Attached files
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| 8-K - SOMANETICS CORP | v188681_8k.htm |
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NEWS
RELEASE
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2600
Troy Center Drive
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· Troy,
MI 48084
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CONTACT: Mary
Ann Victor,
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Phone: (248)
244-1400
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· Fax: (248)
244-0978
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Vice
President and Chief Administrative Officer
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| www.somanetics.com |
(248)
244-1409
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Bill
Iacona, Chief Financial Officer,
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(248)
244-1423
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FOR
IMMEDIATE RELEASE
SOMANETICS REPORTS SECOND QUARTER 2010
RESULTS
TROY, Mich. – June 21, 2010 —
Somanetics Corporation (Nasdaq: SMTS) today reported net revenues of $13.9
million for the second quarter ended May 31, 2010, a 17 percent increase from
$11.8 million in the same period of 2009. For the six months ended
May 31, 2010, net revenues increased 18 percent to $27.0 million from $23.0
million in the same period last year.
U.S. net
revenues increased 15 percent to $10.7 million in the second quarter of 2010
from $9.3 million in the same period last year. International net
revenues increased 28 percent to $3.2 million from $2.5 million. For the
six-month period, U.S. and international revenues increased 17 and 20 percent,
respectively, to $21.1 million and $5.9 million from $18.1 million and $4.9
million.
Second-quarter
income before income taxes was $2.4 million, compared with $2.9 million for the
second quarter of 2009. Net income was $1.5 million, or $0.12 per
diluted share, compared with net income of $1.8 million, or $0.14 per diluted
share, in the second quarter of 2009.
For the
six-month period ended May 31, 2010, income before income taxes improved to $5.5
million from $5.0 million for the same period last year. Net income increased 15
percent to $3.6 million from $3.1 million for the comparable period in
2009.
Gross
margin was 88 percent in the second quarter, compared with 86 percent in the
second quarter of 2009. For the six months ended May 31, 2010, gross
margin was 87 percent, compared with 86 percent in the same period of
2009.
Cash,
marketable securities and long-term investments at May 31, 2010 totaled $80.1
million, with no borrowings.
Cancellation
of Second-Quarter Conference Call
On June
16, 2010, Covidien plc and Somanetics announced the signing of a definitive
merger agreement under which Covidien will acquire all of the outstanding shares
of Somanetics Corporation for $25.00 per share in cash, for a total of $250
million, net of cash acquired. In light of this announcement, Somanetics has
canceled its second-quarter 2010 financial results conference call, which had
been scheduled to take place on June 23, 2010.
SOMANETICS
ANNOUNCES SECOND QUARTER RESULTS
The
acquisition, which will take the form of an all-cash tender offer by a
wholly-owned subsidiary of Covidien, followed by a second-step merger, is
subject to customary closing conditions, including receipt of certain regulatory
approvals, and is expected to be completed by July 31, 2010. Once the
transaction has been completed, Covidien will report the Somanetics business as
part of its Oximetry and Monitoring product line in the Medical Devices business
segment.
About
Somanetics
Somanetics
Corporation develops, manufactures and markets the INVOS® Cerebral/Somatic
Oximeter. The INVOS System is the only commercially-available cerebral/somatic
oximeter with labeling for improved outcomes after surgery in patients above 2.5
kg. The INVOS System is the clinical reference standard in cerebral/somatic
oximetry, with a 12-year market track record, more than 750 clinical references
and implementation at approximately 800 U.S. hospitals. Somanetics also
develops, manufactures and markets the Vital Sync™ System, a device that
integrates data from bedside devices into a single system for enhanced patient
assessment and decision making, data management and data storage. 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 http://www.somanetics.com/.
FORWARD-LOOKING
STATEMENTS
This
release contains forward-looking statements that are not historical facts.
Covidien and Somanetics have identified some of these forward-looking statements
with words like “believe,” “may,” “could,” “would,” “might,” “possible,” “will,”
“should,” “expect,” “intend,” “plan,” “anticipate,” or “continue,” the negative
of these words, other terms of similar meaning or the use of future dates.
