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InvestorPresentationAugust 2020
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Cautionary Note
2
Forward Looking Statements
This investor presentation contains statements that are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include information concerning our liquidity and our
possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as “believe,” “expect,” “project,” “potential,” “anticipate,” “intend,”
“plan,” “estimate,” “seek,” “will,” “may,” “would,” “should,” “could,” “forecasts” or similar words. These statements are based on certain assumptions that we have made in light of our experience in the industry as
well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. We believe these assumptions are reasonable, but
you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of
important factors, both positive and negative, that may be revised or supplemented in subsequent releases or reports. These statements involve risks, estimates, assumptions, and uncertainties that could cause
actual results to differ materially from those expressed in these statements and elsewhere in this presentation. These uncertainties include, but are not limited to, the financial and business impacts of COVID-19 on
our operations and the operations of our customers, suppliers, governmental and private payers and others in the healthcare industry and beyond; federal laws governing the health care industry; governmental
policies affecting O&P operations, including with respect to reimbursement; failure to successfully implement a new enterprise resource planning system or other disruptions to information technology systems; the
inability to successfully execute our acquisition strategy, including integration of recently acquired O&P clinics into our existing business; changes in the demand for our O&P products and services, including
additional competition in the O&P services market; disruptions to our supply chain; our ability to enter into and derive benefits from managed-care contracts; our ability to successfully attract and retain qualified O&P
clinicians; and other risks and uncertainties generally affecting the health care industry. For additional information and risk factors that could affect the Company, see its Form 10-K for the year ended December 31,
2019 and Quarterly Report on Form 10-Q for the three months ended June 30, 2020, each as filed with the Securities and Exchange Commission. The information contained in this investor presentation is made only
as of the date hereof, even if subsequently made available by the Company on its website or otherwise.
Note Regarding the Presentation of non-GAAP Financial Measures: This presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the federal Securities Exchange Act of 1934.
Non-GAAP measures include Adjusted EBITDA, Adjusted EBITDA Margin, adjusted earnings per share, leverage ratios, free cash flow. As required under Regulation G, Reconciliations of GAAP and non-GAAP financial
results are included in schedules at the Appendix. These schedules reconcile the non-GAAP financial measures included in this presentation to the most direct comparable financial measure under generally-accepted
accounting principles in the United States. The non- GAAP measures contained herein are used by the Company’s management to analyze the Company’s business results and are provided for informational and
analytical context.
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Agenda
3
Company Overview
The Orthotics and Prosthetics Market
Patient Care Segment
Products and Services Segment
Financial Performance
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Company Overview
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Hanger
5
At Glance
WHO WE ARE
BY THE NUMBERS3
1Source: Hanger Inc. estimates.2Adjusted EBITDA is a non GAAP-measure. Please see the Appendix for a reconciliation of GAAP
to non-GAAP metrics.3Calendar Year 2019 unless noted.
• Industry leader in orthotics & prosthetics services
• $4.3 billion1 addressable O&P domestic U.S. market
• Pioneered prosthetic devices in 1861
• Focus on custom devices
• Net Revenue $1.098 billion
• Adjusted EBITDA2 $124.2 million
• 4,900 FTEs (as of 6.30.20)
• 815 clinic & satellite locations in 46 states and D.C. (as of 6.30.20)
• Two segments:
• Patient Care (82.5% revenue)
• Products & Services (17.5% revenue)
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Hanger
O U R V A L U E S O U R V I S I O N
6
O U R P U R P O S E
Values, Vision and Purpose
Patient-focused, integrity,
outcomes, collaboration,
innovation – are the heartbeat of a
cultural evolution that places our
patients at the core of everything
we do
To lead the orthotic and
prosthetic markets by providing
superior patient care, outcomes,
services and value
Empowering Human Potential
Together
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Business Mix
7
Primary Focus on the Provision of Specialty Health Care
Net Revenue1
$1.098 BILLION
Adjusted EBITDA1, 2
$124.2 MILLION – 11.3% EBITDA MARGIN
Patient Care
$905.7 million
82.5% revenue
Products &
Services
$192.4 million
17.5% revenue
Patient Care
$164.6 million
18.2% margin
Corporate &
Other
($69.5) million
Products &
Services
$29.2 million
15.2% margin
1Calendar Year 2019.2Adjusted EBITDA is a non-GAAP measure. Please see the Appendix for a reconciliation of GAAP to non-GAAP metrics.
