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BASKING RIDGE, N.J., Nov. 4, 2002 -- Hooper Holmes, Inc. (Amex: HH) announced today that it has completed its previously announced acquisition of the stock of privately held D & D Associates, a provider of Independent Medical Examinations, for approximately $38 million in cash. The acquisition is immediately accretive to Hooper Holmes' earnings and is expected to contribute between $0.04 and $0.05 per diluted share to earnings in 2003.
Headquartered in Nassau County, New York, D & D Associates is a leading provider of Independent Medical Examination (IME) case management services in the New York City area. D & D provides integrated IME processing, maintains a rigorous quality control system and ensures an effective process for credentialing and qualifying physicians. D & D's client base is comprised mostly of property and casualty insurance companies, and to a lesser extent, law firms and smaller indemnity carriers. It also includes some of the largest automobile insurance companies in the nation. Its operations support three distinct categories of claims: Personal Injury Protection (PIP), Automobile No-Fault Liability (Tort) and Workers Compensation.
D & D has a solid track record of revenue growth and profitability, with no debt. From 1999 through 2001, revenue improved at a compounded annual growth rate of over 25%, while pro-forma EBITDA margins have averaged in the 20% range. The pro-forma EBITDA adjustments exclude certain officer compensation expenses that will not be incurred by Hooper Holmes. D & D expects to grow revenues in 2002 to over $30 million, as compared to $25.0 million in 2001.
D & D Associates is the second business to be integrated into Hooper Holmes' Diversified Business Unit (DBU), reporting to Steve Kariotis, Senior Vice President of the Company and General Manager and head of the DBU. Stephan Schector, the owner of D & D Associates, has agreed to act as a consultant to Hooper Holmes for one year, ensuring a smooth transition. Hooper Holmes has retained D & D Associates' other key management and its panel of over 1,300 Board Certified Physicians and Certified Insurance Consultants.
James McNamee, Chairman, President and CEO of Hooper Holmes, commented, "This acquisition, by enabling us to enter the $2 billion plus IME market, is consistent with our strategy of acquiring businesses in growth areas that complement our core health information business. Not only does IME provide a convenient, high quality method for insurers to assess injuries, but also the prevalence of fraud and abuse injury claims creates additional demand for such services."
Mr. McNamee continued, "D & D provides us with an extremely solid foundation in the IME business, and we intend to expand its services to other geographical regions in the United States. At the same time, with the integration of D & D into Hooper Holmes, we expect to benefit from synergies in the areas of field marketing and administration. We look forward to continuing to build this business as part of Hooper Holmes."
Hooper Holmes, Inc. provides health and other underwriting information on insurance policy applicants to the life insurance industry. The Company provides these health information services though over 300 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 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.
Contact:
Hooper Holmes, Inc.,
Fred Lash, Chief Financial Officer
+1-908-766-5000
FD Morgen-Walke
Investors: Lauren Levine, Lanie Fladell
Media: Sean Leous
+1-212-850-5600
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