SonoSite sees Q3 profits rise, reshuffles execs

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SonoSite has reported positive financial results for the third quarter and nine months, which ended Sept. 30.

For the third quarter of 2008, the Bothell, Wash.-based SonoSite booked a net income of $4.7 million, compared with net income of $1.5 million in the third quarter of 2007. For the nine months of 2008, net income grew to $8.5 million, compared with net income of $2.6 million for the nine months of 2007. Net income in both the third quarter and nine month periods of 2008 included a $1.5 million after-tax benefit for the settlement of the Zonare patent lawsuit.

Worldwide revenue in the third quarter of 2008 grew 23 to $61.6 million compared with $50 million in the third quarter of 2007. For the nine months of 2008, worldwide revenue grew 24 percent to $173.4 million compared with $140.2 million for the nine months of 2007. Changes in foreign currency rates increased worldwide revenue by approximately 0.6 percent for the third quarter and 2.7 percent for the nine months of 2008, the company said.

Kevin M. Goodwin, SonoSite President and CEO, said that the company has ended negotiations with an acquisition candidate. “These discussions had been ongoing for awhile but we could not reach an agreement. We will therefore take a $3 million one-time, pre-tax charge in the fourth quarter for associated expenses as well as for severance.”

Total operating expenses declined 6 percent in the third quarter to $33.1 million and increased 6 percent to $104.6 million for the nine months as compared with the same periods in 2007.  

Operating income in the third quarter of 2008 was $10 million compared with a loss of $340,000 in the prior year. For the nine months, operating income was $17.8 million as compared with an operating loss of $1.1 million in the year ago period.

SonoSite updated its financial outlook for 2008, projecting revenue to grow approximately 19 to 20 percent for the year, instead of 20 percent. The expanded range reflects the potential negative impact on revenue growth from changes in foreign currency rates and a cautious capital spending outlook for U.S. hospitals, the company said.

In executive news, SonoSite also announced the promotions of Graham D. Cox to senior vice president, worldwide sales and distribution and James M. Gilmore to senior vice president, product innovation and delivery.

Cox joined SonoSite in 1999 as general manger for Europe, Middle East and Africa and was promoted to vice president for the region in 2003. Prior to SonoSite, he held management positions with ATL Ultrasound, Philips Medical Systems and Acuson.

Gilmore was one of the first engineers to join SonoSite at the time of the company’s spin-off in 1998 and served as director of transducer engineering for six years. He rejoined SonoSite in 2006 as vice president research and development after serving as global engineering manager for ultrasound probes at GE Healthcare from 2004 to 2006, the company said.