Hanger Orthopedic Cuts Annual Earnings View On Operational Issues At A Unit

(RTTNews) - Hanger Orthopedic Group, Inc. (HGR) Thursday lowered its annual adjusted earnings forecast, citing operational issues related to a non-clinic unit within the Patient Care segment in the fourth quarter. The firm said operating problems at this unit impacted its fourth quarter results. The stock fell 13 percent in the extended trade.

The company delivers orthotic and prosthetic patient care, and distributes such products and rehabilitative solutions to the broader market.

The company now expects adjusted earnings per share for fiscal year 2013 to be between $1.94 and $1.96, below the previous guidance of $2.08 to $2.11.

On a reported basis, the company expects earnings per share to be between $1.79 and $1.81.

Adjusted earnings per share excludes certain tax benefits, costs of the debt refinance, costs related to acquisitions and costs related to the implementation of the company's new clinic management system.

On average, 6 analysts polled by Thomson Reuters expect the company to report full-year earnings of $2.10 per share. Analysts' estimates typically exclude special items.

According to the firm, its lower than expected earnings in the fourth quarter of 2013 were principally the result of operational issues isolated to a small non-clinic unit within the Patient Care segment.

The impact of the unit's operational issues was identified during the quarter end close process through the annual physical inventory valuation and analysis of changes in collection trends. These preliminary results are subject to the company's final year end close and audit and therefore are subject to change.

Vinit Asar, CEO, said, "We are clearly disappointed that operating problems at this unit impacted our fourth quarter results. Despite this unfortunate setback we still anticipate delivering adjusted EPS growth of at least 8% for 2013. We remain confident in our core business and expect to deliver adjusted EPS growth of approximately 10% in 2014."

HGR closed up 1.3 percent on Thursday, but dropped 13 percent in the extended trade.