Hanger Orthopedic Group, Bethesda, Maryland, has announced net sales of $193.5 million for the quarter ended June 30, 2009, an increase of $12.3 million, or 6.8 percent, from $181.2 million in the prior year. Net income increased $2.0 million, or 25.4 percent, to $10 million in the second quarter of 2009 from $8 million last year. Earnings per share for the second quarter of 2009 were $0.31 per diluted share compared to pro forma earnings per share for the same period in 2008 of $0.25 per diluted share, a 24.0 percent increase.
The sales growth for the quarter was primarily the result of a $6.9 million, or 4.4 percent, increase in same-center sales in the company’s patient care centers, a $900,000, or 4.2 percent, increase in sales of the company’s distribution segment and a $4.3 million increase related to sales from acquired entities.
Cost of materials increased $3.6 million, or 6.5 percent, to $58.8 million in the second quarter of 2009 compared to the same quarter last year, principally due to the sales increase. Cost of materials as a percentage of sales decreased to 30.4 percent for the second quarter of 2009 compared to 30.5 percent for the second quarter of 2008.
Personnel costs increased $4.2 million, or 6.8 percent, in the second quarter of 2009 compared to the second quarter of 2008. Contributing to this increase were personnel costs of $1.7 million from acquisitions, additional stock, and severance compensation of $1.3 million and other increases of $1.2 million.
Other operating costs increased $2.3 million, or 5.9 percent, in the second quarter of 2009 over the same quarter in the prior year due to additional variable compensation accruals of $2 million, higher occupancy costs of $300,000, other operating costs of acquisitions of $400,000, and additional bad debt expense of $900,000, offset by lower professional fees of $900,000 and $400,000 of reductions in other overhead costs. As a percentage of sales, other operating costs decreased by 20 basis points compared to the second quarter of last year.
Interest expense for the second quarter of 2009 was $500,000 less than the same period of last year due to lower variable interest rates.
Net sales for the six months ended June 30, 2009 increased by $23.9 million, or 7.0 percent, to $362.7 million from $338.8 million in the same period last year. The sales growth was principally the result of a $13.1 million, or 4.4 percent, increase in same-center sales in our patient care centers, a $2.9 million, or 7.1 percent, increase in sales of the company’s distribution segment and a $7.9 million increase related to sales from acquired entities.
