Complete fourth quarter and full-year 2023
financial results will be announced on Tuesday, February 27,
2024
Masimo Corporation (Nasdaq: MASI) today announced select
preliminary financial results for the fourth quarter and full-year
ended December 30, 2023 and provided estimates for its full-year
2024 guidance.
Preliminary Fourth Quarter 2023
Financial Results:
•
Consolidated revenue of $541 million to
$551 million;
•
Healthcare revenue of $336 million to $341
million; and
•
Non-healthcare revenue of $205 million to
$210 million.
Preliminary Full-Year 2023 Financial
Results:
•
Consolidated revenue of $2,041 million to
$2,051 million;
•
Healthcare revenue of $1,272 million to
$1,277 million; and
•
Non-healthcare revenue of $769 million to
$774 million.
The preliminary financial information presented in this press
release is based on Masimo’s current expectations and may be
adjusted as a result of, among other things, completion of
customary annual audit procedures. Management plans to discuss
Masimo’s complete fourth quarter and full-year 2023 financial
results after the market closes on Tuesday, February 27, 2024.
Full-Year 2024 Guidance:
•
Consolidated revenue of $2,045 million to
$2,165 million;
•
Healthcare revenue of $1,345 million to
$1,385 million;
•
Non-healthcare revenue of $700 million to
$780 million;
•
GAAP earnings per diluted share of $1.91
to $2.08;
•
Non-GAAP earnings per diluted share of
$3.00 to $3.15 (prior definition); and
•
Non-GAAP earnings per diluted share of
$3.44 to $3.60 (updated definition).
Effective fiscal year 2024, we are updating our non-GAAP
financial measures to exclude the impact of all expenses related to
our litigation against Apple. Masimo had previously only excluded
the expenses related to the U.S. International Trade Commission
litigation against Apple. Masimo believes all of the Apple
litigation expenses are unique in nature and not indicative of the
Company’s on-going operating performance and is therefore excluding
them from its non-GAAP financial measures. The Company has included
a reconciliation of its non-GAAP financial measures under both the
updated and prior definitions to assist investors in making
comparisons of period-to-period operating results.
Full-Year 2024
Guidance
(Updated Definition)
(Prior Definition)
(in millions, except earnings per
diluted share)
GAAP
Non-GAAP
Non-GAAP
Consolidated revenue
$2,045 to $2,165
$2,045 to $2,165
$2,045 to $2,165
Healthcare revenue
$1,345 to $1,385
$1,345 to $1,385
$1,345 to $1,385
Non-healthcare revenue
$700 to $780
$700 to $780
$700 to $780
Consolidated operating income
$198 to $214
$307 to $322
$275 to $290
Consolidated earnings per diluted
share
$1.91 to $2.08
$3.44 to $3.60
$3.00 to $3.15
Supplementary Non-GAAP Financial Information
For additional non-GAAP financial details, please visit the
Investor Relations section of the Company’s website at www.masimo.com to access Supplementary Financial
Information.
Non-GAAP Financial Measures
The non-GAAP financial measures contained herein are a
supplement to the corresponding financial measures prepared in
accordance with U.S. GAAP. The non-GAAP financial measures
presented exclude the items described below. Management uses these
non-GAAP financial measures internally for its operating and
budgeting purposes, and believes that adjustments for these items
assist investors in making comparisons of period-to-period
operating results. Furthermore, management believes that the
excluded items are not indicative of the Company’s on-going
operating performance. These non-GAAP financial measures have
certain limitations in that they do not reflect all of the costs
associated with the operations of the Company’s business as
determined in accordance with GAAP.
Therefore, investors should consider non-GAAP financial measures
in addition to, and not as a substitute for, or as superior to,
measures of financial performance prepared in accordance with GAAP.
The non-GAAP financial measures presented by the Company may be
different from the non-GAAP financial measures used by other
companies.
The Company has presented the following non-GAAP measures to
assist investors in understanding the Company’s net operating
results on an on-going basis: (i) constant currency revenue growth
%, (ii) non-GAAP net income, (iii) non-GAAP (net income) earnings
per diluted share and (iv) non-GAAP operating income/margin. These
non-GAAP financial measures may also assist investors in making
comparisons of the Company’s operating results with those of other
companies. Management believes constant currency revenue growth,
non-GAAP operating income/margin, non-GAAP net income and non-GAAP
earnings per diluted share are important measures in the evaluation
of the Company’s performance and uses these measures to better
understand and evaluate our business.
