8-K

 

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

       Date of Report (Date of earliest event reported): November 12, 2004
                                                        -----------------

                                  Langer, Inc.
                                  ------------
             (Exact name of registrant as specified in its charter)



             Delaware                   0-12991               11-2239561
- --------------------------------------------------------------------------------
  (State or other jurisdiction     (Commission File          (IRS Employer
        of incorporation)               Number)           Identification No.)


    450 Commack Road, Deer Park, New York                    11729 - 4510
- --------------------------------------------------------------------------------
   (Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code: 631-667-1200
                                                   ---------------


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:


     [ ]  Written communications pursuant to Rule 425 under the Securities Act
          (17 CFR 230.425)

     [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
          CFR 240.14a-12)

     [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
          Exchange Act (17 CFR 240.14d-2(b))

     [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
          Exchange Act (17 CFR 240.13e-4(c))




ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Kanders & Company

On November 12, 2004, Langer, Inc., (the "Company") entered into a consulting
agreement (the "Consulting Agreement") with Kanders & Company, Inc., the sole
stockholder of which is Warren B. Kanders, who on November 12, 2004 became our
Chairman of the Board of Directors. The Consulting Agreement provides that
Kanders & Company, Inc. will act as our non-exclusive consultant, providing
general investment banking and financial advisory services for a term of three
years. The Consulting Agreement provides for Kanders & Company, Inc. to receive
an annual fee of $200,000, options to purchase 240,000 shares of our common
stock at an exercise price of $7.50 per share, vesting in three equal annual
installments beginning on November 12, 2005, as well as indemnification
protection.

Andrew H. Meyers

On November 16, 2004, the Company and Andrew H. Meyers, our President and Chief
Executive Officer, agreed to extend his employment agreement with us for an
additional year ending December 31, 2005, and to modify certain other provisions
of his employment agreement. The agreement, as amended, provides for a base
salary of $175,000, participation in incentive or bonus plans at the discretion
of our Board of Directors and maintenance of a $1 million life insurance policy
for Mr. Meyers' beneficiary. Mr. Meyers would be entitled to terminate his
employment agreement and receive payment of $300,000 over a period of one-year
in addition to any accrued but unpaid obligations of the Company if we terminate
his agreement "without cause", he terminates for "good reason", or in the event
of a "change of control" of the Company as such terms are defined in the
agreement. Mr. Meyers also agreed to certain confidentiality and non-competition
provisions and certain limitations on his ability to sell or transfer his shares
of common stock or options for the purchase of common stock.

W. Gray Hudkins

On November 16, 2004, the Company entered into an employment agreement with W.
Gray Hudkins, effective as of October 1, 2004, that provides he will serve as
our Chief Operating Officer for a term expiring on October 1, 2007. The
agreement provides for a base salary of $200,000, participation in incentive and
bonus plans at the discretion of our Board of Directors, ten-year options to
purchase up to 150,000 shares of our common stock, at an exercise price of $7.50
per share, vesting in three equal annual installments commencing on October 1,
2005, and maintenance of a $1 million life insurance policy for Mr. Hudkins'
beneficiary. Mr. Hudkins has also agreed to certain confidentiality,
non-competition, and non-solicitation provisions. In the event Mr. Hudkins is
terminated by us "without cause", he is entitled to receive his base
compensation, which may be payable at our option in cash or shares of our common
stock, for a period of six months from the date of such termination.



Steven Goldstein

On November 16, 2004, the Company entered into an employment agreement with
Steven Goldstein, effective as of January 1, 2004, that provides that he will
serve as our Executive Vice President for a term expiring on December 31, 2007.
The agreement provides for a base salary of $250,000, participation in incentive
and bonus plans at the discretion of our Board of Directors, ten-year options to
purchase up to 100,000 shares of our common stock, at an exercise price of $7.50
per share, vesting in three equal annual installments commencing on January 1,
2005, and maintenance of a $1 million life insurance policy for Mr. Goldstein's
beneficiary. Mr. Goldstein also receives a car allowance of $500 a month. Mr.
Goldstein has also agreed to certain confidentiality, non-competition, and
non-solicitation provisions. In the event Mr. Goldstein is terminated by us
"without cause", he is entitled to receive his base compensation, which may be
payable at our option in cash or shares of our common stock, for a period of six
months from the date of such termination.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 15, 2004, the Company issued an earnings press release announcing
financial results for the third quarter ended September 30, 2004. A copy of the
earnings press release is furnished as Exhibit 99.1 and incorporated herein by
reference.

