Hanger Orthopedic Group Inc. announced net sales of $206.7 million for the quarter that ended Sept. 30, an increase of $14.5 million from $192.3 million in the prior year. Adjusted diluted earnings per share, which excludes relocation of the company’s corporate headquarters and costs related to the pending acquisition of Accelerated Care Plus Corp, (ACP), were $0.37 per diluted share for the third quarter of 2010, a 23.3% increase compared to $0.30 per diluted share for the same period in 2009. Diluted earnings per share were $0.21 for the third quarter of 2010.
The sales increase for the quarter that ended Sept. 30 was primarily the result of a $6.9 million increase in same-center sales in the patient care segment, a $2.4 million increase in sales from the company’s distribution segment and a $5.2 million increase principally related to sales from acquired entities. Income from operations for the quarter ended Sept. 30 was $18.3 million compared to $23.8 million in the prior year. Excluding the $8 million of costs related to the relocation of the corporate headquarters and the $0.6 million of cost related to the pending acquisition of ACP, income from operations increased to $26.9 million due to increased sales and expense management.
Net sales for the 9 months ending Sept. 30 increased by $35.9 million to $590.9 million from $555 million last year. The sales increase was principally the result of a $19.3 million, or 4% increase in same-center sales in the patient care centers, a $5.6 million increase in sales of the company’s distribution segment and an $11 million increase principally related to sales from acquired entities. Income from operations for the 9 months ending Sept. 30 was $55.7 million compared to $63 million in the prior year. Excluding the $14.8 million of costs related to the relocation of the corporate headquarters and cost related to the pending acquisition of ACP, income from operations increased to $70.5 million.
“We continue to be focused on delivering solid growth in revenues along with expansion of our operating margin. This marks the nineteenth consecutive quarter we have met or exceeded consensus expectations. Year to date we have delivered an 18% increase in adjusted earnings per share,” Thomas F. Kirk, Hanger’s president and chief executive officer, stated in a press release. “We are proud of our employees’ efforts in building shareholder value and our consistent record of growth over the past 5 years. Also, we are pleased to have signed a definitive agreement to purchase Accelerated Care Plus and look forward to working with their high-quality and dedicated staff. Their unique business model and relationships will continue to provide growth within their targeted market segments as well as providing opportunities for Hanger’s traditional services.”
The company has substantially completed the relocation of its corporate headquarters from Bethesda, Md. to Austin, Texas. The cost of the move is reported as a separate component of income from operations. In connection with the move Hanger Orthopedic Group incurred severance, lease termination and other relocation costs of $8 million and $14.2 million for the 3 and 9 months ended Sept. 30, respectively. According to a press release, the company anticipates incurring $1 to $2 million of additional cost in the coming months as the final stages of the move are completed. The company still anticipates that the move will result in a reduction of operating expenses of approximately $2.5 million to $3.5 million annually.
The company expects full year revenues to be between $815 million and $825 million for 2010.
