UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 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): August 12, 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 Results of Operations and Financial Condition
On August 12, 2014, Hooper Holmes, Inc. (the “Company”) issued a press
release announcing its preliminary operating results and financial
condition for the quarter ended June 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 second quarter
investor call on August 12, 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 August 12, 2014.
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99.2 Presentation used during the second quarter investor
conference call on August 12, 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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August 12, 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 Second Quarter 2014 Results
OLATHE, Kan.--(BUSINESS WIRE)--August 12, 2014--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.
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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 June 30,
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Six months ended June 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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6,679
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$
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4,344
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$
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13,977
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$
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9,727
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Cost of operations
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4,529
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3,137
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10,171
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6,870
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Gross profit
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2,150
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1,207
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3,806
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2,857
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Selling, general and administrative expenses
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4,038
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4,556
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8,407
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9,005
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Restructuring charges
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-
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305
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92
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305
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Operating loss from continuing operations
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(1,888
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(3,654
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(4,693
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(6,453
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Other expense:
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Interest expense
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(1
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(25
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(3
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(26
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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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(50
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(81
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(94
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(94
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(50
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(105
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(95
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(116
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Loss from continuing operations before income taxes
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(1,938
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(3,759
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(4,788
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(6,569
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Income tax expense
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5
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4
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10
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9
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Loss from continuing operations
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(1,943
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(3,763
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(4,798
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(6,578
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Discontinued operations:
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Adjustment to gain on sale of Portamedic and subsidiary
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-
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75
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(150
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75
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Gain (loss) from discontinued operations, net of tax
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(870
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(1,314
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(550
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(1,059
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Loss from discontinued operations
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(870
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(1,239
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(700
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(984
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Net loss
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$
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(2,813
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$
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(5,002
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$
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(5,498
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$
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(7,562
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Loss per share
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Continuing operations:
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Basic
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$
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(0.03
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$
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(0.05
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$
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(0.07
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$
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(0.09
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Diluted
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(0.03
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(0.05
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(0.07
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(0.09
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Discontinued operations:
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Basic
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(0.01
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(0.02
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(0.01
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(0.01
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Diluted
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(0.01
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(0.02
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(0.01
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(0.01
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Net loss:
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Basic
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(0.04
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(0.07
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(0.08
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(0.11
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Diluted
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(0.04
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(0.07
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(0.08
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(0.11
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Weighted average number of shares:
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Basic and diluted
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70,586,942
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69,845,277
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70,499,282
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69,840,332
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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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June 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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3,137
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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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6,518
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8,398
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Inventories
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574
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596
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Other current assets
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1,788
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1,597
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Assets held for sale
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1,866
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2,302
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Total current assets
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13,883
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16,863
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Property, plant and equipment, net
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2,781
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2,953
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Other assets
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864
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1,830
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Total assets
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17,528
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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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3,833
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3,440
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Accrued expenses
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4,095
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4,036
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Total current liabilities
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7,928
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7,476
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Other long term liabilities
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1,395
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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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150,618
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150,235
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Accumulated deficit
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(145,177
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(139,679
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8,276
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13,371
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Less: Treasury stock at cost
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(71
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(71
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Total stockholders' equity
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8,205
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13,300
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Total liabilities and stockholders' equity
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$
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17,528
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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
Hooper Holmes, Inc. August
12, 2014 Earnings Presentation Speakers: Henry Dubois, Chief Executive
Officer Tom Collins, Chief Financial Officer
2 Safe Harbor Statement 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 August 12, 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.
