UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K |
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 8, 2018
Commission File Number: 001-36568
HEALTHEQUITY, INC. | ||
Delaware | 7389 | 52-2383166 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) | ||
15 West Scenic Pointe Drive
Suite 100
Draper, Utah 84020
(801) 727-1000
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 Regulation FD Disclosure.
On January 8, 2018, HealthEquity, Inc. (the "Company") issued a press release, attached as Exhibit 99.1 to this current report on Form 8-K, announcing its estimated year-end sales results for its fiscal year 2018 ending January 31, 2018 and that it will present at the 36th Annual J.P. Morgan Healthcare Conference in San Francisco, California on January 10, 2018, at 2:00 PM Pacific Time. A live audio webcast of the presentation along with a copy of the Company's presentation material from the conference will be available through the investor page at the Company website and a copy of the presentation is also attached hereto as Exhibit 99.2 and incorporated herein by reference.
The information in Exhibit 99.1 and 99.2 is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HEALTHEQUITY, INC. | |||
Date: January 8, 2018 | By: | /s/ Darcy Mott | |
Name: | Darcy Mott | ||
Title: | Executive Vice President and Chief Financial Officer | ||
EXHIBIT INDEX
Exhibit no. | Description | |
99.1 | ||
99.2 | ||
HealthEquity Announces Strong Sales,
Presentation at JP Morgan Healthcare Conference
Draper, Utah - (GLOBE NEWSWIRE) - January 8, 2018 - HealthEquity, Inc. (NASDAQ: HQY) (“HealthEquity” or the “Company”), the nation’s largest health savings account (“HSA") non-bank custodian, today announced significant growth in its health plan / administrator network partners and employers served, and provided estimates of HSA members and custodial assets for its fiscal year ending on January 31, 2018.
– | The number of HealthEquity health plan / administrator network partners has reached 124, up 43% during fiscal year 2018. |
– | The number of employers served by HealthEquity exceeds 40,000, up approximately 6,000 during fiscal year 2018. |
– | The Company estimates that HSA members will grow to between 3.3 million and 3.4 million by January 31, 2018, up from 2.7 million a year earlier. |
– | The Company estimates that custodial assets will grow to between $6.4 billion and $6.5 billion by January 31, 2018, up from $5.0 billion a year earlier. |
HealthEquity will discuss these results and estimates during its presentation at the 36th Annual JP Morgan Healthcare Conference on Wednesday, January 10, 2018, at the Westin St. Francis hotel in San Francisco. Jon Kessler, President and Chief Executive Officer, and Darcy Mott, Executive Vice President and Chief Financial Officer, will discuss HealthEquity in a presentation scheduled to begin at 2:00 PM Pacific Time and will be available for one-on-one meetings throughout the conference.
A live audio webcast of the presentation along with a copy of the presentation slides will be available and archived on HealthEquity’s investor relations website at http://ir.healthequity.com.
About HealthEquity
Founded in 2002, HealthEquity is the nation's largest health savings account non-bank custodian. The company's innovative technology platform and tax-advantaged accounts help members build health savings, while controlling health care costs. HealthEquity services more than 3 million health savings accounts for 124 health plan and benefit administrator network partners and employees at more than 40,000 companies across the United States.
Forward-looking statements
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 but not limited to, statements regarding the Company’s industry, business strategy, plans, goals and expectations concerning our market position, product expansion, future operations, revenue, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the control of the Company. The Company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, the continued availability of tax-advantaged consumer-directed benefits to employers and employees, the Company’s ability to acquire and retain new network partners and to cross-sell its products to existing network partners and members, the Company’s ability to successfully identify, acquire and integrate additional portfolio purchases or acquisition targets, the Company’s ability to raise awareness among employers and employees about the advantages of adopting and participating in consumer-directed benefits programs, and the Company’s ability to identify and execute on network partner opportunities. For a detailed discussion of these and other risk factors, please refer to the risks detailed in the Company’s filings with the Securities and Exchange Commission, including, without limitation, the most recent Annual Report on Form 10-K and subsequent periodic and current reports. Past performance is not necessarily indicative of future results. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.
