EX-99.1 3 dex991.htm PRESS RELEASE DATED FEBRUARY 25, 2004 Press Release dated February 25, 2004

EXHIBIT 99.1

 

LOGO   News Release    

170 Mt. Airy Road

Basking Ridge, NJ 07920

 

    CONTACT:
    Fred Lash
    Chief Financial Officer
    908-766-5000

 

    Investors: Tiernan Cavanna / Lanie Fladell
    Media: Sean Leous
    Financial Dynamics
    212-850-5600

 

HOOPER HOLMES ANNOUNCES 2003 FOURTH QUARTER AND

FULL YEAR FINANCIAL RESULTS

 

BASKING RIDGE, NJ, February 25, 2004, Hooper Holmes, Inc. (AMEX:HH) today reported financial results for the fourth quarter and twelve months ended December 31, 2003. Both revenue and operating results were consistent with expectations.

 

Total revenues for the quarter increased 10.8% to $75.6 million from $68.2 million in the fourth quarter of 2002. Net income was $2.8 million, or $0.04 per diluted share, compared to $4.4 million, or $0.07 per diluted share, in the 2002 fourth quarter. Selling, general, and administrative expenses in the fourth quarter of 2003 included additional expenses associated with the companies acquired in late 2002 and 2003 and approximately $600,000 ($0.005 per diluted share) in legal expenses related to an agreement with a client. The Company does not expect to incur any material additional legal expenses with respect to this client agreement.

 

Revenues for the Company’s Health Information Business Unit (“HIBU”), comprised of Portamedic, Infolink, Heritage Labs and Medicals Direct Group (our UK subsidiary acquired in August 2002), grew 7.4% to $67.7 million compared to $63.1 million in last year’s fourth quarter. Fourth quarter revenue growth in the HIBU reflects strong performance from Medicals Direct Group, Heritage Labs and Infolink, which was offset by lower revenue from Portamedic due to continued softness in life insurance application activity and competitive pricing in the life insurance market.

 

Revenues for the Company’s Diversified Business Unit (“DBU”), including D&D Associates which was acquired in October 2002, were $7.9 million in the fourth quarter of 2003 compared to $8.3 million in the third quarter of 2003 due to lower automobile claims activity in New York state and certain clients distributing claims cases more evenly among its service providers.


Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, “2003 was a good year for Hooper Holmes. In the HIBU, our ability to generate revenue growth despite continued softness in the life insurance industry underscores the strength of our business strategy to broaden our service offering and expand internationally in order to reduce our dependence on life insurance application activity.

 

The HIBU’s performance was generated by: continuing favorable trends in the U.K. life insurance market driving strong revenue growth in Medicals Direct, which, as a part of Hooper Holmes consolidated results since August of 2002, increased its revenues $5.1 million from $3.0 million in the fourth quarter of 2002 to $8.1 million in the fourth quarter of 2003; Heritage Labs, which generated 34% revenue growth due to continued market share gains; and Infolink, which generated 15% revenue growth on the success of it’s new state-of-the-art call center. Additionally, amid continued softness and rising competition, management believes it maintained its share of the U.S. paramedical examinations market.

 

In our parallel operating division, the DBU, we made good progress refining the operating infrastructure to make way for expanded profitability in the long term and implemented important strategic initiatives to expand our medical evaluation services practice into new fields—such as workers’ compensation.”

 

For the year ended December 31, 2003, Hooper Holmes’s revenues increased 15.3% to $300.2 million from $260.3 million in 2002. Net income for 2003 was $15.8 million, or $0.24 per diluted share, which included over $1 million ($0.01 per diluted share) of the previously mentioned legal expenses and the additional SG&A expense of acquired companies in late 2002 and 2003. Throughout 2004, we expect our SG&A cost levels to steadily improve, and in the long-term, we believe SG&A expense will return to more traditional levels. Reported net income for 2002 was $14.3 million, or $0.21 per diluted share. Net income for 2002 included a charge of $4.1 million, or $0.06 per diluted share, related to the Company’s write-down of its investment in e-Nable Corporation.

 

Mr. McNamee added, “Capitalizing on our strategic progress in the DBU, in October, we purchased Medimax, Inc. and entered the Pennsylvania and New Jersey independent medical examination (IME) markets and in early January 2004, we entered New York’s workers’ compensation IME market with our acquisition of Allegiance Health Services, Inc. The combination of Allegiance and D&D Associates creates one of the largest IME providers in New York State, with superior geographic coverage, expertise in automobile no-fault and workers’ compensation insurance and an impressive operating infrastructure.

 

Looking ahead, we expect 2004 to be another solid year for Hooper. For the full-year 2004, we expect revenues to range between $325 million and $335 million, with earnings in the range of $0.27 to $0.29 per diluted share.”

