-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZQn6695g7Bv4AmVUFClaSfsdkygHKSgFeiqlHW28h1qG+ql3tpFrVOTvGMs6LBoU yR62dzbNCh+cAtxckXpJ9Q== 0000950110-95-000398.txt : 19950516 0000950110-95-000398.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950110-95-000398 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOOPER HOLMES INC CENTRAL INDEX KEY: 0000741815 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] 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: 95539729 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 10Q PERIOD ENDED MARCH 31, 1995 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, 1995 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, 1995 - ---------------------------- ----------------------------- Common stock, $.04 per value 6,702,560 HOOPER HOLMES, INC. AND SUBSIDIARIES INDEX Page No. -------- PART I - Financial Information (1994 Audited) ITEM 1 - Financial Statements Consolidated Balance Sheets 1,2 as of March 31, 1995 and December 31, 1994 Consolidated Statements of Income 3 for the Three Months Ended March 31, 1995 and 1994 Consolidated Statements of Cash Flows 4 for the Three Months Ended March 31, 1995 and 1994 Notes to Financial Statements 5 ITEM 2 - Management's Discussion and Analysis 6,7 of Financial Condition and Results of Operations PART II - Other Information ITEM 6 - Exhibits and Reports on Form 8-K 8 PART I - Financial Information (1994 Audited) HOOPER HOLMES, INC. CONSOLIDATED BALANCE SHEETS 03/31/95 12/31/94 ------------ ------------ ASSETS Current Assets Cash & Cash Equivalents ..................... $ -- $ 1,695,844 Accounts Receivable ......................... 66,648,791 66,476,298 Prepaid Expenses ............................ 2,658,916 3,407,813 ------------ ------------ Total Current Assets ...................... 69,307,707 71,579,955 ------------ ------------ Property, Plant and Equipment Land and Land Improvements .................. 567,947 567,947 Building .................................... 3,434,743 3,432,655 Furniture, Fixtures & Equipment ............. 11,774,391 11,172,750 Leasehold Improvements ...................... 317,398 307,579 ------------ ------------ Total Property, Plant & Equipment ........... 16,094,479 15,480,931 Less Accumulated Depreciation ............... 7,626,927 7,266,408 ------------ ------------ Net Property, Plant & Equipment ............. 8,467,552 8,214,523 Costs in Excess of Net Assets of Acquired Companies.......................... 22,669,405 23,137,237 Intangible Assets ................................ 2,394,475 2,470,947 Other Assets ..................................... 2,322,946 2,893,254 ------------ ------------ Total Assets ..................................... $105,162,085 $108,295,916 ============ ============ -1- HOOPER HOLMES, INC. CONSOLIDATED BALANCE SHEETS 03/31/95 12/31/94 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current Maturities of Long Term Debt .... $ 2,500,000 $ 2,150,000 Accounts Payable ........................ 5,661,562 6,386,762 Accrued Expenses: Insurance Benefits ................. 170,056 279,158 Salaries, Wages and Fees ........... 1,785,534 2,100,127 Payroll and Other Taxes ............ 2,262,097 1,962,525 Income Taxes Payable ............... 179,506 450,518 Other .............................. 4,766,658 2,137,476 ------------ ------------ Total Current Liabilities ............... 17,325,413 15,466,566 Long Term Debt, Less Current Maturities ...... 41,476,942 46,326,942 Stockholders' Equity: Common Stock ............................ 269,777 269,777 Additional Paid in Capital .............. 24,114,410 24,114,410 Retained Earnings ....................... 22,446,692 22,589,370 ------------ ------------ 46,830,879 46,973,557 Less: Treasury Stock ................... 471,149 471,149 ------------ ------------ Total Stockholders' Equity .............. 46,359,730 46,502,408 ------------ ------------ Total Liabilities & Stockholders' Equity ..... $105,162,085 $108,295,916 ============ ============ -2- HOOPER HOLMES, INC. CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended March 31 --------------------------------- 1995 1994 ------------ ------------ Revenues ............................... $ 64,250,978 $ 61,915,041 Cost of Operations ..................... 52,361,131 50,580,986 ------------ ------------ Gross Profit ........................... 11,889,847 11,334,055 ------------ ------------ Selling, General and Administrative .... 10,942,854 8,896,987 ------------ ------------ Operating Profit ....................... 946,993 2,437,068 ------------ ------------ Other Income (Expense) Interest Expense ..................... (989,580) (386,124) Interest Income ...................... 154,038 54,713 ------------ ------------ (835,542) (331,411) ------------ ------------ Income before Taxes .................... 111,451 2,105,657 Income Taxes ........................... 53,000 916,500 ------------ ------------ Net Income ............................. $ 58,451 $ 1,189,157 ============ ============ Earnings per Share: Weighted Average Number of Shares .. 6,702,560 6,708,585 Net Income ......................... $ 0.01 $ 0.18 ============ ============ -3- HOOPER HOLMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31 ------------------------ 1995 1994 ---------- ---------- Cash flows from operating activities: Net Income ..................................... $ 58,451 $1,189,157 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ................ 924,235 855,242 Provision for bad debt expense ............... 415,293 224,357 Change in assets and liabilities: Accounts receivable .......................... (587,786) (7,997,801) Prepaid expenses and other assets ............ 1,319,205 (208,613) Accounts payable and accrued expenses ........ 1,508,846 1,660,904 ---------- ---------- Net cash provided by (used in) operating activities ................................... 3,638,244 (4,276,754) ---------- ---------- Cash flows from investing activities: Capital expenditures, net of disposals ......... (632,959) (320,832) ---------- ---------- Net cash used in financing activities .......... (632,959) (320,832) ---------- ---------- Cash flows from financing activities: Issuance of long term debt ..................... 2,500,000 3,500,000 Principal Payments of long term debt ........... (7,000,000) 0 Proceeds from exercise of stock options ........ 