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Investment Thesis
S I Z E AB L E M A R KE T
8
D I F FE R E N T I AT OR S
Industry Leader Building Sustainable Competitive Advantage
The leading provider
of orthotic and prosthetic
services in the United States
Provides approximately 21% of
all O&P services
in the United States
$4.3 billion market for
prescription prostheses,
orthoses and prefabricated or
off-the-shelf orthoses
Broad demand drivers across
injuries and multiple, high
prevalence disease etiologies
Competitive differentiation
through investments in clinical
outcomes, centralized revenue
cycle management, patient
engagement and supply chain to
drive growth
G R O W T H L E V E R S
Multi-tier strategy to grow
organically, steadily expand
margins and pursue M&A to
drive incremental growth
opportunities
Premier scalable provider in a large market for specialized healthcare services
M A R KE T L E AD E R
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The Orthotics and Prosthetics Market
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Approximately 45% of Patient Care Revenue
• Orthotic devices modify the structural and
functional characteristics of the neuromuscular
and skeletal system
• Prescribed for injuries, musculoskeletal,
neurological or orthopedic disorders
• Hanger Clinic emphasizes fabrication of
customized devices
Orthotics
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Approximately 55% of Patient Care Revenue
• Prosthetic devices replace a missing limb or portion of a limb
• Provided to patients with amputated or congenitally absent limbs to replace the function and appearance of a limb
• Prosthetics are customized to meet the unique location and characteristics of the patient and their residual limb
• Prostheses have an average useful life ranging 3-5 years
Prosthetics
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Prosthetics: Large & Growing Addressable Market
12
Approximately 500,000 People Living with Major Limb Loss in the U.S.
• Approximately 350,000 people with major limb loss utilize a prosthesis
• Over 90% are lower extremity
• Traumatic amputations tend to have a positive long-term prognosis
• Typically have a 3-5 year replacement cycle (70% recurring revenue)
• Prosthetics total approximately 50% of the prescription O&P market
$400,000
$420,000
$440,000
$460,000
$480,000
$500,000
$520,000
2016 2017 2018 2019
Hanger Prosthetics Sales
Sources:
Ziegler-Graham, et al., “Estimating the Prevalence of Limb Loss in the United States: 2005 to 2050”,
Arch Phys Med Rehabil 2008:89, 422-429;
Dillingham et al., “Rehabilitation Setting and Associated Mortality and Medical Stability Among Persons
With Amputations”, Arch Phys Med Rehabil 2008:89, 1038-1045;
Ahmad N, Thomas GN, Gill P, Chan C, Torella F. Lower limb amputation in England: prevalence, regional
variation and relationship with revascularisation, deprivation and risk factors. A retrospective review of
hospital data. J R Soc Med 2014;107:483-9.
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O&P Market: $4.3 billion
13
Diverse Disease State Mix Drives Demand
Addressable market currently growing at 1.5-2.0% annually
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600 Injuries
Approximately 76,000 major amputations per year, 5-10% of which are due to injury.
+$1 billion spent on prosthetics secondary to injury
Endocrine & Circulatory
Endocrine and circulatory disorders drive the majority of major amputations. Mix of
prosthetics and orthotics
Musculoskeletal Disease
Arthritis, spinal and foot disease requiring braces, boots and supports. Orthotics-only
market
Other
Congenital, cancer and acute infections. May require prosthetics (i.e. congenital limb
difference) or orthotics (i.e. cranial orthosis for plagiocephaly)
Nervous System
795,000 strokes per year – 75% occur in people +65, cerebral palsy, multiple
sclerosis. Ankle-foot orthosis, braces
$ millions
$1.4
$1.2
$1.0
$0.5
$0.2
Sources: Hanger Estimates
Note: “Major amputation or limb loss refers to a lower extremity, above or below the knee and upper limb, or combination thereof”
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Patient Care Segment
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Patient Care Segment
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Building Sustainable Advantages in a Fragmented Industry
• National network and market leadership
• Unique ability to measure and improve patient
outcomes
• Driving patient engagement, connectivity and
satisfaction
• Optimizing reimbursement through centralized
revenue cycle management
• Enhancing productivity and efficiency through
an enterprise supply chain
Net
Revenue
Adjusted
EBITDA2
Products &
Services
Patient Care1
$905.7 million
82.5% revenue
G&A
Patient Care1
$164.6 million
18.2% margin
1Calendar Year 2019.2Adjusted EBITDA is a non GAAP measure. Please see the Appendix for a reconciliation of GAAP to non-GAAP metrics.
