BASKING RIDGE, N.J., Nov. 5, 2010 -- Hooper Holmes (NYSE Amex:HH) today announced financial results for the third quarter ended September 30, 2010.
Consolidated revenues totaled $40.3 million for the third quarter of 2010, representing an 8% revenue decline from $43.8 million in the third quarter of 2009. The Company recorded a net loss of $1.2 million for the third quarter of 2010, or ($0.02) per share, compared to a net loss of $0.7 million, or ($0.01) per share, for the third quarter of 2009. The net loss for the third quarter of 2010 includes restructuring charges of $0.7 million, primarily attributable to severance related to the resignation of the Company's former CEO. The net loss for the third quarter of 2009 includes $0.3 million of restructuring and other charges.
For the nine months ended September 30, 2010, consolidated revenues were $123.0 million compared to $137.4 million in the comparable period of 2009. The Company's net loss for the nine months ended September 30, 2010 totaled $0.7 million, or $(0.01) per share, compared to a net loss of $3.0 million, or $(0.04) per share in 2009. The results for the nine months ended September 30, 2010 include a $1.6 million reduction in a previously established reserve for interest and penalties pertaining to unclaimed property. In addition, the results for the nine months ended September 30, 2010 and 2009 include a non-cash charge of $0.6 million and $2.1 million, respectively, attributable to increased depreciation expense resulting from a reduction in the estimated useful life of the Company's current IT system. The 2010 and 2009 results also include restructuring and other charges totaling $0.9 million and $1.1 million, respectively.
Third quarter 2010 revenues by service line:
Portamedic revenue declined 13% to $28.1 million in the third quarter of 2010 compared to $32.4 million in the third quarter of 2009, primarily due to a 14% decline in paramedical exams completed during the quarter, partially offset by a 0.3% increase in revenue per exam. Heritage Labs revenue totaled $2.8 million for the third quarter of 2010, a decrease of 4% compared to the third quarter of 2009, primarily attributable to reduced demand for lab testing services and specimen collection kits. Hooper Holmes Services revenue totaled $5.7 million for the third quarter of 2010, a 4% decline from $5.9 million in the third quarter of 2009, primarily due to reduced demand for tele-interviewing services. Health & Wellness revenue totaled $3.7 million for the third quarter of 2010, a 48% increase from revenue in the comparable third quarter of 2009.
Net cash provided by operations approximated $0.1 million in the third quarter of 2010. Capital expenditures totaled $1.3 million in the third quarter. As of September 30, 2010, cash and cash equivalents totaled $18.2 million, with no borrowings under the Company's credit facility.
"The third quarter is historically our slowest because less life insurance is sold in the summer and fewer health screenings are completed. Our overall revenue decline slowed to 8% in the third quarter from 12% in the second quarter, which is a move in the right direction," said Ransom J. Parker, President and CEO of Hooper Holmes. "However, we are keenly aware that our success will depend upon driving sales, and investing to improve operations."
Conference Call
The Company will host a conference call, today, November 5, 2010 at 11:00 a.m. ET to discuss third quarter 2010 results.
To participate in the conference call, please dial 877-941-4775, or internationally 480-629-9761, conference ID: 4381489 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 November 5, 2010 until midnight on November 12, 2010, by dialing 877-870-5176, or internationally 858-384-5517. The access code for the replay is 4381489.
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 Nine Months Ended
September 30 September 30,
---------------------- ----------------------
2010 2009 2010 2009
----------- ---------- ----------- ----------
Revenues $ 40,346 $ 43,790 $ 122,978 $ 137,437
Cost of operations 30,064 32,272 90,753 100,603
--------------------- ----------- ---------- ----------- ----------
Gross profit 10,282 11,518 32,225 36,834
--------------------- ----------- ---------- ----------- ----------
Selling, general and
administrative
expenses 10,607 11,867 33,292 38,360
Restructuring and
other charges 669 261 908 1,139
--------------------- ----------- ---------- ----------- ----------
Operating loss from
continuing operations (994) (610) (1,975) (2,665)
--------------------- ----------- ---------- ----------- ----------
Other (expense)
income:
Interest income 27 22 104 66
Other (expense)
income, net (75) (133) 1,374 (335)
--------------------- ----------- ---------- ----------- ----------
(48) (111) 1,478 (269)
----------- ---------- ----------- ----------
Loss from continuing
operations before
income taxes (1,042) (721) (497) (2,934)
Income tax expense
(benefit) 175 (2) 202 36
Loss from continuing
operations (1,217) (719) (699) (2,970)
--------------------- ----------- ---------- ----------- ----------
Discontinued
operations:
Loss on sale of
subsidiary -- -- -- (41)
--------------------- ----------- ---------- ----------- ----------
Net loss $ (1,217) $ (719) $ (699) $ (3,011)
===================== =========== ========== =========== ==========
Basic and diluted
loss per share:
Continuing operations
Basic $ (0.02) $ (0.01) $ (0.01) $ (0.04)
Diluted $ (0.02) $ (0.01) $ (0.01) $ (0.04)
Discontinued
operations
Basic $ -- $ -- $ -- $ --
Diluted $ -- $ -- $ -- $ --
Net loss
Basic $ (0.02) $ (0.01) $ (0.01) $ (0.04)
Diluted $ (0.02) $ (0.01) $ (0.01) $ (0.04)
===================== =========== ========== =========== ==========
Weighted average
number of shares:
Basic and diluted 69,589,587 68,704,587 69,386,528 68,687,994
===================== =========== ========== =========== ==========
HOOPER HOLMES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands, except share and per share data)
September 30, December 31,
2010 2009
--------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 18,247 $ 16,495
Accounts receivable, net of
allowance for doubtful accounts of
$1,015 and $1,237 at September 30,
2010 and December 31, 2009,
respectively 21,505 20,365
Inventories 2,805 2,750
Income tax receivable 18 1,479
Other current assets 1,665 2,816
----------------------------------- --------------- ---------------
Total current assets 44,240 43,905
----------------------------------- --------------- ---------------
Property, plant and equipment at
cost 48,585 45,739
Less: Accumulated depreciation and
amortization 37,557 34,184
----------------------------------- --------------- ---------------
Property, plant and equipment, net 11,028 11,555
Intangible assets, net 630 932
Other assets 329 310
----------------------------------- --------------- ---------------
Total assets $ 56,227 $ 56,702
=================================== =============== ===============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 6,497 $ 5,167
Accrued expenses 7,120 8,636
----------------------------------- --------------- ---------------
Total current liabilities 13,617 13,803
----------------------------------- --------------- ---------------
Other long-term liabilities 1,246 1,473
----------------------------------- --------------- ---------------
Commitments and Contingencies
----------------------------------- ---------------------------------
Stockholders' Equity:
Common stock, par value $.04 per
share; authorized 240,000,000
shares, issued 69,598,982 shares
and 68,713,982 shares as of
September 30, 2010 and December
31, 2009, respectively.
Outstanding: 69,589,587 shares
and 68,704,587 shares at September
30, 2010 and December 31, 2009,
respectively. 2,784 2,748
Additional paid-in capital 148,108 147,507
Accumulated deficit (109,457) (108,758)
----------------------------------- --------------- ---------------
41,435 41,497
Less: Treasury stock, at cost;
9,395 shares as of September 30,
2010 and December 31, 2009 (71) (71)
----------------------------------- --------------- ---------------
Total stockholders' equity 41,364 41,426
----------------------------------- --------------- ---------------
Total liabilities and
stockholders' equity $ 56,227 $ 56,702
=================================== =============== ===============