Hanger Orthopedic Group (Hanger), Austin, Texas, announced net sales of $234.8 million for the quarter ended June 30, 2011, a 14.1 percent increase, from $205.8 million for the second quarter of 2010. Diluted earnings per share (EPS) were $0.45 for the second quarter of 2011, a 50 percent increase compared to $0.30 in the same period in 2010. Excluding costs related to the relocation of corporate headquarters, adjusted diluted EPS increased 21.6 percent to $0.45 for the second quarter from $0.37 for the second quarter of 2010.
The $29 million increase in sales for the second quarter of 2011 was the result of a $15.8 million increase from the therapeutic solutions segment, principally from the acquisition of Accelerated Care Plus (ACP); a $7.4 million increase in same-center sales in the patient care services segment; a $4.5 million increase due to acquisitions in the patient care services segment; and a $1.3 million increase in sales in the company’s distribution segment, according to a Hanger press release. Income from operations for the quarter ended June 30, 2011, was $32.9 million compared to $23.1 million in the prior year. Excluding the headquarters relocation costs, adjusted income from operations increased 20.5 percent for the three months ended June 30, 2011. Adjusted income from operations as a percentage of revenue increased 70 basis points to 14 percent for the second quarter of 2011, with 30 basis points attributable to the acquisition of ACP and the remainder to improved leverage from the company’s existing businesses.
Net sales for the six months ended June 30, 2011, increased by 13.3 percent, to $435.2 million from $384.1 million for the same period in 2010.
Income from operations for the quarter ended June 30, 2011, was $22.1 million, compared to $19.6 million in the same prior-year quarter. As of June 30, 2011, Hanger had $116.1 million in total liquidity, which included $19.5 million of cash and $96.6 million available under its revolving credit facility.
“This quarter our patient care services segment proved to be resilient, delivering same-center sales growth of 4.1 percent,” said Thomas F. Kirk, president and CEO of Hanger. “This growth, combined with the results of ACP and our continued focus on expense containment, enabled us to continue to deliver double-digit earnings growth. We are optimistic of our prospects for continued growth for the second half of 2011. We will continue our disciplined approach to acquisitions and diversification into new adjacent business as well as growing our business and controlling cost.”
Hanger said it expects full 2011 year revenues of between $945 million and $955 million and full-year adjusted diluted EPS between $1.66 to $1.71; its goal is to increase operating margins by 20-40 basis points in its core business in 2011; and it expects to generate cash flow from operations of $85-$95 million and to invest $40-$50 million in new capital additions to fund its core businesses, ACP’s continued expansion and the development of a comprehensive electronic practice management system.
