Summary of Sonomax's Conference Call Held on August 13th, 2008
August 15 2008 - 11:15AM
Marketwired
Sonomax Hearing Healthcare Inc. (TSX VENTURE: SHH) is please to
provide a summary of the Progress Update Conference call held on
August 13, 2008.
The 5 "P's"
As outlined in the past, Sonomax constructs its strategy and
executes its path forward towards positive cash and profitability
based on the 5 "P" systems. The 5 "P's" represent: People,
Profitability, Products, Potential and Predictability. Based on
this system, please find our latest highlights as they pertain to
each "P" provided below:
People
The staffing levels have remained constant since the last
update; the company has not added, nor has it lost any employees.
The company has been refocused to pay a higher level of attention
to the top line. The revenues must increase as we move towards
profitability. This focus on sales is a top down driven initiative
and all employees are expected to make a contribution towards
increasing the sales of the company in an accelerated fashion. The
newly assembled inside sales team has been working pro-actively
with the licensees to provide them the support required to drive
more activities that will result in increased sales.
Profit
The second quarter results will show some progress as compared
to the first quarter of 2008. This follows the overall company plan
to turn the company around within a four to six quarter period and
to show improvements on a quarterly basis.
One of the major breakthroughs for the company occurred this
week when it received its first order to sell Soundcage products to
a software development company based in Montreal. This initial
order will be for over one hundred SonoCustom Hearing Protection
Devices and over fifty Soundcage earphones. This first order will
allow Sonomax to use this company as a reference and, hopefully,
become a springboard for other orders in this space. You may recall
from previous conference calls that this was a target area for the
Soundcage products; we are pleased that the first order has
materialized so quickly.
With regards to the Soundcage(TM) earphones, we are also having
discussion with a few interested parties that may take over the
responsibility for a geographic region. Should an agreement be
reached that is mutually beneficial, they will open free standing
kiosks in high traffic retail areas.
On the industrial side, things continue to progress with
SonoCustom(TM) HPDs and the SonoPass(TM) proof of concept testing
software. Installations at many Fortune 500 companies are
progressing well. The international licensees have also been
challenged to sell the Soundcage(TM) products into available
channels within their regions.
Operating expenses have been reduced with more improvement
expected in the third quarter of 2008, when severance payments from
our right sizing are completed. Cash management is being tightly
controlled through new policies and controls that are in place and
working well.
The third quarter is always challenging in Europe due to the
vacation period however the inside sales team is working hard with
the international licensees to make up for any lost time either
before or after the vacation period.
Products
A new version of the SonoPass(TM) software will be launched
before the end of the quarter. The new 3.2 version has been beta
tested with excellent results and feedback. It is more user-
friendly and should accelerate the adoption process within the
customer base.
The Push to Talk (PTT) Communications earpiece has been improved
over the past 45 days and is now being beta tested in Denmark and
the UK. So far to date, the feedback is positive. The product is
now ready for a full commercial launch and all marketing collateral
has been prepared.
Potential
Over the past 45 days the inside sales team has worked hard to
assist the international licensees in the preparation of their
individual business plans. Each licensee has prepared and submitted
a business plan that will be reviewed at least quarterly. This will
allow the company to target the right customers, market segments,
specific applications and focus on the easiest customers to
penetrate.
The business plans will also provide the company with a rolling
forecast that will be used to establish a more robust supply
chain.
Predictability
As the licensees provide more data and in greater detail, the
company will be much better at predicting future results. This is
still an area of development for the company that will be closely
scrutinized to ensure quarter to quarter improvement.
Additional Highlights
-Channel inventory continues to be reduced
-A first order has been received from VitaSound for the
SonoPlatform(TM) product. This is the product VitaSound will use to
assemble a finished hearing aid. Their strategy is to sell high
quality, affordable hearing aids through the large pharmacy chains
in the United States. This first order will be delivered to
VitaSound by the end of the quarter.
-MSA in South America has placed their first order for the
SonoCustom(TM) HPDs and is now introducing the product to their
wide customer base.
-A 3 year Sonomax business plan has been prepared and will be
used as the basis to drive the company to profitability. The plan
is a dynamic document that will be modified and enhanced as the
external environment changes and the company progresses.
A Review of the Company's Objectives for the next 12 months
1. Get to positive cash, breakeven and then profitability
-Overall company focuses on the top line.
-International licensees have all submitted business plans.
-Cash burn has decreased due to internal controls and right
sizing.
-Purchasing has been centralized to realize cost reductions.
2. Quarter to quarter sales improvement and margin improvement
-First VitaSound order received
-Costs of all products now being benchmarked so that improvement
targets can be set.
-Licensee business plans allow for specific customers to be
targeted and actions established with relentless follow up.
3. Build a sales organization and channel strategy
-Inside sales team in place and using newly developed sales
processes.
-Entire team will be used to work with customers as required.
-Aearo/3M presented an aggressive roll out plan of the
SonoPass(TM) software in many Asian and European countries.
4. Implement key metrics
-Each functional manager has 90 day objectives that are reviewed
regularly. Each objective has an associated metric as
applicable.
5. Improve communications to employees, channel partners,
suppliers, customers, board members and shareholders.
-Over the last 45 days an improved level of communication took
place with all licensees to ensure the focus on revenues is
consistent.
6. Complete the commercialization of products.
-PTT Communications headset is now complete.
-SonoPlatform(TM) products now have new work instructions and
quality standards, in preparation for the ramp in sales from
VitaSound.
-Version 3.2 of the SonoPass(TM) software is ready to be
launched.
-Easier fit/implementation techniques have been developed and
should be commercialized by the end of the year.
7. Determine what new investments in a sales structure will be
needed to achieve objectives.
-A large part of the 3 year business plan has been allocated to
this topic
-Sales processes and resources will continue to be added in order
to drive profitable sales.
Over the next 30 days the company has a few critical items that
require flawless execution. They are: 1) Finalize the path forward
with Aearo/3M globally; 2) Ensure the first software development
customer is a resounding success and 3) Ensure the launch of
version 3.2 of the SonoPass(TM) software is seamless.
The Company is focused, has a plan, and will execute
consistently.
About Sonomax
Sonomax Hearing Healthcare Inc. is a leader in the development
and manufacturing of intra-ear technologies. The company's patented
custom-fit, instant-fit expansion earpieces deliver a perfect
acoustic seal every time and can be certified by SonoPass�, the
company's proprietary, computer generated proof-of-performance
software. Building on its technology leadership in hearing
protection, Sonomax has expanded the applications for its
technologies into high growth consumer products such as MP3 audio,
multi-media and gaming earphones and custom earpieces for other
applications such as Bluetooth(TM) cellular headsets and hearing
aids.
This news release contains certain forward-looking statements
that reflect the current views and/or expectations of Sonomax
Hearing Healthcare Inc. with respect to its performance, business
and future events. Such statements are subject to a number of
risks, uncertainties and assumptions. Actual results and events may
vary significantly.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Sonomax Hearing Healthcare Inc. Nick Laperle President
514-932-3745 nlaperle@sonomax.com
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