Hanger Orthopedic Group, Inc. Announces Record Revenue of $162.3 Million and 20% Growth in Earnings Per Share for the Quarter Ended Septembe...( BETHESDA Md. Oct. 29 /- Hanger Or...),Health

BETHESDA, Md., Oct. 29 /PRNewswire-FirstCall/ -- Hanger Orthopedic Group, Inc. (NYSE: HGR) announces record revenue of $162.3 million and net income of $5.4 million, or $0.18 per diluted share, for the quarter ended September 30, 2007. The results for the quarter included a 7.1% increase in net sales, a 24.6% increase in net income, and a 20% increase in earnings per share compared to pro-forma results for the third quarter of 2006. The pro-forma results for the third quarter of 2006 reflect the impact of the refinancing completed in May 2006 and assume that the resulting new capital structure was in place on January 1, 2006 as illustrated in the attached table.

Net sales for the quarter ended September 30, 2007 increased by $10.8 million, or 7.1%, to $162.3 million from $151.5 million in the prior year's comparable quarter. The sales growth was the result of a $6.9 million, or 5.1%, increase in same-center sales in our patient care business, a $1.6 million, or 10.9%, increase in sales of the Company's distribution segment, a $1.8 million increase related to acquired entities, and a $0.5 million increase in non-core activities. Gross profit for the third quarter of 2007 increased by $7.1 million, to $82.4 million, or 50.7% of net sales compared to $75.3 million, or 49.7% of net sales in the third quarter of 2006. The increase in gross margin was due principally to the increase in sales, which caused our relatively fixed labor costs to decrease as a percentage of sales.

Income from operations of $18.6 million in the third quarter of 2007 was $1.5 million higher than that of the same period of the prior year, principally due to the aforementioned increase in gross profit. Selling, general and administrative e
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