Investor Relations Contact:
Richard Putnam
801-727-1209
rputnam@healthequity.com
Copyright © 2017 HealthEquity, Inc. All rights reserved.
Investor presentation
JP Morgan Healthcare Conference January 2018
Safe Harbor
2
This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes.
This presentation is a summary of information contained in our public filings filed with the Securities and Exchange Commission (SEC), which public filings
are expressly incorporated herein by reference (see http://ir.healthequity.com/), and other publicly available information. Readers are encouraged to review
our public filings for further information.
This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to
management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations
concerning our market position, product expansion, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and
other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,”
“should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent
our management’s beliefs and assumptions only as of the date of this presentation. Our actual future results may be materially different from what we expect. Except as
required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those
anticipated in the forward-looking statements, even if new information becomes available in the future. Readers are encouraged to review our public filings with the SEC
for further disclosure of other factors that could cause actual results to differ materially from those indicated in any forward-looking statements included herein.
This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our
industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.
This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided a reconciliation of those
measures to the most directly comparable GAAP measures, which is available in our public filings.
No part of this presentation may be copied, recorded, or rebroadcast in any form.
Investment highlights
3
1. HealthEquity data measured for fiscal years 2014 to 2017
2. Based on Devenir Research HSA reports December 31, 2010-2016
Key metrics
4
0%
100%
200%
300%
400%
500%
600%
700%
FY14 FY15 FY16 FY17 YTD FY18 TTM
C
u
m
ula
ti
ve
Gro
w
th
1. For the fiscal year ended January 31, 2017
2. Balances as of October 31, 2017
Revenue
Adj. EBITDA
HSAs
Custodial Assets
Rising first dollar responsibility
5
The differences among health plans are narrowing as all plans
trend toward higher deductibles
10-Year
CAGR
Deductible:
HMO PPO POS HDHP
Source: Kaiser Family Foundation 2017 Survey report – September 2017
13.7% 9.2% 7.1% 2.3%
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Deductible for Family Plan
HMO PPO POS HDHP HDHP min
Our core – health savings accounts
6
$6,900
Maximum family HSA contribution
$1,900
Average premium savings1
$1,417
Average employer contribution1
SOURCE: 1. Kaiser Family Foundation, 2017 Employee Benefits Survey
2. MEDACorp Survey referenced in Leerink 2017 Outlook report December 12, 2016.
6%
9%
11% 11%
14%
15%
19% 19%
8%
7%
7% 7% 6% 6% 6% 6%
2010 2011 2012 2013 2014 2015 2016 2017
HSA plan penetration1
Commercial healthcare inflation2
Expanding market
7 1. Devenir HSA Report 6/30/20172. Management estimate
Growing market share
8
4%
7%
8%
9% 9%
11%
13%
4%
6%
7%
8%
9%
10%
12%
2010 2011 2012 2013 2014 2015 2016
Rank
Based on Devenir Research HSA reports December 31, 2010-2016
HealthEquity HSAs market share
UNH
20%
HQY
12%
WBS
14%
All
Others
54%
Custodial assets
UNH
16%
HQY
13%
WBS
11%
All
Others
60%
HSAs
#7 #6 #4/5 #4/5 #4/5 #4/3 #2/3
By custodial assets
By HSA
Proprietary end-to-end platform
9 HealthEquity data as of January 31, 2017
