In early 1998, Kevin Goodwin led the launch of SonoSite Inc., a spin-off of ATL Ultrasound focused on the portable-ultrasound market. The former vice president and general manager of ATL’s Handheld Systems Business Group, Goodwin and his new company hit the ground running with $30 million in cash, courtesy of ATL; some intellectual capital; and a vision for the future of health care.

“The vision we have is that when you or I go into our doctor’s office for an exam, they’ll be looking inside of you with a visualization stethoscope with ultrasound capabilities,” Goodwin told a Herald reporter at the time.

Nine years later, that vision has not wavered, and SonoSite’s investment in research and development has paid off with the creation of an array of sturdy, portable ultrasound devices that have found their way onto battlefields and into hospital critical-care departments. They have been used in remote locations in the wake of natural disasters, and they have improved care in doctors’ offices as well.

The Bothell-based company (NASDAQ: SONO), which started with a staff of about 40, now employs 550 locally and around the globe. Annual revenues have increased from $10 million in 1999, following the launch of its first product, SonoSite180, to $171.1 million in 2006, a year that finished strong with the company attaining its highest revenue quarter ever, $54.4 million.

For providing strong leadership in a market his company helped create — and one that has had such a strong impact on the health-care field — Goodwin, SonoSite’s president and chief executive officer, has been chosen the Snohomish County Business Journal’s 2007 Executive of the Year.

Entering field ‘with long-term growth’ Goodwin’s path to chief executive of SonoSite is not filled with surprises; rather, it is dotted with stepping stones placed at logical intervals that have given him experience in operations, sales and international trade — all within the realm of health care.

Indeed, Goodwin’s interest in health care has been at the center of his career, even preceding it, as he graduated from Monmouth College in Illinois with a bachelor’s degree with an emphasis on hospital management.

“I decided early that I wanted to go into the health-care field; I saw it as a field with long-term growth,” said Goodwin, who sampled the hospital experience during college before deciding to go into the private sector.

He gained operations experience as a national distribution manager with American Hospital Supply Corp. That position was followed by a role as area manager for the southeastern United States for Picker International, a producer of CT, MRI and other scanning devices.

He then returned to American Hospital Supply, this time in the sales division. He ended his first year back as the top sales representative. “I found my calling, I think,” Goodwin said.

In 1987, Goodwin joined ATL as a sales representative in Atlanta, Ga. It was “the 85th territory out of 85 in the company,” he said. “I moved it into the top five during my first year.”

Impressed by his sales ability, ATL promoted Goodwin to sales training and customer education, located in Seattle. He later was promoted to vice president and general manager for ATL’s business in Asia Pacific, Latin America, Australia and Canada. When he took over the division, it was generating $26 million in revenues; five years later, the division was generating $90 million, Goodwin said.

It’s where “I cut my teeth on international business. Along the way, I went to the Stanford Executive Program,” he said.

In early 1997, Goodwin moved to ATL’s handheld division. By the end of that year, ATL executives decided to spin off the division — with Goodwin tapped to lead the new company, SonoSite.

Building the company

“We essentially created a category,” Goodwin said of the handheld ultrasound market. “… We spent the first five, six years developing three generations of ultrasound products. The product ladder is the basic strategy. Over time, we’re going to come out with a lot more products — a ladder with a lot more rungs on it.”

SonoSite’s products include the 180Plus, a battery- or AC-powered ultrasound device that weighs less than 6 pounds and serves general imaging needs; the iLook, a hand-held ultrasound machine designed for vascular access; the Titan, a 7.7-pound, high-resolution ultrasound system with an 8.4-inch display; and the MicroMaxx, an 8-pound, high-resolution ultrasound system with a 10.4-inch digital display.

The strengths of SonoSite products are that they are easy to use and provide high resolution, Goodwin said. “The physicians today that use our technology (are doing things that) they couldn’t do in the past; there’s an immediacy that they didn’t have in the past.”

There’s also improved patient care as well as reduced health-care costs with point-of-care ultrasound, said Anne Bugge, SonoSite’s vice president of corporate affairs.

For instance, the use of ultrasound to guide catheter placement reduces complications in 40 percent of cases and can save about $1,000 compared to other imaging guidance methods, she noted. And ultrasound-guided breast biopsies performed in a doctor’s office are one-third of the cost of a surgical biopsy done in the hospital.

Another example: In administering anesthesia, a physician can track the anesthetic’s journey by ultrasound and monitor when it has reached full efficacy, Bugge said. “They actually use half the amount of anesthesia they would otherwise.”

Because SonoSite’s products are constructed to be military grade, they can be taken into the field and are used by the U.S. military as well as emergency medical personnel around the world, Goodwin said.

This spring, SonoSite’s MicroMaxx will take part in Xtreme Everest, an expedition of medical personnel who want to study blood flow to the brain at high altitudes, a situation that puts stress on the body — much like the stress faced by critical-care patients, Bugge said.

Though other competitors have entered the market since the SonoSite 180 was introduced, General Electric among them, SonoSite claims more than 60 percent of the portable, point-of-care ultrasound market, Goodwin said.

“Competitors like GE have come in but have had minimal impact,” he said. “… We just continue to improve; we try not to let them affect us too much.”

Challenges along the way

That’s not to say that there haven’t been hurdles to overcome. In recent years, SonoSite has been party to two lawsuits regarding intellectual property.

Late last year, the U.S. Court of Appeals sided with SonoSite in a five-year battle against Neutrino Development Corp. of Texas, which claimed that SonoSite’s hand-carried ultrasound devices infringed on its patent. The appeals court affirmed an earlier ruling by the U.S. District Court, whose summary judgment dismissed Neutrino’s claims.

And in February, SonoSite filed a patent infringement lawsuit against Zonare Medical Systems Inc., claiming that the Mountain View, Calif.’s sales of its ultrasound platform infringed on a SonoSite patent covering a portable ultrasound system weighing less than 10 pounds. Zonare countersued in March.

Dealing with such litigation, while not pleasant, is part of the job, Goodwin said. It comes down to the “principles of who we are and what we do. … It’s protecting property. There’s no pressure in that, it’s more principle driven.”

As for its financials, SonoSite’s revenues continue to grow, with 2006 marking $171.1 million in worldwide revenue compared with $147.5 million for 2005 and net income of $7.2 million for the year compared to $5.4 million for 2005.

But 2006 revenues were below the $187 million that the company had earlier forecast for the year. For 2007, Goodwin plans to step up sales, with a goal of at least 15 percent revenue growth.

In announcing the numbers in February, Goodwin said that in order to meet that goal, the company is focusing on increasing global sales capacity, increasing customer-focused support and education, and bringing new products to market. At the same time, SonoSite will work to streamline its administrative cost structure.

“We look forward to building on the progress and momentum we established in our U.S. and international businesses,” he said.