Hooper Holmes (NYSE MKT:HH) today announced financial results
for the second quarter ended June 30, 2014.
Pursuant to the previously announced agreement with Clinical
Reference Laboratory, Inc., the second quarter operating results of
the Company's Heritage Labs and Hooper Holmes Services businesses
are accounted for as discontinued operations in the Company's
consolidated statements. For the first time, the Company is
reporting consolidated revenues and costs of sale for Health &
Wellness operations on a stand-alone basis.
Consolidated revenues totaled $6.7 million for the second
quarter of 2014, representing an increase of $2.3 million, or
53.8%, from the second quarter of 2013. The Company recorded a net
loss of $2.8 million, or $(0.04) per share, for the second quarter
of 2014, as compared to a net loss of $5.0 million, or $(0.07) per
share, for the second quarter of 2013. The net loss for the second
quarter of 2014 includes losses incurred in the discontinued
operations and $0.4 million of transition costs associated with
consolidating operations in Olathe, KS.
The Company's revenue increase is primarily due to an increased
number of screenings. Health & Wellness operations performed
37.3% more health screenings in the second quarter of 2014 compared
to the same period of 2013. Revenue increases were also driven by
annual contractual price adjustments related to a long-term
clinical study contract.
Sales, General and Administrative (SG&A) expenses for the
three-month period ended June 30, 2014 decreased $0.5 million to
$4.0 million compared to the prior year period. The decrease is due
to reduced corporate headcount and lower professional and
consulting services. SG&A expenses include one-time costs of
$0.4 million associated with the transition of the Company’s
headquarters from New Jersey to Olathe, KS.
On April 16, 2014 Hooper Holmes announced a strategic alliance
with Clinical Reference Laboratory, Inc. (“CRL”), under which CRL
will become the Company's exclusive provider of laboratory testing
services and Hooper will become a member of CRL’s preferred
provider network for wellness programs. CRL will acquire certain
assets comprising the businesses of Heritage Labs and Hooper Holmes
Services in a transaction that is expected to close on or before
September 2, 2014. Accordingly, the assets to be sold to CRL now
qualify as assets held for sale.
As of June 30, 2014, cash and cash equivalents totaled $3.1
million, with no borrowings outstanding under the Company's credit
facility, and working capital of $6.0 million.
On August 7, 2014 the Company closed the sale of its New Jersey
property with a purchase price of $3.0 million, resulting in $2.54
million of net cash proceeds.
Commenting on the 2014 second quarter, Henry E. Dubois,
President and CEO of Hooper Holmes, stated: "Our first half
year-over-year revenue growth positions us well for continued
Health & Wellness growth. Reporting Health & Wellness
revenues and costs of sale on a stand-alone basis now provides
clarity on our core business performance. We expect transition
costs related to exiting the Life Insurance sector to end by the
fourth quarter 2014, completing our transformation to a stand-alone
Health & Wellness business."
Mr. Dubois continued, "We expect to conclude our strategic
alliance with CRL by September 2nd and are now completing the
necessary operational integration prior to close. Our Company has a
clean balance sheet with no debt, and access to capital. We are
continuing to focus on long-term strategy, and on delivering
shareholder value.”
Conference Call
The Company will host a conference call today, August 12, 2014,
at 7:30 am CT / 8:30 a.m. ET to discuss second quarter 2014
results. A slide presentation accompanying management’s
presentation is available on the Company's website.
To participate in the conference call, please dial 888-576-4387,
or internationally 719-325-2464, conference ID: 6519789 five to ten
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 11:30 a.m.
ET on August 12, 2014 until midnight ET on August 19, 2014, by
dialing 877-870-5176, or internationally 858-384-5517. The access
code for the replay is 6519789.
About Hooper Holmes
Hooper Holmes, Inc. mobilizes a national network of health
professionals to provide on-site health screenings, laboratory
testing, risk assessment and sample collection services to wellness
and disease management companies, insurance companies, employers,
government organizations and academic institutions.
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 the timing for completion of and our ability to realize the
expected benefits from the transaction with Clinical Reference
Laboratory; our ability to successfully implement our business
strategy; uncertainty as to our working capital requirements over
the next 12 to 24 months; our ability to maintain compliance with
the financial covenant in our credit facility; our expectations
regarding our operating cash flows; and the rate of growth in the
Health and Wellness market. 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, 2013, filed with the Securities and Exchange
Commission on March 31, 2014. 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 June 30, Six months ended June 30,
2014 2013 2014 2013 Revenues $
6,679 $ 4,344 $ 13,977 $ 9,727 Cost of operations 4,529
3,137 10,171 6,870
Gross profit 2,150 1,207 3,806
2,857 Selling, general and administrative
expenses 4,038 4,556 8,407 9,005 Restructuring charges -
305 92 305
Operating loss from continuing operations (1,888 )
(3,654 ) (4,693 ) (6,453 ) Other expense: Interest
expense (1 ) (25 ) (3 ) (26 ) Interest income 1 1 2 4 Other
(expense) income, net (50 ) (81 ) (94 )
(94 ) (50 ) (105 ) (95 ) (116 ) Loss
from continuing operations before income taxes (1,938 ) (3,759 )
(4,788 ) (6,569 ) Income tax expense 5 4
10 9 Loss from continuing
operations (1,943 ) (3,763 ) (4,798 )
(6,578 ) Discontinued operations: Adjustment to gain on sale
of Portamedic and subsidiary - 75 (150 ) 75 Gain (loss) from
discontinued operations, net of tax (870 ) (1,314 )
(550 ) (1,059 ) Loss from discontinued operations
(870 ) (1,239 ) (700 ) (984 ) Net loss
$ (2,813 ) $ (5,002 ) $ (5,498 ) $ (7,562 ) Loss per
share Continuing operations: Basic $ (0.03 ) $ (0.05 ) $ (0.07 ) $
(0.09 ) Diluted (0.03 ) (0.05 ) (0.07 ) (0.09 ) Discontinued
operations: Basic (0.01 ) (0.02 ) (0.01 ) (0.01 ) Diluted (0.01 )
(0.02 ) (0.01 ) (0.01 ) Net loss: Basic (0.04 ) (0.07 ) (0.08 )
(0.11 ) Diluted (0.04 ) (0.07 ) (0.08 )
(0.11 ) Weighted average number of shares: Basic and diluted
70,586,942 69,845,277 70,499,282 69,840,332
Hooper Holmes, Inc. Consolidated Balance
Sheets (unaudited; in thousands)
June 30,
2014 December 31, 2013 ASSETS
Current assets: Cash and cash equivalents $ 3,137 $ 3,970 Accounts
receivable, net of allowance for doubtful accounts 6,518 8,398
Inventories 574 596 Other current assets 1,788 1,597 Assets held
for sale 1,866 2,302 Total current
assets 13,883 16,863 Property, plant and equipment, net
2,781 2,953 Other assets 864 1,830
Total assets 17,528 21,646
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable 3,833 3,440 Accrued expenses 4,095
4,036 Total current liabilities 7,928 7,476
Other long term liabilities 1,395 870 Commitments and
contingencies Stockholders' equity: Common stock 2,835 2,815
Additional paid-in capital 150,618 150,235 Accumulated deficit
(145,177 ) (139,679 ) 8,276 13,371 Less: Treasury
stock at cost (71 ) (71 ) Total stockholders' equity
8,205 13,300 Total liabilities and
stockholders' equity $ 17,528 $ 21,646
Hooper HolmesHenry E. Dubois, 913-764-1045President and
CEOorInvestors:S.M. Berger & CompanyAndrew Berger,
216-464-6400