SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________
Commission file number 1-10670
HANGER ORTHOPEDIC GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-0904275
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7700 Old Georgetown Road, Bethesda, MD 20814
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(301) 986-0701
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Former name, former address and former fiscal year,
if changed since last report.
Indicate by check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of
shares outstanding of each of the issuer's classes of common stock, as
of August 11, 1995, 8,290,544 shares of common stock, $.01 par value
per share.
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1995
(unaudited) and December 31, 1994 1
Consolidated Statements of Operations for the six
months ended June 30, 1995 and 1994 (unaudited) 3
Consolidated Statements of Operations for the three
months ended June 30, 1995 and 1994 (unaudited) 4
Consolidated Statements of Cash Flows for the six
months ended June 30, 1995 and 1994 (unaudited) 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. OTHER INFORMATION
--------------------------------
Item 4. Submission of Matters to a Vote of Securityholders 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1995 1994
---- ----
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,351,631 $ 1,048,381
Accounts receivable less allowances
for doubtful accounts of $1,141,000
and $975,000 in 1995 and 1994 12,368,631 12,392,843
Inventories 10,149,910 9,465,186
Prepaid expenses and other assets 1,289,072 1,149,026
Deferred income taxes 1,264,790 1,264,790
------------ ------------
Total current assets 26,424,034 25,320,226
------------ ------------
PROPERTY, PLANT AND EQUIPMENT
Land 2,991,245 2,991,245
Buildings 2,569,793 2,288,357
Machinery and equipment 3,414,538 3,232,442
Furniture and fixtures 1,561,174 1,526,237
Leasehold improvements 1,148,893 1,075,481
------------ ------------
11,685,643 11,113,762
Less accumulated depreciation and amortization 3,656,647 3,104,828
------------ ------------
8,028,996 8,008,934
------------ ------------
INTANGIBLE ASSETS
Excess of cost over net assets acquired 27,005,433 26,633,643
Non-compete agreements 4,786,371 4,751,371
Other intangible assets 3,729,943 3,762,307
------------ ------------
35,521,747 35,147,321
Less accumulated amortization 8,333,244 7,532,295
------------ ------------
27,188,503 27,615,026
------------ ------------
OTHER ASSETS
Other 393,047 537,032
------------ ------------
TOTAL ASSETS $62,034,580 $61,481,218
============ ============
The accompany notes are an integral part
of the consolidated financial statements.
1
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1995 1994
---- ----
(unaudited)
CURRENT LIABILITIES
Current portion of long-term debt $ 3,120,621 $ 2,132,076
Accounts payable 1,561,495 1,562,625
Accrued expenses 1,667,516 1,300,070
Customer deposits 313,543 392,722
Accrued wages and payroll taxes 1,246,149 1,422,741
Deferred revenue 100,922 97,690
------------ ------------
Total current liabilities 8,010,246 6,907,924
------------ ------------
Long-term debt 22,893,000 24,329,710
Deferred income taxes 563,902 563,902
Other liabilities 256,100 269,871
Mandatorily redeemable preferred stock,
class C, liquidation preference of
$500 per share 242,755 232,086
Mandatorily redeemable preferred stock,
class F, 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 33,585,188 33,595,857
Accumulated deficit (2,945,290) (3,846,811)
------------ ------------
30,724,139 29,833,287
Treasury stock - (133,495 shares) (655,562) (655,562)
------------ ------------
30,068,577 29,177,725
------------ ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $62,034,580 $61,481,218
============ ============
The accompany notes are an integral part
of the consolidated financial statements.
2
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED June 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
Net Sales $25,560,895 $22,944,254
Cost of products and services sold 11,929,638 10,661,199
------------ ------------
Gross profit 13,631,257 12,283,055
Selling, general & administrative 9,604,603 9,710,582
Depreciation and amortization 1,045,961 1,179,556
Amortization of excess cost over net
assets acquired 346,124 332,225
------------ ------------
Income from operations 2,634,569 1,060,692
Other income expense:
Interest expense, net (1,017,024) (769,606)
Other income (expense) (63,203) (18,799)
------------ ------------
Income from continuing operations 1,554,342 309,885
before income taxes
Provision for income taxes 652,822 140,000
------------ ------------
Income from continuing operations 901,520 169,885
Loss from discontinued operations net
of tax benefit of $47,000 (58,252)
------------ ------------
Net income $ 901,520 $ 111,633
============ ============
Income from continuing operations $ .11 $ .02
Loss from discontinued operations (.01)
------------ ------------
Net income per share $ .11 $ .01
============ ============
Weighted average number of common
shares outstanding 8,290,544 8,313,079
The accompany notes are an integral part
of the consolidated financial statements.
