Fourth Quarter 2023 Highlights:
- Consolidated revenue was $548.9 million;
- Healthcare revenue was $339.9 million;
- Non-healthcare revenue was $209.0 million;
- GAAP net income per diluted share of $0.63; and
- Non-GAAP net income per diluted share (updated definition) of
$1.25.
Full-Year 2023 Highlights:
- Consolidated revenue was $2,048.1 million;
- Healthcare revenue was $1,275.5 million;
- Non-healthcare revenue was $772.6 million.
- GAAP net income per diluted share of $1.51; and
- Non-GAAP net income per diluted share (updated definition) of
$3.79.
Masimo (Nasdaq: MASI) today announced its financial results for
the fourth quarter and full-year ended December 30, 2023.
Fourth Quarter 2023 Results:
Consolidated revenue was $548.9 million, comprised of healthcare
revenue of $339.9 million and non-healthcare revenue of $209.0
million.
Excluding handheld and fingertip pulse oximeters, shipments of
noninvasive technology boards and instruments were 58,500.
Consolidated GAAP operating income was $44.1 million.
Consolidated non-GAAP operating income (prior definition) was $78.6
million. Consolidated non-GAAP operating income (updated
definition) was $91.7 million. Consolidated GAAP net income was
$34.0 million, or $0.63 per diluted share. Consolidated non-GAAP
net income (prior definition) was $56.9 million, or $1.06 per
diluted share, and consolidated non-GAAP net income (updated
definition) was $66.9 million, or $1.25 per diluted share.
Full-Year 2023 Results:
Consolidated revenue was $2,048.1 million, consisting of
healthcare revenue of $1,275.5 million and non-healthcare revenue
of $772.6 million.
Excluding handheld and fingertip pulse oximeters, shipments of
noninvasive technology boards and instruments were 263,000.
Consolidated GAAP operating income was $136.5 million.
Consolidated non-GAAP operating income (prior definition) was
$269.6 million. Consolidated non-GAAP operating income (updated
definition) was $313.0 million. Consolidated GAAP net income was
$81.5 million, or $1.51 per diluted share. Consolidated non-GAAP
net income (prior definition) was $171.6 million, or $3.17 per
diluted share, while consolidated non-GAAP net income (updated
definition) was $204.8 million, or $3.79 per diluted share.
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said,
“We exited 2023 with growing momentum driven by record contract
wins for the year in our healthcare business, important FDA
clearances for innovative new products and strong growth in our
hearables business. Our ability to translate our core technologies
into products that deliver better outcomes for consumers, patients,
and providers continues to be the engine for our long-term growth
across all our businesses. With stabilization of hospital census
and operations post pandemic, our healthy contract backlog and our
cutting-edge innovations in growing markets, Masimo is
well-positioned for 2024.”
For additional financial details, please visit the Investor
Relations section of the Company’s website at investor.masimo.com
to access the fourth quarter 2023 earnings presentation
materials.
First Quarter 2024 and Updated Full-Year 2024 Financial
Guidance
The Company provided the following estimates for its first
quarter 2024 and full-year 2024 guidance:
Q1 2024
Guidance(1)
Updated Full-Year 2024
Guidance(1)
(in millions, except earnings per
diluted share)
GAAP
Non-GAAP (Updated
Definition)
Non-GAAP (Prior
Definition)
GAAP
Non-GAAP (Updated
Definition)
Non-GAAP (Prior
Definition)
Consolidated revenue
$476 to $501
$476 to $501
$476 to $501
$2,045 to $2,165
$2,045 to $2,165
$2,045 to $2,165
Healthcare revenue
$331 to $341
$331 to $341
$331 to $341
$1,345 to $1,385
$1,345 to $1,385
$1,345 to $1,385
Non-healthcare revenue
$145 to $160
$145 to $160
$145 to $160
$700 to $780
$700 to $780
$700 to $780
Consolidated operating profit
$35 to $41
$63 to $69
$55 to $61
$198 to $214
$307 to $322
$275 to $290
Consolidated earnings per diluted
share
$0.32 to $0.40
$0.67 to $0.74
$0.56 to $0.63
$1.91 to $2.08
$3.44 to $3.60
$3.00 to $3.15
______________
(1)
Updated guidance provided
February 27, 2024.