The non-GAAP financial measures reflect adjustments for the
following items:
Constant currency revenue
adjustments
Some of our sales agreements with foreign customers provide for
payment in currencies other than the U.S. Dollar. These foreign
currency revenues, when converted into U.S. Dollars, can vary
significantly from period-to-period depending on the average and
quarter-end exchange rates during a respective period. We believe
that comparing these foreign currency denominated revenues by
holding the exchange rates constant with the prior year period is
useful to management and investors in evaluating our revenue growth
rates on a period-to-period basis. We anticipate that fluctuations
in foreign exchange rates and the related constant currency
adjustments for calculation of our revenue growth rate will
continue to occur in future periods.
Acquired tangible asset
amortization
These transactions represent amortization expense in connection
with business or assets acquisitions associated with acquired
tangible assets and asset valuation step-ups.
Acquired intangible asset
amortization
These transactions represent amortization expense in connection
with business or assets acquisitions associated with acquired
intangible assets including, but not limited to customer
relationships, intellectual property, trade names and
non-competition agreements.
Acquisition, integration and related
costs
These transactions represent gains, losses, and other related
costs associated with acquisitions, integrations, investments,
divestitures, assets impairments, and in-process research and
development.
Business transition and related
costs
These transactions represent gains, losses, and other related
costs associated with business transition plans. These items may
include but are not limited to severance, relocation, consulting,
leasehold exit costs, asset impairment, and other related costs to
rationalize our operational footprint and optimize business
results.
Litigation related expenses and
settlements (prior definition)
These transactions represent gains, losses, and other related
costs associated with certain litigation matters, which can vary in
their characteristics, frequency and significance to our operating
results.
Litigation related expenses and
settlements (updated definition)
We have been engaged in various legal proceedings against Apple
since January 2020, including various proceedings in the federal
courts, various proceedings in the U.S. Patent and Trademark Office
(the “PTO proceedings”), and a proceeding in the U.S. International
Trade Commission (the “ITC proceeding”). Although we previously
excluded only expenses relating to the ITC proceeding from the
definition of “Litigation related expenses and settlements”,
beginning with the first quarter of 2024, we have revised the
definition of “Litigation related expenses and settlements” to
exclude not only expenses relating to the ITC proceeding, but also
all other Apple litigation expenses, including those relating to
the federal court proceedings and the PTO proceedings. We believe
all of the Apple litigation expenses are unique in nature and not
indicative of the Company’s on-going operating performance, and
this updated definition will provide more useful information to
investors by facilitating period-to-period comparisons of our
financial performance that otherwise may be obscured by the
significant fluctuations in Apple-related litigation expenses.
Other adjustments
In the event there are gains, losses and other adjustments which
impact period-to-period comparability and do not represent the
underlying ongoing results of the business, the Company may choose
to exclude these from non-GAAP earnings.
Financing related
adjustments
The Company may enter into various financial arrangements
whereby costs are incurred and certain instrument features are
valued and expensed accordingly but are not necessarily indicative
of the on-going cash flow generation of the Company and therefore
excludes these costs from non-GAAP earnings. For GAAP earnings per
diluted share purposes, the Company cannot reflect the
anti-dilutive impact, if applicable, in its diluted shares
calculations. However, the Company believes that reflecting the
anti-dilutive impact of these instruments in non-GAAP earnings per
diluted share provides management and investors with useful
information in evaluating the financial performance of the Company
on a per share basis.
Realized and unrealized gains or
losses
These transactions represent gains, losses, and other related
costs associated with foreign currency denominated transactions and
investments. Changes in the underlying currency rates relative to
the U.S. Dollar may result in realized and unrealized foreign
currency gains and losses between the time these receivables and
payables arise and the time that they are settled in cash.
Unrealized and realized gains and losses on investments may impact
the Company’s reported results of operations for a period. These
items are highly variable, difficult to predict and outside the
control of those responsible for the underlying operations of the
business. Other items also included here are mark-to-market gains
and losses of derivative contracts that are not designated as
hedging instruments or the ineffective portions of cash flow
hedges.
Tax impact of non-GAAP
adjustments
In order to reflect the tax effected impact of the non-GAAP
adjustments, the Company will adjust the non-GAAP earnings by the
approximate tax impact of these adjustments.
