Sonomax Hearing Healthcare Inc.

Sonomax Hearing Healthcare Inc.

August 15, 2008 11:15 ET

Summary of Sonomax's Conference Call Held on August 13th, 2008

MONTREAL, QUEBEC--(Marketwire - Aug. 15, 2008) - 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:


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.


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™ 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™ HPDs and the SonoPass™ 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™ 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.


A new version of the SonoPass™ 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.


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.


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™ 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™ 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
-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
-Entire team will be used to work with customers as required.
-Aearo/3M presented an aggressive roll out plan of the
SonoPass™ 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

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

6. Complete the commercialization of products.

-PTT Communications headset is now complete.

-SonoPlatform™ products now have new work instructions and
quality standards, in preparation for the ramp in sales from

-Version 3.2 of the SonoPass™ software is ready to be

-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™ 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™ 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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