Hooper Holmes Announces Fourth Quarter and Year-End 2007 Results


BASKING RIDGE, N.J., March 14, 2008 -- Hooper Holmes, Inc. (AMEX:HH), a leading provider of healthcare assessment services, today announced financial results for the fourth quarter and year-ended December 31, 2007.

For the three months ended December 31, 2007, total revenues decreased 5% to $58.3 million compared to $61.3 million in the fourth quarter of 2006. The Company recorded net income of $6.9 million for the fourth quarter of 2007, or $0.10 per share compared to a net loss of $42.0 million, or $(0.62) per share in 2006. The fourth quarter 2007 results include a loss from continuing operations of $2.3 million, or $(0.03) per share compared to a loss of $36.7 million, or $(0.54) per share in the prior year. The fourth quarter 2007 loss from continuing operations includes restructuring and other charges of $1.8 million, while the fourth quarter loss from continuing operations for 2006 included restructuring and other charges of $2.0 million and an impairment charge of $33.1 million related to goodwill and intangible assets. Net income for the fourth quarter 2007 includes $9.2 million of income from discontinued operations, resulting from the gain on sale of our U.K. subsidiary, Medicals Direct. Net income for the fourth quarter 2006 included a loss from discontinued operations of $5.3 million, primarily attributable to an impairment charge for goodwill and intangible assets.

For the year ended December 31, 2007, total revenues were $237.7 million compared to $255.2 million in the comparable period of 2006, a decrease of 7%. The Company's net loss for 2007 totaled $7.3 million, or $(0.11) per share, compared to a net loss of $86.1 million, or $(1.29) per share in 2006. The results for the year ended December 31, 2007 include a loss from continuing operations of $16.8 million, or $(0.24) per share compared to a loss of $80.6 million, or $(1.21) per share in the prior year. The loss from continuing operations in 2007 included restructuring and other charges of $4.7 million and an impairment charge of $6.3 million related to goodwill and intangible assets. The 2006 loss from continuing operations included restructuring and other charges of $10.2 million, an impairment charge for goodwill and intangible assets of $33.1 million and a charge of $31.3 million related to an increase in the valuation allowance for deferred tax assets. Net income for the year ended December 31, 2007 also includes $9.4 million of income from discontinued operations, primarily resulting from the $9.2 million gain on sale of Medicals Direct. The prior year results included a loss from discontinued operations of $5.4 million, primarily due to an impairment charge for goodwill and intangible assets.

Fourth Quarter 2007 Results by Division

Health Information Division (HID)

The Company's Health Information Division reported revenues of $51.4 million for the three months ended December 31, 2007 compared to $54.1 million in the prior year period.


    -- Portamedic revenues decreased approximately 5% to $36.1 million,
       compared to $37.9 million in the fourth quarter of 2006.  This decrease
       is the result of a reduction in paramedical exams of approximately 13%
       in comparison to the corresponding period of 2006, partially offset by
       higher average revenue per exam of 7% due to increased pricing.
    -- Infolink revenues were $7.0 million, down 8% from $7.6 million in the
       fourth quarter of 2006, due to a decrease in the number of attending
       physician statement (APS) orders received from customers during the
       quarter.
    -- Heritage Labs revenues rose by 16% to $5.0 million from $4.3 million in
       the same period of 2006. The increase is attributable to growth in our
       lab testing and specimen kits related to wellness health screenings,
       new higher value services and new clients.
    -- Underwriting Solutions revenues decreased 25% to $3.3 million compared
       to $4.3 million in the fourth quarter of 2006. The decrease is due to
       the loss in volume from one major customer, partially offset by revenue
       from new clients.

Claims Evaluation Division (CED)

The CED reported fourth quarter revenues of $6.9 million, a decrease of 4% compared to $7.2 million in the fourth quarter of 2006. The decrease was primarily the result of a continued contraction in the number of independent medical exams ordered by our customers.

Roy H. Bubbs, Interim President and Chief Executive Officer of Hooper Holmes, commented, "As today's results show, we have made progress over the past two years in reducing costs. We now need to focus on gaining market share in our core Portamedic business and growing profitable revenue. We are in the process of strengthening our sales and marketing efforts and I am committed to bringing my experience in life insurance and financial services and track record of growing profitable revenues to improving this business."

Conference Call

The Company will host a conference call, today, March 14, 2008 at 11:00 a.m. Eastern Time to discuss fourth quarter and year-end 2007 financial results.

To participate in the conference call, please dial (888) 790-3758 or (210) 839-8398, passcode: HOOPERHOLMES. A live web cast will be hosted on the Company's web site located at www.hooperholmes.com. Listeners may also access a telephone replay of the conference call, available through March 28, 2008, by dialing (888) 482-2254.

About Hooper Holmes

Hooper Holmes is the 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. As the leading provider of risk assessment services for the insurance industry, Hooper Holmes provides insurers with the widest range of medical exam, data collection, laboratory testing and underwriting services in the industry.

