Hooper Holmes (HH) 8-K Hooper Holmes Announces 2005 Second 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: John Capodanno / Jonathan Birt

Media: Sean Leous

Financial Dynamics

212-850-5600

HOOPER HOLMES ANNOUNCES 2005 SECOND QUARTER FINANCIAL RESULTS

BASKING RIDGE, NJ, July 28, 2005, Hooper Holmes, Inc. (AMEX:HH) today reported its financial results for the second quarter ended June 30, 2005.

Total revenues for the quarter increased 2.5% to $84.9 million compared to $82.8 million in the second quarter of 2004. Net income was $3.4 million or $0.05 per diluted share, the same as in the second quarter of the prior year.

Second quarter 2005 revenues for the Company’s Health Information Division (HID) were $74.7, an increase of 4% over the $71.8 million reported in the second quarter 2004. The HID’s second quarter 2005 performance was attributable to:

• A $5.1 million revenue contribution from Mid-America Agency Services (MAAS), our outsourced underwriting business acquired on May 1, 2004 (this represented an increase of $3 million over the 2004 second quarter amount, which included only two months of operations);

• Medicals Direct, our UK subsidiary, which increased revenues by 11% to $11.1 million, the result of aggressive expansion efforts and select small acquisitions made in 2004;

• Heritage Labs, which generated 29% revenue growth to $5.3 million, due to additional market share gains;

• Infolink, which increased revenues by 11% to approximately $8.1 million attributable to the continued success of its call center; and

• A decline in Portamedic revenues of $3.2 million to $45 million, down 6.7% compared to $48.2 million in the same period last year.

Revenues for the Company’s Claims Evaluation Division (CED) were $10.2 million, compared to $11.0 million for the second quarter of 2004. The decrease was primarily a result of reduced claims activity in the primary markets in which we have focused to date due to both regulatory and customer practice changes.

Jim McNamee, Chairman, President and Chief Executive Officer of Hooper Holmes, stated, “Our second quarter results are inline with our expectations and represent a solid performance given the ongoing reorganization activities and the current market conditions. While our Portamedic unit’s operating results continue to reflect the decline in life insurance application activity and downward pricing pressure, we are extremely pleased with the performance of our other business units, particularly Heritage Labs, which improved revenues 29% year-over-year for the quarter, and Medicals Direct and Infolink, which both increased revenues 11% over the second quarter of the prior year.”

For the six months ended June 30, 2005, revenues increased 2.8% to $167.4 million from $162.8 million in last year’s comparable period. Net income was $5.8 million, or $0.09 per diluted share, compared to $6.4 million, or $0.10 per diluted share, in the first half of last year.

Mr. McNamee concluded, “We are modifying our revenue guidance and affirming our earnings guidance for the full year 2005. We now expect to generate revenues in the range of $340 million to $350 million, reflecting anticipated revenue growth in all businesses except our Portamedic business. We continue our reorganization initiatives and we continue to expect diluted earnings per share to grow 15-20% above 2004 levels.”

Hooper Holmes will host a conference call tomorrow 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 athttp://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 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.

-TABLES TO FOLLOW-

HOOPER HOLMES INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

(unaudited)

	Three Months ended June 30,						Six Months ended June 30,
	2005			2004			2005			2004
Revenues	$	84,870		$	82,842		$	167,373		$	162,835
Cost of operations		60,665			59,770			119,509			116,918
Gross profit		24,205			23,072			47,864			45,917
Selling, general and administrative expenses		18,390			17,353			37,850			35,145
Operating income		5,815			5,719			10,014			10,772
Other income (expense):
Interest expense		(166	)		(196	)		(346	)		(344	)
Interest income		130			51			177			156
Other expense, net		(131	)		(76	)		(227	)		(200	)
		(167	)		(221	)		(396	)		(388	)
Income before income taxes		5,648			5,498			9,618			10,384
Income taxes		2,246			2,129			3,841			3,934
Net income	$	3,402		$	3,369		$	5,777		$	6,450
Earnings per share:
Basic	$	0.05		$	0.05		$	0.09		$	0.10
Diluted	$	0.05		$	0.05		$	0.09		$	0.10
Weighted average number of shares:
Basic		65,283,711			64,987,776			65,261,409			64,931,903
Diluted		66,255,343			66,615,086			66,358,120			66,684,779

HOOPER HOLMES INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

		06/30/2005		12/31/2004
ASSETS
Current Assets:
Cash and cash equivalents		$	13,645	$	16,973
Marketable securities			2,079		6,886
Accounts receivable, net			47,370		42,001
Other current assets			8,502		7,242
Total current assets			71,596		73,102
Property, plant and equipment:			37,865		36,740
Less: Accumulated depreciation and amortization			26,149		25,540
	��
			11,716		11,200
Goodwill			155,899		155,502
Intangible assets			32,721		35,380
Other assets			481		521
Total assets		$	272,413	$	275,705
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		$	1,057	$	1,067
Accounts payable			13,460		14,701
Accrued expenses:
Salaries, wages and fees			1,237		1,105
Income taxes payable			3,114		2,512
Other			13,421		15,453
Total current liabilities			32,289		34,838
Long term debt, less current maturities			—		1,000
Other long term liabilities			706		3,881
Deferred income taxes			7,041		7,475
Minority interest			305		254
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			124,708		126,086
Accumulated other comprehensive income			768		1,466
Retained earnings			119,244		115,424
			247,420		245,676
Less: Treasury stock at cost (2,035,795 shares in 2005 and 2,297,995 shares in 2004)			15,348		17,419
Total stockholders’ equity			232,072		228,257
Total liabilities and stockholders’ equity		$	272,413	$	275,705