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Somanetics Reports Financial Results for the Third Quarter of Fiscal 2008

Wednesday, September 17, 2008 General News J E 4
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Somanetics Corporation (Nasdaq: SMTS) today reported net revenues of $12.4million for the third quarter ended August 31, 2008, a 22 percent increasefrom $10.2 million in the same period of 2007. For the nine months endedAugust 31, 2008, net revenues increased 24 percent to $33.8 million from $27.3million in the same period last year.

U.S. net revenues increased 22 percent to $9.4 million from $7.7 millionin the third quarter of fiscal 2007. International net revenues increased 20percent to $3.0 million from $2.5 million. For the nine-month period, U.S.net revenues increased 23 percent to $27.1 million and international revenuesincreased 28 percent to $6.7 million.

Third quarter operating income increased 29 percent to $4.2 million,compared with $3.2 million in the third quarter of fiscal 2007. Third quarterincome before income taxes increased to $4.7 million from $4.2 million. Netincome increased to $3.0 million, or $0.23 per diluted share, from $2.8million, or $0.19 per diluted share.

For the nine months ended August 31, 2008, operating income increased 22percent to $9.1 million from $7.5 million in the comparable period of fiscal2007. Income before income taxes increased to $11.3 million from $10.4million. Net income was $7.1 million for the nine-month period, or $0.51 perdiluted share, compared with $6.9 million, or $0.47 per diluted share in thesame period of 2007.

Gross margin was 86 percent in the third quarter of fiscal 2008, comparedwith 87 percent in the fiscal 2007 third quarter, and was 87 percent for thenine-month period of 2008, compared with 88 percent for the same period in2007. Somanetics exited the quarter with cash, marketable securities andlong-term investments of $66.2 million and no borrowings.

During 2008 Somanetics implemented a stock repurchase program thatauthorized the repurchase of up to $45 million of its common shares. To dateSomanetics has purchased 1,805,129 shares at an average purchase price of$17.42 per share for approximately $31.4 million, including commissions.

"Our financial results for the third quarter were strong," said Bruce J.Barrett, Somanetics' president and Chief Executive Officer. "We continue toexecute our launch into the neonatal ICU with our new cerebral and somaticsensors and we are ahead of our expectations for this market at this earlystage."

Pediatric and Neonatal ICU Market Update

Somanetics continued its launch of the OxyAlert NIRSensor for infants andneonates during the third quarter and to date 55 U.S. hospitals are using thesensors in pediatric and neonatal ICUs. In late September, Somanetics willparticipate in the 24th annual conference of the National Association ofNeonatal Nurses - Navigating Neonatal Care: A Safe Passage Home.

Sales and Marketing Activities

During the fourth quarter, Somanetics will participate in approximately 20medical conferences, including the 2008 annual meeting of the American Societyof Anesthesiologists, and various regional and state cardiothoracic,perfusion, and anesthesia and pediatric cardiology association meetings.

Somanetics' forecasts are based on market conditions and currentestimates, which reflect management's plan to increase investments in clinicalresearch, sales education and research and development projects to support theexpansion of its efforts in the pediatric and neonatal ICU markets.Somanetics undertakes no obligation to update its estimates.

Somanetics to Host Conference Call

Somanetics will webcast its 2008 third quarter conference call at 10:00a.m. (ET) today. To join the webcast, visit the Investor Center section ofSomanetics' website at www.somanetics.com and click on the "Third Quarter 2008Conference Call" link. The call also will be archived on the website.

About Somanetics

Somanetics Corporation (Nasdaq: SMTS) de
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