SonoSite sees big rival right before its eyes: GE runs TV ad for same device Bothell company makes
Seattle Times business reporter
SonoSite employees have had their VCRs humming throughout the Winter Olympics, and not just because they want to catch up on figure skating.
The tapes show some ominous news. General Electric has been running a commercial during the games of it making handheld ultrasound devices for doctors. That means one of the world's dominant companies would be a dead-on competitor of SonoSite, a 4-year-old Bothell biomedical company.
"We take General Electric seriously as a competitor. They're a big, well-funded company and they're not dumb," said Jens Quistgaard, chief product and marketing officer. "But we're not dummies either."
Quistgaard said SonoSite doesn't know exactly what GE has built, but he doesn't think it could start selling anything before July. He said he's known for more than a year that GE has ultrasound technology from a pair of acquisitions, but until now, he didn't know for sure whether GE was moving in on its turf. A General Electric medical spokesman could not be reached.
Jan Wald, an analyst with AG Edwards, said he thinks SonoSite would have a chance because it has a single-minded focus. He said he believes Quistgaard's contention that GE's marketing firepower would benefit SonoSite by confirming the value of its technology and raising awareness of the product.
SonoSite's handheld ultrasound systems compete with heftier cart-bound ultrasound systems made by two other industrial powerhouses — Philips and Siemens. SonoSite says its handhelds are just as effective as bulkier machines, but lighter and more convenient. This year, it is pitching them around the world for six different medical specialties: cardiac care, radiology, obstetrics, surgery, vascular, and emergency medicine.
Quistgaard said he thinks GE would chase SonoSite because of its growing success. Sales in the quarter were $15.3 million, up 128 percent from $6.7 million in the same quarter a year ago. The quarterly net loss shrunk to $2.4 million, from $8.2 million.
Its annual numbers also improved. Sales were $45.7 million last year, up 43 percent from $32 million a year ago. The net loss was $16.4 million, down from $18.9 million a year ago. SonoSite's stock closed yesterday at $23.72, off 15 percent from its 52-week high of $28.01 a share.
The company could become profitable this year if it hits the high end of its sales projections, said SonoSite chief financial officer Mike Schuh.
Luke Timmerman can be reached at 206-515-5644 or email@example.com.