EXHIBIT 99.1
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 | | News Release |
170 Mt. Airy Road
Basking Ridge, NJ 07920
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| | | Hooper Holmes |
| | | Joseph Marone Vice President & Acting Chief Financial Officer |
| | | (908) 766-5000 |
| PRESS RELEASE | | |
| | | Financial Dynamics |
| | | Investors: Jonathan Birt / John Capodanno |
| | | Media: Sean Leous |
| | | Financial Dynamics |
| | | 212-850-5600 |
HOOPER HOLMES ANNOUNCES 2005 THIRD QUARTER FINANCIAL RESULTS
BASKING RIDGE, NJ, October 31, 2005, Hooper Holmes, Inc. (AMEX:HH) today reported its financial results for the third quarter and nine months ended September 30, 2005.
Total revenues for the quarter decreased 6% to $77.5 million compared to $82.4 million in the third quarter of 2004. Net loss was $2.5 million or $0.04 per diluted share compared to net income of $2.4 million or $0.04 per diluted share in the third quarter of the prior year. The third quarter 2005 operating income included an after tax charge of $.04 per diluted share related to costs associated with the previously announced departures of the Company’s former President and Chief Executive Officer, and the Company’s former Chief Financial Officer, in the third quarter, as well as the write-off of certain purchased business application software.
Third quarter 2005 revenues for the Company’s Health Information Division (HID) were $68.3 million, a decrease of 3.7% compared to the $70.9 million reported in the third quarter 2004. Key factors influencing the HID’s period-over-period operating results were:
| | • | | A $5.4 million, or 12% decrease in Portamedic revenues to $40.6 million, reflecting the continued decline in the Company’s core paramedical business |
| | • | | A $1.0 million, or 28% increase in Mid-America Agency Services (MAAS) revenues to $4.5 million |
| | • | | A $0.3 million, or 3% increase in Medicals Direct, our UK subsidiary, revenues to $10.7 million |
| | • | | A $0.6 million, or 15% increase in Heritage Labs revenues to $4.7 million |
| | • | | A $0.8 million, or 12% increase in Infolink revenues to approximately $7.9 million |
Revenues for the Company’s Claims Evaluation Division (CED) were $9.2 million, compared to $11.5 million, a decrease of 20%, from the third quarter of 2004. The decrease was primarily a result of reduced independent medical exam and peer review activity in New York State, where a substantial amount of the CED’s revenue is generated.
For the nine months ended September 30, 2005, total revenues decreased 0.5% to $244.0 million from $245.3 million in last year’s comparable period. Net income was $2.8 million, or $0.04 per diluted share, for the nine-month period ended September 30, 2005, compared to $8.8 million, or $0.13 per diluted share, in the first nine months of last year.
Benjamin A. Currier, Chairman and interim Chief Executive Officer of Hooper Holmes, stated, “The third quarter results reflect the continuing decline of our core paramedical business, which prompted our release on October 7th of revised revenue and earnings guidance for the full year of 2005. The management team and Board of Directors are committed to completing our reorganization and promptly improving our earnings performance, demonstrating to our customer base an improved quality and efficiency of our operations, and substantially reducing costs. We intend to leverage our employee resources, geographic reach, experience, industry relationships and products and services.”
Mr. Currier added, “The Company’s search for both a CEO and CFO are progressing and we will update the market when a decision has been made.”
Hooper Holmes will host a conference call on Tuesday, November 1, 2005 to discuss third 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.
