Company Announces Acquisition of ICU Data Systems, Inc.

    TROY, Mich., Jan. 21 /PRNewswire-FirstCall/ --
    Fourth Quarter Highlights
    -- Record net revenues of $13.7 million, up 21 percent.
    -- Record income before income taxes of $5.1 million, up 14 percent.
    -- Net income of $3.3 million, up 19 percent; $0.25 per diluted share.
    Fiscal 2008 Highlights
    -- Record net revenues of $47.5 million, up 23 percent.
    -- Record income before income taxes of $16.4 million, up 10 percent.
    -- Record net income of $10.4 million, up 8 percent; $0.76 per diluted
       share.
    -- Gross margin 87 percent for fiscal 2008 and the fourth quarter.
    -- Launched its INVOS Cerebral/Somatic Oximeter in the neonatal intensive
       care unit.  Combined pediatric and neonatal sensor revenue was $10.9
       million in 2008, up 52 percent.
    -- Expanded labeling for the INVOS System to allow its use to monitor
       changes in oxygen saturation in 'any tissue' beneath the sensor.  In
       the neonatal patient, customers are placing sensors over various vital
       organs, such as the brain, kidneys and bowel.
    -- Acquired ICU Data Systems, Inc. of Gainesville, Fla., a company
       developing a technology to integrate data from bedside devices into a
       single display for comparison, data management and data storage.

Somanetics Corporation (Nasdaq: SMTS) today reported financial results for the fourth fiscal quarter and year ended November 30, 2008.

'We achieved our fifth consecutive year of strong growth in revenue and income before income taxes in 2008, reflecting continued market adoption of our INVOS System,' said Bruce Barrett, Somanetics' president and CEO. 'The more compelling results in 2008 were strategic achievements that create major new opportunities for our business. Our entry into the neonatal ICU and expansion of our labeling more than double the size of our addressable market for the INVOS System. Inclusion of cerebral oximetry in the STS Database puts us on a course that can result in practice standards that establish the technology as standard of care in adult cardiac surgeries. And, the acquisition of ICU Data Systems provides us an additional means to advance and differentiate our INVOS product offering as well as a new product with significant revenue potential.'

'We are accelerating investments to capitalize on these new opportunities in the neonatal ICU and with the ICU Data Systems technology,' said Barrett. 'However, we expect the economic downturn to limit capital spending and slow adoption of new technologies, constraining revenue growth in the near term.'

Fourth Quarter Results

Net revenues for the fourth quarter of 2008 increased 21 percent to a record $13.7 million from $11.3 million in the same period of 2007. U.S. net revenues increased 16 percent to $11.0 million from $9.5 million in the same period of 2007. International net revenues increased 51 percent to $2.7 million compared to $1.8 million in the fourth quarter of 2007.

Gross margin was 87 percent compared to 88 percent in the fourth quarter of 2007.

Fourth quarter income before income taxes was a record $5.1 million, compared to $4.5 million in the fourth quarter of 2007. Net income in the fourth quarter of fiscal 2008 was $3.3 million, or $0.25 per diluted share.

Fiscal Year 2008 Results

Fiscal year 2008 net revenues increased 23 percent to a record $47.5 million from $38.6 million a year ago. U.S. net revenues increased 21 percent to $38.0 million and international net revenues increased 34 percent to $9.4 million.

Gross margin was 87 percent, compared to 88 percent in 2007. Income before income taxes increased to a record $16.4 million from $14.9 million in 2007 and net income was a record $10.4 million, or $0.76 per diluted share. Somanetics recognized income taxes at an estimated effective tax rate of 36 percent for 2008.

Somanetics ended fiscal 2008 with cash, marketable securities and long- term investments of $70.0 million and no borrowings.

Somanetics Acquires ICU Data Systems, Inc.

In November 2008, Somanetics acquired substantially all of the assets of Gainesville, Fla.-based ICU Data Systems, Inc., a technology development company, for approximately $2 million in cash plus the assumption of minimal specified liabilities.

ICU Data Systems has developed a patented technology that integrates data from a broad array of hospital bedside devices, such as physiological monitors, ventilators and infusion devices, into a single bedside display for comparison, data management and storage. The patent underlying the technology was licensed from the University of Florida College of Medicine and Engineering and expires in 2023.

The data integration technology offers Somanetics' customers several benefits, including the ability to easily customize the presentation of data from various bedside devices for comparison on the same display and on the same timeline. Once data from various devices are integrated, customers can also customize the calculation and display of derived parameters, or calculated parameters based on the combination of two or more discrete parameters.

In addition, customers can create user-defined, automated event marks and alerts. All resulting information can be stored for inclusion in the patient record and clinical research.

Somanetics plans to further develop and launch its newly-acquired data integration technology as a stand-alone device in mid-2009. The INVOS System is one of many devices whose data can be integrated into the stand-alone device. To support the addition of the derived parameter features to the system, the Company will pursue a new FDA 510(k) clearance in 2009. In addition, the Company will invest to combine the ICU Data Systems and INVOS System technologies in a single product for launch in the second half of 2010.

'There is an important unmet clinical need in the acute care setting for a more intelligent approach to data integration, presentation and management to support clinical decision making and research,' Barrett said.