TROY, Mich., June 18 /PRNewswire-FirstCall/ -- Somanetics Corporation
(Nasdaq: SMTS) today reported record net revenues of $12.7 million for the
second quarter ended May 31, 2008, a 40 percent increase from $9.1 million in
the same period of 2007. For the six months ended May 31, 2008, net revenues
increased 25 percent to $21.4 million from $17.1 million in the same period
last year.
U.S. net revenues increased 32 percent to $10.2 million from $7.7 million
in the second quarter of fiscal 2007. International net revenues increased 83
percent to $2.5 million from $1.4 million. For the six-month period, U.S. net
revenues increased 23 percent to $17.7 million and international revenues
increased 37 percent to $3.8 million.
Second quarter income before income taxes increased 31 percent to $4.8
million compared to $3.6 million for the second quarter of 2007. Net income
was $3.1 million, or $0.21 per diluted share, compared with net income of $2.4
million, or $0.17 per diluted share, in the second quarter of 2007.
For the six months ended May 31, 2008, income before income taxes
increased six percent to $6.5 million from $6.2 million in the comparable
period of fiscal 2007. Net income was $4.1 million, or $0.28 per diluted
share, for the first half of 2008 and the first half of 2007.
Gross margin was 87 percent in the second quarter and first six months of
fiscal 2008, compared with 89 percent and 88 percent for the respective
periods of 2007. Cash, marketable securities and long-term investments at May
31, 2008 totaled $73.0 million, with no borrowings.
In April, Somanetics initiated a $15 million stock repurchase program and
expanded the program in May to a total of up to $30 million. To date
Somanetics has purchased 1,209,029 shares at an average purchase price of
$15.94 per share for approximately $19.3 million, including commissions.
"We are pleased with our second quarter performance, which included a 76
percent increase in INVOS System monitor revenue and a 28 percent increase in
sensor revenue over the second quarter of last year," said Bruce Barrett,
Somanetics' president and chief executive officer. "The launch of the
OxyAlert(TM) NIRSensor disposable sensor for infants and neonates is
progressing ahead of schedule based on the number of hospitals using it in the
pediatric and neonatal ICUs, and customer feedback is positive."
Pediatric and Neonatal ICU Market Update
Somanetics continued its launch of the OxyAlert NIRSensor for infants and
neonates during the second quarter and to date 33 U.S. hospitals are using the
sensors in pediatric and neonatal ICUs. Also during the quarter,
approximately 200 pediatric and neonatal physicians attended a Master Class in
Paris to learn about the applications of the INVOS System.
During the second quarter Somanetics received 510(k) clearance from the
U.S. Food and Drug Administration to expand the indication for use for the
INVOS Cerebral/Somatic Oximeter to include monitoring any tissues beneath the
sensor, not limited to brain and skeletal muscle tissue. The FDA 510(k)
clearance clarifies that the technology is for use on any individual, adults,
children, infants and neonates, and incorporates changes made to the newest
INVOS System Model 5100C monitor. The 510(k) includes data from Somanetics'
neonatal piglet trials that show that placing the sensors over the abdomen and
flank provides important information from the bowels and kidney, respectively.
"We believe these applications and expanded claims will facilitate
adoption of the INVOS System in the neonatal and pediatric markets," Barrett
said.
Business Outlook
Somanetics reiterated its previously announced guidance for fiscal 2008:
-- Net revenues in the range of $46.2 million to $50.0 million, or 20 to
30 percent growth over 2007 revenues.
-- Operating margin in the range of 25 to 27 percent of sales and gross
margin in the range of 87 to 88 percent.
-- Income before income taxes in the range of $15.3 million to $17.5
million.
Somanetics' forecasts are based on market conditions and current
estimates, which reflect management's plan to increase investments in clinical
research, sales education and research and development projects to support the
expansion of its efforts with neonates, infants and children in the pediatric
and neonatal ICU markets. Somanetics undertakes no obligation to update its
estimates.
Somanetics to Host Conference Call
Somanetics will web cast its 2008 second quarter conference call at 10:00
a.m. (ET) today. To join the webcast, visit the Investor Center section of
Somanetics' website at www.somanetics.com and click on the "Second Quarter
2008 Conference Call" link. The call also will be archived on the website.
About Somanetics
Somanetics Corporation (Nasdaq: SMTS) develops, manufactures and markets
the INVOS(R) Cerebral/Somatic Oximeter, a non-invasive patient monitoring
system that continuously measures changes in the blood oxygen levels in the
brain and elsewhere in the body in patients with or at risk for restricted
blood flow. Surgeons, anesthesiologists and other medical professionals can
use the information provided by the INVOS System, in conjunction with other
available information, to identify oxygen imbalances in tissues beneath the
sensor and take necessary corrective action, potentially improving patient
outcomes and reducing the costs of care. Somanetics supports its customers
through a direct U.S. sales force and clinical education team. Covidien
markets INVOS System products in Europe, Canada, the Middle East and South
Africa and Edwards Lifesciences represents INVOS System products in Japan.
