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Basking Ridge, NJ, April 20, 2000, Hooper Holmes, Inc.(AMEX:HH) today reported record results for the first quarterended March 31, 2000.
Revenue for the first quarter of 2000 rose 62% to $85.7million from $52.9 million in the first quarter of last year.Net income improved 66% to $7.9 million over the $4.8 millionreported in the comparable quarter last year. Fully dilutedearnings per share increased 50% to $.24 from the $.16 reportedfor the first quarter 1999.
The Company stated that revenue growth for the quarterresults from continuing market share growth, contribution fromits recent acquisition of PSA (Paramedical Services of America),and a one time positive impact from revenue generated due to alife insurance regulatory phenomenon often referred to as "TripleX" which appears to have caused a rush to buy certain policiesbefore a rate increase or change in premium structure went intoeffect.
Additionally, in February of this year the Companysuccessfully concluded an equity offering of 3.7 million shares,enabling the Company to repay $50 million of the $65 million of debtincurred in connection with the acquisition of the assets of PSA.
Jim McNamee, Chairman and Chief Executive Officer, stated"Overall, 2000 is off to a great start. During the quarter ourorganization worked overtime to keep up with the operationaldemands brought about by the uncanny timing of integrating PSAwhile at the same time dealing with a significant increase inrequests for examinations and other tests brought about by TripleX. We were able to hold our direct production costs andoperating expenses somewhat in line, and incurred less SGAexpenses as a percent of revenue.
We are particularly pleased with our continued strongposition in our ADC (Alternative Distribution Channel) business.This business source, which encompasses the Internet, direct mailand mass media, continues to play an important role in ourstrategic outlook. We're encouraged with the progress of ourHeritage Lab component as well."
The above referenced per share amounts are for pre-splitresults as the Company has declared a 2-for-1 stock spliteffective April 26, 2000.
Mr. McNamee continues, "Our pioneering use of technologyis a key driver of our growth. Having the most automated branchand operating systems in the industry has allowed us to realizethe benefits of the growth of the internet and other distributionchannels as well as the agent, retail segment of the industry.Our exclusive contract with Prudential is a clear example of howwe can handle business from any and all segments engaged in themarketing and/or selling of a life insurance product."
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 forward-looking statements may be affected by the risks and uncertaintiesinvolving in the Company's business. These forward-lookingstatements are qualified in the entirety by cautionary statementscontained in the Company's Securities and Exchange Commissionfilings.
HOOPER HOLMES INC. & SUBSIDIARIES
2000 CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share and per share amounts)
Three Months ended March 31,
2000 1999
Revenues $ 85,772 $ 52,939
Cost of operations 59,973 35,890
Gross profit 25,799 17,049
Selling, general and 11,628 8,570
administrative expenses
Operating income 14,171 8,479
Other income (expense)
Interest expense (920) (10)
Interest income 643 206
Other (39) 3
(316) 199
Income before income taxes 13,855 8,678
Income taxes 5,958 3,927
Net income $ 7,897 $ 4,751
Earnings per share:
Basic $ 0.26 $ 0.17
Diluted $ 0.24 $ 0.16
Weighted average number of shares:
Basic 30,472,446 28,391,733
Diluted 32,476,879 30,284,656
HOOPER HOLMES, INC.
CONSOLIDATED BALANCE SHEETS
3/31/00 12/31/99
(unaudited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 84,409,516 $ 41,363,019
Accounts receivable 39,185,881 36,836,412
Other current assets 5,585,234 5,233,884
Total current assets 129,180,631 83,433,315
Property, plant and equipment 27,716,475 26,465,947
Less: Accumulated
depreciation 16,682,616 16,075,132
Net property, plant
and equipment 11,033,859 10,390,815
Goodwill, net 72,481,980 73,276,965
Intangible assets, net 15,684,597 16,523,290
Other assets 640,145 846,943
Total assets $ 229,021,212 $ 184,471,328
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $ 101,784 $ 142,953
Accounts payable 11,838,423 11,543,665
Accrued expenses:
Insurance benefits 1,355,244 1,559,552
Salaries, wages and fees 414,526 3,209,031
Payroll and other taxes 492,325 349,995
Income taxes payable 4,587,425 5,033,946
Discontinued operations 289,011 293,736
Other 4,082,494 5,224,718
Total current liabilities 23,161,232 27,357,596
Long term debt, less current
maturities 15,307,047 65,307,047
Deferred income taxes 1,753,648 1,911,027
Minority interest 204,302 203,962
Commitments and contingencies
Stockholders' equity:
Common stock, par value
$.04 per share; authorized
240,000,000 shares issued
33,155,976 in 2000, and
29,195,526 in 1999 1,326,239 1,167,821
Additional paid-in capital 128,809,082 37,524,913
Retained earnings 59,432,302 51,971,602
189,567,623 90,664,336
Less: Treasury stock at
cost, 104,332 shares 972,640 972,640
Total stockholders' equity 188,594,983 89,691,696
Total liabilities and
stockholders' equity $ 229,021,212 $ 184,471,328
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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