Forward-looking statements in this release include without limitation statements
regarding the expected timing of the completion of the transaction and
statements regarding the effect of the transaction on Covidien’s business, and
statements regarding future innovation and market growth. Investors and security
holders are cautioned not to place undue reliance on these forward-looking
statements. Actual results could differ materially from those
currently anticipated due to a number of risks and
uncertainties. Risks and uncertainties that could cause results to
differ from expectations include: uncertainties as to the timing of
the transaction; uncertainties as to how many of Somanetics’ stockholders will
tender their shares in the offer; the risk that competing offers will be made;
the possibility that various closing conditions for the transaction may not be
satisfied or waived, including that a governmental entity may prohibit, delay or
refuse to grant approval for the consummation of the transaction; the effects of
disruption from the transaction making it more difficult to maintain
relationships with employees, customers, vendors and other business partners;
the risk that shareholder litigation in connection with the transaction may
result in significant costs of defense, indemnification and liability; other
business effects, including the effects of industry, economic or political
conditions outside of Covidien’s and Somanetics’ control; transaction costs;
actual or contingent liabilities; and other risks and uncertainties discussed in
Covidien’s and Somanetics’ filings with the U.S. Securities and Exchange
Commission, including the “Risk Factors” sections of Covidien’s and Somanetics’
most recent annual report on Form 10-K and subsequent quarterly reports on Form
10-Q, as well as the tender offer documents to be filed by Covidien DE Corp., a
wholly-owned subsidiary of Covidien, and the Solicitation/Recommendation
Statement to be filed by Somanetics. Neither Covidien nor Somanetics
undertakes any obligation to update any forward-looking statements as a result
of new information, future developments or otherwise, except as expressly
required by law. All forward-looking statements in this announcement
are qualified in their entirety by this cautionary statement.
SOMANETICS
ANNOUNCES SECOND QUARTER RESULTS
IMPORTANT
INFORMATION ABOUT THE TENDER OFFER
This
release is neither an offer to purchase nor a solicitation of an offer to sell
any securities of Somanetics Corporation. Covidien DE Corp. (”Purchaser”), an
indirect, wholly-owned subsidiary of Covidien, has not commenced the tender
offer for the Somanetics common shares described in this release.
Upon
commencement of the tender offer, Purchaser will file with the SEC a tender
offer statement on Schedule TO and related exhibits, including the offer to
purchase, letter of transmittal, and other related
documents. Following commencement of the tender offer, Somanetics
will file with the SEC a tender offer solicitation/recommendation statement on
Schedule 14D-9. These documents will contain important information
about Covidien, Somanetics, the transaction and other related
matters. Investors and security holders are urged to read each of
these documents carefully when they are available.
Investors
and security holders will be able to obtain free copies of the tender offer
statement, the tender offer solicitation/recommendation statement and other
documents filed with the SEC by Purchaser and Somanetics through the web site
maintained by the SEC at www.sec.gov. In
addition, investors and security holders will be able to obtain free copies of
these documents by contacting:
Covidien
Investor
Relations
508-452-4650
investor.relations@covidien.com
or
Somanetics
Corporation
Investor
Relations
248-244-1409
irrequests@somanetics.com
SOMANETICS
ANNOUNCES SECOND QUARTER RESULTS
SOMANETICS
CORPORATION
BALANCE
SHEETS
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May 31,
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November 30,
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|||||||
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2010
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2009
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(Unaudited)
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(Audited)
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ASSETS
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CURRENT
ASSETS:
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Cash
and cash equivalents
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$ | 34,795,802 | $ | 28,964,273 | ||||
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Marketable
securities
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8,749,471 | 24,763,854 | ||||||
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Accounts
receivable
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8,140,310 | 8,878,942 | ||||||
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Inventory
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3,270,486 | 3,622,531 | ||||||
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Prepaid
expenses
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413,644 | 1,087,450 | ||||||
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Accrued
interest receivable
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50,598 | 138,099 | ||||||
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Deferred
tax asset - current
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51,060 | 51,060 | ||||||
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Total
current assets
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55,471,371 | 67,506,209 | ||||||
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PROPERTY
AND EQUIPMENT (at cost):
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Demonstration
and no capital cost sales equipment at customers
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4,475,463 | 4,285,163 | ||||||
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Machinery
and equipment
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2,157,316 | 1,886,582 | ||||||
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Furniture
and fixtures
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1,055,489 | 545,796 | ||||||
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Leasehold
improvements
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468,877 | 197,450 | ||||||
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Total
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8,157,145 | 6,914,991 | ||||||
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Less
accumulated depreciation and amortization
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(3,931,415 | ) | (3,966,645 | ) | ||||
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Net
property and equipment
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4,225,730 | 2,948,346 | ||||||
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OTHER
ASSETS:
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Long-term
investments
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36,535,755 | 26,004,995 | ||||||
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Deferred
tax asset – non-current
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3,091,381 | 2,795,963 | ||||||
