UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

CURRENT REPORT

FORM 8-K/A

Amendment No. 1

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

Date of Report (Date of Earliest Event Reported): February 15, 2018

Hanger, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)

1-10670
(Commission File Number)

84-0904275
(IRS Employer
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):

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

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Explanatory Note

Hanger, Inc. (the “Company”) is filing this Amendment No. 1 (the “Amendment”) to its Current Report on Form 8-K (the “Original Form 8-K”) to correct a typographical error in the date included at the end of the last sentence of the second paragraph contained in Item 2.02 of the Original Form 8-K. The reference in that sentence to the second quarter of 2017 has been modified to correctly reference the second quarter of 2018.

The Amendment does not update any other disclosures in the Original Form 8-K except as described above, and the disclosures in the Original Form 8-K continue to speak as of the date of the Original Form 8-K.

Item 2.02 Results of Operations and Financial Condition.

On May 12, 2017, Hanger, Inc. (the “Company”) filed its Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”) with the Securities and Exchange Commission (the “SEC”). On January 19, 2018, the Company filed with the SEC its Annual Report on Form 10-K for the years ended December 31, 2015 and December 31, 2016 (the “2016 Form 10-K”). The filing of the 2016 Form 10-K was delayed significantly as a result of the delay in the filing of the 2014 Form 10-K, the number of accounting periods encompassed within the 2016 Form 10-K, and the additional review, analysis and substantive procedures performed due to the material weaknesses in our internal control over financial reporting. These material weaknesses were disclosed in the 2016 Form 10-K.

The Company has not yet filed financial statements for the first, second and third quarters of 2017, or the full year ended December 31, 2017. The Company is currently preparing its 2017 financial statements and related financial data, and has commenced the audit process. The Company believes its prior reconstruction, reconciliation and correction of the accounting records and ledgers supporting the preparation of its consolidated financial statements for the years ended 2014, 2015 and 2016, along with the clarification and documentation of its updated and revised accounting policies, will reduce the time necessary for the completion of its 2017 financial accounting and reporting processes. Nevertheless, due to the existing material weaknesses in its internal control over financial reporting, it is necessary for the Company to prepare, review and undertake substantive testing and confirmation of its financial accounting, and these activities have resulted in an extended timetable for the completion of its 2017 financial statements. The Company intends to prepare and complete its consolidated financial statements for 2017 and file its Annual Report on Form 10-K for the year ended December 31, 2017 as expeditiously as possible, and currently believes that absent unforeseen issues or circumstances, it can do so during the second quarter of 2018.

Cash Flow Data

Due to the continuing financial statement preparation and audit activities described above, the Company is not yet able to provide preliminary balance sheet or income statement data for the financial periods for which it has not yet provided financial statements or reports. The Company believes, however, that it has sufficient information from which to provide the following preliminary estimates of certain cash flow data for the periods set forth below.

The preliminary estimated amounts provided below are based on information currently available, which the Company believes is reasonable. However, the amounts remain subject to material change until the Company files its financial statements and reports covering the periods set forth below, and there can be no assurance that these amounts will remain as disclosed herein. Such changes, if they occur, may include re-classification of amounts between cash flow statement line items.

SUMMARY CASH FLOW INFORMATION

ESTIMATED AMOUNTS

SUBJECT TO FURTHER REVIEW AND MATERIAL CHANGE

(in millions; unaudited)	Year Ended December 31,
	2017			2016
Net cash provided by operating activities	$	30		$	69

Acquisitions	—			—
Purchase of property, plant and equipment, net	(19		)	(18		)
Other investing activities	16			—
Net cash used in investing activities	(3		)	(18		)

Net cash used in financing activities	(32		)	(103		)
Decrease in cash and cash equivalents	(5		)	(52		)
Cash and cash equivalents at beginning of period	7			59
Cash and cash equivalents at end of period	$	2		$	7

Supplemental cash flow information:
Cash interest paid	$	48		$	42
Cash taxes paid (refunds received)	1			(35		)
Certain cash payments to 3rd party professional firms (as described below)	38			48

Non-cash investing and financing activities:
Net additions/(retirements) of capital lease obligations	$	1		$	(2	)

The “Supplemental cash flow information” provided in the table above reflects items that are inherently included as deductions within the net cash numbers provided on the “Net cash provided by operating activities” line item.