 

Hooper Holmes will host a conference call today to discuss fourth quarter and year end results at 9:30 a.m. Eastern Time. The call will be broadcast live over the Internet, and is accessible at the Company’s website located at http://www.hooperholmes.com. In addition, an online archive of the broadcast will be available within two hours of the live call until the next quarterly conference call.

 

Hooper Holmes provides outsourced risk assessment services, including underwriting and claims information to the life, health, automobile, and workers’ compensation insurance industries. The Company provides these health information services through over 275 locations nationwide and in the


United Kingdom.

 

Certain information contained herein includes information that is forward-looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involving the Company’s business. These forward-looking statements are qualified in the entirety by cautionary statements contained in the Company’s Securities and Exchange Commission filings. The Company disclaims any obligation to update these forward-looking statements.

 

-TABLES TO FOLLOW-

 

HOOPER HOLMES INC.

2003 CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

 

    

Three Months ended

December 31,


    Twelve Months ended
December 31,


 
     2003

    2002

    2003

    2002

 

Revenues

   $ 75,609     $ 68,221     $ 300,182     $ 260,317  

Cost of operations

     54,830       49,098       213,709       185,760  
    


 


 


 


Gross profit

     20,779       19,123       86,473       74,557  
    


 


 


 


Selling, general and administrative expenses

     15,743       12,347       59,679       45,935  

Investment reserve

     0       0       0       6,750  
    


 


 


 


Operating income (loss)

     5,036       6,776       26,794       21,872  
    


 


 


 


Other income (expense):

                                

Interest expense

     (173 )     (27 )     (443 )     (113 )

Interest income

     185       383       768       2,309  

Other (expense) income, net

     (145 )     (67 )     (820 )     (619 )
    


 


 


 


       (133 )     289       (495 )     1,577  
    


 


 


 


Income before income taxes

     4,903       7,065       26,299       23,449  

Income taxes

     2,122       2,642       10,452       9,156  
    


 


 


 


Net income

   $ 2,781     $ 4,423     $ 15,847     $ 14,293  
    


 


 


 


Earnings per share:

                                

Basic

   $ 0.04     $ 0.07     $ 0.24     $ 0.22  
    


 


 


 


Diluted

   $ 0.04     $ 0.07     $ 0.24     $ 0.21  
    


 


 


 


                                  

Weighted average number of shares:

                                

Basic

     64,803,095       64,505,296       64,773,346       64,868,163  

Diluted

     66,560,189       66,288,419       66,598,604       67,229,119  

 

-MORE-

 


HOOPER HOLMES INC.

CONSOLIDATED BALANCE SHEETS

 

     12/31/03

   12/31/02

ASSETS

             

Current Assets:

             

Cash and cash equivalents

   $ 28,291,019    $ 23,298,151

Marketable securities

     10,603,332      22,761,101

Accounts receivable, net

     34,663,082      27,809,521

Other current assets

     6,569,707      6,823,818
    

  

Total current assets

     80,127,140      80,692,591
               

Property, plant and equipment:

     33,736,508      30,620,147

Less: Accumulated depreciation and amortization

     24,152,655      21,924,363
    

  

Property, plant and equipment, net

     9,610,853      8,695,784

Goodwill, net

     135,130,744      117,075,544

Intangible assets, net

     29,617,156      28,474,439

Other assets

     810,358      1,291,172
    

  

Total assets

   $ 255,296,251    $ 236,229,530
    

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

             

Current liabilities:

             

Current maturities of long-term debt

   $ 1,000,000    $ 172,776

Accounts payable

     12,106,987      10,436,388

Accrued expenses:

             

Insurance benefits

     149,613      484,748

Salaries, wages and fees

     1,478,189      1,816,791

Payroll and other taxes

     552,464      449,093

Income taxes payable

     3,116,446      2,703,713

Other

     8,714,175      5,853,132
    

  

Total current liabilities

     27,117,874      21,916,641
               

Long term debt, less current maturities

     2,028,363      3,313,983

Other long term liabilities

     4,554,160      806,195

Deferred income taxes

     1,758,879      3,483,114

Minority interest

     358,705      902,650
               

Stockholders’ equity:

             

Common stock, par value $.04 per share; authorized 240,000,000 shares, issued 67,499,074 in 2003 and 2002.

     2,699,963      2,699,963

Additional paid-in capital

     127,487,718      128,079,363

Accumulated other comprehensive income

     855,719      160,873

Retained earnings

     108,613,932      96,009,551
    

  

       239,657,332      226,949,750

Less: Treasury stock at cost (2,662,151 and 2,754,151 shares)

     20,179,062      21,142,803
    

  

Total stockholders’ equity

     219,478,270      205,806,947
    

  

Total liabilities and stockholders’ equity

   $ 255,296,251    $ 236,229,530
    

  

 

# # #