With presence in over 250 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. Each year we arrange more than two million medical exams and process tests for more than 750,000 people in our laboratory. We provide 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. We underwrite 200,000 cases annually and complete more than two million telephone interviews. We are also a leading provider of medical claims evaluation services used by property and casualty insurance carriers, law firms, self- insureds and third-party administrators to handle personal injury and accident claims.

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; uncertainty as to our working capital requirements over the next 12 to 24 months; our ability to maintain compliance with the financial covenants in our credit facility; our expectations regarding our operating cash flows; 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, 2006, filed with the Securities and Exchange Commission on March 15, 2007. 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.


                               -Tables follow-




                             Hooper Holmes, Inc.
                         Consolidated Balance Sheets
          (unaudited; in thousands except share  and per share data)

                                                  December 31,    December 31,
                                                         2007            2006
    ASSETS
    Current assets:
       Cash and cash equivalents                      $10,580          $6,667
       Accounts receivable, net                        29,734          30,425
       Inventories                                      2,548           2,557
       Income tax receivable                              518           2,968
       Other current assets                             2,346           1,796
       Assets of subsidiary held for sale                   -          13,337
          Total current assets                         45,726          57,750


    Property, plant and equipment, net                 14,892          14,703
    Goodwill                                                -           5,702
    Intangible assets, net                              4,253           6,485
    Other assets                                        1,067             570
          Total assets                                $65,938         $85,210

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
       Accounts payable                                $8,457         $10,457
       Accrued expenses                                15,134          16,730
       Liabilities of subsidiary held for sale              -           8,321
       Total current liabilities                       23,591          35,508

    Other long-term liabilities                           438           1,733

    Commitments and Contingencies

    Stockholders' equity:
       Common stock, par value $.04 per share;
        authorized 240,000,000 shares, issued
        68,643,982 and 67,933,274 shares as of
        December 31, 2007 and 2006, respectively.       2,746           2,717
       Additional paid-in capital                     146,103         143,332
       Accumulated other comprehensive income               -           1,553
       Accumulated deficit                           (106,869)        (99,562)
                                                       41,980          48,040
       Less: Treasury stock at cost, 9,395
        shares as of December 31, 2007 and
        2006, respectively.                               (71)            (71)
       Total stockholders' equity                      41,909          47,969
          Total liabilities and
           stockholders' equity                       $65,938         $85,210



    HOOPER HOLMES, INC.
    2007 CONSOLIDATED STATEMENTS OF OPERATIONS
    (unaudited; in thousands, except share data)

                                   Three Months ended      Twelve Months ended
                                      December 31,             December 31,
                                    2007        2006        2007        2006

    Revenues                      $58,268     $61,268    $237,677    $255,210
    Cost of operations             43,743      47,296     179,501     196,122
      Gross profit                 14,525      13,972      58,176      59,088
    Selling, general and
     administrative expenses       15,045      16,875      63,698      67,055
    Impairment of goodwill and
     intangibles                        -      33,147       6,296      33,147
    Restructuring and other
     charges                        1,797       1,958       4,668      10,241
      Operating loss               (2,317)    (38,008)    (16,486)    (51,355)
    Other income (expense):
      Interest expense                (11)         (9)       (206)       (148)
      Interest income                  81          60         119         196
      Other expense, net              (29)       (114)       (252)       (418)
                                       41         (63)       (339)       (370)
      Loss from continuing
       operations before
       income taxes                (2,276)    (38,071)    (16,825)    (51,725)

    Income tax provision
     (benefit)                          7      (1,361)        (75)     28,920

      Loss from continuing
       operations                 $(2,283)   $(36,710)   $(16,750)   $(80,645)

    Discontinued operations:
    Income (loss) from
     discontinued operations            -      (5,292)        284      (5,446)
    Gain on sale of subsidiary      9,159           -       9,159           -
    Income (loss) from
     discontinued operations        9,159      (5,292)      9,443      (5,446)

    Net income (loss)               6,876     (42,002)     (7,307)    (86,091)


    Income (loss) per share:
      Continuing operations:
         Basic                     $(0.03)     $(0.54)     $(0.24)     $(1.21)
         Diluted                   $(0.03)     $(0.54)     $(0.24)     $(1.21)

      Discontinued operations:
         Basic                      $0.13      $(0.08)      $0.14      $(0.08)
         Diluted                    $0.13      $(0.08)      $0.14      $(0.08)

      Net income (loss):
         Basic                      $0.10      $(0.62)     $(0.11)     $(1.29)
         Diluted                    $0.10      $(0.62)     $(0.11)     $(1.29)

    Weighted average number of
     shares:
      Basic                    68,634,587  67,742,307  68,476,194  66,804,605
      Diluted                  68,634,587  67,742,307  68,476,194  66,804,605