Products &
Services
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General Lower Extremity Patient Rehab Timeline
16
Schedule
prosthetist & pre-op
peer visit
• Apply post-op
protector
• Schedule post-op
peer visit
• Begin limb
shaping and pre-
prosthetic
training
• Remove sutures
• Wear shrinker to
manage limb
volume
• Initial prosthetic
evaluation
• Incision fully healed
• Measure for
prosthesis
• Limb volume
stabilization
• Ongoing therapy
and prosthetic
adjustments
• Fit first prosthesis
• Prosthetic gait
training
Pre-Op Post-Op Recovery Healing Initial Device Maturation Definitive Device
• First definitive
prosthesis
delivery
• Patient continues
to work toward
long term rehab
goals
• Follow-up adjustments
• Patient events and
continued peer support
• Device replacements every
3 – 5 years.
Holistic Care
Hanger provides comprehensive patient care for a lifetime
Note: Example timeline for a new amputee reflects a general rehabilitation for a lower extremity vascular amputation patient, actual experiences vary. Replacement devices average a 45-60 day replacement cycle.
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Scale as a Competitive Advantage
17
National Network Brings Hanger Closer to the Community
1,600 CLINICIANS
Hanger employs over 20% of the board certified O&P clinicians in the U.S.
Competitors are spread out in small local practitioner settings
N ATIONWIDE NET WORK
Hanger’s broad provider footprint allows for a healthy diversity of payor and referral sources
Geographic diversity insulates Hanger from local or market specific challenges
800+ PATIENT CARE LOCATIONS
Hanger is the only O&P provider operating a nationwide network of patient care clinics in 46 states and D.C.
2 MILLION ANNUAL PATIENT ENCOUNTERS
Hanger has the highest volume of O&P patients as compared with any provider
Enables Hanger to develop and deliver best practices in O&P care
Hanger Patient Care Clinics
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Market Leader
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In a Fragmented Industry
O&P Patient Care Clinic Market1
(by location)
• Hanger currently operates 815 patient care locations nationally
• 707 patient care clinics
• 108 satellite locations
• 21% of private O&P clinics in the nation
• VA: Next largest at 2%
• Rest of market is comprised of diverse small providers
Approximately
3,300 Clinics1
79
349
2,160
Hanger Clinic
10 next largest
O&P providers• Ranging from
22-66 clinics
• Average of 35 clinics
707
Veteran’s
Administration
Rest of
Market
1Total clinic count includes VA plus approximately 3,200 private sector certified clinics.
Source: American Board For Certification 2019.
Figures reflect Hanger as of 6.30.20
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Patient Engagement& Connectivity
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Enhance Consistency, Quality of Patient Experience
Strategic initiatives that engage and connect our community, measure and improve
patient satisfaction, driving growth
• Clinician and peer visitors
• Net promoter score: Average of 85 (Healthcare industry average – 75)
• Outcomes, patient satisfaction and quality life tracked and reported at the
patient and referral source level
• Patient events designed to support mobility and utilization of devices
• Comprehensive social media programs including patient and clinician stories
as well as community outreach
Net promoter score as of 6.30.20
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Clinical Focus on Patient Outcomes
C L I NI C A L T E A M A N D S E N I OR L E AD ER S HI P
T E C HN OLOG Y A N D P R O C ES S
20
O U T C O M ES , R E S E ARC H A N D E D U C AT I ON
Implementing Clinical Care Standards and Demonstrating Value
• Chief Clinical Officer and clinical
leadership group
• 1,600+ certified/licensed
clinicians
• 500 technicians and assistants
• Specialists and centers of
excellence
• Enterprise-wide electronic health
record captures more O&P
clinical outcomes than any other
source
• Implementing a patient portal
• Comprehensive outcomes programs
across Hanger Clinic, as standard of
care
• Collaborations with leading clinical
and academic institutions (i.e. 2020
DoD research grant on fall outcomes)
• Six multi-center publications released
to measure the impact of prosthetics
on mobility
• Annual education conference
Agenda expanding beyond prosthetics in 2020 to orthotics and health economics
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• O&P requires highly specialized customized devices
• Patient population is high acuity (similar to an acute setting) with volume of ambulatory care
• Importance of detailed documentation and demonstration of medical necessity, supported by referring provider records
• Central RCM significantly reduces clinician burden, allowing for focus on patient care
Revenue Cycle ManagementCentral Function Drives Lower Disallowed Revenue
• Operate within DMEPOS fee schedules
• Requires specialized knowledge of claim management, edits and denials management
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Advancing Supply Chain Capabilities
22
2 019 2 0 20 2 0 21 2 0 22 2 0 23 2 0 24
Industry Leading Product Selection
Same-Day Shipments
90+% E-Commerce Ordering
Enhanced Product Descriptions & Website Features
Vendor Consignment
Lower excess shipment costs through inventory
optimization*
Lower In-Bound Freight Costs*
Optimize Hanger Fabrication Network w/ Best-In-
Class Systems to Reduce Costs*
Hanger Distribution Center Throughput
& Productivity Increases Materially*
Transforming Through Technology and Process Re-engineering
*These capabilities are currently paused due to the impact of the COVID-19 pandemic and management’s asset allocation decisions. This representation is subject to additional change.
