-----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, ReEXeeg0CVJGHCpUflt2pBUQMqGpY2qduSdF6XvOu9aIHeH2uKDfflBTizVA3Fjk ocJFJrTa/5oBKznt1qu4IA== 0000950130-96-001655.txt : 19960514 0000950130-96-001655.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950130-96-001655 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 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: 96561496 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 (FIRST QUARTER) 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, 1996 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, 1996 - ---------------------------- ----------------------------- Common stock, $.04 per value 6,712,114 HOOPER HOLMES, INC. AND SUBSIDIARIES INDEX Page No. -------- PART I - Financial Information (1995 Audited) ITEM 1 - Financial Statements Consolidated Balance Sheets 1 as of March 31, 1996 and December 31, 1995 Consolidated Statements of Income 2 for the Three Months Ended March 31, 1996 and 1995 Consolidated Statements of Cash Flows 3 for the Three Months Ended March 31, 1996 and 1995 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 03/31/96 12/31/95 ------------- ------------- (Unaudited) (Audited) ASSETS Current Assets: Cash and cash equivalents $ - $ 1,065,464 Accounts receivable - trade 20,346,945 21,974,398 Accounts receivable - other 1,142,190 2,387,010 Escrow funds 5,205,957 15,000,000 Refundable income taxes 8,914,734 9,264,734 Other current assets 5,008,661 4,716,328 ------------- ------------- Total current assets 40,618,487 54,407,934 Property, plant and equipment: Land and land improvements 570,116 570,116 Building 3,471,186 3,465,876 Furniture, fixtures and equipment 14,161,237 13,955,687 Leasehold improvements 278,676 278,676 ------------- ------------- Total property, plant and equipment 18,481,215 18,270,355 Less: Accumulated depreciation 8,007,167 7,423,190 ------------- ------------- Net property, plant and equipment 10,474,048 10,847,165 Cost in excess of net assets of acquired companies 16,388,502 16,601,785 Intangible assets 10,711,148 10,589,722 Other assets 905,776 1,550,489 ------------- ------------- Total assets $ 79,097,961 $ 93,997,095 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long term debt $ 1,350,000 $ 8,800,000 Accounts payable 7,165,821 10,677,452 Accrued expenses: Insurance benefits 101,572 127,215 Salaries, wages and fees 374,222 596,886 Payroll and other taxes 265,013 740,678 Income taxes payable 501,591 0 Discontinued operations 3,700,234 4,380,023 Other 4,472,487 4,299,369 ------------- ------------- Total current liabilities 17,930,940 29,621,623 Long term debt, less current maturities 22,700,000 26,250,000 Deferred income taxes 4,824,831 4,993,459 ------------- ------------- Total other liabilities 27,524,831 31,243,459 Common stock 269,777 269,777 Additional paid-in capital 24,083,393 24,080,988 Retained earnings 9,616,703 9,138,401 ------------- ------------- 33,969,873 33,489,166 Less: Treasury stock 327,683 357,153 ------------- ------------- Total stockholders' equity 33,642,190 33,132,013 ------------- ------------- Total liabilities and stockholders' equity $ 79,097,961 $ 93,997,095 ============= ============= -1- HOOPER HOLMES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) YTD March 31, ------------------------------ 1996 1995 ------------- ------------- Revenues $ 38,611,000 $ 23,997,443 Cost of operations 29,413,988 17,981,211 ------------- ------------- Gross profit 9,197,012 6,016,232 Selling, general and administrative expenses 7,823,618 4,939,508 ------------- ------------- Operating income 1,373,394 1,076,724 Other income (expense) Interest expense (627,014) (369,330) Interest income 301,068 66,853 ------------- ------------- (325,946) (302,477) ------------- ------------- Income before income taxes 1,047,448 774,247 Income taxes 502,000 368,190 ------------- ------------- Income from continuing operations 545,448 406,057 ------------- ------------- Discontinued operations: Loss from operations, net of taxes 0 (347,606) Loss on disposal, net of taxes 0 0 ------------- ------------- Loss from discontinued operations 0 (347,606) ------------- ------------- Net income $ 545,448 $ 58,451 ============= ============= Earnings (loss) per share: Weigted average number of shares 6,712,114 6,702,502 Income from continuing operations 0.08 0.06 Loss from discontinued operations 0.00 (0.05) ------------- ------------- Net income $ 0.08 $ 0.01 ============= ============= -2- HOOPER HOLMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended March 31, ------------------------------ 1996 1995 -------------- ------------- Cash flows from operating activities: Income from continuing operations $ 545,448 $ 406,057 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 1,316,309 527,403 Provision for bad debt expense 95,000 107,502 Issuance of stock awards 31,875 0 Change in assets and liabilities, net of effect from acquisitions / dispositions of businesses: Accounts receivable 2,777,274 (1,630,419) Escrow funds 9,794,043 0 Income tax receivable 350,000 0 Other current assets (273,022) 712,725 Accounts payable and accrued expenses (3,740,398) 1,444,666 Accrued expenses -- discontinued operations (679,789) 0 -------------- ------------ Net cash provided by operating activities of continuing operations 10,216,740 1,567,934 -------------- ------------ Net cash provided by operating activities of discontinued operations 0 2,070,310 -------------- ------------ Net cash provided by operating activities 10,216,740 3,638,244 -------------- ------------ Cash flows from investing activities: Capital expenditures, net of disposals (215,058) (394,856) Net investing activities of discontinued operations 0 (238,103) -------------- ------------ Net cash used in investing activities (215,058) (632,959) -------------- ------------ Cash flows from financing activities: Issuance of long term debt 2,500,000 2,500,000 Principal payments on long term debt (13,500,000) (7,000,000) Dividends paid (67,146) (201,129) -------------- ------------ Net cash used in financing activities (11,067,146) (4,701,129) -------------- ------------ Net decrease in cash and cash equivalents (1,065,464) (1,695,844) Cash and cash equivalents at beginning of year 1,065,464 1,695,844 -------------- ------------ Cash and cash equivalents at end of period $ 0 $ 0 ============== ============
