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ORTHOMET ANNOUNCES THIRD QUARTER RESULTS

 MINNEAPOLIS, April 27 /PRNewswire/ -- Orthomet, Inc. (NASDAQ: OMET) today announced a sales increase of 71 percent for its third quarter ended March 31 and a 39 percent increase for the first nine months of the fiscal year, compared to the same periods last year.
 Sales for this year's third quarter were $5,841,000, compared with $3,421,000 a year ago. Net earnings for the quarter were $410,000 and earnings per share were $.08 as compared to the third quarter last year, in which the company reported a loss of $1,093,000, or $.25 per share.
 For the first nine months of the fiscal year, sales were $15,918,000, net earnings were $1,575,000 and earnings per share were $.32. The year-to-date 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 a year ago, sales were $11,422,000 and Orthomet incurred a loss of $1,422,000 or $.36 per share.
 Richard D. Nikolaev, Orthomet's chairman and chief executive officer, said, "We have now had four quarters of successive sales increases since a disappointing third quarter a year ago, and three quarters in a row in which operations were profitable. We're starting to see the results of ongoing efforts to strengthen our sales agent network in the U.S. export sales, particularly to Japan, have been strong throughout the year; gross margins for comparable year-to-date periods have improved over eight percentage points; we're bringing new products to market and key development projects remain on schedule; and we're holding the line on overhead expenses. We said at the start of the fiscal year that our goal was to increase sales at twice the market growth rate of about 12 percent and to be profitable doing so. With one quarter to go., it appears we have the opportunity to exceed our sales goal. In order to do so we must sustain the momentum we have established in the market. Although we remain determined to be profitable operationally, we will continue to invest our resources where we believe the investment will provide long-term benefits to the company."
 Orthomet, Inc. designs, manufactures and markets selected orthopaedic reconstructive implant products and related surgical instrumentation.
 ORTHOMET, INC.
 STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 Three Months Ended Nine Months Ended
 3/31/93 3/31/92 3/31/93 3/31/92
 Net sales $5,841 $3,421 $15,918 $11,422
 Cost of sales 2,229 1,677 6,255 5,496
 Gross profit 3,612 1,744 9,663 5,926
 Operating expenses (income):
 Sales and marketing 1,726 1,246 4,490 3,372
 General and administrative 974 905 2,635 2,375
 Research and development 562 433 1,598 1,132
 Provision for officer severance -- 210 -- 210
 Other operating (income) expense (31) (21) (30) (68)
 -- 3,231 2,773 8,693 7,021
 Operating earnings (loss) 381 (1,029) 970 (1,095)
 Other income (expense):
 Interest and financing expense (63) (67) (221) (315)
 Interest income 49 33 130 78
 Other 65 -- 817 --
 Earnings (loss) before
 income taxes 432 (1,063) 1,696 (1,332)
 Income taxes 1,000 -- 31,000 --
 Net earnings (loss) 431 (1,063) 1,665 (1,332)
 Less preferred stock
 cash dividends 30 30 90 90
 Net earnings (loss) applicable
 to common stock $401 $(1,093) $1,575 $(1,422)
 Earnings (loss) per common share $.08 $(.25) $.32 $(.36)
 Weighted average number of
 common shares and common
 share equivalents
 outstanding 5,044,014 4,296,566 4,875,953 3,918,310
 ORTHOMET, INC.
 BALANCE SHEETS
 (in thousands, except per share data)
 3/31/93 6/30/92
 ASSETS
 Current assets:
 Cash and cash equivalents $5,696 $2,768
 Marketable securities 250 250
 Accounts receivable (net) 3,125 3,521
 Employee and distribution advances 243 131
 Inventories (net) 6,211 5,824
 Prepaid expenses and other assets 310 411
 Total current assets 15,835 12,905
 Property and equipment (net) 2,798 3,605
 Other assets 465 144
 Total assets $19,098 $16,654
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $1,391 $1,161
 Employee compensation 624 485
 Other liabilities and accrued expenses 869 613
 Accrued severance costs -- 112
 Accrued rework costs 51 81
 Current portion of lease obligation 292 286
 Total current liabilities 3,227 2,738
 Lease obligations 625 845
 Redeemable convertible preferred stock 2,000 2,000
 Shareholders' equity:
 Common stock 444 435
 Additional paid-in capital 15,889 15,298
 Retained earnings (deficit)
 Total shareholders' equity 13,246 11,071
 Total liabilities and
 shareholders' equity $19,098 $16,654
 -0- 4/27/93
 /CONTACT: James C. Hawley, executive vice president of Orthomet, 612-944-6112/
 (OMET)


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

KH -- MN030 -- 1629 04/27/93 17:00 EDT
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:Apr 27, 1993
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