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ORTHOMET ANNOUNCES FOURTH QUARTER RESULTS

 ORTHOMET ANNOUNCES FOURTH QUARTER RESULTS
 MINNEAPOLIS, Aug. 17 /PRNewswire/ -- Orthomet, Inc. (NASDAQ: OMET)


reported a five percent increase in sales for its fiscal year ended June 30, 1992, with fourth quarter sales up 28 percent. The company incurred losses for both the full year and final quarter, which were less than in the comparable periods a year ago and in line with securities analysts' estimates.
 Sales for fiscal 1992 were $15,762,000, compared to $14,946,000 in fiscal 1991. The net loss for the year was $1,830,000, or $.46 per share, compared to a net loss of $3,362,000, or $1.09 per share, in fiscal 1991.
 For the fourth quarter, sales were $4,340,000, compared to $3,389,000 in the same period a year ago. The net loss in the quarter was $408,000, or $.09 per share, which included a charge equal to $.03 per share related to the buyout of a portion of the lease for the company's office and manufacturing facility that would have required renting additional space. The net loss in the previous year's fourth quarter was $1,678,000, or $.54 per share.
 Richard D. Nikolaev, Orthomet's chairman and chief executive officer, said, "Orthomet made solid progress in the fourth quarter. Sales recovered from a disappointing third quarter, and were more representative of actual use rather than of a building up of distributor inventories. In addition, the gross profit margin improved to 56 percent in the quarter compared with 52 percent for the first nine months. Looking ahead to fiscal 1993, Orthomet's biggest challenge and healthiest path to profitability is to increase sales. This will be our number one priority."
 Orthomet also announced that in July it sold 325,000 shares of common stock of Spine-Tech, Inc., a development-stage medical products company, which resulted in a gain of $750,000, or approximately $.17 per share. This gain will be included in the company's operating results for its first quarter ending Sept. 30, 1992. Orthomet continues to hold
50,000 shares of Spine-Tech common stock. In June 1991, Orthomet sold its spinal research and development project to Spine-Tech in exchange for cash and common stock.
 Orthomet, Inc. is in the business of designing, manufacturing and marketing selected orthopedic reconstructive implant products and related surgical instrumentation.
 ORTHOMET, INC.
 STATEMENTS OF OPERATIONS
 (In thousands, except per share)
 Three Months Ended 12 Months Ended
 6/30/92 6/30/91 6/30/92 6/30/91
 Net sales $4,340 $3,389 $15,762 $14,946
 Cost of sales 1,892 1,835 7,389 6,691
 Gross profit 2,448 1,554 8,373 8,255
 Operating expenses (income):
 Sales and marketing 1,336 1,517 4,708 4,310
 General and administrative 922 1,275 3,296 3,682
 Research and development 441 406 1,573 1,431
 Provision for inventory -- -- -- 1,750
 Provision for officer
 severance -- -- 210 275
 Other operating income (22) (93) (90) (180)
 -- 2,677 3,105 9,697 11,268
 Operating loss (229) (1,551) (1,324) (3,013)
 Other income (expense):
 Interest and financing expense (57) (110) (371) (263)
 Interest income 38 13 115 34
 Lease buyout (130) -- (130) --
 Loss before income taxes (378) (1,648) (1,710) (3,242)
 Income taxes -- -- -- --
 Net loss $(378) $(1,648) $(1,710) $(3,242)
 Less preferred stock
 cash dividends 30 30 120 120
 Net loss applicable to
 common stock $(408) $(1,678) $(1,830) $(3,362)
 Loss per common share $(.09) $(.54) $(.46) $(1.09)
 Weighted average number of
 common shares and common
 share equivalents
 outstanding 4,329,094 3,111,804 4,020,445 3,076,087
 BALANCE SHEETS
 (In thousands, except per share)
 ASSETS 6/30/92 6/30/91
 Current assets:
 Cash and cash equivalents $2,768 $261
 Marketable securities 250 --
 Accounts receivable (net) 3,521 4,649
 Employee and distribution advances 131 16
 Officer notes and receivables -- 16
 Inventories 5,824 6,963
 Prepaid expenses and other assets 411 378
 Total current assets 12,905 12,283
 Property and equipment (net) 3,605 4,058
 Other assets 144 83
 Total assets $16,654 $16,424
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Notes payable to bank -- $1,916
 Notes payable to directors -- 650
 Accounts payable 1,161 1,680
 Employee compensation 485 420
 Other liabilities and accrued expenses 613 644
 Accrued severance costs 112 193
 Accrued rework costs 81 200
 Current portion of lease obligation 286 251
 Total current liabilities 2,738 5,954
 Lease obligations 845 1,022
 Redeemable convertible preferred stock 2,000 2,000
 Shareholders' equity:
 Common stock 435 312
 Additional paid-in capital 15,297 9,968
 Retained earnings (deficit) (4,661) (2,832)
 Total shareholders' equity 11,071 7,448
 Total liabilities and shareholders' equity $16,654 $16,424
 -0- 8/17/92
 /CONTACT: James C. Hawley of Orthomet, 612-944-6112/
 (OMET) CO: Orthomet, Inc. ST: Minnesota IN: MTC SU: ERN


AL -- MN017 -- 0716 08/17/92 18:17 EDT
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