-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, r/yfwVGoYpnuONigJeQ0IAZTnH5aKY3uqo/aiWY6nJdPX3OL0tv4h4SGDVbmi74k gXRbbqpIqhjy38R1y6zkZQ== 0000908634-95-000023.txt : 19950530 0000908634-95-000023.hdr.sgml : 19950530 ACCESSION NUMBER: 0000908634-95-000023 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950518 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANGER ORTHOPEDIC GROUP INC CENTRAL INDEX KEY: 0000722723 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 840904275 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10670 FILM NUMBER: 95540775 BUSINESS ADDRESS: STREET 1: 7700 OLD GEORGETOWN RD 2ND FL CITY: BETHESDA STATE: MD ZIP: 20814 BUSINESS PHONE: 3019860701 MAIL ADDRESS: STREET 2: 7700 OLD GEORGETOWN RD 2ND FL CITY: BETHESDA STATE: MD ZIP: 20814 FORMER COMPANY: FORMER CONFORMED NAME: SEQUEL CORP DATE OF NAME CHANGE: 19890814 FORMER COMPANY: FORMER CONFORMED NAME: CELLTECH COMMUNICATIONS INC DATE OF NAME CHANGE: 19860304 10-Q/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ FORM 10-Q/A No. 1 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 HANGER ORTHOPEDIC GROUP, INC. (Exact name of Registrant as specified in its charter) Delaware 1-10670 84-0904275 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 7700 Old Georgetown Road Bethesda, Maryland 20814 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (301) 986-0701 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, as set forth in the pages attached hereto: PART I, Item 1 - Financial Statements (Statements of Cash Flows - page 6) Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. HANGER ORTHOPEDIC GROUP, INC. By: RICHARD A. STEIN Richard A. Stein Vice President-Finance and Principal Financial and Accounting Officer Date: May 18, 1995 HANGER ORTHOPEDIC GROUP, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 1995 1994 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 853,253 $ 1,048,381 Accounts receivable less allowances for doubtful accounts of $1,041,000 and $975,000 in 1995 and 1994, respectively 12,008,411 12,392,843 Inventories 9,806,559 9,465,186 Prepaid expenses and other assets 1,400,891 1,149,026 Deferred income taxes 1,264,790 1,264,790 ------------ ------------ Total current assets 25,333,904 25,320,226 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT Land 2,991,245 2,991,245 Buildings 2,473,014 2,288,357 Machinery and equipment 3,311,302 3,232,442 Furniture and fixtures 1,551,802 1,526,237 Leasehold improvements 1,126,905 1,075,481 ------------- ------------ 11,454,268 11,113,762 Less accumulated depreciation and amortization 3,372,091 3,104,828 ------------- ------------ 8,082,177 8,008,934 ------------- ------------ INTANGIBLE ASSETS Excess of cost over net assets acquired 27,001,565 26,633,643 Non-compete agreements 4,786,371 4,751,371 Other intangible assets 3,746,507 3,762,307 ------------- ----------- 35,534,443 35,147,321 Less accumulated amortization 7,976,590 7,532,295 ------------- ----------- 27,557,853 27,615,026 ------------- ----------- OTHER ASSETS Other 408,734 537,032 ------------- ----------- TOTAL ASSETS $61,382,668 $61,481,218 ============= =========== 2 HANGER ORTHOPEDIC GROUP, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 1995 1994 (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 3,258,239 $ 2,132,076 Accounts payable 1,656,684 1,562,625 Accrued expenses 1,239,766 1,300,070 Customer deposits 294,512 392,722 Accrued wages and payroll taxes 1,057,183 1,422,741 Deferred revenue 100,536 97,690 --------------- --------------- Total current liabilities 7,606,920 6,907,924 --------------- --------------- Long-term debt 23,265,190 24,329,710 Deferred income taxes 563,902 563,902 Other liabilities and accrued dividends 292,645 269,871 Mandatorily redeemable preferred stock, class C, 300 shares authorized, liquidation preference of $500 per share 237,192 232,086 Mandatorily redeemable preferred stock, class F, 100,000 shares authorized, liquidation preference of $500 per share SHAREHOLDERS' EQUITY Common stock, $.01 par value; 25,000,000 shares authorized 8,424,039 shares issued and 8,290,544 shares outstanding in 1995 and 1994 84,241 84,241 Additional paid-in capital 33,590,751 33,595,857 Accumulated deficit (3,602,611) (3,846,811) --------------- -------------- 30,072,381 29,833,287 Treasury stock - (133,495 shares) (655,562) (655,562) --------------- -------------- 29,416,819 29,177,725 --------------- -------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $61,382,668 $61,481,218 =============== ============== 3 HANGER ORTHOPEDIC GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED March 31, 1995 and 1994 (unaudited) 1995 1994 ---- ---- Net Sales $ 12,211,038 $ 10,108,590 Cost of products and services sold 5,867,202 5,059,790 ----------------- ----------------- Gross profit 6,343,836 5,048,800 Selling, general & administrative 4,727,703 4,869,696 Depreciation and amortization 538,970 583,344 Amortization of excess cost over net assets acquired 172,942 161,004 ------------------ ---------------- Income (loss) from operations 904,221 (565,244) Other expense: Interest expense, net (466,757) (339,915) Other (16,518) (15,176) ------------------ ---------------- Income (loss) from continuing operations before income taxes 420,946 (920,335) Provision (benefit) for income taxes 176,746 (414,000) ------------------ ----------------- Income (loss) from continuing operations before loss from discontinued operations 244,200 (506,335) Loss from discontinued operations net of tax benefit of $23,000 (28,618) ------------------ ------------------ Net income (loss) $ 244,200 $ (534,953) ================= ================= Income (loss) from continuing operations $.03 ($.06) Loss from discontinued operations $ .03 $ (.06) ================== ================= Weighted average number of common shares outstanding 8,290,544 8,383,181 4 HANGER ORTHOPEDIC GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED March 31, 1995 and 1994 (unaudited) 1995 1994 ---- ---- Cash flows from operating activities: Net income (loss) $ 244,200 $ (534,953) Adjustments to reconcile net income to net cash provided by (used in ) operating activities: Discontinued operations 51,618 Provision for bad debt 127,232 146,237 Amortization of deferred compensation 4,197 Depreciation and amortization 538,970 583,344 Amortization of excess cost over net assets acquired 172,942 161,004 Deferred taxes (437,000) Changes in assets and liabilities, net of effect from acquired companies: Decrease in accounts receivable 275,507 413,365 Increase in inventory (295,203) (683,786) Increase in prepaid and other assets (428,611) (166,073) Decrease (increase) in other assets 128,298 (25,343) Increase in accounts payable 92,745 446,697 Decrease in accrued expenses (60,304) (27,480) Decrease in accrued wages and payroll taxes (365,558) (119,758) Increase (decrease) in customer deposits (98,210) 32,185 Increase in deferred revenue 2,846 5,800 Increase in taxes payable 176,746 Increase in other liabilities 22,774 85,410 ------------- ------------ Total adjustments 290,173 476,417 ------------- ------------ Net cash provided by (used in) in continuing operations 534,373 (58,536) Net cash used in discontinuing operations (5,031) ------------- ------------ Net cash provided by (used in) operating activities 534,373 (63,567) ------------- ------------ Cash flows from investing activities: Purchase of fixed assets, net (330,647) (169,782) Purchase of patents (17,089) (2,165) Acquisitions, net of cash (265,194) (860,170) Purchase of non-compete agreements (35,000) (150,500) Other intangibles (1,103) (106,369) -------------- ----------- Net cash used in investing activities (649,033) (1,288,986) -------------- ------------ Continued 5 HANGER ORTHOPEDIC GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED March 31, 1995 and 1994 (unaudited) 1995 1994 ---- ---- Cash flows from financing activities: Net borrowings under revolving credit facility $ 500,000 $ 674,449 Repayment of long-term debt (613,357) (324,147) Increase (decrease) in financing costs 32,889 (12,093) ------------- --------- Net cash (used in) provided by financing activities (80,468) 338,209 ------------- --------- Net change in cash and cash equivalents for the period (195,128) (1,014,344) Cash and cash equivalents at beginning of period 1,048,381 1,404,157 ------------- --------- Cash and cash equivalents at end of period $ 853,253 $ 389,813 ============= ========= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 616,808 $ 342,522 ============= ========= Non-cash financing and investing activities: Issuance of common stock in connection with acquisitions $ 200,000 Issuance of notes in connection with acquisitions $ 175,000 $ 425,000 ============= ========= Dividends declared - preferred stock $ 5,262 $ 4,810 ============= ========= The accompanying notes are an integral part of the consolidated financial statements. 6 NOTE A -- BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of a normal recurring nature, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the financial statements of Hanger Orthopedic Group, Inc. (the "Company"), as of December 31, 1994, and notes thereto included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission. NOTE B -- INVENTORY Inventories at March 31, 1995 and December 31, 1994 were comprised of the following: March 31, 1995 December 31, 1994 -------------- ----------------- (unaudited) Raw materials $7,905,847 $8,078,838 Work-in-process 754,828 835,934 Finished goods 1,145,884 530,414 ----------- ------------ $9,806,559 $9,465,186 ========== ========== NOTE C -- ACQUISITIONS During the first quarter of 1995, the Company acquired two orthotic and prosthetic companies and certain assets of another O&P company. The aggregate purchase price was $390,000 comprised of $215,000 in cash and $175,000 in promissory notes. The cash portion of these acquisitions was borrowed under the Company's revolving credit facility. 7 -----END PRIVACY-ENHANCED MESSAGE-----