Third Quarter 2023 Highlights
- Consolidated revenue was $478.9 million;
- Healthcare revenue was $307.8 million;
- Non-healthcare revenue was $171.1 million;
- GAAP net income per diluted share was $0.20; and
- Non-GAAP net income per diluted share was $0.63.
Masimo Corporation (Nasdaq: MASI) today announced its financial
results for the third quarter of 2023, ended September 30,
2023.
Third Quarter 2023 Financial Results
Consolidated revenue was $478.9 million, comprised of healthcare
revenue of $307.8 million and non-healthcare revenue of $171.1
million.
Shipments of noninvasive technology boards and instruments were
63,100.
Consolidated GAAP operating income was $25.2 million.
Consolidated non-GAAP operating income was $56.9 million.
Consolidated GAAP net income was $10.6 million, or $0.20 per
diluted share. Consolidated non-GAAP net income was $33.7 million,
or $0.63 per diluted share.
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said,
“Our performance for the third quarter was within our guidance
range communicated last quarter. That said, our healthcare business
is navigating a clear transition away from COVID-era conditions. We
are beginning to see that customer behavior and sensor purchasing
patterns are shifting back to the pre-pandemic growth trend line we
saw from 2017 to 2019. Together with our record contracting
performance through the third quarter, this reinforces our
conviction in the underlying long-term growth rate for our
healthcare business. As we emerge from this transition year, these
trends, along with our new product launches and rapid growth in our
hearables category, are setting the stage for a strong 2024.”
For additional financial details, please visit the Investor
Relations section of the Company’s website at investor.masimo.com
to access the third quarter 2023 earnings presentation
materials.
Updated Fourth-Quarter 2023 and Full-Year 2023 Financial
Guidance
The Company provided the following updated estimates for its
fourth-quarter 2023 and full-year financial guidance:
Guidance
Fourth-Quarter 2023(1)
Updated Full-Year
2023(1)
(in millions, except earnings per
diluted share)
GAAP
Non-GAAP
GAAP
Non-GAAP
Consolidated revenue
$526 to $576
$526 to $576
$2,025 to $2,075
$2,025 to $2,075
Healthcare revenue
$320 to $345
$320 to $345
$1,255 to $1,280
$1,255 to $1,280
Non-healthcare revenue
$206 to $231
$206 to $231
$770 to $795
$770 to $795
Consolidated operating income
$45 to $59
$65 to $79
$138 to $152
$256 to $270
Consolidated net income per diluted
share
$0.45 to $0.65
$0.74 to $0.94
$1.34 to $1.54
$2.85 to $3.05
______________ (1) Guidance provided November 7, 2023.
- For the healthcare segment, fourth-quarter 2023 revenue
guidance includes year-over-year foreign currency tailwinds of $1
million and full-year 2023 revenue guidance includes year-over-year
foreign currency headwinds of $6 million.
- For the non-healthcare segment, fourth-quarter 2023 revenue
guidance includes year-over-year foreign currency tailwinds of $3
million and full-year 2023 revenue guidance includes year-over-year
foreign currency headwinds of $9 million.
Supplementary Non-GAAP Financial Information
For additional non-GAAP financial details, please visit the
Investor Relations section of the Company’s website at
investor.masimo.com to access Supplementary Financial
Information.
Non-GAAP Financial Measures
The non-GAAP financial measures contained herein are a
supplement to the corresponding financial measures prepared in
accordance with U.S. GAAP. The non-GAAP financial measures
presented exclude the items described below. Management believes
that adjustments for these items assist investors in making
comparisons of period-to-period operating results. Furthermore,
management also believes that these items are not indicative of the
Company’s on-going operating performance. These non-GAAP financial
measures have certain limitations in that they do not reflect all
of the costs associated with the operations of the Company’s
business as determined in accordance with GAAP.
Therefore, investors should consider non-GAAP financial measures
in addition to, and not as a substitute for, or as superior to,
measures of financial performance prepared in accordance with GAAP.
The non-GAAP financial measures presented by the Company may be
different from the non-GAAP financial measures used by other
companies.
