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Fri, August 14, 2009 Health Benefits Direct Corporation: Health Benefits Direct Announces Second Quarter 2009 Financial Results
RADNOR, PA--(Marketwire - August 14, 2009) - Health Benefits Direct Corporation (
During the second quarter, the Company continued its previously announced restructuring activities. As part of these restructuring efforts, in the first quarter of 2009, the Company ceased selling health and life insurance products to individuals and families and disposed of a significant portion of its agency business, which is now classified as discontinued operations in the Company's financial statements.
Second Quarter Highlights
-- Revenues from continuing operations of $1.5 million, compared to $1.4 million in the second quarter of 2008, due primarily to increased InsPro revenues from consulting, ASP and maintenance agreements. -- Operating expenses for continuing operations of $3.5 million, compared to $3.1 million in the second quarter of 2008, primarily attributable to an increase in InsPro Technologies' (formerly Atiam Technologies LLC) staffing and technology consultants to support current client requirements, future needs and growth plans. -- Net loss from continuing operations of $2.0 million, compared to $1.7 million in the second quarter of 2008. This increase is consistent with the Company's strategy to enhance InsPro Technologies' capacity by increasing expenditures for marketing, sales, infrastructure and product development. -- Negotiated a new sublease agreement and recorded an abandoned lease accrual of $2.0 million for our Florida office, which is reported in loss from discontinued operations. -- Atiam Technologies renamed to InsPro Technologies. -- At June 30, 2009, the Company had a cash balance of $2.1 million, total assets of $6.6 million and total shareholders' equity of $1.5 million.
"Throughout the second quarter, we made further progress with our restructuring initiatives where our goal is to focus on our technology businesses and reduce expenses," said Anthony Verdi, Acting Principal Executive Officer of Health Benefits Direct and Chief Financial Officer. "Among our major accomplishments in the second quarter was the successful negotiation of a new sublease for the majority of our Florida office space. This agreement expands a current tenant's sublease to approximately 30,000 out of 50,000 square feet, which we anticipate will significantly mitigate the future cash outflow for the Florida office. This new agreement is effective in the third quarter and continues through February 2011. As a result of this revised sublease we recorded an approximate $2.0 million accrual for our future obligations for the Florida office in the second quarter.
"With the greater portion of our occupancy expenses covered through two subleases and the unreimbursed costs of the Florida and New York offices accounted for, we are now better positioned to focus resources on our promising technology platforms and execute our strategy to maximize our earnings potential and create shareholder value," Mr. Verdi concluded.
About Health Benefits Direct Corporation
Through its subsidiary, InsPro Technologies, Health Benefits Direct offers InsPro software, an internet-based marketing and administration system used by Insurance carriers and Third Party Administrators. Through its subsidiary, Insurint Corporation, Health Benefits Direct provides a proprietary, professional-grade, web-based agent quote engine portal that aggregates real-time quotes from more than 100 health insurance carriers, life insurance carriers and carriers of related insurance products. [ www.healthbenefitsdirect.com ]
Forward-Looking Statements
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 growth potential of our technology platforms and providing the financial support and resources needed to demonstrate the strength of these growing technology businesses. 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 from the statements made, including risks described in Health Benefit Direct's most recent Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K filed with the Securities and Exchange Commission and available on Health Benefits Direct's website at [ www.healthbenefitsdirect.com ]. These documents are also available on the Securities and Exchange Commission's website at [ www.sec.gov ]. Health Benefits Direct does not undertake any obligation to update any forward-looking statement to conform the statement to actual results or changes in expectations.
