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To: Mike 2.0 who wrote (8002)	8/11/1999 5:33:00 PM
From: Grommit	Read Replies (2) \| Respond to of 78821

HGR -- It looks good to me, opinions appreciated. Hanger Orthopegic Group. Health Care. They mfg and sell orthotics (braces) and prosthesis (artificial limbs) -- O&P. They manufacture, distribute (they sell to non-Hanger O&P centers) and also have "stores" -- patient care centers. They have a nice history of sales and revenue growth. Clean accounting. No debt until recent acquisition of a larger company in the sector -- Nova Care. So now half debt/equity. They are the dominant company in the market. All the analysts see the merger with Nova Care as very strategically sound. The company has been increasing market share and has been doing it while increasing margins -- so they are not stealing volume via price reductions. biz.yahoo.com I've got copies of all the anaylst reports and I do not see anything negative. Well one thing -- Alex Brown mentions that they do NOT think that a proposal to reduce Medicare O&P rates is under ACTIVE consideration by Congress. I am unsure what "active' means. But since them mentioned it - maybe something's up. Company mgmt believes that a law requiring disbursement of orthotics only to certified O&P professionals is more likely to be passed. This would benefit HGR since all practicioners are certified. This negative item was not worth a whole paragraph here, I think. Novacare's branches have just started buying thru Hanger's distribution system. They expect $11 million of G&A savings with the merger, I have read. I haven't looked too closely at the acquired Nova Care since it seems to be a division of a larger company. Analysts say it is 1.5 Hanger's size, more profitable but slower growing. Blah, blah, blah.... I will buy this one soon unless you smart guys see something that I missed. Thanks for the help. Here's a clip from their webpage, the Nova care paragraph seem up to date, but the 1987 info is old -- 1998 revenue mix is 81%, 14%, 5%. Hanger Orthopedic Group, Inc. is the largest public company specializing exclusively in practice management for orthotics and prosthetics. Following the acquisitions of J.E. Hanger of Georgia and NovaCare Orthotics and Prosthetics, the company owns and operates over 650 patient care centers in 42 states and the District of Columbia. Hanger is vertically integrated, manufacturing custom-made and prefabricated orthotics and prosthetics, as well as being the largest distributor of components and finished patient care products in the 0&P industry. The company has aggressively addressed the impact of the growth of managed care with the formation of OPNET, a unique national managed care network that provides patient care services to over 336 managed care programs. Hanger's 1997 revenues of $130 million were generated from three operating segments: patient care -74%; distribution -19%; and manufacturing -7%.