UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
Report: (Date of earliest event reported): November 13, 2014
Hooper Holmes, Inc.
(Exact
name of registrant as specified in its charter)
New York
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1-9972
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22-1659359
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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560 N. Rogers Road, Olathe, KS 66062
(Address of principal
executive offices) (Zip Code)
Registrant’s telephone number, including area code (913)
764-1045
Not Applicable
(Former names or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General
Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02
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Results of Operations and Financial Condition
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On November 13, 2014, Hooper Holmes, Inc. (the “Company”) issued a press
release announcing its preliminary operating results and financial
condition for the quarter ended September 30, 2014. A copy of the press
release is attached hereto as Exhibit 99.1, which is incorporated herein
by reference. The presentation discussed during the third quarter
investor call on November 13, 2014 is attached as Exhibit 99.2, which is
also incorporated herein by reference.
The information furnished in this section of the Current Report on Form
8-K and Exhibits attached hereto shall not be deemed “filed” for the
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liabilities of
that section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange
Act, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01
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Financial Statements and Exhibits
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(d) Exhibits
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99.1 Press Release, dated November 13, 2014.
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99.2 Presentation used during the third quarter investor
conference call on November 13, 2014.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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Hooper Holmes, Inc.
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Date:
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November 13, 2014
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By:
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/s/ Tom Collins
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Tom Collins
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Senior Vice President and
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Chief Financial Officer
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Exhibit 99.1
Hooper
Holmes Announces Third Quarter 2014 Results
OLATHE, Kan.--(BUSINESS WIRE)--November 13, 2014--Hooper Holmes (NYSE
MKT:HH) today announced financial results for the third quarter ended
September 30, 2014.
Consolidated revenues totaled $7.9 million for the third quarter of
2014, representing an increase of $2.7 million, or 51%, from the third
quarter of 2013. The Company recorded a net loss of $1.3 million, or
$(0.02) per share, for the third quarter of 2014, as compared to a net
loss of $1.7 million, or $(0.02) per share, for the third quarter of
2013. The net loss for the third quarter of 2014 includes a net loss of
$1.4 million from discontinued operations, and $0.2 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 34% more health
screenings in the third quarter of 2014 compared to the same period of
2013.
Sales, General and Administrative (SG&A) expenses for the three-month
period ended September 30, 2014 decreased $0.9 million to $3.5 million
compared to the prior year period. The decrease is primarily due to
reduced corporate headcount.
The Company received $5.1 million in net proceeds in the third quarter
from sales of its New Jersey property and Heritage Labs and Hooper
Holmes Services business units. Cash outflows during the third quarter
included $1.1 million associated with discontinued operations and
transition costs, $0.4 million invested in capital expenditures, and
expenses associated with the fulfillment of a large number of screening
events in advance of cash receipts from the Company’s customers. As of
September 30, 2014, cash and cash equivalents totaled $4.1 million, with
no borrowings outstanding under the Company's credit facility, and
working capital of $4.5 million.
Commenting on the 2014 third quarter, Henry E. Dubois, President and CEO
of Hooper Holmes, stated: “Our third quarter year-over-year revenue
growth positions us well and our ongoing initiatives are streamlining
the business. As a result we have reduced SG&A and are enhancing service
quality.”
Mr. Dubois continued, “Our priorities include continuing to improve
operating efficiency and strengthening gross margins. We continue our
drive towards total cash flow positive results for the full year 2014
and believe we are well positioned for 2015.”
Conference Call
The Company will host a conference call today, November 13, 2014, at
7:30 am CT / 8:30 a.m. ET to discuss third 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 888-430-8705, or
internationally 719-325-2323, conference ID: 6083263 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 10:30 a.m. CT
(11:30 a.m. ET) on November 13, 2014 until 11:00 p.m. CT (midnight ET)
on November 20, 2014, by dialing 877-870-5176, or internationally
858-384-5517. The access code for the replay is 6083263.
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 our ability to
realize the expected benefits from our strategic alliance with Clinical
Reference Laboratory; our ability to successfully implement our business
strategy; our ability to retain and grow our customer base; our ability
to recognize operational efficiencies and reduce costs; 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; 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.