- financial tables to follow -
HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, December 2009 31, 2008 ----------- ----------- (Unaudited) ASSETS CURRENT ASSETS: Cash $ 2,084,769 $ 1,842,419 Accounts receivable, less allowance for doubtful accounts $1,069 and $0 683,628 461,875 Tax receivable 26,290 31,290 Prepaid expenses 123,433 126,804 Other current assets 885 8,461 ----------- ----------- Total current assets 2,919,005 2,470,849 Restricted cash 1,150,000 1,150,000 Property and equipment, net of accumulated depreciation $377,144 and $267,384 918,167 729,881 Intangibles, net of accumulated amortization $1,410,496 and $1,021,187 1,499,763 1,911,461 Other assets 110,608 110,607 ----------- ----------- Total assets $ 6,597,543 $ 6,372,798 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Note payable $ 29,351 $ - Accounts payable 482,830 733,128 Accrued expenses 994,752 697,255 Current portion of capital lease obligations 128,524 89,297 Due to related parties - 4,315 Unearned commission advances - - Deferred revenue 524,223 457,500 Liabilities of discontinued operations 2,699,450 2,238,315 ----------- ----------- Total current liabilities 4,859,130 4,219,810 ----------- ----------- LONG TERM LIABILITIES: Deferred tax liability - - Capital lease obligations 270,350 209,511 ----------- ----------- Total long term liabilities 270,350 209,511 ----------- ----------- SHAREHOLDERS' EQUITY: Preferred stock ($.001 par value; 10,000,000 shares authorized; Series A convertible preferred stock; 3,437,500 shares authorized, 1,000,000 shares issued and outstanding (liquidation value $10,000,000)) 2,038,944 - Common stock ($.001 par value; 200,000,000 shares authorized; 41,279,645 shares issued and outstanding) 41,279 41,279 Additional paid-in capital 45,601,829 43,281,139 Accumulated deficit (46,213,989) (41,378,941) ----------- ----------- Total shareholders' equity 1,468,063 1,943,477 ----------- ----------- Total liabilities and shareholders' equity $ 6,597,543 $ 6,372,798 =========== =========== HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended For the Six Months Ended June 30, June 30, -------------------------- -------------------------- 2009 2008 2009 2008 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ 1,535,271 $ 1,409,467 $ 3,257,710 $ 2,694,790 Operating Expenses: Salaries, employee benefits and related taxes 1,820,438 1,782,906 4,346,395 3,568,869 Advertising and other marketing 37,384 20,770 141,109 23,800 Depreciation and amortization 287,045 221,030 565,407 505,515 Rent, utilities, telephone and communications 205,847 157,247 411,317 320,242 Professional fees 811,066 573,944 1,507,545 1,058,272 Other general and administrative 381,614 349,465 716,233 791,257 ------------ ------------ ------------ ------------ 3,543,394 3,105,362 7,688,006 6,267,955 ------------ ------------ ------------ ------------ Loss from operations (2,008,123) (1,695,895) (4,430,296) (3,573,165) ------------ ------------ ------------ ------------ Gain (loss) from discontinued operations (1,559,871) 342,814 (383,027) (2,127,044) Other income (expense): Interest income 10,200 22,229 22,311 52,735 Interest expense (23,985) (11,605) (44,036) (16,215) ------------ ------------ ------------ ------------ Total other income (expense) (13,785) 10,624 (21,725) 36,520 ------------ ------------ ------------ ------------ Net loss $ (3,581,779) $ (1,342,457) $ (4,835,048) $ (5,663,689) ============ ============ ============ ============ Net loss per common share - basic and diluted: Loss from operations $ (0.05) $ (0.04) $ (0.11) $ (0.09) Gain (loss) from discontinued operations (0.04) 0.01 (0.01) (0.06) ------------ ------------ ------------ ------------ Net loss per common share - basic and diluted $ (0.09) $ (0.03) $ (0.12) $ (0.15) ============ ============ ============ ============ Weighted average common shares outstanding - basic and diluted 41,279,645 41,808,004 41,279,645 38,410,827 ============ ============ ============ ============ HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, -------------------------- 2009 2008 ------------ ------------ (Unaudited) (Unaudited) Cash Flows From Operating Activities: Net loss $ (4,835,048) $ (5,663,689) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 565,407 505,784 Stock-based compensation and consulting 310,691 1,371,632 Loss on impairment of property and equipment of discontinued operations 416,764 88,922 Loss on impairment of intangible assets of discontinued operations 1,222,817 295,633 Gain on the disposal of property and equipment of discontinued operations (10,228) - Provision for bad debt 16,048 63,850 Changes in assets and liabilities: Accounts receivable (237,801) (433,388) Tax receivable 5,000 (36,212) Deferred compensation advances - - Prepaid expenses 3,371 (143,720) Other current assets 7,576 9,477 Other assets - 1,729 Accounts payable (250,298) 96,925 Accrued expenses 297,497 (320,644) Sub-tenant security deposit - - Due to related parties (4,315) (28,500) Unearned commission advances - - Deferred revenue 66,723 (149,125) Income tax payable - (157,288) Liabilities of discontinued operations (1,168,218) (49,410) ------------ ------------ Net cash used in operating activities (3,594,014) (4,548,025) ------------ ------------ Cash Flows From Investing Activities: Purchase of property and equipment (288,930) (234,945) Proceeds from the sale of property and equipment of discontinued operations 11,495 - Purchase of intangible assets and capitalization of software development - (267,202) ------------ ------------ Net cash used in investing activities (277,435) (502,147) ------------ ------------ Cash Flows From Financing Activities: Gross proceeds from note 32,831 - Payments on note (3,481) - Gross proceeds from capital leases 154,025 126,097 Payments on capital leases (53,959) (12,207) Gross proceeds from sales of preferred stock 4,000,000 - Gross proceeds from sales of common stock - 5,000,000 Fees paid in connection with offering (15,617) (70,238) ------------ ------------ Net cash provided by financing activities 4,113,799 5,043,652 ------------ ------------ Net increase (decrease) in cash 242,350 (6,520) Cash - beginning of the year 1,842,419 5,787,585 ------------ ------------ Cash - end of the period $ 2,084,769 $ 5,781,065 ============ ============
