EX-99.1 3 irm306a.txt PRESS RELEASE [GRAPHIC OMITTED][HANGER ORTHOPEDIC GROUP, INC. LOGO] Two Bethesda Metro Center Phone 301.986.0701 Suite 1200 Fax 301.986.0702 Bethesda, MD 20814 Contacts: Ivan R. Sabel (301) 986-0701 George E. McHenry(301) 986-0701 Jason P. Owen (301) 986-0701 News Release HANGER ORTHOPEDIC GROUP, INC. ANNOUNCES FIRST QUARTER NET INCOME INCREASED TO $0.19 PER DILUTED SHARE BETHESDA, MARYLAND, April 30, 2003 - Hanger Orthopedic Group, Inc. (NYSE:HGR) today announced net income increased to $0.19 per diluted share for the three-month period ended March 31, 2003. Net income increased by $3.9 million and EPS by $0.18 per diluted share compared to the same period last year. Net sales for the three months ended March 31, 2003 increased by $2.6 million, or 2.1%, to $126.1 million from $123.5 million in the prior year's first quarter. The sales growth was primarily the result of a 1.0% increase in sales in the Company's O&P practices and a 22.2% increase in the sales of the company's distribution segment. Gross profit for the first quarter of 2003 was $65.4 million, or 51.9% of net sales, compared to $64.0 million, or 51.8% of net sales, in the prior year. The improvement in gross profit, in both dollars and as a percentage of net sales, was due to a reduction in material costs. Net income for the first quarter of 2003 was $5.5 million, an improvement of $4.0 million over the comparable period last year. For the first quarter of 2002, Hanger reported net income of $1.5 million. Net income applicable to common stock for the first quarter of 2003 was $4.1 million, or approximately $0.19 per diluted share, an improvement of $3.9 million over the comparable period last year. For the corresponding period of the prior year, Hanger reported net income applicable to common stock of $0.3 million, or approximately $0.01 per diluted share. Net income comparisons were favorably impacted by the loss on early extinguishment of debt recorded in the first quarter of 2002. In 2002, these expenses were reported as a $2.8 million extraordinary item, net of tax. New reporting requirements no longer allow this extraordinary treatment and require that these losses be reported as non-operating expenses. Chairman and CEO, Ivan R. Sabel stated, "We are pleased to be able to report continued improvement in earnings. As expected, the weather did have some impact on our patient-care sales growth; however, we continued to grow our earnings. As we move forward, we expect our patient-care sales growth to return to historic rates. As always, I want to thank our employees for all the hard work it took to achieve these results." Hanger Orthopedic Group, Inc., headquartered in Bethesda, Maryland, is the world's premier provider of orthotic and prosthetic patient-care services. Hanger is the market leader in the United States, owning and operating 589 patient-care centers in 44 states and the District of Columbia, with 3,102 employees including 866 certified practitioners. Hanger is organized into two business segments: patient-care which consists of nationwide orthotic and prosthetic practice centers and distribution which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient-care centers. In addition, Hanger operates the largest orthotic and prosthetic managed care network in the country. _____________________ Certain statements included in this press release are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to the Company's SEC filings for factors that could cause actual results to differ materially from the Company's expectations. -tables to follow-
Hanger Orthopedic Group, Inc. (In Thousands, Except Share and Per Share Data) For the Three Months Ended Income Statement: March 31, ---------------- 2003 2002 Net sales $ 126,128 $ 123,510 Cost of goods sold 60,690 59,537 ---------- --------- Gross profit 65,438 63,973 Selling, general and administrative 44,766 44,777 Depreciation and amortization 2,453 2,784 ---------- --------- Income from operations 18,219 16,412 Interest expense, net 9,096 9,079 Loss on early extinguishment of debt - 4,686 ---------- --------- Income before taxes 9,123 2,647 Provision for income taxes 3,645 1,125 ---------- --------- Net income 5,478 1,522 Less preferred stock dividends declared and accretion 1,357 1,266 ---------- --------- Net income applicable to common stock $ 4,121 $ 256 ========== ========= Diluted Per Share Data: ---------------------- Net income applicable to common stock $ 0.19 $ 0.01 ========== ========= Weighted average number of diluted common shares outstanding 21,990,343 21,642,231 ========== ========= March 31, March 31, Balance Sheet Data: 2003 2002 ------------------ ---- ---- Working Capital $ 139,582 $ 137,918 Total Debt 388,429 404,760 Shareholders' Equity 172,167 146,659 -more-
Hanger Orthopedic Group, Inc. For the Three Months Ended Statistical Data: March 31, ---------------- 2003 2002 Patient-Care Centers 589 591 Certified Practitioners 866 864 Number of States (including D.C.) 45 45 Payor Mix Private Pay and Other 55.6% 57.1% Medicare 32.1% 31.2% Medicaid 9.6% 9.5% VA 2.7% 2.2% Percentage of Net Sales from: Patient-Care Services 93.6% 94.7% Distribution 6.4% 5.3% Operating Margin 14.4% 13.3%