The Company has presented the following non-GAAP measures to
assist investors in understanding the Company’s net operating
results on an on-going basis: (i) constant currency revenue growth
%, (ii) non-GAAP net income, (iii) non-GAAP (net income) earnings
per diluted share and (iv) non-GAAP operating income/margin. These
non-GAAP financial measures may also assist investors in making
comparisons of the Company’s operating results with those of other
companies. Management believes constant currency revenue growth,
non-GAAP operating income/margin, non-GAAP net income and non-GAAP
earnings per diluted share are important measures in the evaluation
of the Company’s performance and uses these measures to better
understand and evaluate our business.
The non-GAAP financial measures reflect adjustments for the
following items:
Constant currency revenue
adjustments
Some of our sales agreements with foreign customers provide for
payment in currencies other than the U.S. Dollar. These foreign
currency revenues, when converted into U.S. Dollars, can vary
significantly from period-to-period depending on the average and
quarter-end exchange rates during a respective period. We believe
that comparing these foreign currency denominated revenues by
holding the exchange rates constant with the prior year period is
useful to management and investors in evaluating our revenue growth
rates on a period-to-period basis. We anticipate that fluctuations
in foreign exchange rates and the related constant currency
adjustments for calculation of our revenue growth rate will
continue to occur in future periods.
Acquisition, integration and related
costs
These transactions represent gains, losses, and other related
costs associated with acquisitions, integrations, investments,
divestitures, assets impairments, and in-process research and
development.
Acquired tangible asset
amortization
These transactions represent amortization expense in connection
with business or assets acquisitions associated with acquired
tangible assets and asset valuation step-ups.
Acquired intangible asset
amortization
These transactions represent amortization expense in connection
with business or assets acquisitions associated with acquired
intangible assets including, but not limited to customer
relationships, intellectual property, trade names and
non-competition agreements.
Business transition and related
costs
These transactions represent gains, losses, and other related
costs associated with business transition plans. These items may
include but are not limited to severance, relocation, consulting,
leasehold exit costs, asset impairment, and other related costs to
rationalize our operational footprint and optimize business
results.
Litigation related expenses,
settlements and awards
These transactions represent gains, losses, and other related
costs associated with certain litigation matters, which can vary in
their characteristics, frequency and significance to our operating
results.
Other adjustments
In the event there are gains, losses and other adjustments which
impact period-to-period comparability and do not represent the
underlying ongoing results of the business, the Company may choose
to exclude these from non-GAAP earnings.
Realized and unrealized gains or
losses
These transactions represent gains, losses, and other related
costs associated with foreign currency denominated transactions and
investments. Changes in the underlying currency rates relative to
the U.S. Dollar may result in realized and unrealized foreign
currency gains and losses between the time these receivables and
payables arise and the time that they are settled in cash.
Unrealized and realized gains and losses on investments may impact
the Company’s reported results of operations for a period. These
items are highly variable, difficult to predict and outside the
control of those responsible for the underlying operations of the
business. Other items also included here are mark-to-market gains
and losses of derivative contracts that are not designated as
hedging instruments or the ineffective portions of cash flow
hedges.
Tax impact of non-GAAP
adjustments
In order to reflect the tax effected impact of the non-GAAP
adjustments, the Company will adjust the non-GAAP earnings by the
approximate tax impact of these adjustments.
Excess tax benefits from stock-based
compensation expense
GAAP requires that excess tax benefits recognized on stock-based
compensation expense be reflected in our provision for income taxes
rather than paid-in capital. As these excess tax benefits may be
highly variable from period-to-period, the Company may choose to
exclude these tax benefits from non-GAAP earnings to facilitate
comparability between periods and with peers.
Financing related
adjustments
The Company may enter into various financial arrangements
whereby costs are incurred and certain instrument features are
valued and expensed accordingly but are not necessarily indicative
of the on-going cash flow generation of the Company and therefore
excludes these costs from non-GAAP earnings. For GAAP earnings per
diluted share purposes, the Company cannot reflect the
anti-dilutive impact, if applicable, in its diluted shares
calculations. However, the Company believes that reflecting the
anti-dilutive impact of these instruments in non-GAAP earnings per
diluted share provides management and investors with useful
information in evaluating the financial performance of the Company
on a per share basis.
