Mike Schuh – CFO andAnne Bugge, VP – Corporate Affairs
2005 Pacific Growth Equities Life Sciences Growth Conference – San Francisco
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Forward-Looking Information
Except for historical information presented, the statements made today are forward-looking statements that are based on the opinions and estimates of our management as of today. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expected or implied. Factors that could affect our actual results include the performance and acceptance of our products, our ability to compete effectively and other risks described under the heading, “factors affecting our operating results, our business and our stock price,” included in our latest periodic report filed with the SEC. We caution investors not to place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any forward-looking statements made today.
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Profile
#1 Brand - 60% share est.
#1 Installed Base - 20,000+ units
#1 Technology - ASICS, transducers
World leader in hand-carried ultrasound -
4
Benefits of SonoSite HCU
Smaller
Lighter
High performance ultrasound
wherever it’s needed
… ER
… ICU
… OR
… Imaging lab
… Doctor’s office
5
Disruptive Technology
=8 lbs.
300+ lbs.
6
Investment Thesis
Revenue growth – 63% 5-yr. CAGR
Transitioning to profitability
High and expanding gross margins
Revenue rising on new technology and expanded channels
Major new market opportunity –
CardioVascular Disease Management
Major new product cycle beginning
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Global Diagnostic Imaging Market
MRI CT
NuclearImaging
MobilizationOpportunity
X-Ray
$17B
Ultrasound$3.5 B PET
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Radiology40%
OB/Gyn20%
Cardiology25%
Vascular 5%
Cart-based Slow unit growth Slow $ growth Substitution risk Commoditization
Other 10%
The Impact of HCU
High unit growth High $ growth Broad market potential
HCU
Vascular Access
Surgery
ER
Anesthesia
Cardiovascular Mgmt.
Point of Care Expansion
Other 10%
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Spawning A New Market
Historical PriceSegmentation
53%53%
27%27%
$100K+
$50 - 100K
Under $50K20%
Vascular Access
Surgery
ER
Anesthesia
Point of Care Expansion
Radiology40%
OB/Gyn20%
Other 10%
Cardiology25%
Vascular 5%
$3.5B
Traditional
Cardiovascular Mgmt.
SO
NO
SO
NO
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Hand-Carried Ultrasound Projected Growth Trajectory
* Klein Biomedical-2005
2010 Imaging PhysicalTM – Company Estimates
1999
2004
2010
$10M $195M* $1B
DiagnosticDiagnostic
Imaging
PhysicalTM
30%
Procedural20%
Procedural
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Entering Cardiovascular Disease Mgmt
Cardiovascular disease affects more than 64 million Americans 50% men/64% women who died of heart attacks had no previous symptoms Analysis of carotid artery lining can be effective indicator of asymptomatic disease SonoSite with IMT software can bring technique to physician’s office
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The Impact of HCU on CVDM
Imaging
PhysicalImaging PhysicalFamily Practice
Neuro
logis
ts
Ob/G
yn
Endocrinologists
Internal Medicine
Card
iolo
gis
ts
85,000
40,000
Diagnostic
30%
Procedural
7,500
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SonoSite Technology Proposition
180PlusTM (1999)
5.4 pounds
ASIC Transducer Design Value
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iLook® (2002)
3.0 pounds
SonoSite Technology Proposition
ASIC Transducer Design Value
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SonoSite Technology Proposition
TITANTM (2003)
7.8 pounds
ASIC Transducer Design Value
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Gen III – The Crossover PointIntroducing– MicroMAXX™
High-end cart performance in 8 lb. device
Dramatic increase in raw system
processing performance without increased size
… 4X Channels
… 4X improvement in dynamic range
… 2X bandwidth
Standard 5-year warranty
Embedded IMT
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Mobilizing High Performance Ultrasound
Traditional
Gen I6 BOPS
Gen II10 BOPS
Gen III
PERFORMANCE
SIZE
The Next Generation - Scalable
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Robust Intellectual Property Portfolio
22 issued patents in US:
Digital ultrasound under 10 lbs
Transducer technology
ASIC technology
Device designs
48 patents pending
20 in US; 28 foreign
License to former parent’s HCU-related technology
Result:
Unmatchable performance, price and size
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Driving Ultrasound Across the Clinical Spectrum
Rad
OB/Gyn
Vasc
Card/Share
d
Hospital
Office
EMED
SURGERY
ANESTH
Direct Selling Direct/Partner Mix
Rad
OB/Gyn Vas
c
Cardiology
EurologyAcute
Care
Early Diagnosis & Management
Screening
Vascular Access
Endocrinology Internal Medicine Family Practice OB/GYN
Wellness Channels
Catheter Insertion
Line Placement
Biopsy
Nerve BlockCard/Share
d
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Driving Ultrasound Across the Clinical Spectrum
Rad
OB/Gyn
Vasc
Card/Share
d
Hospital
Office
EMED
SURGERY
ANESTH
Direct Selling Direct/Partner Mix
Rad
OB/Gyn Vas
c
Cardiology
EurologyAcute
Care
Early Diagnosis & Management
Screening
Vascular Access
Endocrinology Internal Medicine Family Practice OB/GYN
Wellness Channels
Catheter Insertion
Line Placement
Biopsy
Nerve BlockCard/Share
d
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Driving Ultrasound Across the Clinical Spectrum
Rad
OB/Gyn
Vasc
Card/Share
d
Hospital
Office
EMED
SURGERY
ANESTH
Direct Selling Direct/Partner Mix
Rad
OB/Gyn Vas
c
Cardiology
NeurologyAcute
Care
Early Diagnosis & Management
Screening
Vascular Access
Endocrinology Internal Medicine Family Practice OB/GYN
Wellness Channels
Catheter Insertion
Line Placement
Biopsy
Nerve BlockCard/Share
d
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SonoSite’s Expanding Global Presence
7 Direct Subsidiaries 75 Distributors
United
Arab
Emirates
Miami
SEATTLE
UNITED KINGDOM
GERMANYFRANCE
SPAIN JAPAN
AUSTRALIA/
NEW ZEALAND
Brasillia
Shanghai
Subsidiaries
CANADA
(Toronto)
Major Regional
Sales OfficesCorporate
Headquarters
Singapore
IndiaMexico
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Revenue Growth
CAGR 63%
$10 mm
$32 mm
$46 mm
$73 mm
$85 mm
$116 mm
1999 2000 2001 2002 20042003 ‘04 ‘05
$24 mm
$34 mm
1st Quarter
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Expanding Gross Margins
36.2%
1999 2000 2001 2002 20042003 ‘04 ‘05
64.8%
70.2%
1st Quarter
41.8%
52.2%
59.2%63.5%
67.4%
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Moving Toward Profitability
-$3.08
1999
$0.23 *
2004
-$0.12
2003
-$0.59
2002
-$1.59
2001
-$2.01
2000
* Excludes tax benefit of $1.23 per share
‘04‘05
-$0.10
$0.05
1st Quarter
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Balance Sheet Strength
($ millions) March 31, 2005
Cash and Investments $ 61.5
Total Assets $ 155.2
Long-term Debt - 0 -
Stockholders’ Equity $ 136.2
Current Ratio 5:1
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Nasdaq: SONO
www.sonosite.com
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