SonoSite Announces Fourth Quarter and Full Year 2001 Results; Revenues Up 129% Vs. Q4 2000, and Up 43% Over Prior Year.

Business Editors

BOTHELL, Wash.--(BUSINESS WIRE)--Feb. 14, 2002

SonoSite, Inc. (Nasdaq:SONO):

-- Company Achieves $15.3 Million in Quarterly Revenues with Gross Margins of
57.6%.

-- Full Year Revenues Come in at $45.7 Million.

-- SonoSite Launches SonoHeart(R) ELITE System for Cardiology and Opens Direct
Operation in Spain

SonoSite, Inc. (Nasdaq:SONO) today released financial results for the fourth quarter and year ended Dec. 31, 2001.

For the quarter SonoSite reported product revenues of $15.3 million, up 29 percent sequentially and 129 percent over Q4 2000. Gross margins increased for the fourth consecutive quarter to 57.6 percent, an improvement of 22.9 percentage points over Q4 2000. For the year, the Company achieved $45.7 million in revenues, up 43 percent over the prior year, and gross margins of 52.2 percent, up 10.4 percentage points over the prior year.

SonoSite reported a quarterly net loss of $2.4 million, or $0.21 per share, compared to a net loss of $8.2 million, or $0.86 per share for Q4 2000. The quarterly net loss included legal fees of $618 thousand associated with the defense of our intellectual property rights and losses of $425 thousand on our investment in China. For the year, SonoSite reported a net loss of $16.4 million, or $1.59 per share. This loss compares to a loss of $19.0 million, or $2.01 per share, for the prior year. Excluding the above mentioned expenses, the net loss per share would have been $0.12 per share for the quarter and $1.49 per share for the year.

"The fourth quarter was a continuation of strong progress for SonoSite throughout 2001. Revenues were up sequentially across all of our geographic markets," said Kevin M. Goodwin, president and CEO of SonoSite. "Moving forward, we plan to build on the momentum of 2001 by growing our core markets, introducing new products, and building sales and marketing momentum in key geographic markets."

The Company also announced today the opening of a direct operation in Barcelona, Spain. Pascual Garcia, who will manage the new office, has more than 12 years of experience in the ultrasound industry. Formerly, he was a regional manager for Acuson in Spain. This office is the fourth direct operation that SonoSite has established in Western Europe in the past year.

Earlier this month, SonoSite also announced its newest product for cardiology, the SonoHeart ELITE hand-carried ultrasound system. Since the product's introduction, the Company has received several order commitments. Designed exclusively for the cardiovascular market, the SonoHeart ELITE system is the first all-digital, full-featured system weighing just 5.7 pounds with continuous wave Doppler for quantification of blood flow and Extended Resolution Harmonics for enhanced 2D imaging. For the first time, physicians can perform a full echo exam with a truly portable, affordable system without sacrificing image quality.

Other highlights include:

-- SonoSite shipped its 5,000th hand-carried ultrasound system in

December. SonoSite's first product, the SonoSite(R) 180

system, began shipping in September 1999.

-- SonoSite Germany and SonoSite France direct offices were

established, providing direct sales and support to two of the

world's largest medical equipment markets.

-- Broadlane, a leader in healthcare supply chain management

services, signed a two-year purchasing agreement that provides

Broadlane customers with access to SonoSite products.

Broadlane customers include Kaiser Permanente, Tenet

Healthcare Corporation, Universal Health Services, Community

Health Systems and others.

-- National Health Service (NHS) in the United Kingdom signed a

two-year agreement with SonoSite to provide NHS customers with

SonoSite products. NHS is responsible for the purchase and

supply management of over 85 percent of all medical equipment

sales in the U.K.

-- The SonoHeart system was the subject of studies presented at

the Annual Scientific Sessions of the American Heart

Association. Researchers concluded that the SonoHeart system

is effective in improving detection of significant

asymptomatic disease.

