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BASKING RIDGE, N.J., April 24 -- Hooper Holmes, Inc. (Amex: HH) today reported financial results for the first quarter ended March 31, 2003.
Total revenues for the quarter grew 13% to $74.9 million from $66.5 million in the first quarter last year, reflecting contributions from the Company's acquisitions of D&D Associates and Medicals Direct Group plc in 2002.
Revenues for the Health Information Business Unit, comprised of the Company's Portamedic, Infolink, Heritage Labs and Medicals Direct divisions, were $66.1 million, or 88% of total revenues. Medicals Direct increased its revenues 65% to $3.3 million compared to $2.0 million in the 2002 first quarter, prior to being acquired by Hooper Holmes in August 2002. Revenues for the Diversified Business Unit, comprised of D&D Associates, were $8.7 million, or 12% of total revenues, a 16% improvement over D&D's $7.5 million in revenue for the first quarter of 2002, prior to being acquired by Hooper Holmes in November 2002.
Net income for the first quarter 2003 was $4.7 million, or $0.07 per diluted share, compared to $5.8 million, or $0.09 per diluted share, reported in the first quarter of 2002. Net income was impacted by lower revenues from the core health information business and increased SG&A expenses related to higher insurance, legal and administrative costs. Additionally, the acquisitions in late 2002, on a comparative basis, added $2.0 million of SG&A.
Commenting on the quarter, Mr. McNamee stated, "The positive effect of acquisitions more than offset the impact of continued softness in life insurance applications on our U.S. health information business. This balance demonstrates the effectiveness of our ongoing efforts to diversify our revenues, a key element of our business plan."
Mr. McNamee continued, "We are forging ahead, continuing to execute our strategy of leveraging our leading health information business to expand our presence in complementary areas of the life and health insurance industries. As we move further along, we are evaluating those U.S. regions with no-fault automobile insurance programs where IME's play an important role. Our plan is to be operating in additional states this year, and we have targeted six opportunities in four states that we are actively pursuing."
Looking ahead, Mr. McNamee stated, "Based on current information, we expect second quarter 2003 revenues to range between $75 million and $77 million. For the full year 2003, we continue to 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 in 2002."
Hooper Holmes will host a conference call today to discuss first quarter 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 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.
HOOPER HOLMES INC.
2003 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three Months ended March 31,
2003 2002
Revenues $74,850 $66,490
Cost of operations 52,099 45,901
Gross profit 22,751 20,589
Selling, general and administrative
expenses 14,949 11,236
Operating income 7,802 9,353
Other income (expense):
Interest expense (60) (29)
Interest income 215 555
Other income, expense, net (326) (190)
(171) 336
Income before income taxes 7,631 9,689
Income taxes 2,973 3,876
Net income $4,658 $5,813
Earnings per share:
Basic $0.07 $0.09
Diluted $0.07 $0.09
Weighted average number of shares:
Basic 64,744,169 64,871,744
Diluted 66,222,850 67,724,851
HOOPER HOLMES, INC.
CONSOLIDATED BALANCE SHEETS
3/31/2003 12/31/2002
(unaudited) (audited)
ASSETS
Current Assets
Cash and cash equivalents $23,242,137 $23,298,151
Marketable securities 21,597,437 22,761,101
Accounts receivable, net 31,477,879 27,809,521
Other current assets 6,340,293 6,823,818
Total current assets 82,657,746 80,692,591
Property, plant and equipment: 31,055,667 30,620,147
Less: Accumulated depreciation
and amortization 22,486,277 21,924,363
Property, plant and
equipment, net 8,569,390 8,695,784
Goodwill, net 118,994,353 117,075,544
Intangible assets, net 27,924,733 28,474,439
Other assets 1,323,529 1,291,172
Total assets $239,469,751 $236,229,530
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of
long-term debt $0 $172,776
Accounts payable 10,492,169 10,436,388
Accrued expenses:
Insurance benefits 29,531 484,748
Salaries, wages and fees 1,462,051 1,816,791
Payroll and other taxes 441,599 449,093
Income taxes payable 4,073,355 2,703,713
Other 5,183,775 5,853,132
Total current liabilities 21,682,480 21,916,641
Long term debt, less current
maturities 3,060,668 3,313,983
Other long term liabilities 806,195 806,195
Deferred income taxes 3,416,349 3,483,114
Minority interest 1,113,554 902,650
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 127,962,449 128,079,363
Accumulated other
comprehensive income 112,813 160,873
Retained earnings 99,857,814 96,009,551
230,633,039 226,949,750
Less: Treasury stock at cost
(2,802,451 and 2,754,151 shares) 21,242,534 21,142,803
Total stockholders' equity 209,390,505 205,806,947
Total liabilities and
stockholders' equity $239,469,751 $236,229,530
Contacts: Fred Lash, Chief Financial Officer
908-766-5000
Investors - Lauren Levine or Lanie Fladell
Media - Sean Leous
FD Morgen-Walke
212-850-5600
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