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Products and Services Segment
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Products and Services
24
National Scale Supports Profitable Growth
Net
Revenue1
Adjusted
EBITDA2
Patient
CareProducts & Services
$192.4 million
17.5% revenue
G&A
Products & Services
$29.2 million
15.2% margin
1Calendar Year 2019.2Adjusted EBITDA is a non GAAP measure. Please see the Appendix for a reconciliation of GAAP to non-GAAP metrics.
Patient
Care
Distribution of O&P components & related devices through SPS (75% of
segment net revenue)
• 5.4% net revenue growth in 2019
• Comprehensive catalog for independent O&P providers
• One-stop O&P industry destination with access to over 450,000 SKUs
across more than 300 manufactures
• Leading dedicated O&P distributor in the industry
Therapeutic solutions features innovative rehabilitation technology through
ACP (25% of segment net revenue)
• Rehabilitation technologies and clinical programs to skilled nursing
facilities (SNFs)
• Has faced headwinds due to challenging conditions and the reimbursement
environment in SNFs
• Initial signs of stabilization in late 2019
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Financial Performance
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Growth Model
26
Two-Fold Approach
SELECT, IN-MARKET ACQUISITIONS
DRIVE ORGANIC REVENUE GROW TH
Exceed industry growth rate of 1.5 - 2.0%
• Increase referral volumes through differentiation
• Focus on high-value custom O&P
• Capitalize on base of strong prosthetic growth
• Implement new delivery strategies for lower margin
orthotic categories
• Stabilize therapeutic solutions business
Disciplined approach to O&P acquisitions
• Focus on synergistic geographies and specialties
• Seek good cultural fit
• Ensure valuations are accretive
• Fully integrate into centralized infrastructure
Fixed infrastructure provides operating leverage with volume growth
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Financial Results
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Second Quarter 2020 and 2020 Year to Date Revenue Performance
$281.1
$517.5
$233.4
$467.2
2019 2020
R E V E N U E D E C L I N E S A S A R E S U L T O F C O V I D - 1 9
• Q2 2020: Due to lower patient volumes as a result of the COVID-19 pandemic, same clinic revenue on a day-adjusted basis declined by 18.7% for the quarter.
• Net revenue from prosthetic services declined at a lower rate than net revenue from orthotic services.
• Product & Services segment revenue declined in Q2 mostly driven by the impact of the pandemic as well as the intentional exit of certain third party channels for some orthotics componentry.
• YTD 2020: Patient Care segment declined 11.7% on a same clinic day-adjusted net basis, revenue from prosthetics decreased 5.3%, while orthotics revenue declined by 18.6%.
• Products & Services segment revenue declined by 15.3% due to a $12.6 million decrease in distribution services and a $2.0 decrease in revenue from therapeutic solutions.