3
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED June 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
Net Sales $13,349,857 $12,835,664
Cost of products and services sold 6,062,436 5,601,409
------------ ------------
Gross profit 7,287,421 7,234,255
Selling, general & administrative 4,876,900 4,840,886
Depreciation and amortization 506,991 596,212
Amortization of excess cost over net
assets acquired 173,182 171,221
------------ ------------
Income from operations 1,730,348 1,625,936
Other expense:
Interest expense, net (550,267) (429,691)
Other income (expense) (46,685) 33,975
------------ ------------
Income from continuing operations 1,133,396 1,230,220
before income taxes
Provision for income taxes 476,076 554,000
------------ ------------
Income from continuing operations 657,320 676,220
Loss from discontinued operations net
of tax benefit of $24,000 (29,634)
------------ ------------
Net income $ 657,320 646,586
============ ============
Income from continuing operations $ .08 $ .08
Loss from discontinued operations
------------ ------------
Net income per share $ .08 $ .08
============ ============
Weighted average number of common
shares outstanding 8,290,544 8,313,440
The accompany notes are an integral part
of the consolidated financial statements.
4
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED June 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
Cash flows from operating activities:
Net income $ 901,520 111,633
Adjustments to reconcile net income to
net cash provided by operating activities:
Discontinued operations 82,251
Provision for bad debt 352,749 215,133
Amortization of deferred compensation 4,197
Depreciation and amortization 1,045,961 1,179,556
Amortization of excess cost over net
assets acquired 346,124 332,225
Changes in assets and liabilities,
net of effect from acquired companies:
Increase in accounts receivable (310,230) (1,039,093)
Increase in inventory (638,554) (1,219,887)
Increase in prepaid and other assets (140,046) (781,976)
(Increase) decrease in other assets 143,985 (64,919)
Increase (decrease) in accounts payable (2,444) 943,962
Increase (decrease) in accrued expenses (285,376) 432,548
Decrease in accrued wages and
payroll taxes (176,592) (466,934)
Increase (decrease) in customer deposits (79,179) 87,746
Increase in deferred revenue 3,232 2,500
Increase in taxes payable 652,822 93,000
Increase (decrease) in other liabilities (13,771) 110,024
------------ ------------
Total adjustments 898,681 (89,667)
------------ ------------
Net cash provided by continuing operations 1,800,201 21,966
Net cash provided by discontinued operations 10,333
------------ ------------
Net cash provided by operating activities 1,800,201 32,299
------------ ------------
Cash flows from investing activities:
Purchase of fixed assets, net (600,985) (530,211)
Purchase of patents (38,255) (7,718)
Acquisitions, net of cash (264,294) (2,494,496)
Purchase of non-compete agreements (35,000) (450,500)
Other intangibles (5,871) (256,483)
------------ ------------
Net cash used in investing activities (944,405) (3,739,408)
Continued
The accompany notes are an integral part
of the consolidated financial statements.
5
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED June 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
Cash flows from financing activities:
Net borrowings under revolving credit facility $ 350,000 $ 2,058,449
Proceeds from the sale of common stock
Increase in long-term debt 1,962,166
Repayment of long-term debt (973,165) (602,828)
Increase in financing costs 70,619 (17,601)
------------ ------------
Net cash (used in) provided by
financing activities (552,546) 3,400,186
------------ ------------
Net change in cash and cash equivalents
for the period 303,250 (306,923)
equivalents for the period
Cash and cash equivalents at beginning
of period 1,048,381 1,404,157
------------ ------------
Cash and cash equivalents at end of period $ 1,351,631 1,097,234
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 1,096,072 $ 726,727
============ ============
Taxes $ 136,450
============
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 1,725,000
============ ============
Dividends declared preferred stock $ 10,643 9,730
============ ============
The accompany notes are an integral part
of the consolidated financial statements.
