AUSTIN, Texas, May 2, 2012 /PRNewswire/ -- Hanger Orthopedic Group, Inc. (NYSE: HGR) announced net sales of $218.1 million for the quarter ended March 31, 2012, an increase of $17.7 million, or 8.8%, from $200.4 million for the first quarter of 2011. Diluted earnings per share increased 15.8% to $0.22 for the first quarter of 2012 compared to adjusted diluted earnings per share of $0.19 in the same period in 2011. Adjusted diluted earnings per share for the quarter ended March 31, 2011 exclude $0.01 of cost incurred to relocate the Company’s headquarters. Diluted earnings per share for the three months ended March 31, 2011 were $0.18.
The $17.7 million, or 8.8%, increase in sales for the first quarter of 2012 was the result of a $11.4 million, or 7.1%, increase in same-center sales in the Patient-Care Services segment; a $4.4 million increase from acquired entities; a $2.8 million, or 11.9%, increase in sales in the Distribution segment; and a $0.9 million decrease from the Therapeutic Solutions segment. The increase in revenues resulted in a 6.4%, or $1.2 million, increase in income from operations to $20.0 million for the three months ended March 31, 2012 compared to adjusted income from operations of $18.8 million for the same period in 2011. Adjusted income from operations excludes $0.4 million of cost related to the relocation of the Company’s headquarters for the quarter ended March 31, 2011. Income from operations for the 2011 period was $18.4 million.
The Company’s cash flow from operations increased $13.6 million to $1.3 million during the quarter ended March 31, 2012, compared to a use of $12.3 million for the first quarter of 2011. As of March 31, 2012, the Company had $131.7 million in total liquidity, which included $32.2 million of cash and $99.5 million available under its revolving credit facility, net of $0.5 million of letters of credit. The Company’s leverage ratio, as defined in its credit facilities, was 3.0 at March 31, 2012 and December 31, 2011.
“Our Patient-Care Services and Distribution segments delivered strong revenue growth, which drove 15.8% growth in diluted earnings per share,” commented Thomas F. Kirk, Chief Executive Officer of Hanger Orthopedic Group. “We are very pleased with the strength of this performance and remain confident in achieving our full year guidance. Never the less, we expect the regulatory and reimbursement environment to remain challenging though the remainder of 2012.”
The Company expects full year 2012 revenues of between $970 million and $990 million resulting from a comparable store sales growth in our Patient-Care Services and Distribution segments of 3% to 5%. We expect flat to slightly higher revenues in our Therapeutic Services segment for the year, with sales in the first half of the year down then trending up the second half as the rate of new contracts accelerates. The Company anticipates diluted earnings per share between $1.72 and $1.79 excluding approximately $2.8 million in one-time, pretax costs which are primarily training costs related to the implementation of Janus, the Company’s new practice management and billing system. As in past years, the Company’s goal is to increase operating margins by twenty to forty basis points. The Company anticipates generating cash flow from operations between $70 million and $80 million in 2012 and investing a total of $40 million to $50 million in capital additions. During 2012 the Company will continue its acquisition program with a goal of closing acquisitions that total approximately $20 million in annualized revenues.
A conference call to discuss these results is scheduled to begin at 9:00 a.m., EDT, on Thursday, May 3, 2012. Those wishing to participate should call 1-877-312-5846. In addition, a replay will be available until Friday, May 11, 2012, by dialing 1-855-859-2056 and referencing Conference ID # 66359345.
About Hanger Hanger Orthopedic Group, Inc., headquartered in Austin, Texas, is the world’s premier provider of services and products that enhance human physical capability. Hanger provides orthotic and prosthetic patient care services, distributes O&P devices and components and provides therapeutic solutions to the broader post-acute market. Hanger is the largest owner and operator of orthotic and prosthetic patient care centers, with in excess of 700 O&P patient care centers located in 45 states and the District of Columbia. Hanger, through its subsidiary Southern Prosthetic Supply, is also the largest distributor of branded and private label O&P devices and components in the United States. Hanger provides therapeutic solutions through its subsidiaries Innovative Neurotronics and Accelerated Care Plus. Innovative Neurotronics introduces emerging neuromuscular technologies developed through independent research in a collaborative effort with industry suppliers worldwide. Accelerated Care Plus is a developer of specialized rehabilitation technologies and the nation’s leading provider of evidence-based clinical programs for post-acute rehabilitation, serving more than 4,000 long-term care facilities and other sub-acute rehabilitation providers throughout the U.S. For more information on Hanger, visit www.hanger.com.
