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Advanced Orthopedic Technologies announces 1995 year end results.

WEST HEMPSTEAD, N.Y.--(BUSINESS WIRE)--March 20, 1996-- Advanced Orthopedic Technologies, Inc. (Nasdaq Small Cap Issues: AOTI) ("AOTI") today announced financial results for the twelve and three month periods ended December 31, 1995 (See attached table).

Sales for the year ended December 31, 1995 increased to a record $13,813,000 from $13,162,000 in 1994. Operating income for the year was $1,266,000 compared to $1,394,000 in 1994. Net income for the year rose to $486,000, or $.11 per share, versus net income of $406,000, or $.09 per share, for the 1994 year.

Sales for the fourth quarter increased to $3,637,000 from $3,468,000 for the same period last year. Operating income for the quarter was $194,000 versus $278,000 reported for the same period in 1994. Net income for the fourth quarter rose to $60,000, or $.01 per share, compared to a net loss of $79,000, or $.02 per share for the fourth quarter last year. Higher sales for the twelve and three month periods were primarily the result of internal growth, and the inclusion of sales by Clayton Prosthetics and Orthotics, acquired in the second quarter of 1994.

Operating income for the twelve and three months ended December 31, 1995 was impacted by $374,000 of charges associated with litigation; obsolete inventory; and the write-down of impaired assets. Exclusive of these charges, operating income for the twelve and three month periods ended December 31, 1995 would have been $1,640,000 and $568,000, respectively; respective net income for these periods would have been $709,000, or $.16 per share, and $283,000, or $.06 per share. During 1994, there were $275,000 of charges in connection with an abandoned acquisition and costs incurred in connection with the post-effective amendment of the registration of its publicly held warrants, which were not exercised. For comparison purposes, exclusion of these charges would have resulted in net income of $571,000, or $.13 per share and $86,000 or $.04 per share for the twelve and three months ended December 31, 1994, respectively.

Andrew H. Meyers, President and Chief Executive Officer of AOTI, commented, "The Company achieved several significant milestones in 1995. The unusual charges the Company took in the fourth quarter were unfortunate, but despite these charges the fourth quarter results were very strong. During 1995, we added 37 managed care contracts for a total to date of 82 national and/or regional specific managed care agreements. Among them is our recently announced agreement with Health Insurance Plan of Greater New York ("HIP"). This agreement has resulted in an increase in patient flow at our Nassau, Suffolk and Queens patient care centers.

"An increasing number of patient referrals are coming from managed care companies who seek providers that offer high-quality service to their members and have multiple locations throughout a large regional geographic area. AOTI's strategy of achieving regional dominance in those areas in which we have operations is evidenced by the January 1996 acquisition of certain assets of Med-Tech O&P Services, Inc., one of the largest O&P services providers in the New York area. As a result of this acquisition, AOTI is now the largest single-source provider of O&P services in the New York metropolitan area which makes us an attractive partner for managed care companies."

In closing, Mr. Meyers stated, "We believe that a wealth of opportunities exist in the O&P marketplace. We will continue to pursue managed care agreements as a means to expand our business internally and, as the industry continues to consolidate, we will seek out strategic acquisition candidates. We believe that AOTI is well- positioned for future growth and expect favorable revenue and earnings comparisons in 1996."

Advanced Orthopedic Technologies is one of the nation's leading providers of patient care services to the orthotic (design, fabrication and fitting of custom-made braces and other devices) and prosthetic (design, fabrication and fitting of artificial limbs) rehabilitation markets. Currently, the Company operates 35 patient care centers in California, New Mexico, New Jersey, New York, Virginia and West Virginia. -0-
 Three Months Ended Year Ended
 December 31, December 31,
 1995 1994 1995 1994

Sales $3,637,000 $3,468,000 $13,813,000 $13,162,000
Gross profit 1,865,000 1,735,000 7,075,000 6,732,000
Selling, general
 and administrative
 expenses 1,297,000 1,457,000 5,435,000 5,338,000
Litigation costs,
 inventory obsolescence
 and impairment
 of assets 374,000 - 374,000 -
Operating Income 194,000 278,000 1,266,000 1,394,000
Interest expense 91,000 102,000 380,000 353,000
Other income
 (deductions) 7,000 (268,000) 12,000 (263,000)
Income (loss)
 before provision
 for income taxes 110,000 (92,000) 898,000 778,000
Provision for
 income taxes 50,000 (13,000) 412,000 372,000
Net income (loss) $60,000 $(79,000) $486,000 $406,000
Earnings (loss)
 per common share $.01 $(.02) $.11 $.09
Shares used in
 earnings per
 common share
 computation 4,470,975 4,446,782 4,453,711 4,404,287

CONTACT: Advanced Orthopedic Technologies

Andrew H. Meyers, Chief Executive Officer

(516) 481-9670


The Equity Group Inc.

Devin Sullivan (212) 836-9608

Robert Goldstein (212) 371-8660
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Publication:Business Wire
Date:Mar 20, 1996
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