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BASKING RIDGE, N.J., Jul 28, 2004 -- Hooper Holmes, Inc. (HH) today reported financial results for the second quarter ended June 30, 2004.
Total revenues for the quarter increased 8.8% to $82.8 million from $76.2 million in the second quarter of 2003, reflecting strong performance of Medicals Direct Group, InfoLink and Heritage Labs as well as $6.4 million in revenues from the Company's acquisitions of Allegiance Health, Medimax, Michigan Evaluation Group (MEG) and Mid-America Agency Services, Inc. (MAAS), all of which were acquired subsequent to June 2003. Net income was $3.4 million, or $0.05 per diluted share, compared to $5.1 million, or $0.08 per diluted share in the second quarter of 2003. Operating margins in the 2004 second quarter were negatively impacted by continued softness and related pricing pressure in the Company's core examination business.
Revenues for the Company's Health Information Business Unit ("HIBU"), grew 6.3% to $71.8 million compared to $67.6 million in last year's second quarter.
The HIBU's second quarter performance was attributable to:
* Medicals Direct, which continued to exceed expectations, grew its
revenues to $10.0 million from $5.1 million a year earlier, as a result
of continuing favorable trends in the U.K. life insurance and claims
management market;
* Infolink, which generated 24% revenue growth on the success of the
Kansas City call center;
* Heritage Labs, which generated 8% revenue growth reflecting increased
market share; and
* Portamedic, which reported second quarter revenues of $48.2 million,
down from $52.8 million in the second quarter of 2003, reflecting
continued industry softness and pricing pressure.
Revenues for the Company's Diversified Business Unit ("DBU") increased 28.2% to $11.0 million from $8.6 million in the second quarter of 2003 as a result of new revenue contributions from the acquisitions of Allegiance Health, Medimax, and MEG.
Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, "We are pleased to report that the DBU's revenues for the second quarter, excluding revenues from companies acquired since the second quarter of 2003, exceeded the previous quarter's revenues. We are also optimistic that the inflection point in our core examination business could be sometime late in the third quarter or early in the fourth quarter of this year."
For the six months ended June 30, 2004, revenues increased 7.8% to $162.8 million from $151.0 million in last year's comparable period. Net income was $6.4 million, or $0. 10 per diluted share compared to $9.8 million, or $0.15 per diluted share, in the first half of last year.
Mr. McNamee concluded, "For the full year of 2004, we expect to generate revenues in the range of $335 million to $340 million. We expect our full year diluted earnings per share to be between $0.22 to $0.24, reflecting current strategic initiatives that include activities aimed at realigning our operating structure with our revenues."
Hooper Holmes will host a conference call today to discuss second 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 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.
2004 CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
Three Months ended Six Months ended
June 30, June 30,
2004 2003 2004 2003
Revenues $82,842 $76,170 $162,835 $151,020
Cost of operations 59,770 53,839 116,918 105,938
Gross profit 23,072 22,331 45,917 45,082
Selling, general and
administrative expenses 17,353 13,976 35,145 28,926
Operating income 5,719 8,355 10,772 16,156
Other income (expense):
Interest expense (196) (115) (344) (175)
Interest income 51 257 156 472
Other expense, net (76) (189) (200) (514)
(221) (47) (388) (217)
Income before income
taxes 5,498 8,308 10,384 15,939
Income taxes 2,129 3,213 3,934 6,186
Net income $3,369 $5,095 $6,450 $9,753
Earnings per share:
Basic $0.05 $0.08 $0.10 $0.15
Diluted $0.05 $0.08 $0.10 $0.15
Weighted average number
of shares:
Basic 64,987,776 64,756,409 64,931,903 64,750,322
Diluted 66,615,086 66,694,179 66,684,779 66,458,515
HOOPER HOLMES INC.
CONSOLIDATED BALANCE SHEETS
6/30/04 12/31/03
ASSETS
Current Assets:
Cash and cash equivalents $16,208,093 $28,291,019
Marketable securities 2,302,924 10,603,332
Accounts receivable, net 36,184,215 34,663,082
Other current assets 8,310,109 6,569,707
Total current assets 63,005,341 80,127,140
Property, plant and equipment: 35,596,179 33,004,834
Less: Accumulated depreciation and
amortization 24,406,465 23,393,981
Property, plant and equipment, net 11,189,714 9,610,853
Goodwill 148,785,863 135,130,744
Intangible assets 37,887,021 29,617,156
Other assets 517,441 810,358
Total assets $261,385,380 $255,296,251
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $1,087,502 $1,028,363
Accounts payable 13,970,460 12,106,987
Accrued expenses:
Salaries, wages and fees 1,368,543 1,478,189
Income taxes payable 4,192,829 3,116,446
Other 10,056,672 9,416,252
Total current liabilities 30,676,006 27,146,237
Long term debt, less current maturities 1,000,000 2,000,000
Other long term liabilities 3,055,930 4,554,160
Deferred income taxes 1,608,708 1,758,879
Minority interest 230,350 358,705
Stockholders' equity:
Common stock, par value $.04 per share;
authorized 240,000,000 shares,
issued 67,499,074 in 2004 and 2003. 2,699,963 2,699,963
Additional paid-in capital 126,877,758 127,487,718
Accumulated other comprehensive income 823,689 855,719
Retained earnings 113,115,030 108,613,932
243,516,440 239,657,332
Less: Treasury stock at cost
(2,467,295 and 2,662,151 shares) 18,702,054 20,179,062
Total stockholders' equity 224,814,386 219,478,270
Total liabilities and stockholders'
equity $261,385,380 $255,296,251
Contact:
Hooper Holmes, Inc.
Fred Lash, Chief Financial Officer
+1-908-766-5000
Investors - Tiernan Cavanna or Lanie Fladell
or Media - Sean Leous, all of Financial Dynamics
+1-212-850-5600
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