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Intangible
assets, net
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227,845 | 234,003 | ||||||
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Goodwill
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1,783,712 | 1,783,712 | ||||||
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Other
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15,000 | 15,000 | ||||||
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Total
other assets
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41,653,693 | 30,833,673 | ||||||
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TOTAL
ASSETS
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$ | 101,350,794 | $ | 101,288,228 | ||||
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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CURRENT
LIABILITIES:
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Accounts
payable
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$ | 1,228,344 | $ | 1,466,497 | ||||
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Accrued
liabilities
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1,833,547 | 1,788,552 | ||||||
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Total
current liabilities
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3,061,891 | 3,255,049 | ||||||
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OTHER
LIABILITIES:
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Deferred
rent
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106,705 | - | ||||||
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Total
other liabilities
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106,705 | - | ||||||
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TOTAL
LIABILITIES
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3,168,596 | 3,255,049 | ||||||
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COMMITMENTS
AND CONTINGENCIES
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SHAREHOLDERS'
EQUITY:
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Preferred
shares; authorized, 1,000,000 shares of $.01 par value;
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||||||||
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no
shares issued or outstanding
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- | - | ||||||
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Common
shares; authorized, 20,000,000 shares of $.01 par value;
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issued
and outstanding, 11,953,384 shares at May 31, 2010,
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and
12,104,462 shares at November 30, 2009
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119,534 | 121,045 | ||||||
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Additional
paid-in capital
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94,294,835 | 97,696,229 | ||||||
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Retained
earnings
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3,767,829 | 215,905 | ||||||
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Total
shareholders' equity
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98,182,198 | 98,033,179 | ||||||
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TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
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$ | 101,350,794 | $ | 101,288,228 | ||||
SOMANETICS
ANNOUNCES SECOND QUARTER RESULTS
SOMANETICS
CORPORATION
STATEMENTS
OF OPERATIONS
(Unaudited)
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Three Months
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Six Months
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|||||||||||||||
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Ended May 31,
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Ended May 31,
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2010
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2009
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2010
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2009
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NET
REVENUES
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$ | 13,884,777 | $ | 11,831,560 | $ | 27,024,461 | $ | 22,986,914 | ||||||||
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COST
OF SALES
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1,676,771 | 1,603,755 | 3,422,225 | 3,184,236 | ||||||||||||
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Gross
Margin
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12,208,006 | 10,227,805 | 23,602,236 | 19,802,678 | ||||||||||||
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OPERATING
EXPENSES:
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Research,
development and engineering
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738,600 | 485,780 | 1,351,754 | 919,742 | ||||||||||||
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Selling,
general and administrative
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9,405,910 | 7,184,010 | 17,382,185 | 14,487,908 | ||||||||||||
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Total
operating expenses
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10,144,510 | 7,669,790 | 18,733,939 | 15,407,650 | ||||||||||||
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OPERATING
INCOME
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2,063,496 | 2,558,015 | 4,868,297 | 4,395,028 | ||||||||||||
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OTHER
INCOME:
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Interest
income
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356,421 | 328,836 | 608,889 | 600,221 | ||||||||||||
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Total
other income
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356,421 | 328,836 | 608,889 | 600,221 | ||||||||||||
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INCOME
BEFORE INCOME TAXES
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2,419,917 | 2,886,851 | 5,477,186 | 4,995,249 | ||||||||||||
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INCOME
TAX EXPENSE
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(914,219 | ) | (1,109,286 | ) | (1,925,262 | ) | (1,915,505 | ) | ||||||||
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NET
INCOME
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$ | 1,505,698 | $ | 1,777,565 | $ | 3,551,924 | $ | 3,079,744 | ||||||||
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NET
INCOME PER COMMON SHARE - BASIC
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$ | 0.13 | $ | 0.15 | $ | 0.30 | $ | 0.26 | ||||||||
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NET
INCOME PER COMMON SHARE - DILUTED
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$ | 0.12 | $ | 0.14 | $ | 0.28 | $ | 0.24 | ||||||||
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WEIGHTED
AVERAGE SHARES OUTSTANDING - BASIC
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11,943,665 | 12,056,844 | 11,985,978 | 12,047,707 | ||||||||||||
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WEIGHTED
AVERAGE SHARES OUTSTANDING - DILUTED
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12,890,899 | 12,923,857 | 12,889,541 | 12,923,141 | ||||||||||||