6
<PAGE>
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 June 30, 1995 and December 31, 1994 were comprised of the
following:
June 30, 1995 December 31, 1994
(unaudited)
Raw materials $ 8,380,357 $ 8,078,838
Work-in-process 754,829 835,934
Finished goods 1,014,724 550,414
------------ ------------
$10,149,910 $9,465,186
============ ============
NOTE C -- ACQUISITIONS
During the six months 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
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The following table sets forth for the periods indicated certain items of
the Company's statements of operations and their percentage of the Company's
net sales:
For the Six For the Three
Months Ended Months Ended
June 30, June 30,
1995 1994 1995 1994
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products and services sold 46.7 46.5 45.4 43.6
Gross profit 53.3 53.5 54.6 56.4
Selling, general & administrative
expenses 37.6 42.3 36.5 37.7
Depreciation and amortization 4.1 5.1 3.8 4.6
Amortization of excess cost over net
assets acquired 1.4 1.4 1.3 1.3
Income from operations 10.3 4.6 13.0 12.7
Interest expense 4.0 3.4 4.1 3.3
Provision for income taxes 2.6 .6 3.6 4.3
Net income 3.5 .5 4.9 5.0
For the Six Months Ended June 30, 1995
Compared to the Six Months Ended June 30, 1994
Net Sales
Net sales for the six months ended June 30, 1995 amounted to
approximately $25,561,000, an increase of approximately $2,617,000, or 11.4%,
over net sales of approximately $22,944,000 for the six months ended June 30,
1994. The increase was primarily a result of an increase in net sales
attributable to patient care centers and facilities that were in operation
during both periods ("Internal Base Net Sales") of $1,864,000, or an increase
of 9%. Of the $1,864,000 increase in Internal Base Net Sales, $1,619,000, or
an increase of 11%, was attributable to patient care centers and $245,000 was
attributable to the Company's manufacturing and distribution activities. The
increase was attributable to O&P patient care centers and facilities acquired
by the Company in late 1994 and 1995. The increase of $2,617,000 in net sales
occurred notwithstanding the sale or closure of nine patient care centers
during late 1994 and the first quarter of 1995 in connection with the
restructuring (the "Restructuring") announced by the Company in March 1995.
These nine centers accounted for net sales of $862,000 during the first six
months of 1994 compared with only $77,000 in the first half of 1994. The
non-recurring charges associated with the Restructuring were recorded during
the fourth quarter of 1994.
8
<PAGE>
Gross Profit
Gross profit for the first six months of 1995 increased by approximately
$1,348,000, or 11.0% over the prior year's comparable period. Gross profit as
a percent of net sales remained constant for the comparable periods.
Selling, General and Administrative
Selling, general and administrative expenses for the first six months
ended June 30, 1995 decreased by approximately $106,000, or 1.1%, compared to
the first six months of 1994. In addition to decreasing in dollar amounts,
selling, general and administrative expenses as a percent of net sales
decreased to 37.6% for the six months ended June 30, 1995 from 42.3% of net
sales for the six months ended June 30, 1994. The decrease in general and
administrative expense as a percent of net sales resulted primarily from the
increase in Internal Base Net Sales while selling, general and administrative
expenses decreased. The decrease in selling, general and administrative
expenses was primarily a result of cost reduction efforts initiated in late
1994 in connection with the Restructuring.
Income from Operations
Principally as a result of the above, income from operations in the first
six months ended June 30, 1995 amounted to approximately $2,634,000, an
increase of $1,587,000, or 149.7%, from the prior year's comparable period. In
addition to increasing in dollar amount, income from operations as a percent
of net sales increased from 4.6% in the six months ended June 30, 1994 to
10.3% in the six months ended June 30, 1995.
Interest Expense
Interest expense for the first six months of 1995 amounted to
approximately $1,017,000, an increase of approximately $247,000, or 32.1%,
over the $770,000 of interest expense incurred in the six months of 1994. In
addition, interest expense as a percent of net sales increased from 3.4% for
the six months ended June 30, 1994 to 4.0% for the six months ended June 30,
1995. The increase in interest expense was primarily attributable to
indebtedness incurred in connection with the acquisition of O&P patient care
centers and facilities acquired subsequent to June 30, 1994 and the increase
in the Bank's prime rate.
9
<PAGE>
Income Taxes
The provision for income taxes for the six months ended June 30, 1995
amounted to approximately $653,000 as compared to a $140,000 for the six
months ended June 30, 1994.
Net Income
As a result of the above, the Company recorded net income of $657,000 or
$.11 per share in the first six months of 1995, compared to net income of
$676,000 or $.01 per share in the first six months of 1994.
