SonoSite Announces Fourth Quarter and Full Year 2000 Results.Business Editors BOTHELL, Wash.--(BUSINESS WIRE)--Feb. 7, 2001 Company Finishes Year with $32 Million in Revenues, U.S. Direct Sales Show Strong Increase for the Second Consecutive Quarter SonoSite, Inc. (Nasdaq:SONO) today released financial results for the fourth quarter and year ended December 31, 2000. For the quarter and year ended December 31, 2000, SonoSite reported product revenues of $6.7 million and $32.0 million, respectively. For the year ended December 31, 1999, SonoSite reported product revenues of $10.2 million. SonoSite began product shipments in September 1999. SonoSite reported a net loss of $8.2 million, or $0.86 per share, for the quarter, and a net loss of $19.0 million for the year, or $2.01 per share. This net loss compares to a net loss of $21.6 million, or $3.08 per share, for the year ended December 31, 1999. Gross margin was 35 percent for the fourth quarter, a decline of nine percent from the third quarter due to one-time charges. These charges relate to the internalization Internalization A decision by a brokerage to fill an order with the firm's own inventory of stock. Notes: When a brokerage receives an order they have numerous choices as to how it should be filled. of manufacturing and inventory allowances recorded during the fourth quarter. For the year ended December 31, 2000, gross margins were 42 percent compared to 36 percent for the prior year. Cash and investments as of December 31, 2000, totaled $29.3 million. "The year 2000 was a great learning experience for us," said Kevin M. Goodwin, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of SonoSite, Inc. "The success and momentum of our U.S. sales force - with this group accounting for 60 percent of our revenues in Q4 and 50 percent sequential unit growth from the previous quarter - we confirmed that direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. works. Based on continued strong indications of demand we will intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our U.S. market focus and expand our sales organization. In Europe, we are planning to phase in direct selling focusing initially in the U.K., France and Germany." Recent highlights include: --The Company signed three national account agreements naming SonoSite as a preferred supplier: - Novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party , the country's largest healthcare supply cost management company; - AmeriNet, the country's largest membership-based healthcare group purchasing organization A group purchasing organization is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are funded by administrative fees that are actually paid by the vendors. ; and - Kaiser Permanente Kaiser Permanente is an integrated managed care organization, based in Oakland, California, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield. , the nation's largest not-for-profit healthcare organization. In a contract estimated at a minimum of $1.0 million sales per year for SonoSite, the two-year agreement gives SonoSite preferred supplier status for the 35 medical centers and 423 medical offices within the Kaiser Permanente network. The contract includes an optional two-year renewal. --The Company ended the year with more than 9,000 U.S. leads resulting from advertising, direct mail, tradeshows and other promotional activities. --SonoSite completed the transition of system and transducer transducer, device that accepts an input of energy in one form and produces an output of energy in some other form, with a known, fixed relationship between the input and output. manufacturing facilities from ATL (Active Template Library) A set of software routines from Microsoft that provide the basic framework for creating ActiveX and COM objects. Stemming from the standard template library (STL) that comes with C++ compilers, ATL includes an object wizard that sets up to SonoSite, becoming fully functional in the fourth quarter, ahead of schedule. --In November, SonoSite introduced four new products at the 86th annual meeting of the Radiological Society of North America The Radiological Society of North America (RSNA), founded in 1915, has the purpose to "promote and develop the highest standards of radiology and related sciences through education and research". : - C11/7-4 MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. broadband transducer for pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. applications; - L38/10-5 MHz broadband transducer with an expanded application for superficial superficial /su·per·fi·cial/ (-fish´al) pertaining to or situated near the surface. su·per·fi·cial adj. 1. Of, affecting, or being on or near the surface. 2. musculoskeletal musculoskeletal /mus·cu·lo·skel·e·tal/ (-skel´e-t'l) pertaining to or comprising the skeleton and muscles. mus·cu·lo·skel·e·tal adj. Relating to or involving the muscles and the skeleton. imaging; - SiteLink image manager for digital image transfer to a personal computer (PC); and - System DICOM (medical, standard) DICOM - (From Digital Imaging and COmmunications in Medicine) A standard developed by ACR-NEMA (American College of Radiology - National Electrical Manufacturer's Association) for communications between medical imaging devices. compatibility using the ALI Ali (älē`) (Ali ibn Abu Talib), 598?