Hanger announces restatement of previously issued financial statements

Hanger recently announced it will restate certain previously issued financial information. According to a press release, the restatement is due to errors identified in connection with Hanger’s implementation of new inventory valuation estimation methods, processes and controls, as well as other previously disclosed errors.

The restated financial periods will include the fiscal years ended Dec. 31 of 2009, 2010, 2011, 2012 and 2013; all interim periods for 2012 and 2013; and the interim periods ended March 31 and June 30, 2014.

Hanger has preliminarily established the estimated impact of inventory value adjustments that need to be made due to the new systems it implemented in the fourth quarter of 2014. The adjustments were determined to be material errors requiring restatements due to their size.

The restatements will also include other corrections of lease accounting errors, as well as other errors previously disclosed in Hanger’s press release and Current Report on Form 8-K filed on Feb. 17, 2015.

“Given the complexity of the inventory accounting issues and magnitude of the amounts involved, this has been one of the more demanding areas the company has had to address,” Vinit Asar, MBA, Hanger president and CEO, said in the release. “While we recognize how difficult this period has been for our investors, we believe we are making significant progress in resolving the company’s financial reporting and accounting challenges.”

The release noted investors should no longer rely upon the company’s previously issued financial information for these periods or any press releases or other shareholder communications that relate to that information.

Hanger will file restated financial information as soon as practicable, according to the release. A list of items to be restated, including details on inventory valuation, lease accounting and other adjustments, is available via the company website.

Reference: www.hanger.com.

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