BETHESDA, Md., Feb. 10 /PRNewswire-FirstCall/ -- Hanger Orthopedic Group, Inc. announced net sales of $205.1 million for the quarter ended December 31, 2009, an increase of $19.6 million, or 10.6%, from $185.5 million in the prior year. Earnings per share for the fourth quarter of 2009 were $0.37 per diluted share compared to proforma earnings per diluted share of $0.26 for the same period in 2008, a 42.3% increase.
Net income increased $3.6 million, or 43.7%, to $11.9 million in the fourth quarter of 2009 compared to proforma net income of $8.3 million last year. The proforma results for the fourth quarter of 2008 exclude the impact of a non-cash mark-to-market pre-tax adjustment of $0.7 million related to interest rate swaps. In addition to improved income from operations, net income benefited from lower variable interest cost in the fourth quarter of 2009.
The growth in sales combined with effective expense management caused income from operations to increase by $12.8 million, or 16.5%, to $90.5 million for the year end December 31, 2009. Operating income as a percentage of sales improved 80 basis points to 11.9% in 2009 compared to 11.1% in the prior year.
Cash from operations for the year ended December 31, 2008 was $73.1 million, a $19.9 million, or 37.4% increase, compared to 2008. The improvement was primarily the result of improved operating results. The Company had total liquidity of $148.5 million, comprised of $84.6 million of cash and $63.9 million available under its revolving credit facility at December 31, 2009.
For 2010, the Company expects revenues to be between $815 million and $825 million an increase of 7.2 % to 8.5% compared to 2009. The Company expects diluted EPS for 2010 to be in the range of $1.27 to $1.29, which would represent a 12.4% to 14.2% increase over 2009 diluted EPS. We expect to improve operating margins by 20-40 basis points and to generate cash flow from operations of $60 to $70 million. During 2010 the Company will be relocating its corporate headquarters from Bethesda, Maryland to Austin, Texas and the cost of this move will be reported as a separate component of income from operations. The Company expects to incur severance and relocation cost of approximately $10.0 million to $12.0 million, as well as, lease exit cost of approximately $3.0 million to $5.0 million. Once complete, the Company anticipates that the move will result in a reduction of operating expenses of approximately $2.5 million to $3.5 million annually.
Hanger Orthopedic Group, Inc., headquartered in Bethesda, Maryland, is the world's premier provider of orthotic and prosthetic patient care services. Hanger is the market leader in the United States, owning and operating 677 patient care centers in 45 states and the District of Columbia, with over 3,700 employees including 1,127 practitioners as of December 31, 2009. Hanger is organized into four units. The two key operating units are patient care, which consists of nationwide orthotic and prosthetic practice centers, and distribution, which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient care centers. The third is Linkia, which is the first and only provider network management company for the orthotics and prosthetics industry. The fourth unit, Innovative Neurotronics, introduces emerging neuromuscular technologies developed through independent research in a collaborative effort with industry suppliers worldwide. For more information on Innovative Neurotronics, Inc. or the WalkAide(R), visit http://www.ininc.us. For more information on Hanger, visit http://www.hanger.com.
-tables to follow-
Hanger Orthopedic Group, Inc.
