Worldwide Revenues Reach $16.6 Million, Loss Narrows to $0.20 Per Share, Launch of Next-Generation iLook Products Planned for Third Quarter
BOTHELL, WA, July 23, 2002 - Sonosite, Inc. (Nasdaq: SONO) today released financial results for the quarter ended June 30, 2002. For the quarter, Sonosite, which specializes in hand-carried ultrasonic medical devices, reported worldwide revenues of $16.6 million compared to $10.3 million for the second quarter of 2001, an increase of 61 percent. Sequentially, revenues rose 29 percent, and year-to-date, revenues are up 60 percent over the first half of last year. Sonosite reported a net loss of $2.5 million, or $0.20 per share, for the quarter compared to a net loss of $5.0 million, or $0.52 per share, for the comparable quarter in the prior year.
Gross margins increased for the sixth consecutive quarter to 58.2 percent, compared to 48.2 percent in the second quarter of 2001. As of June 30, 2002, cash and cash equivalents totaled $71.7 million. Worldwide, Sonosite's revenues increased in each region. Compared to the same quarter in 2001, revenues rose 79 percent in the U.S., 52 percent in Europe and 33 percent in the JPLAC region (Japan, Asia Pacific, Latin America, Australia and Canada). "I am pleased to report another quarter of solid progress for Sonosite," said Kevin M. Goodwin, Sonosite president and CEO.
"The second quarter was highlighted by 79 percent growth in revenue by the U.S. sales organization. During the quarter we also introduced a new vascular surgery transducer, the HST, as well as received the FDA's clearance of our new iLook platform, our next generation product. We're continuing to build our business with integrated moves in sales, marketing and product development." "Sonosite is creating a movement in visualization in medicine," continued Goodwin.
"Our products put the power of visualization into the hands of physicians. The iLook platform which will launch late in the third quarter weighs three pounds, offers a touch screen interface and will enable substantial gains in patient care efficiency, quality and safety.1 The iLook platform is the closest realization thus far to a visual stethoscope."
Highlights from the Quarter Included:
- The trend toward multiple system purchases of the Sonosite 180PLUS system continued - In March, a major west coast hospital placed a nine-system order. The institution now has 20 systems in use across the hospital.
- SonoHeart ELITE showed strong sales growth - Launched earlier this year, the SonoHeart ELITE system demonstrated impressive sales gains compared to SonoHeart sales in the first half of last year. The product is a significant clinical development because it enables cardiologists to perform full echocardiography exams anytime, anywhere.
- Sonosite introduced the Hockey Stick Transducer (HST) for vascular surgery - The HST lets surgeons evaluate the quality of blood vessel repairs, and enables the surgeon to correct post-operative problems (leaks, blockages, etc.) immediately. These immediate, on-the-spot repairs are easier, less costly and less traumatic for the patient.
- Sonosite received FDA clearance for the iLook platform - The two versions of the iLook platform offer a potential $250 million market for Sonosite over the next five years based on internal estimates. The product line will be marketed and sold by Sonosite's existing sales force and targeted at hospitals.
- Aurora Healthcare agreement signed - Sonosite completed a two-year sole-source agreement with Aurora Healthcare, Wisconsin's largest not-for-profit health care system.
- Sonosite completed follow-on public offering - On May 21, 2002, Sonosite completed a follow-on equity offering of 2.7 million shares, which netted approximately $43 million. The offering increased the number of shares outstanding to approximately 14 million. The capital will be used to support the growth of Sonosite.
"In the third quarter, we expect to continue the sales momentum of our existing products, launch our iLook platform worldwide, and capitalize on our European sales momentum by continuing to expand our sales and marketing presence in those key markets," Goodwin said.
"As a result, we expect to continue our year-over-year quarterly growth rates of approximately 50 percent with revenue expectations for the third quarter of $17.5 million to $19.0 million. Margins are expected to approach 59 percent in third quarter. Our operating expenses will be in the range of $13.5 million to $14 million including the launch of the iLook line as well as the acceleration of direct operations in Europe. As a result, we anticipate the loss in Q3 will range from $0.16 to $0.22 per share."
"Sonosite is on track to be profitable in the fourth quarter," Goodwin continued. "We expect revenues of between $25 million to $27 million. Gross margins are anticipated to approach 60 percent. Expenses in the fourth quarter will be approximately $15 million, and we estimate earnings in the range of $0.01 to $0.05 per share. In the second half we expect to generate operating losses of $1.2 million to $3.2 million versus a $6.2 million loss in the first half of this year," Goodwin concluded.
About Sonosite 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.