For the Three Months Ended June 30, 1995
Compared to the Three Months Ended June 30, 1994
Net Sales
Net sales for the three months ended June 30, 1995, amounted to
approximately $13,350,000, an increase of approximately $514,000, or 4.0%,
over net sales of approximately $12,836,000 for the three months ended June
30, 1994. The increase was primarily a result of an increase in net sales
attributable to patient care centers and facilities that were in operation
during both periods ("Internal Base Net Sales") of $298,000, or 3.0%. Of the
$298,000 increase in Internal Base Net Sales, $183,000, or an increase of 2%,
was attributable to patient care centers and $115,000 was attributable to the
Company's manufacturing and distribution activities. The remaining increase
was attributable to O&P patient care centers and facilities acquired by the
Company in late 1994 and 1995. The increase in net sales occurred
notwithstanding the sale or closure of nine patient care centers during late
1994 and the first quarter of 1995 in connection with the restructuring (the
"Restructuring") announced by the Company in March 1995. These nine centers
accounted for net sales of $475,000 during the three months ended June 30,
1995 compared with only $7,000 during the three months ended June 30, 1994.
The non-recurring charges associated with the Restructuring were recorded
during the fourth quarter of 1994.
Gross Profit
Gross profit in the three months ended June 30, 1995 increased by
approximately $53,000, or 0.7%, from the prior year's comparable quarter.
Gross profit as a percent of net sales decreased from 56.4% to 54.6% for the
comparable periods.
Selling, General and Administrative
Selling, general and administrative expenses in the three months ended
June 30, 1995 increased by approximately $36,000, or 0.7%, compared to the
three months ended June 30, 1994. However, selling, general and administrative
expenses as a percent of net sales decreased to 36.5% in the three months
ended June 30, 1995 from 37.7% for the last year's comparable period. This
decrease in general and administrative expenses as a percent of net sales
resulted primarily from the increase in Internal Base Net Sales while selling,
general and administrative remained essentially the same.
10
<PAGE>
Income from Operations
Principally as a result of the above, income from operations in the three
months ended June 30, 1995 amounted to approximately $1,730,000, an increase
of $106,000, or 6.5%, from the prior year's comparable quarter. Income from
operations as a percent of net sales, increased to 13.0% in the second quarter
of 1995 from 12.7% for the prior year's comparable period.
Interest Expense
Interest expense in the second quarter of 1995 amounted to approximately
$550,000, an increase of approximately $120,000, or 28.1%, from the $430,000
of interest expense incurred in the second quarter of 1994. Interest expense
as a percent of net sales also increased to 4.1% from 3.3% for the same period
a year ago. The increase in interest expense is primarily a result of
indebtedness incurred in connection with acquisitions consummated subsequent
to June 30, 1994 and an increase in the Bank's prime rate.
Income Taxes
The provision for income taxes for the quarter ended June 30, 1995 was
$476,000 compared to $554,000 for the quarter ended June 30, 1994.
Net Income
As a result of the above, the Company recorded net income of $657,000 or
$.08 per share in the quarter ended June 30, 1995, compared to net income of
$647,000 or $.08 per share in the quarter ended June 30, 1994.
Liquidity and Capital Resources
The Company's consolidated working capital at June 30, 1995 was
approximately $18.4 million. Cash available at that date was approximately
$1,352,000. Net cash provided by operations for the six months ended June 30,
1995 was $1,800,000. The Company's cash resources available during the first
six months of 1995 were satisfactory to meet its obligations.
The Company's total long-term debt at June 30, 1995, including a current
portion of approximately $3.1 million, was approximately $26.0 million. Such
indebtedness included: (i) $4.0 million principal amount of an 8.5%
Convertible Note; (ii) $1.0 million principal amount of an 8.25% Convertible
Note; (iii) $13.1 million borrowed under the Company's $13.5 million revolving
credit facility with NationsBank, N.A. (the "Bank"); (iv) a total of $4.9
million in term loans borrowed from the Bank and (v) approximately $3.0
million of other indebtedness.
11
<PAGE>
Under the terms of the Financing and Security Agreement between the Bank
and the Company (the "Financing Agreement"), the Bank currently provides a
$13.25 million revolving credit facility (the "Revolving Credit Facility"),
reduced as of June 30, 1995, from its original amount of $13.5 million, for a
period of three years, expiring on June 30, 1996, bearing interest at either a
fluctuating rate equal to the Bank's prime lending rate plus .25% or a fixed
rate equal to the three-month London InterBank Offered Rate ("LIBOR") plus
2.5%, at the Company's option. The committed amount under the Financing
Agreement will be automatically and permanently reduced, through mandatory
pre-payments, to $12.25 million, $12.0 million and $11.75 million at,
September 30, 1995, December 31, 1995 and March 31, 1996, respectively.
