Sonic Innovations Announces Results for Fourth Quarter and Full...( Record Annual Net ...),Health

Record Annual Net Sales and Net Income

SALT LAKE CITY, Feb. 5 /PRNewswire-FirstCall/ -- Sonic Innovations, Inc. (Nasdaq: SNCI), a leading producer of advanced digital hearing aids, today announced results for the fourth quarter 2007. Net sales for the fourth quarter 2007 of $32.3 million were up 12.4% over the $28.7 million for the fourth quarter of 2006. Net sales for the year 2007 of $122.5 million improved 16.1% over the $105.5 million for the year 2006. The auditory testing equipment division was sold in February 2007 and has been reflected as a discontinued operation.

North American sales of $46.7 million in 2007 increased 11.9% from $41.8 million in 2006. European sales of $50.5 million in 2007 increased 21.1% from $41.7 million in 2006. Rest-of-world sales of $25.2 million in 2007 were up 14.7% from $22.0 million in 2006. North American sales of $11.4 million in the fourth quarter 2007 increased 5.8% from $10.8 million in the fourth quarter of 2006. European sales of $13.6 million in the fourth quarter 2007 increased 11.6% from $12.1 million in the fourth quarter 2006. Rest-of-world sales of $7.3 million in the fourth quarter 2007 were up 26.4% from $5.8 million in the fourth quarter 2006.

Gross profit was $77.3 million in 2007, up 26.9%, from 2006. Gross margin in 2007 of 63.1% increased from the 2006 level of 57.7%. Gross profit was $20.8 million in the fourth quarter 2007, up 20.2%, from the same period in 2006. Gross margin of 64.5% in the fourth quarter 2007, a record for the company, was up from the fourth quarter of 2006 level of 60.3%. The increase in gross margin was a result of cost reductions in manufacturing, distribution activities, lower warranty costs, reduced returns and foreign c
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