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ORTHOMET ANNOUNCES SECOND QUARTER RESULTS

 MINNEAPOLIS, Jan. 26 /PRNewswire/ -- Orthomet, Inc. (NASDAQ: OMET) announced today that sales for its second quarter ended Dec. 31 increased 26 percent over the same quarter a year ago, and that it earned $.05 per share compared to a loss of $.01 per share in last year's second quarter.
 Orthomet reported second quarter sales of $5,354,000 compared to $4,241,000 in the prior year. Although net earnings were reduced by a non-recurring $155,000 settlement expense related to the termination of relationships with three distributors, the company's earnings were $245,000 for the seocnd quarter. Orthomet reported a loss of $62,000 in the second quarter last year.
 For the first seix months, Orthomet's sales increased 26 percent to $10,077,000 and net earnings were $1,174,000, or $.24 per share. Earnings include a gain of $750,000, or $.15 per share, in the first quarter from the sale of an investment in a development stage company. For the comparable period last year, sales were $8,001,000 and the company reported a loss of $329,000, or $.09 per share.
 Richard D. Nikolaev, Orthomet's chairman and chief executive officer, said, "The progress report looks good. Sales in international markets, particularly in Japan, have been strong. We are also continuing to strengthen our network of sales agents in the United States, expanding into new territories and making changes in others. The gross profit margin so far this year is just over 60 percent, compared to 52 percent at this point last year. New product development efforts are proceeding on schedule. After two quarters we remain on track to achieve the goal we set for the full fiscal year: to increase sales at twice the market growth rate of about 12 percent and to be profitable doing so."
 Orthomet, Inc. designs, manufactures and markets selected orthopaedic reconstructive implant products and related surgical instrumentation.
 ORTHOMET, INC.
 STATEMENTS OF OPERATIONS
 Three Months Ended Six Months Ended
 12/31/92 12/31/91 12/31/92 12/31/91
 Net sales $5,354,000 $4,241,000 $10,077,000 $8,001,000
 Cost of sales 2,138,000 2,028,000 4,026,000 3,820,000
 Gross profit 3,216,000 2,213,000 6,051,000 4,181,000
 Operating expenses (income):
 Sales and marketing 1,526,000 1,078,000 2,764,000 2,126,000
 General and
 administrative 790,000 724,000 1,661,000 1,469,000
 Research & development 514,000 357,000 1,036,000 699,000
 Other operating
 (income) expense 51,000 37,000 1,000 (46,000)
 -- 2,881,000 2,196,000 5,462,000 4,248,000
 Operating earnings
 (loss) 335,000 17,000 589,000 (67,000)
 Other income (expense):
 Interest and
 financing expense (85,000) (86,000) (158,000) (247,000)
 Interest income 47,000 37,000 81,000 45,000
 Other (22,000) -- 752,000 --
 Earnings (loss) before
 income taxes 275,000 (32,000) 1,264,000 (269,000)
 Income taxes -- -- 30,000 --
 Net earnings (loss) $275,000 $(32,000) $1,234,000 $(269,000)
 Less preferred stock
 cash dividends 30,000 30,000 60,000 60,000
 Net earnings (loss)
 applicable to
 common stock 245,000 (62,000) 1,174,000 (329,000)
 Earnings (loss) per
 common share $.05 $(.01) $.24 $(.09)
 Weighted average number
 of common shares and
 common share equivalents
 outstanding 4,901,000 4,280,634 4,981,069 3,632,912
 ORTHOMET, INC.
 BALANCE SHEETS
 12/31/92 6/30/92
 Assets
 Current Assets:
 Cash and cash equivalents $4,457,000 $2,768,000
 Marketable securities 708,000 250,000
 Accounts receivable (net) 2,873,000 3,521,000
 Employee and distribution advances 40,000 131,000
 Inventories (net) 6,042,000 5,824,000
 Prepaid expenses and other assets 396,000 411,000
 Total current assets 14,516,000 12,905,000
 Property and equipment (net) 2,942,000 3,605,000
 Other assets 409,000 144,000
 Total assets $17,867,000 $16,654,000
 Liabilities and Shareholders' Equity
 Current liabiltiies:
 Accounts payable $915,000 $1,161,000
 Employee compensation 408,000 485,000
 Other liabilities and
 accrued expenses 639,000 613,000
 Accrued severance costs -- 112,000
 Accrued rework costs 60,000 81,000
 Income taxes payable 30,000 --
 Current portion of lease obligation 286,000 286,000
 Total current liabilities 2,338,000 2,738,000
 Lease obligations 714,000 845,000
 Redeemable convertible
 preferred stock 2,000,000 2,000,000
 Shareholders' equity:
 Common stock 444,000 435,000
 Additional paid-in cpaital 15,858,000 15,298,000
 Retained earnings (deficit) (3,487,000) (4,662,000)
 Total shareholders' equity 12,815,000 11,071,000
 Total liabilities and
 shareholders' equity $17,867,000 $16,654,000
 -0- 1/26/93 R
 /CONTACT: James C. Hawley, executive vice president of Orthomet, 612-944-6112/
 (OMET)


CO: Orthomet, Inc. ST: Minnesota IN: MTC SU: ERN

MP -- MN022 -- 9514 01/27/93 10:05 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
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Date:Jan 27, 1993
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