Record results mark 18th consecutive quarter of revenue growth 2007 Highlights: * Product revenues increased 29% to a record $199.7 million * Masimo SET pulse oximeter units increase 20% to 116,300 unitsIRVINE, Calif., Feb 26, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Masimo Corporation
(Nasdaq: MASI), the inventor of Pulse CO-Oximetry and Measure-Through Motion &
Low Perfusion pulse oximetry, today announced its financial results for both
the quarter and year ended December 29, 2007.
For the fiscal fourth quarter, Masimo reported product revenues of
$55.2 million representing a 29% increase over $42.9 million for the fourth
quarter of 2006. Including royalty revenues, Masimo reported total fourth
quarter revenues of $69.3 million compared to $61.6 million for the fourth
quarter of 2006. Net income for the quarter was $12.1 million representing
$0.20 earnings per common share, including $0.02 per common share relating to
a year-to-date tax benefit recorded in the fourth quarter. Masimo also
reported that it shipped 29,400 Masimo SET and Masimo Rainbow SET oximetry
units, excluding handheld units, during the fourth quarter of 2007, up 10%
from 26,700 in the comparable prior year period, resulting in a new estimated
worldwide installed base of 470,000 Masimo SET pulse oximeters.
For the year ended December 29, 2007, Masimo's product revenues were
$199.7 million, up 29% from $155.1 million in 2006. Including royalty
revenues, Masimo's total revenues were $256.3 million for the year ended
December 29, 2007, up from $224.3 million in 2006. In the year ended
December 29, 2007, Masimo shipped 116,300 Masimo SET and Masimo Rainbow SET
pulse oximeter units, excluding handheld pulse oximeters, compared to 96,600
in 2006, representing a 20% increase in new pulse oximeter and Pulse CO-
Oximeter shipments.
Net income for the year ended December 29, 2007, was $42.3 million
compared to $181.8 million in 2006, which included $262.6 million in net
patent litigation settlement proceeds and various one-time stock option based
bonus payments related to a January 2006 patent litigation settlement. For
the year ended December 29, 2007, Masimo's reported net income attributable to
common stockholders was $23.1 million, or $0.60 per common share, as compared
to $3.04 per common share for the year ended December 31, 2006.
Cash, cash equivalents and short-term investments rose to $96.7 million at
December 29, 2007 up from $88.6 million at September 29, 2007 and from
$55.4 million at December 31, 2006.
Financial Guidance
For the full year 2008, Masimo expects total revenues to be approximately
$292 million and total product revenues to be approximately $246 million.
Masimo also expects full year 2008 earnings per common share to be
approximately $0.52 per share. Included in the $0.52 per common share
projection is approximately $11.0 million in expected 2008 non cash stock
based compensation charges, up from $3.9 million in 2007. Stock based
compensation charges are expected to increase due principally to the increase
in the market price of our common stock and to due to the increase in the
number of options granted consistent with the increase in our total employee
headcount. The projections and guidance set forth above are estimates only
and actual performance could differ.
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 (800) 295-4740 for domestic
callers and (617) 614-3925 for international callers. The reservation number
for both dial-in numbers is 39491099. 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 web
site through March 26, 2008. In addition, a telephonic replay of the call
will be available until March 10, 2008. The replay dial-in numbers are
(888) 286-8010 for domestic callers and (617) 801-6888 for international
callers. Please use reservation code 89834871.
The financials results included in this release are unaudited. The
complete audited financial statements of the company for the year ended
December 29, 2007 will be included in the Masimo Annual Report on Form 10-K,
to be filed with the SEC early next month.
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, and with it 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 trustworthy SpO2 and pulse rate measurements even under the most
difficult 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)), pending
regulatory approval, carboxyhemoglobin (SpCO(TM)) and methemoglobin
(SpMet(TM)), pleth variability index (PVI(TM)), in addition to oxyhemoglobin
(SpO2), perfusion index (PI) and pulse rate, 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
http://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 plans, objectives and
prospects regarding, among other things, 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, such as the recently introduced total hemoglobin
measurement, and our assumption of total hemoglobin's timely regulatory
clearing by appropriate regulatory bodies, if ever, and our assumption to
expand into additional areas of vital signs monitoring and measurements; and
expectations for total revenues, product revenues, GAAP earnings per share,
non-GAAP 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 introduction of competing products; the lack of
acceptance of any new products and technologies, including the recently
announced total hemoglobin measurement and including whether regulatory
clearances will be obtained, the loss of our customers; increases in prices
for raw materials or the loss of key supplier contracts; the failure to retain
and recruit senior management and manage expected growth; 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 quarter ended September 29, 2007,
filed with the Securities and Exchange Commission on November 1, 2007.
