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June 23, 2010
Share ThisSomanetics Corp. (SMTS) recently reported second quarter fiscal 2010 earnings per share (EPS) of 12 cents, in line with the Zacks Consensus Estimate. However, the result came in lower than last year's 14 cents. The company reported revenues of $13.9 million, an increase of 17% from the second quarter of fiscal 2009.
During the quarter, Somanetics earned 77% of its revenues from the domestic market. Robust performances in both domestic and international markets contributed to the top line growth of the company. Revenues from the US and international market were $10.7 million (up15%) and $3.2 million (up 28%), respectively.
Gross margin improved 200 basis points (bps) to 88% during the quarter. This was possible as cost of goods sold increased by only 4.5% compared to the year-ago period.
Despite an increase in revenues, net earnings during the reported quarter declined, driven by a 31.7% rise in operating expenses. While research development and engineering expenses increased 52% to $0.74 million; selling, general and administrative expenses increased 30.5% to $9.4 million.
Somanetics, a leader in cerebral and somatic oximetry, exited the second quarter with $34.8 million in cash and cash equivalents, up from $28.9 million at the end of fiscal 2009.
Somanetics’ acquisition by Covidien (COV) is still in process, subject to certain regulatory approvals. Earlier this month, Covidien announced its intention to acquire Somanetics for $25 per share or a total of $250 million, net of cash acquired. The transaction is expected to be completed by July 31, 2010.
Somanetics’ INVOS(R) (In-Vivo Optical Spectroscopy) Cerebral/Somatic Oximeter is a noninvasive patient monitor that continuously measures blood oxygen levels in the brain and in the body of patients who are at risk of restricted blood flow. The acquisition will enable Covidien to further diversify its portfolio.
Read the full analyst report on "SMTS"
Read the full analyst report on "COV"
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