BASKING RIDGE, N.J., Aug 06, 2010 -- Hooper Holmes (NYSE:HH) today announced financial results for the second quarter ended June 30, 2010.
Consolidated revenues totaled $40.7 million for the second quarter of 2010, representing a 12% revenue decline from the $46.2 million in the second quarter of 2009. The Company recorded net income of $1.2 million for the second quarter of 2010, or $0.02 per share, compared to a net loss of $0.5 million, or a loss of ($0.01) per share for the second quarter of 2009. Net income for the second quarter of 2010 includes a $1.6 million reduction in a previously established reserve for interest and penalties pertaining to unclaimed property. In addition, net income for the second quarter 2010 includes non-cash charges of $0.2 million attributable to accelerated depreciation expense resulting from a reduction in the estimated useful life of the Company's current IT system, along with $0.1 million of restructuring charges. The net loss for the second quarter 2009 included $0.8 million attributable to accelerated depreciation expense and $0.7 million of restructuring and other charges.
Second quarter 2010 revenues by service line:
-- Portamedic revenue declined 13% to $30.1 million in the second quarter of 2010 compared to $34.6 million in the second quarter of 2009, primarily due to a 15% decline in paramedical exams completed during the quarter, partially offset by a 0.4% increase in revenue per exam.
-- Heritage Labs revenue totaled $2.8 million for the second quarter of 2010, a decrease of 10% compared to the second quarter of 2009, primarily attributable to reduced demand for lab testing services and specimen collection kits.
-- Hooper Holmes Services revenue totaled $5.5 million for the second quarter of 2010, a 15% decline from $6.5 million in the second quarter of 2009, primarily due to reduced demand for the Company's medical records collection services.
-- Health & Wellness revenue totaled $2.3 million for the second quarter of 2010, an 18% increase from revenue in the comparable second quarter of 2009.
Net cash provided by operations approximated $2.8 million in the second quarter of 2010. Capital expenditures totaled $1.1 million in the second quarter. As of June 30, 2010, cash and cash equivalents totaled $19.5 million, with no borrowings under the Company's credit facility.
"Three of our divisions were profitable as we worked hard to control costs, even with a slowdown in insurance exams due to the economy," said Roy H. Bubbs, President and CEO of Hooper Holmes. "In our remaining Services division, we are taking actions to eliminate unacceptable losses and we expect to achieve sustained profitability in this division by December 2010. I am pleased with the strong growth in our Health and Wellness division compared to the prior year, and with the favorable customer response to our new iParamed platform, which should lead to increased profits consistent with our 5% profitability goal."
Larry Ferguson, Chairman of the Board of Hooper Holmes, commented "Management and the Board continue to pursue short-term operational improvements and broader strategic initiatives. Efforts are still underway to drive us toward our goal of 5% profitability and we are cautiously optimistic we will achieve this goal in the fourth quarter."
Conference Call
The Company will host a conference call, today, August 6, 2010 at 11:00am ET to discuss second quarter 2010 results.
To participate in the conference call, please dial 877-941-4775, or internationally 480-629-9761, conference ID: 4338093 five to 10 minutes before the call is scheduled to begin. A live webcast will be hosted on the Company's website located at www.hooperholmes.com. A replay of the conference call will be available from 2:00 p.m. on August 6, 2010 until midnight on August 13, 2010, by dialing 877-870-5176, or internationally 858-384-5517. The access code for the replay is 4338093.
About Hooper Holmes
Hooper Holmes is a leader in collecting personal health data and transforming it into useful information, enabling customers to take actions that manage or reduce their risks and expenses. With presence in hundreds of markets and a network of thousands of examiners, Hooper Holmes can arrange a medical exam anywhere in the U.S. and deliver the results to its customers.
Hooper Holmes has four divisions. Portamedic provides a wide range of medical exam services nationwide. Heritage Labs tests millions of samples annually and helps life insurers improve underwriting performance by better applying the predictive powers of today's tests. Health & Wellness provides a complete service for wellness, disease management, and managed care companies including scheduling support, fulfillment of supplies, blood collection kits, medical screenings, lab testing and data transmission. Hooper Holmes Services reduces the insurance sales cycle through integrated data collection, tele-interviewing and underwriting services.
