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BASKING RIDGE, N.J., Feb. 26, 2003 -- Hooper Holmes, Inc. (Amex: HH) today reported financial results for the fourth quarter and twelve months ended December 31, 2002.
Revenues for the quarter increased 7% to $68.2 million from $63.6 million in the fourth quarter of 2001. Net income grew modestly to $4.4 million, or $0.07 per diluted share, compared to $3.8 million, or $0.06 per diluted share, reported in the 2001 fourth quarter. Fourth quarter results in 2001 would have been approximately $0.01 per diluted share higher if the Statement of Financial Accounting Standards No. 142 (goodwill amortization) had been applied in 2001 as the Company was required to do this year.
Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, "Underscoring the strength and resilience of our company and business strategy, we reported reasonably solid financial results for the fourth quarter despite a challenging market environment for life insurance. Further, our aggressive cost management initiatives enabled us to expand our gross profit margin by more than 140 basis points sequentially in the fourth quarter versus the third quarter of 2002."
Mr. McNamee further commented, "During the quarter, we completed our acquisition of D&D Associates, the cornerstone of our Diversified Business Unit. We are excited about the prospects presented by the combination of Hooper's expertise and market leadership in health information and D&D's leading position in Independent Medical Examinations (IME). As D&D continues to be integrated into Hooper Holmes, we plan to expand into areas with strong no-fault insurance coverage where IME's play an important role, and we expect to be operating in additional states by year-end."
Mr. McNamee continued, "Our Medicals Direct Group business, acquired effective September 1, 2002, performed well in the quarter, as it grew its customer base within the health information industry in the U.K. Going forward, we plan to look for opportunities to expand into other key insurance markets within Europe."
For the year ended December 31, 2002, Hooper's revenues increased 6% to $260.3 million from $245.2 million in 2001. Net income for 2002 was $14.3 million, or $0.21 per diluted share. Excluding reserves recorded for e-Nable, net income grew to $18.4 million, or $0.27 per diluted share, compared to $15.2 million, or $0.23 per diluted share for 2001. An after-tax adjustment of $4.1 million, or $0.06 per diluted share, was taken when the e-Nable investment was written off in the second and third quarters of 2002. Net income in 2001 would have been approximately $0.03 per diluted share higher if the Statement of Financial Accounting Standards No. 142 (goodwill amortization) had been applied in 2001, as the Company was required to do this year.
Mr. McNamee concluded, "Looking ahead, we expect 2003 to be an exciting and strong year for Hooper, as we continue to execute our strategy of leveraging our core assets and capabilities to drive growth through the Diversified Business Unit (DBU) into complementary markets. To that end, for the full year 2003, with significant contribution from the acquired companies, we expect revenues to range between $300 million and $320 million, with earnings growth in the range of 20% to 25% over 2002 earnings, excluding e-Nable charges."
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, Inc. provides health and other underwriting information on insurance policy applicants to the life insurance industry and independent medical examinations to the casualty claim and workers compensation markets. The Company provides these services through over 300 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.
HOOPER HOLMES INC.
2002 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three Months Twelve months
ended December 31, ended December 31,
2002 2001 2002 2001
Revenues $68,221 $63,590 $260,317 $245,185
Cost of operations 49,098 45,196 185,760 175,282
Gross profit 19,123 18,394 74,557 69,903
Selling, general and
administrative expenses 12,347 11,580 45,935 45,792
Loss on investment 0 0 6,750 0
Operating income 6,776 6,814 21,872 24,111
Other income (expense)
Interest expense (27) (38) (113) (204)
Interest income 383 598 2,309 3,290
Other (expense) income,
net (67) (1,056) (619) (1,273)
289 (496) 1,577 1,813
Income before income
taxes 7,065 6,318 23,449 25,924
Income taxes 2,642 2,488 9,156 10,677
Net income 4,423 3,830 14,293 15,247
Earning per share:
Basic $0.07 $0.06 $0.22 $0.23
Diluted $0.07 $0.06 $0.21 $0.23
Weighted average number
of shares:
Basic 64,505,296 64,504,535 64,868,163 64,895,764
Diluted 66,288,419 67,018,472 67,229,119 67,618,151
HOOPER HOLMES, INC.
CONSOLIDATED BALANCE SHEETS
(Audited)
12/31/02 12/31/01
ASSETS
Current Assets:
Cash and cash equivalents $23,295,780 $52,571,616
Marketable securities 22,763,472 31,225,891
Accounts receivable, net 27,809,521 24,939,364
Other current assets 6,823,818 5,676,399
Total current assets 80,692,591 114,413,270
Property, plant and equipment: 30,620,147 28,188,908
Less: Accumulated depreciation and
amortization 21,924,363 20,355,456
Property, plant and equipment,
net 8,695,784 7,833,452
Goodwill, net 117,075,544 81,515,202
Intangible assets, net 28,474,439 11,995,686
Investment 0 5,218,750
Other assets 1,291,172 994,383
Total assets $236,229,530 $221,970,743
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $172,804 $239,669
Accounts payable 10,436,388 7,479,797
Accrued expenses:
Insurance benefits 484,748 386,093
Salaries, wages and fees 1,816,791 3,368,318
Payroll and other taxes 449,093 289,779
Income taxes payable 2,703,713 4,683,762
Other 5,855,664 3,906,662
Total current liabilities 21,919,201 20,354,080
Long term debt, less current
maturities 3,313,955 3,280,496
Other long term liabilities 803,663 0
Deferred income taxes 3,483,114 1,741,617
Minority interest 902,650 187,676
Stockholders' equity:
Common stock, par value $.04 per share;
authorized 240,000,000 shares, issued
67,499,074 in 2002 and 2001. 2,699,963 2,699,963
Additional paid-in capital 128,079,363 134,482,010
Accumulated other comprehensive
income 160,873 201,589
Retained earnings 96,009,551 84,308,815
226,949,750 221,692,377
Less: Treasury stock at cost
(2,754,151 and 2,949,459 shares) 21,142,803 25,285,503
Total stockholders' equity 205,806,947 196,406,874
Total liabilities and
stockholders' equity $236,229,530 $221,970,743
Contacts:
Hooper Holmes, Inc.
Fred Lash, Chief Financial Officer
908-766-5000
FD Morgen-Walke
Investors:
Lauren Levine/Lanie Fladell
Media:
Sean Leous
212-850-5600, for Hooper Holmes, Inc.
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