Exhibit 99.1
Unaudited Pro Forma Combined Statement of Operations
For the Nine Months Ended September 30, 2014
($ in 000’s, except share and per share data)
| Health Insurance Innovations, Inc. Historical | Health Pocket, Inc. Historical (through July 14, 2014) | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
Revenues (consolidated premium equivalents of $110,375 and pro forma premium equivalents of $111,083, respectively, for the nine months ended September 30, 2014) | $ | 62,228 | $ | 863 | $ | (155 | ) (a) | $ | 62,936 | |||||||
Cost of revenues | (397 | ) | (134 | ) | — | (531 | ) | |||||||||
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Gross margin | 61,831 | 729 | (155 | ) | 62,405 | |||||||||||
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Operating expenses: | ||||||||||||||||
Third-party commissions | 30,577 | — | — | 30,577 | ||||||||||||
Credit cards and ACH fees | 1,367 | — | — | 1,367 | ||||||||||||
Selling, general and administrative | 27,478 | 1,122 | (155 | ) (a) | 28,445 | |||||||||||
| 723 | (b) | 723 | ||||||||||||||
| (520 | ) (c) | (520 | ) | |||||||||||||
Depreciation and amortization | 1,723 | 3 | 918 | (d) | 2,644 | |||||||||||
| 404 | (e) | 404 | ||||||||||||||
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Total operating expenses | 61,145 | 1,125 | 1,370 | 63,640 | ||||||||||||
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Loss from operations | 686 | (396 | ) | (1,525 | ) | (1,235 | ) | |||||||||
Other expense (income): | ||||||||||||||||
Interest (income) expense | (17 | ) | 48 | (48 | ) (f) | (17 | ) | |||||||||
Other expense | 957 | — | — | 957 | ||||||||||||
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Net loss before income taxes | (254 | ) | (444 | ) | (1,477 | ) | (2,175 | ) | ||||||||
Provision from income taxes | (205 | ) | — | (1,550 | ) (g) | (1,755 | ) | |||||||||
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Net income (loss) | (49 | ) | (444 | ) | 73 | (420 | ) | |||||||||
Net income (loss) attributable to noncontrolling interests | 364 | — | (56 | ) (h) | 308 | |||||||||||
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Net income (loss) attributable to Health Insurance Innovations, Inc. | $ | (413 | ) | $ | (444 | ) | $ | 129 | $ | (728 | ) | |||||
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Per share data: | ||||||||||||||||
Net income (loss) per share attributable to Health Insurance Innovations, Inc. | ||||||||||||||||
Basic | $ | (0.07 | ) | $ | (0.13 | ) | ||||||||||
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Diluted | $ | (0.07 | ) | $ | (0.13 | ) | ||||||||||
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Weighted average Class A shares outstanding | ||||||||||||||||
Basic | 5,538,422 | 5,538,422 | ||||||||||||||
Diluted | 5,538,422 | 5,538,422 | ||||||||||||||
| (a) | To eliminate revenues and costs incurred in transactions between HII and HealthPocket. |
| (b) | To record stock compensation expense that would have incurred from the employees of HealthPocket. |
| (c) | To adjust for acquisition-related expenses incurred during the nine months ended September 30, 2014. |
| (d) | To record amortization expense on acquired intangible assets. |
| (e) | To record compensation expense that would have been paid to Telkamp and Wang pursuant to employment agreements entered into with HII. |
| (f) | To adjust for interest expense incurred during the nine months ended September 30, 2014. |
| (g) | To record the income tax effect on the pro forma earnings before income taxes. The Pro forma adjustment for income tax reflects an effective tax rate of 80.7% for the nine months ended September 30, 2014. |
| (h) | To adjust for the effects of the pro forma adjustments described herein on the allocation of net loss to noncontrolling interests. |