Hooper Holmes Providing Alternate-Site Health Information
1995 Annual Report to Shareholders
Hooper Holmes
1995 Annual Report
Providing
Alternate-Site
Health
Information
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Hooper Holmes
provider of alternate-site health information
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Hooper Holmes, Inc. is the nation's leading provider of alternate-site health
information. Through approximately 200 locations serving all 50 states, the
Company's network of experienced medical professionals conducts physical
examinations, testing and personal health interviews, primarily for the life and
health insurance industry. Information gathered in these activities is used by
insurance underwriters to assess risks and make informed decisions.
Hooper Holmes' customers include most of the nation's major life and health
insurers, and the Company performs approximately 2.5 million tests on insurance
applicants each year under its two trade names, Portamedic and ASB/Meditest. The
Company believes it offers the industry's widest geographic coverage and
up-to-date technology to ensure timely, accurate delivery of health information.
Hooper Holmes' mission is to be recognized as a quality service provider that
meets the needs of its customers, employees and shareholders.
Headquartered in Basking Ridge, New Jersey, Hooper Holmes' common stock trades
on the American Stock Exchange under the symbol "HH."
Financial Highlights
Years ended December 31,
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(dollars in 000's except share data) 1995 1994 1993
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Revenues $ 111,313 $ 92,534 $ 80,600
Operating income 4,059 3,803 5,020
Income from continuing operations 1,667 1,480 2,739
Income (loss) from discontinued operations (14,716) 1,184 867
Net income (loss) ($ 13,049) $ 2,664 $ 3,606
Earnings per share from continuing operations $ .25 $ .22 $ .41
Earnings (loss) per share from discontinued operations ($ 2.19) $ .18 $ .13
Net earnings (loss) per share ($ 1.94) $ .40 $ .54
Cash dividends per share $ .06 $ .30 $ .30
Weighted average number of shares outstanding 6,707,128 6,706,713 6,714,061
To Our Shareholders
We will remember 1995 as a defining year for Hooper Holmes, one in which the
Company sharpened its operating focus and firmly established itself as a leader
in its industry. The Company executed a major business transaction that allowed
us to focus solely on alternate-site health information services -- a successful
business for us for over 25 years. The completion and subsequent integration of
the transaction have required a substantial commitment of management's
attention, but even so, Hooper Holmes turned in a solid financial performance in
1995, with growth in sales and operating income. We ended the year a revitalized
company with an optimistic eye toward the future.
A Unique Opportunity
Our transaction with Olsten Corporation, which closed September 29, 1995,
represented a unique opportunity for Hooper Holmes. Structured as a swap
transaction, it enabled us to divest our Nurse's House Call home healthcare
division in return for ASB/Meditest and a cash payment of approximately $27.3
million, which is being used to retire existing debt. ASB was previously a
respected competitor of our Portamedic division, with a strong branch network
and excellent relationships with many of the country's largest life and health
insurers.
The result of the transaction is a transformed Hooper Holmes with strong growth
opportunities. We now serve roughly 30% of the life and health insurance market
for alternate-site health information. This expanded presence improves our
position as one of the leading information sources for the country's largest
life and health insurers, while ASB/Meditest provides the opportunity for
expansion in the potentially lucrative wellness/health screening niche market.
Meanwhile, the integration of the businesses presents attractive margin
improvement opportunities. Alternate-site services is a higher margin business
than home healthcare, and we are making it more attractive by streamlining the
Portamedic and ASB office networks and leveraging Portamedic's established
infrastructure.
Improved Operating Base
Income from continuing operations for the year ended December 31, 1995 totaled
$1.7 million, or $0.25 per share, an increase of 13% over $1.5 million, or $0.22
per share in 1994. Revenues totaled $111.3 million for the year. Approximately
$98.5 million of revenues were attributable to the full-year contribution of
Portamedic, with the remainder consisting of the fourth quarter contribution
from ASB. In 1994, Portamedic's revenues totaled $92.5 million.
Hooper Holmes accounted for its Nurse's House Call healthcare business as a
discontinued operation in the second quarter and concluded that in the fourth
quarter, with the disposal, as a discontinued operation, of its occupational
health business, resulting in a charge of $14.7 million, or $2.19 per share. As
a result, the Company reported a net loss for the full year of $13.0 million, or
$1.94 per share. In 1994, Hooper Holmes earned $2.7 million, or $0.40 per share.
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President.}
As the increase in income from continuing operations indicates, Hooper Holmes
enjoys a much-improved operating base going forward. In addition to synergistic
and new business opportunities, we expect operating margins to benefit from the
substantial reduction in interest expense made possible by the cash portion of
the transaction. Outstanding bank debt was cut to $35.1 million in 1995, and
interest expense in 1996 should be substantially below the level of the prior
year. The Company expects to reduce its debt further in 1996.
Industry and Business Growth
As a healthier, more profitable company, Hooper Holmes is well-prepared to
compete in what we see as a growth industry. Life and health insurers are more
focused than ever on minimizing their exposure to serious health risks in an era
when the healthcare industry's cost structure is rapidly being lowered. Already,
we see stricter underwriting standards and lower thresholds for mandatory
pre-screening of applicants, two key trends that indicate increasing demand for
alternate-site health information. Moreover, insurers are striving to maximize
their own efficiency and are increasingly outsourcing the medical testing and
information gathering functions.
As we head into 1996, Hooper Holmes is positioned to realize the maximum
benefits of these industry trends. Our primary goal is to complete the effective
integration of ASB/Meditest, and we have already succeeded by eliminating
operating redundancies and preserving relationships with existing ASB customers.
We will continue to exploit the cost savings opportunities and will use the
advantages of a larger, more focused company to address attractive business
opportunities. In all of our endeavors, we are committed to using our position
as the leader in our industry as a platform to support stronger growth and
profitability.
Our thanks go to our customers, employees and shareholders. We look forward to a
successful 1996.
Sincerely,
/s/ Frederick D. King /s/ James M. McNamee
- --------------------- --------------------
Frederick D. King James M. McNamee
Chairman of the Board President and Chief Executive Officer
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Defining Alternate-Site Health Information
Alternate-site health information provided to life and health insurance
companies is a $600 million industry in the United States. In a time of
increasing cost pressures on businesses and rapid changes in the structure of
the healthcare delivery network, insurance underwriters around the nation regard
the delivery of timely, accurate health information as a critical service with a
growing value.
Hooper Holmes and other top alternate-site providers typically conduct
paramedical pre-screening of life and health insurance applicants, utilizing
physicians, nurses and other medically trained professionals to obtain reliable
health information in a location convenient to the applicant such as the home or
office. Services performed can be as routine as a physical exam but may be
broadened to include blood and other lab tests, electrocardiograms and personal
health interviews yielding information on lifestyles and health histories. This
data is packaged for ready reference by insurance underwriters, facilitating
better-informed risk-assessment and decision-making on the part of insurance
companies.
