Somanetics Achieves Its First Quarter of Net Income in the Fourth Quarter of 2001.

Business Editors & Health/Medical Writers

TROY, Mich.--(BW HealthWire)--Jan. 22, 2002

Somanetics Corporation (Nasdaq:SMTS) reported net income of $50,495, or $0.01 per common share, for the fourth quarter ended November 30, 2001, its first quarter of net income in its history. The fourth quarter results compare to a net loss of $818,087, or $0.12 per common share, for the same period a year ago. For the fiscal year ended November 30, 2001, Somanetics reported a net loss of $2,330,911, or $0.31 per common share, as compared to a net loss of $3,622,087, or $0.57 per common share, in fiscal 2000.

Somanetics reported record net revenues of $1,845,806 for the fourth quarter ended November 30, 2001, a 13 percent increase over net revenues of $1,629,009 for the same period in 2000. For the fiscal year ended November 30, 2001, Somanetics reported record net revenues of $5,655,532, an 11 percent increase over fiscal 2000 net revenues of $5,103,098.

Somanetics manufactures and markets the INVOS(R) Cerebral Oximeter system, the only noninvasive and continuous monitor of changes in regional oxygen saturation of a patient's blood in the brain commercially available in the U.S. Use of the patient monitoring system helps medical professionals, such as surgeons and anesthesiologists, identify regional brain blood oxygen imbalances and take corrective action. Such action can prevent or reduce neurological injuries related to adverse events during surgery or in the critical care unit and reduce the associated cost of care. Somanetics has also developed the CorRestore(TM) System for use in cardiac repair and reconstruction, including a procedure called Surgical Ventricular Restoration, or SVR, a treatment for patients with certain types of congestive heart failure.

On November 27, 2001, the Company announced its receipt of U.S. Food and Drug Administration clearance to market the CorRestore System in the U.S.

"We started the year with goals of progressing the INVOS Cerebral Oximeter business toward profitability and securing FDA clearance to market the CorRestore System," said Bruce Barrett, Somanetics' president and CEO. "We accomplished both. Our goals for fiscal 2002 are to continue to grow revenues and become more profitable in our INVOS Cerebral Oximeter business while launching the recently FDA-cleared CorRestore System."

On January 18, 2002, Somanetics announced that the CorRestore System was used for the first time in an SVR procedure, with excellent results. The initial marketing launch of the CorRestore System is planned to begin at the end of January at the Society of Thoracic Surgeons annual meeting in Ft. Lauderdale, Fla., with shipments expected to begin in February.

Somanetics expects to break-even for fiscal 2002, with some losses incurred in the first half of the year associated with the launch of the CorRestore System, offset by profits in the second half of fiscal 2002. Somanetics forecasts that its INVOS Cerebral Oximeter business will produce a profit of approximately $1 million on a 20 to 25 percent increase in revenue. Due to the investments required to launch the CorRestore System, and given the uncertainties associated with forecasting a new business, Somanetics forecasts that its CorRestore System business will incur a loss of approximately $1 million on revenue of approximately $3 million. Somanetics expects that cash flows used in operations will be less than $1 million in fiscal 2002.

"We believe our progress in the INVOS Cerebral Oximeter business will be driven by the results of clinical research presented during 2001 and the results we expect to be presented," said Barrett.

In May, clinicians from Weill Medical College at Cornell University presented research results showing that length of intensive care unit and total hospital stay were reduced in cardiac surgery patients when medical interventions were made based on information obtained from use of the INVOS Cerebral Oximeter. Also in May, clinicians from Hackensack University presented research results showing that neurological injuries, renal failure and length of stay were reduced in cardiac surgery patients when interventions were made based on cerebral oximetry readings. These results were followed in October by new research from the Weill Medical College at Cornell University showing that stroke and coma were reduced in cardiac surgery patients when interventions were made based on use of the INVOS Cerebral Oximeter.

On January 16, 2002, Somanetics announced that it completed a public offering of 1,000,000 newly-issued common shares at a price of $4.25 per share, for gross proceeds of $4,250,000 and estimated net proceeds of approximately $3,725,000.

"We believe we will make substantive progress in 2002," said Barrett. "With a healthy INVOS Cerebral Oximeter business, the launch of our second product platform, the CorRestore System, and sufficient financial resources to execute our business plans, we are excited about our future."

(Tables to follow)

                        SOMANETICS CORPORATION

                    SELECTED INCOME STATEMENT DATA
            For the Years Ended November 30, 2001 and 2000
            (In thousands except share and per share data)

                                      2001                   2000
                                      ----                   ----
Total revenues                       $5,656                 $5,103
Gross margin                          3,561                  2,733
Net loss                             (2,331)                (3,622)
Net loss per common share -
 basic and diluted                   $(0.31)                $(0.57)
Weighted average number of
 Common Shares outstanding        7,605,865              6,310,109



                      SELECTED BALANCE SHEET DATA
                      November 30, 2001 and 2000
                            (In thousands)

                                       2001                   2000
                                       ----                   ----
Working capital                      $1,724                 $1,393
Total assets                          3,587                  3,659
Total liabilities                       575                    776
Shareholders' equity                 $3,013                 $2,883

Except for historical information contained herein, the matters discussed in this news release 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. Actual results may be affected by, among other things, economic conditions in general and in the healthcare market, new product development cycles, research and development activities, regulatory approvals of new products, the demand for and market for our products in domestic and international markets, introduction of competitive products by others, third party reimbursement, physician training, and other factors set forth from time to time in Somanetics' Securities and Exchange Commission filings, including Somanetics' Registration Statement on Form S-1 (file no. 333-74788) effective January 11, 2002.