For more information visit www.somanetics.com .
Safe-Harbor Statement
Except for historical information contained herein, the matters discussed
in this news release, including financial guidance for fiscal year 2008, are
forward-looking statements, the accuracy of which is necessarily subject to
risks and uncertainties. Actual results may differ significantly from results
discussed in the forward-looking statements and may be affected by, among
other things, economic conditions in general and in the healthcare market, the
demand for and market acceptance of our products in existing market segments
and in new market segments we plan to pursue, our current dependence on the
INVOS System and disposable sensors, our dependence on distributors and
independent sales representative firms for a substantial portion of our sales,
our dependence on single-source suppliers, potential competition, the
effective management of our growth, our ability to attract and retain key
personnel, the potential for products liability claims, government regulation
of our business, changes in our deferred tax assets, future equity
compensation expenses, the challenges associated with developing new products
and obtaining and maintaining regulatory approvals if necessary, research and
development activities, the lengthy sales cycle for our products, sales
employee turnover, changes in our actual or estimated future taxable income,
changes in accounting rules, enforceability and the costs of enforcement of
our patents, potential infringements of others' patents and the other factors
set forth from time to time in Somanetics' Securities and Exchange Commission
filings, including its 2007 Annual Report on Form 10-K filed on February 6,
2008 and First Quarter Form 10-Q filed on April 2, 2008.
SOMANETICS CORPORATION
BALANCE SHEETS
May 31, November 30,
2008 2007
ASSETS (Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $43,835,916 $33,172,977
Marketable securities 7,992,244 18,978,074
Accounts receivable 7,896,049 7,486,571
Inventory 2,675,083 1,998,284
Prepaid expenses 285,212 560,885
Accrued interest receivable 117,708 551,117
Deferred tax asset - current 2,123,121 3,069,929
Total current assets 64,925,333 65,817,837
PROPERTY AND EQUIPMENT (at cost):
Demonstration and no capital cost sales
equipment at customers 3,602,353 3,386,287
Machinery and equipment 1,519,018 1,531,387
Furniture and fixtures 494,061 307,919
Leasehold improvements 197,450 196,700
Total 5,812,882 5,422,293
Less accumulated depreciation and
amortization (3,017,029) (2,931,596)
Net property and equipment 2,795,853 2,490,697
OTHER ASSETS:
Long-term investments 21,193,809 33,653,099
Deferred tax asset - non-current 1,807,586 3,004,755
Other 15,000 15,000
Intangible assets, net -- 3,097
Total other assets 23,016,395 36,675,951
TOTAL ASSETS $90,737,581 $104,984,485
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,279,471 $1,118,003
Accrued liabilities 1,280,684 1,701,481
Total current liabilities 2,560,155 2,819,484
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred shares; authorized, 1,000,000 shares
of $.01 par value; no shares issued or
outstanding -- --
Common shares; authorized, 20,000,000 shares
of $.01 par value; issued and outstanding,
12,436,424 shares at May 31, 2008, and
13,443,961 shares at November 30, 2007 124,364 134,440
Additional paid-in capital 101,021,202 119,079,383
Accumulated deficit (12,968,140) (17,048,822)
Total shareholders' equity 88,177,426 102,165,001
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $90,737,581 $104,984,485
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Six Months
Ended May 31, Ended May 31,
2008 2007 2008 2007
NET REVENUES $12,740,063 $9,122,178 $21,433,338 $17,147,050
COST OF SALES 1,679,256 1,047,117 2,696,081 2,048,840
Gross Margin 11,060,807 8,075,061 18,737,257 15,098,210
OPERATING EXPENSES:
Research, development
and engineering 231,901 164,421 562,337 277,787
Selling, general and
administrative 6,769,838 5,270,093 13,267,984 10,589,529
Total operating
expenses 7,001,739 5,434,514 13,830,321 10,867,316
OPERATING INCOME 4,059,068 2,640,547 4,906,936 4,230,894
OTHER INCOME:
Interest income 700,685 1,005,598 1,635,102 1,966,086
Total other income 700,685 1,005,598 1,635,102 1,966,086
INCOME BEFORE INCOME
TAXES 4,759,753 3,646,145 6,542,038 6,196,980
INCOME TAX EXPENSE (1,707,501) (1,239,689) (2,461,356) (2,106,973)
NET INCOME $3,052,252 $2,406,456 $4,080,682 $4,090,007
NET INCOME PER COMMON
SHARE - BASIC $0.23 $0.18 $0.31 $0.31
NET INCOME PER COMMON
SHARE - DILUTED $0.21 $0.17 $0.28 $0.28
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 13,145,234 13,171,881 13,297,128 13,168,088
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 14,220,477 14,575,237 14,380,547 14,601,768
SOURCE Somanetics Corporation
