Sonus Corp. Announces Improved Profit In Second Quarter

Revenues Increase Substantially and Record Profit and EBITDA Achieved

Portland, OR -- Sonus Corp. (AMEX: SSN), the largest audiology-based retailer of hearing instruments in North America with 723 company-owned and franchised hearing centers, today announced financial results for its fiscal second quarter and six months ended January 31, 2001.
Revenues for the three months ended January 31, 2001 increased 19% to $12,370,000 from $10,387,000 in the same period last year. For the six months ended January 31, 2001, revenues increased 27% to $25,932,000 from $20,489,000 for the six months ended January 31, 2000. Increased revenues were due primarily to more than tripling the number of franchised locations from 177 as of January 31, 2000 to 554 as of January 31, 2001 in the Company's franchise program, The Sonus Network. Increased revenues were also due to the continued growth of HearPO, the largest provider of managed hearing benefits in the United States, with over 57 million covered lives, an increase of 28 million lives since January 2000.

Net income for the fiscal 2001 second quarter improved by $1,249,000 to $728,000, or $0.06 per fully diluted outstanding share, versus a net loss of $521,000, or $0.09 per fully diluted outstanding share, for the second quarter of fiscal 2000. For the six months ended January 31, 2001, the Company reported net income of $832,000, or $0.07 per fully diluted outstanding share, versus a net loss of $1,144,000, or $0.19 per fully diluted outstanding share for the first half of fiscal 2000. Fiscal 2001 second quarter results included income of $554,000, or $0.05 per fully diluted outstanding share, related to a previously announced settlement with Starkey Laboratories, Inc. and other defendants for misappropriation of a customer list owned by Sonus. The second quarter of fiscal 2001 was the fourth consecutive quarter in which Sonus produced net income (excluding aged receivable charges that were incurred in the fourth quarter of fiscal 2000).

Similarly, EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended January 31, 2001 improved by $1,050,000 to $1,247,000 from EBITDA of $197,000 for the same period last year. Sonus reported a $2,068,000 improvement in EBITDA for the six months ended January 31, 2001 to EBITDA of $2,424,000 compared to EBITDA of $356,000 for the first half of fiscal 2000. This marks the sixth consecutive quarter in which Sonus has reported positive and sequentially improved EBITDA before any one-time charges or gains.

Brandon M. Dawson, Chairman and Chief Executive Officer of Sonus, commented, 'We are pleased with the strength of our earnings as we continue to aggressively deal with various system conversion and related collection issues that have been noted previously. We are also extremely pleased with the rapid growth of our franchise program, which has more than offset same store sales decreases at company-owned hearing centers for the three and six month periods ended January 31, 2001, as compared to the same periods in the prior fiscal year. We are working diligently on our company-owned hearing centers but understand that the continued growth of The Sonus Network and HearPO will have an impact on our ability to grow same-store sales in key markets. The transition of Sonus from purely a consolidator of hearing centers to a more comprehensive solution for our clients and our franchisees is progressing well. In just two years, Sonus has increased its franchised hearing care centers from 33 to 619. The Sonus Network is one of the fastest growing franchise systems in the U.S. and has allowed the Company to increase our market share and grow without the additional expense inherent in opening company-owned clinics.'

The following chart illustrates the Company's consecutive quarterly improvement in operating results that Sonus' balanced business plan has produced:



Sonus Corp. is the largest audiology-based retailer of hearing instruments in North America. Sonus' 723 company-owned and franchised hearing centers provide a full range of products and services to hearing impaired patients. The Company's vision is to become the premier network of hearing centers in North America. Sonus' strategy involves the consolidation of the industry through acquisition and licensing of quality hearing centers. To learn more about the Company, visit the Sonus website at www.sonus.com.

This news release contains forward looking statements which may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Sonus Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors with respect to Sonus Corp. include economic trends in Sonus Corp.'s market areas, the ability of Sonus Corp. to manage its growth and integrate new acquisitions into its network of hearing care clinics, the development of new or improved medical or surgical treatments for hearing loss or of technological advancements in hearing instruments, changes in the application or interpretation of applicable governmental laws and regulations, the ability of Sonus Corp. to complete additional acquisitions of hearing care clinics on terms favorable to Sonus Corp., the degree of consolidation in the hearing care industry, Sonus Corp.'s success in attracting and retaining qualified audiologists and staff to operate its hearing clinics, the ability of Sonus Corp. to attract audiology clinics as franchise licensees under the Sonus Network, product and professional liability claims brought against Sonus Corp. that exceed its insurance coverage, Sonus Corp.'s ability to collect accounts receivable in a timely manner, and the availability of and costs associated with potential sources of financing. Sonus Corp. disclaims any obligation to update any such factors or to publicly announce the results of any revision to the forward looking statements contained herein to reflect future events or developments.