2005 CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
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| | | Three Months ended
September 30,
| | | Nine Months ended
September 30,
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| | | 2005
| | | 2004
| | | 2005
| | | 2004
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Revenues | | $ | 77,548 | | | $ | 82,446 | | | $ | 244,019 | | | $ | 245,281 | |
Cost of operations | | | 59,302 | | | | 59,161 | | | | 178,810 | | | | 176,079 | |
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Gross profit | | | 18,246 | | | | 23,285 | | | | 65,209 | | | | 69,202 | |
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Selling, general and administrative expenses | | | 22,317 | | | | 19,260 | | | | 60,167 | | | | 54,405 | |
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Operating (loss) income | | | (4,071 | ) | | | 4,025 | | | | 5,042 | | | | 14,797 | |
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Other income (expense): | | | | | | | | | | | | | | | | |
Interest expense | | | (147 | ) | | | (216 | ) | | | (493 | ) | | | (560 | ) |
Interest income | | | 111 | | | | 94 | | | | 288 | | | | 251 | |
Other income, expense, net | | | (126 | ) | | | (65 | ) | | | (353 | ) | | | (265 | ) |
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| | | | (162 | ) | | | (187 | ) | | | (558 | ) | | | (574 | ) |
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(Loss) Income before income taxes | | | (4,233 | ) | | | 3,838 | | | | 4,484 | | | | 14,223 | |
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Income tax (benefit) expense | | | (1,742 | ) | | | 1,488 | | | | 1,725 | | | | 5,423 | |
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Net (loss) Income | | $ | (2,491 | ) | | $ | 2,350 | | | $ | 2,759 | | | $ | 8,800 | |
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Net (loss) income per share: | | | | | | | | | | | | | | | | |
Basic | | $ | (0.04 | ) | | $ | 0.04 | | | $ | 0.04 | | | $ | 0.14 | |
Diluted | | $ | (0.04 | ) | | $ | 0.04 | | | $ | 0.04 | | | $ | 0.13 | |
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Weighted average number of shares: | | | | | | | | | | | | | | | | |
Basic | | | 65,527,594 | | | | 65,032,457 | | | | 65,351,112 | | | | 64,965,666 | |
Diluted | | | 65,527,594 | | | | 66,287,393 | | | | 66,080,614 | | | | 66,550,831 | |
Hooper Holmes, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
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| | | 09/30/2005
| | 12/31/2004
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ASSETS | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 12,188 | | $ | 16,973 |
Marketable securities | | | 2,172 | | | 6,886 |
Accounts receivable, net | | | 44,962 | | | 42,001 |
Other current assets | | | 7,117 | | | 7,242 |
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Total current assets | | | 66,439 | | | 73,102 |
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Property, plant and equipment: | | | 38,994 | | | 36,740 |
Less: Accumulated depreciation and amortization | | | 26,804 | | | 25,540 |
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| | | | 12,190 | | | 11,200 |
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Goodwill | | | 155,586 | | | 155,502 |
Intangible assets | | | 31,447 | | | 35,380 |
Other assets | | | 434 | | | 521 |
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Total assets | | $ | 266,096 | | $ | 275,705 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Current maturities of long-term debt | | $ | 1,052 | | $ | 1,067 |
Accounts payable | | | 12,632 | | | 14,701 |
Accrued expenses: | | | | | | |
Salaries, wages and fees | | | 961 | | | 1,105 |
Income taxes payable | | | 454 | | | 2,512 |
Other | | | 14,688 | | | 15,453 |
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Total current liabilities | | | 29,787 | | | 34,838 |
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Long term debt, less current maturities | | | — | | | 1,000 |
Other long term liabilities | | | 152 | | | 3,881 |
Deferred income taxes | | | 6,967 | | | 7,475 |
Minority interest | | | 348 | | | 254 |
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Stockholders’ equity: | | | | | | |
Common stock, par value $.04 per share; authorized 240,000,000 shares, issued 67,499,074 in 2004 and 2003. | | | 2,700 | | | 2,700 |
Additional paid-in capital | | | 123,882 | | | 126,086 |
Accumulated other comprehensive income | | | 688 | | | 1,466 |
Retained earnings | | | 115,244 | | | 115,424 |
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| | | | 242,514 | | | 245,676 |
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Less: Treasury stock at cost (1,815,995 shares in 2005 and 2,297,995 shares in 2004) | | | 13,672 | | | 17,419 |
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Total stockholders’ equity | | | 228,842 | | | 228,257 |
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Total liabilities and stockholders’ equity | | $ | 266,096 | | $ | 275,705 |
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