Third Quarter 2023 Actuals versus Third
Quarter 2022 Actuals
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT
CURRENCY REVENUE(1):
Three Months Ended
(in millions, except
percentages)
September 30,
2023
October 1, 2022
GAAP healthcare revenue
$
307.8
$
327.2
Constant currency revenue adjustments
(0.7
)
N/A
Non-GAAP healthcare constant currency
revenue
$
307.1
$
327.2
GAAP healthcare revenue growth %
(5.9
)%
Non-GAAP healthcare constant currency
revenue growth %
(6.1
)%
__________________ (1) May not foot due to rounding.
RECONCILIATION OF NON-HEALTHCARE GAAP TO NON-GAAP
CONSTANT CURRENCY REVENUE(1):
Three Months Ended
(in millions, except
percentages)
September 30,
2023
October 1, 2022
GAAP non-healthcare revenue
171.1
222.1
Constant currency revenue adjustments
(1.5
)
N/A
Non-GAAP non-healthcare constant currency
revenue
$
169.6
$
222.1
GAAP non-healthcare revenue growth %
(23.0
)%
Non-GAAP non-healthcare constant currency
revenue growth %
(23.6
)%
__________________ (1) May not foot due to rounding.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
Three Months Ended
September 30,
2023
October 1, 2022
(in millions)
$
$
GAAP operating income
$
25.2
$
54.8
Non-GAAP adjustments:
Acquired tangible asset amortization
0.9
8.8
Acquired intangible asset amortization
9.4
4.6
Acquisition, integration and related
costs(2)
10.6
9.7
Business transition and related costs
4.2
—
Litigation related expenses, settlements
and awards(3)
6.0
3.4
Other adjustments
0.5
—
Total non-GAAP adjustments
31.7
26.6
Non-GAAP operating income
$
56.9
$
81.3
__________________ (1) May not foot due to rounding. (2)
Includes a $7.0 million impairment charge in Q3 2023 for certain
indefinite-lived trademarks from the non-healthcare reporting unit.
(3) Includes legal expenses associated with the Apple ITC
proceedings and governance-related matters.
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Three Months Ended
September 30,
2023
October 1, 2022
(in millions, except per diluted share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$
10.6
$
0.20
$
37.9
$
0.70
Non-GAAP adjustments:
Acquired tangible asset amortization
0.9
0.02
8.8
0.16
Acquired intangible asset amortization
9.4
0.18
4.6
0.09
Acquisition, integration and related
costs(2)
10.6
0.20
9.7
0.18
Business transition and related costs
4.2
0.08
—
—
Litigation related expenses, settlements
and awards(3)
6.0
0.11
3.4
0.06
Other adjustments
0.5
0.01
(0.4
)
(0.01
)
Realized and unrealized gains or
losses
(1.0
)
(0.02
)
(5.4
)
(0.10
)
Financing related adjustments
0.5
0.01
0.5
0.01
Tax impact of non-GAAP adjustments
(8.0
)
(0.15
)
(4.9
)
(0.09
)
Excess tax benefits from stock-based
compensation expense
(0.2
)
—
(0.3
)
(0.01
)
Total non-GAAP adjustments
22.9
0.43
16.0
0.30
Non-GAAP net income
$
33.7
$
0.63
$
53.9
$
1.00
Weighted average shares
outstanding-diluted
53.9
54.1
__________________ (1) May not foot due to rounding. (2)
Includes a $7.0 million impairment charge in Q3 2023 for certain
indefinite-lived trademarks from the non-healthcare reporting unit.
(3) Includes legal expenses associated with the Apple ITC
proceedings and governance-related matters.
Updated Fourth-Quarter 2023 and
Full-Year 2023 Financial Guidance
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT
CURRENCY REVENUE(1):
Guidance(2)
(in millions, except
percentages)
Fourth-Quarter 2023
Updated
Full-Year 2023
GAAP healthcare revenue
$320 to $345
$1,255 to $1,280
Constant currency revenue adjustments
(1)
6
Non-GAAP healthcare constant currency
revenue
$319 to $344
$1,261 to $1,286
GAAP healthcare revenue growth %
(9)% to (2)%
(6)% to (4)%
Non-GAAP healthcare constant currency
revenue growth %
(9)% to (2)%
(6)% to (4)%
__________________ (1) May not foot due to rounding. (2)
Guidance provided November 7, 2023.
