usa growth going great, europe and asia to follow.gross margain improves from 52% to 56%.
SomnoMed USA subsidiary achieves fourth quarter profitability Strong ongoing growth in unit sales 28 July 2008, Sydney: SomnoMed Limited (ASX: SOM) announced today that its wholly owned US subsidiary SomnoMed Inc., performed above expectations and generated an profit of A$198,000 (unaudited EBITDA) in the fourth quarter of the last financial year ending June 2008.
The US profits are the result of continued strong growth in sales. SomnoMed Inc. is responsible for the marketing and sales of the SomnoDent MAS in North America. Over 1,500 units were sold in the June 2008 quarter, 140 percent more than in the same quarter a year ago. US revenues reached A$874,000 which allowed the US subsidiary to achieve profitability. This comes after the March 2008 quarter showed good growth in the US operation but still recorded an unaudited loss of A$40,000 for the three months period.
SomnoMed CEO Ralf Barschow said, “This is a milestone event for our US subsidiary. The excellent performance of our US operation in the last quarter is consistent with the build up we have seen over the last 12 months. SomnoDent sales are constantly gaining momentum in the most important market in the world.”
“We expect continued growth in the foreseeable future as our SomnoDent MAS will be increasingly recognized as the gold standard for MAS - the patient friendly alternative to a CPAP mask in the treatment of sleep apnea and snoring,” said Mr Barschow.
Global sales in the June quarter (including US) amounted to 2,323 units, 114 percent more than the 1,088 units sold in the same quarter in 2007. Total global revenues were A$1.27 million for the three months ending June 2008, 88 percent higher than in the comparable period last year. Unit sales in the June 2008 quarter were also 28 percent higher than in the March 2008 quarter,indicating strong ongoing growth.
For the June 2008 quarter, the highest volume growth, year on year, was achieved in the North America region with 140 percent. The Australia-Pacific region recorded an increase of 36 percent,year on year. Europe contributed eight percent to the total number of SomnoDent units sold globally in the June 2008 quarter.
In the previous year, operations in Europe had not yet commenced.SomnoMed achieved a gross margin of 56 percent in the June 2008 quarter, compared to 52 percent in the March 2008 quarter. Despite higher selling costs, licensing expenses and corporate overheads, the operating cash burn improved further in the June quarter and reduced to a total of A$361,000, from an operating cash burn of A$605,000 in the March 2008 quarter. At 30 June 2008, SomnoMed Limited had cash reserves of A$ 5.43 million.
“North America is expected to contribute increasing profits in the 2009 financial year. At the same time, we will continue to invest in other regions of the world. We intend to build a strong basis for our European and Asian operation. Market presence and dominance are essential components in our global strategy, which will cement SomnoMed’s position as the leading company in dental sleep medicine in the world. It took over two years for our US operation to reach profitability. We are confident that Europe, where we commenced operations in November 2007, will be able to build on what we have achieved in the last 12 months and become profitable in a shorter period of time,” said Mr Barschow.
The medical term for your lower jaw is ‘mandible’ and an oral appliance worn over the teeth is a ‘splint’, hence the name SomnoDent™ Mandibular Advancement Splint, or SomnoDent™ MAS.
The SomnoDent™ MAS consists of two acrylic plates fitted over the upper and low teeth. A patented fin coupling mechanism on the lower arch accurately positions the lower jaw (mandible) a little forward of its natural position. This positioning tightens the soft tissue at the back of the throat to stop it from collapsing – the cause of snoring (partial collapse) and sleep apnoea (full collapse). SomnoDent™ MAS allows the normal opening and closing of the mouth, allowing the user to yawn, speak and drink. The device will last 5 years and comes with a warranty .
The SomnoDent™ MAS is provided to patients through an integrated clinical protocol, involving dentists, primary care practitioners and sleep physicians. This pathway ensures that all patients are appropriately diagnosed and that only suitable patients are fitted with the device.
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