Excess tax benefits from stock-based
compensation expense
GAAP requires that excess tax benefits recognized on stock-based
compensation expense be reflected in our provision for income taxes
rather than paid-in capital. As these excess tax benefits may be
highly variable from period-to-period, the Company may choose to
exclude these tax benefits from non-GAAP earnings to facilitate
comparability between periods and with peers.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
(in millions)
Full-Year 2024
Guidance(2)
Full-Year 2023
Guidance(3)
GAAP Operating Income
$198 to $214
$ 138 to $152
Non GAAP Adjustments:
Acquired tangible asset amortization
6
6
Acquired intangible asset amortization
37
38
Acquisition, integration and related
costs
7
20
Business transition and related costs
12
4
Litigation related expenses and
settlements
14
45
Other adjustments
—
4
Non-GAAP Operating Income (prior
definition)
$275 to $290
$256 to $270
Litigation related expenses and
settlements(4)
32
38
Non-GAAP Operating Income (updated
definition)
$307 to $322
$294 to $308
__________________
(1) May not foot due to rounding. (2) Guidance provided January
10, 2024. (3) Guidance provided on November 7, 2023. (4)
Adjustments to conform to the new updated non-GAAP definition which
excludes all Apple-related litigation expenses.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET
INCOME PER DILUTED SHARE(1):
Full-Year 2024
Guidance(2)
Full-Year 2023
Guidance(3)
(in thousands, except per share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$105 to $115
$1.91 to $2.08
$72 to $83
$1.34 to $1.54
Non-GAAP adjustments:
Acquired tangible asset amortization
6
0.12
6
0.12
Acquired intangible asset amortization
37
0.68
38
0.70
Acquisition, integration and related
costs
7
0.12
20
0.36
Business transition and related costs
12
0.22
4
0.08
Litigation related expenses and
settlements
14
0.24
45
0.83
Other adjustments
—
—
4
0.07
Realized and unrealized gains or
losses
—
—
(7)
(0.12)
Financing related adjustments
2
0.03
2
0.03
Tax impact of non-GAAP adjustments
(16) to (17)
(0.30) to (0.31)
(27)
(0.50)
Excess tax benefits from stock-based
compensation
(2)
(0.03)
(4)
(0.07)
Non-GAAP net income (prior definition)
$165 to $174
$3.00 to $3.15
$155 to $165
$2.85 to $3.05
Litigation related expenses and
settlements(4)
32
0.58
38
0.71
Tax impact of non-GAAP adjustments
(8)
(0.14)
(9)
(0.17)
Non-GAAP net income (updated
definition)
$189 to $198
$3.44 to $3.60
$184 to $195
$3.39 to $3.59
Weighted average shares outstanding -
diluted
55.1
54.2
__________________
(1) May not foot due to rounding. (2) Guidance provided January
10, 2024. (3) Guidance provided on November 7, 2023. (4)
Adjustments to conform to the new updated non-GAAP definition which
excludes all Apple-related litigation expenses.
Conference Call:
The conference call to review Masimo’s complete fourth quarter
and full-year 2023 financial results will begin at 1:30 p.m. PT
(4:30 p.m. ET) on Tuesday, February 27, 2024 and will be hosted by
Joe Kiani, Chairman and Chief Executive Officer, and Micah Young,
Executive Vice President and Chief Financial Officer. A live
webcast of the conference call will be available online from the
investor relations page of the Company’s corporate website at
www.masimo.com.
To register for the conference call and receive the dial-in
number, please use the link below. Upon registering, each
participant will be provided with call details and a registrant ID
number.
Conference Call Registration Link:
https://conferencingportals.com/event/nUSpRIEm
A replay of the webcast and conference call will be available
shortly after the conclusion of the call and will be archived on
the Company’s website.
About Masimo
Masimo (Nasdaq: MASI) is a global technology company that
develops and produces a wide array of industry-leading monitoring
technologies, including innovative measurements, sensors, patient
monitors, and automation and connectivity solutions. In addition,
Masimo Consumer Audio is home to eight iconic audio brands,
including Bowers & Wilkins®, Denon®, Marantz®, and Polk Audio®.
Our mission is to improve life, improve patient outcomes; and
reduce the cost of care. Masimo SET® Measure-through Motion and Low
Perfusion™ pulse oximetry, introduced in 1995, has been shown in
over 100 independent and objective studies to outperform other
pulse oximetry technologies. Masimo SET® has also been shown to
help clinicians reduce severe retinopathy of prematurity in
neonates, improve CCHD screening in newborns, and, when used for
continuous monitoring with Masimo Patient SafetyNet™ in
post-surgical wards, reduce rapid response team activations, ICU
transfers, and costs. Masimo SET® is estimated to be used on more
than 200 million patients in leading hospitals and other healthcare
settings around the world, and is the primary pulse oximetry at 9
of the top 10 hospitals as ranked in the 2022-23 U.S. News and
World Report Best Hospitals Honor Roll. In 2005, Masimo introduced
rainbow® Pulse CO-Oximetry technology, allowing noninvasive and
continuous monitoring of blood constituents that previously could
only be measured invasively and intermittently, including total
hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin
(SpCO®), methemoglobin (SpMet®), Pleth Variability Index (Pvi®),
RPVi™ (rainbow® Pvi), and Oxygen Reserve Index (Ori™). In 2013,
Masimo introduced the Root® Patient Monitoring and Connectivity
Platform, built from the ground up to be as flexible and expandable
as possible to facilitate the addition of other Masimo and
third-party monitoring technologies; key Masimo additions include
Next Generation SedLine® Brain Function Monitoring, O3® Regional
Oximetry, and ISA™ Capnography with NomoLine® sampling lines.
