BENEFYTT TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
($ in thousands, except share and per share data)
| March 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,051 | $ | 3,771 | ||||
| Restricted cash | 16,030 | 17,788 | ||||||
| Accounts receivable, net, prepaid expenses and other current assets | 7,361 | 2,911 | ||||||
| Income taxes receivable | 23,018 | 18,210 | ||||||
| Advanced commissions, net | 40,524 | 45,250 | ||||||
| Contract asset | 172,554 | 184,474 | ||||||
| Total current assets | 264,538 | 272,404 | ||||||
| Long-term contract asset | 207,675 | 209,239 | ||||||
| Property and equipment, net | 5,494 | 5,415 | ||||||
| Deferred tax asset | 645 | — | ||||||
| Right-of-use assets | 16,568 | 496 | ||||||
| Goodwill | 94,814 | 135,182 | ||||||
| Intangible assets, net | 25,473 | 28,963 | ||||||
| Other assets | 2,623 | 159 | ||||||
| Total assets | $ | 617,830 | $ | 651,858 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 45,568 | $ | 51,477 | ||||
| Commissions payable | 92,833 | 97,785 | ||||||
| Contingent consideration, current | 1,750 | — | ||||||
| Current portion of long-term debt, net | 9,488 | 10,684 | ||||||
| Operating lease liabilities, current | 1,466 | 237 | ||||||
| Other current liabilities | 296 | 557 | ||||||
| Total current liabilities | 151,401 | 160,740 | ||||||
| Commissions payable, long-term | 79,287 | 82,369 | ||||||
| Contingent consideration, long-term | 66,302 | 65,171 | ||||||
| Debt, net, long-term | 183,470 | 167,947 | ||||||
| Due to member | 34,142 | 29,121 | ||||||
| Deferred tax liability, net | — | 5,722 | ||||||
| Operating lease liabilities, long-term | 14,965 | 224 | ||||||
| Other liabilities | 330 | 590 | ||||||
| Total liabilities | 529,897 | 511,884 | ||||||
| Commitments and contingencies (Note 14) | ||||||||
| Stockholders’ equity: | ||||||||
| Class A common stock (par value $0.001 per share, 100,000,000 shares authorized; 17,119,217 and 16,219,217 shares issued as of March 31, 2020 and December 31, 2019, respectively; 13,203,527 and 12,273,630 shares outstanding as of March 31, 2020 and December 31, 2019, respectively) | 17 | 16 | ||||||
| Class B common stock (par value $0.001 per share, 20,000,000 shares authorized; 1,016,667 and 1,916,667 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively) | 1 | 2 | ||||||
| Preferred stock (par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively) | — | — | ||||||
| Additional paid-in capital | 131,943 | 118,465 | ||||||
| Treasury stock, at cost (3,915,690 and 3,945,587 shares as of March 31, 2020 and December 31, 2019, respectively) | (125,643 | ) | (127,400 | ) | ||||
| Retained earnings | 66,152 | 110,418 | ||||||
| Total Benefytt Technologies, Inc. stockholders’ equity | 72,470 | 101,501 | ||||||
| Noncontrolling interests | 15,463 | 38,473 | ||||||
| Total stockholders’ equity | 87,933 | 139,974 | ||||||
| Total liabilities and stockholders’ equity | $ | 617,830 | $ | 651,858 | ||||
BENEFYTT TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows (unaudited)
($ in thousands)
| Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities: | ||||||||
| Net (loss) income | $ | (49,815 | ) | $ | 2,182 | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Stock-based compensation | 2,627 | 1,816 | ||||||
| Fair value adjustment to contingent acquisition consideration | 2,881 | — | ||||||
| Loss on disposal of assets | 73 | — | ||||||
| Provision for allowance for doubtful accounts | 116 | 13 | ||||||
| Impairment of assets | 41,076 | — | ||||||
| Depreciation and amortization | 4,345 | 1,132 | ||||||
| Deferred financing costs | 202 | — | ||||||
| Deferred income taxes | (4,838 | ) | 191 | |||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable, prepaid expenses and other assets | (6,914 | ) | 275 | |||||
| Decrease (increase) in advanced commissions | 4,610 | (196 | ) | |||||
| Increase in income taxes receivable | (4,808 | ) | — | |||||
| Increase in right-of-use asset | (16,072 | ) | (639 | ) | ||||
| Decrease (increase) in contract asset | 12,776 | (13,327 | ) | |||||
| Increase in lease liability | 15,893 | 538 | ||||||
| Decrease in accounts payable, accrued expenses and other liabilities | (5,353 | ) | (6,568 | ) | ||||
| (Decrease) increase in commission payable | (8,034 | ) | 6,387 | |||||
| Increase in income taxes payable, net | — | 2,452 | ||||||
| Net cash used in operating activities | (11,235 | ) | (5,744 | ) | ||||
| Investing activities: | ||||||||
| Business acquisition: release of hold-back | (1,000 | ) | — | |||||
| Capitalized internal-use software and website development costs | (501 | ) | (315 | ) | ||||
| Purchases of property and equipment | (429 | ) | (109 | ) | ||||
| Net cash used in investing activities | (1,930 | ) | (424 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from borrowings under credit agreement | 18,000 | 50,000 | ||||||
| Payments on borrowings under credit agreement | (3,875 | ) | — | |||||
| Payments related to tax withholding for share-based compensation | (1,526 | ) | (918 | ) | ||||
| Purchases of Class A common stock pursuant to share repurchase plan | — | (45,272 | ) | |||||
| Contributions (distributions) | 88 | (677 | ) | |||||
| Net cash provided by financing activities | 12,687 | 3,133 | ||||||
| Net decrease in cash and cash equivalents, and restricted cash | (478 | ) | (3,035 | ) | ||||
| Cash and cash equivalents, and restricted cash at beginning of period | 21,559 | 25,999 | ||||||
| Cash and cash equivalents, and restricted cash at end of period | $ | 21,081 | $ | 22,964 | ||||