Hanger Orthopedic Group, Austin, Texas, announced net sales of $248.1 million for the quarter ended December 31, 2011, a 9.5 percent increase from the prior year. Diluted earnings per share (EPS) were $0.52 for the fourth quarter of 2011 compared to $0.02 for the fourth quarter of 2010.
According to the company, the $21.6 million increase in sales for the fourth quarter of 2011 was the result of a $10 million increase from the therapeutic solutions segment, principally from the acquisition of Accelerated Care Plus (ACP); a $6.3 million increase due to acquisitions in the patient care services segment; a $4.4 million increase in same-center sales in the patient care services segment; and a $0.9 million increase in sales in the distribution segment.
Income from operations for the quarter was $34.3 million compared to $25.7 million in the fourth quarter of 2010. The increase in adjusted income from operations was principally a result of an increase of $1.4 million from the therapeutic solutions segment, primarily from the acquisition of ACP, and a $1.1 million increase in the patient care services segment.
Net sales increased 12.4 percent, or $101.2 million, to $918.5 million for the year ended December 31, 2011, from $817.4 million for the year ended December 31, 2010. The sales increase was driven principally by a $57.4 million increase in the therapeutic solutions segment, resulting primarily from the acquisition of ACP; a $20.5 million increase due to acquisitions in the patient care services segment; an $18.4 million increase in same-center sales in the patient care services segment; and a $4.9 million increase in sales in the distribution segment. Diluted EPS were $1.61 for 2011, compared to $0.65 in 2010.
The company generated $61.8 million in cash flow from operations during the year ended December 31, 2011, compared to $54.2 million in the prior year and invested $28.1 million in new capital additions. During 2011, the company acquired eight companies comprising 21 patient care services centers for an aggregate purchase price of approximately $24.9 million, including $14.1 million in cash and $10.8 million in unsecured notes and earn-outs to be paid over the next four years. These 21 acquired patient care centers are expected to generate approximately $28 million in annualized revenues. As of December 31, 2011, the company had $139.5 million in total liquidity, which included $42.9 million of cash and $96.6 million available under its revolving credit facility.
“We are pleased to achieve a 15.5 percent increase in adjusted earnings per share for 2011 in a challenging economic environment that included continued high unemployment, flat Medicare pricing, as well as reductions in Medicaid reimbursement in our patient care services segment and a reduction in Medicare reimbursement for skilled nursing facilities, which indirectly impacted our therapeutic services segment,” said Thomas F. Kirk, CEO. “We thank our employees for their dedicated performance in 2011 and look forward to continued growth in revenues and earnings for 2012.”
The company said it expects full year 2012 revenues to be between $970 million and $990 million and diluted EPS between $1.72 and $1.79. The company expects to generate cash flow from operations between $70 million and $80 million in 2012, and invest $40 million to $50 million in capital additions, as well as continue its acquisition program with a goal of closing acquisitions that total approximately $20 million in annualized revenues.