An estimated 6.5 million insurance applicants are pre-screened each year, 30% by
Hooper Holmes' examiners. As the industry leader, Hooper Holmes serves most of
the largest life insurers in the country and a broad base of local and regional
insurance agents, offering the industry's widest geographic coverage and
strongest technological capabilities. Many smaller players only conduct business
at the local and regional level and/or specialize in niche services such as drug
and substance abuse screening.
Service providers must be highly responsive and well-attuned to the needs of
their clients. Major insurers approve and recommend use of a specific providers
primarily based on their accuracy, geographic presence and technological
reporting capabilities. Local insurance agents then rely on the recommendations
of their affiliated corporations in selecting service providers for applicants.
The local agent, whose motivation is closing sales of new policies, places a
high priority on timely information delivery.
The value of accurate health information in the risk-assessment process is on
the rise as insurers increasingly react to cost-containment trends in healthcare
delivery and managed care programs. Heightened concerns about the impact of AIDS
and other major health issues, as well as indications
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...timeliness, accuracy/quality, geographic coverage, technology...
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Hooper Holmes is the industry's largest and most technically advanced provider
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from regulators that certain home testing products might be approved for
consumer use, are leading insurers to reconsider the minimum threshold at which
they require insurer-sponsored applicant pre-screening. As a result of these
industry dynamics, greater value is being placed on health information and
underwriting standards are tightening.
At the same time, demand for alternate-site services is benefitting from the
increased outsourcing of paramedical testing. Increasingly, insurers are
stripping away the layers of their processing organizations, offering outside
providers the opportunity to bridge the gap with rapidly obtained information
that is transmitted directly to the underwriter.
Clearly, the providing of alternate-site health information is a growing
industry. Portamedic's revenues grew at an average annual rate of 16% during the
first half of this decade, and the business trends point to continued volume
expansion. Hooper Holmes is also targeting attractive new health information
opportunities designed to help employers, HMOs and other organizations discern
and address potential risks among their insured bases.
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Providing Information with Value
Hooper Holmes
accomodates
well over
200,000
requests for service
each month.
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...quality of service, rapid turnaround, high standards...
[GRAPHIC]
Hooper Holmes' Portamedic and ASB/Meditest together form the nation's largest
provider of alternate-site health information. The combined operations offer an
industry-leading 200 company-owned office locations operating in all 50 states
and major U.S. territories. Hooper Holmes utilizes a network of experienced
medical professionals including physicians, RNs and LPNs, ECG technicians and
phlebotomists. This integrated network accommodates well over 200,000 requests
for services each month, including medical testing, personal inspection
reporting, wellness screenings and other services, from customers such as
Prudential Insurance, Metropolitan Life and State Farm. Hooper Holmes now counts
46 of the nation's 50 largest life and health insurers among its clientele.
Through an established, state-of-the-art information infrastructure, Hooper
Holmes possesses an ability to gather and communicate information on a level
that is unmatched in its industry. The Company is the first testing provider
delivering paramedical exam results electronically and within 24 hours. Hooper
Holmes' Infolink Services Group, which operates out of four regional service
centers and now serves both Portamedic and ASB/Meditest clients, permits
customers immediate access to inspection reports covering pertinent applicant
data such as financial and health histories. Also, each Portamedic and ASB
branch is linked to corporate headquarters via an automated reporting system.
Hooper Holmes professionals are equipped to supply paramedical information to
specified insurers via laptop computers, a service which saves the insurer money
by cutting into the multiple layers of processing staff traditionally needed to
review applications. These integrated systems help Hooper Holmes maintain its
reputation for high quality service and the industry's best turnaround.
Hooper Holmes uses a two-tier marketing approach, led by seven seasoned
professionals who concentrate on corporate-level account relationships. Their
efforts include establishing preferred provider relationships with major
insurers which then recommend Hooper Holmes to their agent networks. The
corporate sales staff is also instrumental in identifying expanded relationship
opportunities. On the second tier, each Portamedic and ASB branch employs a
local sales representative who serves as a point of contact for insurance agents
and is responsible for ensuring fast, accurate service.
In an industry with promising growth opportunities, Hooper Holmes has two key
growth strategies. First, the Company is working to increase its market share
and further solidify its position as the industry's leading service provider.
This effort is being driven by the primary competitive advantage of integrated
information systems, which enables Hooper Holmes to provide services with value,
helping insurers eliminate processing costs from their systems by gathering
information quickly and reporting directly to underwriters.
Second, the Company is leveraging its information infrastructure to expand its
position in the industrial and health information services markets. Services in
this segment can include pre-employment physicals, personnel reporting and
employee health profile and risk assessment programs. The Company believes the
potential for growth in this area is tremendous. With a broad geographic scope
and integrated reporting capabilities, Hooper Holmes is working with employers
and managed care providers to establish "wellness programs," whereby aggregated
health information on employees or covered lives can be used as a basis for
education on potential health risks. Thus, Hooper Holmes can facilitate a degree
of preventive care on behalf of clients who otherwise have little or no means of
managing risk.
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Hooper Holmes, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
1995 Compared to 1994
Total revenues for 1995 increased 20.3% to $111.3 million from $92.5 million for
1994. This growth results from a 19% unit increase in the number of paramedical
examinations performed and a 26% increase in inspection and attending physician
statement units. Of the overall increase, approximately 14% reflects new revenue
provided in the fourth quarter by the acquisition of ASB Meditest and 6% stems
from revenue growth of the existing offices. Management believes this latter
increase is the result of marketshare gains, partially offset by pricing
pressures and volume discounting. In 1995, the Company discontinued its
healthcare operations including its occupational health operations. See Note 2
to the consolidated financial statements for information related to discontinued
operations. The results reported herein are representative of the Company's
continuing operations.
The Company's cost of operations in 1995 totaled $85.9 million compared to
$70.7 million for 1994. Cost of operations as a percentage of revenues totaled
77.2% for 1995 versus 76.4% for 1994. This increase was primarily due to
competitive pricing pressures in the marketplace and higher branch operating
expenses, partly due to the ASB Meditest acquisition. The Company believes that
additional branch operating savings will be realized as planned consolidations
of the ASB Meditest acquisition are completed.
Selling, general and administrative expenses ("SG&A") increased
to $21.3 million for 1995 from $18.1 million for 1994. The increase
of $3.2 million is largely attributed to SG&A expenses related to ASB Meditest's
corporate functions which were duplicative of existing company SG&A. The Company
believes that as the integration of ASB Meditest continues, additional cost
savings may be realized.
