Masimo Reports Fourth Quarter and Full Year 2012 Financial Results; Provides 2013 Financial Guidance

IRVINE, Calif., Feb. 14, 2013 /PRNewswire/ --

Q4 2012 Highlights (compared to Q4 2011):

• Product revenue rose 20% to $125.3 million
• Masimo rainbow revenue rose 13% to $11.1 million
• Shipped 42,700 Masimo SET® and Masimo rainbow® SET units
• Net income was $15.0 million, with EPS of $0.26 versus $0.23 in the year-ago period

Full Year 2012 Highlights (compared to 2011):

• Product revenue rose 14% to $464.9 million
• Masimo rainbow revenue rose 18% to $40.3 million
• Shipped 146,400 Masimo SET® and Masimo rainbow® SET units, increasing worldwide installed base by 11%
• Net income was $62.3 million, with EPS of $1.07 versus $1.05 in 2011

Masimo (NASDAQ: MASI) today announced its financial results for the fourth quarter and year ended December 29, 2012.

Masimo's total fourth quarter revenue, including royalties, rose 18% to $132.2 million, compared to $112.3 million for the fourth quarter of 2011.  Fourth quarter 2012 product revenue rose 20% to $125.3 million, compared to $104.7 million for the fourth quarter of 2011.  The company's worldwide end-user product revenue grew 18% in the fourth quarter of 2012 and represented 85% of product revenue.  OEM sales, which accounted for 15% of product revenue, rose 28% compared to the same period in 2011.  Revenue from sales of Masimo rainbow products rose 13% to $11.1 million in the fourth quarter, compared to $9.8 million for the fourth quarter of 2011.  

Net income for the fourth quarter of 2012 was $15.0 million, or $0.26 per diluted share, compared to net income of $13.8 million, or $0.23 per diluted share, in the fourth quarter of 2011.  The fourth quarter 2012 results were impacted by a $1.3 million non-operating expense primarily related to realized and unrealized net losses on foreign currency denominated transactions due to strengthening of the U.S. dollar against the Japanese yen, and suspension of the federal research tax credit in fiscal 2012, which combined to reduce fourth quarter 2012 EPS by approximately $0.03. 

For 2012, Masimo's total revenue, including royalties, rose 12% to $493.2 million, compared to $439.0 million for 2011.  Total 2012 product revenue rose 14% to $464.9 million, compared to $406.5 million for 2011.  The company's worldwide end-user revenue grew 16% in 2012 and represented 85% of product revenue.  OEM sales, which accounted for 15% of product revenue, rose 8% compared to 2011.  Revenue from sales of Masimo rainbow products rose 18% to $40.3 million in 2012, compared to $34.1 million in 2011.  Total 2012 rainbow revenue included a 48% increase in total hemoglobin (SpHb) sales compared to 2011.     

Net income for 2012 was $62.3 million, or $1.07 per diluted share, compared to net income of $63.7 million, or $1.05 per diluted share, in 2011.  The 2012 results were impacted by a $1.4 million non-operating expense primarily related to realized and unrealized net losses on foreign currency denominated transactions due to strengthening of the U.S. dollar against the Japanese yen, and the suspension of the federal research tax credit in fiscal 2012, which combined to reduce 2012 EPS by approximately $0.03.  The 2012 results also included a $0.06 per share loss attributed to Masimo's 2012 acquisitions of PHASEIN AB and Spire Semiconductor.

During the fourth quarter, the company shipped approximately 42,700 Masimo SET pulse oximetry and Masimo rainbow SET Pulse CO-Oximetry units, excluding handheld units, up 24% compared to approximately 34,400 in the same prior-year period.  For 2012, Masimo shipped approximately 146,400 Masimo SET pulse oximetry and Masimo rainbow SET Pulse CO-Oximetry units, excluding handheld units, down 1% compared to approximately 148,200 in 2011.  Masimo estimates its worldwide installed base as of December 29, 2012 to be 1,088,000 units, up 11% from 979,000 units as of December 31, 2011.      

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, "We finished 2012 with a 20% rise in fourth quarter product revenue.  We've entered 2013 fully focused on advancing our mission, strategy, and 2013 objectives, which is to continue to grow our core SET Pulse Oximetry business by increasing our presence in critical care and the general ward, while leveraging our breakthrough rainbow Pulse CO-Oximetry platform to pursue new opportunities in and beyond the hospital setting."         

As of December 29, 2012, Masimo's cash and cash equivalents were $71.5 million, compared to $129.9 million as of December 31, 2011.  The change reflects primarily net cash generated from operations, offset by $37.4 million in cash used to acquire PHASEIN AB and Spire Semiconductor, $26.3 million in cash used to repurchase shares of Masimo common stock and $57.3 million used to pay a special $1.00 per share cash dividend to stockholders on December 11, 2012. 

2013 Financial Guidance
Masimo expects fiscal 2013 total revenue to be approximately $548 million, including product revenue of $520 million and royalty revenue of $28 million.  Included in the 2013 product revenue guidance is a rainbow revenue expectation of $50 million.  The company expects fiscal 2013 GAAP earnings per share to be $1.14.  Each of the components of Masimo's guidance set forth above is an estimate only and actual performance could differ.

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 www.masimo.com.  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 92598385.  After the live webcast, the call will be available on Masimo's website through March 14, 2013.  In addition, a telephonic replay of the call will be available through February 28, 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 92598385.

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^TM, 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 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; expectations regarding our ability to design and deliver innovative new noninvasive technologies; demand for our technologies; and expectations for total revenue, royalty revenue and product revenue, including rainbow revenue, and GAAP earnings per share, for the full fiscal year 2013, as well as the expected benefit from the recent reinstatement of the federal research tax credit .  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 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