Just seven days after the quarter ended, SonoSite (Nasdaq: SONO ) has announced its revenues for the fourth quarter. The announcement was made so that its CEO could talk about the ultrasound maker's recent stellar growth at this year's JPMorgan Healthcare Conference.
Revenue from the fourth quarter was up 20% year over year, keeping its full-year revenue growth for 2007 at 20%. Perhaps more impressive is that 30% of the revenue in the fourth quarter came from new products that were just launched. With only 40 selling days for the new products, SonoSite's customers are clearly impressed with the new offerings.
Rather than compete with the big boys of diagnostic imaging -- General Electric (NYSE: GE ) , Siemens (NYSE: SI ) and Royal Philips Electronics (NYSE: PHG ) -- SonoSite has concentrated on making small ultrasound machines that doctors can use as they perform procedures -- guiding a catheter through a vein for example. What's interesting is that the Motley Fool Rule Breakers pick has essentially grown its own market by convincing doctors that being able to see inside the body is better than doing the procedures blindly.
SonoSite has stepped away from its traditional handheld model with its newest offering, the S-line. The new, wall-mounted product is actually a series of different offerings specific to different medical departments. They're all based on the same platform using Texas Instruments' (NYSE: TXN ) DaVinci technology and Microsoft's (Nasdaq: MSFT ) Windows CE.
I was a little worried that customers would shun the wall mounting, since it requires that there be a machine in every room, but either hospitals have a lot of room in their budgets for machines, or they're all buying the optional stands so the machines can be moved from room to room.
Investors will have to wait until SonoSite's earnings release next month to see how expenses for the quarter rang up. With the extra costs of the product launches and stepped up R&D spending, we might not see as big year-over-year growth in the bottom line. Even so, the early adoption of the product is a sign that 2008 will be a good year for SonoSite.
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