-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CenTcq2Z8cbsCubB42Eo4RdXkgUA9bSdFxOL2jnZ8PoBTv30xLxWVKuZJ27+nocm D0tN59BWsgekJzdN5XGlbQ== 0000950109-97-003824.txt : 19970512 0000950109-97-003824.hdr.sgml : 19970512 ACCESSION NUMBER: 0000950109-97-003824 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOOPER HOLMES INC CENTRAL INDEX KEY: 0000741815 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 221659359 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09972 FILM NUMBER: 97599402 BUSINESS ADDRESS: STREET 1: 170 MT AIRY RD CITY: BASKING RIDGE STATE: NJ ZIP: 07920 BUSINESS PHONE: 9087665000 MAIL ADDRESS: STREET 1: 170 MT AIRY ROAD CITY: BASKING RIDGE STATE: NJ ZIP: 07920 10-Q 1 FORM 10-Q FORM 10Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1997 Commission File No. 1-9972 Hooper Holmes, Inc. ------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 22-1659359 - ----------------------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 170 Mt. Airy Rd., Basking Ridge, NJ 07920 - ----------------------------------------------- ----------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (908) 766-5000 None - -------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --------------- -------------- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class Outstanding at March 31, 1997 - ------------------------------ ------------------------------------ Common stock, $.04 par value 6,829,056 HOOPER HOLMES, INC. AND SUBSIDIARIES INDEX
Page No. -------- PART I - Financial Information (1996 Audited) ITEM 1 - Financial Statements Consolidated Balance Sheets 1 as of March 31, 1997 and December 31, 1996 Consolidated Statements of Income 2 for the Three Months Ended March 31, 1997 and 1996 Consolidated Statements of Cash Flows 3 for the Three Months Ended March 31, 1997 and 1996 Notes to Financial Statements 4 ITEM 2 - Management's Discussion and Analysis 5,6 of Financial Condition and Results of Operations PART II - Other Information ITEM 6 - Exhibits and Reports on Form 8-K Exhibit 27
Hooper Holmes, Inc. Consolidated Balance Sheets
03/31/97 12/31/96 ---------------------- ---------------------- (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 2,415,696 $ 2,936,447 Accounts receivable - trade 19,972,405 17,035,255 Accounts receivable - other 165,915 1,095,772 Refundable taxes 1,178,535 1,230,198 Other current assets 3,763,234 3,474,226 --------------------- --------------------- Total current assets 27,495,785 25,771,898 Property, plant and equipment: Land and land improvements 571,314 571,314 Building 3,548,523 3,545,546 Furniture, fixtures and equipment 14,927,969 14,782,996 Leasehold improvements 296,157 296,157 --------------------- --------------------- Total property, plant and equipment 19,343,963 19,196,013 Less: Accumulated depreciation 10,320,091 9,712,650 --------------------- --------------------- Net property, plant and equipment 9,023,872 9,483,363 Cost in excess of net assets of acquired companies 15,733,250 15,948,735 Intangible assets 8,955,049 9,394,485 Other assets 566,100 697,185 --------------------- --------------------- Total assets $ 61,774,056 $ 61,295,666 ===================== ===================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long term debt $ 1,950,000 $ 1,030,000 Accounts payable 5,838,279 6,168,864 Accrued expenses: Insurance benefits 1,767,837 1,536,315 Salaries, wages and fees 1,459,548 1,264,739 Payroll and other taxes 218,820 167,013 Income taxes payable 1,873,263 334,879 Discontinued operations 973,156 1,287,700 Other 3,004,446 2,175,651 --------------------- --------------------- Total current liabilities 17,085,349 13,965,161 Long term debt, less current maturities 1,000,000 5,250,000 Deferred income taxes 4,192,421 4,361,049 Common stock 273,120 271,658 Additional paid-in capital 25,033,119 24,645,945 Retained earnings 14,208,549 12,820,355 --------------------- --------------------- 39,514,788 37,737,958 Less: Treasury stock 18,502 18,502 --------------------- --------------------- Total stockholders' equity 39,496,286 37,719,456 --------------------- --------------------- Total liabilities and stockholders' equity $ 61,774,056 $ 61,295,666 ===================== =====================
See accompanying notes to consolidated financial statements. -1- Hooper Holmes, Inc. Consolidated Statements Of Operations (unaudited)
Three months ended March 31, ------------------------------------------- 1997 1996 -------------------- --------------------- Revenues $ 40,713,867 $ 38,611,000 Cost of operations 29,647,270 29,413,988 -------------------- --------------------- Gross profit 11,066,597 9,197,012 SG & A expenses 8,103,029 7,823,618 -------------------- --------------------- Operating income 2,963,568 1,373,394 Other income (expense) Interest expense (83,121) (578,817) Interest income 29,532 181,433 Other 46,064 71,438 -------------------- --------------------- (7,525) (325,946) -------------------- --------------------- Income before income taxes 2,956,043 1,047,448 Income taxes 1,432,000 502,000 -------------------- --------------------- Net income $ 1,524,043 $ 545,448 ==================== ===================== Earnings per share: Weighted average number of shares 6,798,575 6,712,141 Net income $ 0.22 $ 0.08 ==================== =====================
See accompanying notes to consolidated financial statements. -2- Hooper Holmes, Inc. Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31, ---------------------------------------------- 1997 1996 ---------------- --------------- Cash flows from operating activities: Income from continuing operations $ 1,524,043 $ 545,448 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,272,089 1,316,309 Provision for bad debt expense 120,000 95,000 Deferred tax (benefit) expense (168,628) 0 Issuance of stock awards 0 31,875 Loss on sale of fixed assets 1,262 0 Change in assets and liabilities, net of effect from acquisitions / dispositions of businesses: Accounts receivable (2,127,291) 2,777,274 Other current assets (157,923) (273,022) Income tax receivable 51,663 350,000 Accounts payable and accrued expenses 2,200,189 (4,420,187) ---------------- -------------- Net cash provided by operating activities 2,715,404 422,697 ---------------- -------------- Cash flows from investing activities: Net proceeds from dispositions 0 9,794,043 Capital expenditures, net of disposals (158,941) (215,058) ---------------- -------------- Net cash (used in) provided by investing activities (158,941) 9,578,985 ---------------- -------------- Cash flows from financing activities: Issuance of long term debt 0 2,500,000 Principal payments on long term debt (3,330,000) (13,500,000) Proceeds related to the exercise of stock options 388,635 0 Dividends paid (135,849) (67,146) ---------------- -------------- Net cash used in financing activities (3,077,214) (11,067,146) ---------------- -------------- Net decrease in cash and cash equivalents (520,751) (1,065,464) Cash and cash equivalents at beginning of year 2,936,447 1,065,464 ---------------- -------------- Cash and cash equivalents at end of period $ 2,415,696 $ 0 ================ ==============
