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SOMANETICS ANNOUNCES THIRD-QUARTER RESULTS

 TROY, Mich., Sept. 21 /PRNewswire/ -- Somanetics Corporation (NASDAQ-NMS: SMTS) today reported net revenues of $1,016,859 for its third fiscal quarter ended Aug. 31, 1993. The results compare to net revenues of $570,781 for the second fiscal quarter of 1993, with no revenues reported for the third quarter of 1992. Raymond W. Gunn, executive vice president and chief financial officer, said the quarter's results were on target with Somanetics' sales plans, and included a 78-percent increase in revenue over the second quarter.
 The company reported a net loss of $753,529 for the third quarter ($.07 per Common Share). These results include changes in estimates of approximately $300,000 for incentive compensation and 401(k) contribution accruals which are not being funded. The third-quarter results compare to a net loss of $1,610,524 for the second quarter of 1993 ($.15 per Common Share) and a net loss of $1,045,055 ($.10 per Common Share) for the third quarter of 1992.
 Gunn noted that gross margins have improved from 43 percent to 50 percent from the second to the third quarter, as Somanetics spread its total fixed costs over increased unit and dollar sales, thereby achieving greater economies of scale. The company expects the direct and indirect costs of manufacturing to continue to decline as a percentage of sales.
 "One of our financial performance benchmarks is sales per full-time employee, which, at approximately $78,000 per employee on an annualized basis, surpassed our plans of about $66,000 per employee," said Gunn. He explained that sales per employee is a measurement of financial productivity and efficiencies. At the end of the quarter, Somanetics had 52 full-time employees. "A successful medical device company, from which we are benchmarking our operations, experienced annualized revenues in the range of $60,000 per employee upon the commercial launch of its first product," he said.
 Somanetics began commercial shipments of the INVOS 3100 Cerebral Oximeter in May 1993. The Cerebral Oximeter monitoring system is initially intended for use in the operating room, intensive care unit, post-anesthesia care unit and emergency room.
 "Somanetics is confident that the INVOS technology has broad-based clinical applications. We plan to support the INVOS 3100 Cerebral Oximeter, enhance its features and introduce a pediatric version of the 3100 monitor," Gunn said. He also noted that the company is currently conducting a feasibility study of a complementary product which should provide Somanetics with a stronger proprietary position in the area of critical care monitoring.
 Other results for the third quarter over the same period of 1992 included an increase in selling, general and administrative expenses, particularly expenses related to product promotion and distributor sales support. These expenses are expected to increase in the fourth quarter, during which Somanetics will participate in several major domestic and international medical trade shows, including the American Society of Anesthesiologists and the International Congress of Neurological Surgery. Other activities will include advertising in medical trade journals, increasing the company's international distribution network and publishing the results of ongoing clinical studies.
 Gunn said a significant portion of the company's sales is from export markets, including a large percentage to Japan. Somanetics currently has distributors covering the entire United States and 30 nations. The company's initial domestic target market is approximately 26,000 critical care sites. The international target market initially is approximately 39,000 critical care sites. Sales of the disposable SomaSensor are expected to comprise a larger percentage of the company's sales as the company increases its installed base of adult monitors in hospitals around the world.
 The INVOS 3100 Cerebral Oximeter monitoring system is the first commercial product that noninvasively, directly, and continuously measures the regional oxygen saturation of the blood in an adult's brain. Monitoring oxygen saturation levels is critical because the brain is the human organ least tolerant of oxygen deprivation. Without sufficient oxygen, brain cells die within minutes, possibly resulting in paralysis, disability, irreversible brain damage or death. The Cerebral Oximeter permits surgeons, anesthesiologists and other medical personnel to directly monitor oxygen saturation in the brain which helps them take early corrective action when required.
 Somanetics' Common Shares and Class B Warrants are traded on the NASDAQ National Market System under the symbols SMTS and SMTSZ, respectively.
 SOMANETICS CORPORATION
 (A development stage company)
 SELECTED INCOME STATEMENT DATA
 For the fiscal quarters and nine-month periods ended
 Aug. 31, 1993 and 1992
 (In thousands, except share and per-share data; unaudited)
 Three Months Nine Months
 Ended Aug. 31, Ended Aug. 31,
 1993 1992 1993 1992
 Total revenues $1,017 $0 $1,588 $50
 Gross margin 508 0 755 2
 Net (loss) (754) (1,045) (4,003) (3,283)
 Net (loss) per
 common share ($0.07) ($0.10) ($0.38) ($0.39)
 Weighted average
 number of common
 shares
 outstanding 10,901,468 10,302,764 10,583,304 8,375,407
 SOMANETICS CORPORATION
 (A development stage company)
 SELECTED BALANCE SHEET DATA
 Aug. 31, 1993 and Nov. 30, 1992
 (In thousands)
 Aug. 31, Nov. 30,
 1993 1992
 (Unaudited) (Audited)
 Total current assets $6,171 $9,531
 Total assets 7,090 10,310
 Total current liabilities 870 755
 Long-term debt and redeemable
 convertible preferred shares 65 80
 Shareholders' equity 6,155 9,475
 -0- 9/21/93
 /CONTACT: Mary Ann Robb, director of Corporate Communications of Somanetics, 313-689-3996/
 (SMTS)


CO: Somanetics Corporation ST: Michigan IN: MTC SU: ERN

JG-MS -- DE016 -- 4133 09/21/93 11:43 EDT
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Date:Sep 21, 1993
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