2006 Annual Report

May 2007 

Dear Fellow Share Owners:

2006 was an interesting year for the business, one marked by significant challenges in the beginning of the year followed by significant steps toward the end of the year in the execution of our long-term strategy of creating a diversified medical and personal care products business. As we outlined in our annual report a year ago, we undertook initiatives in early 2006 designed to strengthen our manufacturing operations, specifically introducing lean manufacturing processes in our custom orthotic manufacturing facilities. We also spent considerable efforts developing our Silipos customer base and were successful in a number of key areas. Most significantly, however, were the acquisitions we made during the year and the implications they have for the rest of the business.

First, in connection with our base medical products business, we determined earlier that a shift in customer focus and in the overall business model would be an important factor in our future success. In terms of customers, we expanded the focus of our sales efforts beyond our traditional markets, specifically on the long-term care market, and began targeting larger institutional customers with multiple facilities in order to take advantage of the volume leverage inherent in dealing with customers of this type. This also led us to explore the opportunity to couple a service component with our products in order to achieve higher selling prices and leverage the manufacturing base we had in place.

After exploring the creation of this new model organically, ultimately we made the decision to acquire Regal Medical Supply, which is a provider of contracture management products and services to the long-term care market. The acquisition of Regal accomplished a number of things. First, it gave us immediate access to the longterm care market through the Regal sales force. Second, it allowed us to convert a fixed-cost sales model in our Langer business to a variable cost model that takes advantage of the increased number of feet on the street. Third, it provided a new avenue for the organic growth of our medical products business through the addition of field representatives.

As important, looking at the personal care side of our business, the acquisition of Twincraft, Inc. was a significant step in the execution of an acquisition strategy we articulated some time ago. Twincraft is a manufacturer of bar soap focused on the health and beauty, direct marketing, amenities and mass markets. Similar to our skincare product line, Twincraft manufactures products sold under the brand names of other companies or retailers, a business model we find attractive as we believe it allows us to focus on product development and innovation without the significant sales and marketing expense and risk that typically accompanies branded businesses. In addition, with approximately $31.0 million in revenues for 2006, the addition of Twincraft significantly expanded the size of the company, improving alternatives for financing and our ability to continue looking at larger acquisition opportunities.

In closing, while we were not necessarily pleased with our financial results for fiscal 2006, we are pleased with the progress we made in correcting some internal issues, reenergizing the business through some changes in the way we approach our business, and completing two acquisitions that we believe lay the groundwork for a more successful 2007.

As always, we appreciate the support of our Board of Directors, the diligence and hard work of our employees, and the loyalty of our customers.

Warren B. Kanders
Chairman

Stephen M. Brecher
CPA

Burtt R. Ehrlich
Consultant 

Arthur Goldstein
Consultant 

Stuart P. Greenspon
Consultant 

Peter A. Asch
Director 

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Management 

W. Gray Hudkins
President and Chief Executive Officer 

Kathryn P. Kehoe
Senior Vice President 

Peter A. Asch
President of Twincraft, Inc. 

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Stockholder Information

Headquarters

Langer Inc.
450 Commack Road
Deer Park, NY 11729
(631) 667-1200

Investor Relations Contact

W. Gray Hudkins
(631) 667-1200 

Stock Quotation

The Company's common stock is quoted on the Nasdaq National Market under the symbol GAIT. Current quotes for Langer common stock can be viewed at www.langerinc.com. No cash dividends have been declared.

Registrar and Transfer Agent

Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016-3572 

Independent Accountants

BDO Seidman, LLP
401 Broadhollow Road
Melville, NY 11747 

Legal Counsel

Kane Kessler, P.C.
1350 Ave. of the Americas
New York, NY 10019 

Annual Meeting

The 2007 Annual Meeting of Stockholders will be held on Wednesday, June 20, 2007 at 10:30 a.m., Eastern U.S. time, at 41 Madison Avenue, 28th Floor, New York, N.Y. 10010. Detailed information about the meeting is contained in the Notice of Annual Meeting and Proxy Statement sent with a copy of this Annual Report. 

www.langerinc.com