Masimo’s family of continuous and spot-check monitoring Pulse
CO-Oximeters® includes devices designed for use in a variety of
clinical and non-clinical scenarios, including tetherless, wearable
technology, such as Radius-7®, Radius-PPG® and Radius VSM™,
portable devices like Rad-67®, fingertip pulse oximeters like
MightySat® Rx, and devices available for use both in the hospital
and at home, such as Rad-97®. Masimo hospital and home automation
and connectivity solutions are centered around Root and the Masimo
Hospital Automation™ platform, and include Iris® Gateway, iSirona™,
Patient SafetyNet, Replica®, Halo ION, UniView®, UniView :60™, and
Masimo SafetyNet™. Masimo’s growing portfolio of health and
wellness solutions include Radius T™ and the Masimo W1™ watch,
Stork™, Opioid Halo™, Bridge™, and PerL™. Additional information
about Masimo and its products may be found at www.masimo.com. Published clinical studies on
Masimo products can be found at www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and are not available
for sale in the United States. The use of the trademark Patient
SafetyNet is under license from University HealthSystem
Consortium.
Forward-Looking Statements
All statements other than statements of historical facts
included in this press release that address activities, events or
developments that we expect, believe or anticipate will or may
occur in the future are forward-looking statements including our
expectations regarding our updated fourth-quarter and full-year
2023 preliminary financial results and full-year 2024 guidance,
including consolidated revenue, healthcare revenue, non-healthcare
revenue, consolidated operating income and consolidated GAAP and
non-GAAP earnings per diluted share. These forward-looking
statements are based on management’s current expectations and
beliefs and are subject to uncertainties and factors, all of which
are difficult to predict and many of which are beyond our control
and could cause actual results to differ materially and adversely
from those described in the forward-looking statements. These risks
include, but are not limited to, those related to: completion of
customary annual audit procedures for our 2023 financial
statements; our dependence on Masimo SET® and Masimo rainbow SET™
products and technologies for substantially all of our revenue; any
failure in protecting our intellectual property exposure to
competitors’ assertions of intellectual property claims; the highly
competitive nature of the markets in which we sell our products and
technologies; any failure to continue developing innovative
products and technologies; our ability to successfully integrate
Sound United’s brands into our business; our ability to address and
expand into new markets; the lack of acceptance of any of our
current or future products and technologies; obtaining regulatory
approval of our current and future products and technologies; the
risk that the implementation of our international realignment will
not continue to produce anticipated operational and financial
benefits, including a continued lower effective tax rate; the loss
of our customers; the failure to retain and recruit senior
management; product liability claims exposure; a failure to obtain
expected returns from the amount of intangible assets we have
recorded; the maintenance of our brand; the amount and type of
equity awards that we may grant to employees and service providers
in the future; our ongoing litigation and related matters; and
other factors discussed in the “Risk Factors” section of our most
recent periodic reports filed with the Securities and Exchange
Commission (“SEC”), including our most recent Form 10-K and Form
10-Q, all of which you may obtain for free on the SEC’s website at
www.sec.gov. Although we believe that
the expectations reflected in our forward-looking statements are
reasonable, we do not know whether our expectations will prove
correct. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof,
even if subsequently made available by us on our website or
otherwise. We do not undertake any obligation to update, amend or
clarify these forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws.
Masimo, SET, Signal Extraction Technology, Improving Patient
Outcome and Reducing Cost of Care... by Taking Noninvasive
Monitoring to New Sites and Applications, rainbow, SpHb, SpOC,
SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of
Masimo Corporation.
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version on businesswire.com: https://www.businesswire.com/news/home/20240110665066/en/
Investor Contact: Eli Kammerman (949) 297-7077
ekammerman@masimo.com
Media Contact: Evan Lamb (949) 396-3376
elamb@masimo.com
Masimo (NASDAQ:MASI)
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