Accordingly, the Company's operating income for 1995 increased
to $4.1 million versus $3.8 million for 1994, and as a percentage of revenues,
decreased to 3.6% for 1995 compared to 4.1% for 1994.
Interest expense increased in 1995 over 1994 due to higher amounts borrowed,
but this increase was offset by certain other income items. See note 3 to the
consolidated financial statements.
As a result of the foregoing, net income from continuing operations in 1995
totaled $1.7 million or $0.25 per share compared to $1.5 million or $0.22 per
share for 1994. The 1995 net loss from discontinued operations totaled $14.7
million, or $2.19 per share, compared to a net income of $1.2 million, or $0.18
per share for the prior year.
The net loss for 1995 was $13.0 million compared to net income of $2.7
million for 1994. The net loss in 1995 includes a $14.7 million or $2.19 per
share, net loss from discontinued operations. See Note 2 to the consolidated
financial statements.
In the second quarter of 1995, the Company discontinued its Nurse's House
Call healthcare business and entered into a contract to sell this business. In
the fourth quarter of 1995 the Company discontinued its occupational health
business recently acquired as part of ASB Meditest which primarily consisted of
drug testing and immunizations. These disposals are in connection with the
Company's strategy to focus on its core business of providing health information
services.
Inflation did not have a significant effect on the Companies operations in
1995.
1994 Compared to 1993
Total revenues for 1994 increased to $92.5 million from $80.6 million for 1993.
This 14.8% increase results from a 12.4% growth in the number of paramedical
examinations due in part to the acquisition of Lifedata Medical Services, in
September 1993. Management believes that this increase results from Portamedic
continuing to be a preferred provider of examination services. Management also
believes it will continue to gain marketshare as well as being able to develop
new health information related products to the managed care industry. Prudential
Insurance Company of America accounted for more than 10% of Health Information
Services revenues in the amount of $11.0 million.
The Company's cost of operations in 1994 increased to $70.7 million from
$60.8 million, in 1993, representing an increase of 16.3%. This increase is
attributed to the 12.4% increase in volume offset by certain pricing pressures
beginning in late 1993. Cost of operations as a percent of revenues totaled
76.4% in 1994 compared to 75.4% in 1993, somewhat due to pricing pressures in
the form of volume discounting.
Selling, general and administrative (SG&A) expenses increased to $18.1
million in 1994 from $14.8 million in 1993. The increase, was the result of an
expansion in the number of offices nationwide resulting from the Lifedata
Services, Inc. acquisition in September 1993, plus other increases in personnel
in administrative groups, especially the financial and system departments,
required to support the Health Information Services business.
Operating income declined from $5.0 million in 1993 to $3.8 million in 1994,
and as a percentage of revenues, decreased to 4.1% from 6.2%.
Net income from continuing operations decreased from $2.7 million in 1993 to
$1.5 million in 1994, representing a decrease of 46.0%. This decrease is
attributable to the previously noted costs, as well as an increase in interest
costs attributed to borrowing to fund the acquisition, accounts receivable
growth and working capital needs. Also impacting net income was a higher
effective state tax rate due to a change in the mix of income amongst the
states. Earnings per share from continuing operations decreased in 1994 to $.22
from $.41 per share in 1993, and earnings from discontinued operations increased
to $.18 per share in 1994 from $.13 per share in 1993.
Net Income for 1994 decreased to $2.7 million in 1994 from $3.6 million in
1993.
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Liquidity and Financial Resources
The Company's historical primary sources of cash are internally generated funds
and the Company's bank credit facility. Acquisitions in late 1993 required
significantly greater amounts of cash due to increasing accounts receivable
balances and other working capital needs. The Company borrowed from its banks
significant amounts to finance these acquisitions and for operating cash needs.
In the second quarter of 1995, the Company discontinued its Nurse's House Call
(NHC) health care operations and entered into a contract to sell those
operations and in return receive cash and a health information services company,
ASB Meditest, from the buyer. The transaction closed September 29, 1995 and the
Company received $12.3 million in cash after finalizing the net asset values of
NHC and ASB Meditest, and an additional $15 million was placed into an interest
bearing escrow account to be released to the Company to the extent that certain
accounts receivable sold as part of the transaction are collected.
For the year ended December 31, 1995, the net cash provided by operating
activities for continuing operations was $5.6 million and for discontinued
operations, the net cash used in operating activities was $3.3 million. The
significant sources include the increase in liabilities of approximately $3.0
million. The increases in other assets and refundable taxes of $1.9 million were
the significant uses of cash. Through February 29, 1996, collections of the sold
accounts receivables were at a level which allowed the release of $9.8 million
of the $15 million escrow. Management is confident that the remainder of the
escrow will be collected within the terms of the accounts receivable collection
agreement.
The Company replaced its term loan and revolving credit facility in November
1995 with a $40 million revolving credit facility which can be extended one year
beyond its January 1998 expiration date. The revolver loan will accrue interest
at the bank's base rate less 1/4% or at LIBOR plus 2.25%, at the option of the
Company. The total amount of the facility declines over the period of the
agreement to $20 million as of June 1997. At December 31, 1995 the total
available to the Company was $39 million, of which $31.5 million had been
borrowed. The current maturities of long-term debt will be paid with the escrow
funds as they are released from escrow. Capital expenditures for 1996 are
anticipated at less than $2.0 million. Due to the loss on the sale of Nurse's
House Call operations, the Company anticipates an income tax refund in 1996 of
approximately $9.0 million.
Management believes that the combination of cash and cash equivalents, other
working capital sources, borrowings under the Company's credit facility, the
escrow cash and anticipated income tax refund, along with the anticipated cash
flows from continuing operations, will provide sufficient capital resources for
the foreseeable future.
Recently Issued Accounting Standards
In March 1995, the Financial Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, which became
effective on January 1, 1996. SFAS No. 121 established accounting standards for
the impairment of long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used and for long-lived assets
and certain identifiable intangibles to be disposed. Adoption of SFAS No. 121 is
not expected to have a material impact on the Company's consolidated financial
position and operating results, nor will it affect the Company's cash flows.
