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Masimo Reports First Quarter 2013 Financial Results

IRVINE, Calif., May 2, 2013 /PRNewswire/ -- Masimo (NASDAQ: MASI) today announced its financial results for the first quarter ended March 30, 2013.

Masimo's total first quarter revenue, including royalties, rose 14% to $135.9 million, compared to $119.2 million for the first quarter of 2012.  First quarter 2013 product revenue rose 15% to $128.6 million, compared to $112.2 million for the first quarter of 2012.  The company's worldwide direct product revenue grew 13% in the first quarter of 2013 and represented 84% of product revenue.  OEM sales, which accounted for 16% of product revenue, rose 26% compared to the same period in 2012.  Revenue from sales of Masimo rainbow products rose 24% to $10.5 million in the first quarter, compared to $8.5 million for the first quarter of 2012.  

Net income for the first quarter of 2013 was $16.4 million, or $0.28 per diluted share, compared to net income of $15.8 million, or $0.27 per diluted share, in the first quarter of 2012.  First quarter 2013 earnings per share were reduced by approximately $0.03 due to non-operating expenses primarily related to realized and unrealized net losses on foreign currency denominated transactions due to the strengthening of the U.S. dollar against the Japanese yen.

During the first quarter, the company shipped approximately 39,500 Masimo SET pulse oximetry and Masimo rainbow SET Pulse CO-Oximetry units, excluding handheld units, up 19% compared to approximately 33,300 in the same prior-year period.  Masimo estimates its worldwide installed base as of March 30, 2013 to be 1,117,000 units, up 11% from 1,005,000 units as of March 31, 2012.Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, "Masimo is off to a solid start in 2013, with product revenue up 15%, fueled by a 14% rise in our core SET Pulse Oximetry business and a 24% rise in sales of rainbow SET Pulse CO-Oximetry and other rainbow related products. The 19% increase in driver shipments in the quarter further underscores the growing demand for our superior technology in hospitals and alternate care settings worldwide.  In addition, we took advantage of strong cash flows in the quarter to repurchase 778,000 shares of Masimo common stock, demonstrating our confidence in the company's strategy, business model and future growth prospects."As of March 30, 2013, Masimo's cash and cash equivalents were $81.6 million, compared to $71.6 million as of December 29, 2012.  The change reflects primarily net cash generated from operations, offset by $12.4 million in cash used to repurchase approximately 778,000 shares of Masimo common stock. 

Conference Call
Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results.  A live webcast of the conference call will be available online from the investor relations page of the company's corporate website at  The dial-in numbers are (888) 520-7182 for domestic callers and +1 (706) 758-3929 for international callers.  The reservation code for both dial-in numbers is 32475273.  After the live webcast, the call will be available on Masimo's website through June 2, 2013.  In addition, a telephonic replay of the call will be available through May 16, 2013.  The replay dial-in numbers are (800) 585-8367 for domestic callers and +1 (855) 859-2056 for international callers. Please use reservation code 32475273.

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 have shown that Masimo SET® outperforms other pulse oximetry technologies, 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. And in 2012, Masimo acquired the assets of Spire Semiconductor, LLC, a maker of advanced light emitting diode (LED) and other advanced component-level technologies; and PHASEIN AB, a developer and manufacturer of ultra-compact mainstream and sidestream capnography, multigas analyzers, and handheld capnometry solutions. Masimo SET® and Masimo rainbow® SET® technologies also can 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 Outcome 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

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; expectations regarding our ability to design and deliver innovative new noninvasive technologies; and demand for our technologies.  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 impact of the decline in the worldwide credit markets on us and our customers; the integration of acquisitions; 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"), 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  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. Investor Contact: Sheree AronsonMedia Contact: Mike Drummond(949) 297-7043 (949) 297-7434 mdrummond@masimo.comMasimo, 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.