The information furnished herein, including Exhibit 99.1, shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.


ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS' ELECTION OF DIRECTORS;
          APPOINTMENT OF PRINCIPAL OFFICERS.

Mr. Kanders was appointed as Chairman of the Board of Directors of the Company
effective as of November 12, 2004. Mr. Kanders has served as the chairman of the
board of directors of Armor Holdings, Inc., which is listed on the New York
Stock Exchange, since January 1996 and as its Chief Executive Officer since
April 2003. Mr. Kanders has served as a member of the board of directors of
Clarus Corporation, which is listed on The OTC Bulletin Board, since June 2002
and as the Executive Chairman of Clarus Corporation's board of directors since
December 2002. Mr. Kanders has also served as the Executive Chairman of Net
Perceptions' board of directors, which is listed on The OTC Bulletin Board,
since April 2004. From October 1992 to May 1996, Mr. Kanders served as Vice
Chairman of the board of Benson Eyecare Corporation. From June 1992 to March
1993, Mr. Kanders served as the President and a director of Pembridge Holdings,
Inc. Mr. Kanders received a B.A. degree in Economics from Brown University in
1979. Mr. Kanders is 46 years old.

As discussed above in Item 1.01, on November 12, 2004, we entered into the
Consulting Agreement with Kanders & Company, Inc., the sole stockholder of which
is Mr. Kanders. Mr. Kanders is the sole manager and voting member of Langer
Partners LLC ("Langer Partners"), one of our principal stockholders. Langer
Partners holds $2,500,000 principal



amount of our 4% convertible subordinated notes due August 31, 2006, as well as
$750,000 principal amount of our 7% Senior Subordinated Notes due September 30,
2007 and related warrants to purchase 15,000 shares of our common stock at an
exercise price of $0.02 per share. In connection with our acquisition of
Silipos, Inc., we granted 100,000 shares of restricted stock to Kanders &
Company, Inc., vesting on the third anniversary of the grant date and
accelerating upon a change of control of the Company.

Mr. Hudkins was appointed as Chief Operating Officer of the Company effective as
of November 12, 2004. Previously, the Company announced Mr. Hudkins was
appointed as Acting Chief Operating Officer. Mr. Hudkins has served as Director
of Corporate Development for Clarus Corporation since December 2002, as a
Principal in Kanders & Company, Inc. since December 2003, and as Director of
Corporate Development for Net Perceptions, Inc. since April 2004. Prior to this,
from February 2002 until December 2002, Mr. Hudkins served as Manager of
Financial Planning and Development for Bay Travelgear, Inc., a branded consumer
products company based in New York and Chicago. From April 2000 until February
2002, Mr. Hudkins served as an Associate at Chartwell Investments LLC, a New
York based private equity firm, and from August 1999 until March 2000, Mr.
Hudkins served as an Associate at Saunder, Karp & Megrue, a private merchant
bank based in Stamford, CT. Mr. Hudkins graduated cum laude with an A.B. in
Economics and a Certificate in Germanic Language and Literature from Princeton
University in 1997. Mr. Hudkins is 29 years old. As discussed above in Item
1.01, on November 15, 2004, we entered into an employment agreement with Mr.
Hudkins, effective as of October 1, 2004.

In connection with our acquisition of Silipos, Inc., we granted 40,000 shares of
restricted stock to Mr. Hudkins, vesting in three equal annual tranches
commencing on the first anniversary of the grant date and accelerating upon a
change of control of the Company.


ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.


     (c) Exhibits.

          The following Exhibits are hereby filed as part of this Current Report
          on Form 8-K:

            Number         Exhibit
            ------         -------

            99.1           Press Release dated November 15, 2004 with respect to
                           the Company's financial results for the third quarter
                           ended September 30, 2004 (furnished only).




