Record results mark 20th consecutive quarter of revenue growth Q2 2008 Highlights:
IRVINE, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Masimo Corporation
(Nasdaq: MASI), the inventor of Pulse CO-Oximetry and Measure-Through-Motion-
and-Low-Perfusion pulse oximetry, today announced its financial results for
the 2008 second fiscal quarter.
For the second quarter of 2008, Masimo reported product revenues of $61.9
million representing a 30% increase over $47.6 million for the second quarter
of 2007. Including royalty revenues, Masimo reported total 2008 second
quarter revenues of $74.8 million compared to $63.7 million for the second
quarter of 2007. Net income for the 2008 second quarter was $10.6 million or
$0.18 per common share compared to $10.6 million or $0.13 per common share for
the second quarter of 2007.
During the second quarter of 2008, Masimo also reported that it shipped
29,000 Masimo SET and Masimo Rainbow SET oximetry units, excluding handheld
units, compared to 29,700 units in the same prior year quarter. For the first
half of 2008, Masimo shipped 57,600 new units representing an annualized
increase of 24% over the estimated 471,000 Masimo units in the market as of
December 2007 and has now increased its total worldwide net installed base to
515,000 units. In the second quarter of 2008, revenues from Masimo Rainbow
SET products increased 40% from the same prior year quarter.
Joe E. Kiani, Chairman and Chief Executive Officer of Masimo, said, "We
believe that the benefit to patients, clinicians and hospitals of our life
saving Masimo SET and Masimo Rainbow SET technologies continue to create
momentum for the adoption of our products. Despite the generally difficult
economic environment, we believe our business model continues to resonate with
hospitals who demand the best technology for their patients. In addition,
after a strong first quarter, we are pleased that sales of our Rainbow SET
products have continued to gain momentum and set a new record in the second
quarter of 2008."
As of June 28, 2008, cash and cash equivalents totaled $102.9 million-an
increase from both December 29, 2007 of $96.7 million and from March 29, 2008
of $86.3 million. As previously announced, during the 2008 first fiscal
quarter, Masimo repaid in full a $26.7 million debt obligation, the majority
of which was established in early fiscal 2007.
Financial Guidance
Based on the results of the first half of fiscal year 2008, Masimo now
expects its total fiscal year 2008 product revenues to be approximately $253
million and total revenues, including royalties, to be approximately $300
million. These figures are up from the previous guidance of $246 million and
$292 million, respectively. Masimo also now expects earnings per common share
to be approximately $0.64 per share, up from the prior guidance of $0.52 per
share.
Conference Call
Masimo will hold a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to
discuss the results. The dial-in numbers are (866) 356-3095 for domestic
callers and (617) 597-5391 for international callers. The reservation number
for both dial-in numbers is 90085495. A live web cast of the conference call
will be available online from the "Investor Relations" page of the Company's
corporate web site at http://www.masimo.com.
After the live web cast, the call will remain available on Masimo's
website through September 4, 2008. In addition, a telephonic replay of the
call will be available until August 18, 2008. The replay dial-in numbers are
(888) 286-8010 for domestic callers and (617) 801-6888 for international
callers. Please use reservation code 86583404.
About Masimo
Masimo (Nasdaq: MASI) develops innovative monitoring technologies that
significantly improve patient care-helping solve "unsolvable" problems. In
1995, the company debuted Measure-Through-Motion-and-Low-Perfusion pulse
oximetry, known as Masimo SET, which virtually eliminated false alarms and
increased pulse oximetry's ability to detect life-threatening events. More
than 100 independent and objective studies demonstrate Masimo SET provides the
most reliable SpO2 and pulse rate measurements even under the most challenging
clinical conditions, including patient motion and low peripheral perfusion. In
2005, Masimo introduced Masimo Rainbow SET, a breakthrough noninvasive blood
constituent monitoring platform that can measure many blood constituents that
previously required invasive procedures. Rainbow SET continuously and
noninvasively measures total hemoglobin (SpHb(TM)), oxygen content (SpOC(TM)),
carboxyhemoglobin (SpCO(R)), methemoglobin (SpMet(R)), and PVI(TM), in
addition to oxyhemoglobin (SpO2), pulse rate (PR), and perfusion index (PI),
allowing early detection and treatment of potentially life-threatening
conditions. Founded in 1989, Masimo has the mission of "Improving Patient
Outcomes and Reducing Cost of Care by Taking Noninvasive Monitoring to New
Sites and Applications." Additional information about Masimo and its products
may be found at www.masimo.com.