Progress Since May 14th
Financials Revenue and gross margin reflect our Health and Wellness
business only Labs and Services treated as discontinued operations
Transition costs reflected in SG&A (CRL Alliance, HQ, corporate
right-sizing) • Transition costs to continue through 3Q14 H&W Growth 2Q
Revenue up nearly 55% 2Q Screenings up 37% Price per unit up due to
composition of work Operating improvements to drive margin• Evaluating
cost structure• Operating scale• Expanding HealthProfessional network HQ
consolidation completed in Olathe, KS Basking Ridge building sold August
7, 2014 – adds $2.54 million in cash (after closing costs and building
repairs) CRL Strategic Alliance on track for 3Q closure Transformation
Transformation to a purely Health and Wellness company nearing
completion – and we like what we see 3
4 Revenue ($mm) Gross
Margin ($mm) Key Takeaway 54% increase revenue and 37% increase in
screenings over 2Q2013 Cash position of $3.1mm and no debt outstanding
Operating income improvement Margin improvements• Continually looking at
cost structures and areas to generate operating scale• Continued
expansion of our Health Professional network Labs and Services
operations are presented as discontinued operations 2Q/H1 2014 Results
vs. 2Q/H1 2013 54% Growth 44% Growth
5 5 SG&A & Transition Costs
($mm) Operating Income ($mm) Key Takeaway 2Q/H1 2014 Results vs. 2Q/H1
2013, cont’d SG&A decreased $0.5mm compared to the prior year• Result of
efficiencies achieved in relocating the corporate headquarters to
Olathe, KS Transition costs incurred in connection with the relocation
of the headquarters in 1Q14 Transition costs primarily include:• Cost
associated with winding down the operations and facility in New Jersey
$4.57 $4.04 $8.4 $9.0
6 Transformation Update•
Closed sale of Basking Ridge facility on August 7, 2014• Purchase price
of $3.05mm; net cash received of $2.54 mm after transaction costs and
building repairs Building Sale• Targeting to close on or before
September 2nd• Actively working IT integration to ensure a smooth
transition to CRL as our lab provider• Once closed, we look forward to•
Leveraging CRL’s expanded testing capabilities and experience• Support
them in servicing their H&W clients by providing them biometric
screenings CRL Transaction
7 Update on Initiatives
Previously Discussed On track for close by September 2nd
Occurs with Strategic Alliance close, exploring H&W growth opportunities
Focusing sales efforts by channel Continuous improvement concept being
implemented Small /mid-sized business opportunities Teamwork with
channel partners to win Expanding offers Cash flow on planCurrent
Progress What We Said We Would Do Close CRL Strategic Alliance Sole
focus on Health & Wellness Expand sales capabilities Improve service
delivery model Explore additional markets & channels Attract new
employers for services Refine offering to broaden revenue base Cash flow
positive for full year
8 8 1Q13 vs 1Q14 1H13 vs
1H14 2Q13 vs 2Q14 Solid year-over-year screening growth Volume growth
will drive margin improvements due to scale efficiencies• Continually
looking at cost structures and areas to generate operating scale•
Continued expansion of our Health Professional network Key Takeaway
Health & Wellness Screening Volume Growth 37% Growth 34% Growth 35%
Growth # of Screenings # of Screenings # of Screenings
9 Health & Wellness Focus
WHERE WE ARE• 44% revenue growth year-over-year for 1H• Operations fully
consolidated in Olathe• Clean balance sheet, no debt, access to capital•
Continued focus on long-term Health & Wellness strategy • Year-over-year
growth expected with margin improvements• Strategy remains consistent:•
Work with channel partners• Expand offerings for small and medium sized
companies• Continuously exploring all growth opportunities• Leverage CRL
capabilitiesWHAT’S NEXT?Heading into busy season well positioned
10 Focus on Sustainable
Growth With existing partners New opportunities•Work with our existing
channel partners to add new Wellness clients • With our Channel
Partners, utilize outreach programs to improve participation rates •
Most of our opportunities currently come through the Wellness company
channel • Exploring other channels such as benefit brokers, health
plans, clinical research, etc. • Exploring ways to efficiently penetrate
small and mid-sized company markets • Technology improvements • Leverage
CRL’s expanded lab testing capabilities • Utilize partners to provide
health improvement initiatives New offerings HH Today Market volume
Biometric Screenings Organizations currently offering wellness programs,
requiring biometric screenings 2013 Hooper Screenings 420,000 Wellness
Potential Organizations currently considering or administering employee
wellness programs Total U.S. Workforce 160mm workers