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 believes
that adjustments for these items assist investors in making
comparisons of period-to-period operating results. Furthermore,
management also believes that these 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
percentage, (ii) non-GAAP net income (prior definition and updated
definition), (iii) non-GAAP (net income) earnings per diluted share
(prior definition and updated definition) and (iv) non-GAAP
operating income/margin (prior definition and updated definition).
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 product
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.
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.
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.
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.
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.
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.
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.
Fourth Quarter and Full-Year 2023
Actuals versus Fourth Quarter and Full-Year 2022
Actuals:
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT
CURRENCY REVENUE(1):
Three Months Ended
(in millions, except
percentages)
December 30,
2023
December 31,
2022
GAAP healthcare revenue
$
339.9
$
351.9
Constant currency revenue adjustments
(1.1
)
N/A
Non-GAAP healthcare constant currency
revenue
$
338.8
$
351.9
GAAP healthcare revenue growth
percentage
(3.4
)%
Non-GAAP healthcare constant currency
revenue growth percentage
(3.7
)%
__________________
(1) May not foot due to
rounding.
RECONCILIATION OF NON-HEALTHCARE GAAP TO NON-GAAP
CONSTANT CURRENCY REVENUE(1):
Three Months Ended
(in millions, except
percentages)
December 30,
2023
December 31,
2022
GAAP non-healthcare revenue
$
209.0
$
265.1
Constant currency revenue adjustments
(3.6
)
N/A
Non-GAAP non-healthcare constant currency
revenue
$
205.4
$
265.1
GAAP non-healthcare revenue growth
percentage
(21.2
)%
Non-GAAP non-healthcare constant currency
revenue growth percentage
(22.5
)%
__________________
(1) May not foot due to
rounding.
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT
CURRENCY REVENUE(1):
Twelve Months Ended
(in millions, except
percentages)
December 30,
2023
December 31,
2022
GAAP healthcare revenue
$
1,275.5
$
1,340.3
Constant currency revenue adjustments
5.8
N/A
Non-GAAP healthcare constant currency
revenue
$
1,281.3
$
1,340.3
GAAP healthcare revenue growth
percentage
(4.8
)%
Non-GAAP healthcare constant currency
revenue growth percentage
(4.4
)%
__________________
(1) May not foot due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
Three Months Ended
(in millions)
December 30,
2023
December 31,
2022
GAAP operating income
$
44.1
$
73.5
Non-GAAP adjustments:
Acquired tangible asset amortization
0.9
2.4
Acquired intangible asset amortization
9.1
10.1
Acquisition, integration and related
costs
5.1
5.8
Business transition and related costs
9.7
—
Litigation related expenses, settlements
and awards
9.9
12.6
Total non-GAAP adjustments
34.7
30.9
Non-GAAP operating income (prior
definition)
$
78.6
$
104.4
Litigation related expenses and
settlements
13.1
7.1
Non-GAAP operating income (updated
definition)
$
91.7
$
111.6
__________________
(1) May not foot due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
Twelve Months Ended
(in millions)
December 30,
2023
December 31,
2022
GAAP operating income
$
136.5
$
210.0
Non-GAAP adjustments:
Acquired tangible asset amortization
5.0
59.4
Acquired intangible asset amortization
38.1
25.5
Acquisition, integration and related
costs
23.5
38.4
Business transition and related costs
13.9
—
Litigation related expenses, settlements
and awards