–661, 4th caliph (656–61). The debate over his right to the caliphate caused a major split in Islam into Sunni and Shiite branches, and he is regarded by the Shiites as the first Imam, or leader: NewPORT(TM) DICOM image capture system designed for convenient integration into the SiteStand(TM)mobile docking station (1) A cradle for a portable device that serves to charge the unit and connect it to other sources or destinations. For example, an iPod docking station charges the iPod and connects it to a computer, speakers or TV set. . --SonoHeart(TM) personal hand-carried ultrasound ultrasound or sonography, in medicine, technique that uses sound waves to study and treat hard-to-reach body areas. In scanning with ultrasound, high-frequency sound waves are transmitted to the area of interest and the returning echoes recorded device was the subject of three abstracts presented at the 73rd American Heart Association American Heart Association (AHA), n.pr a national voluntary health agency that has the goal of increasing public and medical awareness of cardiovascular diseases and stroke, and thereby reducing the number of associated deaths and disabilities. scientific sessions in November 2000. A leading institution in the Midwest presented two abstracts that revealed: 1) the SonoHeart device imaged well on patients weighing an average of 191 pounds, providing important data in nearly all cases; and 2) the device could be used for fetal fetal /fe·tal/ (fe´tal) of or pertaining to a fetus or the period of its development. fe·tal adj. Of, relating to, or being a fetus. heart screening. The third abstract submitted by a hospital in Japan, indicated that the SonoHeart device provides reliable data comparable to cart-based systems. Guidance for 2001 In 2001, the Company is targeting a revenue growth rate of 50 percent over the prior year. Margins are targeted to trend toward 50 percent for the year. The Company is targeting to be profitable in the year 2002. SonoSite, Inc. (www.sonosite.com) headquartered in Bothell, WA, develops, manufactures, markets and sells a new class of hand-carried, all-digital ultrasound systems designed to have the image quality of larger, more expensive systems but small enough to be hand-carried from bedside to bedside and room to room in many clinical settings. SonoSite became an independent public company on April 6, 1998, as a result of a spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. from ATL Ultrasound. Forward-looking Information and the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995 ----------------------------------------------------------------- Certain statements in this press release, including statements concerning market acceptance and performance are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Litigation Reform Act of 1995. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guaranties of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect SonoSite's actual results include, among others, uncertainties as to the Company's ability to manage potential problems, delays or unanticipated expenses, and product acceptance by the medical community. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Reference is made to SonoSite's latest quarterly report on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission for a more definitive description of such factors. SonoSite undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of anticipated events.
SonoSite, Inc.
Selected Financial Information
Statements of Operations
(in thousands except per share data) (unaudited)
Quarter Ended Years Ended
December 31, December 31,
2000 1999 2000 1999
Sales revenue $ 6,707 $ 9,439 $ 32,037 $ 10,185
Cost of sales 4,378 5,990 18,649 6,498
------- ------- -------- --------
Gross margin 2,329 3,449 13,388 3,687
Grant revenue -- -- -- 125
Expenses:
Research and
development 3,343 3,393 11,835 14,533
Sales and
marketing 5,514 3,079 17,371 9,767
General and
administrative 1,525 852 4,647 2,637
------- ------- -------- --------
Total Expenses 10,382 7,324 33,853 26,937
Other (loss)/income,
net (178) 665 1,493 1,514
-------- ------- -------- --------
Net loss $ (8,231) $ (3,210) $ (18,972) $ (21,611)
======= ======= ======== ========
Basic and diluted
net loss per
share $ (0.86) $ (0.38) $ (2.01) $ (3.08)
======= ======= ======== ========
Weighted average shares used in computation
of basic and diluted
net loss per
share 9,519 8,361 9,418 7,025
======= ======= ======== ========
Condensed Balance Sheets
(in thousands) (unaudited) Dec. 31, Dec. 31,
2000 1999
Cash and cash equivalents $ 11,067 $ 33,252
Short-term investment securities 18,218 16,594
Trade accounts receivable, net 7,303 7,857
Inventory 12,325 1,926
Prepaid expenses and other current
assets 1,400 1,176
-------- --------
Total current assets 50,313 60,805
Property and equipment, net 5,980 4,846
Long-term investment securities -- 3,164
Other assets 1,730 911
-------- --------
Total assets $ 58,023 $ 69,726
======== ========
Accounts payable $ 5,561 $ 2,718
Accrued expenses and deferred
liabilities 4,085 2,777
Capital lease obligations 569 522
Shareholders' equity:
Common stock, additional
paid-in capital
and other equity items 109,300 106,230
Accumulated deficit (61,492) (42,521)
-------- ----------
Total stockholders' equity 47,808 63,709
-------- ----------
Total liabilities and
stockholders' equity $ 58,023 $ 69,726
======== =========
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