This press release contains "forward-looking" statements, as such term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions. Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements are our ability to successfully implement our business strategy; our working capital requirements over the next 12 to 24 months; our ability to maintain compliance with the financial covenant in our credit facility; the level of our liquidity in operating cash flows; customer and creditor concerns about our financial health; and the rate of life insurance application activity. Additional information about these and other factors that could affect the Company's business is set forth in the Company's annual report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on March 12, 2010. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release to reflect the occurrence of unanticipated events, except as required by law.
HOOPER HOLMES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except share and per share data)
Three Months ended Six Months ended
June 30, June 30,
----------------------- ---------------------
2010 2009 2010 2009
---------- ----------- ---------- ----------
Revenues $ 40,714 $ 46,212 $ 82,632 $ 93,647
Cost of operations 29,940 33,292 60,689 68,331
----------------------- ---------- ----------- ---------- ----------
Gross profit 10,774 12,920 21,943 25,316
----------------------- ---------- ----------- ---------- ----------
Selling, general and
administrative
expenses 10,975 12,661 22,685 26,493
Restructuring and
other charges 131 690 239 878
----------------------- ---------- ----------- ---------- ----------
Operating loss from
continuing
operations (332) (431) (981) (2,055)
----------------------- ---------- ----------- ---------- ----------
Other income (expense):
Interest income 27 20 77 44
Other income
(expense), net 1,540 (69) 1,449 (202)
----------------------- ---------- ----------- ---------- ----------
1,567 (49) 1,526 (158)
---------- ----------- ---------- ----------
Income (loss)
from continuing
operations
before income
taxes 1,235 (480) 545 (2,213)
Income tax expense 13 21 27 38
Income (loss)
from continuing
operations $ 1,222 $ (501) $ 518 $ (2,251)
----------------------- ---------- ----------- ---------- ----------
Discontinued
operations:
Loss on sale of
subsidiary -- -- -- (41)
----------------------- ---------- ----------- ---------- ----------
-- -- -- (41)
---------- ----------- ---------- ----------
Net income (loss) 1,222 (501) 518 (2,292)
======================= ========== =========== ========== ==========
Income (loss)
per share:
Continuing
operations:
Basic $ 0.02 $ (0.01) $ 0.01 $ (0.03)
Diluted $ 0.02 $ (0.01) $ 0.01 $ (0.03)
Discontinued
operations:
Basic $ -- $ -- $ -- $ --
Diluted $ -- $ -- $ -- $ --
Net income (loss):
Basic $ 0.02 $ (0.01) $ 0.01 $ (0.03)
Diluted $ 0.02 $ (0.01) $ 0.01 $ (0.03)
======================= ========== =========== ========== ===========
Weighted average
number of shares:
Basic 69,566,125 68,684,477 69,283,316 68,679,559
Diluted 69,988,628 68,684,477 69,955,901 68,679,559
Hooper Holmes, Inc.
Consolidated Balance Sheets
(unaudited; in thousands, except share and per share data)
June 30, 2010 December 31, 2009
------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $ 19,459 $ 16,495
Accounts receivable, net of
allowance for doubtful accounts
of $1,080 and $1,237 at
June 30, 2010 and December 31,
2009, respectively 20,107 20,365
Inventories 2,444 2,750
Income tax receivable 18 1,479
Other current assets 1,660 2,816
------------- -----------------
Total current assets 43,688 43,905
Property, plant and
equipment at cost 47,648 45,739
Less: accumulated depreciation
and amortization 36,800 34,184
------------- -----------------
Property, plant and equipment, net 10,848 11,555
Intangible assets, net 726 932
Other assets 293 310
------------- -----------------
Total assets $ 55,555 $ 56,702
============= =================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,273 $ 5,167
Accrued expenses 6,538 8,636
------------- -----------------
Total current liabilities 11,811 13,803
Other long term liabilities 1,261 1,473
Commitments and Contingencies
Stockholders' equity:
2,784 2,748
Common stock, par value $.04 per
share; authorized 240,000,000
shares; Issued: 69,598,982
shares and 68,713,982 shares at
June 30, 2010 and
December 31, 2009, respectively.
Outstanding: 69,589,587 shares
and 68,704,587 shares at
June 30, 2010 and
December 31, 2009, respectively.
Additional paid-in capital 148,010 147,507
Accumulated deficit (108,240) (108,758)
------------- -----------------
42,554 41,497
(71) (71)
Less: Treasury stock at cost,
9,395 shares as of June 30, 2010
and December 31, 2009
------------- -----------------
Total stockholders' equity 42,483 41,426
------------- -----------------
Total liabilities and
stockholders' equity $ 55,555 $ 56,702
============= =================