-- The Japanese Ministry of Health, Labor and Welfare granted

clearance to market and distribute the SonoSite(R) 180PLUS

system in Japan.

Today, SonoSite's management team will host a conference call at 1:30 p.m. PST to discuss fourth quarter and year end 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).

SonoSite, Inc. (www.sonosite.com), headquartered in Bothell, Wash., is creating and leading the point-of-service, hand-carried ultrasound market. By putting all-digital, high resolution ultrasound into an easy-to-use, affordable package, SonoSite is creating new markets and removing barriers to the use of ultrasound across medicine. The Company is dedicated to putting the power of its technology into the hands of trained physicians, allowing them to take a high quality quick look inside the body for better, faster, clinical decisions, potentially enabling earlier treatment and improving patient outcomes.

Forward-looking Information and the Private Litigation Reform Act of 1995

Certain statements in this press release are "forward-looking statements" which 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. The words "believe," "expect," "intend," "anticipate" and similar expressions are intended to identify forward-looking statements, but their absence does not necessarily mean that the statement is not forward-looking. These statements are not guaranties of future performance and are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions. Factors that could affect SonoSite's actual results are described under the heading, "Factors Affecting Our Operating Results, Our Business and Our Stock Price," included in our latest periodic report 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.

                            SonoSite, Inc.
                    Selected Financial Information

Statements of Operations
(in thousands, except per share data)
(unaudited)
                                   Quarter Ended        Years Ended
                                 Dec. 31, Dec. 31,  Dec. 31,  Dec. 31,
                                   2001     2000      2001      2000
                                 -------- --------  --------  --------
Sales revenue                    $15,337  $ 6,707   $45,695   $32,037
Cost of sales                      6,502    4,378    21,861    18,649
                                 -------- --------  --------  --------
Gross profit                       8,835    2,329    23,834    13,388

Expenses:
   Research and development        2,596    3,343    12,715    11,835
   Sales and marketing             6,265    5,514    22,312    17,371
   General and administrative      2,059    1,525     5,198     4,647
                                 -------- --------  --------  --------
Total expenses                    10,920   10,382    40,225    33,853

Other (loss) income, net            (302)    (178)      (18)    1,493
                                 -------- --------  --------  --------
Net loss                         $(2,387) $(8,231) $(16,409) $(18,972)
                                 ======== ========  ========  ========
Basic and diluted net loss
 per share                       $ (0.21) $ (0.86)  $ (1.59)  $ (2.01)
                                 ======== ========  ========  ========
Weighted average shares used in
 computation of basic and diluted
 net loss per share               11,358    9,519    10,300     9,418
                                 ======== ========  ========  ========

Condensed Balance Sheets
(in thousands) (unaudited)                        Dec. 31,   Dec. 31,
                                                    2001       2000
                                                 ---------  ---------
Cash and cash equivalents                        $ 33,116   $ 11,067
Marketable securities                                   -     18,218
Trade accounts receivable, net                     14,124      7,303
Inventory                                           8,299     12,325
Prepaid expenses and other current assets           1,017      1,400
                                                 ---------  ---------
Total current assets                               56,556     50,313

Property and equipment, net                         5,685      5,980
Receivable from affiliate                              67        880
Other assets                                          870        851
                                                 ---------  ---------
Total assets                                     $ 63,178   $ 58,024
                                                 =========  =========

Accounts payable                                  $ 1,914    $ 5,561
Accrued expenses and deferred liabilities           5,265      4,086
Capital lease obligations                             316        569
Shareholders' equity:
   Common stock, additional paid in capital
      and other equity items                      133,584    109,300
   Accumulated deficit                            (77,901)   (61,492)
                                                 ---------  ---------
Total shareholders' equity                         55,683     47,808
                                                 ---------  ---------
Total liabilities and shareholders' equity       $ 63,178   $ 58,024
                                                 =========  =========