Management Projects Revenue Growth of 10-12% for the Full Year 2010 Conference Call Webcast Live Today at 1:30 pm Pacific/4:30 pm Eastern
BOTHELL, WA – April 26, 2010 – Sonosite, Inc. (Nasdaq:SONO), the world leader and specialist in hand-carried ultrasound for the point-of-care, today reported financial results for the first quarter ended March 31, 2010.
REVENUE
Revenues in the first quarter of 2010 were $56 million, an increase of 8% compared to the first quarter of 2009. Revenues from the recently acquired CardioDynamics (CDIC) were $3.2 million for the quarter. Revenues were up 2%, excluding CDIC, and included a 4% currency gain. "We saw some encouraging signs of improvement in our US hospital channel with year-over-year revenue growth of 12% and order booking rates that increased at a much faster rate," said Kevin M. Goodwin, Sonosite President and CEO. "With stable pricing, we delivered solid progress on EBIT with growth of 68% alongside an increase in EPS of 60%. We also experienced broadening success globally as 20 of 25 revenue regions achieved or exceeded forecast."
Mr. Goodwin continued, "As planned, our US enterprise channel had decreased revenues of 59% for the quarter. We expect this will improve during the remainder of the year. The Company’s new primary care division (formerly CardioDynamics) had a sequential decline in revenues for ICG systems, due to ongoing channel restructuring. We saw encouraging signs for long-term ultrasound sales growth following two quarters of market development."
"We were not completely satisfied with expense control during the quarter, as overall operating expenses came in $500k higher than planned. Thus, we are tightening our focus on expense management for the remainder of the year as we strive to deliver operating margins of 11-13% for the year, commensurate with our revenue performance."
EBIT and EBITDAS
First quarter EBIT was $2.7 million, an increase of 68% compared to the first quarter of 2009. First quarter EBITDAS was $5.4 million, an increase of 4% compared to the first quarter of 2009; year-over-year EBITDAS comparisons were negatively affected by changes in stock compensation.
NET INCOME
For the first quarter of 2010, the Company recorded net income of $1.4 million or $0.08 per share, compared to $0.9 million or $0.05 per share in 2009.
COMMENTARY
"We exited the quarter with encouraging signs from our US hospital channel on both revenue performance and booking rates," said Mr. Goodwin. "We believe we will see improvement in our international business. We have updated our revenue outlook for the year and now expect growth between 10 – 12%. We are also reaffirming our EBIT margin targets of 11-13%."
Mr. Goodwin continued, "During the quarter, we finalized two strategic steps. The first was with Carticept Medical, Inc., a developer of innovative products for the treatment of musculoskeletal injuries, located in Atlanta, Georgia. The second alliance was an exclusive agreement with Physio-Control, Inc., a wholly-owned subsidiary of Medtronic, Inc., which is the world leader in cardiac monitors and external defibrillation for emergency medical services (EMS), based in Redmond, Washington. This is part of our long-term growth strategy to expand our footprint into the emerging segments of musculoskeletal medicine and EMS."
2010 FINANCIAL OUTLOOK
The company is updating guidance (at current exchange rates):
This release includes a discussion of "EBITDAS" which is a non-GAAP financial measure. Sonosite believes this measure is a useful complement to results provided in accordance with GAAP. "EBITDAS" refers to operating income (EBIT) before depreciation, amortization and stock-based compensation.
Conference Call Information
Sonosite will hold a conference call on April 26 at 1:30 pm PT/4:30 pm ET. The call will be broadcast live and can be accessed via www.sonosite.com/company/investors. A replay of the audio webcast will be available beginning April 26, 2010, 5:30 pm PT and will be available until May 10, 2010, 9:59 pm PT by dialing (719) 457-0820 or toll-free (888) 203-1112. The confirmation code 4670785 is required to access the replay. The call will also be archived on Sonosite’s website.
About Sonosite
Sonosite, Inc. (www.sonosite.com) is the innovator and world leader in hand-carried ultrasound and industry leader in impedance cardiography equipment. Headquartered near Seattle, the company is represented by ten 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 relating to our future financial position and operating results are "forward-looking statements" for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the opinions 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 the acquisition of CardioDynamics will not yield the expected potential benefits, our ability to manufacture, market and sell our newest products, our ability to manage expenses, spending patterns in the hospital market, healthcare reform, prolonged adverse conditions in the U.S. or world economies or Sonosite’s industry 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. Download selected financial information (PDF)
BOTHELL, WA – April 26, 2010 – Sonosite, Inc. (Nasdaq:SONO), the world leader and specialist in hand-carried ultrasound for the point-of-care, today reported financial results for the first quarter ended March 31, 2010.
