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ORTHOMET REPORTS SECOND QUARTER RESULTS

 ORTHOMET REPORTS SECOND QUARTER RESULTS
 MINNEAPOLIS, Jan. 23 /PRNewswire/ -- Orthomet, Inc. (NASDAQ: OMET)


announced sales of $4,241,000, for its second fiscal quarter ended Dec. 31, 1991, which represented a 4.4 percent increase over the prior year's quarterly sales of $4,061,000. The company reported a net loss of $62,000 or $.01 per share for the quarter. This compares to a net loss of $1,951,000 or $.64 per share for its second fiscal quarter a year ago. The previous year's quarterly loss included one-time charges of $2,025,000 against inventory and severance provisions.
 Sales for the first six months of the fiscal year were $8,001,000, a 9.4 percent increase over sales of $7,311,000 for the same period a year ago in fiscal 1991. The net loss for the six months was $329,000 or $.09 per share compared to a loss of $1,961,000 or $.64 per share for the same period a year ago.
 Bert J. Amdahl, Orthomet's president and chief operating officer, said, "Results for the second quarter show a continuation of the progress made in the first quarter and were in line with our expectations. However, sales in the second quarter to lower margin international markets increased to 31 percent of total net sales, compared with 18 percent in the first quarter of fiscal 1992. Although our U.S. agent dealer network posted gains during the quarter, we are not satisfied with the pace of the expansion of this network.
 "In order to accelerate the growth and expansion of our domestic distribution systems where our profit margins are more favorable, we have added Kevin Delaney to our staff as vice president of sales. Kevin has demonstrated the ability of building an effective domestic orthopedic sales organization and his experience will help us focus on increasing sales in our most profitable markets."
 Amdahl added, "To sustain progress and attain the profitability we believe Orthomet is capable of achieving, we will continue to scrutinize all costs and expenses and to concentrate on expanding our more profitable domestic sales organization." Earlier this week, Orthomet announced the appointment of a new Chairman of the Board and Chief Executive Officer, Richard D. Nikolaev, who has over 30 years of orthopedic industry experience.
 Orthomet, Inc. is in the business of designing, manufacturing and marketing selected orthopedic products, primarily reconstructive knee and hip implants and related surgical instrumentation.
 ORTHOMET, INC.
 STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 Three Months Ended Six Months Ended
 12/31/91 12/31/90 12/31/91 12/31/90
 Net sales $4,241 $4,061 $8,001 $7,311
 Cost of sales 2,028 1,771 3,820 3,181
 Gross profit 2,213 2,290 4,181 4,130
 Operating expenses (income):
 Sales and marketing 1,078 922 2,126 1,731
 General and administrative 724 900 1,469 1,563
 Research and development 357 341 699 696
 Provision for inventory -- 1,750 -- 1,750
 Provision for officer severance -- 275 -- 275
 Other operating (income) expense 37 (12) (46) (47)
 -- 2,196 4,176 4,248 5,968
 Operating earnings (loss) 17 (1,886) (67) (1,838)
 Other income (expense):
 Interest and financing expense (86) (54) (247) (70)
 Interest income 37 7 45 7
 Earnings (loss) before taxes (32) (1,933) (269) (1,901)
 Income taxes (benefit) -- (12) -- --
 Net earnings (loss) (32) (1,921) (269) (1,901)
 Less preferred stock cash div. 30 30 60 60
 Net earnings (loss) applicable
 to common stock (62) (1,951) (329) (1,961)
 Earnings (loss) per common
 share $(0.01) $(0.64) $(0.09) $(0.64)
 Weighted average number of
 common shares and common
 share equivalents
 outstanding (actual) 4,280,634 3,027,487 3,632,912 3,053,599
 ORTHOMET, INC.
 BALANCE SHEETS
 (In thousands, except per share data)
 12/31/91 6/30/91
 ASSETS
 Current assets:
 Cash and cash equivalents $2,919 $261
 Accounts receivable (net) 3,871 4,649
 Employee and distribution advances 54 16
 Officer notes and receivable 1 16
 Inventories 6,091 6,963
 Prepaid expenses and other assets 354 378
 Total current assets 13,290 12,283
 Property and equipment (net) 4,099 4,058
 Other assets 62 83
 Total assets $17,451 $16,424
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Notes payable to bank --- $1,916
 Notes payable to directors --- 650
 Accounts payable 624 1,680
 Employee compensation 514 420
 Other liabilities and accrued expenses 609 644
 Accrued severance costs 87 193
 Accrued rework costs 40 200
 Current portion of lease obligation 289 251
 Total current liabilities 2,163 5,954
 Lease obligations $999 $1,022
 Redeemable convertible preferred stock 2,000 2,000
 Shareholders' equity:
 Common stock, par value $.10 per share --
 authorized -- 7,500,000 shares; issued and
 outstanding Dec. 31, 1991 -- 4,290,058
 shares; June 30, 1991 -- 3,120,547 shares 429 312
 Additional paid-in capital 15,021 9,968
 Retained earnings (deficit) (3,161) (2,832)
 Total shareholders' equity 12,289 7,448
 Total liabilities and shareholders'
 equity $17,451 $16,424
 -0- 1/23/92
 /CONTACT: James C. Hawley of Orthomet, 612-944-6112/
 (OMET) CO: Orthomet, Inc. ST: Minnesota IN: MTC SU: ERN


AL -- MN022 -- 3040 01/23/92 17:18 EST
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Date:Jan 23, 1992
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