Forward-Looking Statements
This press release includes 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 financial condition,
results of operations, prospects and business generally; the market acceptance
of our technologies and products; the value of measuring new parameters;
expectations regarding our ability to design and deliver innovative new
noninvasive technologies; and expectations for total revenues, product
revenues, GAAP earnings per share, non-GAAP pro forma earnings per share and
stock based compensation expenses for the full fiscal year 2008. 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 from those described in the forward-
looking statements. These risks include, but are not limited to, those related
to: our reliance on Masimo SET and related 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; the failure to continue developing innovative products and
technologies; the lack of acceptance of any new products and technologies of
ours; obtaining regulatory approval of our current and future products and
technologies, including the recently announced total hemoglobin measurement;
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; and other factors discussed in the "Risk
Factors" section of our Quarterly Report on Form 10-Q for the fiscal quarter
ended March 29, 2008 filed with the Securities and Exchange Commission on May
1, 2008. Although we believe that the expectations reflected in our forward-
looking statements are reasonable, we do not know whether our expectations
will prove correct. All forward-looking statements included in this press
release are expressly qualified in their entirety by the foregoing cautionary
statements. You are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof. We do not
undertake any obligation to update, amend or clarify these forward-looking
statements or the risk factors contained in our Quarterly Report on Form 10-Q
for the fiscal quarter ended March 29, 2008, whether as a result of new
information, future events or otherwise, except as may be required under the
applicable securities laws.
Masimo, SET, Signal Extraction Technology, Improving Outcomes and Reducing
Cost of Care by Taking Noninvasive Monitoring to New Sites and Applications,
Rainbow, SpHb, SpCO, SpMet, PVI, Pulse CO-Oximetry and Pulse CO-Oximeter are
trademarks or registered trademarks of Masimo Corporation.
MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 29, 2007 June 28, 2008
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $96,733 $102,903
Accounts receivable, net of allowance for
doubtful accounts 26,97029,576
Royalties receivable13,86611,375
Inventories 23,11029,256
Prepaid expenses 7,084 7,079
Deferred tax assets 14,33414,334
Other current assets 1,543 1,156
Total current assets 183,640 195,679
Deferred cost of goods sold 26,24927,764
Property and equipment, net 11,16411,837
Deferred tax assets 5,332 5,332
Restricted cash 513 518
Intangible assets, net5,589 6,793
Goodwill448 448
Other assets 2,576 2,539
Total assets $235,511 $250,910
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $14,640 $16,810
Accrued compensation12,40913,059
Accrued liabilities 6,211 5,135
Dividends payable 183 183
Deferred revenue16,82721,946
Current portion of long-term debt 11,539 647
Total current liabilities 61,80957,780
Deferred revenue366 336
Long-term debt, less current portion 19,502 285
Other liabilities 3,768 3,837
Total liabilities 85,44562,238
Commitments and contingencies
Stockholders' equity
Common stock5556
Treasury stock (1,209) (1,209)
Additional paid-in capital 143,297 162,399
Accumulated other comprehensive loss(1,034) (923)
Retained earnings8,95728,349
Total stockholders' equity150,066 188,672
Total liabilities and stockholders' equity $235,511 $250,910
MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share information)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 28, June 30, June 28,
2007 2008 2007 2008
Revenue:
Product $47,627 $61,850 $93,391 $121,523
Royalty and license fee 16,053 12,916 29,24324,353
Total revenue 63,680 74,766 122,634 145,876
Cost of goods sold 17,919 21,403 34,82042,524