In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation. This statement establishes an alternative method of accounting for
stock based compensation awarded to employees, such as stock options granted by
the Company to employees. The standard provides for the recognition of
compensation expense based on the fair value of the stock-based award, but
allows companies to continue to measure compensation cost in accordance with
Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to
Employees. Companies electing to retain this method must make pro forma
disclosures of net income and earnings per share as if the fair value based
method had been applied. The Company plans to continue to use APB No. 25, which
does not require the Company to record compensation expense for the stock
options it awards to employees. In 1996, the Company will disclose the pro forma
effect of the fair value method on 1996 and 1995 net income and earnings per
share.
page. 9
Hooper Holmes, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31,
1995 1994
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Assets
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Current Assets:
Cash and cash equivalents $ 1,065,464 $ 1,695,844
Accounts receivable - trade (Note 4) 21,974,398 12,706,513
Accounts receivable - other (Note 2) 2,387,010 0
Escrow funds (Note 3) 15,000,000 0
Refundable taxes 9,264,734 0
Other current assets 4,716,328 2,347,383
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Total current assets 54,407,934 16,749,740
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Property, plant and equipment (Notes 5 and 6) 18,270,355 12,290,826
Less: Accumulated depreciation and amortization 7,423,190 6,027,686
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10,847,165 6,263,140
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Cost in excess of net assets of acquired companies
(net of accumulated amortization of $1,742,563 in 1995
and $1,136,172 in 1994) (Note 3) 16,601,785 4,283,384
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Intangible assets (net of accumulated amortization of $535,691 in 1995
and $128,130 in 1994) (Note 3) 10,589,722 197,284
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Other assets 1,550,489 1,632,763
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Net assets held for disposal (Note 2) 0 74,045,993
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$ 93,997,095 $ 103,172,304
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Liabilities and Stockholders' Equity
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Current Liabilities:
Current maturities of long-term debt $ 8,800,000 $ 2,150,000
Accounts payable 10,677,452 5,043,424
Accrued expenses:
Insurance benefits 127,215 117,717
Salaries, wages and fees 596,886 522,181
Payroll and other taxes 740,678 422,392
Income taxes payable 0 450,518
Discontinued operations (Note 2) 4,380,023 0
Other 4,299,369 1,636,722
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Total current liabilities 29,621,623 10,342,954
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Long-term debt, less current maturities (Note 6) 26,250,000 46,326,942
Deferred income taxes (Note 9) 4,993,459 0
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Commitments and contingencies (Note 7 and 8)
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Stockholders' Equity (Note 11):
Common stock, par value $.04 per share; authorized
20,000,000 shares, issued 6,744,422 in 1995 and 1994 269,777 269,777
Additional paid-in capital 24,080,988 24,114,410
Retained earnings 9,138,401 22,589,370
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33,489,166 46,973,557
Less: Treasury stock, 32,308 shares in 1995 and
42,620 shares in 1994, at cost 357,153 471,149
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Total stockholders' equity 33,132,013 46,502,408
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$ 93,997,095 $103,172,304
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See accompanying notes to consolidated financial statements.
page. 10
Hooper Holmes, Inc. and Subsidiaries
Consolidated Statements of Operations
Years ended December 31,
1995 1994 1993
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Revenues $111,313,005 $ 92,533,685 $ 80,600,398
Cost of operations 85,933,510 70,677,574 60,799,945
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Gross profit 25,379,495 21,856,111 19,800,453
Selling, general and administrative expenses 21,320,852 18,053,281 14,780,902
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Operating income 4,058,643 3,802,830 5,019,551
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Other income (expense):
Interest expense (1,673,548) (994,208) (237,420)
Interest income 262,247 21,682 65,151
Other income (Note 3) 383,793 0 0
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(1,027,508) (972,526) (172,269)
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Income before income taxes 3,031,135 2,830,304 4,847,282
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Income taxes (Note 9) 1,364,161 1,350,272 2,108,045
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Income from continuing operations 1,666,974 1,480,032 2,739,237
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Discontinued operations: (Note 2)
Income (loss) from operations, net of taxes (4,389,559) 1,183,488 866,654
Loss on disposal, net of taxes (10,326,068) 0 0
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Income (loss) from discontinued operations (14,715,627) 1,183,488 866,654
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Net income (loss) $ (13,048,653) $ 2,663,520 $ 3,605,891
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Earnings (loss) per share: (Note 10)
Weighted average number of shares 6,707,128 6,706,713 6,714,061
Income from continuing operations $ 0.25 $ .22 $ .41
Income (loss) from discontinued operations $ (2.19) $ .18 $ .13
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Net income (loss) $ (1.94) $ .40 $. 54
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See accompanying notes to consolidated financial statements.
page. 11
Hooper Holmes, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
Common Stock Additional
Number of Paid-in Retained Treasury
Years ended December 31, 1993, 1994 and 1995 Shares Amount Capital Earnings Stock Total
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Balance, December 31, 1992 6,729,422 $269,177 $23,957,538 $20,346,384 $(189,159) $44,383,940
Net income 3,605,891 3,605,891
Cash dividends ($.30 per share) (2,014,028) (2,014,028)
Exercise of stock options (35,129) 83,599 48,470
Issuance of stock award 15,000 600 220,650 221,250
Purchase of treasury stock (329,151) (329,151)
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Balance, December 31, 1993 6,744,422 269,777 24,143,059 21,938,247 (434,711) 45,916,372
Net income 2,663,520 2,663,520
Cash dividends ($.30 per share) (2,012,397) (2,012,397)
Exercise of stock options (28,649) 67,370 38,721
Purchase of treasury stock (103,808) (103,808)
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Balance, December 31, 1994 6,744,422 269,777 24,114,410 22,589,370 (471,149) 46,502,408
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Net loss (13,048,653) (13,048,653)
Cash dividends ($.06 per share) (402,316) (402,316)
Exercise of stock options (16,728) 55,959 39,231
Issuance of stock award (16,694) 58,037 41,343
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Balance, December 31, 1995 6,744,422 $269,777 $24,080,988 $9,138,401 $(357,153) $33,132,013
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See accompanying notes to consolidated financial statements.
