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Masimo Reports First Quarter 2009 Financial Results

05/05/2009

Q1 2009 Highlights:

  • Earnings per share increased by 47% to $0.22 per share from $0.15 in prior year
  • Product revenues increased approximately 25% to $74.5 million from $59.7 million in prior year

IRVINE, Calif., May 5 /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 first quarter of 2009.

For the first quarter of 2009, Masimo reported product revenues of $74.5 million representing a 24.7% increase over $59.7 million for the first quarter of 2008. Including royalty revenues, Masimo reported total 2009 first quarter revenues of $85.5 million compared to $71.1 million for the first quarter of 2008. For the first quarter of 2009, Masimo reported earnings per share of $0.22 compared to $0.15 per common share for the first quarter of 2008.

Masimo reported that it shipped 27,700 Masimo SET and Masimo Rainbow SET oximetry units, excluding handheld units, during the first quarter of 2009, resulting in at least 587,000 of Masimo SET and Masimo Rainbow SET pulse oximeters in use worldwide. In the first quarter of 2009, revenues from Masimo Rainbow SET products increased to $3.1 million from $2.7 million in the same prior year quarter.

Joe E. Kiani, Chairman and Chief Executive Officer of Masimo, said, "Despite the continuing difficult economic environment, we are happy that our revenues and earning were better than we had expected in Q1. We believe that this performance is largely due to our gold standard Masimo SET pulse oximetry technology and our expanding Masimo Rainbow SET Pulse CO-Oximetry platform, including the March 23, 2009 commercial release of total hemoglobin, the world's first continuous non-invasive total hemoglobin monitor."

Masimo also reported that as of April 4, 2009, cash and cash equivalents totaled $152.2 million, up from $146.9 million at January 3, 2009.

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 (888) 520-7182 for domestic callers and +1 (706) 679-9937 for international callers. The reservation number for both dial-in numbers is 95073118. 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 www.masimo.com. After the live web cast, the call will remain available on Masimo's website through June 5, 2009. In addition, a telephonic replay of the call will be available until May 19, 2009. The replay dial-in numbers are (800) 642-1687 for domestic callers and +1 (706) 645-9291 for international callers. Please use reservation code 95073118.

About Masimo

Masimo (NASDAQ: MASI) develops, manufactures and markets 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 clinical and laboratory 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(R)), oxygen content (SpOC(TM)), carboxyhemoglobin (SpCO(R)), methemoglobin (SpMet(R)) and plethysmograph variability index (PVI(R)), 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. Any information contained in, or that can be accessed through, our website is not incorporated by reference into, nor is it in any way a part of, this release.

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; and expectations regarding our ability to design and deliver innovative new noninvasive 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 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 risk that the implementation of our international realignment, even if timely implemented, will not produce the anticipated operational and financial benefits, including a 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 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 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)


                                                April 4, 2009  January 3, 2009
                                                -------------  ---------------
                                                 (Unaudited)
      ASSETS
      Current assets
            Cash and cash equivalents             $152,247        $146,910
            Accounts receivable, net of
             allowance for doubtful
             accounts                               35,627          30,715
            Royalties receivable                    10,828          11,375
            Inventories                             29,788          27,400
            Prepaid expenses                         3,688           4,780
            Deferred tax assets                     10,511          10,511
            Other current assets                       522             551
                                                       ---             ---
                Total current assets               243,211         232,242
      Deferred cost of goods sold                   28,649          28,431
      Property and equipment, net                   12,331          12,979
      Deferred tax assets                            8,777           8,781
      Intangible assets, net                         7,524           7,410
      Other assets                                   4,409           3,505
                                                     -----           -----
                Total assets                      $304,901        $293,348
                                                  ========        ========


      LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities
            Accounts payable                       $15,963         $15,914
            Accrued compensation                    13,215          15,607
            Accrued liabilities                      6,354           5,566
            Income taxes payable                     4,666          10,862
            Deferred revenue                        19,939          17,233
            Current portion of long-term debt          403             465
                                                       ---             ---
                Total current liabilities           60,540          65,647
      Long-term debt, less current portion             140             157
      Other liabilities                              8,125           8,046
                                                     -----           -----
                Total liabilities                   68,805          73,850
      Commitments and contingencies
      Stockholders' equity
            Common stock                                57              57
            Treasury stock                          (1,209)         (1,209)
            Additional paid-in capital             183,474         179,666
            Accumulated other comprehensive
             loss                                     (498)             (7)
            Retained earnings                       53,905          40,884
                                                    ------          ------
            Total Masimo Corporation's
             stockholders' equity                  235,729         219,391
                Noncontrolling interest                367             107
                                                       ---             ---
                Total stockholders' equity         236,096         219,498
                                                   -------         -------
                Total liabilities and
                 stockholders' equity             $304,901        $293,348
                                                  ========        ========



                                MASIMO CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   (in thousands, except per share information)
                                    (unaudited)

                                                      Three Months Ended
                                                      ------------------
                                                April 4, 2009  March 29, 2008
                                                -------------  --------------
      Revenue:
            Product                                   $74,497         $59,735
            Royalty                                    10,995          11,375
                                                       ------          ------
      Total revenue                                    85,492          71,110
      Cost of goods sold                               24,745          21,121
                                                       ------          ------
      Gross profit                                     60,747          49,989
      Operating expenses:
            Research and development                    7,767           6,298
            Selling, general and administrative        32,880          29,529
            Antitrust litigation                           14             168
                                                           --             ---
      Total operating expenses                         40,661          35,995
                                                       ------          ------
      Operating income                                 20,086          13,994
      Non-operating income (expense):
            Interest income                                45             959
            Interest expense                              (10)           (643)
            Other                                        (322)            103
                                                         ----             ---
      Total non-operating income (expense)               (287)            419
                                                         ----             ---
      Income before provision for income taxes         19,799          14,413
      Provision for income taxes                        6,535           5,622
                                                        -----           -----
      Net income including noncontrolling
       interest                                        13,264           8,791
      Net income attributable to the
       noncontrolling interest                           (243)              -
                                                         ----             ---
      Net income attributable to Masimo
       Corporation                                    $13,021          $8,791
                                                      =======          ======


      Net income per common share attributable
       to Masimo Corporation stockholders:
            Basic                                       $0.23           $0.16
                                                        =====           =====

            Diluted                                     $0.22           $0.15
                                                        =====           =====



    The following table presents details of the share based compensation
    expense that is included in each functional line item in the condensed
    consolidated statements of income above (in thousands):

                                                       Three Months Ended
                                                       ------------------
                                                  April 4, 2009 March 29, 2008
                                                  ------------- --------------
      Cost of goods sold                                  $74             $29
      Research and development                            613             412
      Selling, general and administrative               1,953           1,137

SOURCE Masimo Corporation

CONTACT:
Investors,
Mark P. de Raad,
Executive Vice President and Chief Financial Officer,
+1-949-297-7080,
mderaad@masimo.com,
or
Media,
Dana Banks,
Manager,
Public Relations,
+1-949-297-7348,
dbanks@masimo.com,
both of Masimo Corporation

Web Site: http://www.masimo.com

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