Hooper Holmes Announces 2005 Second Quarter Financial Results
BASKING RIDGE, N.J., July 28 -- 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 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 to the life insurance industry through over 265 locations nationwide and in the United Kingdom, as well as claims evaluation information services to the automobile, and workers' compensation insurance industries.
Certain information contained herein includes information that is forward- looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involving the Company's business. These forward-looking statements are qualified in their entirety by cautionary statements contained in the Company's Securities and Exchange Commission filings. The Company disclaims any obligation to update these forward-looking statements.
HOOPER HOLMES INC.
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 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