page. 12
Hooper Holmes, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years ended December 31,
1995 1994 1993
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Cash flows from operating activities:
Income from continuing operations $ 1,666,974 $ 1,480,032 $ 2,739,237
Adjustments to reconcile income from continuing operations
to net cash provided (used in) by operating activities:
Depreciation and amortization 2,469,116 1,316,040 1,094,649
Provision for bad debt expense 320,979 76,000 261,205
Deferred tax expense (benefit) 363,000 (67,000) (126,000)
Issuance of stock awards 41,343 0 221,250
Loss on sale of fixed assets 14,429 37,619 8,517
Change in assets and liabilities, net of effect from
acquisitions/dispositions of businesses:
Accounts receivable (328,030) 39,192 (3,023,802)
Other current assets (647,540) (968,992) (172)
Income tax receivable (1,269,570) 0 0
Accounts payable and accrued expenses 2,999,731 254,376 (116,686)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities
of continuing operations 5,630,432 2,167,267 1,058,198
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash (used in) operating activities
of discontinued operations (3,265,830) (13,367,913) (9,705,881)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 2,364,602 (11,200,646) (8,647,683)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Net proceeds from dispositions 12,449,646 0 0
Acquisition of Lifedata Medical Services, Inc. 0 0 (6,307,795)
All other acquisitions 0 (23,000) (31,000)
Capital expenditures, net of disposals (857,126) (872,726) (844,368)
Net investing activities of discontinued operations (797,475) 307,559 (18,709,346)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities 10,795,045 (588,167) (25,892,509)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of long term debt 43,500,000 21,326,942 35,300,000
Principal payments on long term debt (56,926,942) (4,350,000) (6,800,000)
Issuance of note payable 0 0 3,000,000
Payment of note 0 (3,000,000) 0
Proceeds from exercise of stock options 39,231 38,721 48,470
Treasury stock acquired 0 (103,808) (329,151)
Dividends paid (402,316) (2,012,397) (2,014,028)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (13,790,027) 11,899,458 29,205,291
- ------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (630,380) 110,645 (5,334,901)
Cash and cash equivalents at beginning of year 1,695,844 1,585,199 6,920,100
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 1,065,464 $ 1,695,844 $ 1,585,199
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest $ 1,446,753 $ 904,034 $ 218,985
Income taxes $ 1,238,356 $ 2,899,520 $ 2,843,784
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
page. 13
Hooper Holmes, Inc. and Subsidiaries
Notes To Consolidated Financial Statements
Note 1 -- Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Hooper Holmes,
Inc. and its wholly owned subsidiaries (the "Company"). All significant
intercompany balances and transactions are eliminated in consolidation.
Description of the Business
The Company provides alternate-site health information. The Company's network of
experienced medical professionals conduct physical examinations, testing, and
personal health interviews, primarily for the life and health insurance
industry. Information gathered in these activities is used by insurance
underwriters to assess risks and make informed decisions. The Company is subject
to certain risks and uncertainties as a result of changes that could occur in
the life and health insurance industry's underwritng requirements and standards,
and in the Company's customer base.
Use of Estimates
The preparation of the consolidated financial statements requires management to
make estimates and assumptions that affect reported amounts and disclosures in
these financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers highly liquid investments with maturities at date of
purchase of less than ninety days to be cash equivalents.
Property, plant and equipment
Property, plant and equipment are carried at cost. Depreciation is computed
using the straight line and accelerated method over the assets estimated useful
life. The cost of maintenance and repairs is charged to income as incurred;
significant renewals and betterments are capitalized.
Intangibles
Cost in excess of net assets of acquired companies and other intangible assets
are being amortized using the straight line method over lives ranging from 10-25
years and 3-15 years, respectively. Intangible assets are periodically reviewed
to determine recoverability by comparing their carrying values to expected
future cash flows.
Revenues
Revenues from services rendered are recognized when services are performed.
Income taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Concentration of Credit Risk
The Company's accounts receivable are due primarily from insurance companies.
Prudential Insurance Company of America continues as a major customer but due to
overall revenue growth, fell below 10% of total revenues for 1995. In 1994 and
1993 however, Prudential provided revenues of $11.0 million and $12.0 million
respectively
Fair Value of Financial Instruments
The carrying value of long-term debt approximates its fair value due
to the variable interest rate and short interest rate reset period. For all
other financial instruments, their carrying value approximates fair value, due
to the short maturity of these instruments.
Advertising
Costs related to space in publications are expensed the first time the
advertising occurs. Advertising expense was approximately $318,000, $230,000,
and $179,000 in 1995, 1994, and 1993, respectively.
Note 2 -- Discontinued Operations
The Company transferred substantially all of the assets and business
of its Nurse's House Call health care division (the "NHC division") to Olsten
Corporation, (the "NHC Transaction"), pursuant to an Agreement of Acquisition
between the Company and Olsten, dated May 26, 1995.
The transaction closed September 29, 1995 subject to the final adjustment of
the cash portion of the purchase price as discussed below. Pursuant to the
Acquisition Agreement Olsten transferred, to the Company all of the issued and
outstanding capital stock ("ASB Meditest Stock") of American Service Bureau,
Inc., engaged in the business of providing paramedical examinations and related
services to the life and health insurance industries under the name ASB Meditest
("ASB Meditest"), $27.3 million in cash as adjusted to reflect changes in the
NHC Division Net Asset Amount between November 30, 1994 and the Closing Date,
and in the ASB Meditest Net Asset Amount between December 31, 1994 and the
Closing Date and assumed certain specified liabilities of approximately $5.1
million relating to the NHC Division. Included in accounts receivable other, are
amounts due from Olsten for liabilities paid by the Company on Olsten's behalf.
Net sales for the NHC Division for the period ended September 29, 1995 were
$117.2 million, and for the years ending December 1994 and 1993 were $159.3
million and $106.8 million, respectively.
Earnings (loss) from operations of such business, for the period ending
September 29, 1995, were ($4.1) million, and for the years ending December 31,
1994 and 1993 were $1.2 million and $.9 million, respectively, and are net of
taxes (benefits) of ($2.2) million for the period
page. 14
Hooper Holmes, Inc. and Subsidiaries
ending September 29, 1995, and $1.1 million and $.7 million for the years ended
December 31, 1994, and 1993, respectively. Interest expense was allocated to
discontinued operations based on the increase in debt required to fund the NHC
Division's accounts receivable growth. Interest expense allocated to the NHC
Division was approximately $1.9 million, $1.7 million, and $.3 million in 1995,
1994, and 1993, respectively.
The Company has recorded a loss in the amount of $10.3 million, net of tax
benefits of $7.6 million, on the disposal of the NHC Division. The Company
recorded a provision for certain costs related to the disposal including the
transaction loss, severance and other expenses, transaction fees, and accounts
receivable collection fees.
Consistent with the Company's decision to discontinue its healthcare
business, the Company, in the 4th quarter of 1995, also discontinued the
operations of its Occupational Health segment acquired as part of the ASB
Meditest acquisition, and has reflected in its discontinued operations, a loss,
net of taxes of $.3 million. In October 1995, the Company sold the Drug Screen
portion of its Occupational Health segment for $700,000 in cash, and a $500,000,
one year promissory note, which is included in accounts receivable - other. The
assets consisted primarily of computer equipment and software and customer
lists. There was no gain or loss to be recognized on this transaction. The
Company concluded its seasonal Flu vaccination commitments late in 1995, and
will not continue this business in 1996.
The 1995 consolidated financial statements exclude amounts for discontinued
operations from captions applicable to continuing operations. The 1994 and 1993
consolidated financial statements have been restated to conform with the 1995
presentation.
