Second Quarter 2021 Highlights
- Product revenue was $305.1 million;
- GAAP net income per diluted share was $0.88; and
- Non-GAAP net income per diluted share was $0.94.
Masimo (Nasdaq: MASI) today announced its financial results for
the second quarter of 2021, ended July 3, 2021.
Second Quarter 2021 Results:
Product revenue increased 1.4% to $305.1 million, and decreased
0.1% on a constant currency basis, compared to $301.0 million in
the second quarter of 2020. Excluding handheld and fingertip pulse
oximeters, shipments of noninvasive technology boards and
instruments were 72,500 in the second quarter of 2021.
GAAP operating margin for the second quarter 2021 was 21.3%
compared to 20.7% in the second quarter of 2020. Second quarter
2021 non-GAAP operating margin was 23.4% compared to 21.1% in the
second quarter of 2020.
For the second quarter of 2021, GAAP net income was $50.2
million, or $0.88 per diluted share compared to net income of $55.8
million, or $0.96 per diluted share, in the second quarter of 2020.
Non-GAAP net income was $54.0 million, or $0.94 per diluted share,
compared to net income of $49.3 million, or $0.85 per diluted
share, in the second quarter of 2020.
Total cash and cash equivalents were $576.0 million as of July
3, 2021.
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said
“We are happy to report strong second quarter results. While we
expected the drivers and capital orders of 2021 to be lower than we
achieved in 2020 due to high demand during the height of COVID-19,
and expected sensor volumes to rebound as elective surgeries
recover, we did not anticipate the very strong increase in
single-patient-use sensors that we realized this quarter. This
produced higher revenues that exceeded expectations for this
period.”
2021 Financial Guidance
The Company provided the following updated estimates for its
full-year 2021 guidance:
2021 Updated
Guidance(1)
Prior 2021 Guidance(1)
(in millions, except percentages and
earnings per share)
GAAP
Non-GAAP
GAAP
Non-GAAP
Total revenue
$
1,216.0
$
1,216.0
$
1,205.0
$
1,205.0
Product revenue
$
1,216.0
$
1,216.0
$
1,205.0
$
1,205.0
Percentage growth - as reported
6.3
%
N/A
5.4
%
N/A
Percentage growth - constant currency
N/A
5.4
%
N/A
4.5
%
Gross margin
65.3
%
66.0
%
66.7
%
67.0
%
Operating margin
22.3
%
23.8
%
23.2
%
24.5
%
Earnings per diluted share
$
3.83
$
3.85
$
3.83
$
3.83
Estimated tax rate
18.2
%
23.4
%
20.0
%
24.3
%
(1)
Updated guidance provided July 27, 2021.
Prior guidance provided April 26, 2021.
- Product revenue increasing to $1,216 million, which reflects
reported growth of 6.3% and constant currency growth of 5.4%;
- GAAP earnings per diluted share remains at $3.83;
- Non-GAAP earnings per diluted share increasing to $3.85;
- Included in our full-year 2021 revenue guidance is
approximately $10.0 million of year-over-year currency tailwinds,
which is consistent with our prior guidance.
Supplementary Non-GAAP Financial Information
For additional non-GAAP financial details, please visit the
Investor Relations section of the Company’s website at www.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 product 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 product 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, as well as the related income tax effects
thereof:
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 product
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 product
revenue growth rate will continue to occur in future periods.
Royalty and other revenue, net of
related costs
We derive royalty and other revenue, net of related costs, from
certain non-recurring contractual arrangements that we do not
expect to continue in the future. We believe the exclusion of
royalty and other revenue, net of related costs, associated with
these non-recurring revenue streams is useful to management and
investors in evaluating the performance of our ongoing operations
on a period-to-period basis.
Acquisition, integration and related
costs
These transactions represent gains, losses, and other related
costs associated with acquisitions, integrations, investments and
divestitures. These items also include but are not limited to
amortization and depreciation of intangible assets, asset
impairments, and in-process research and development. We believe
that the exclusion of these items is useful to management and
investors in evaluating the performance of our ongoing operations
on a period-to-period basis.
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. We believe that the exclusion of these items is useful to
management and investors in evaluating the performance of our
ongoing operations on a period-to-period basis.
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. As the Company does not actively hedge these currency
exposures, 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. We
believe that exclusion of these items is useful to management and
investors in evaluating the performance of our ongoing operations
on a period-to-period basis.
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.
Second Quarter 2021 Actuals versus
Second Quarter 2020 Actuals
RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY
PRODUCT REVENUE(1):
Three Months Ended
(in thousands, except
percentages)
July 3, 2021
June 27, 2020
GAAP product revenue
$
305,118
$
300,953
Non-GAAP constant currency
adjustments:
Constant currency F/X adjustments
(4,335
)
N/A
Total non-GAAP constant currency
adjustments
(4,335
)
N/A
Non-GAAP constant currency product
revenue
$
300,783
$
300,953
Product revenue growth %
GAAP
1.4
%
Non-GAAP constant currency
(0.1
)%
(1)
May not foot due to rounding.