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HOOPER HOLMES INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited; in thousands, except share and per share data)
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Three months ended September 30,
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Nine months ended September 30,
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2014
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2013
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2014
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2013
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Revenues
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$
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7,875
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$
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5,227
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$
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21,852
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$
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14,954
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Cost of operations
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6,021
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4,272
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16,193
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11,141
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Gross profit
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1,854
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955
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5,659
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3,813
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Selling, general and administrative expenses
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3,541
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4,386
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11,915
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13,392
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Gain on sale of real estate
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(1,830
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-
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(1,830
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-
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Restructuring charges
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-
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362
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92
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667
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Operating income (loss) from continuing operations
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143
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(3,793
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(4,518
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(10,246
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Other expense:
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Interest expense
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(1
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(54
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(3
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(80
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Interest income
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1
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1
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2
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4
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Other (expense) income, net
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(61
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(82
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(155
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(176
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(61
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(135
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(156
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(252
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Income (loss) from continuing operations before taxes
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82
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(3,928
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(4,674
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(10,498
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Income tax expense
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5
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5
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15
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14
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Income (loss) from continuing operations
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77
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(3,933
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(4,689
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(10,512
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Discontinued operations:
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Gain on sale of subsidiaries, net of adjustments
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1,354
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3,682
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1,204
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3,757
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Loss from discontinued operations, net of tax
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(2,739
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(1,463
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(3,321
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(2,521
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(Loss) income from discontinued operations
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(1,385
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2,219
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(2,117
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1,236
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Net loss
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$
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(1,308
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$
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(1,714
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$
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(6,806
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$
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(9,276
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)
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Income (loss) per share
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Continuing operations:
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Basic
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$
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0.00
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$
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(0.06
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$
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(0.07
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$
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(0.15
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Diluted
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0.00
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(0.06
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(0.07
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(0.15
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Discontinued operations:
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Basic
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(0.02
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0.03
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(0.03
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0.02
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Diluted
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(0.02
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0.03
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(0.03
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0.02
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Net loss:
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Basic
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(0.02
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(0.02
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(0.10
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(0.13
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Diluted
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(0.02
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(0.02
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(0.10
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(0.13
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Weighted average number of shares:
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Basic and diluted
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70,866,603
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69,952,153
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70,623,068
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69,877,878
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Hooper Holmes, Inc.
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Consolidated Balance Sheets
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(unaudited; in thousands)
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September 30, 2014
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December 31, 2013
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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4,082
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$
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3,970
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Accounts receivable, net of allowance for doubtful accounts
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8,245
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8,398
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Inventories
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1,106
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596
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Other current assets
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957
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1,597
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Assets held for sale
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246
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2,302
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Total current assets
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14,636
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16,863
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Property, plant and equipment, net
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2,829
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2,953
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Other assets
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934
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1,830
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Total assets
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18,399
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21,646
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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3,164
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3,440
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Accrued expenses
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6,928
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4,036
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Total current liabilities
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10,092
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7,476
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Other long term liabilities
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1,328
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870
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Commitments and contingencies
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Stockholders' equity:
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Common stock
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2,835
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2,815
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Additional paid-in capital
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150,700
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150,235
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Accumulated deficit
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(146,485
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)
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(139,679
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)
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7,050
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13,371
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Less: Treasury stock at cost
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(71
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)
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(71
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Total stockholders' equity
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6,979
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13,300
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Total liabilities and stockholders' equity
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$
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18,399
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$
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21,646
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CONTACT:
Hooper Holmes
Henry E. Dubois, 913-764-1045
President
and CEO
or
Investors:
S.M. Berger & Company
Andrew
Berger, 216-464-6400
Exhibit 99.2
1 Hooper Holmes, Inc.
November 13, 2014 Earnings Presentation Speakers: Henry Dubois, Chief
Executive Officer Tom Collins, Chief Financial Officer
2 Safe Harbor Statement 2
The presentation contains forward-looking statements concerning plans,
objectives, goals, strategies, future events or performances, which are
not statements of historical fact. The forward-looking statements
contained in this release reflect our current beliefs and expectations.
Actual results or performance may differ materially from what is
expressed in the forward-looking statements. You are referred to the
documents filed by us with the SEC, specifically reports on Form 10-K
and Form 10- Q including risk factors that could cause actual results to
differ from forward-looking statements. These reports are available at
www.sec.gov. This presentation should be used in conjunction with the
earnings call dated November 13, 2014. This presentation contains
information from third-party sources, including data from studies
conducted by others and market data and industry forecasts obtained from
industry publication. Although Hooper Holmes, Inc. believes that such
information is reliable, Hooper Holmes, Inc. has not independently
verified any of this information and Hooper Holmes, Inc. does not
guarantee the accuracy or completeness of this information.
3 Progress Since August 12th
Financials Revenue and gross margin reflect Health & Wellness business
only Labs and services treated as discontinued operations 3Q decrease in
SG&A as expenses come in line with shift to Health & Wellness business
only H&W Growth 3Q Revenue up 51% from 3Q 2013 3Q Screenings up 34% from
3Q 2013 Margin improvement over 3Q 2013 3 Sold Basking Ridge real estate
on August 7th Closed CRL Strategic Alliance on September 2nd which was
last major piece of transition $0.2mm transition costs in 3Q
Transformation Transformation to a purely Health and Wellness company is
complete; focus is on growth and execution
4 Revenue ($mm) Gross
Margin ($mm) Key Points 3Q revenue increased 51% yearover-year • Some
revenue shifted from 4Q to 3Q as screenings were conducted earlier YTD
revenue is up $6.9mm, or 46%, year-over-year Margin improved to 23.5% in
3Q compared to 18.3% last year• Early volume spike squeezed margin as
staffing costs briefly driven up to meet increased demand 3Q/YTD 2014
Results vs. 3Q/YTD 2013 51% Growth 46% Growth
5 SG&A Expense ($mm) Income
From Continuing Operations ($mm) Key Points 3Q/YTD 2014 Results vs.
