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Q4 2020 Earnings Conference Call
spk_2: Greetings and welcome to hangers. Fourth quarter 2020 earnings call. All participants will be in Listen only mode. Should you need assistance, please signal a conference specialists by pressing the Starkey, followed by zero as a reminder. This conference is being recorded today. We will have prepared remarks followed by a Q and A period. Instructions for questions and answers will be provided after the formal presentation. It is now my pleasure to introduce your host, Seth Frank, vice president of Treasury and investor relations. Please go ahead.
spk_1: Good morning and thank you. Welcome to hangers fourth quarter 2020 earnings conference call with us today are minute officer hangers president and chief executive officer Thomas Crowley, executive vice president and chief financial officer. Some of the information discussed today will include forward looking information in the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause hangers actual results to materially differ from those we discussed today. Those risks include, among others, matters we have identified and forward looking statement portion of our latest earnings release and enough filings with the SEC hanger disclaims any obligation
spk_0: to update forward looking
spk_1: information discussed on this call. And now let's handle collaborative in it.
spk_0: Thanks, Seth and good morning. Thank you all for joining hangers. Fourth quarter and full year 2020 earnings call. I hope you and yours are staying safe and healthy. We were pleased with our results in Q four. The resilience and determination of the communities we serve, as well as the tenacity of our hanger nationwide organization to meet the continuing needs of our patients and customers were significant factors in our success. Despite the national surge in covid 19 cases in the fourth quarter. That said, Covid, 19 continues to challenge our industry. We believe that a cohort of patients, particularly those most vulnerable to the virus, such as the elderly and those with chronic health issues may be delaying certain aspects of the orthotic and prosthetic care in deference to social distancing and other life priorities. So while we are pleased with our achievements, we remain cautious in the near term until key public health considerations become clearer. Looking at our overall fourth quarter results, net revenue totaled $277.3 million a decrease of 7.8% compared to the same period of 2019. Adjusted EBITA was $35.5 million. These results are notable particularly in light of the fact that we made the critical decision to bring back the organization to pre pandemic staffing levels essentially intact. In October, we fully normally see base salaries, eliminated furloughs and returned hourly employees to full time schedules. We took these actions because we remain convinced of the temporary nature of the pandemic related business downturn. From a cash perspective, the results are quite remarkable across the entire company. We continue to make excellent progress on cash collections and managing our working capital needs. Looking at our business segments. Inpatient care appointment volumes for Q four were at 88% of the same period last year. This is an improvement compared to the 84% in the third quarter. So there is a recovery in place that did not go backwards despite the resurgence of infections during the quarter. From our perspective, oh, and patients most vulnerable to a poor covid outcome continue to be the most impacted by surges and infection rates and intensity of disease typically these individuals suffer from chronic illnesses, including diabetes. In general, it appears these are the patients that are currently more reticent to come in for care. Conversely, the less vulnerable and higher mobility patients needing higher technology, prosthetic and orthotic devices were less impacted and constituted more of the patient encounters during the fourth quarter. Prosthetic volumes overall did improve modestly from third quarter levels, driving a sequential improvement in segment revenue. Excluding acquisitions when compared to the fourth quarter, 2019 prosthetics declined approximately 12% driven primarily by lower mobility device volumes. Orthotics revenues continued to firm up as the year went on, and this was true. In Q four, orthotics revenues declined 8% an improvement from third quarter levels. Custom orthotics performed relatively well, while off the shelf orthotics and shoes declined more than the category average.