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BASKING RIDGE, N.J., May 2, 2006 -- Hooper Holmes, Inc. (AMEX:HH) today reported that it has filed its 2005 annual report on Form 10-K with the Securities and Exchange Commission (SEC). The Company's financial results for the fourth quarter and full year ended December 31, 2005 are reflected in its 2005 annual report.
For the twelve months ended December 31, 2005, total revenues decreased 2% to $320.3 million compared to $326.7 million in 2004. Net loss was $96.6 million or $1.47 per diluted share compared to net income of $10 million or $0.15 per diluted share in the prior year. The net loss includes pre-tax impairment charges to goodwill and long-lived assets totaling $133.6 million and increased SG&A costs.
Full Year 2005 Results
Health Information Division (HID)
HID reported a slight decline in full year revenues to $281.8 million compared to $283.2 million in 2004, due to continued weakness in the Company's core paramedical business. All of the division's other units experienced positive growth, helping to offset much of the decline in Portamedic's revenues. The year-over-year results include:
-- Portamedic revenues decreased 9.1% to $171.9 million, compared to
$189.1 million in 2004.
-- Mid-America Agency Services (MAAS) revenues increased $8.2 million
to $17.3 million compared to 2004, with 2005 reflecting a full
year of revenues.
-- Medicals Direct Group revenues increased 4.6% to $42.2 million
compared to $40.3 million in 2004.
-- Heritage Labs reported revenues of $19.1 million, an increase of
14.5% compared to $16.7 million in 2004.
-- Infolink reported revenues of $31.3 million, an increase of 12.2%
compared to $27.9 million in 2004.
Claims Evaluation Division (CED)
The CED reported full year revenues of $38.5 million, a decline of 11.5% compared to $43.5 million in 2004. The decrease was primarily a result of continued declines in independent medical exam and peer review activity in New York State.
Fundamental Strategic Review
In January 2006, Hooper Holmes announced the appointment of Mr. James Calver as Chief Executive Officer. Mr. Calver has initiated a review of all aspects of the Company, which will focus on a number of areas, including:
-- Aligning costs with existing levels of revenues to restore
operating margins.
-- Making better use of assets, particularly Portamedic branch offices
and branch office personnel.
-- Completing the integration of operations of the acquired companies
that comprise the Claims Evaluation Division to reduce overhead
expenses.
-- Enhancing operational controls on a Company-wide basis.
-- Enhancing the Company's information technology platform to generate
cost efficiencies.
-- Consolidating regional service centers into a national service
center.
-- Seeking opportunities for service enhancement.
-- Adding new services that enable the Company to get closer to its
customers and facilitate furthering their business objectives.
-- Augmenting sales and marketing resources dedicated to the Company's
growth businesses.
Mr. Calver stated, "Several challenges need to be addressed in the coming year, but I am confident the Company has a strong foundation on which to build. We have an excellent array of quality products and services, an unrivalled client base and a committed and talented group of employees. To maximize these assets, I am in the process of conducting an extensive internal review of our operational and financial condition, and analyzing our current market position and future market opportunities. I have also started to institute a number of operational changes including the addition of key personnel to our management team and have begun implementing several internal operating procedures and controls to improve the efficiency and oversight of the organization."
Mr. Calver added, "To take advantage of the opportunities before us, it is imperative that we improve the quality and consistency of our operational performance. We will do so by strengthening our leadership team, improving key systems and processes, and prudently expanding our service offers."
Hooper Holmes will host a conference call on Wednesday May 3, 2006 to discuss fourth quarter and year end results at 11:00 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.
With the filing of its 2005 annual report with the SEC, the Company believes that it is in full compliance with the American Stock Exchange's continuing listing standards. However, because of the lateness in filing its 2005 annual report on Form 10-K, the Company anticipates that it will be late in filing with the SEC its quarterly report on Form 10-Q for the first quarter of 2006, which will be due on May 10, 2006. If this proves the case, the Company will cease to be in compliance with the American Stock Exchange's continuing listing standards pending the filing of the Form 10-Q. However, the Company anticipates that it will be able to file the Form 10-Q within a short period after the due date, at which time it believes it will regain full compliance with the American Stock Exchange's continued listing standards.
Hooper Holmes provides outsourced risk assessment services to the life insurance industry through over 265 locations nationwide and in the United Kingdom, as well as claims evaluation information services to the automobile, and workers' compensation insurance industries.
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 their 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.
2005 Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Years ended December 31,
2005 2004
(Restated)
Revenues $320,346 $326,651
Cost of operations 239,074 236,010
Gross profit 81,272 90,641
Selling, general and administrative expenses 82,007 73,060
Impairment of goodwill and intangibles 133,584 --
Operating income (loss) (134,319) 17,581
Other income (expense):
Interest expense (524) (632)
Interest income 297 245
Other expense, net (530) (347)
(757) (734)
Income (loss) before income taxes (135,076) 16,847
Income tax (benefit) provision (38,453) 6,832
Net income (loss) $(96,623) $10,015
Earnings (loss) per share:
Basic $(1.47) $0.15
Diluted $(1.47) $0.15
Weighted average number of shares:
Basic 65,513,451 64,996,778
Diluted 65,513,451 66,534,421
Hooper Holmes, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
December 31,
2005 2004
(Restated)
ASSETS
Current Assets:
Cash and cash equivalents $11,683 $16,973
Marketable securities 383 6,887
Accounts receivable, net 44,503 41,552
Income tax receivable 5,612 --
Deferred income taxes 1,295 1,057
Other current assets 4,906 6,185
Total current assets 68,382 72,654
Property, plant and equipment, net 13,478 11,200
Goodwill 40,038 155,355
Intangible assets, net 12,203 35,380
Deferred income taxes 30,269 --
Other assets 342 520
Total assets $164,712 $275,109
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $1,046 $1,067
Accounts payable 16,087 14,701
Accrued expenses 14,313 16,682
Income taxes payable 3,190 1,908
Total current liabilities 34,636 34,358
Long-term debt, less current
maturities -- 1,000
Other long-term liabilities 1,174 4,317
Deferred income taxes -- 7,475
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.04 per share;
authorized 240,000,000 shares,
issued 67,499,074 in 2005 and 2004 2,700 2,700
Additional paid-in capital 121,278 126,086
Accumulated other comprehensive income 354 1,466
Retained earnings 14,574 115,126
138,906 245,378
Less: Treasury stock, at cost;
1,328,795 shares in 2005 and 2,297,995
shares in 2004 10,004 17,419
Total stockholders' equity 128,902 227,959
Total liabilities and stockholders'
equity $164,712 $275,109
Contacts: Hooper Holmes, Inc.
James Calver, Chief Executive Officer
+1-908-766-5000
Financial Dynamics, for Hooper Holmes, Inc.
Investors: Jonathan Birt or John Capodanno
Media, Sean Leous
+1-212-850-5600
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