0 15,472 Dividends paid ................................. (201,129) (503,085) ---------- ---------- Net cash (used in) provided by financing activities ......................... (4,701,129) 3,012,387 ---------- ---------- Net decrease in cash and cash equivalents ........ (1,695,844) (1,585,199) Cash and cash equivalents at beginning of year ... 1,695,844 1,585,199 ---------- ---------- Cash and cash equivalents at end of period ....... $ 0 $ 0 ========== ========== -4- HOOPER HOLMES, INC. Notes to Financial Statements (Unaudited) March 31, 1995 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 results of operations for the three month period ended March 31, 1995 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. -5- HOOPER HOLMES, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation Results of Operation--Three months ended March 31, 1995 compared to Three months ended March 31, 1994 Revenues for the first quarter of 1995 were $64,251,000 compared to $61,915,000 for the first quarter of 1994, an increase of 3.8%. This revenue increase evolves from both of our business segments and is as follows: 1st Qtr. 1st Qtr. (000's) 1995 1994 Increase ------- -------- --------- -------- Healthcare Svcs. $40,254 $39,253 2.6% Health Information Svcs. 23,997 22,662 5.9% The first quarter 1995 increase in healthcare services revenue is attributed to our certified healthcare area. In Portamedic, the health information services division, revenue grew 5.9% for the first quarter 1995 versus 1994. With the continued objective of enhancing or maintaining margins, revenue sources with less than expected margins are being reviewed. This, to some extent, is temporary limiting the overall growth in revenues. The Company's direct cost of operations, as a percentage of revenues, was 81.5% during the first quarter of 1995 compared to 81.7% during the first quarter of 1994 or from $50.6 million in 1994 to $52.4 million in 1995. Increased Medicare stepdown of home office costs helped stabilize this percentage relationship. As healthcare services revenue continues to constitute an increased percentage of our total revenue, this cost of operations percentage will increase. Pricing pressures on both sides of our business continue to contribute to this level of revenue growth. Selling, general and administrative (SG&A) expenses, as a percentage of revenues, were 17.0% during the first quarter of 1995 versus 14.4% during the first quarter of 1994. This percentage increase results from a $2.1 million increase in first quarter 1995 SG&A over first quarter 1994. This increase in healthcare SG&A resulted from additional selling, legal, regulatory and billing and collection personnel to service the increased healthcare business resulting from the Norrell acquisition. The lesser increase in health information SG&A is primarily from allocated home office SG&A expenses. Operating profit for the first quarter 1995 decrease 61% to $947,000 as a result of the above increase in SG&A. The operating profit for the first quarter 1995 from health information services was approximately $2 million versus an approximate loss from healthcare of $1.0 million. Interest expense for the first quarter 1995 versus the first quarter 1994 was up over $.6 million due to higher net borrowings and higher interest rates. Other income was up $100,000 for the same period due to interest income and deferred gain recognized on the payment of the note receivables that resulted from the sale of our Direct Marketing business in 1992. This resulted in net Income for the first quarter of 1995 being $58,000 as compared to $1,189,000 for the first quarter of 1994. Earnings per share for the first quarter of 1995 was $.01 per share versus $.18 in first quarter 1994. Average shares for the respective periods were 6,702,560 and 6,708,585. - 6 - Financial Condition The Company's primary sources of cash are the Company's bank credit facility and internally generated funds. As of March 31, 1995 we reduced our total debt by $4.5 million compared to December 31, 1994. Days sales outstanding (DSO), a measure of accounts receivable efficiency, improved 14 days and 3 days respectively for healthcare and health information. Overall healthcare receivables decreased over $2 million in the first quarter 1995. That decrease is approximately equally split between our Medicare/Medicaid receivables and all other receivables. The Company renegotiated its revolving credit facility and increased it from $25 to $30 million, amended certain financial covenants and changed to base rate less 1/4% pricing. As of March 31, 1995, there was $21.3 borrowed of this facility. The Company's current ratio at the end of the first three months of 1995 was 4.0 to 1 compared to 3.1 to 1 at 3/31/94 and 4.6 to 1 at 12/31/94. The Company closed the first quarter with over $51.9 million of working capital available. Inflation has not nor is it expected to have a material impact on the company's results in 1995 nor have there been any material commitments for capital expenditures. Dividends per share were decreased from $0.75 per share for the first quarter 1994 to $.03 for the first quarter 1995 and $.01 for the second quarter 1995. Management believes that the combination of existing working capital available under the Company's credit facility and anticipated cash flows from operations will provide sufficient capital resources in the short term. Due to our increase in accounts receivable, management has initiated several steps to maximize the generation of cash in the short term, and will explore other financing options. The Company has recently retained Bear Stearns Inc. to assist the Company in evaluating and pursuing various alternatives with respect to the Nurse's House Call division, including the possible sale of the division. - 7 - Part II - Other Information ITEM 6: Exhibits and Reports on Form 8-K Page No. -------- Exhibit 27 10 -8- 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 15, 1995 BY: JAMES M. McNAMEE -------------------------- President and Chief Executive Officer BY: FRED LASH -------------------------- Senior Vice President Chief Financial Officer & Treasurer -9- EX-27 2 FDS, FOR QUARTER ENDING 3/31/95
5 1 3-MOS DEC-31-1995 MAR-31-1995 0 0 69,972,692 3,323,901 0 69,307,707 16,094,479 7,626,927 105,162,085 17,325,413 41,476,942 269,777 0 0 46,089,953 105,162,085 64,250,978 64,405,016 52,361,131 52,361,131 10,527,561 415,293 989,580 111,451 53,000 58,451 0 0 0 58,451 $0.01 $0.01
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