TROY, Mich., June 18 /PRNewswire-FirstCall/ -- Somanetics Corporation 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 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.
CONTACT: Mary Ann Victor, Vice President and Chief Administrative Officer,
+1-248-689-3050, ext. 5803, or Bill Iacona, Chief Financial Officer,
+1-248-689-3050, ext. 5819, +1-248-689-4272 fax
Web site: http://www.somanetics.com/
