Sonus Corp. Acquires Nation's Largest Hearing Benefits Administrator

Business Wire, August 3, 1998

PORTLAND, Ore.--(BUSINESS WIRE)--August 3, 1998--

Company Launches Franchise Licensing Program in 36 States

Sonus Corp. (AMEX: SSN), the largest operator of audiology clinics in the United States and Canada, today announced the acquisitions of Paradigm Group Management Corporation and Hearing Plans Management Corporation, collectively doing business as Hear PO. Terms were not disclosed.

Hear PO is the nation's largest administrator of hearing care services for managed care and corporate health providers, organized labor unions, worker's compensation packages and self-insured benefits programs. This acquisition creates the first ever national audiology hearing health network providing multiple benefits to the approximately 1,000 Hear PO affiliates, 80 Sonus owned clinics and 388 managed care contracts. Management noted that Hear PO's 1,000 affiliates control an estimated $200 million annually of the $2 billion hearing care industry. Hear PO,which will operate as a wholly owned subsidiary of Sonus-USA, will retain its current management team, individual identity, proprietary database and affiliate confidentiality following the acquisition.

Brandon M. Dawson, President and Chief Executive Officer of Sonus, commented, "This acquisition is the perfect fit for Sonus and Hear PO. Our companies share the same patient-focused approach to audiology and better hearing. Together, we intend to create the first ever North American network of audiology centers that focuses on creating greater customer satisfaction and hearing health awareness - with integrated services and solutions - to meet the hearing health care needs of managed care organizations and their patients. We are delighted with this partnership and believe that it will improve the delivery of hearing care diagnostics and instruments in the managed care environment. In this regard, Sonus now services more managed care contracts than any other organization in the industry."

"Both organizations win with this agreement," said Hear PO President James A. Benson. "By joining Sonus we become part of the most impressive operator of hearing health care clinics in North America. We believe that this partnership will improve the delivery of hearing health in today's new medical environment and help audiologists respond to a definite, growing need as the Baby Boom generation ages and the rate of hearing loss increases. Together, Hear PO and Sonus have increased the capacity of the hearing health care industry to deliver both quality and affordable hearing health care services."

Sonus also announced that, in conjunction with the acquisition of Hear PO, it has launched its franchise licensing program - The Sonus Network - in 36 states. The Company expects that this program will become available in the remaining 14 states by the end of its fiscal 1999 first quarter ending October 31, 1998.

Participating audiology practices who join The Sonus Network receive the benefits of being part of a large, national organization while retaining their ability to meet local needs for high-quality, cost-competitive hearing health services.

Highlights of Hear PO and The Sonus Network are as follows:

-- Buying Group - All Hear PO members have been grandfathered into

the buying group, which provides audiologists with the highest quality hearing instruments at significant cost savings due to the purchasing power of Sonus. Given that Hear PO affiliates control an estimated $200 million of the market and with retail hearing instrument prices averaging $1,000, management anticipates the buying group to have a positive impact on Sonus' earnings.

-- Managed Care Access - Audiologists will have access to 388

managed care contracts. The number of Hear PO managed care sales representatives will be immediately increased, allowing Hear PO to pursue an even greater number of managed care opportunities.

-- Practice Management Training - All network members will have

access to specialized, advanced audiological training and placement service opportunities through the Sonus Greenhouse Training Program, a six-week, comprehensive course of study for audiologists that focuses on every facet of clinical audiology and private practice business management.

-- Marketing Services - Sonus will provide network members with

professional marketing services to enhance the local and regional image of each clinic, with a national advertising campaign in the near future.

-- Billing Centralization - Hear PO will perform all third party

billings for existing Sonus clinics. Sonus' centralized information management system coupled with Hear PO's expertise in the managed care industry will result in more efficient claims processing and quicker turnaround on third party payments. Sonus expects to realize an estimated annual cost savings of approximately $275,000.

-- Patient Convenience - Patients will now have access to the

largest integrated audiology hearing health network in the United States and Canada, with 1,080 locations.

Mr. Dawson commented, "This program will allow Sonus to accelerate its national expansion efforts without the constraints of a heavy regional management structure, while increasing our exposure to the thousands of independently owned, private practice audiology clinics throughout the United States. We believe the acquisition of Hear PO will favorably impact The Sonus Network by providing access to managed care contracts in addition to the wide range of other services that are available to licensed franchisees across the country."