Gross profit 45,761 53,363 87,814 103,352
Operating expenses:
Research and development 5,4605,980 10,91412,278
Selling, general and administrative 21,577 30,366 42,97959,895
Antitrust litigation 465 277 475 445
Total operating expenses 27,502 36,623 54,36872,618
Operating income 18,259 16,740 33,44630,734
Non-operating income (expense):
Interest income 189 625 544 1,584
Interest expense(685) (60) (1,112) (703)
Other170 75 211 178
Total non-operating income (expense) (326) 640 (357)1,059
Income before provision for income
taxes 17,933 17,380 33,08931,793
Provision for income taxes 7,3776,779 13,43612,401
Net income 10,556 10,601 19,65319,392
Accretion of preferred stock (1,956) - (3,913)-
Undistributed income attributable to
preferred stockholders(5,802) - (10,630)-
Net income attributable to common
stockholders $2,798 $10,601 $5,110 $19,392
Net income per common share:
Basic $0.17$0.19$0.31 $0.35
Diluted$0.13$0.18$0.25 $0.32
The following table presents details of the stock based compensation
expense that is included in each functional line item in the condensed
consolidated statements of income above (in thousands):
Three Months Ended Six Months Ended
June 30, June 28, June 30, June 28,
2007 2008 2007 2008
Cost of goods sold $45 $75 $78 $104
Research and development164 607 2751,019
Selling, general and administrative$849 $1,487 $1,295 $2,624
MASIMO CORPORATION
Reconciliation of GAAP to Non-GAAP Earnings per Share
(unaudited)
The following tables provide a comparison of our earnings per share
calculated under Emerging Issues Task Force Issue No. 03-6,
"Participating Securities and the Two-Class Method under FASB Statement
No. 128", or EITF 03-6, and SFAS No. 128 "Earnings per Share", or SFAS
128, in accordance with GAAP and the non-GAAP if-converted method based
solely upon SFAS No. 128. The non-GAAP if-converted method assumes
conversion of all shares of our preferred stock into common stock as of
December 31, 2006.
Upon closing of the Company's initial public offering on August 13, 2007,
all of the outstanding convertible preferred shares were converted into
common shares. Therefore, subsequent to this stock conversion the Company
uses the if-converted method under SFAS No. 128 to calculate earnings per
share.
We believe that the following non-GAAP earnings per share information for
the three and six months ended June 30, 2007 is relevant and useful
information that can be used by analysts, investors and other interested
parties to assess our performance on a comparable basis to the three and
six months ended June 28, 2008 and future reported earnings per share.
Accordingly, we are disclosing this information to permit additional
analysis of our performance (in thousands, except share data):
20072008
As Reported Non-GAAP As Reported
Three Six Three Six Three Six
monthsmonths months months months months
ended endedended ended endedended
June 30, June 30, June 30, June 30, June 28, June 28,
2007 2007 2007 2007 2008 2008
Numerator:
Net income
as rep-
orted$10,556$19,653 $10,556 $19,653$10,601 $19,392
Accretion of
preferred
stock (1,956)(3,913) -- --
Undistributed
income
attributable
to preferred
stock-
holders (5,802) (10,630) -- --
Net income
attributable
to common
stock-
holders $2,798 $5,110 $10,556 $19,653$10,601 $19,392
Denominator:
Weighted average
common shares
outstanding
- number of
shares used
in per share
calculation -
Basic 16,692,547 16,642,779
Options to
purchase
common
stock 4,039,467 4,056,332
Weighted
average
number of
shares used
in per
common share
calculation -
Dil-
uted 20,732,014 20,699,111
Weighted
average
common
shares
outstanding 16,692,547 16,642,779
Weighted
average
preferred
shares
outstanding 34,612,503 34,612,503
Number of
shares used
in per share
calculation
- Basic 51,305,050 51,255,282 56,166,934 55,637,976
Options to
purchase
common
stock 4,039,4674,056,332 3,883,6884,413,349
Weighted
average
number of
shares used
in per share
calculation
- Diluted55,344,517 55,311,614 60,050,622 60,051,325
Net income
per share:
Basic $0.17 $0.31 $0.21$0.38 $0.19$0.35
Diluted $0.13 $0.25 $0.19$0.36 $0.18$0.32
SOURCE Masimo Corporation