RECONCILIATION OF NON-HEALTHCARE GAAP TO NON-GAAP
CONSTANT CURRENCY REVENUE(1):
Guidance(2)
(in millions, except
percentages)
Fourth-Quarter 2023
GAAP non-healthcare revenue
$206 to $231
Constant currency revenue adjustments
(3)
Non-GAAP non-healthcare constant currency
revenue
$204 to $229
GAAP non-healthcare revenue growth %
(22)% to (13)%
Non-GAAP non-healthcare constant currency
revenue growth %
(23)% to (14)%
__________________ (1) May not foot due to rounding. (2)
Guidance provided November 7, 2023.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING
INCOME(1):
Guidance(2)
(in millions)
Fourth-Quarter 2023
Updated
Full-Year 2023
GAAP operating income
$45 to $59
$138 to $152
Non-GAAP adjustments:
Acquired tangible asset amortization
2
6
Acquired intangible asset amortization
9
38
Acquisition, integration and related
costs
1
20
Business transition and related costs
—
4
Litigation related expenses, settlements
and awards(3)
7
45
Other adjustments(3)
—
4
Total non-GAAP adjustments
20
118
Non-GAAP operating income
$65 to $79
$256 to $270
__________________ (1) May not foot due to rounding. (2)
Guidance provided November 7, 2023. (3) Includes legal expenses
associated with the Apple ITC proceedings and governance-related
matters.
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Guidance(2)
Fourth-Quarter 2023
Updated
Full-Year 2023
(in millions, except per diluted share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$24 to $35
$0.45 to $0.65
$72 to $83
$1.34 to $1.54
Non-GAAP adjustments:
Acquired tangible asset amortization
2
0.04
6
0.12
Acquired intangible asset amortization
9
0.17
38
0.70
Acquisition, integration and related
costs
1
0.03
20
0.36
Business transition and related costs
—
0.01
4
0.08
Litigation related expenses, settlements
and awards(3)
7
0.12
45
0.83
Other adjustments
—
0.00
4
0.07
Realized and unrealized gains or
losses
—
0.00
(7)
(0.12)
Financing related adjustments
—
0.01
2
0.03
Tax impact of non-GAAP adjustments
(4)
(0.08)
(27)
(0.50)
Excess tax benefits from stock-based
compensation expense
—
(0.01)
(4)
(0.07)
Total non-GAAP adjustments
16
0.29
82
1.52
Non-GAAP net income
$40 to $51
$0.74 to $0.94
$155 to $165
$2.85 to $3.05
Weighted average shares
outstanding-diluted
54.2
54.2
__________________ (1) May not foot due to rounding. (2)
Guidance provided November 7, 2023. (3) Includes legal expenses
associated with the Apple ITC proceedings and governance-related
matters.
Conference Call:
The conference call to review the results will begin at 1:30
p.m. PT today (4:30 p.m. ET) and will be hosted by Joe Kiani,
Chairman and Chief Executive Officer, and Micah Young, Executive
Vice President and Chief Financial Officer.
To register for the conference call and receive the dial-in
number, please use the link below. Upon registering, each
participant will be provided with call details and a registrant ID
number.
Conference Call Registration Link:
https://conferencingportals.com/event/nUSpRIEm
A replay of the webcast and conference call will be available
shortly after the conclusion of the call and will be archived on
the Company’s website.
About Masimo
Masimo (Nasdaq: MASI) is a global technology company that
develops and produces a wide array of industry-leading monitoring
technologies, including innovative measurements, sensors, patient
monitors, and automation and connectivity solutions. In addition,
Masimo Consumer Audio is home to eight iconic audio brands,
including Bowers & Wilkins®, Denon®, Marantz®, and Polk Audio®.
Our mission is to improve life, improve patient outcomes; and
reduce the cost of care. Masimo SET® Measure-through Motion and Low
Perfusion™ pulse oximetry, introduced in 1995, has been shown in
over 100 independent and objective studies to outperform other
pulse oximetry technologies. Masimo SET® has also been shown to
help clinicians reduce severe retinopathy of prematurity in
neonates, improve CCHD screening in newborns, and, when used for
continuous monitoring with Masimo Patient SafetyNet™ in
post-surgical wards, reduce rapid response team activations, ICU
transfers, and costs. Masimo SET® is estimated to be used on more
than 200 million patients in leading hospitals and other healthcare
settings around the world, and is the primary pulse oximetry at 9
of the top 10 hospitals as ranked in the 2022-23 U.S. News and
World Report Best Hospitals Honor Roll. In 2005, Masimo introduced
rainbow® Pulse CO-Oximetry technology, allowing noninvasive and
continuous monitoring of blood constituents that previously could
only be measured invasively and intermittently, including total
hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin
(SpCO®), methemoglobin (SpMet®), Pleth Variability Index (Pvi®),
RPVi™ (rainbow® Pvi), and Oxygen Reserve Index (Ori™). In 2013,
Masimo introduced the Root® Patient Monitoring and Connectivity
Platform, built from the ground up to be as flexible and expandable
as possible to facilitate the addition of other Masimo and
third-party monitoring technologies; key Masimo additions include
Next Generation SedLine® Brain Function Monitoring, O3® Regional
Oximetry, and ISA™ Capnography with NomoLine® sampling lines.