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 quarter
ended September 29, 2007, 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 and Pulse CO-Oximeter are
trademarks or registered trademarks of Masimo Corporation.
MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, 2006 December 29, 2007
ASSETS
Current assets
Cash and cash equivalents $55,382 $96,733
Accounts receivable, net of allowance
for doubtful accounts 22,350 26,970
Royalties receivable 1,289 13,866
Inventories 17,135 23,110
Prepaid expenses 2,021 3,837
Prepaid income taxes - 3,247
Deferred tax assets 18,116 14,334
Other current assets 1,022 1,543
Total current assets 117,315 183,640
Deferred cost of goods sold 21,899 26,249
Property and equipment, net 10,290 11,164
Deferred tax assets 3,163 5,332
Restricted cash 507 513
Intangible assets, net 4,592 5,589
Goodwill 448 448
Other assets 859 2,576
Total assets $159,073 $235,511
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $10,142 $14,640
Accrued compensation 12,207 12,409
Accrued liabilities 4,655 6,211
Dividends payable 37,533 183
Income taxes payable 1,245 -
Deferred revenue 13,880 16,827
Current portion of long-term debt 7,528 11,539
Total current liabilities 87,190 61,809
Deferred revenue 490 366
Long-term debt, less current portion 13,514 19,502
Other liabilities 918 3,768
Total liabilities 102,112 85,445
Commitments and contingencies - -
Stockholders' equity
Convertible preferred stock 88,328 -
Common stock 17 55
Treasury stock (628) (1,209)
Additional paid-in capital - 143,297
Accumulated other comprehensive loss (317) (1,034)
Retained earnings (deficit) (30,439) 8,957
Total stockholders' equity 56,961 150,066
Total liabilities and
stockholders' equity $159,073 $235,511
MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
(unaudited)
Three Months Ended Year Ended
December 31, December 29, December 31, December 29,
2006 2007 2006 2007
Revenue:
Product $42,852 $55,171 $155,131 $199,684
Royalty and license
fee 18,760 14,105 69,207 56,602
Total revenue 61,612 69,276 224,338 256,286
Cost of goods sold 15,842 19,976 61,640 73,606
Gross profit 45,770 49,300 162,698 182,680
Operating expenses:
Research and
development 5,608 5,505 24,875 22,960
Selling, general
and administrative 21,922 26,659 91,384 91,234
Patent litigation
proceeds (4) - (262,605) -
Antitrust
litigation 6 555 109 1,537
Total operating
expenses 27,532 32,719 (146,237) 115,731
Operating income 18,238 16,581 308,935 66,949
Non-operating
income (expense):
Interest income 805 1,091 6,741 2,361
Interest expense (411) (644) (1,824) (2,475)
Other 230 517 551 1,287
Total non-operating
income 624 964 5,468 1,173
Income before
provision for
income taxes 18,862 17,545 314,403 68,122
Provision for
income taxes 7,952 5,490 132,577 25,867
Net income 10,910 12,055 181,826 42,255
Preferred stock
dividend (19,215) - (77,785) -
Accretion of
preferred stock (1,956) - (7,985) (4,837)
Undistributed
income
attributable to
preferred
stockholders - - (34,275) (14,339)
Net income (loss)
attributable to
common
stockholders $(10,261) $12,055 $61,781 $23,079
Net income (loss)
per common share:
Basic $(0.62) $0.22 $3.79 $0.71
Diluted $(0.62) $0.20 $3.04 $0.60
The following table presents details of the stock-based compensation
expense that is included in each functional line item in the condensed
consolidated statement of operations above (in thousands):
Three Months Ended Year Ended
December 31, December 29, December 31, December 29,
2006 2007 2006 2007
Cost of goods sold $364 $130 $2,379 $264
Research and development 887 204 9,378 670
Selling, general and
administrative 1,612 966 23,313 2,958
MASIMO CORPORATION
Reconciliation of GAAP to Non-GAAP Diluted Earnings per Share
(unaudited)
We prepare our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America,
or U.S. GAAP. In an effort to provide investors with additional
information regarding our results of operations and to provide a
meaningful period-over-period comparison of our financial performance, we
use non-GAAP financial measures as defined by the Securities and Exchange
Commission. The differences between the U.S. GAAP and non-GAAP financial
measures are reconciled below.