See accompanying notes to consolidated financial statements. -3- HOOPER HOLMES, INC. Notes to Financial Statements March 31, 1997 Note 1: Basis of Presentation The financial information included herein is unaudited unless otherwise indicated; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K. The results of operations for the three month period ended March 31, 1997 are not necessarily indicative of the results to be expected for the full year. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information. Note 2: Earnings Per Share Earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the respective periods as outlined in Part I. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share ("EPS"), which is effective as of December 31, 1997. This standard changes the way companies compute EPS to require all companies to show "basic" and "dilutive" EPS and is to be retroactively applied, including each 1997 interim quarter. The statement is not expected to have a material effect on the calculation of EPS as, under current accounting standards, the dilutive EPS calculation is not more than 3% different than the basic calculation. - 4 - HOOPER HOLMES, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation Results of Operation - Three months ended March 31, 1997 compared to Three months ended March 31, 1996 Revenues for the first quarter of 1997 were $40.7 million compared to $38.6 million for the first quarter of 1996, an increase of 5.4%. This growth results primarily from increases in revenues per unit of service performed. Certain revenue sources reviewed and discontinued in 1996 contributed approximately $1.0 million in revenue in the first quarter 1996 that were not sources in 1997. The Company's cost of operations for the first quarter of 1997 totaled $29.6 million compared to $29.4 million for the first quarter of 1996. Cost of operations as a percentage of revenues, decreased from 76.2% for the first quarter of 1996 to 72.8% for the first quarter of 1997. As a percentage of revenues, the decrease is due to ongoing efforts to reach the optimum number of branches, control branch operating expenses, and the efficiencies realized from the integration of ASB Meditest. Selling, general and administrative expenses totaled $8.1 million as compared to $7.8 million for the first quarters of 1997 and 1996, respectively, and as a percentage of revenue totaled 19.9% compared to 20.3%. As a percentage of revenues, the decrease is due to ongoing efforts to control corporate level expenses and in 1997 includes no residual ASB corporate costs that were in 1996. Accordingly, the Company's operating income improved to $3.0 million from $1.4 million and as a percentage of revenues, increased to 7.3% from 3.6% for the first quarter of 1997 compared to the first quarter of 1996. Interest expenses decreased in the first quarter of 1997 to $.1 million compared to $.6 million for the first quarter of 1996, due to lower amounts borrowed. Long term debt at March 31, 1997 was $1.0 million compared to $22.7 million as of March 31, 1996. The remaining $1.0 million was paid down in April. Net income and earnings per share for the first quarter of 1997 were $1,524,000 or $.22 per share versus $545,000 or $.08 per share for the first quarter of 1996. Average shares for the respective periods were 6,798,575 and 6,712,141. - 5 - Financial Condition The Company's primary sources of cash are internally generated funds and the Company's bank credit facility. Net cash provided by operating activities for the first quarter of 1997 was $2.7 million compared to $.4 million for the first quarter of 1996. The significant sources were income from continuing operations of $1.5 million, $1.3 million of depreciation and amortization, $2.2 million of accounts payable and accrued expenses and was partially offset by a $2.1 million increase in accounts receivable returning to a more traditional level. Our revolver credit facility was $1.0 million at March 31, 1997, compared to $20.8 million at March 31, 1996. As of March 31, 1997, a total credit line of $19.0 million is available under the revolver. The Company's current ratio at the end of March 1997 stood at 1.6:1 as compared to 1.8:1 at December 31, 1996. Also, inflation has not, nor is it expected to have a material impact on the Company's financial results in 1997 and there have been no material commitments for capital expenditures. Dividends declared in January 1997 were declared at $.02 per share. Management believes that the combination of cash and cash equivalents, other working capital sources, and borrowings under the Company's credit facility, along with the anticipated cash flows from continuing operations, will provide sufficient capital resources for the foreseeable future. - 6 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Hooper Holmes, Inc. Dated: May 9, 1997 BY: ------------------------------------ James M. McNamee President and Chief Executive Officer BY: ------------------------------------ Fred Lash Senior Vice President Chief Financial Officer & Treasurer EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated balance sheet of Hooper Holmes, Inc. and subsidiaries as of March 31, 1997 and the related consolidated statements of income and cash flows for the period ended March 31, 1997 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 2,415,696 0 20,810,805 838,400 0 27,495,785 19,343,963 10,320,091 61,774,056 17,085,349 1,000,000 0 0 273,120 39,223,166 61,774,056 40,713,867 40,713,867 29,647,270 29,647,270 8,103,029 120,000 83,121 2,956,043 1,432,000 1,524,043 0 0 0 1,524,043 0.22 0
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