Masimo’s family of continuous and spot-check monitoring Pulse
CO-Oximeters® includes devices designed for use in a variety of
clinical and non-clinical scenarios, including tetherless, wearable
technology, such as Radius-7®, Radius-PPG® and Radius VSM™,
portable devices like Rad-67®, fingertip pulse oximeters like
MightySat® Rx, and devices available for use both in the hospital
and at home, such as Rad-97®. Masimo hospital and home automation
and connectivity solutions are centered around Root and the Masimo
Hospital Automation™ platform, and include Iris® Gateway, iSirona™,
Patient SafetyNet, Replica®, Halo ION, UniView®, UniView :60™, and
Masimo SafetyNet™. Masimo’s growing portfolio of health and
wellness solutions include Radius T™ and the Masimo W1™ watch,
Stork™, Opioid Halo™, Bridge™, and PerL™. Additional information
about Masimo and its products may be found at www.masimo.com.
Published clinical studies on Masimo products can be found at
www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and are not available
for sale in the United States. The use of the trademark Patient
SafetyNet is under license from University HealthSystem
Consortium.
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 our
expectations regarding our updated third-quarter 2023 and full-year
financial guidance, including consolidated revenue, healthcare
revenue. non-healthcare revenue, consolidated operating income and
consolidated earnings per diluted share; our ability to manage cost
structure to preserve profitability; our expectations regarding the
pace of recovery in inpatient volumes and weakness in the high-end
consumer audio market, our contracting activity and new products
and our ability to rebound and achieve long-term growth targets.
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; our ability to
successfully integrate Sound United’s brands into our business; our
ability to address and expand into new markets; 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 amount and type of equity awards that we may grant
to employees and service providers in the future; our ongoing
litigation and related matters; 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 and ORI are trademarks or registered trademarks of
Masimo Corporation.
MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
September 30,
2023
December 31,
2022
ASSETS
Current assets
Cash and cash equivalents
$
124.4
$
202.9
Accounts receivable, net of allowance for
credit losses
356.9
445.9
Inventories
584.6
501.0
Other current assets
171.6
158.8
Total current assets
1,237.5
1,308.6
Lease receivable, non-current
79.9
73.1
Deferred costs and other contract
assets
44.7
41.9
Property and equipment, net
415.0
402.5
Customer relationships, net
175.5
201.6
Acquired technologies, net
129.3
160.1
Other intangible assets, net - (Note
9)
100.7
98.9
Trademarks
224.5
262.0
Goodwill
400.1
445.4
Deferred tax assets
88.2
102.5
Other non-current assets
100.5
114.0
Total assets
$
2,995.9
$
3,210.6
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
283.5
$
276.8
Accrued compensation
55.9
89.3
Deferred revenue and other contract
liabilities, current
73.1
80.6
Other current liabilities
166.3
183.3
Total current liabilities
578.8
630.0
Long-term debt
910.1
941.6
Deferred tax liabilities
112.1
163.6
Other non-current liabilities
119.3
136.5
Total liabilities
1,720.3
1,871.7
Commitments and contingencies
Stockholders’ equity
Preferred stock
—
—
Common stock
0.1
0.1
Treasury stock
(1,169.2
)
(1,169.2
)
Additional paid-in capital
773.7
782.2
Accumulated other comprehensive (loss)
income
(90.9
)
11.5
Retained earnings
1,761.9
1,714.3
Total stockholders’ equity
1,275.6
1,338.9
Total liabilities and stockholders’
equity
$
2,995.9
$
3,210.6
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in millions,
except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