REVENUE
Revenues in the first quarter of 2010 were $56 million, an increase of 8% compared to the first quarter of 2009. Revenues from the recently acquired CardioDynamics (CDIC) were $3.2 million for the quarter. Revenues were up 2%, excluding CDIC, and included a 4% currency gain. "We saw some encouraging signs of improvement in our US hospital channel with year-over-year revenue growth of 12% and order booking rates that increased at a much faster rate," said Kevin M. Goodwin, Sonosite President and CEO. "With stable pricing, we delivered solid progress on EBIT with growth of 68% alongside an increase in EPS of 60%. We also experienced broadening success globally as 20 of 25 revenue regions achieved or exceeded forecast."
Mr. Goodwin continued, "As planned, our US enterprise channel had decreased revenues of 59% for the quarter. We expect this will improve during the remainder of the year. The Company’s new primary care division (formerly CardioDynamics) had a sequential decline in revenues for ICG systems, due to ongoing channel restructuring. We saw encouraging signs for long-term ultrasound sales growth following two quarters of market development."
"We were not completely satisfied with expense control during the quarter, as overall operating expenses came in $500k higher than planned. Thus, we are tightening our focus on expense management for the remainder of the year as we strive to deliver operating margins of 11-13% for the year, commensurate with our revenue performance."
EBIT and EBITDAS
First quarter EBIT was $2.7 million, an increase of 68% compared to the first quarter of 2009. First quarter EBITDAS was $5.4 million, an increase of 4% compared to the first quarter of 2009; year-over-year EBITDAS comparisons were negatively affected by changes in stock compensation.
NET INCOME
For the first quarter of 2010, the Company recorded net income of $1.4 million or $0.08 per share, compared to $0.9 million or $0.05 per share in 2009.
COMMENTARY
"We exited the quarter with encouraging signs from our US hospital channel on both revenue performance and booking rates," said Mr. Goodwin. "We believe we will see improvement in our international business. We have updated our revenue outlook for the year and now expect growth between 10 – 12%. We are also reaffirming our EBIT margin targets of 11-13%."
Mr. Goodwin continued, "During the quarter, we finalized two strategic steps. The first was with Carticept Medical, Inc., a developer of innovative products for the treatment of musculoskeletal injuries, located in Atlanta, Georgia. The second alliance was an exclusive agreement with Physio-Control, Inc., a wholly-owned subsidiary of Medtronic, Inc., which is the world leader in cardiac monitors and external defibrillation for emergency medical services (EMS), based in Redmond, Washington. This is part of our long-term growth strategy to expand our footprint into the emerging segments of musculoskeletal medicine and EMS."
2010 FINANCIAL OUTLOOK
The company is updating guidance (at current exchange rates):
- revenue growth of 10 – 12%;
- stable gross margins of approximately 70%;
- reaffirmed EBIT margins of 11 – 13%;
- EBITDAS margins of 16 – 18%, and
- full-year effective tax rate of 30%.
This release includes a discussion of "EBITDAS" which is a non-GAAP financial measure. Sonosite believes this measure is a useful complement to results provided in accordance with GAAP. "EBITDAS" refers to operating income (EBIT) before depreciation, amortization and stock-based compensation.
Conference Call Information
Sonosite will hold a conference call on April 26 at 1:30 pm PT/4:30 pm ET. The call will be broadcast live and can be accessed via www.sonosite.com/company/investors. A replay of the audio webcast will be available beginning April 26, 2010, 5:30 pm PT and will be available until May 10, 2010, 9:59 pm PT by dialing (719) 457-0820 or toll-free (888) 203-1112. The confirmation code 4670785 is required to access the replay. The call will also be archived on Sonosite’s website.
About Sonosite
Sonosite, Inc. (www.sonosite.com) is the innovator and world leader in hand-carried ultrasound and industry leader in impedance cardiography equipment. Headquartered near Seattle, the company is represented by ten 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 relating to our future financial position and operating results are "forward-looking statements" for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the opinions 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 the acquisition of CardioDynamics will not yield the expected potential benefits, our ability to manufacture, market and sell our newest products, our ability to manage expenses, spending patterns in the hospital market, healthcare reform, prolonged adverse conditions in the U.S. or world economies or Sonosite’s industry 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. Download selected financial information (PDF)