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eHealth, Inc. Announces Preliminary Results For The Fourth Quarter And Fiscal Year 2018 And Provides 2019 Annual Guidance

eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance exchange in the United States, today announced preliminary financial results and select operating metrics for the fourth quarter and fiscal year ended December 31, 2018 and provided 2019 annual guidance.

“We are very pleased with our operational achievements and financial results for the fourth quarter and the full year 2018,” commented Scott Flanders, chief executive officer of eHealth. “Our strong execution during the critical Medicare Annual Enrollment Period validated eHealth’s value proposition for this important market and has allowed us to exceed our revenue and EBITDA expectations for 2018. We expect to maintain this momentum as reflected in our 2019 annual guidance.”

Fourth Quarter and Fiscal Year 2018 Preliminary Results

Revenue for the fourth quarter of 2018 is expected to be in the range of $133.5 million to $135.5 million with expected fourth quarter revenue from the Medicare segment in the range of $121.0 million to $122.0 million. GAAP net income for the fourth quarter of 2018 is expected to be in the range of $24.3 million to $27.3 million. Adjusted EBITDA(a) for the fourth quarter of 2018 is expected to be in the range of $51.7 million to $52.7 million.

For the year ended December 31, 2018, eHealth anticipates revenue to be in the range of $250 million to $252 million as compared to the company’s guidance of $217.5 million to $227.5 million. Revenue from the Medicare segment for the full year 2018 is expected to be in the range of $210 million to $211 million. eHealth anticipates GAAP net income (loss) for the year ended December 31, 2018 to be in the range of $(1.5) million to $1.5 million as compared to the company’s guidance of $1.6 million to $6.6 million. eHealth anticipates Adjusted EBITDA(a) for the year ended December 31, 2018 to be in the range of $33.5 million to $34.5 million as compared to the company’s guidance of $21.9 millionto $26.9 million.

2018 GAAP Net Income includes a non-cash charge of approximately $12 million related to an increase in fair value of the earnout liability assumed in connection with eHealth’s acquisition of GoMedigap. The increase is driven primarily by eHealth’s share price appreciation since the transaction closed in January of 2018. The share price appreciation has increased the value of the equity-based portion of the earnout consideration owed to the former holders of GoMedigap equity interests.

Submitted applications for all Medicare products grew 64% during the fourth quarter of 2018 compared to the fourth quarter a year ago. For the full year 2018, submitted Medicare applications grew 39% compared to the full year 2017. Approximately 22% and 16% of Medicare major medical applications (b) submitted during the fourth quarter and the full year 2018 respectively were submitted online.

Submitted applications for individual and family plan (IFP) products declined 45% during the fourth quarter of 2018 compared to the fourth quarter a year ago. For the full year 2018, submitted IFP applications declined 56% compared to 2017. The decline in IFP applications reflects continuing volatility in the Individual market as well as our decision to shift our marketing spend towards Medicare.

These preliminary, unaudited results are based on information available as of January 22, 2019 and management's initial review of operations for the quarter ended December 31, 2018. They remain subject to change based on management's ongoing review of the company's fourth-quarter results and are forward-looking statements. eHealth assumes no obligation to update these statements. The actual results may be materially different and are affected by the risk factors and uncertainties identified in this release and in eHealth’s annual and quarterly filings with the Securities and Exchange Commission. eHealth anticipates providing its full financial and operating results for 2018 on or about February 24, 2019.

2019 Guidance

The company is providing the following guidance for the full year ending December 31, 2019 based on information available as of January 22, 2019. These expectations are forward-looking statements, and eHealth assumes no obligation to update these statements. Actual results may be materially different and are affected by the risk factors and uncertainties identified in this release and in eHealth’s annual and quarterly filings with the Securities and Exchange Commission:

  • Total revenue is expected to be in the range of $290 million to $310 million. Revenue from the Medicare segment is expected to be in the range of $256 million to $272 million.
  • GAAP net income is expected to be in the range of $16.3 million to $21.3 million.
  • Adjusted EBITDA(a) is expected to be in the range of $45 million to $50 million.
(a)   Adjusted EBITDA is calculated by adding stock-based compensation expense, depreciation and amortization expense, acquisition costs, amortization/impairment of intangible assets, other income (expense), net and provision (benefit) for income taxes to GAAP net income (loss). See “Non-GAAP Financial Information and Reconciliations.”
     
(b)   Major Medicare plans include Medicare Advantage and Medicare Supplement plans.
     

 

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