Masimo Reports Third Quarter 2010 Financial Results

IRVINE, Calif., Nov. 2, 2010 /PRNewswire-FirstCall/ --

Q3 2010 Highlights (compared to Q3 2009):

• Total revenue rose 15.5% to $101.0 million
• Product revenue rose 18.2% to $88.8 million
• Masimo SET and Masimo rainbow SET unit shipments rose 43.1% to 37,500
• Masimo rainbow revenue rose 98.7% to $11.9 million
• GAAP EPS rose 22.7% to $0.27.  Excluding $0.01 in one-time expenses, adjusted EPS rose 27.3% to $0.28

Masimo Corporation (Nasdaq: MASI) today announced its financial results for the third quarter of 2010.

Masimo’s total revenue for the third quarter rose 15.5% to $101.0 million, compared to $87.4 million for the third quarter of 2009.  Masimo’s third quarter product revenue rose 18.2% to $88.8 million, compared to $75.1 million for the third quarter of 2009.  Revenue from Masimo rainbow products rose 98.7% to $11.9 million in the third quarter, compared to $6.0 million for the third quarter of 2009.  

Net income for the third quarter was $16.4 million, or $0.27 per diluted share, including $0.01 per diluted share in one-time marketing-related expenses that Masimo had previously planned and announced after receiving $30.1 million in proceeds in the first quarter of 2010 from an antitrust lawsuit against Covidien.  Excluding these one-time expenses, adjusted net income for the third quarter was $16.9 million, or $0.28 per diluted share, compared to net income of $13.1 million, or $0.22 per diluted share, in the third quarter of 2009.  

During the third quarter, the company shipped approximately 37,500 Masimo SET pulse oximetry and Masimo rainbow SET Pulse CO-Oximetry units, excluding handheld units, up 43.1% compared to approximately 26,200 in the same period last year.  Masimo estimates its worldwide installed base as of October 2, 2010 to be 821,000 units, up 17.8% from 697,000 units as of October 3, 2009.      

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “Masimo continues to pursue its mission to improve patient outcomes and reduce healthcare costs by taking noninvasive monitoring to new sites and applications.  Our third-quarter results demonstrate the strength of our technology and mission.”  

As of October 2, 2010, cash, cash equivalents and short-term investments totaled $125.4 million, compared to $189.0 million as of January 2, 2010.  The decline was due primarily to the March 31, 2010 dividend payment of $117.5 million, partially offset by the net proceeds from the antitrust lawsuit and operating cash flow in the first nine months of 2010.    

Conference Call

Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results.  The dial-in numbers are (888) 520-7182 for domestic callers and +1 (706) 679-9937 for international callers. The reservation code for both dial-in numbers is 17706796. After the live webcast, the call will be available on Masimo's website through December 2, 2010. In addition, a telephonic replay of the call will be available through November 16, 2010. The replay dial-in numbers are (800) 642-1687 for domestic callers and +1 (706) 645-9291 for international callers. Please use reservation code 17706796.

About Masimo

Masimo (NASDAQ: MASI) is the global leader in innovative noninvasive 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 rainbow® SET Pulse CO-Oximetry™ technology, allowing noninvasive and continuous monitoring of blood constituents that previously required invasive procedures, including total hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), and Pleth Variability Index (PVI®), in addition to SpO2, pulse rate, and perfusion index (PI).  In 2008, Masimo introduced Patient SafetyNet™, a remote monitoring and wireless clinician notification system designed to help hospitals avoid preventable deaths and injuries associated with failure to rescue events.  In 2009, Masimo introduced rainbow Acoustic Monitoring™, the first-ever noninvasive and continuous monitoring of acoustic respiration rate (RRa™).  Masimo’s rainbow SET technology platform offers a breakthrough in patient safety by helping clinicians detect life-threatening conditions and helping guide treatment options.  In 2010, Masimo acquired SEDLine®, a pioneer in the development of innovative brain function monitoring technology and devices.  Masimo SET and Masimo rainbow SET technologies can also be found in over 100 multiparameter patient monitors from over 50 medical device manufacturers around the world.  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

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 and business generally.  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 the 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 impact of the decline in the worldwide credit markets on us and our customers; 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 most recent periodic reports filed with the Securities and Exchange Commission ("SEC"), 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, Rainbow Acoustic Monitoring, RRa, Radical-7, Rad-87, Rad-57, Rad-8, Rad-5, Pulse CO-Oximetry, Pulse CO-Oximeter, and SEDLine  are trademarks or registered trademarks of Masimo Corporation.

SOURCE Masimo Corporation