S E C O N D Q U A R T E R ‘ 2 0 Y T D 2 0 2 0
$ millions
-17.0% -9.7%
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Financial Results
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Second Quarter 2020 and Year to Date 2020 Adjusted EBITDA1 Performance
$37.4
$49.3
$36.5
$41.8
2019 2020
T E M P O R A R Y C O S T R E D U C T T O N M E A S U R E S H E L P E D R E D U C E T H E I M P A C T O F L O W E R V O L U M E S
• Adjusted EBITDA benefited from decreases in operating costs associated with reduced salaries, employee furloughs and other cost reduction actions.
• In Q2 2020, Patient Care segment Adjusted EBITDA declined by 6.7%.
• Products & Services Adjusted EBITDA totaled $8.6 million, a $0.8 million increase compared with the same period of 2019.
• In the first six months of 2020, lower patient care volumes attributable to the COVID-19 pandemic onset resulted in a decrease of $7.5 million in Adjusted EBITDA compared to the same period of 2019.
• Adjusted EBITDA amounts above exclude the benefits of $20.5 million in CARES Act provider grants.
S E C O N D Q U A R T E R ‘ 2 0 Y T D 2 0 2 0
Margin %13.3% 15.6% 9.5% 8.9%1Adjusted EBITDA is a non-GAAP measures. Please see the Appendix for a reconciliation of GAAP to
non-GAAP metrics.
$ millions
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Quarterly % Change
Impact of COVID-19 began in the last two weeks of March,
2020 and continues through Q2 20
Same Clinic Rate of Growth
29
Net Revenue on Per Day Basis
Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q419
-18.7%
1.1% 1.7% 2.1%
0.3%
-0.1%
3.0%2.1%
2.9%
-3.2%
Q1 20 Q2 20
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Payor Mix and Accounts Receivable Trend
30
Multi-Year Improvements in Working Capital Conversion
• Commercial mix excludes Medicare and Medicaid Managed Care
• Diverse reimbursement mix combined with improved A/R aging has driven stronger working capital characteristics
• 45 Day Days Sales Outstanding as of 6.30.20 (decline 2 days year/year)
Payor Mix, Percentage of Patient
Care Net Revenue1
33%
Commercial 35%9%
7%
16%Medicaid Medicare
Private Pay
VA
30
35
40
45
50
55
60
0
20
40
60
80
100
120
140
160
180
200
2014 2015 2016 2017 2018 2019
B A L A NC E S A S O F D E C EM B ER 31
Accounts Receivable, net
(green bars) $ millions
Day Sales Outstanding
(orange line)
Peak in late 2014DSO 48 and A/R
balance at $159
million
1 YTD as of 6.30.20
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C A S H F L O W L I Q U I D I T Y & C A P I TAL E X P E N D I TU R E S
31
I N D E B TE D N E S S
Various cost saving measures were enacted to confront expected revenue declines from COVID-19 resulting in:
• a $21 million decrease in material costs
• $27 million in savings from exempt salary reductions, employee furloughs, reduced hours, benefits and associated payroll taxes
• $8 million in savings from reduced travel, professional fees, advertising, bad debt, office expenses and other operating expenses
TTM Q2 20201 Net Cash Flow (Adjusted EBITDA2 -CapEx) of $83.2 million
TTM Q2 20201 CapEx, including purchase of equipment leased to third parties, totaled $33.6 million
Cash Flow, Liquidity & Capital
1 Referenced amounts reflect TTM 6.30.20.2 Adjusted EBITDA is a non GAAP-measure. Please see the Appendix for a reconciliation of GAAP to non-GAAP metrics.3 As of 6.30.20.
