8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

CURRENT REPORT

FORM 8-K

Pursuant to Section 13 or 15(d) of the Securities Exchange Act

Date of Report (Date of Earliest Event Reported): February 28, 2012

Hanger Orthopedic Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-10670	84-0904275
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

10910 Domain Drive, Suite 300

Austin, Texas 78758

 (Address of principal executive offices (zip code))

512-777-3800

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a - 12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d-4(c))

Item 7.01.  Regulation FD Disclosure

From time to time, Hanger Orthopedic Group, Inc. (“we”, “our” or the “Company”) makes presentations to the investment community. The current version of our investment community presentation materials are furnished as Exhibit 99.1 to this Form 8-K and are posted under the investor relations section of our website (www.hanger.com). This information is furnished pursuant to Item 7.01 of Form 8-K and Regulation FD, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. By filing this report on Form 8-K and furnishing this information, we make no admission as to the materiality of any information in this report.

The information contained in the presentation materials is summary information that is intended to be considered in the context of our filings with the Securities and Exchange Commission (“SEC”) and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this report, although we may do so from time to time as our management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Certain expectations and projections regarding the future performance of the Company referenced in the exhibit to this report are “forward-looking statements” as provided in the United States Private Securities Litigation Reform Act of 1995.  These expectations and projections are based on currently available competitive, financial, and economic data, along with the Company’s operating plans.  However, various risks, uncertainties and contingencies could cause actual results or performance to differ materially from those expressed in, or implied by, these statements, including the Company’s ability to enter into and derive benefits from managed care contracts, the demand for the Company’s orthotic and prosthetic services and products and the other factors identified in the Company’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. We caution readers that in addition to the above cautionary statements, all forward-looking statements contained herein should be read in conjunction with our SEC filings and other public releases or disclosures.

Item 9.01.      Financial Statements and Exhibits

(d)	Exhibits.
	99.1	February 2012 Investment Community Presentation Materials

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HANGER ORTHOPEDIC GROUP, INC.

By:	/s/George E. McHenry
	George E. McHenry
	Chief Financial Officer

Dated:  February 28, 2012

3

Hanger Orthopedic Group, Inc.

Exhibit Index to Current Report on Form 8-K

Dated February 28, 2012

Exhibit
Number
99.1	February 2012 Investment Community Presentation Materials

4

EX-99.1

Exhibit 99.1

Investor Presentation February 2012 ADVANCING THE VISION

Except for the historical information contained herein, the matters discussed in this presentation constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These include the rate at which Hanger grows same-center net sales, competitive pressures within the industry, government regulation and reimbursement, and other factors discussed from time to time in the reports filed by the company with the Securities and Exchange Commission. The company assumes no obligation to update information contained in this presentation. SAFE HARBOR 1

Be the partner of choice for products and services that enhance human physical capability. VISION 2

OVERVIEW Distribution Patient Care Therapeutics Solutions 11% of revenues $101 million revenue 82% of revenues Linkia 7% of revenues ACP, Inc. IN, Inc. $753 million revenue $919 million in revenues Adjusted EBITDA $150 million 3 $65 Million revenue

DISCIPLINED DIVERSIFICATION OF REVENUE MARKET 4

DISCIPLINED DIVERSIFICATION OF REVENUE 5 HANGER’S SHARE 29% of Traditional O&P Market 31% of Post Acute Rehabilitation Market

COMPELLING GROWTH DRIVERS Sources: Company estimates; Wall Street Research; 2003–2006 National Health and Nutrition Examination Survey; National Institutes of Health; Amputee Coalition of America. Aging Population (U.S.) (%) Diabetes – Prevalence By Age Group Disease and aging population Advancing technology Regulatory reform Increased focus on lowering costs 6

PATIENT CARE

One or more certified practitioners Technical personnel Office administrators Line of site incentives to grow revenues and collect receivables CAGR of 6.7% (2008 - 2011) PATIENT CARE PROFILE BUSINESS OVERVIEW CENTER OVERVIEW Over 700 O&P patient-care centers Over 1,100 O&P certified and licensed practitioners Stand alone – design, fabricate and fit Treat more than 650,000 patients annually 8

PATIENT CARE MARKET POSITION Only national or regional provider Hanger operates ~25% of accredited O&P facilities No other provider has more than 2% market share Adjacent market of $1.4 Billion Principal Reimbursement Sources for Patient Care Services $2.6 Billion US Market 9

First to market with new technologies and products Linkia Network Management Diversification into new adjacent businesses CARES Dosteon Solutions Small O&P acquisitions Sales synergies with ACP PATIENT CARE GROWTH OPPORTUNITIES 10

First and only O&P network management company Insurers’ exclusive or preferred provider of their network Hanger network of approximately 1,030 O&P centers 52 contracts; 1-3 years; auto renew Value proposition to large name companies through expanded services 28% CAGR of contracted revenues (2008 - 2011) LINKIA NETWORK MANAGEMENT 11

