Officials from the Hanger Orthopedic Group Inc. announced net sales of $160.4 million and net income applicable to common stock of $4.7 million, or $0.17 per diluted share, for the second quarter of 2007. This compares to a loss applicable to common stock of $9.3 million, or a loss of $0.42 per diluted share in the same period of the previous year.
Net sales for the second quarter increased by $7.5 million, or 4.9%, to $160.4 million from $152.9 million in the previous year’s comparable quarter. The sales growth was primarily the result of a $5.8 million, or 4.2%, increase in same-center sales in patient care business, and a $1.1 million, or 7.5%, increase in sales of the company’s distribution segment. Gross profit for the second quarter of 2007 increased by $3.9 million to $81.4 million, or 50.8% of net sales, compared to $77.5 million, or 50.7% of net sales, in the second quarter of the previous year. The increase in gross profit was due principally to the increase in sales.
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Income from operations was $17.8 million in the second quarter of 2007, compared to $16 million in the second quarter of 2006, a $1.8 million, or 11.4%, increase primarily due to the aforementioned increase in gross profit, offset by a $2 million increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses included a $1.1 million increase in labor expenses to support the growth in revenues and for merit increases, and a $0.5 million increase in the investments relating to the company’s growth initiatives.
Net income applicable to common stock for the second quarter of 2007 was $4.7 million compared to the previous year’s net loss applicable to common stock of $9.3 million. Net sales for the first 6 months of 2007 increased by $10.9 million (3.7%), to $304.2 million from $293.3 million in 2006. The sales growth was principally the result of a $9.1 million (3.5%) increase in same-center sales in the patient care business, and a $0.8 million (3%) increase in sales of the company’s distribution segment. Gross profit for the first 6 months of 2007, increased by $5 million to $152.7 million, or 50.2% of net sales, compared to $147.7 million, or 50.4% of net sales, in the first 6 months of the previous year.
Ivan R. Sabel, chairman and chief executive officer of Hanger Orthopedic Group, said in a press release, “We steadily improved our performance during the second quarter of 2007, as our patient care centers generated same center sales growth of over 4%. In addition to our sound financial performance, we also increased the pace of our acquisition program with the acquisition of Paris O&P, a multi-site provider of orthotic and prosthetic services; and the acquisition of SureFit, a leading manufacturer and distributor of diabetic footwear in the podiatric market.”
