Hooper Holmes (HH) 8-K Hooper Holmes Announces 2004 First Quarter Financial Results

EXHIBIT 99.1

	News Release
170 Mt. Airy Road
Basking Ridge, NJ 07920
	CONTACT:
	Fred Lash
	Chief Financial Officer
	908-766-5000
	Investors: Tiernan Cavanna / Lanie Fladell
	Media: Sean Leous
	Financial Dynamics
	212-850-5600

HOOPER HOLMES ANNOUNCES 2004 FIRST QUARTER FINANCIAL RESULTS

BASKING RIDGE, NJ, April 28, 2004, Hooper Holmes, Inc. (AMEX:HH) today reported financial results for the first quarter ended March 31, 2004.

Total revenues for the quarter increased 6.9% to $80.0 million from $74.9 million in the first quarter of 2003. Net income was $3.1 million, or $0.05 per diluted share, compared to $4.7 million, or $0.07 per diluted share, in the 2003 first quarter. First quarter 2004 operating margins were negatively impacted by an increase in cost of sales due to continued softness in the core business and investments in Medicals Direct’s growth, and additional selling, general, and administrative expenses associated with the companies acquired in 2003 and in January 2004.

Revenues for the Company’s Health Information Business Unit (“HIBU”), comprised of Portamedic, Infolink, Heritage Labs and UK-based Medicals Direct Group, grew 6.3% to $70.3 million compared to $66.1 million in last year’s first quarter.

The HIBU’s first quarter performance was attributable to:

• Medicals Direct, which nearly tripled its revenues to $9.5 million from $3.3 million a year earlier, as a result of continuing favorable trends in the U.K. life insurance market and some small acquisitions including National Medicals;

• Infolink, which generated 34.5% revenue growth on the success of its new call center; and

• Heritage Labs, which generated 20.5% revenue growth, reflecting continued market share gains.

• Portamedic, which reported first quarter revenues of $50.0 million compared to $54.4 million in the year ago quarter.

Revenues for the Company’s Diversified Business Unit (“DBU”), including D&D Associates, Allegiance Health (acquired January 2004) and Medimax (acquired October 2003), increased 11.1% to

$9.7 million from $8.8 million in the first quarter of 2003, and 23.6% from $7.9 million in the fourth quarter 2003, as a result of new revenue contributions amounting to $2.9 million in the first quarter of 2004 from the acquisitions of Allegiance Health and Medimax. D&D Associates revenue declined $1.9 million due to lower automobile claims activity in New York state and certain clients distributing claims cases more evenly among its service providers.

Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, “Despite difficult conditions in the life insurance industry, we continue to maintain our share of Portamedic’s market and gain share in Heritage Labs’ and Infolink’s respective markets. At the same time, we continue to expand our product offerings with new services for our life and health insurance customers.”

“In the DBU, we are aggressively pursuing our ‘national IME provider’ business strategy as we execute on multi-state and national IME contracts with a focus on expanding our workers compensation services. Our pipeline of new business initiatives continues to grow and we are receiving encouraging feedback on promising new business opportunities. With its innovative approach, the DBU is well placed for improved growth. I am confident that our forward-looking strategy will position us well for the future.”

Mr. McNamee concluded, “Based on our performance to date, our previous guidance for full-year 2004 revenues in the range of $325 million and $335 million and earnings in the range of $0.27 to $0.29 per diluted share, appears attainable.”

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 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.

-TABLES TO FOLLOW-

HOOPER HOLMES INC.

2004 CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Three Months ended March 31,
	2004			2003
Revenues	$	79,993		$	74,850
Cost of operations		57,148			52,099
Gross profit		22,845			22,751
Selling, general and administrative expenses		17,793			14,949
Operating income		5,052			7,802
Other income (expense):
Interest expense		(148	)		(60	)
Interest income		105			215
Other expense, net		(123	)		(326	)
		(166	)		(171	)
Income before income taxes		4,886			7,631
Income taxes		1,805			2,973
Net income	$	3,081		$	4,658
Earnings per share:
Basic	$	0.05		$	0.07
Diluted	$	0.05		$	0.07
Weighted average number of shares:
Basic		64,876,031			64,744,169
Diluted		66,747,322			66,222,850

-MORE-

HOOPER HOLMES INC.

CONSOLIDATED BALANCE SHEETS

	3/31/04		12/31/03
ASSETS
Current Assets:
Cash and cash equivalents	$	19,087,297	$	28,291,019
Marketable securities		6,681,972		10,603,332
Accounts receivable, net		40,554,106		34,663,082
Other current assets		6,687,238		6,569,707
Total current assets		73,010,613		80,127,140
Property, plant and equipment:		33,880,967		33,004,834
Less: Accumulated depreciation and amortization		23,996,774		23,393,981
Property, plant and equipment, net		9,884,193		9,610,853
Goodwill		140,537,860		135,130,744
Intangible assets		33,538,014		29,617,156
Other assets		565,110		810,358
Total assets	$	257,535,790	$	225,296,251
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	1,018,662	$	1,028,363
Accounts payable		12,325,991		12,106,987
Accrued expenses:
Salaries, wages and fees		1,212,111		1,478,189
Income taxes payable		4,601,508		3,116,446
Other		8,421,424		9,416,252
Total current liabilities		27,579,696		27,146,237
Long term debt, less current maturities		1,000,000		2,000,000
Other long term liabilities		4,720,298		4,554,160
Deferred income taxes		1,674,695		1,758,879
Minority interest		412,299		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		127,299,050		127,487,718
Accumulated other comprehensive income		1,067,902		855,719
Retained earnings		110,721,253		108,613,932
		241,788,168		239,657,332
Less: Treasury stock at cost (2,590,951 and 2,662,151 shares)		19,639,366		20,179,062
Total stockholders’ equity		222,148,802		219,478,270
Total liabilities and stockholders’ equity	$	257,535,790	$	255,296,251

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