3Q/YTD 2013, cont’d 3Q SG&A decreased $0.9mm and YTD SG&A decreased
$1.5mm compared to prior year even as screenings increased • 3Q included
$0.2mm in transition costs • Excluding transition costs, 3Q and YTD SG&A
decreased 25% Already realizing results of streamlined operation
Positive income from continuing operations in 3Q and strong improvement
year-over-year• Included one-time gain of $1.8mm on sale of NJ property
less transaction and operating costs 25% Improvement Ex. Transition $4.4
$3.5 3Q13 3Q14 YTD13 YTD14 $13.4 $11.9 25% Improvement Ex. Transition
6 Key Points Received
$5.1mm, net of transaction costs, from sale of NJ real estate sale and
certain assets to CRL Incurred $1.1mm in losses from discontinued
operations and transition costs $0.4mm capital expenditure and $1.3mm
ramping up second half business $1.3mm due to change in working capital
3Q Cash 3Q Cash Position 3Q cash balance of $4.1mm, no debt, and working
capital of $4.5mm
7 3Q 13 vs 3Q 14 YTD 13 vs
YTD 14 Solid year-over-year growth continued in 3Q reflecting advance of
some 4Q business As employers become more proactive, screenings are
scheduled earlier in the year smoothing out volume distribution to some
degree Success in smoothing out revenue curve impacts timing of programs
slated for 4Q Anticipate 4Q volume to be in line with volumes realized
in 3Q Key Takeaways Health & Wellness Screening Volume Growth 35% Growth
34% Growth # of Screenings # of Screenings
8 Transformation That Began
in 2H 2013 Now Complete Path to becoming a Health & Wellness company
Completed post-close transition away from Portamedic Streamlined the
organization and added to our management team Added operational
capabilities in Health & Wellness business Consolidated operations and
technology infrastructure in Olathe, Kansas Sold Basking Ridge, New
Jersey real estate Closed strategic alliance with Clinical Reference
Laboratory (CRL)Here’s a look at what we do at the new Hooper
9 Plan Biometric Screening
– Three Key Steps Each employee population is different – close
coordination required Serving over 2,500 employers, each with different
requirements Utilize a network of over 9,000 Health Professionals to
offer services in all 50 states Each group screening is tailored to
local needs and requirements 347,000 screenings completed in first 9
months of 2014 Over 420,000 screenings completed last year Fast,
accurate data Delivering data for hundreds of thousands of employees
annually Over 2 million screening records captured since inception of
Health & Wellness Deliver ReportHow we provide integrated end-to-end
biometric screening solutions
10 Planning For Different
Employee Populations Plan Centralized event management Scheduling &
Health Professional engagement Logistics & supply chain Pre-event site
visit Right solution for every customer Evaluate screening area Confirm
supplies have arrived Answer questions & set expectations
11 Delivering Integrated
Screening Solutions Deliver Site management Health Professionals conduct
screenings Health data captured Maximize satisfaction: Participant,
Sponsor, Channel Partner High Health Professional standards Ensure
Privacy Maximize Efficiency Direct Participant Flow
12 Reporting Actionable
Results Report Lab testing Data verification & aggregation Data
transmission Engagement materials Integration
13 Hooper Health & Wellness
Plan Deliver Report Base operations Areas for leverage through increased
volume Increased screenings can be scheduled and fulfilled without
additional labor costs; our scheduling and fulfillment processes can
scale for added volume Health Professionals are able to work more events
and conduct more screenings with limited incremental travel costs; can
work multiple events in a day or in an area via improved technology and
processes Order entry, scheduling, event management, staffing, and
fulfillment labor for coordinating events Site managers and Health
Professionals to work screening events Integrated laboratory and IT
delivery system for reporting results.
14 Expectations Continued
year-over-year growth Market expansion as 3Q demand indicates health &
wellness is top of mind for employers End 2014 with an improved cash
position on our balance sheet Enter 2015 optimistic about further
growth, and expect to make further investments in our future to deliver
positive operating cash flow The Plan Execute our strategy focused on
growth, both with existing channel partners and new partners Drive
operational and cost structure improvements to drive gross margin and
further reduce SG&A Refine and update our operating, training and
administrative processes and technology to continually improve the
quality of services we deliver Going Forward