|
Basking Ridge, N.J., October 22, 1999 - Hooper Holmes, Inc. (AMEX: HH) today reported results for the third quarter and nine months ended September 30, 1999.
Revenues for the third quarter increased 19% to $53.8 million from the $45.4 million reported in the third quarter of last year. Operating income grew to $8.3 million, up 30% from the $6.4 million reported for the third quarter of 1998. Net income rose 41% to $5.0 million over the $3.5 million reported for the same period last year. Earnings per fully diluted share grew to $0.16, compared with the $0.12 reported in last year's third quarter.
For the nine months ended September 30, 1999, revenues rose 18% to $161.2 million from $137.1 million in the comparable period last year. Operating income for the first nine months of 1999 rose to $25.2 million over the $18.5 million reported for the comparable period last year. Net income increased to $14.6 million over the $10.1 million reported for the first nine months of fiscal 1998. Earnings per fully diluted share grew to $0.48, compared with the $0.34 for the first nine months of 1998.
The Company stated that the strong revenue growth was driven by solid unit volume and continued growth in the Company's non-traditional life insurance distribution channels such as direct mail, telemarketing, and the Internet. During the third quarter of 1999, exams generated from these non-traditional channels of insurance sales now represent 18.5% of total revenues and the internet ordered portion of this doubled this quarter from the second quarter of this year. Operating margins expanded to 15.5% from 14.1% reported in the third quarter of 1998 due to controls on branch operating costs and reduced SG&A costs. For the first nine months of 1999, the Company's operating margin expanded to 15.7% compared to 13.5% for the same period last year.
During the quarter, the Company entered into a definitive agreement to purchase the assets of Paramedical Services of America (PSA) the Atlanta based paramedical examination subsidiary of Pediatric Services of America. The acquisition of PSA is consistent with Hooper Holmes strategy of expanding its existing capabilities of providing outsourced health information services for the life and health insurance industries nationwide.
Jim McNamee, Chairman and Chief Executive Officer, commented, "We are pleased with our performance in the third quarter, which is traditionally a slow period for our industry. Our core business grew 14% while sales from alternate distribution channels grew 48% fueled by the demand for life insurance policies and an increase in the number of tests and services per policy. Heritage Labs continues to perform as expected and is on plan. We continue to make investments in technology and human resources to enable us to meet the growing demands of the industry."
Hooper Holmes, Inc. provides medical and other underwriting information on insurance policy applicants to the major companies in the life and health insurance industry. The Company provides these health information services through its 200 locations nationwide.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 involved in 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.
HOOPER HOLMES INC.
1999 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three Months Nine months
ended ended
September 30, September 30,
1999 1998 1999 1998
Revenues 53,830 45,383 161,241 137,063
Cost of Operations 37,753 31,760 111,183 95,192
Gross Profit 16,077 13,623 50,058 41,871
Selling, general
and administrative
expenses 7,752 7,224 24,822 23,348
Operating income 8,325 6,399 25,236 18,523
Other income (expense)
Interest expense (10) 0 (30) 0
Interest income 310 205 749 522
Other 119 (48) 145 (143)
419 158 864 379
Income before
Income taxes 8,744 6,557 26,100 18,902
Income taxes 3,754 3,019 11,539 8,785
Net income 4,990 3,538 14,561 10,117
Net income per
common share:
Basic 0.17 0.13 0.51 0.36
Diluted 0.16 0.12 0.48 0.34
Weighted average
Number of
shares: (1)
Basic 28,893,070 28,197,228 28,678,459 28,095,961
Diluted 30,899,970 29,847,653 30,641,601 29,783,122
Note: Per share calculations are adjusted to reflect a two for one stock split effective January 8, 1999.
HOOPER HOLMES, INC.
Consolidated Balance Sheets
ASSETS
9/30/99 12/31/98
Current Assets: (unaudited) (audited)
Cash and cash
Equivalents 40,547,401 29,752,361
Accounts receivable 23,719,228 18,145,856
Other current assets 6,626,153 5,396,202
Total current assets 70,892,782 53,294,419
Property, plant and equipment:
Land and land improvements 618,972 591,213
Building 4,497,789 4,236,358
Furniture, fixturesand equipment 18,216,421 17,345,109
Leasehold improvements 319,323 314,545
Total property, plant and equipment 23,652,505 22,487,225
Less: Accumulated depreciation 15,457,649 14,166,163
Net property, plant and equipment 8,194,856 8,321,062
Cost in excess of net
assets of acquired companies, net 15,912,310 16,398,245
Intangible assets, net 5,621,295 6,728,112
Other assets 944,329 274,547
Total assets 101,565,572 85,016,385
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable 450,000 450,000
Accounts payable 7,242,071 6,606,518
Accrued expenses:
Insurance benefits 1,225,138 1,662,747
Salaries, wages and fees 1,221,358 2,356,582
Payroll and other taxes 246,780 204,893
Income taxes payable 2,386,658 3,315,758
Discontinued operations 1,577,633 2,845,007
Other 1,368,252 2,377,001
Total current liabilities 15,717,890 19,818,506
Deferred income taxes 2,012,602 2,518,487
Minority interest 202,761 385,441
Stockholders' equity:
Common stock, par value $.04 per
share; authorized 80,000,000 shares;
issued 29,180,426 in 1999,
and 28,379,964 in 1998 1,167,217 1,135,198
Additional paid-in capital 37,334,444 29,515,099
Retained earnings 46,103,298 32,616,294
84,604,959 63,266,591
Less: Treasury stock at cost,
104,332 shares in 1999 and 1998 972,640 972,640
Total stockholders' equity 83,632,319 62,293,951
Total liabilities and
stockholders' equity 101,565,572 85,016,385
-0-
CONTACT: Hooper Holmes, Inc.
Fred Lash
Chief Financial Officer
908/766-5000
or
Morgen-Walke Associates
Ephraim Bernstein/Jill Zames
Stacey Nield - Media
212/850-5600
|