Note 3 -- Acquisitions and Dispositions
On September 29, 1995, in connection with the NHC transaction the Company
acquired all of the outstanding common stock of ASB Meditest, a national health
information services company. As a result of an independent appraisal, the
Company has recorded costs in excess of net assets acquired of approximately
$12.3 million, and intangible assets in the amount of $10.8 million, comprised
of assembled work force $2.3 million, contractor network $2.4 million, referral
base $4.1 million, and a non competition agreement valued at $2.0 million. These
amounts are all being amortized over their useful lives.
The NHC transaction called for a portion of the purchase price to be placed
in escrow until collections of the trade receivables of NHC sold to Olsten are
reduced to below $30.0 million. At that point the escrow funds are released
dollar for dollar until the balance is reduced to $15.0 million. As of February
29, 1996, the Company has received $8.2 million of the escrowed funds. The
escrowed funds as released, are utilized to pay down existing debt.
On September 24, 1993, the Company acquired all of the outstanding common
stock of Lifedata Medical Services, Inc., a national health information services
company, headquartered in Overland Park, Kansas. The purchase price was in the
amount of $6.0 million. Cost in excess of net assets acquired was approximately
$3.1 million. Additionally, a noncompetition agreement was entered into in the
amount of $.2 million.
The acquisitions discussed above have been accounted for using the purchase
method of accounting and the purchase price of each acquisition has been
assigned to the net assets based on the fair value of such assets and
liabilities at the date of acquisition. The consolidated financial statements
include the results of operations of Lifedata Medical Services, Inc. from
September 24, 1993, and ASB Meditest from September 29, 1995.
In 1992 the Company sold its Direct Marketing business and received cash and
a six year promissory note. The Company determined that the gain on this
transaction should be recognized as note payments are received. During 1995, the
Company received $364,000 which is included in other income.
The following unaudited pro forma information has been prepared as if the
1995 acquisition of ASB Meditest had occurred on January 1, 1994, and excludes
the NHC Division. This pro forma information does not purport to be an
indication of the results that actually would have been obtained if the
operations had been combined during the periods.
(in thousands, except for per
share amounts) 1995 1994
- --------------------------------------------------------------------------------
Revenues $170,296 $174,380
- --------------------------------------------------------------------------------
Net income $ 4 $ 743
Earnings per share $ .00 $ .11
- --------------------------------------------------------------------------------
Note 4 -- Accounts Receivable
Accounts receivable are net of an allowance for doubtful accounts in the amount
of $466,021 and $157,886 in 1995 and 1994, respectively.
page. 15
Hooper Holmes, Inc. and Subsidiaries
Note 5 -- Property, Plant and Equipment
Property, plant and equipment consists of the following:
Estimated
December 31, December 31, Useful Life
1995 1994 In Years
- --------------------------------------------------------------------------------
Land and
improvements $ 570,116 $ 567,947 10 - 20
- --------------------------------------------------------------------------------
Building and
improvements 3,744,552 3,543,381 10 - 45
- --------------------------------------------------------------------------------
Furniture,
fixtures and
equipment 13,955,687 8,179,498 5 - 10
- --------------------------------------------------------------------------------
$18,270,355 $12,290,826
- --------------------------------------------------------------------------------
Note 6 -- Long Term Debt
Long term debt, excluding current portion:
(millions) 1995 1994
- --------------------------------------------------------------------------------
1993 Term loan, due December 2000 $ 0.0 $ 17.7
1993 Revolving loan, due January 1997 0.0 25.3
1995 Revolving loan, due January 1998 24.0 0.0
Mortgage, due January 1998 2.3 3.3
- --------------------------------------------------------------------------------
$ 26.3 $ 46.3
- --------------------------------------------------------------------------------
Annual maturities for the two years subsequent to December 31, 1996 are as
follows: 1997 - $5.0 million and 1998 - $21.3 million. The 1993 term loan and
1993 revolving loan were refinanced in November 1995 with a $40.0 million
revolving loan which decreases over the term to $20.0 million in June 1997. The
1995 revolving loan accrues interest at the bank's base rate minus 1/4% or LIBOR
plus 2 1/4%. The rate at December 31, 1995 was 8.1% and the maximum available
credit amount was $39.0 million. Also, commitment fees of 1/4% of the unused
credit are charged and the loan is secured by the Company's assets, largely
accounts receivable. Dividend payments are limited to quarterly amounts of $.02
to $.05 through the agreement term based on maintaining certain financial
ratios. At December 31, 1994 the interest rates on the 1993 term loan and the
1993 revolving loan were 8.3% and 7.2% respectively. The mortgage is composed of
two components, one accrues interest at 6.9% and the other at 5.65%.
The Company has entered into a one year renewable Letter of Credit to the
benefit of an insurance company relating to workers' compensation insurance. At
December 31, 1995 the amount was $4.5 million.
Note 7 -- Commitments and Contingencies
The Company leases branch field offices under a number of operating leases which
expire in various years through 2000. These leases generally contain renewal
options and require the Company to pay all executory costs (such as property
taxes, maintenance and insurance). The Company also leases telephone, computer
and other miscellaneous equipment which are classified as operating leases and
expire in the years 1996 through 2000. The following is a schedule of future
minimum lease payments for operating leases (with initial or remaining terms in
excess of one year) as of December 31, 1995:
- --------------------------------------------------------------------------------
Year Ending December 31,
- --------------------------------------------------------------------------------
1996 $ 7,112,040
1997 4,551,073
1998 2,097,400
1999 665,915
2000 184,166
- --------------------------------------------------------------------------------
Total minimum lease payments $14,610,594
- --------------------------------------------------------------------------------
Rental expenses, under operating leases were $3,908,709, $3,740,373 and
$2,780,268 in 1995, 1994 and 1993, respectively.
On April 4, 1995, the Company was served with a Civil Investigative Demand
which relates to an investigation by the U.S. Deptartment of Justice of
allegations that a specific office of Hooper Holmes, Inc's discontinued Nurse's
House Call division falsified records and submitted false claims for
reimbursement under Medicare and/or Medicaid. The Company is cooperating to
resolve this matter and management does not anticipate that the final resolution
of this matter will have a material adverse impact on the Company's results of
operation or its financial condition. On January 24, 1990, the Company entered
into an employment retention contract with the President for a two year period
from the date a change in control occurs as further defined in the contract.
