599) $(13,967,824)
============ ============ ============ ============
Net loss per
common share:
Net loss per
common share
- basic and
diluted $ (0.13) $ (0.13) $ (0.43) $ (0.51)
============ ============ ============ ============
Weighted
average
common shares
outstanding -
basic and
diluted 34,867,255 28,539,732 33,006,127 27,578,861
============ ============ ============ ============
HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, December 31,
2007 2006
------------ ------------
ASSETS
CURRENT ASSETS:
Cash $ 5,787,585 $ 2,311,781
Accounts receivable, less allowance for
doubtful accounts $59,106 and $26,436 1,720,014 2,197,523
Deferred compensation advances 578,372 684,998
Prepaid expenses 182,087 107,995
Other current assets 22,285 11,011
------------ ------------
Total current assets 8,290,343 5,313,308
Restricted cash 1,150,000 1,150,000
Property and equipment, net of accumulated
depreciation $1,115,562 and $511,985 1,592,480 1,483,411
Intangibles, net of accumulated
amortization $3,108,771 and $1,668,181 5,095,960 4,108,833
Other assets 165,871 181,900
------------ ------------
Total assets $ 16,294,654 $ 12,237,452
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,483,064 $ 1,160,254
Accrued expenses 1,406,641 1,427,628
Current portion of capital lease
obligations 14,707 --
Due to related parties 28,500 63,672
Unearned commission advances 8,450,585 5,155,117
Deferred revenue 209,125 --
Income tax payable 157,288 --
------------ ------------
Total current liabilities 11,749,910 7,806,671
------------ ------------
LONG TERM LIABILITIES:
Capital lease obligations 44,241 --
------------ ------------
Total long term liabilities 44,241 --
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock ($.001 par value;
10,000,000 shares authorized; no shares
issued and outstanding) -- --
Common stock ($.001 par value; 90,000,000
shares authorized; 34,951,384 and
28,586,471 shares issued and outstanding 34,951 28,586
Additional paid-in capital 36,868,409 22,668,453
Accumulated deficit (32,402,857) (18,266,258)
------------ ------------
Deferred compensation -- (1,810,676)
------------ ------------
Total shareholders' equity 4,500,503 4,430,781
------------ ------------
Total liabilities and shareholders'
equity $ 16,294,654 $ 12,237,452
============ ============
HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
--------------------------
2007 2006
------------ ------------
Cash Flows From Operating Activities:
Net loss $(14,136,599) $(13,967,824)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 2,286,767 2,147,041
Stock-based compensation and consulting 1,772,031 2,162,498
Provision for bad debt (20,317) 49,029
Changes in assets and liabilities:
Accounts receivable 1,140,843 (2,052,291)
Deferred compensation advances 106,626 (511,302)
Prepaid expenses (71,944) (87,520)
Other current assets (11,274) (11,011)
Other assets (61,308) (159,241)
Accounts payable 288,532 778,942
Accrued expenses (143,662) 1,015,564
Due to related parties (35,172) (144,082)
Unearned commission advances 3,295,468 4,268,178
Deferred revenue 51,837 --
Income tax payable 37,288 --
------------ ------------
Net cash used in operating activities (5,500,884) (6,512,019)
------------ ------------
Cash Flows From Investing Activities:
Purchase of property and equipment (555,787) (1,595,176)
Purchase of intangible assets and
capitalization of software development (1,331,233) (1,603,994)
------------ ------------
Net cash used in investing activities (1,887,020) (3,199,170)
------------ ------------
Cash Flows From Financing Activities:
Capital leases obligations assumed 19,081 --
Gross proceeds from capital leases 41,875 --
Payments on capital leases (2,008) --
Gross proceeds from sales of common stock 11,250,000 6,450,000
Gross proceeds from exercise of warrants 450,000 675,000
Gross proceeds from exercise of stock
options -- 300,000
Restricted cash in connection with letters
of credit -- (1,150,000)
Placement and other fees paid in connection
with offering (895,240) (285,826)
Proceeds from line of credit --
Payment on notes payable -- (399,630)
------------ ------------
Net cash provided by financing activities 10,863,708 5,589,544
------------ ------------
Net increase (decrease) in cash 3,475,804 (4,121,645)
Cash - beginning of year 2,311,781 6,433,426
------------ ------------
Cash - end of year $ 5,787,585 $ 2,311,781
============ ============