-3- HOOPER HOLMES, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1996 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, 1996 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. NOTE 3: DISCONTINUED OPERATIONS The 1995 consolidated financial statements exclude amounts for discontinued operations from captions applicable to continuing operations and have been restated to conform with the 1996 presentation. -4- HOOPER HOLMES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION RESULTS OF OPERATION - THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995 Revenues for the first quarter of 1996 were $38.6 million compared to $24.0 million for the first quarter of 1995, an increase of 60.9%. Management believes this growth results from a combination of its continued efforts to gain marketshare and approximately $13.0 million of acquired revenue from the ASB Meditest acquisition. The Company's cost of operations for the first quarter of 1996 totaled $29.4 million compared to $18.0 million for the first quarter of 1995. This increase in cost of sales results primarily from the added business of the ASB Meditest acquisition in September 1995, and higher branch operating expenses due largely to that acquisition. The Company believes that it may continue to realize additional branch operating savings as the planned consolidations of the ASB Meditest acquisition are finalized. Cost of operations as a percentage of revenues, increased from 74.9% for the first quarter of 1995 to 76.2% for the first quarter of 1996. Selling, general and administrative expenses totaled $7.8 million as compared to $4.9 million for the first quarter of 1996 and 1995, respectively, and as a percentage of revenue totaled 20.3% compared to 20.6%. The increase of $2.9 million is largely attributed to SG&A expenses related to ongoing ASB Meditest corporate functions. The Company believes that additional savings will be realized as the integration of ASB Meditest continues. Accordingly, the Company's operating income improved to $1.4 million from $1.1 million and as a percentage of revenues, decreased to 3.6% from 4.5% for the first quarter of 1996 compared to the first quarter of 1995. Interest expenses increased in the first quarter of 1996 to $.6 million compared to $.4 million for the first quarter of 1995, due to higher amounts borrowed. This increase was offset by certain other income items, primarily interest earned on the escrowed accounts receivable sold as part of the Nurse's House Call transaction in September 1995. Net income and earnings per share for the first quarter of 1996 were $545,000 or $.08 per share versus $406,000 or $.06 per share for the first quarter of 1995. Average shares for the respective periods were 6,712,114 and 6,702,502. -5- FINANCIAL CONDITION The Company has three primary sources of cash, it's bank credit facility, internally generated funds and the escrowed cash from the Olsten/ASB Meditest deal that closed in September 1995. Net cash provided by operations in the first quarter ended March 31, 1996 was $10.2 million. The primary source of this cash was $9.8 million from the escrow cash and $2.8 million from the reduction of ongoing accounts receivables. This was offset partly by a decrease in operating payables and accrued expenses due to temporarily higher levels at December 31, 1995 as a result of the NHC transaction. Our revolver credit facility stood at $31.5 million at December 31, 1995 and was reduced $10.7 million during the quarter. The revolver balance at March 31, 1996 was $20.8 million with a total credit line available under the revolver of $29.3 million. The balance of escrow cash at the start of the year was $15.0 million and at the close of the first quarter of 1996 was $5.2 million. Due to the loss on the sale of Nurse's House Call operations in 1995, the Company anticipates an income tax refund in the second half of 1996 of approximately $9.0 million. The Company's current ratio at the end of March 1996 stood at 2.3:1 as compared to 1.8:1 at December 31, 1995. Also, inflation has not, nor is it expected to have a material impact on the Company's financial results in 1996 and there have been no material commitments for capital expenditures. Dividends declared in February and May 1996 were declared at $.01 per share. Management believes that the combination of cash and cash equivalents, other working capital sources, borrowings under the Company's credit facility, the escrow cash and anticipated income tax refund, 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 13, 1996 /s/ James M. McNamee BY: _________________________________ James M. McNamee President and Chief Executive Officer /s/ Fred Lash BY: _________________________________ Fred Lash Senior Vice President Chief Financial Officer & Treasurer -7- EX-27 2 ARTICLE 5 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, 1996 AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 0 0 22,050,216 561,081 0 40,618,487 18,481,215 8,007,167 79,097,961 17,930,940 0 0 0 269,777 33,372,413 79,097,961 38,611,000 38,611,000 29,413,988 29,413,988 7,823,618 95,000 627,014 1,047,448 502,000 545,448 0 0 0 545,448 0.08 0
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