SonoSite Inc. (SONO) filed Quarterly Report for the period ended 2009-09-30.
SonoSite is a leader in the design, development and commercialization ofminiaturized, high-performance, digital ultrasound imaging devices. Physicians utilize ultrasound imaging as an effective tool for thenoninvasive visual examination of soft tissue. Sonosite Inc. has a market cap of $433.33 million; its shares were traded at around $25.07 with a P/E ratio of 54.5 and P/S ratio of 1.78.
Highlight of Business Operations:
Revenue decreased to $53.6 million for the three months ended September 30, 2009 from $61.6 million for the three months ended September 30, 2008. Revenue decreased to $157.7 million for the nine months ended September 30, 2009 from $173.4 million for the nine months ended September 30, 2008. The decrease in the third quarter of 2009 compared to 2008 and for the nine months of 2009 compared to 2008 was attributable to a slowdown in hospital capital spending, offset by revenues of $3.0 million from CDIC. Foreign exchange rates had no effect on revenues during the quarter but had an unfavorable impact of $6.7 million, or 4% for year to date.
U.S. revenue decreased to $26.9 million for the three months ended September 30, 2009 from $33.9 million for the three months ended September 30, 2008. U.S. revenue decreased to $74.0 million for the nine months ended September 30, 2009 from $84.3 million for the nine months ended September 30, 2008. The decrease in the third quarter 2009 compared to 2008 and for the nine months of 2009 compared to 2008 was primarily attributable to a 23% decline in direct sales during the quarter and a 20% decline year to date primarily due to reduced hospital capital spending within the difficult economic environment, offset by CDIC sales of $2.7 million.
Sales, general and administrative expenses were $28.9 million for the three months ended September 30, 2009, compared to $28.3 million for the three months ended September 30, 2008. Sales, general and administrative expenses were $81.7 million for the nine months ended September 30, 2009, compared to $86.7 million for the nine months ended September 30, 2008. The increase in the third quarter of 2009 compared to 2008 was primarily attributable to operations and integration costs of CDIC, offset by a reduction in legal costs. The decrease in the nine months was primarily attributable to reduced legal costs and compensation expense, and a favorable impact from foreign exchange rates. Included in operating expenses are integration related charges of $4.0 million in the third quarter and $4.1 million for the nine months ended of 2009.
Operating activities provided cash of $8.9 million for the nine months ended September 30, 2009, compared to cash provided of $18.0 million for the nine months ended September 30, 2008. Net income for the nine months ended September 30, 2009 was adjusted by stock-based compensation expense of $5.2 million, depreciation and amortization of $3.6 million, amortization of debt discount and debt issuance costs of $3.8 million, deferred income taxes of $1.2 million, a gain on convertible note repurchase of $1.3 million, and a gain on the bargain purchase of CDIC of $1.1 million. Operating assets and liabilities were primarily impacted by the timing of payments and receipts. For the nine month period ended September 30, 2009 operating assets provided $11.6 million and operating liabilities used $15.8 million. The change in operating assets is due to accounts receivable collections being higher than sales for 2009 compared to 2008, and the change in operating liabilities is due to the timing of payments of accrued expenses.
Investing activities provided cash of $23.1 million for the nine months ended September 30, 2009, compared to $59.2 million for the nine months ended September 30, 2008. The cash provided in 2009 was primarily due to the sale and maturity of investments of $134.3 million, offset by the purchase of investment securities of $100.4 million, the acquisition of CDIC of $8.2 million, the purchase of property and equipment of $2.3 million, and $0.4 million of earn-out consideration associated with the acquisition of SonoMetric Health, Inc.
Financing activities used cash of $25.5 million for the nine months ended September 30, 2009, compared to cash provided of $4.5 million for the nine months ended September 30, 2008. Cash used in financing activities was primarily due to the repurchase of our convertible debt and associated warrants for $21.7 million, repayment of debt assumed in the CDIC acquisition of $5.3 million and shares retired for taxes of $1.3 million, partially offset by the sale of call options for $1.4 million and proceeds from the exercise of stock-based awards totaling $1.4 million.
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