The following tables provide a comparison of our diluted 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 Financial Accounting Standards Board No. 128
"Earnings per Share", or FASB 128, in accordance with GAAP and the
non-GAAP if converted method based upon 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, 2005.
Upon the closing of our initial public offering on August 13, 2007, all
outstanding shares of our prior Series A through Series G convertible
preferred stock were converted into an aggregate of 34,612,503 shares of
common stock. Therefore, effective August 13, 2007, we transitioned from
computing diluted earnings per share from the two class method in
accordance with EITF 03-6 to the if converted method in accordance with
FASB 128. Net income for the year ended December 29, 2007 was allocated
between the periods during which two classes of equity securities were
outstanding and during which a single class of equity securities was
outstanding based on the respective number of days. For the year ended
December 29, 2007, two classes of equity securities were outstanding for
224 days and a single class of equity securities was outstanding for 139
days, or 61.7% and 38.3% of the total days in the twelve month reporting
period, respectively. For the three months ended December 29, 2007, a
single class of equity securities was outstanding for the entire period.
We believe that the following non-GAAP diluted earnings per share
information 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 future reported diluted earnings per share.
Accordingly, we are disclosing this information to permit additional
analysis of our performance (in thousands, except share data):
Three Months Ended Year Ended
December 31, December 29, December 31, December 29,
2006 2007 2006 2007
Numerator:
GAAP: Net income
(loss)
attributable
to common
stockholders $(10,261) $12,055 $61,781 $23,079
Less: Net income
(loss)
attributable
to common
stockholders
during which
two classes
of equity
securities were
outstanding (A) (10,261) - 61,781 6,899
Net income
attributable
to common
stockholders
during which a
single class of
equity
securities was
outstanding (B) $- $12,055 $- $16,180
GAAP: Net income
(loss)
attributable to
common
stockholders (2) $(10,261) $12,055 $61,781 $23,079
Preferred stock
dividend (2) 19,215 - 77,785 -
Accretion of
preferred stock 1,956 - 7,985 4,837
Undistributed
income
attributable to
preferred
stockholders - - 34,275 14,339
Non-GAAP:
Net income
attributable to
common
stockholders (C) $10,910 $12,055 $181,826 $42,255
Denominator:
Weighted average
number of common
shares
outstanding
under the two
class method -
Diluted (D) 16,549,901 - 20,302,872 20,732,872
Weighted average
number of common
shares outstanding
under the single
class method -
Diluted (E) - 59,985,371 - 59,829,198
Non-GAAP:
Weighted
average common
shares
outstanding -
Diluted (F) 55,135,822 59,985,371 54,915,375 57,227,507
Earnings (loss)
per share -
Diluted:
Earnings (loss)
per share -
Two class
(A)/(D) (2) $(0.62) $- $3.04 $0.33
Earnings per
share -
Single
class (B)/(E) - 0.20 - 0.27
GAAP: Earnings
(loss) per
share -
Diluted $(0.62) $0.20 $3.04 $ 0.60
Non-GAAP:
Earnings per
share -
Diluted
(C)/(F) (1) $0.20 $0.20 $3.31 $0.74
(1) For the three months ended December 29, 2007, the amount indicated as
Non-GAAP: Earnings per share is equal to the GAAP: Earnings per share,
and is shown here for comparison purposes only.
(2) In December 2006, we declared a dividend to preferred stockholders
that was more than the net income for the three months ended
December 31, 2006. This resulted in a net loss attributable to common
stockholders during the three months ended December 31, 2006. As a
result, for the three months ended December 31, 2006, the earnings
(loss) per share reported herein is different from amounts previously
reported due to a correction of a prior period calculation.
SOURCE Masimo Corporation
http://www.masimo.com