                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.

Dated: November 16, 2004

LANGER, INC.

By: /s/ Andrew H. Meyers
    --------------------
    Andrew H. Meyers
    President and Chief Executive Officer









                                  Exhibit Index


      Number         Exhibit
      ------         -------

      99.1           Press Release dated November 15, 2004 with respect to the
                     Company's financial results for the third quarter ended
                     September 30, 2004 (furnished only).

EX-99.1

[LANGER LOGO]

CONTACT:          W. Gray Hudkins
                  Chief Operating Officer
                  (631) 667-1200, ext. 226

                  Joseph P. Ciavarella
                  Vice President and
                  Chief Financial Officer
                  (631) 667-1200, ext. 233

FOR IMMEDIATE RELEASE
- ---------------------

                    LANGER, INC. REPORTS 3RD QUARTER RESULTS

         WARREN B. KANDERS APPOINTED CHAIRMAN OF THE BOARD OF DIRECTORS

           W. GRAY HUDKINS JOINS AS PERMANENT CHIEF OPERATING OFFICER



         Deer Park, New York - November 15, 2004- Langer, Inc. (NASDAQ:GAIT,
"Langer" or the "Company") today announced financial results for the third
quarter ended September 30, 2004. Langer also announced that Mr. Warren B.
Kanders has been appointed as Chairman of the Board of Directors and that W.
Gray Hudkins, previously appointed as Acting Chief Operating Officer, has joined
the Company as the permanent Chief Operating Officer.

         Reporting its operating results, Langer announced net sales for the
three months ended September 30, 2004 of $6,285,384 compared to net sales of
$6,332,684, or a 1% decline, for the comparable prior year period. Net sales for
the nine months ended September 30, 2004 were $18,596,823, or a 2% increase
compared to net sales of $18,282,606 for the prior comparable period in 2003.
Net income for the three months ended September 30, 2004 was $43,868 or $.01 per
fully diluted share, as compared to the year-ago level of $49,469, or $.01 per
fully diluted share. For the nine months ended September 30, 2004, Langer
reported a net loss of $97,729, or $.02 per fully diluted share, as compared to
a net loss of $182,311 or $.04 per fully diluted share for the comparable period
in 2003.


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         For the third quarter, the Company's gross profit margin increased to
36.3% versus 35.0% for the comparable prior year period. The gross profit margin
for the nine months ended September 30, 2004 increased to 35.7% versus 34.5% for
the comparable prior year period. Gross profit margin increases were primarily
attributable to manufacturing efficiency improvements, including decreased labor
costs and lower production overhead expenses.

         Selling expenses for the third quarter were $790,038, or 12.6% of net
sales, as compared to $783,423, or 12.4% of net sales, for the comparable prior
year period. Selling expenses for the nine months ended September 30, 2004 were
$2,384,172 or 12.8% of net sales compared to $2,333,850, also 12.8% of net
sales, for comparable prior year period. Selling expenses as a percentage of
sales remained constant as a result of cost controls related to sales and
marketing activities.

         General and administrative expenses for the third quarter were
approximately $1,259,016, or 20.0% of net sales, compared to $1,206,363, or
19.0% of net sales, for prior year. General and administrative expenses
year-to-date were $3,777,039, or 20.3% of net sales, versus $3,565,550, or 19.5%
of net sales, for the comparable prior year period. General and administrative
expenses increased slightly due to Sarbanes-Oxley compliance costs as well as
investments in our operating infrastructure.

         Andrew H. Meyers, Langer's President and Chief Executive Officer, said,
"Our pricing initiatives and cost containment measures are beginning to show
positive results as we continue to pursue margin enhancement opportunities to
enhance future financial results."

         Langer also announced that Warren B. Kanders has joined the Board of
Directors of Langer and been appointed Chairman. Mr. Kanders became the
controlling stockholder of Langer in connection with the change of control
transaction in February 2001.

