RADNOR, Pa., March 31, 2009 (GLOBE NEWSWIRE) -- Health Benefits Direct Corporation (OTCBB:HBDT), a leading technology innovator in the marketing, sales and administration of a range of insurance products, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2008.
Fourth Quarter Highlights
* Revenues of $5.6 million, compared to $6.0 million in the fourth quarter of 2007, due to reduced marketing and selling activity in Telesales. * Operating expenses decreased to $7.2 million from $10.6 million in the fourth quarter of 2007 as a result of cost cutting initiatives completed earlier in the year. * Net loss of $1.6 million, or ($0.04) per share, compared with a net loss of $4.5 million, or ($0.13) per share, in the fourth quarter of 2007. * At December 31, 2008, the Company had a cash balance of $1.8 million, total assets of $8.7 million and total shareholders' equity of $1.9 million.
Fiscal Year Highlights
* Revenues increased 17% to $24.1 million, compared to $20.7 million in fiscal 2007, due to $5.6 million in revenues from Atiam offset by lower Telesales revenues. * Revenues of $97,177 from Insurint, the Company's proprietary, professional-grade web-based agent portal introduced to the market this year. * Net loss of $9.0 million, or $0.23 per share, compared with a net loss of $14.1 million, or $0.43 per share, in fiscal 2007. * Net decrease in cash of $3.9 million in fiscal 2008, compared to a net increase of $3.5 million for fiscal 2007. The decrease in cash in 2008 was the result of net cash of $5.2 million from financing activities, which included $5 million from a private placement of common stock and warrants to certain institutional investors, less $8.3 million of net cash used in operations and $0.8 million of net cash used in investing activities.
Anthony Verdi, Acting Principal Executive Officer of Health Benefits Direct and Chief Financial Officer, commented, "We are very pleased with the significant progress we made during 2008 in restructuring our operations and executing on our strategic plan to better position the Company for long-term growth and profitability. By focusing on our technology businesses and exiting the agency segment of our business, we believe we are well positioned for future growth in our core markets. Additionally, we implemented strategic cost reductions to decrease our operating costs, and these efforts are reflected in our improved fourth quarter financial results.
"We remain confident about the growth potential of our technology platforms, which are gaining increasing acceptance in the market. We now have nine InsPro clients, and we are pleased with the progress we are making in growing this business. We recently enhanced the quoting capability of Insurint by adding more than 100 insurance companies to that platform and have also launched a powerful new integrated co-browsing tool."
Subsequent Events
* Raised $4 million from a private placement of preferred stock and warrants on January 21, 2009 to an institutional investor. * Transferred the majority of its existing health insurance members and agreed to refer all of its ongoing health insurance prospects to an unaffiliated third party on February 20, 2009. * Received $1.3 million in cash, of which $1.0 million was used to repay certain liabilities and transferred $1.4 million of liabilities in exchange for the transfer of its existing health insurance members and referrals of its ongoing health insurance prospects. This business represents approximately 66% of the Company's total revenues. * Ceased the direct marketing and sale of health and life insurance and related products to individuals and families and reduced staff. * The Company's cash balance at February 28, 2009 was $4.5 million.
Anthony Verdi remarked, "We completed another major step in the Company's restructuring with the sale of its agency business. We are now focused on providing InsPro and Insurint the financial support and resources needed to demonstrate the strength of these growing technology businesses."
About Health Benefits Direct Corporation
Through its subsidiary, Atiam 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.
HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31, December 31, 2008 2007 ----------- ----------- ASSETS CURRENT ASSETS: Cash $ 1,842,419 $ 5,787,585 Accounts receivable, less allowance for doubtful accounts $2,173 and $59,106 919,868 1,720,014 State tax receivable 31,290 -- Deferred compensation advances 36,186 578,372 Prepaid expenses 177,833 182,087 Other current assets 8,461 22,285 ----------- ----------- Total current assets 3,016,057 8,290,343 Restricted cash 1,150,000 1,150,000 Property and equipment, net of accumulated depreciation $1,545,150 and $1,115,562 1,163,948 1,592,480 Intangibles, net of accumulated amortization $4,859,779 and $3,108,771 3,198,407 5,095,960 Other assets 180,641 165,871 ----------- ----------- Total assets $ 8,709,053 $16,294,654 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 912,751 $ 1,483,064 Accrued expenses 2,030,948 1,406,641 Current portion of capital lease obligations 89,297 14,707 Sub-tenant security deposit 39,093 -- Due to related parties 4,315 28,500 Unearned commission advances 3,022,161 8,450,585 Deferred revenue 457,500 209,125 Income tax payable -- 157,288 ----------- ----------- Total current liabilities 6,556,065 11,749,910 ----------- ----------- LONG TERM LIABILITIES: Deferred tax liability -- -- Capital lease obligations 209,511 44,241 ----------- ----------- Total long term liabilities 209,511 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; 41,279,645 and 34,951,384 shares issued and outstanding 41,279 34,951 Additional paid-in capital 43,281,139 36,868,409 Accumulated deficit (41,378,941) (32,402,857) ----------- ----------- Total shareholders' equity 1,943,477 4,500,503 ----------- ----------- Total liabilities and shareholders' equity $ 8,709,053 $16,294,654 =========== =========== HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months For the Years Ended Ended December 31, December 31, ------------------------- ------------------------- 2008 2007 2008 2007 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Revenues $ 5,629,551 $ 6,005,203 $ 24,128,027 $ 20,709,750 Operating Expenses: Salaries, commission and related taxes 3,128,724 5,214,749 17,132,830 17,544,167 Lead, advertising and other marketing 482,687 2,516,253 4,390,483 8,489,695 Depreciation and amortization 616,494 655,585 2,568,145 2,286,767 Rent, utilities, telephone and communications 1,371,976 786,436 3,509,713 2,720,735 Professional fees 988,503 784,762 2,948,503 2,062,107 Loss on impairment of property and equipment -- -- 88,922 -- Loss on impairment of intangible asset 85,078 -- 380,711 125,000 Other general and administrative 570,268 651,194 2,072,431 1,934,320 ------------ ------------ ------------ ------------ 7,243,730 10,608,979 33,091,738 35,162,791 ------------ ------------ ------------ ------------ Loss from operations (1,614,179) (4,603,776) (8,963,711) (14,453,041) ------------ ------------ ------------ ------------ Other income (expense): Gain (Loss) on disposal of property and equipment 45,895 -- (46,479) (2,592) Interest income 6,794 70,743 73,913 350,707 Interest expense (11,903) (9,848) (39,807) (31,673) ------------ ------------ ------------ ------------ Total other income (expense) 40,786 60,895 (12,373) 316,442 ------------ ------------ ------------ ------------ Net loss $ (1,573,393)$ (4,542,881)$ (8,976,084)$(14,136,599) ============ ============ ============ ============ Net loss per common share: Net loss per common share - basic and diluted $ (0.04)$ (0.13)$ (0.23)$ (0.43) ============ ============ ============ ============ Weighted average common shares outstanding - basic and diluted 41,279,645 34,867,255 39,734,505 33,006,127 ============ ============ ============ ============ HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, ---------------------------- 2008 2007 ------------ ------------- Cash Flows From Operating Activities: Net loss $ (8,976,084) $ (14,136,599) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,568,145 2,286,767 Stock-based compensation and consulting 1,516,686 1,772,031 Loss on impairment of property and equipment 88,922 -- Loss on impairment of intangible assets 380,711 -- Loss on the disposal of property and equipment 46,479 -- Provision for bad debt 46,748 (20,317) Changes in assets and liabilities: Accounts receivable 753,398 1,140,843 State tax receivable (31,290) -- Deferred compensation advances 542,186 106,626 Prepaid expenses 4,254 (71,944) Other current assets 13,824 (11,274) Other assets (14,770) (61,308) Accounts payable (570,313) 288,532 Accrued expenses 599,301 (143,662) Sub-tenant security deposit 39,093 -- Due to related parties (24,185) (35,172) Unearned commission advances (5,428,424) 3,295,468 Deferred revenue 248,375 51,837 Income tax payable (157,288) 37,288 ------------ ------------- Net cash used in operating activities (8,354,232) (5,500,884) ------------ ------------- Cash Flows From Investing Activities: Purchase of property and equipment (533,661) (555,787) Proceeds from the sale of property and equipment 64,950 -- Purchase of intangible assets and capitalization of software development (291,847) (1,331,233) ------------ ------------- Net cash used in investing activities (760,558) (1,887,020) ------------ ------------- Cash Flows From Financing Activities: Capital leases obligations assumed -- 19,081 Gross proceeds from capital leases 282,271 41,875 Payments on capital leases (42,409) (2,008) Gross proceeds from sales of common stock 5,000,000 11,250,000 Gross proceeds from exercise of warrants -- 450,000 Placement and other fees paid in connection with offering (70,238) (895,240) ------------ ------------- Net cash provided by financing activities 5,169,624 10,863,708 ------------ ------------- Net increase (decrease) in cash (3,945,166) 3,475,804 Cash - beginning of the year 5,787,585 2,311,781 ------------ ------------- Cash - end of the year $ 1,842,419 $ 5,787,585 ============ =============