48.4
28.7
Other adjustments
3.9
—
Total non-GAAP adjustments
132.8
152.0
Non-GAAP operating income (prior
definition)
$
269.6
$
362.2
Litigation related expenses and
settlements
43.4
20.3
Non-GAAP operating income (updated
definition)
$
313.0
$
382.5
_________________
(1) May not foot due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET
INCOME PER DILUTED SHARE(1):
Three Months Ended
December 30,
2023
December 31,
2022
(in millions, except per diluted share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$
34.0
$
0.63
$
41.1
$
0.76
Non-GAAP adjustments:
Acquired tangible asset amortization
0.9
0.02
2.4
0.04
Acquired intangible asset amortization
9.1
0.17
10.1
0.19
Acquisition, integration and related
costs
5.1
0.09
5.8
0.11
Business transition and related costs
9.7
0.18
—
—
Litigation related expenses, settlements
and awards
9.9
0.18
12.6
0.23
Realized and unrealized gains or
losses
8.0
0.15
7.3
0.14
Financing related adjustments
0.5
0.01
0.5
0.01
Tax impact of non-GAAP adjustments
(12.0
)
(0.22
)
(8.2
)
(0.15
)
Excess tax benefits from stock-based
compensation expense
0.2
—
(0.2
)
—
Tax Related Adjustments
(8.2
)
(0.15
)
—
—
Total non-GAAP adjustments
23.1
0.43
30.3
0.56
Non-GAAP net income (prior definition)
$
56.9
$
1.06
$
71.3
$
1.32
Litigation related expenses and
settlements
13.1
0.24
7.1
0.13
Tax impact of non-GAAP adjustments
(3.1
)
(0.06
)
(1.7
)
(0.03
)
Non-GAAP net income (updated
definition)
$
66.9
$
1.25
$
76.8
$
1.42
Weighted average shares
outstanding-diluted
53.7
54.1
__________________
(1) May not foot due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET
INCOME PER DILUTED SHARE(1):
Twelve Months Ended
December 30,
2023
December 31,
2022
(in millions, except per diluted share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$
81.5
$
1.51
$
143.5
$
2.60
Non-GAAP adjustments:
Acquired tangible asset amortization
5.0
0.09
59.4
1.08
Acquired intangible asset amortization
38.1
0.70
25.5
0.46
Acquisition, integration and related
costs
23.5
0.44
38.4
0.70
Business transition and related costs
13.9
0.26
—
—
Litigation related expenses, settlements
and awards
48.4
0.89
28.7
0.52
Other adjustments
3.9
0.07
(0.9
)
(0.02
)
Realized and unrealized gains or
losses
1.2
0.02
(5.5
)
(0.10
)
Financing related adjustments
1.9
0.03
1.5
0.03
Tax impact of non-GAAP adjustments
(34.8
)
(0.64
)
(35.2
)
(0.64
)
Excess tax benefits from stock-based
compensation expense
(2.9
)
(0.05
)
(2.4
)
(0.04
)
Tax Related Adjustments
(8.2
)
(0.15
)
—
—
Total non-GAAP adjustments
90.0
1.66
109.4
1.98
Non-GAAP net income (prior definition)
$
171.6
$
3.17
$
253.2
$
4.59
Litigation related expenses and
settlements
43.4
0.80
20.3
0.37
Tax impact of non-GAAP adjustments
(10.3
)
(0.19
)
(4.8
)
(0.09
)
Non-GAAP net income (updated
definition)
$
204.8
$
3.79
$
268.7
$
4.87
Weighted average shares
outstanding-diluted
54.1
55.2
__________________
(1) May not foot due to
rounding.
First Quarter 2024 and Full-Year 2024
Financial Guidance:
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
(in millions)
Q1 2024 Guidance(2)
Updated Full-Year
2024 Guidance(2)
GAAP operating income
$35 to $41
$198 to $214
Non-GAAP adjustments:
Acquired tangible asset amortization
2
6
Acquired intangible asset amortization
9
37
Acquisition, integration and related
costs
2
7
Business transition and related costs
4
11
Litigation related expenses, settlements
and awards
2
14
Total non-GAAP adjustments
20
75
Non-GAAP operating income (prior
definition)
$55 to $61
$275 to $290
Litigation related expenses and
settlements
8
32
Non-GAAP operating income (updated
definition)
$63 to $69
$307 to $322
__________________
(1) May not foot due to rounding.
