UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

CURRENT REPORT

 

FORM 8-K

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act

 

Date of Report (Date of Earliest Event Reported): June 8, 2020

 

Hanger, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 1-10670 84-0904275
(State or other jurisdiction
of incorporation)
(Commission File Number) (IRS Employer
Identification No.)

 

10910 Domain Drive, Suite 300

Austin, Texas 78758

(Address of principal executive offices (zip code))

 

(512) 777-3800

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

¨                  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨                  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a - 12)

 

¨                  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨                  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.01 per share HNGR New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company    ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

 

 

 

   

 

 

Item 8.01Other Events.

 

As previously disclosed, in April 2020, Hanger, Inc. (the “Company”) experienced a decline in day- adjusted patient appointment volumes in its Patient Care clinics of approximately 40% as compared to the same period in 2019. For the month of May 2020, the Company has seen a reduction in day-adjusted patient appointments when compared to the same period in May 2019 of approximately 34%. As of the end of May 2020, the Company had temporarily closed 24 patient care clinics and 165 were open for reduced hours or by appointment only, as compared to 27 and 179, respectively, as of the end of April 2020. Day-adjusted billings for componentry delivered to independent providers or orthotics and prosthetics by the Company’s distribution services business decreased by approximately 37% during the month of May 2020 as compared to a decrease of approximately 40% during the month of April  2020, when compared to the respective period in the prior year.

 

On June 4, 2020, the Company had liquidity of $170.5 million, comprised of $154.7 million in available cash and investment balances and $15.8 million in undrawn capacity under its revolving credit facility.

 

Also as previously disclosed, on March 31, 2020, the Company announced that all members of its senior leadership team, including all of the Company’s named executive officers, had agreed to forego base salary in varying percentages during the period commencing on April 4, 2020 and concluding on or before October 2, 2020 (the “Reduction Period”) as a part of the Company’s efforts to mitigate the financial impact of the COVID-19 pandemic on the Company. Each of the named executive officers further agreed to waive any breach of his amended and restated executive employment agreement with the Company (each, an “Employment Agreement”) that would be triggered by the salary reduction during the Reduction Period, while also preserving the definition of base salary under the Employment Agreement for all other purposes.

 

Effective May 30, 2020, the Company reinstated a portion of the initial base salary reduction announced on March 31, 2020. The percentage of base salary that each of the named executive officers will forego during the remainder of the Reduction Period, subject to further modification, is as follows: Vinit K. Asar: 100%; Thomas E. Kiraly: 50.25%; Samuel M. Liang: 41.72%; Thomas E. Hartman: 31.77%; and Scott Ranson: 31.69%. All of the other members of the senior leadership team are similarly foregoing between 30.97% and 31.52% of their base salary during the remainder of the Reduction Period.

 

In addition, the Company implemented certain personnel cost reductions during the Reduction Period for all exempt employees in response to anticipated decreases in business volume, including an average 32% decrease in the salaries of all exempt employees. Effective May 30, 2020 the Company reinstated a portion of the salary reduction for its exempt employees, resulting in an average 21% decrease in salaries for the remainder of the Reduction Period. Each of the members of our Board of Directors continues to forego the quarterly installments of their annual cash retainer during the Reduction Period.

 

   

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  HANGER, INC.
   
  By: /s/ Thomas E. Hartman
    Thomas E. Hartman
    Senior Vice President and General Counsel
   
Dated: June 8, 2020