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Basking Ridge, N.J., February 29, 2000 - Hooper Holmes, Inc.(AMEX:HH) today reported record results for the fourth quarterand year-ended December 31, 1999.
Revenue for the fourth quarter of 1999 increased 57% to$75.8 million compared to $48.1 million in the fourth quarter of1998. Operating income grew to $11.3 million, a 60% increaseover the $7.1 million reported for the same period last year.Net income from continuing operations rose 53% to $6.2 millionfrom the $4.1 million reported for the comparable period lastyear. Earnings per fully diluted share from continuingoperations increased 43% to $0.20 compared with the $0.14reported in the fourth quarter of 1998. 1998 fourth quarter andyear-end net income and earnings per share excludes an after taxcharge associated with a prior divestiture.
For the year, revenue increased to $237.1 million from the$185.2 million reported in the prior year. Operating income grewto $36.5 million an increase over the $25.6 million reported forthe twelve-month period of fiscal 1998. Income from continuingoperations rose to $20.8million over the $14.2 million reported for the comparable periodlast year. Earnings per dilutedshare increased 42% to $0.68 over the $0.48, excluding the abovementioned charge, reportedlast year.
The Company stated that the strong revenue growth for thefourth quarter and the year reflect an increase in overall unitvolume, growth in the number of tests and services beingperformed per exam, as well as contributions from ParamedicalServices of America (PSA) and Heritage Labs acquisitions. Inaddition, the Company continues to experience an increase inrevenues generated from alternative distribution channels.Operating margins for the full year 1999 expanded a full 160basis points to 15.4% compared to 13.8% in 1998.
Jim McNamee, Chairman and Chief Executive Officer,commented, "1999 was another year of accomplishment for theCompany which is reflected in our ability to sustain robustrevenue growth and record operating earnings. We areparticularly pleased with the growth in our non-traditionalchannels which continues to become a greater percentage of ouroverall revenue. The trend of ordering policies over theInternet continues, creating further demand for our servicesleading to additional market share gains."
Mr. McNamee continued, "During the quarter, we completedthe purchase of the PSA assets, further strengthening ourleadership position and geographic reach within the paramedicaltesting industry. The integration of the PSA operations into ourPortamedic and InfoLink networks was smooth and is now complete.As we move into the year 2000, we expect to reap the benefits ofthe combined company in terms of greater operating leverage andthe ability to expand even further services to our customerbase."
Mr. McNamee concluded, "During the year, we took advantageof our financial strength and made additional investments in bothtechnology and human resources , eventually contributing toincreased profitability for the Company. As a result, we believewe have the infrastructure, strong reputation in the industry,and solid customer relations that will enable us to maintain ourleading position in the health information services sector."
Hooper Holmes, Inc. provides health information services oninsurance policy applicants to the life insurance industry. TheCompany provides these health information services through over300 locations nationwide.
Certain information contained herein includes informationthat is forward looking. The matters referred to in forwardlooking statements may be affected by the risks and uncertaintiesinvolved in the Company's business. These forward lookingstatements are qualified in the entirety by cautionary statementscontained in the Company's Securities and Exchange Commissionfilings
-Tables to follow-
HOOPER HOLMES INC.
1999 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three months ended Twelve months ended
December 31, December 31,
1999 1998 1999 1998
Revenues $75,827 $48,147 $237,068 $185,209
Cost of operations 52,775 34,069 163,958 129,261
Gross profit 23,052 14,078 73,110 55,948
Selling, general and 11,752 7,008 36,574 30,356
administrative expenses
Operating income 11,300 7,070 36,536 25,592
Other income (expense)
Interest expense (830) (3) (860) (3)
Interest income 358 246 1,107 769
Other 104 54 249 (89)
(368) 297 496 677
Income before income taxes 10,932 7,367 37,032 26,269
Income taxes 4,700 3,299 16,239 12,084
Income from continuing
operations 6,232 4,068 20,793 14,185
Discontinued operations
Loss on disposal, net of taxes 0 (1,485) 0 (1,485)
Net Income $6,232 $2,583 $ 20,793 $12,700
Earnings per share - basic:
Income from continuing
operations $0.21 $0.14 $ 0.72 $0.50
Discontinued operations -
net of taxes 0.00 (0.05) 0.00 (0.05)
Net income $ 0.21 $0.09 $0.72 $0.45
Earnings per share - diluted:
Income from continuing
operations $0.20 $0.14 $0.68 $0.48
Discontinued operations -
net of taxes 0.00 (0.05) 0.00 (0.05)
Net income $0.20 $0.09 $0.68 $0.43
Weighted average number of
shares:
Basic 29,082,432 28,194,049 28,780,282 28,120,685
Diluted 31,081,800 30,012,048 30,766,779 29,859,710
Note: Per share calculations are adjusted to reflect a two forone stock split effective January 8, 1999.
HOOPER HOLMES INC. CONSOLIDATED BALANCE SHEETS
12/31/99 12/31/98
(audited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 41,363,019 29,752,361
Accounts receivable 36,836,412 18,145,856
Other current assets 5,233,884 5,396,202
Total current assets 83,433,315 53,294,419
Property, plant and equipment 26,465,947 22,487,225
Less: Accumulated depreciation 16,075,132 14,166,163
Net property, plant and equipment 10,390,815 8,321,062
Goodwill, net 73,276,965 16,398,245
Intangible assets, net 16,523,290 6,728,112
Other assets 846,943 274,547
Total assets $184,471,328 $85,016,385
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $142,953 $ 450,000
Accounts payable 11,543,665 6,606,518
Accrued expenses:
Insurance benefits 1,559,552 1,662,747
Salaries, wages and fees 3,209,031 2,356,582
Payroll and other taxes 349,995 204,893
Income taxes payable 5,033,946 3,315,758
Discontinued operations 293,736 2,845,007
Other 5,224,718 2,377,001
Total current liabilities 27,357,596 19,818,506
Long term debt, less current maturities 65,307,047 0
Deferred income taxes 1,911,027 2,518,487
Minority interest 203,962 385,441
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.04 per share;
authorized 240,000,000 shares, issued
29,195,526 in 1999, and 28,379,964 in 1998 1,167,821 1,135,198
Additional paid-in capital 37,524,913 29,515,099
Retained earnings 51,971,602 32,616,294
90,664,336 63,266,591
Less: Treasury stock at cost, 104,332
shares in 1999 and 1998 972,640 972,640
Total stockholders' equity 89,691,696 62,293,951
Total liabilities and stockholders'
equity $ 184,471,328 $85,016,385
CONTACT: Fred Lash
Chief Financial Officer
908/766-5000
Ephraim Bernstein/Dory Lombardo
Stacey Nield - Media
Morgen-Walke Associates
212/850-5600
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