Masimo Reports Second Quarter 2007 Financi...(75 $ 45 $ 1966 $ 78 .....)

Research and development 35 164 8,418 275

Selling, general and

administrative $ 194 $ 849 $21,428 $ 1,295

MASIMO CORPORATION

Unaudited Reconciliation of GAAP to Non-GAAP Earnings per Share

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, in accordance with GAAP and the non-GAAP if converted method based upon Financial Accounting Standards Board No. 128 "Earnings per Share", or FASB 128. The non-GAAP if converted method assumes conversion of all shares of the Company's preferred stock into common stock as of December 31, 2006. As a result of the three-for-one forward stock split of our common stock effected on June 25, 2007, the conversion price of each outstanding share of our preferred stock was reduced to one-third of the pre-stock split conversion price, which effectively increased the conversion ratio to three shares of common stock for one share of preferred stock. Upon closing of our initial public offering on August 13, 2007, all outstanding shares of our preferred stock were converted into an aggregate of 34,612,503 shares of common stock. Therefore, effective August 13, 2007, the Company transitioned from computing earnings per share from the two class method, in accordance with EITF 03-6 to the if converted method in accordance with FASB 128. The Company believes that the following non-GAAP earnings per share information is relevant and useful information that can be used by analysts, investors and other interested parties to assess the Company's performance on a comparable basis to future reported earnings per share. Accordingly, the Company is disclosing this information to permit additional analysis of the Co
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