SOURCE: Health Benefits Direct Corp.

November 14, 2006 16:16 ET

Health Benefits Direct Corporation Announces Third Quarter 2006 Financial Results

RADNOR, PA -- (MARKET WIRE) -- November 14, 2006 -- Health Benefits Direct Corporation (OTCBB: HBDT), a leading innovator in the direct marketing and distribution of a wide range of health and life insurance products to individuals, today announced its results of operations for the third quarter and nine months ended September 30, 2006.

Third Quarter Results

Net revenues for the three months ended September 30, 2006 increased 473% to $3,222,434 as compared to $562,497 for the three months ended September 30, 2005. The increase in net revenues is primarily the result of the company's business expansion driven in part by a year-over-year increase in the number of licensed insurance agents employed by Health Benefits Direct from approximately 34 at September 30, 2005 to approximately 90 at September 30, 2006, and a year-over-year increase in the number of insurance products being sold.

Operating expenses for the three months ended September 30, 2006 totaled $7,334,578 as compared to $1,380,785 for the three months ended September 30, 2005. The primary factors contributing to the increase in operating expenses included 1) higher salaries, wages and commissions associated with the increase in total employees from 85 at September 30, 2005 to 232 at September 30, 2006, 2) higher lead expense associated with the increased number of licensed agents employed by the company, 3) expenses associated with new offices opened within the past year, and 4) higher general and administrative expense associated with the substantial increase in operational activities as compared with the third quarter of 2006.

Net loss for the three months ended September 30, 2006 was $(4,061,475), or $(0.14) per basic and diluted share, as compared to a net loss of $(824,620), or $(0.11) per basic and diluted share, for the three months ended September 30, 2005.

Year-to-date Results

Net revenues for the nine months ended September 30, 2006 increased 335% to $7,082,413 as compared to $1,627,330 for the nine months ended September 30, 2005. Operating expenses for the nine months ended September 30, 2006 totaled $17,721,684 as compared to $3,546,529 for the nine months ended September 30, 2005. Net loss for the nine months ended September 30, 2006 was $(10,338,320), or $(0.38) per basic and diluted share, as compared to a net loss of $(1,937,989), or $(0.25) per basic and diluted share, for the nine months ended September 30, 2005.

At September 30, 2006, Health Benefits Direct had a cash balance of $3,073,100, total shareholders' equity of $7,910,831 and no long-term debt.

"Through the successful execution of our organic growth plan, we achieved another quarter of solid sequential and year-over-year revenue growth," stated Scott Frohman, Chief Executive Officer. "During the third quarter, we expanded our life insurance portal with leading life carriers, added highly-rated health insurance carriers, expanded the number of health insurance products that we offer, and continued to improve our portal technologies and processes to further enhance our customer value proposition.

"During the fourth quarter and beyond, we are accelerating our implementation of multi-channel marketing objectives and pursuing product line development through selective carrier mix expansion. To date, we have invested in ample capacity to address our escalating market opportunity, and we remain focused on strategies to reduce our cash burn as we grow into our infrastructure and increase our operating leverage. We believe we are well positioned for continued growth as we reinforce our position as a premier individual health and life insurance agency for individuals and families."

About Health Benefits Direct Corporation

Health Benefits Direct Corporation is a contact center-based insurance agency that operates an online marketplace enabling consumers to shop for, compare, and purchase individual health and life insurance and related products for individuals and families. Health Benefits Direct's sales platform combines its proprietary, integrated online technology and dialing application to connect consumers who express an interest in purchasing health or life insurance or related products with its knowledgeable, licensed agents housed in one of its contact center locations. www.hbdc.com or 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 company's marketing plans, its financial position, anticipated growth and the execution of its business strategy and plans. Forward-looking statements provide Health Benefits Direct's current expectations or forecasts of future events. Actual events could differ materially from those reflected in these forward-looking statements due to Health Benefits Direct Corporation's ability to successfully implement its marketing objectives, product line development and carrier mix expansion initiatives, and strategies to reduce cash burn and increase operating leverage. 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 Nine Months Ended
                         September 30,                September 30,
                   --------------------------  ---------------------------
                       2006          2005           2006          2005
                   ------------  ------------  -------------  ------------
                    (Unaudited)   (Unaudited)    (Unaudited)   (Unaudited)