$202.7 million in liquidity3, comprised of:
• $129.9 million in cash and cash equivalents
• $72.8 million of borrowing capacity
2020 Capital Expenditures of $30-$35 million
Total debt3 of $552.4 million:
• Term Loan B $493.6 million;
• Revolving Loan $22.0 million;
• Seller Notes $29.6 million;
• Finance Leases & other $7.2 million;
61% of term loan hedged
Approximately $32 million annualized cash
interest expense, or 5.5%, including revolver
Pro forma leverage of approximately 3.6x at
end of Q2 2020 (TTM Adjusted EBITDA)
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P R O TE C T PAT I E N T S , E M P L OY E E S U N I N TE R UPT E D A C C E S S T O C A R E
32
E N S UR E L I Q U I D I T Y F O R D U R AT I O N O F PA N D E M I C
Strategic Imperatives Ensure Hanger Emerges Post-Pandemic on a Strong Footing
• COVID-19 Crisis Management Team,
formed in January 2020, to ensure
employee and patient safety, ensure
business continuity and centralize
employee communications
• COVID-19 protocols in place to ensure a
safe clinical environment for patients and
Hanger staff
• Avoid permanent layoffs and protect all
eligible employees health benefits through
the crisis
COVID-19 Update
• Orthotic & prosthetics are “essential
health services” under the Affordable
Care Act
• Most Hanger Clinics remain open or see
patients by appointment for essential care
• Remote and telemedicine-based
consultations support continuity of care
• Picking up some volumes from closed or
limited operations of other providers
• Implemented temporary reductions in base
pay beginning in April for all salaried
employees, averaging 32% for up to six months
• CEO salary reduction of 100% scaling down to
47% initially for named executive officers
• Mandatory and voluntary furloughs; hourly
reductions for non-exempt employees
• Effective in June and July, salaries were
partially reinstated, resulting in an
approximate 11% reduction for the remainder
of the period (October)
• Focus on additional reduced operating
expenses
• Temporary pause of supply chain and financial
system implementation and other capital
expenditure reductions
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Investment Thesis
S I Z E AB L E M A R KE T
33
D I F FE R E N T I AT OR S
Industry Leader Building Sustainable Competitive Advantage
The leading provider
of orthotic and prosthetic
services in the United States
Provides approximately 21% of
all O&P services
in the United States
$4.3 billion market for
prescription prostheses,
orthoses and prefabricated or
off-the-shelf orthoses
Broad demand drivers across
injuries and multiple, high
prevalence disease etiologies
Competitive differentiation
through investments in clinical
outcomes, centralized revenue
cycle management, patient
engagement and supply chain to
drive growth
G R O W T H L E V E R S
Multi-tier strategy to grow
organically, steadily expand
margins and pursue M&A to
drive incremental growth
opportunities
Premier scalable provider in a large market for specialized healthcare services
M A R KE T L E AD E R
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Appendix Non-GAAP Reconciliations
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Net Income to Adjusted EBITDA 2019-2017
2019 2018 2017
Net Income (Loss) - as reported (GAAP) 27,525$ (858)$ (104,671)$
Adjustments to calculate EBITDA:
Depreciation and amortization 35,925 36,455 39,259
Interest expense, net 34,258 37,566 57,688
Loss on extinguishment of debt — 16,998 —
Non-service defined benefit plan expense 691 703 736
Benefit (provision) for income taxes 2,954 5,238 27,297
Adjustments - Net loss to EBITDA 73,828 96,960 124,980
EBITDA (Non-GAAP) 101,353 96,102 20,309
Further adjustments to calculate Adjusted EBITDA:
Impairment of intangible assets — 183 54,735
Third-party professional fees 8,548 12,461 32,301
Equity-based compensation 13,414 13,065 12,930
Acquisition-related expenses 939 510 —
Disaster recovery / unclaimed property settlement — (2,221) —
Severance expenses (11) 957 64
Further adjustments - EBITDA to Adjusted EBITDA 22,890 24,955 100,030
Adjusted EBITDA (Non-GAAP) 124,243$ 121,057$ 120,339$
For the Years Ended December 31,
EM
PO
WE
RI
NG
HU
MA
N P
OT
EN
TI
AL
36
Net Income to Adjusted EBITDA June 30 2020 v. June 30 2019
