Sonomax Hearing Healthcare Inc.

Sonomax Hearing Healthcare Inc.

July 02, 2008 11:32 ET

Highlights From Sonomax's Annual General Meeting and June Monthly Update Conference Call

MONTREAL, QUEBEC--(Marketwire - July 2, 2008) - Sonomax Hearing Healthcare Inc. (TSX VENTURE:SHH) is please to provide a summary of the highlights of the AGM held on June 26, 2008 and the Monthly Update Conference Call held on June 27, 2008.


There were over 100 attendees at this year's AGM that lasted two hours and thirty minutes: Here are some of the most salient points:

Sonomax introduced the framework of managing the business using the 5 Ps model. The 5 Ps are: People, Profitability, Products, Potential and Predictability. The Company will continue to develop and enhance its business plan using this framework.

Dan Casey, Sonomax' CEO provided the following insight pertaining to each "P" and where the company is today:

People - The Sonomax team is a group of focused, dedicated and persevering people that are embracing the change the company is currently undergoing.

Profitability - The Company has not been there yet but has a detailed plan in place to show improvements on a quarter to quarter basis. It is anticipated that the company will get to positive cash and breakeven sometime in the first half of 2009. The Company is preparing a business plan with the long term objective to reach a $25 Million sales target in 2011.

Products - Sonomax has four products that are the main focus for 2008 and 2009. They are:

1) Hearing Protection Devices (HPD) - SonoCustom™ - this product is mature and of the highest quality and best of class. It is showing quarter to quarter growth and penetrating new customers every month

2) Proof of Performance Software - SonoPass™ - the only objective testing software to measure the attenuation level of any HPD. Sonomax's strong IP position provides the company with a significant competitive edge and as this product is embraced by more and more companies it will become an important revenue stream

3) MP3 Earphones sold under the brand Soundcage™ - the Soundcage™ products have great potential and the balance of the year will be used to finalize the channel strategy for these products and

4) Push To Talk - the communication headset used for two way radios that allows wearers to talk and listen through the earpiece. The product is being test marketed in Europe and we are confident that it will be another winning product for Sonomax.

Potential - During the May 28, 2008 conference call the potential of each product line was explained. The Company is playing in areas of great potential with very little market share. The upside is significant.

Predictability - This P has not been strength in the past and will improve as the Company obtains the necessary data to improve its decision making and create a more efficient supply chain. Great progress has been made so far. It is expected that by the end of Q3-08 the sales forecasting element will be a tool that can used to plan production, optimize inventory turns and increase the company's working capital.

An update pertaining too many of the actions that have taken place since the beginning of the year was provided. Some of those highlights are:

- Channel inventory has been reduced by 50%;

- Finished Goods inventory will be reduced by 50% by early part of next year;

- The Company has reduced expenses and consequently the cash burn is down by about 50%;

- The sales to Vitasound will start in late Q3-08 as they start successfully penetrating the hearing aid market;

- The sales team is being built, sales process are being developed and being implemented. This is one of the key elements of the success of Sonomax going forward;

- Overall company and department objectives are in place and tracked regularly. This is an essential management process to ensure that the company executes in a timely fashion;

It was repeatedly stressed that the company clearly understands its number one priority is to get to positive cash then breakeven and then profit.

The Company will make progress in Q2-08 over Q1-08 and it is working diligently to achieve its objective of quarter to quarter improvements. The second half of the year will be better than the first half.

The company is growing with its licensee network in Europe and Australia and is struggling in North America. MSA in South America has finally received the CA certifications for Brazil and is ready to start selling. The company is optimistic that it should see some reasonable progress by the end of the year.

Overall, the organization must execute on the following items over the short term:

1. A focused organization on the top line;

2. Consistent and conservative cash management;

3. Aggressive pursuit of any areas related to margin improvement and cost reduction;

4. A rapid and significant improvement in the sales situation in North America;

5. The proper level of funding for the next 6 quarters;

The summary of the material presented ended with an explanation as to why the Sonomax team is very confident. The reasons are: a) New management team that has a proven rack record in sales, operations, supply chain and the execution of objectives within a business plan, which will be complementary to the founders' vision and success in developing best in class products; b) Organization changes and processes are now in place and working well; c) The company has great products., They are unique with strong IP protection and limited competition and d) A plan is in place, there will be focused execution and the organization will hold itself accountable on a daily basis.

In addition to the above items, Bruce Jones the new Sonomax VP of Sales and Marketing presented a summary of his sales strategy and processes for the organization.


The company is excited by its potential in growing market segments and will execute to the plan in place. It is focused on the top line and will make Sonomax a great company. As previously mentioned it will take time. The company thanks all the shareholders for their patience and continued support.

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™ 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

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