Langer Reports Operating Results

Langer Inc., Deer Park, New York, reported a net loss of approximately $1,825,000 or 17 cents per share on a fully diluted basis, compared to a net loss for the three months ended March 31, 2007, of approximately $784,000 or 7 cents per share on a fully diluted basis. The principal reasons for the increase in the net loss are a decrease of approximately $423,000 in gross profit, along with increases in general and administrative expenses of approximately $398,000 and selling expenses of approximately $158,000.

Net sales for the three months ended March 31, 2008, were approximately $15,778,000, compared to approximately $14,321,000 for the three months ended March 31, 2007, an increase of approximately $1,457,000 or 10.2 percent. The principal reason for the increase in net sales were the sales generated by Twincraft, which were approximately $7,910,000 in the quarter ended March 31, 2008, an increase of $1,864,000 as compared to the quarter ended March 31, 2007. Twincraft was acquired January 23, 2007, and its sales for the first 23 days of 2007 of approximately $1,645,000 were not included in the company's 2007 first quarter sales.

Consolidated gross profit decreased approximately $423,000 to approximately $4,867,000 for the three months ended March 31, 2008, compared to approximately $5,290,000 in the three months ended March 31, 2007. Consolidated gross profit as a percentage of net sales for the three months ended March 31, 2008, was 30.9 percent, compared to 36.9 percent for the three months ended March 31, 2007. The principal reasons for the decrease in gross profit are an increase in material costs at Twincraft principally due to increases in the cost of soap base, the largest component of its material costs, and increases in other components of cost of goods sold at Silipos as a result of changes in the sales mix.

General and administrative expenses for the three months ended March 31, 2008, were approximately $3,641,000, or 23.1 percent of net sales, compared to approximately $3,243,000, or 22.6 percent of net sales for the three months ended March 31, 2007, an increase of approximately $398,000. The increase is due to an acceleration of depreciation expenses of approximately $350,000 on the leasehold improvements related to the 41 Madison Avenue, New York lease, which will be surrendered during the second quarter of 2008, a write offof $49,000 of the receivables due from the sellers of the Regal business, increases in salaries related to the establishment of the permanent corporate finance staffof $127,000, bank fees of $70,000 related to audits of certain assets which support the Company's credit facility, approximately $139,000 of additional expenses at Twincraft resulting from the inclusion of the full first quarter of 2008 in the Company's consolidated results, all of which were offset by declines in professional fees paid to outside accounting consultants of approximately $152,000, a decrease of $165,000 in legal fees, and other net reductions of approximately $74,000.

Interest expense for the three months ended March 31, 2008, was approximately $558,000, compared to approximately $526,000 for the three months ended March 31, 2007, an increase of approximately $32,000. The principal reason for the increase was that the three months ended March 31, 2008, included approximately $22,000 of amortization of deferred financing costs related to the company's credit facility with Wachovia, which did not occur during the three months ended March 31, 2007.

Cash and cash equivalents at March 31, 2008 were approximately $2,123,000, compared to approximately $2,422,000 at December 31, 2007, a decrease of approximately $299,000. The decrease in cash and cash equivalents during the three-month period is primarily attributable to the decrease of working capital of Langer UK, classified as assets and liabilities held for sale at December 31, 2007, net of receipt of approximately $808,000 in January 2008 as a result of the sale, the use of approximately $695,000 of cash to purchase the company's common stock, and approximately $372,000 of cash used to purchase equipment, offset by increases in other current liabilities of approximately $731,000. Working capital as of March 31, 2008 was approximately $12,304,000, compared to approximately $13,953,000 at December 31, 2007.

Gray Hudkins, Langer president and CEO, said, "We are actively continuing the process of evaluating all strategic alternatives available to us in order to maximize shareholder value. As we previously noted, this may include a sale of one or more of our businesses or assets provided that such dispositions would meet our criteria. We have made progress with respect to this analysis, in part reflected by our previously announced sale of Langer UK.

"In addition, our Board of Directors has authorized an increase, to $6,000,000 from $2,000,000, in the amount we may apply to repurchase our common stock. We intend to be strategic and tactical in determining when and whether to repurchase our common stock."