Revenues, net      $  3,222,434  $    562,497  $   7,082,413  $  1,627,330


Operating Expenses:
  Salaries,
   commission and
   related taxes      3,880,233       830,123      9,376,924     1,912,233
  Lead expense        1,456,159       190,637      2,889,930       491,876
  Depreciation and
   amortization         645,802        21,447      1,485,115        59,515
  Professional fees     143,429        63,388        855,105        81,576
  Management
   salaries -
   related parties            -       157,500              -       472,500
  Other general and
   administrative     1,208,955       117,690      3,114,610       528,829
                   ------------  ------------  -------------  ------------

                      7,334,578     1,380,785     17,721,684     3,546,529
                   ------------  ------------  -------------  ------------

Loss from
 operations          (4,112,144)     (818,288)   (10,639,271)   (1,919,199)
                   ------------  ------------  -------------  ------------

Other income (expense):
   Loss on disposal
    of property and
    equipment              (339)            -           (339)            -
   Registration
    rights penalty
    reversal                  -             -         60,537             -
   Interest income       54,638             -        258,220             -
   Interest expense      (3,630)       (6,332)       (17,467)      (18,790)
                   ------------  ------------  -------------  ------------

      Total other
       Income
       (expense)         50,669        (6,332)       300,951       (18,790)
                   ------------  ------------  -------------  ------------

Net loss           $ (4,061,475) $   (824,620) $ (10,338,320) $ (1,937,989)
                   ============  ============  =============  ============

Net loss per common
 share:
   Net loss per
    common share -
    basic and
    diluted        $      (0.14) $      (0.11) $       (0.38) $      (0.25)
                   ============  ============  =============  ============

Weighted average
 common shares
 outstanding -
 basic and diluted   28,254,578     7,800,000     27,351,853     7,800,000
                   ============  ============  =============  ============



              HEALTH BENEFITS DIRECT CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEET


                                          September 30,     December 31,
                                               2006             2005
                                         ---------------  ---------------
                                           (Unaudited)
                   ASSETS

CURRENT ASSETS:
  Cash                                   $     3,073,100  $     6,433,426
  Accounts receivable, less allowance
   for doubtful accounts of $16,532 and
   $16,032                                     1,486,914          194,261
  Deferred compensation advances                 686,193          173,696
  Prepaid expenses                               403,380                -
  Other current assets                            17,611                -
                                         ---------------  ---------------

     Total current assets                      5,667,198        6,801,383

Restricted cash                                1,154,504  $             -
Property and equipment, net of
 accumulated depreciation of $384,423
 and $98,577                                   2,253,126          274,061
Intangibles, net of accumulated
 amortization of $1,145,764 and $16,000        4,330,624          133,456
Other assets                                     169,851           22,659
                                         ---------------  ---------------

     Total assets                        $    13,575,303  $     7,231,559
                                         ===============  ===============

   LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Line of credit                         $             -  $       399,630
  Accounts payable                               771,896          381,312
  Accrued expenses                               824,916          410,524
  Due to related parties                         276,680          207,754
  Unearned commission advances                 3,790,980          886,939
                                         ---------------  ---------------

     Total current liabilities                 5,664,472        2,286,159
                                         ---------------  ---------------

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;
   28,603,083 and 20,241,471 shares
   issued and outstanding                         28,603           20,241
  Additional paid-in capital                  24,765,020        9,315,260
  Accumulated deficit                        (14,636,754)      (4,298,434)
  Deferred compensation                       (2,246,038)         (91,667)
                                         ---------------  ---------------

     Total shareholders' equity                7,910,831        4,945,400
                                         ---------------  ---------------

     Total liabilities and shareholders'
      equity                             $    13,575,303  $     7,231,559
                                         ===============  ===============

Contact Information

  • Contact:
    Brandi Piacente
    The Piacente Group
    Tel: 212-481-2050
    Email: Email Contact