Hanger, Austin, Texas, announced its financial results for the third quarter (3Q) and nine months ended September 30.
3Q highlights were as follows:
- Net revenue was $289.8 million for the three months ended September 30, compared to $256.6 million for the same period in 2020, reflecting growth of 12.9 percent.
- Net income was $21.1 million for the three months ended September 30, 2021, compared to $6.8 million for the same period in 2020. Income from operations was $25.7 million for the quarter compared to $13.1 million for the same period in 2020. 3Q 2020 generally accepted accounting principles (GAAP) income from operations and net income benefited from approximately $16 million related to temporary labor and operating cost reductions taken during that period in response to the COVID-19 pandemic.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $37.2 million in 3Q 2021, compared to $27.9 million for the same period in 2020, reflecting growth of $9.3 million or 33.5 percent. Adjusted EBITDA results for 3Q 2020 benefited in part, from the temporary cost reductions discussed above.
- GAAP diluted earnings per share was $0.54 per share for the 3Q 2021, compared to $0.18 per share for the same period in 2020. Adjusted diluted earnings per share was $0.39 for the three months ended September 30, 2021, compared to $0.20 for the same period in 2020.
Highlights for the nine months ended September 30 were as follows:
- For the period, net revenue was $808.1 million, compared to $723.8 million in 2020, reflecting a net revenue increase of 11.6 percent. Acquisitions of O&P clinics consummated in 2020 and 2021 contributed $24.7 million of incremental revenue for the nine-month period.
- Patient care net revenue totaled $676.8 million, reflecting growth of $78.1 million, or 13 percent. Year-to-date same clinic day-adjusted net revenue per day grew 10.2 percent. For the period, the patient care segment net revenue on a day-adjusted same-clinic basis totaled approximately 98 percent of the level reported for the equivalent period in 2019.
- Net revenue from prosthetics, excluding acquisitions, grew 5.5 percent on a day-adjusted basis, while orthotics revenue grew by 16.3 percent, also on a net day-adjusted basis and excluding acquisitions. For the year-to date, prosthetics constituted 54 percent of the patient care segment net revenue.
- The products and services segment net revenue totaled $131.3 million, an increase of $6.2 million, or 4.9 percent growth, driven by an increase of $7.7 million in revenue from distribution services and a $1.5 million decline in revenue from therapeutic solutions.
- GAAP net income was $27.9 million compared to $22.1 million in 2020. Hanger’s GAAP results for the first nine months of 2020 included a benefit of $20.6 million to other operating costs related to the receipt of CARES Act healthcare provider grants as compared to $0.7 million in the 2021 period. These grants were received under the Public Health and Social Services Emergency Fund, also referred to as The Provider Relief Fund, established by the CARES Act and are excluded from Adjusted EBITDA.
- Adjusted EBITDA totaled $81.7 million, an increase of $12.1 million as compared to the $69.7 million reported in 2020. The increase in adjusted EBITDA for the nine-month period resulted from improvement in net revenue partially offset by the restoration of temporary cost reductions taken during the second and third quarters of 2020.
- GAAP diluted earnings per share was $0.71, compared to $0.57 per share in 2020. Adjusted diluted earnings per share was $0.58 for the first nine months of 2021, compared to $0.27 for the same period in 2020.
- Hanger revised its annual financial outlook for net revenue and adjusted EBITDA primarily due to the continuing impact of the COVID pandemic on patient volumes. The company anticipates net revenue in the range of $1.115 billion to $1.140 billion and adjusted EBITDA in a range between $124 million and $128 million.
“While we continue to demonstrate favorable recovery from the peak COVID periods of 2020, and were operating at 99 percent of 2019 levels in the quarter, our third quarter revenue levels were affected by the Delta variant and fell short of our original expectations,” said Vinit Asar, president and CEO. “Although we believe that market conditions and Hanger’s performance will continue to strengthen as COVID subsides in 2022, we are adjusting our outlook for the remainder of the current year to reflect the lingering impact of the pandemic on our business.”