Hanger Reports 2020 Results
March 02, 2021
Hanger, Austin, Texas, announced its financial results for 2020. Highlights were as follows:
· Net revenue was $1,001.2 million for the year ended December 31, 2020, compared to $1,098 million for the same period of 2019, reflecting net revenue decline of 8.8 percent. For the twelve-month period, acquisitions of O&P clinics that were consummated in 2019 and 2020 contributed $15.6 million of incremental revenue.
· Patient care net revenue declined $74.1 million, or 8.2 percent, for the year to $831.6 million, while same clinic day-adjusted net revenue per day declined 11.0 percent. Net revenue from prosthetics, excluding acquisitions, decreased 8.3 percent on a day-adjusted basis, while orthotics net revenue, excluding acquisitions, declined by 14.2 percent, also on a day-adjusted basis.
· Throughout 2020, the patient care segment revenue was adversely impacted by a decline in patient volumes due to the impact of the COVID-19 pandemic. Patient appointment volumes for the full year were approximately 17 percent below those of 2019.
· Products and services segment net revenue declined $22.8 million, or 11.9 percent, resulting from a decrease of $19.4 million, or 13.5 percent, in distribution services and a $3.4 million decrease, or 7.1 percent, in net revenue from therapeutic solutions.
· Generally accepted accounting principles (GAAP) net income was $38.2 million for the year ended December 31, 2020, compared to $27.5 million for the same period in 2019. GAAP results for the year included a benefit of $24 million to other operating costs related to the receipt of CARES Act healthcare provider grants.
· Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2020 was $105.1 million and compares with the $124.2 million reported in the prior year. Adjusted EBITDA excludes the benefit of the CARES Act healthcare provider grants, a gain on the sale of real property as well as third-party professional fees, equity compensation, supply chain implementation, certain payments of executive severance and acquisition-related expenses. The decline in adjusted EBITDA is a result of lower revenue in both of the company's business segments associated primarily with the COVID-19 pandemic.
· GAAP diluted earnings per share was $0.99, compared to $0.72 per share in 2019. Adjusted diluted earnings per share was $0.63 for 2020, compared to $0.90 per share for the same period in 2019.
· Cash flow provided by operating activities for the year was $155.6 million compared to $58.8 million for the same period in 2019. Hanger benefited from the $24.0 million in CARES Act grants as well as significant improvements in cash collections and other working capital reduction measures in 2020.
· On December 31, 2020, the company had liquidity of $239.4 million, comprised of $144.6 million in cash and cash equivalents, and $94.8 million in available borrowing capacity under its revolving credit facility. This reflects an increase in liquidity of $70.2 million as compared with liquidity of $169.2 million as of December 31, 2019.
Hanger said that it believes that the degree of impact and timing of the cessation of the effects of the COVID-19 pandemic on its business remains uncertain. Assuming significant continuing declines in the effects of the virus on public activities during the second quarter of 2021, and a full return to pre-COVID activities by the end of June 2021, the company anticipates 2021 net revenue in a range between $1.145 billion and $1.175 billion, and adjusted EBITDA in a range between $130 million and $135 million.
The outlook for 2021 includes approximately $27 million in revenue relating to the full year of contribution of acquisitions consummated in 2020 and prior to the date of this release in 2021.