2020 2019 2020 2019
Net income - as reported (GAAP) 31,054$ 10,035$ 15,306$ 3,084$
Adjustments to calculate EBITDA:
Depreciation and amortization 8,879 8,760 17,710 17,533
Interest expense, net 8,636 8,481 16,906 17,019
Non-service defined benefit plan expense 158 173 316 346
(Benefit) provision for income taxes (987) 4,414 (2,840) 675
Adjustments - Net income to EBITDA 16,686 21,828 32,092 35,573
EBITDA (Non-GAAP) 47,740 31,863 47,398 38,657
Further adjustments to calculate Adjusted EBITDA:
Third-party professional fees — 1,745 1,639 3,394
Equity-based compensation 8,984 3,450 12,485 6,715
Acquisition-related expenses 39 328 372 498
Hanger Supply Chain implementation costs 295 — 430 —
Severance expenses — (1) — (11)
Proceeds from grants under the CARES Act (20,533) — (20,533) —
Further adjustments - EBITDA to Adjusted EBITDA (11,215) 5,522 (5,607) 10,596
Adjusted EBITDA (Non-GAAP) 36,525$ 37,385$ 41,791$ 49,253$
For the Three Months Ended For the Six Months Ended
June 30, June 30,
EM
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HU
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37
Net Income to Segment Adjusted EBITDA
2020 2019 2020 2019
Patient Care
Net income from operations - as reported (GAAP) 58,619$ 41,774$ 70,156$ 57,531$
Depreciation & amortization 4,827 4,502 9,303 9,054
EBITDA (Non-GAAP) 63,446 46,276 79,459 66,585
Further adjustments to calculate Adjusted EBITDA:
Impairment of intangible assets — — — —
Third-party professional fees — — — —
Equity-based compensation 1,078 1,101 2,256 2,195
Hanger supply chain implementation costs 202 — 337 —
Severance expenses — — — (11)
Proceeds from grants under the CARES Act (20,533) — (20,533) —
Further adjustments - EBITDA to Adjusted EBITDA (19,253) 1,101 (17,940) 2,184
Adjusted EBITDA (Non-GAAP) 44,193 47,377 61,519 68,769
Products & Services
Net income from operations - as reported (GAAP) 5,758 4,924 7,838 9,022
Depreciation & amortization 2,498 2,596 5,250 5,139
EBITDA (Non-GAAP) 8,256 7,520 13,088 14,161
Further adjustments to calculate Adjusted EBITDA:
Impairment of intangible assets — — — —
Equity-based compensation 241 246 446 490
Severance expenses — — — —
Hanger supply chain implementation costs 93 — 93 —
Further adjustments - EBITDA to Adjusted EBITDA 334 246 539 490
Adjusted EBITDA (Non-GAAP) 8,590 7,766 13,627 14,651
Corporate & Other
Net loss from operations - as reported (GAAP) (25,516)$ (23,595)$ (48,306)$ (45,429)$
Depreciation & amortization 1,554 1,662 3,157 3,340
EBITDA (Non-GAAP) (23,962) (21,933) (45,149) (42,089)
Further adjustments to calculate Adjusted EBITDA:
Impairment of intangible assets — — —
Third-party professional fees — 1,745 1,639 3,394
Equity-based compensation 7,665 2,103 9,783 4,030
Acquisition related expenses 39 328 372 498
Disaster recovery / unclaimed property settlement — — —
Severance expenses — (1) —
Further adjustments - EBITDA to Adjusted EBITDA 7,704 4,175 11,794 7,922
Adjusted EBITDA (Non-GAAP) (16,258) (17,758) (33,355) (34,167)
Total Adjusted EBITDA (Non-GAAP) 36,525$ 37,385$ 41,791$ 49,253$
For the Three Months Ended For the Six Months Ended
June 30, June 30,
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38
Adjusted EBITDA Margin: Second Quarter 2020 v. 2019 and Year to Date 2020 v. 2019
2020 2019 2020 2019
Net Revenue (a)
Patient Care 195,859$ 231,168$ 386,042$ 421,769$
Products & Services 37,575 49,930 81,131 95,748
Net revenue 233,434$ 281,098$ 467,173$ 517,517$
EBITDA (b)
Patient Care 63,446$ 46,276$ 79,459$ 66,585$
Products & Services 8,256 7,520 13,088 14,161
Corporate & Other (23,962) (21,933) (45,149) (42,089)
EBITDA (Non-GAAP) 47,740$ 31,863$ 47,398$ 38,657$
Adjusted EBITDA (b)
Patient Care 44,193$ 47,377$ 61,519$ 68,769$
Products & Services 8,590 7,766 13,627 14,651
Corporate & Other (16,258) (17,758) (33,355) (34,167)
Adjusted EBITDA (Non-GAAP) 36,525$ 37,385$ 41,791$ 49,253$
Adjusted EBITDA Margin (Non-GAAP)
Patient Care 22.6 % 20.5 % 15.9 % 16.3 %
Products & Services 22.9 % 15.6 % 16.8 % 15.3 %
Net revenue 15.6 % 13.3 % 8.9 % 9.5 %
(a) Excludes intersegment revenue
(b) EBITDA and Adjusted EBITDA are "Non-GAAP" measures.
For the Three Months Ended For the Six Months Ended
June 30, June 30,
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