DISTRIBUTION

Largest dedicated distributor of O&P devices and components Over 29,000 O&P related items 6 strategically located distribution facilities Comprehensive Customer Service Manufacture and distribute therapeutic footwear Net sales $101 million and CAGR of 7.6% (2008 - 2011) Inter-company sales $190 million DISTRIBUTION PROFILE 13

Increase depth and breadth of product line Increase penetration of existing customer base Expand customer base Expand market presence geographically Apply core competencies to adjacent businesses Expand O&P fabrication operation to Independent O&P Providers DISTRIBUTION OPPORTUNITIES 14

THERAPEUTIC SOLUTIONS

Innovative Neurotronics Development and commercialization of products V-Hold and WalkAid Accelerated Care Plus (ACP) Value proposition to rehabilitation providers Technology, clinical modalities, training and education THERAPEUTIC SOLUTIONS– Diversification of Revenue 16

17 ACP OVERVIEW ACP enables post-acute providers with 24 evidence-based clinical therapy programs Physical Agent Modality Basics Wound Healing Fall Prevention Continence Improvement Contracture Management Pain Management Physical Agent Modality Basics Osteoarthritis of the Knee Orthotic Therapy Hemiplegic Gait Chronic Obstructive Pulmonary Disease Electrode Application & Safety Rheumatoid Arthritis of Wrist & Hand Stroke – Hand Edema Stroke Recovery Herpes Zoster (Shingles) Sports & Orthopedic Rehabilitation PRE’s with Elastic Bands Aerobic Exercise for Aging Adults PAM Documentation Recommendations Clients facility’s standard equipment package OMNISTIM® 500 AND OMNISTIM® FX2 ELECTRICAL STIMULATION OMNISOUND® 300 ULTRASOUND MEGAPULSE® SHORTWAVE DIATHERMY OMNICYCLE® MOTOR ASSISTED CYCLE Monthly Supplies

18 ACP MARKET OPPORTUNITIES ACP offers Hanger a $1.3 billion revenue post-acute opportunity Core SNF Business – $241 Million Opportunity Strong Core Business Recurring revenue business model with high customer retention Strong demographic trends Advancing new technologies, products and modalities combined with 30% penetration leading to growth within the SNF core business Other Rehab Settings – $1.1 Billion Opportunity Long-Term Growth Platform Natural progression into other post-acute settings Strong post-acute customer relationships provide significant opportunities for product/service extensions Seasoned management team possesses a track record for successfully managing growth and expansion Extend Reach to Additional Markets with Numerous Organic Growth and Acquisition Opportunities +

FINANCIAL OVERVIEW

Earnings and margin growth Substantial cash flow generation Strong balance sheet management Moderate leverage post ACP acquisition Consistent Reduction of Leverage SOLID FINANCIAL POSITION 20

Same Store Sales 2.6% YTD and 2.2% for 4th Quarter 22.8% growth in Adjusted EBITDA Improved Operating Margins Repriced Debt (March 2011) 15.5% increase in adjusted earnings per share 2011 IN REVIEW 21

22 REVENUE GROWTH CAGR 9.3% ($ in millions) 1000 900 800 700 600 500 400 300 200 100 0 2008 2009 2010 2011 $703.1 $760.1 $817.4 $918.5

23 ADJUSTED EBITDA GROWTH AND MARGINS* CAGR 16.4% * Excludes relocation expenses and cost related to the ACP acquisition. 13.5% 14.1% 14.9% Adjusted EBITDA (in millions) Adjusted EBITDA Margins % 16.3% 160 140 120 100 80 60 40 20 0 2008 2009 2010 2011 $94.9 $106.8 $122.0 $149.8

24 GROWTH IN ADJUSTED EPS * Excludes relocation expenses, cost related to the ACP acquisition and accelerated non-cash preferred dividend in 2008. CAGR 24.0% $0.86 $1.13 $1.42 $1.64 2008 2009 2010 2011

STEADY COMPARABLE QUARTER GROWTH 2008 2009 2010 2011 Adjusted EBITDA* ($ in millions) * Excludes relocation expenses and cost related to the ACP acquisition. Revenues ($ in millions) Adjusted Earnings Per Diluted Share* * Excludes relocation expenses, cost related to the ACP acquisition and accelerated non-cash preferred dividend. 25

IMPROVED LEVERAGE & LIQUIDITY 26 NOTE: Net Debt is Total Debt less Cash and Adjusted EBITDA adds back Restricted Stock and Deferred Compensation Non-Cash Expenses At 12/31/11 (millions) Cash and equivalents $ 42.9 Availability on Revolver $ 96.6 Total liquidity $ 139.5 Debt $ 508.0

Compelling industry growth drivers Dominant market position Attractive organic growth opportunities Adjacent continuum of care opportunities Proven acquisition capabilities Solid financial position KEY INVESTMENT POINTS 27

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