Langer, New York, New York, reported its operating results for 2008, a year in which it made major strategic changes in divesting itself of four key holdings, including its custom-orthotics business. Though its losses for the year totaled $13.6 million, more than double its losses for the previous year, President and CEO Gray Hudkins said that the company’s divestitures had set the company in good stead for the future.
“During 2008, we undertook the process of reviewing our strategic alternatives with an eye toward streamlining our business and focusing on our largest and most profitable operations, Twincraft and Silipos,” stated Hudkins in a press release. “In connection with this, we successfully executed the divestitures of Langer UK, Bi-Op Laboratories, Regal Medical, and the Langer-branded custom-orthotics business. In addition, we took a number of steps to materially reduce our operating expenses in anticipation of a difficult economic environment. As a result, we finished the year with approximately $4 million in cash and approximately $591,000 in receivables related to the custom-orthotics disposition, and an undrawn credit line with approximately $7.8 million of availability.”
He continued, “Net sales in our continuing operations, which include Twincraft and Silipos, increased by approximately 5.4 percent for the year ended December 31, 2008, though our gross margins were negatively impacted by certain commodity raw-material price factors. We reduced our operating expenses for the year by approximately $800,000, and we expect to continue this process of reducing our expenses in 2009. We anticipate, for example, our cash operating expenses from continuing operations in the first quarter of 2009 to be approximately $800,000 lower than in the first quarter of 2008.”
Hudkins concluded, “Given current economic conditions, we remain cautious about our business prospects; however, we believe we have made substantial progress toward strengthening our balance sheet, solidifying liquidity, and positioning the company for future profitability. Commodity prices have declined, which is expected to improve gross margins, and we believe the cost reductions we have implemented will position the business for improved operating leverage when the economy improves. As a sign of our long-term commitment to our business, since the inception of our common stock repurchase program in January 2008, the company has purchased a total of 2,907,460 shares of its common stock, which is in excess of 25 percent of the common stock outstanding prior to the commencement of this program, and we expect to continue this program in 2009. Our liquidity position remains strong, we have no debt maturities until December 2011, and while the economic environment is certainly challenging, we believe we are well-positioned for the future.”