2013 December 29,
2012ASSETSCurrent assetsCash and cash equivalents

71,554Accounts receivable, net of allowance for doubtful accounts

67,83567,911Royalties receivable


48,46247,358Prepaid expenses

7,4798,587Deferred tax assets

12,87912,911Other current assets

3,1053,896Total current assets

228,535219,347Deferred cost of goods sold

54,82352,103Property and equipment, net

23,91023,924Intangible assets, net


22,78922,824Deferred tax assets

22,34422,363Other assets

7,6598,022Total assets

$   387,827$
375,946LIABILITIES AND EQUITYCurrent liabilitiesAccounts payable

27,033Accrued compensation

21,46025,021Accrued liabilities

19,88216,648Income taxes payable

3,4311,504Deferred revenue

20,50119,278Current portion of capital lease obligations

11455Total current liabilities

96,26489,539Deferred revenue

454576Capital lease obligations, less current portion

23960Other liabilities

10,30310,103Total liabilities

107,260100,278EquityMasimo Corporation stockholders' equity:Common stock

5757Treasury stock

(79,045)(63,664)Additional paid-in capital

262,507258,783Accumulated other comprehensive income

3,6953,542Retained earnings

90,78974,361Total Masimo Corporation stockholders' equity

278,003273,079Noncontrolling interest

2,5642,589Total equity

280,567275,668Total liabilities and equity

$   387,827$

 MASIMO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)Three Months EndedMarch 30,
2013March 31,

$   128,635$ 112,219Royalty

7,3077,009Total revenue

135,942119,228Cost of goods sold

46,36139,923Gross profit

89,58179,305Operating expenses:Selling, general and administrative

52,27346,472Research and development

14,16710,505Total operating expenses

66,44056,977Operating income

23,14122,328Non-operating expense

(2,326)(582)Income before provision for income taxes

20,81521,746Provision for income taxes

4,4135,980Net income including noncontrolling interest

16,40215,766Net loss attributable to the noncontrolling interest

268Net income attributable to Masimo Corporation stockholders

,428$   15,774Net income per share attributable to Masimo Corporation stockholders:Basic


.27Weighted average shares used in per share calculations:Basic



2013March 31,
2012Cash flows from operating activities:Net income including noncontrolling interest

5,766Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:Depreciation and amortization

2,7831,760Share-based compensation

3,4133,804Loss on disposal of property and equipment

78—Provision (benefit) for doubtful accounts

142(217)Provision for obsolete inventory

165471Provision for warranty costs

777619Income tax benefit from exercise of stock options granted prior to January 1, 2006

1256Excess tax deficit from share-based compensation arrangements

164167Changes in operating assets and liabilities:Increase in accounts receivable

(72)(3,496)Increase in royalties receivable

(70)(183)Increase in inventories

(1,274)(1,930)(Increase) decrease in deferred cost of goods sold

(2,741)1,119Decrease in prepaid expenses

1,0673,031(Increase) decrease in other assets

1,128(2,090)Increase in accounts payable

3,8741,268Decrease in accrued compensation

(3,405)(2,198)Increase (decrease) in accrued liabilities

(436)170Increase in income taxes payable

1,7794,141Increase in deferred revenue

1,102683Increase in other liabilities

213307Net cash provided by operating activities

25,10123,248Cash flows from investing activities:Purchases of property and equipment

(1,839)(1,913)Increase in intangible assets

(1,107)(525)Cash paid for acquisitions

—(7,176)Net cash used in investing activities

(2,946)(9,614)Cash flows from financing activities:Repayments of capital lease obligations

(84)(12)Proceeds from issuance of common stock

463275Excess tax deficit from share-based compensation arrangements

(164)(167)Repurchases of common stock

(12,431)(14,366)Net cash used in financing activities

(12,216)(14,270)Effect of foreign currency exchange rates on cash

82(398)Net increase (decrease) in cash and cash equivalents

10,021(1,034)Cash and cash equivalents at beginning of period

71,554129,882Cash and cash equivalents at end of period


SOURCE Masimo Corporation
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