Revenues Hit $75.7 Million in the Quarter, Up 10%
Year-to-Date Revenues Reach $219.5 Million, Up 18%
Conference Call Webcast Live Today at 1:30 pm Pacific/4:30 pm Eastern
BOTHELL, WA - October 25, 2011 - Sonosite, Inc. (Nasdaq:SONO), the world leader and specialist in bedside and point-of-care ultrasound, today reported financial results for the third quarter and nine months ended September 30, 2011.
Revenues for the third quarter of 2011 were $75.7 million, rising 10% in comparison to $68.5 million in the third quarter of 2010.
Revenues for the nine months of 2011 were $219.5 million, compared to $186.1 million in 2010, an increase of 18%.
Overall order booking rates increased 16% in the quarter.
Foreign exchange contributed to a 2.1% favorable impact on third quarter results and a 2.8% favorable impact on the first nine months of 2011.
EBITDAS, EBITDA and OPERATING INCOME (EBIT)
For the quarter, EBITDAS includes non-recurring severance charges of $1.3 million from SG&A cost restructuring. Operating expense run rate savings are projected at $6.0 million for 2012, positioning the company for improved operating margins while launching new products and driving marketing initiatives in 2012.
EBITDAS was $8.5 million, or 11% of revenue, a decrease of 12% over the third quarter of 2010. These results reflect a planned increase in marketing and new product development that the company projected during its first quarter of 2011 earnings call.
EBITDA was $6.4 million, 8% of revenue, and down 17%, and EBIT was $3.9 million, 5% of revenue, and down 24% compared to 2010, as planned.
EBITDAS was $23.6 million, or 11% of revenue, and a decrease of 2% over the prior year.
EBITDA was $17.6 million, 8% of revenue, and down 11%, and EBIT was $9.9 million, 4% of revenue, and down 29% compared to 2010.
EPS was $0.05 per share for the third quarter of 2011 versus $0.07 per share in 2010. For the nine months year-to-date, EPS was $0.04 per share versus $0.27 per share in the prior year, which was impacted by non-recurring severance charges of $1.5 million, and planned marketing and new product investments.
THIRD QUARTER AND YEAR-TO-DATE 2011 COMMENTARYTHIRD QUARTER AND YEAR-TO-DATE 2011 COMMENTARY
- Gross margins improved sequentially to 71.6% from 70.5% in the previous quarter of 2011.
- The third quarter was led by a strong revenue performance in North America, which grew 24% and increased by 19% for the nine months. This growth was driven from strong momentum in the company's core markets.
- Overall bookings grew 16% in the third quarter, resulting in a healthy backlog heading into the fourth quarter of 2011.
- International revenues increased by 1% in the quarter, and were level on a year-to-date basis. Economic conditions remain challenging in Europe. Australia also faced some late quarter revenue delays, due to a slowdown in healthcare spending.
- Revenues from the pre-clinical business, VisualSonics, Inc. (VSI), came in below expectations, decreasing by 6.0% in the third quarter.VSI sales in North America were up 52%, despite a lengthening in the National Institute of Health's (NIH) funding cycle. Sales were also impacted by a softer market in Europe and ongoing channel implementation internationally.
New Products and Marketing
The company introduced two new products from its strong pipeline:
- "The Edge," an improved hand-carried ultrasound system was introduced internationally and made its debut at the European Society of Regional Anesthesia conference in Dresden, Germany. International shipments are projected to begin in the fourth quarter of 2011, following CE marking, and US shipments will follow later in the quarter, or early 2012, pending 510(k) clearance.
- The BioZ® Cardio Profile, a new impedance cardiography tool, was first introduced, and well received, at the American Society of Anesthesiologists on October 15th. The BioZ product targets core hospital markets where there is a clinical need for hemodynamic monitoring during surgical procedures. The product is currently being shipped worldwide.
National Marketing Campaign
- The company kicked off a robust national marketing campaign that included its first national TV commercial to increase unaided physician and provider awareness. After four weeks of tracking data, metrics have shown an increase in web traffic, lead generation and sales opportunities.
Cost and Safety Advocacy
- Sonosite continued its "Cost and Safety Advocacy" with clinical executives, healthcare payers and policymakers by showcasing a strengthening database of clinical and economic evidence, clarifying the cost effectiveness, safety, and clinical value of point-of-care ultrasound. This data is proving to be meaningful as hospital decision makers prepare for the financial implications of new regulations such as Medicare's Value Based Purchasing, which focuses on cost reductions in the hospital.
This release includes discussions of EBITDA and EBITDAS; these are non-GAAP financial measures. Sonosite believes these measures are a useful complement to results provided in accordance with GAAP. "EBITDA" refers to operating income (EBIT) before depreciation and amortization. "EBITDAS" refers to operating income (EBIT) before depreciation, amortization and stock-based compensation.
Conference Call Information
Sonosite will hold a conference call on October 25th at 1:30 pm PT/4:30 pm ET. The call will be broadcast live and can be accessed via http://www.sonosite.com/company/investors. A replay of the audio webcast will be available beginning October 25th at 4:30 pm PT and will be available until November 8th at 9:59 pm PT by dialing (719) 457-0820 or toll-free (888) 203-1112. The confirmation code 7745091 is required to access the replay. The call will also be archived on Sonosite's website.
Sonosite, Inc. (www.sonosite.com) is the innovator and world leader in bedside and point-of-care ultrasound and an industry leader in ultra high-frequency micro-ultrasound technology and impedance cardiography equipment. Headquartered near Seattle, the company is represented by fourteen subsidiaries and a global distribution network in over 100 countries. Sonosite's small, lightweight systems are expanding the use of ultrasound across the clinical spectrum by cost-effectively bringing high-performance ultrasound to the point of patient care.
Forward-looking Information and the Private Litigation Reform Act of 1995
Certain statements in this press release are "forward-looking statements" for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to our future financial condition and results of operations and statements regarding planned product launches and the potential market opportunity for these products. These forward-looking statements are based on the opinpions and estimates of our management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expected or implied by the forward-looking statements. These statements are not guaranties of future performance, are based on potentially inaccurate assumptions and are subject to known and unknown risks and uncertainties, including, without limitation, the risk that we do not achieve the financial results that we expect, the risk we are unable to launch our new products as and when expected, the risk that our existing and new products do not achieve market success and the other factors contained in Item 1A. "Risk Factors" section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. We caution readers not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. We undertake no obligation to publicly revise any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.