(2) Updated guidance provided on February
27, 2024.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET
INCOME PER DILUTED SHARE(1):
Q1 2024 Guidance(2)
Updated Full-Year
2024 Guidance(2)
(in millions, except per diluted share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$18 to $22
$0.32 to $0.40
$105 to $115
$1.91 to $2.08
Non-GAAP adjustments:
Acquired tangible asset amortization
2
0.03
6
0.12
Acquired intangible asset amortization
9
0.17
37
0.68
Acquisition, integration and related
costs
2
0.04
7
0.12
Business transition and related costs
4
0.07
11
0.20
Litigation related expenses, settlements
and awards
2
0.04
14
0.25
Financing related adjustments
0
0.01
2
0.03
Tax impact of non-GAAP adjustments
(7
)
(0.13) to (0.14
)
(16) to (17
)
(0.30) to (0.31
)
Excess tax benefits from stock-based
compensation expense
(0
)
(0.01
)
(2
)
(0.03
)
Total non-GAAP adjustments
13
0.22
59
1.06
Non-GAAP net income (prior definition)
$30 to $34
$0.56 to $0.63
$165 to $174
$3.00 to $3.15
Litigation related expenses and
settlements
8
0.15
32
0.58
Tax impact of non-GAAP Adjustments
(2
)
(0.03
)
(8
)
(0.14
)
Non-GAAP net income (Updated
definition)
$37 to $40
$0.67 to $0.74
$189 to $198
$3.44 to $3.60
Weighted average shares
outstanding-diluted
54.6
55.1
__________________
(1) May not foot due to rounding.
(2) Updated guidance provided on February
27, 2024.
Conference Call:
The conference call to review Masimo’s complete financial
results for the fourth quarter and full-year ended December 30,
2023 will begin at 1:30 p.m. PT (4:30 p.m. ET) on 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 legendary 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, 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 the Masimo Hospital Automation™ platform, and
include Iris® Gateway, iSirona™, Patient SafetyNet, Replica®, Halo
ION®, UniView®, UniView :60™, and Masimo SafetyNet®. Its growing
portfolio of health and wellness solutions includes Radius T® and
Masimo W1™ watch. 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 is 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, in
particular, the statements about our expectations for full-year
2023 financial guidance; the interest in our W1™ watch and upcoming
innovations; our long-term outlook; demand for our products;
anticipated revenue and earnings growth; our financial condition,
results of operations and business generally; expectations
regarding our ability to design and deliver innovative new
noninvasive technologies and reduce the cost of care; our ability
to address supply chain challenges; anticipated benefits from our
acquisition of Sound United; and demand for our products and
technologies; including with respect to revenue, revenue growth and
constant currency revenue growth, gross margin, operating margin,
GAAP earnings per diluted share, non-GAAP earnings per diluted
share, estimated tax rate and year-over-year currency headwinds;
our long-term outlook; our ability to continue in our leadership in
delivering innovative solutions to clinicians and patients
worldwide; anticipated revenue and earnings growth. 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: 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; 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; risks related to global economic
and marketplace uncertainties related to the impact of the COVID-19
pandemic; 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.
MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
December 30,
2023
December 31,
2022
ASSETS
Current assets
Cash and cash equivalents
$
163.0
$
202.9
Accounts receivable, net of allowance for
credit losses
355.5
445.9
Inventories
545.0
501.0
Other current assets
168.4
158.8
Total current assets
1,231.9
1,308.6
Lease receivable, non-current
71.4
73.1
Deferred costs and other contract
assets
57.3
41.9
Property and equipment, net
424.4
402.5
Customer relationships, net
177.7
201.6
Acquired technologies, net
129.4
160.1
Other intangible assets, net
112.8
98.9
Trademarks
232.4
262.0
Goodwill
407.7
445.4
Deferred tax assets
107.2
102.5
Other non-current assets
89.3
114.0
Total assets
$
3,041.5
$
3,210.6
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
251.5
$
276.8
Accrued compensation
62.6
89.3
Deferred revenue and other
contract-related liabilities, current
87.3
80.6
Other current liabilities
162.4
183.3
Total current liabilities
563.8
630.0
Long-term debt
871.7
941.6
Deferred tax liabilities
111.7