         Commenting on the appointment of Mr. Kanders as Chairman, Mr. Meyers
said, "We are thrilled to have Warren join the Board as Chairman. Since 2001
when we initially invested in Langer, Warren has provided significant strategic
advice and guidance to management. Warren brings to Langer extensive experience
investing in and building public companies through acquisition programs and we
are pleased to have him increase his involvement in the Company as we embark on
this next phase of our growth."

         Mr. Kanders said of his appointment as Chairman of the Board, "We
believe the Silipos acquisition marked a significant step in the development of
the Company as it increases our product offerings, improves our distribution
capabilities, and provides scale that is important to continue our development
as a platform for future acquisitions. I look forward to working with the Langer






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management team to grow the Company's business through our stated strategy of
growth both organically as well as through targeted acquisitions."

         Langer, Inc., together with its wholly owned subsidiary Silipos Inc.,
is a leading provider of high quality medical products targeting the orthopedic,
orthotic and prosthetic markets. In addition, the Company offers a diverse line
of skincare products for the medical and therapeutic markets. The Company sells
its products primarily in the U.S. and Canada as well as in more than 30 other
countries to national, regional, international and independent medical
distributors and directly to healthcare professionals. Langer is based in Deer
Park, New York and has additional manufacturing facilities in Niagara Falls, NY,
Brea, California, Montreal, Canada, Stoke-on-Trent, UK as well as sales and
marketing offices in Toronto, Canada and New York, New York.

         Certain matters discussed in this press release constitute
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those projected. The Company may use
words such as "anticipates," "believes," "plans," "expects," "intends," "future"
and similar expressions to identify forward-looking statements. These risks and
uncertainties are described in the Company's filings with the Securities and
Exchange Commission, including the Company's Registration Statement on Form S-
3, its 2003 Form 10-K and most recently filed Form 10-Qs and Form 8-Ks.




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                                  LANGER, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)




                                                                  THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                    SEPTEMBER 30,                       SEPTEMBER 30,
                                                                  2004            2003            2004               2003
                                                            --------------- ---------------  ---------------- -----------------

      Net sales                                              $  6,285,384    $  6,332,684     $  18,596,823     $  18,282,606
      Cost of sales                                             4,007,133       4,113,520        11,957,703        11,981,180
                                                            --------------- ---------------  ---------------- -----------------
         Gross profit                                           2,278,251       2,219,164         6,639,120         6,301,426

      Selling expenses                                            790,038         783,423         2,384,172         2,333,850
      General and administrative expenses                       1,259,016       1,206,363         3,777,039         3,564,550
                                                            --------------- ---------------  ---------------- -----------------
         Operating income                                         229,197         229,378           477,909           403,026
                                                            --------------- ---------------  ---------------- -----------------

      Other income (expense):
      Interest income                                              47,347          33,462           135,715           111,235
      Interest expense                                           (196,689)       (205,725)         (602,860)         (628,606)
      Other                                                         2,013          30,454             4,507            58,684
                                                            --------------- ---------------  ---------------- -----------------

         Other expenses, net                                     (147,329)       (141,809)         (462,638)         (458,687)
                                                            --------------- ---------------  ---------------- -----------------
       Income (loss) before provision for income taxes             81,868          87,569            15,271           (55,661)
      Provision for income taxes                                   38,000          38,100           113,000           126,650
                                                            --------------- ---------------  ---------------- -----------------
         Net income (loss)                                   $     43,868      $   49,469       $   (97,729)      $  (182,311)
                                                           =============== ===============  ================ =================

      Weighted average number of common shares used
       in computation of net income
         (loss) per share:
             Basic                                              4,380,851       4,377,255         4,380,707         4,372,525
                                                            =============== ===============  ================ =================
             Diluted                                            4,748,812       4,625,874         4,380,707         4,372,525
                                                            =============== ===============  ================ =================

      Net income (loss) per common share:
             Basic                                              $     .01       $     .01         $    (.02)       $     (.04)
                                                            =============== ===============  ================ =================
             Diluted                                            $     .01      $      .01         $    (.02)       $     (.04)
                                                            =============== ===============  ================ =================







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