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Hanger Orthopedic Group Inc. announced net sales of $205.1 million for the quarter that ended Dec. 31, 2009, an increase of $19.6 million, or 10.6%, from $185.5 million in the prior year. Earnings per share for the fourth quarter of 2009 were $0.37 per diluted share compared to pro forma earnings per diluted share of $0.26 for the same period in 2008, a 42.3% increase.
The $19.6 million, or 10.6%, sales increase for the fourth quarter was primarily the result of a $10.8 million, or 6.6%, increase in same-center sales in patient care centers, a $2.4 million, or 12.1%, increase in sales of the company’s distribution segment and a $6.4 million increase principally related to sales from acquired entities. The combination of increased sales and effective expense management caused income from operations to increase by $5.6 million, or 25.4%, to $27.5 million for the fourth quarter of 2009, compared to $21.9 million in 2008.
Net income increased $3.6 million, or 43.7%, to $11.9 million in the fourth quarter of 2009 compared to pro forma net income of $8.3 million in 2008. The pro forma results for the fourth quarter of 2008 exclude the impact of a non-cash mark-to-market pre-tax adjustment of $0.7 million related to interest rate swaps. In addition to improved income from operations, net income benefited from lower variable interest cost in the fourth quarter of 2009.
Net sales for 2009 increased by $57 million, or 8.1%, to $760.1 million from $703.1 million in 2008. The sales increase was principally the result of a $29.6 million, or 4.9%, increase in same-center sales in patient care centers, a $7.3 million, or 9.1%, increase in sales of the company’s distribution segment and a $20.1 million increase principally related to sales from acquired entities.
The growth in sales combined with effective expense management caused income from operations to increase by $12.8 million, or 16.5%, to $90.5 million for 2009. Operating income as a percentage of sales improved 80 basis points to 11.9% in 2009 compared to 11.1% in the prior year.
“The year 2009 presented a challenging environment due to the uncertainty surrounding proposed changes to federal health care regulations and reimbursement and the impact of the ongoing recession. In spite of these challenges, we delivered record sales, profits and cash flows,” Thomas F. Kirk, president and chief executive officer of Hanger Orthopedic Group, said in a news release. “The combination of an 8.1% increase in revenue and a focused effort on expense management generated an 80 basis point improvement in our operating margin. I am proud of our employees’ efforts in 2009 and I am optimistic about our opportunities in 2010.”