Note 8 -- Litigation
The Company is a party to a number of legal actions arising in the ordinary
course of its business. In the opinion of management, the Company has adequate
legal defense and/or insurance coverage respecting each of these actions and
does not believe their ultimate disposition will materially affect the Company's
operations or financial position.
page. 16
Hooper Holmes, Inc. and Subsidiaries
Note 9 -- Income Taxes
Income tax expense is comprised of the following:
1995 1994 1993
- --------------------------------------------------------------------------------
United States Federal:
Current $ 699,000 $1,077,000 $1,677,000
Deferred 362,000 (67,000) (126,000)
State and local:
Current 303,000 340,000 557,000
- --------------------------------------------------------------------------------
$1,364,000 $1,350,000 $2,108,000
- --------------------------------------------------------------------------------
The following reconciles the "statutory" federal income tax rates to the
effective income tax rates:
1995 1994 1993
- --------------------------------------------------------------------------------
Computed "expected"
tax expense 34% 34% 34%
Increase (reduction) in tax
expense resulting from:
State tax, net of federal
income tax benefit 6 7 7
Non-tax deductible,
amortization of goodwill 7 5 2
Other (2) 2 1
- --------------------------------------------------------------------------------
Effective income tax rates 45% 48% 44%
- --------------------------------------------------------------------------------
The tax effects of temporary differences that give rise to the deferred tax
assets and liabilities at December 31, 1995, and 1994, are as follows (in
thousands):
1995 1994
- --------------------------------------------------------------------------------
Deferred tax assets:
Discontinued operation accruals $ 933 $ 0
Receivable allowance 196 75
Intangible assets 191 258
Net operating loss carry forwards 365 0
Acquisition bases adjustment
accounts receivable 875 0
Other 117 38
- --------------------------------------------------------------------------------
2,677 371
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Accumulated depreciation (975) (480)
Acquisition bases adjustment
primarily intangibles (4,692) 0
- --------------------------------------------------------------------------------
(5,667) (480)
- --------------------------------------------------------------------------------
Net deferred tax liability $ (2,990) $ (109)
- --------------------------------------------------------------------------------
Deferred tax assets (liabilities) are reflected in the consolidated balance
sheets at December 31, 1995 as follows, prepaid expenses and other $2,003 and
deferred income taxes (noncurrent) $(4,993) and at December 31, 1994 in accrued
expenses other ($109).
At December 31, 1995, the Company had net operating loss carryforwards of
approximately $365,000 that will expire in the year 2010.
No valuation allowance has been provided on deferred tax assets since
management believes that it is more likely than not that such assets will be
realized through the reversal of existing deferred tax liabilities and future
taxable income.
The principal components of the deferred tax provision in 1995 and 1994
include differences between financial and tax reporting for depreciation,
amortization, and allowance for accounts receivable.
Note 10 -- Earnings (loss) Per Share
Earnings (loss) per share of common stock have been computed based on the
weighted average number of shares outstanding. No effect has been given in the
calculation for common stock equivalents since the equivalents are either not
materially dilutive to earnings per share or are antidilutive to loss per share.
Note 11 -- Capital Stock
Stockholder Rights Plan -- On January 23, 1990, the Board of Directors adopted a
Stockholder Rights Plan, which was amended and restated on May 10, 1991 and
further amended on July 12, 1995. The Board declared a dividend of one Common
Share Right for each outstanding share of Common Stock distributable on April 2,
1990. Such rights only become exercisable ten business days after (a) the
Company or a person or group announces that such person or group (other than
certain specified persons, such as the Company, any wholly-owned subsidiary,
employee benefit plans of the Company and persons who held at least 20% of the
Common Stock when the Rights Plan was adopted, until the occurrence of certain
events, or as the result of an acquisition of shares by the Company) has
acquired beneficial ownership of 20% or more of the Company's Common Stock or
(b) the commencement of a tender offer by a person or group to acquire 30% or
more of the Company's Common Stock (such date, the "Separation Date"). Upon the
Separation Date, each right shall constitute the right to purchase one share of
Common Stock of the Company for $24.00, subject to adjustment. After (x) the
announcement of the acquisition by a person or group of 20% or more of the
Company's Common Stock (other than in a tender offer for all shares which has
been approved by the Board of Directors), or (y) the Company enters into or
consummates a merger or other similar business transaction, or a sale of more
than 50% of the assets or earning power, each right shall be adjusted to
constitute the right to purchase that number of shares of Common Stock of the
Company or capital stock of the acquiring company, as the case may be, having an
aggregate market
page. 17
Hooper Holmes, Inc. and Subsidiaries
price on the date of such announcement of the acquisition or such consummation
or occurrence of the transaction equal to twice the exercise price of $24.00,
also subject to adjustment. The rights may be redeemed for $0.05 per right at
any time until the tenth day following public announcement that a 20% position
has been acquired. The rights will expire on March 16, 2000, unless sooner
redeemed.
Stock Awards -- The Company's president is entitled to receive stock awards
based on the attainment of performance goals established for any given year. For
the years ended December 31, 1995, 1994 and 1993, awards of 6,000 (paid in cash
at its fair value at the time of grant), 5,250 (shares issued in 1995), and
11,000 shares, respectively, have been granted.
Stock Option Plan -- The Company's stockholders approved stock option plans
totaling 300,000 and 500,000 shares, respectively, in 1988 and 1992, and 500,000
shares in 1994, which provide that options may be granted to management. Options
were granted at market value on the dates of the grants and are exercisable as
follows: 25% after two years and 25% on each of three anniversary dates
thereafter, and terminate after 10 years. As of December 31, 1995, 253,038
shares are exercisable.
Shares under option are:
1995 1994 1993
- --------------------------------------------------------------------------------
Options outstanding January 1 664,925 606,438 461,513
Options granted 191,100 141,000 161,300
Options exercised (a) 5,062 5,813 7,125
Options cancelled 111,413 76,700 9,250
Options outstanding December 31 739,550 664,925 606,438
- --------------------------------------------------------------------------------
Option price range $ 5.50 $ 5.50 $ 5.50
to to to
$ 14.94 $ 14.94 $ 14.94
- --------------------------------------------------------------------------------
- ----------
(a) 5,062, 3,000 and 4,125 were exercised at $7.75 in 1995, 1994 and 1993
respectively, all others exercised at $5.50.
Note 12 -- 401k Savings and Retirement Plan
This plan is available to all employees with at least one year of service of
greater than 1000 hours of employment, and is administered by Lincoln National
Life Ins. Co. The Company matches up to 25% of the first 10% of employee salary
contributions. The Company payments for 1995, 1994, and 1993, were $137,000,
$123,000, and $114,000, respectively.
Independent Auditors' Report
The Board of Directors and Stockholders
Hooper Holmes, Inc.
We have audited the accompanying consolidated balance sheets of Hooper Holmes,
Inc. and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Hooper
Holmes, Inc. and subsidiaries at December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1995 in conformity with generally accepted accounting
principles.
