Revenues Increase 33.6 Percent Worldwide and Gross Margins Rise for the Ninth Consecutive Quarter to 62.9 Percent
BOTHELL, WA, April 30, 2003 - Sonosite, Inc. (Nasdaq: SONO), the leader in point-of-care ultrasound, today released financial results for the first quarter ended March 31, 2003. In comparison to the first quarter of 2002, Sonosite reported a solid increase in revenues and increasing gross margins. Along with these financial results, in early April the Company launched its newest product, the TITAN high-resolution modular ultrasound system.
For the quarter, Sonosite reported revenues of $17.2 million compared to $12.8 million for the first quarter of 2002, an increase of 33.6 percent. Sonosite reported a net loss of $2.6 million, or $0.18 per share, for the quarter. This compared to a net loss of $3.7 million, or $0.32 per share for the comparable quarter in the prior year.
Gross margins increased for the ninth consecutive quarter to 62.9 percent, compared to 58.0 percent in the first quarter of 2002, and 60.3 percent in the fourth quarter of 2002. Gross margins rose as a result of a stronger mix from direct sales and advanced product configurations. As of March 31, 2003, cash, cash equivalents and investment securities totaled $64.9 million.
Compared to the first quarter of 2002, U.S. revenues rose 50 percent with revenue per sales representative increasing 90 percent. In Europe, continued development of our markets resulted in a 63 percent increase in revenues over the same period a year ago. In the JPLAC region (Japan, Asia, Latin America, Australia and Canada), revenues were down 29 percent compared to the comparable quarter in the prior year due to a decrease in Japan. Excluding Japan, JPLAC revenues were up 19 percent on a quarterly comparison basis. Our Japanese revenues were minimal as a result of the ongoing reconfiguration of our Olympus partnership and their sales force. We believe this reconfiguration will result in stronger sales in the long term, with improved revenue in the second half of 2003. The revenue mix was 57 percent domestic and 43 percent international.
'We are pleased with our overall business results in a quarter affected by the normal seasonality in U.S. hospital purchasing and an expected decline in our revenue from Japan,' said Kevin M. Goodwin, president and CEO. 'We met our financial objectives in addition to focusing the entire Company on launching the TITAN system, which is based upon a new generation proprietary ultrasound platform called Maximum Modular Imaging. We believe this new product can improve quality and efficiency in patient care in a variety of clinical environments.
"In summary, we now have three streams of business," Goodwin continued. "The first is serving our core markets with modular high-resolution ultrasound for new point-of-care users. The second is competing in the mid-range of the annual $3 billion ultrasound market" with our new imaging platform. The third is creating and serving new visual procedures markets, such as vascular access, primarily with our iLook product line."
Today, Sonosite's management team will host a conference call at 1:30 p.m. PDT to discuss first quarter results. To listen to the call live, dial 913-981-5517 or toll-free 800-289-0468. The call also will be broadcast live via the "Investors" section of Sonosite's website (www.sonosite.com).
"For the second quarter, we expect revenue of $21 million to $23 million," Goodwin said. "Margins are expected to be approximately 63 percent. Central to our efforts in the second quarter will be our continued focus on logistics and execution. We anticipate shipping our new TITAN product in the latter part of June. Our TITAN shipments could be up to 50 percent of our Q2 revenues. For the full year, we continue to expect revenue in the range of $90 million to $110 million, and expect to be profitable for the full year with earnings of $0.30 per share to $0.40 per share."
Sonosite, Inc. (www.sonosite.com) is the innovator and world leader in hand-carried ultrasound, with an installed base of more than 20,000 systems. The Company, headquartered near Seattle, Washington is represented by eight subsidiaries and a global distribution netwok in over 75 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. The Company employs approximately 450 people worldwide.