“Certain cash payments to 3rd party professional firms” reflect amounts paid to third party professional firms in connection with the remediation of the Company’s material weaknesses and financial reporting processes, as well as legal activities incurred in connection with these activities and costs associated with the preparation and audit of the Company’s financial statements. Disclosure of these expenditures has been provided to assist in the explanation of changes in the Company’s cash flow trends between the comparative periods disclosed in the table. Cash payments differ in timing from the Company’s recognition of expenses as the Company recognizes the cost related to its independent audits in the year to which the audit work pertains. Expenses related to 3rd party professional firms were $37 million in 2016 and are currently estimated to be approximately $30 million in 2017 and $13 million in 2018. These expense amounts reflect the Company’s estimate of that portion of its professional fees that have been or are expected to be

incurred in excess of the Company’s historically incurred amounts for related accounting and auditing activities of approximately $2 million per year. As of December 31, 2017, the Company estimates that it had $15 million of professional fees incurred in connection with these activities accrued but unpaid.

During 2016, net cash from operating activities benefited from the receipt of approximately $35 million in net federal income tax refunds and further benefited from favorable improvements in the collection of accounts receivable. Operating cash flow as presented above should not be considered reflective of any trend in the Company’s underlying operating results, nor should it be deemed to indicate any amount of relative underlying earnings from operations. These amounts, when viewed along with other disclosures the Company has made concerning its outstanding indebtedness and other obligations, should be used solely for the purposes of assisting in the assessment of the Company’s current sources and uses of cash, and liquidity.

Liquidity

Please refer to “Note N - Long Term Debt” in the Company’s financial statements and “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both provided within the 2016 Form 10-K, for a discussion of the Company’s liquidity and pending financial obligations. The information provided within this Form 8-K is intended to augment the disclosures and discussions provided within the 2016 Form 10-K with information regarding the Company’s cash position, outstanding borrowings and available borrowings under its revolving credit facility as of December 31, 2017.

At December 31, 2017, the Company had $2 million in cash and cash equivalents and $86 million in undrawn capacity available to it through the $118 million Aggregate Revolving Commitment under its Credit Agreement. As of that date, the Company had $5 million in borrowings and $6 million in letters of credit outstanding under its Aggregate Revolving Commitment. The Company’s availability under the Aggregate Revolving Commitment was reduced by approximately $21 million pursuant to the applicable usage limitation as specified in the Credit Agreement.

TABLE OF DEBT

AMOUNTS ARE PRELIMINARY AND SUBJECT TO CHANGE

	As of
(in millions; unaudited)	December 31, 2017

Revolving credit facility (matures on June 17, 2018)	$	5
Term loan under existing credit facility (matures on June 17, 2018)	152
Term B credit agreement (matures on August 1, 2019)	280
Subordinated seller notes, non-collateralized, net of unamortized discount and principal	6
Capital leases, including build to suit	18
Total debt before unamortized discount	461
Unamortized discount	(11		)
Total debt	450
Cash and cash equivalents	2
Total debt, less cash and cash equivalents	$	448

Disclosures About Forward-Looking Statements

This Form 8-K contains certain “forward-looking statements” relating to the Company. All statements, other than statements of historical fact included herein, are “forward-looking statements,” including statements regarding the timing of filing of, and the outcome of the Company’s work in connection with, completing certain financial statements and other financial data. These forward-looking statements are often identified by the use of forward-looking terminology such as “intends,” “expects” or similar expressions and involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this filing. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. These uncertainties include, but are not limited to, the risk that additional information may arise during the course of the Company’s ongoing financial statement preparation and closing processes that would require the Company to make additional adjustments or revisions to its estimates or financial statements and other financial data, to identify additional material weaknesses, or to take any other necessary action relating to the Company’s accounting practices; the time required to complete the financial statements and other financial data and accounting review; the time required to prepare its periodic reports for filings with the Securities and Exchange Commission; the impact of the Tax Cuts and Jobs Act on the Company’s financial statements; and any regulatory review of, or litigation relating to, the Company’s accounting practices, financial statements and other financial data or other corporate actions. For additional information and risk factors that could affect the Company, see its Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission. The information contained in this filing is made as of the date hereof, even if this filing is subsequently made available by the Company on its website or otherwise.

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, INC.


	By:	/s/ Thomas E. Hartman
		Thomas E. Hartman
		Senior Vice President and General Counsel

	Dated: February 15, 2018