Short Hills, New Jersey
March 4, 1996
page. 18
Hooper Holmes, Inc. and Subsidiaries
Selected Financial Data
For the years Ended December 31,
(in thousands except for per share data) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Operations Data:
Revenues $ 111,313 $ 92,534 $ 80,600 $ 68,931 $ 61,585
Operating income 4,059 3,803 5,020 4,548 4,079
Interest expense 1,674 994 237 144 319
Income from continuing operations 1,667 1,480 2,739 2,779 2,159
Income (loss) from discontinued operations (2) (14,716) 1,184 867 2,099 1,427
Net income (loss) (13,049) 2,664 3,606 4,878 3,586
Earnings from continuing operations per share 0.25 0.22 0.41 0.42 0.42
Earnings (loss) from discontinued operations per share (2) (2.19) 0.18 0.13 0.31 0.28
Earnings (loss) per share (1) (1.94) 0.40 0.54 0.73 0.70
Cash dividends per share (1) $ 0.06 $ 0.30 $ 0.30 $ 0.25 $ 0.24
Weighted average number (1)
of shares outstanding 6,707,128 6,706,713 6,714,061 6,717,667 5,141,201
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
Working capital $ 24,786 $ 6,407 $ 4,024 $ 9,861 $ 15,720
Total assets 93,997 103,172 88,355 52,754 48,962
Current maturities of long term debt 8,800 2,150 1,550 0 93
Long-term debt, less current maturities 26,250 46,327 29,950 3,000 3,078
Total long-term debt 35,050 48,477 31,500 3,000 3,171
Stockholders' equity $ 33,132 $ 46,502 $ 45,916 $ 44,384 $ 41,160
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Adjusted to reflect a 3 for 2 stock split effective February 28, 1992.
(2) See Note 2 to the consolidated financial statements.
page. 19
Hooper Holmes, Inc. and Subsidiaries
Quarterly Common Stock Price Ranges and Dividends
(Dollars)
1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
High Low High Low
Quarter Bid Bid Dividend Bid Bid Dividend
- ------------------------------------------------------------------------------------------------------------------------------------
First 10 3/4 6 1/2 .03 14 3/4 11 1/8 .075
Second 10 1/2 7 5/8 .01 13 5/8 11 5/8 .075
Third 10 6 3/4 .01 11 7 5/8 .075
Fourth 9 7/8 7 3/4 .01 8 3/8 5 3/4 .075
- ------------------------------------------------------------------------------------------------------------------------------------
Hooper Holmes, Inc. and Subsidiaries
Quarterly Financial Data
(Unaudited)
Per share of common stock
-----------------------------------------
Net income Net Income from Discon- Net
Gross continuing Discontinued income continuing tinued income
Quarter (1) Revenues profit operations operations(1) (loss) operations operations (loss)
-----------------------------------------------------------------------------------------------------------------------------------
1995
Fourth $ 39,736 $ 8,136 $ 421 $ (338) $ 83 $ 0.06 $ (0.05) $ 0.01
Third 23,184 5,287 394 (720) (326) 0.06 (0.11) (0.05)
Second 24,396 5,940 446 (13,310) (12,864) 0.07 (1.98) (1.91)
First 23,997 6,016 406 (348) 58 0.06 (0.05) 0.01
-----------------------------------------------------------------------------------------------------------------------------------
Total $111,313 $ 25,379 $ 1,667 $(14,716) $(13,049) $ 0.25 $ (2.19) $ (1.94)
-----------------------------------------------------------------------------------------------------------------------------------
1994
Fourth $ 24,176 $ 5,681 $ 205 $ 512 $ 718 $ 0.03 $ 0.08 $ 0.11
Third 22,680 5,489 220 95 315 0.03 0.01 0.04
Second 23,016 5,012 141 301 442 0.02 0.05 0.07
First 22,662 5,674 914 276 1,189 0.14 0.04 0.18
-----------------------------------------------------------------------------------------------------------------------------------
Total $ 92,534 $ 21,856 $ 1,480 $ 1,184 $ 2,664 $ 0.22 $ 0.18 $ 0.40
- ------------------------------------------------------------------------------------------------------------------------------------
(1) During 1995, the second quarter consists of after tax charges of $10.3
million for the loss on the disposal of the NHC division and $3.0 million
of operating loss. The third quarter consists of an after tax charge of $.7
million for additional NHC division operating losses. The fourth quarter
charge of $.3 million, net of tax, relates to discontinuance of the
Occupational Health segment acquired as part of the ASB Meditest
acquisition. See Note 2 to the Consolidated Financial Statements.
page. 20
Directors
Frederick D. King
Chairman of the Board
Benjamin A. Currier
Senior Vice President,
Security Life of Denver Ins. Co.
Quentin J. Kennedy
Executive Vice President,
Secretary and Director
Federal Paper Board Company
Retired
Elaine L. La Monica
Professor
Department of Nursing Education
Teachers College
Columbia University
James M. McNamee
President and
Chief Executive Officer
John E. Nolan, Jr.
Partner
Steptoe & Johnson, LLP
Kenneth R. Rossano
Senior Vice President
Cassidy & Associates
Anne King Sullivan
Business Executive
Retired
G. Earle Wight
Senior Vice President
Officers
Frederick D. King
Chairman of the Board
James M. McNamee
President and
Chief Executive Officer
Paul W. Kolacki
Executive Vice President
and Chief Operating Officer
Robert William Jewett
Senior Vice President,
General Counsel and Secretary
Fred Lash
Senior Vice President,
Chief Financial Officer
and Treasurer
G. Earle Wight
Senior Vice President
Francis A. Stiner
Vice President
Stock Listing
The company's common stock is traded on the American Stock Exchange (AMEX) under
the symbol "HH."
Form 10-K
Holders of the company's common stock may obtain, without charge, a copy of the
Hooper Holmes, Inc. Annual Report on Form 10-K as filed with the Securities and
Exchange Commission upon request.
Address inquiries to:
Secretary
Hooper Holmes, Inc.
170 Mt. Airy Road
Basking Ridge, NJ 07920
Independent Certified Public Accountants
KPMG Peat Marwick LLP
Short Hills, NJ
Transfer Agents & Registrar
Midlantic Bank, N.A.
Edison, NJ
Annual Meeting
May 22, 1996
at the American Stock Exchange
New York, NY
[This page in the printed document contains 2 photos against a background
photo.]
Hooper Holmes
provider of alternate-site health information
Design: Zahor & Bender Incorporated
Hooper Holmes, Inc.
Corporate Headquarters
170 Mount Airy Road
Basking Ridge, NJ 07920
(908) 766-5000