The Revolving Credit Facility is collateralized by substantially all the
assets of the Company and contains covenants restricting, among other things,
the payment of dividends, the making of acquisitions and other transactions,
and imposes net worth, debt service coverage and other financial maintenance
requirements.
The Company plans to finance future acquisitions through internally
generated funds or borrowings under the Revolving Credit Facility, the
issuance of notes or shares of common stock of the Company, or through a
combination thereof.
During the first six months of 1995, the Company acquired two orthotic
and prosthetic companies and certain assets of another O&P company.
Negotiations relating to those acquisitions commenced prior to the
Restructuring. The total purchase price of the acquisitions effected during
that period was $390,000, of which $215,000 was paid in cash, $175,000 was
financed through seller notes. The cash paid to effect such acquisitions was
borrowed under the Revolving Credit Facility established between the Company
and the Bank.
The Company is actively engaged in ongoing discussions with prospective
acquisition candidates. The Company plans to continue to expand its operations
through acquisitions, at a slower rate, with a view towards increasing
efficiency and profitability of its existing facilities.
Other
Inflation has not had a significant effect on the Company's operations,
as increased costs to the Company generally have been offset by increased
prices of products and services sold. PART II. OTHER INFORMATION
12
<PAGE>
Item 4. Submission of Matters to a Vote of Security-Holders
The Company's Annual Meeting of Shareholders was held on June 9, 1995.
The following nine directors were reelected by the following votes to
serve as members of the Board of Directors for one year or until their
successors are elected and qualified:
Name Votes For Votes Withheld
Ronald J. Manganiello 5,503,366 218,799
Ivan R. Sabel 5,516,594 205,571
Mitchell J. Blutt, M.D. 5,407,945 314,220
B. Martha Cassidy 5,460,036 262,129
Thomas P. Cooper, M.D. 5,419,295 302,870
James G. Hellmuth 5,416,145 306,020
William L. McCulloch 5,516,121 206,044
Walter J. McNerney 5,519,146 203,019
Robert J. Glaser, M.D. 5,516,796 205,369
Shareholders ratified the selection of Coopers & Lybrand as the
independent accountants for the Company for the current fiscal year. Such
proposal was approved by a vote of 5,678,888 shares for and 35,712 shares
against, with 7,565 shares abstaining.
Item 5. Other Information
On July 31, 1995, the Company announced that Ivan R. Sabel, President and
Chief Operating Officer, had been elected to the additional offices of
Chairman of the Board and Chief Executive Officer, following the resignation
of Ronald J. Manganiello to pursue other interests. The New Canaan,
Connecticut office of the Company is being closed and its operations
consolidated with the Bethesda, Maryland headquarters office.
Item 6. Exhibit and Reports on Form 8-K
(a) Exhibits
The following exhibit is filed herewith:
11 Computation of net Income Per Share
(b) Reports on Form 8-K
None
13
<PAGE>
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 thereunto duly authorized.
HANGER ORTHOPEDIC GROUP, INC.
Date: August 11, 1995 /s/IVAN R. SABEL
----------------
Ivan R. Sabel
Chief Executive Officer
Date: August 11, 1995 /s/RICHARD A. STEIN
-------------------
Richard A. Stein
Vice President - Finance
Principal Financial and
Accounting Officer
14
HANGER ORTHOPEDIC GROUP, INC.
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
FOR THE THREE MONTHS ENDED June 30, 1995 and 1994
1995 1994
---- ----
Net income $ 646,586 $ 657,320
Less:
Dividends declared (5,381) (4,920)
------------ ------------
Total 651,939 641,666
Divided by:
Weighted average number of shares
outstanding 8,290,544 8,313,440
------------ ------------
Net income (loss) per share .08 .08
FOR THE SIX MONTHS ENDED June 30, 1995 and 1994
1995 1994
---- ----
Net income 901,520 111,633
Less:
Dividends declared (10,643) (9,730)
------------ ------------
Total $ 890,877 $ 101,903
Divided by:
Weighted average number of shares
outstanding 8,290,544 8,313,079
------------ ------------
Net income per share $ .11 .01
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<PERIOD-END> JUN-30-1995
<CASH> 1351631
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<RECEIVABLES> 14484631
<ALLOWANCES> 2116000
<INVENTORY> 10149910
<CURRENT-ASSETS> 26424034
<PP&E> 11685643
<DEPRECIATION> 3656647
<TOTAL-ASSETS> 62034580
<CURRENT-LIABILITIES> 8010246
<BONDS> 0
<COMMON> 84241
242755
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