163.6
Other non-current liabilities
129.5
136.5
Total liabilities
1,676.7
1,871.7
Commitments and contingencies
Stockholders’ equity
Common stock
0.1
0.1
Treasury stock
(1,169.2
)
(1,169.2
)
Additional paid-in capital
783.4
782.2
Accumulated other comprehensive (loss)
income
(45.3
)
11.5
Retained earnings
1,795.8
1,714.3
Total stockholders’ equity
1,364.8
1,338.9
Total liabilities and stockholders’
equity
$
3,041.5
$
3,210.6
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in millions,
except per share amounts)
Three Months Ended
Twelve Months Ended
December 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
Revenue
$
548.9
$
617.0
$
2,048.1
$
2,035.8
Cost of goods sold
286.2
303.6
1,044.6
977.0
Gross profit
262.7
313.4
1,003.5
1,058.8
Operating expenses:
Selling, general and administrative
159.8
185.6
664.0
657.4
Research and development
38.0
54.3
175.2
191.4
Litigation settlements
3.0
—
17.8
—
Impairment charge
17.8
—
10.0
—
Total operating expenses
218.6
239.9
867.0
848.8
Operating income
44.1
73.5
136.5
210.0
Non-operating loss
(20.9
)
(17.6
)
(48.4
)
(16.6
)
Income before provision for income
taxes
23.2
55.9
88.1
193.4
Provision for income taxes
(10.8
)
14.8
6.6
49.9
Net income
$
34.0
$
41.1
$
81.5
$
143.5
Net income per share:
Basic
$
0.64
$
0.78
$
1.54
$
2.68
Diluted
$
0.63
$
0.76
$
1.51
$
2.60
Weighted-average shares used in per share
calculations:
Basic
52.8
52.6
52.8
53.6
Diluted
53.7
54.1
54.1
55.2
The following table presents details of the stock-based
compensation expense that is included in each functional line item
in the consolidated statements of operations (in millions):
Three Months Ended
Twelve Months Ended
December 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
Cost of goods sold
$
0.3
$
0.2
$
1.1
$
1.0
Selling, general and administrative
5.6
7.8
(1.5
)
32.9
Research and development
3.5
3.1
7.4
13.8
Total
$
9.4
$
11.1
$
7.0
$
47.7
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Twelve Months Ended
December 30,
2023
December 31,
2022
Cash flows from operating
activities:
Net income
$
81.5
$
143.5
Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation and amortization
98.3
136.1
Stock-based compensation
7.0
47.7
Amortization of debt issuance
costs
1.9
1.4
Loss on disposal of equipment,
intangibles and other assets
0.8
0.5
Provision for credit losses
1.1
1.3
Benefit from deferred income
taxes
(43.9
)
(39.3
)
Impairment charge
10.0
—
Changes in operating assets and
liabilities:
(Increase) decrease in trade
accounts receivable
90.2
(138.5
)
(Increase) decrease in
inventories
(69.2
)
(155.9
)
(Increase) decrease in other
current assets
(8.6
)
(7.4
)
(Increase) decrease in lease
receivable, net
1.7
(12.8
)
(Increase) decrease in deferred
costs and other contract assets
(14.4
)
(13.4
)
(Increase) decrease in other
non-current assets
3.0
(4.9
)
Increase (decrease) in accounts
payable
(19.6
)
60.5
Increase (decrease) in accrued
compensation
(26.8
)
(9.3
)
Increase (decrease) in deferred
revenue and other contract-related liabilities
7.1
28.1
Increase (decrease) in income
taxes payable
(15.1
)
3.8
Increase (decrease) in accrued
liabilities
(22.8
)
(16.1
)
Increase (decrease) in other
non-current liabilities
11.9
4.1
Net cash provided by (used in)
operating activities
94.1
29.4
Cash flows from investing
activities:
Purchases of property and equipment,
net
(44.0
)
(52.8
)
Increase in intangible assets
(43.7
)
(3.5
)
Business combinations, net of cash
acquired
7.5
(999.7
)
Other strategic investing activities
(1.0
)
(1.7
)
Net cash (used in) provided by
investing activities
(81.2
)
(1,057.7
)
Cash flows from financing
activities:
Borrowings under revolving line of
credit
189.0
1,083.9
Repayments under revolving line of
credit
(240.2
)
(135.4
)
Debt issuance costs
—
(9.3
)
Proceeds from issuance of common stock
7.0
8.1
Repurchases of common stock
—
(401.5
)
Payroll tax withholdings on behalf of
employees for stock options
(12.9
)
(25.4
)
Net cash (used in) provided by
financing activities
(57.1
)
520.4
Effect of foreign currency exchange rates
on cash
2.8
(30.9
)
Net increase in cash, cash equivalents and
restricted cash
(41.4
)
(538.8
)
Cash, cash equivalents and restricted cash
at beginning of period
209.6
748.4
Cash, cash equivalents and restricted cash
at end of period
$
168.2
$
209.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227044241/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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