FY 18 sales results
10
• Largest HSA take
away
• Preferred relationship
agreements with
Blue Cross Blue
Shield Association
and Health Plan
Alliance
• Renewal of
Anthem partnership
Powerful monetization
11
Service
Card
Cash
Investing
Service
40%
Custodial
38%
Interchange
22%
FY18 YTD*
Service
50%
Custodial
31%
Interchange
19%
FY14
*Nine months as of October 31, 2017
Growing forward
12
1. Kaiser Family Foundation Annual Survey 2017
2. Devenir Research HSA report, December 31, 2016
3. Management estimate based on HealthEquity HSAs as a percent of eligible employees within enterprise employers
Account balance growth by age
13
$7,457
$6,783
$5,493
$4,588
$4,059
$3,595
$3,053
$2,464
$2,061 $1,710 $1,355 $1,232
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
12/31/16 12/31/15 12/31/14 12/31/13 12/31/12
Average balance by year the account opened*
* Devenir Research HSA report December 31, 2016
Value of mature accounts
14
$1,595
$4,544 $3,914 $240
$9,993
$1,835
$320
$4,544
$13,907
AVG HSA SPENDER CONFIDENT CONSUMER HEALTHY SAVER
NOTE: HealthEquity data as of January 31, 2017
Rising above
15
1. Data as of January 31, 2017
2. Devenir Research HSA report, December 31, 2016
3. Management estimate as of January 31, 2017
4. HealthEquity data as of October 31, 2017
3rd quarter operating results
16
HSAs (000s)
• New organic Q3 HSAs of 109K vs 89K YoY
• An additional 14K FIBK HSAs
• 27% Q3 growth in ending HSAs YoY
• Net increase of $1.3B YoY
• 30% growth YoY
NOTE: Historic performance depicted is not necessarily indicative of past and future performance. For more information, see our Company’s public filings with the Securities and Exchange Commission
2,308
3,713
4,593
385
571
987
2,693
4,284
5,580
Q3 FY16 Q3 FY17 Q3 FY18
Cash Assets Investment Assets
Custodial Assets ($M)
1,108
1,602
2,378
494
776
635
1,602
2,378
3,013
Q3 FY16 Q3 FY17 Q3 FY18
Net new HSAs
3rd quarter financial results
17
NOTE: Historic performance depicted is not necessarily indicative of past and future performance. For more information, see our Company’s public filings with the Securities and Exchange Commission
(1) See Appendix for a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA.
• 31% Q3 revenue growth YoY
- 22% Q3 growth in Service Revenue
- 48% Q3 growth in Custodial Revenue
- 22% Q3 growth in Interchange Revenue
• 46% Adjusted EBITDA growth Q3 YoY
• Q3 Gross margins 59%
• Q3 Operating margins 24%
Revenue ($M)
Three Months
$30.6
$43.4
$56.8
FY16 FY17 FY18
$90.9
$131.6
$169.1
FY16 FY17 FY18
Nine Months
$31.8
$51.0
$67.6
FY16 FY17 FY18
Adjusted EBITDA
(1)
($M)
$9.9
$14.5
$21.2
FY16 FY17 FY18
Three Months Nine Months
Capitalization
18
($ in millions) January 31, 2017 October 31, 2017
Cash, cash equivalents
& marketable securities $180.4 $225.1
Long-term debt ($100M available LOC) $0.0 $0.0
Total equity $261.9 $334.4
NOTE: For more information, see our public filings with the Securities and Exchange Commission.
Guidance
19
Business Outlook
For the Fiscal Year Ending January 31, 2018
Guidance as of:
($ in millions, except per share) December 5, 2017
* September 5, 2017 June 6, 2017 March 21, 2017
Revenue $225 - $228 $223 – $228 $222 - $227 $220 - $225
Non-GAAP Net Income** $39 - $41 $39 - $43 $38 - $42
Non-GAAP EPS diluted** $0.64 - $0.66 $0.64 - $0.68 $0.62 - $0.67
Adjusted EBITDA** $80 - $83 $79 – $84 $78 - $83 $77 - $82
*Guidance issued in press release dated December 5, 2017. We do not undertake to update this guidance, which speaks only as of the date given.
** See press release on December 5, 2017, for a reconciliation of net income, the most comparable GAAP measure, to Non-GAAP Net Income, Non-GAAP EPS and Adjusted EBITDA.
