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Advanced Orthopedic Technologies reports record third quarter and nine month results;.

WEST HEMPSTEAD, N.Y.--(BUSINESS WIRE)--Nov. 7, 1996--Advanced Orthopedic Technologies, Inc. (Nasdaq Small Cap Issues: AOTI) ("AOTI"), a leading national provider of orthotic and prosthetic ("O&P") patient care services, today announced record financial results for the third quarter and nine months ended September 30, 1996.

For the three months ended September 30, 1996, sales increased 36.6% to a record $4,668,000 from $3,417,000 for the same period in 1995. Operating income for the quarter rose at a much faster rate, up 73.6% to $724,000 compared to $417,000 for the comparable 1995 period. Net income for the third quarter increased 107.5% to $361,000, or $.07 per share, versus net income of $174,000, or $.04 per share, for the same period in 1995.

For the nine months ended September 30, 1996, sales increased 29.0% to a record $13,123,000 from $10,176,000 for the same period in 1995. Operating income for the nine month period rose at a much faster rate, up 64.6% to $1,765,000 from $1,072,000 for the comparable 1995 period. Net income for the first nine months of 1996 increased 100.7% to $855,000, or $.17 per share, versus net income of $426,000, or $.10 per share, for the same period last year.

Andrew H. Meyers, President and Chief Executive Officer of AOTI, commented, "Record sales for the three and nine month periods primarily reflect the inclusion of sales from Med-Tech O&P Services ("Med-Tech"), whose operating assets were acquired by AOTI in January, as well as increased patient volume. We also continue to pursue managed care agreements as an avenue of internal growth. In this regard, we have entered into a total of 106 national and/or regional specific managed care agreements."

Mr. Meyers continued, "Operating margins for the 1996 three and nine month periods improved to 15.5% and 13.4%, respectively, from 12.2% and 10.5% for the comparable periods last year. Selling, general and administrative expenses as percentage of revenues for these same periods decreased to 34.3% and 36.6%, respectively, from 39.5% and 40.7% for the comparable 1995 periods. These improvements reflect higher sales and economies realized from the integration of Med-Tech into AOTI's existing New York City operations."

On October 2, 1996 Advanced Orthopedic Technologies, Inc. and NovaCare, Inc. (NYSE:NOV) announced a definitive agreement for the merger of AOTI with a wholly-owned subsidiary of NovaCare. Subject to approval by AOTI's shareholders, the parties anticipate closing of the merger by December 31, 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 37 patient care centers in California, New Mexico, New Jersey, New York, Virginia and West Virginia.

This press release contains forward looking statements which involve numerous risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities and Exchange Commission. -0-
 ADVANCED ORTHOPEDIC TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)

 Three Months Ended Nine Months Ended
 September 30, September 30,

 1996 1995 1996 1995

Sales $4,668,000 $3,417,000 $13,123,000 $10,176,000

Gross profit 2,327,000 1,767,000 6,567,000 5,210,000

Operating income 724,000 417,000 1,765,000 1,072,000

Income before
 provision for
 income taxes 634,000 323,000 1,508,000 788,000

Provision for income
 taxes 273,000 149,000 653,000 362,000

Net income 361,000 174,000 855,000 426,000

Earnings per common
 share $.07 $.04 $.17 $.10

Shares used in earnings per
 common share
 computation 4,911,918 4,451,125 4,911,918 4,451,125
-0-





CONTACT: Advanced Orthopedic Technologies

Andrew H. Meyers, Chief Executive Officer

(516) 481-9670

or

INVESTOR RELATIONS COUNSEL:

The Equity Group Inc.

Devin Sullivan

(212) 836-9608

Robert Goldstein

(212) 371-8660
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Publication:Business Wire
Date:Nov 7, 1996
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