Hanger Reports 1Q 2020 Financial Results
May 08, 2020
Hanger, Austin, Texas, announced its financial results for the first quarter (1Q) ended March 31. The highlights are as follows:
· Net revenue was $233.7 million for the three months ended March 31, compared to $236.4 million for the same period in 2019, reflecting a decrease of 1.1 percent. Net same clinic revenue on a day-adjusted basis declined by 3.2 percent, due primarily to a decrease in patient volumes associated with the COVID-19 pandemic.
· Net loss was $15.7 million, compared to $7 million for the same period in 2019. The loss from operations was $9.2 million for the quarter compared to $2 million for the same period in 2019.
· Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $5.3 million, compared to $11.9 million for the same period in 2019, reflecting a decrease of $6.6 million. The decline resulted primarily from lower revenues associated with decreases in patient volumes related to the COVID-19 pandemic, which affected device deliveries in late March.
· Income from operations and adjusted EBITDA were also adversely affected in the quarter by an increase in bad debt expense of $1.9 million compared to the first quarter of 2019. This increase related to anticipated future write-offs of products and services customer accounts, driven primarily by declining credit conditions resulting from the economic impact of the COVID-19 pandemic.
· Generally accepted accounting principles (GAAP) loss per share was $0.42 for the first quarter of 2020, compared to a loss of $0.19 per share for the same period in 2019. Adjusted diluted loss per share was $0.28 for the three months ended March 31, compared to a loss per share of $0.16 for the same period in 2019.
· In response to the COVID-19 pandemic, Hanger implemented operational and cost reduction measures in late March, including decreases in componentry purchases, a reduction in exempt employee and officer salaries, the furloughing of employees, reductions of operating hours and days of clinics, and temporarily delaying the implementation of its supply chain and financial systems project.
"Our highest priorities during the COVID-19 pandemic are to protect the safety of our patients and employees, and to continue to provide our patients with uninterrupted access to care," said Vinit Asar, president and CEO. "We entered the year with positive momentum and had high expectations for 2020 prior to the onset of the COVID-19 pandemic. In response, we have taken necessary but painful actions in the near term to ensure our ability to manage through this unprecedented public health crisis."