Hanger,Inc. (OTCMKTS:HNGR) Files An 8-K Material Impairments

ME Staff 8-k
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Hanger,Inc. (OTCMKTS:HNGR) Files An 8-K Material Impairments
Item 2.06 Material Impairments.

Hanger,Inc. (the “Company”) has previously disclosed in its Current Reports on Form8-K filed with the Securities and Exchange Commission (the “SEC”) on June22, 2016 and November17, 2016 that, due to a significant decline in the market capitalization of the Company’s common stock following announcements included in its Current Report on Form8-K filed with the SEC on February26, 2016, which included disclosure that the Company’s stock would no longer be listed for trading on the New York Stock Exchange, the Company had commenced the first step of a two-step interim impairment test of its goodwill. The Company has also previously disclosed, based on the results of the first step of the impairment test, that Company management, in consultation with the Audit Committee of the Company’s Board of Directors (the “Audit Committee”), made a preliminary assessment that it was more likely than not that the Company would record a material non-cash goodwill impairment charge effective in its financial statements for either 2015 or 2016.

The Company has now substantially completed the second step of its impairment analyses, as specified under Accounting Standards Codification, Topic 350 — Intangibles — Goodwill and Other. In accordance with this standard, on January18, 2018, the Audit Committee concluded that the Company’s goodwill and certain indefinite-lived intangible assets were impaired as of December31, 2015 and October1, 2016, and that the preliminary estimated amount of the impairment charges are approximately $385.8 million and $86.2 million, respectively. The impairment at December31, 2015 reflected an estimated fair value below the carrying value of the Company’s Patient Care reporting unit’s goodwill, while the impairment at October1, 2016 reflected an estimated fair value below the carrying value of the Company’s Therapeutic Solutions and Distribution Services reporting units’ goodwill. The impairment at December31, 2015 is due primarily to a decline in the fair value of the Company’s assets attributable to an increase in the required rate of return on investment arising from the delay in the filing of the Company’s periodic financial statements and resulting delisting from the New York Stock Exchange, decline in the Company’s market capitalization, and other factors. In addition to these factors, the impairment at October1, 2016 also related to decreases in the Company’s anticipated future earnings performance from the Therapeutic Solutions and Distribution Services reporting units.

The impairment charges do not result in any current or future cash expenditure. Additionally, the charges do not have an impact on the Company’s compliance with its financial ratio or other covenants in its credit agreements.

Disclosures About Forward-Looking Statements

This Form8-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 “preliminary,” “intends,” “expects,” “plans” 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 Company’s financial statements and other financial data and accounting review; the time required to prepare its periodic reports for filings with the SEC; 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, periodic reports or other corporate actions. For additional information and risk factors that could affect the Company, see its Form10-K for the year ended December31, 2016 as filed with the SEC. The information contained in this filing is made as of the date hereof, even if subsequently made available by the Company on its website or otherwise.


About Hanger,Inc. (OTCMKTS:HNGR)

Hanger, Inc. is a rehabilitative product and service company. The Company delivers orthotic and prosthetic (O&P) patient care, products, services and therapeutic solutions. The Company offers advanced prosthetics and orthotics, clinically differentiated programs and unsurpassed customer service. The Company comprises nine business units that serve various segments of the O&P industry. The Company’s segments include Patient Care, and Products & Services. The Patient Care segment includes Hanger Clinic and Linkia. The Hanger Clinic specializes in orthotic and prosthetic services and products. Linkia is a specialty healthcare company, which is engaged in the O&P management and care. The Products & Services segment includes Southern Prosthetic Supply (SPS), Accelerated Care Plus (ACP), SureFit, Innovative Neurotronics, Inc. and SPS National Labs.