2023
October 1, 2022
September 30,
2023
October 1, 2022
Revenue
$
478.9
$
549.3
$
1,499.2
$
1,418.8
Cost of goods sold
244.1
266.8
758.4
673.4
Gross profit
234.8
282.5
740.8
745.4
Operating expenses:
Selling, general and administrative
156.1
174.6
504.1
471.6
Research and development
46.5
53.1
137.2
137.1
Impairment charge
7.0
—
7.0
—
Total operating expenses
209.6
227.7
648.3
608.7
Operating income
25.2
54.8
92.5
136.7
Non-operating (loss) income
(11.2
)
(2.8
)
(27.5
)
1.0
Income before provision for income
taxes
14.0
52.0
65.0
137.7
Provision for income taxes
3.4
14.1
17.4
35.1
Net income
$
10.6
$
37.9
$
47.6
$
102.6
Net income per share:
Basic
$
0.20
$
0.72
$
0.90
$
1.90
Diluted
$
0.20
$
0.70
$
0.88
$
1.85
Weighted-average shares used in per share
calculations:
Basic
52.8
52.5
52.8
54.0
Diluted
53.9
54.1
54.2
55.6
The following table presents details of the stock-based
compensation (benefit) expense that is included in each functional
line item in the condensed consolidated statements of operations
(in millions):
Three Months Ended
Nine Months Ended
September 30,
2023
October 1, 2022
September 30,
2023
October 1, 2022
Cost of goods sold
$
0.2
$
0.3
$
0.8
$
0.8
Selling, general and administrative
(2.4
)
9.2
(7.1
)
29.4
Research and development
1.1
4.0
3.9
11.5
Total
$
(1.1
)
$
13.5
$
(2.4
)
$
41.7
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Nine Months Ended
September 30,
2023
October 1, 2022
Cash flows from operating
activities:
Net income
$
47.6
$
102.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
75.8
56.6
Stock-based compensation (benefit)
expense
(2.4
)
41.7
Gain on disposal of equipment, intangibles
and other assets
0.6
0.1
Provision for credit losses
1.1
1.2
Amortization of debt issuance cost
1.4
0.9
Impairment charge
7.0
—
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable
84.8
(66.7
)
(Increase) decrease in inventories
(93.1
)
(71.0
)
(Increase) decrease in other current
assets
(14.6
)
11.7
(Increase) decrease in lease receivable,
net
(6.8
)
(5.9
)
(Increase) decrease in deferred costs and
other contract assets
(2.9
)
(31.6
)
(Increase) decrease in other non-current
assets
(42.0
)
(22.2
)
Increase (decrease) in accounts
payable
3.6
69.6
Increase (decrease) in accrued
compensation
(32.8
)
(6.9
)
Increase (decrease) in accrued
liabilities
(19.5
)
(26.5
)
Increase (decrease) in income tax
payable
(7.1
)
(8.4
)
Increase (decrease) in deferred revenue
and other contract-related liabilities
(6.2
)
19.7
Increase (decrease) in other non-current
liabilities
22.5
(28.9
)
Net cash provided by operating
activities
17.0
36.0
Cash flows from investing
activities:
Purchases of property and equipment,
net
(33.1
)
(36.0
)
Increase in intangible assets
(29.3
)
(13.9
)
Business combinations, net of cash
acquired
7.5
(985.0
)
Other strategic investing activities
(1.0
)
—
Net cash used in investing
activities
(55.9
)
(1,034.9
)
Cash flows from financing
activities:
Borrowings under line of credit
139.5
1,050.6
Repayments on line of credit
(154.3
)
(96.3
)
Debt issuance costs
—
(9.3
)
Proceeds from issuance of common stock
6.7
6.9
Payroll tax withholdings on behalf of
employees for vested equity awards
(12.7
)
(25.4
)
Repurchases of common stock
—
(401.4
)
Net cash (used in) provided by
financing activities
(20.8
)
525.1
Effect of foreign currency exchange rates
on cash
(17.6
)
(52.5
)
Net decrease in cash, cash equivalents and
restricted cash
(77.3
)
(526.3
)
Cash, cash equivalents and restricted cash
at beginning of period
209.6
748.4
Cash, cash equivalents and restricted cash
at end of period
$
132.3
$
222.1
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107903853/en/
Investor Contact: Eli Kammerman (949) 297-7077
ekammerman@masimo.com
Media Contact: Evan Lamb (949) 396-3376
elamb@masimo.com
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