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Three Months Ended
July 3, 2021
June 27, 2020
(in thousands, except per share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$
50,235
$
0.88
$
55,772
$
0.96
Non-GAAP adjustments:
Acquisition, integration and related
costs
2,509
0.04
1,313
0.02
Litigation related expenses, settlements
and awards(2)
373
0.01
25
—
Other adjustments(3)
3,362
0.06
—
—
Realized and unrealized gains or
losses
59
—
(11
)
—
Tax impact of non-GAAP adjustments
(1,218
)
(0.02
)
(361
)
(0.01
)
Excess tax benefits from stock-based
compensation expense
(1,324
)
(0.02
)
(7,486
)
(0.13
)
Total non-GAAP adjustments
3,760
0.07
(6,519
)
(0.11
)
Non-GAAP net income
$
53,997
$
0.94
$
49,253
$
0.85
Weighted average shares outstanding -
diluted
57,379
58,204
(1)
May not foot due to rounding.
(2)
Litigation related expenses, settlements
and awards includes legal expenses in 2021 related to a complaint
filed against Apple, Inc. with the U.S. International Trade
Commission (ITC).
(3)
Other adjustments includes a charge in the
second quarter of 2021 related to assisting a long-term OEM
customer with their medical device correction.
RECONCILIATION OF GAAP TO
NON-GAAP OPERATING MARGIN(1):
Three Months Ended
July 3, 2021
June 27, 2020
(in thousands, except
percentages)
$
$
GAAP operating income/margin
$
65,136
$
62,220
Non-GAAP adjustments:
Acquisition, integration and related
costs
2,509
1,313
Litigation related expenses, settlements
and awards(2)
373
25
Other adjustments(3)
3,362
—
Total non-GAAP adjustments
6,244
1,338
Non-GAAP operating income/margin
$
71,381
$
63,558
GAAP operating income/margin %
21.3
%
20.7
%
Non-GAAP operating income/margin %
23.4
%
21.1
%
(1)
May not foot due to rounding.
(2)
Litigation related expenses, settlements
and awards includes legal expenses in 2021 related to a complaint
filed against Apple, Inc. with the U.S. International Trade
Commission (ITC).
(3)
Other adjustments includes a charge in the
second quarter of 2021 related to assisting a long-term OEM
customer with their medical device correction.
Full-Year 2021 Guidance versus
Full-Year 2020 Actuals
RECONCILIATION OF GAAP PRODUCT
REVENUE GROWTH % TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH
%(1):
(in thousands, except
percentages)
Full-Year 2021
Updated Guidance(2)
Full-Year 2020
Actuals
GAAP product revenue
$
1,216,000
$
1,143,744
Non-GAAP constant currency
adjustments:
Constant currency F/X adjustments
(10,000
)
N/A
Total non-GAAP constant currency
adjustments
(10,000
)
N/A
Non-GAAP constant currency product
revenue
$
1,206,000
$
1,143,744
Product revenue growth %:
GAAP
6.3
%
Non-GAAP constant currency
5.4
%
(1)
May not foot due to rounding.
(2)
Updated guidance provided July 27, 2021.
Prior guidance provided April 26, 2021.
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Full-Year 2021
Updated Guidance(2)
Full-Year 2020
Actuals
(in thousands, except per share
amounts)
$
Per Diluted Share
$
Per Diluted Share
GAAP net income
$
221,300
$
3.83
$
240,302
$
4.14
Non-GAAP adjustments:
Acquisition, integration and related
costs
10,100
0.18
8,286
0.14
Litigation related expenses, settlements
and awards(3)
5,000
0.09
(474
)
(0.01
)
Other adjustments(4)
3,400
0.06
—
—
Realized and unrealized gains or
losses
900
0.02
(2,631
)
(0.05
)
Tax impact of non-GAAP adjustments
(3,500
)
(0.06
)
(6,096
)
(0.11
)
Excess tax benefits from stock-based
compensation expense
(15,000
)
(0.26
)
(30,172
)
(0.52
)
Total non-GAAP adjustments
800
0.01
(31,086
)
(0.54
)
Non-GAAP product net income
$
222,100
$
3.85
$
209,216
$
3.60
Weighted average shares outstanding -
diluted
57,700
58,037
(1)
May not foot due to rounding.
(2)
Updated guidance provided July 27, 2021.
Prior guidance provided April 26, 2021.
(3)
Litigation related expenses, settlements
and awards includes legal expenses in 2021 related to a complaint
filed against Apple, Inc. with the U.S. International Trade
Commission (ITC).
(4)
Other adjustments includes a charge in the
second quarter of 2021 related to assisting a long-term OEM
customer with their medical device correction.
RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND
OPERATING MARGIN(1):
Full-Year 2021
Updated Guidance(2)
Full-Year 2020
Actuals
(in thousands, except
percentages)
$
$
GAAP gross margin
$
794,500
$
743,065
Non-GAAP adjustments:
Acquisition, integration and related
costs
4,100
1,807
Other adjustments(4)
3,400
—
Total non-GAAP adjustments
7,500
1,807
Non-GAAP gross margin
$
802,000
$
744,872
GAAP gross margin %
65.3
%
65.0
%
Non-GAAP gross margin %
66.0
%
65.1
%
GAAP operating income/margin
$
270,900
$
255,823
Non-GAAP adjustments:
Acquisition, integration and related
costs
10,100
8,286
Litigation related expenses, settlements
and awards(3)
5,000
(474
)
Other adjustments(4)
3,400
—
Total non-GAAP adjustments
18,500
7,812
Non-GAAP operating income/margin
$
289,400
$
263,636
GAAP operating income/margin %
22.3
%
22.4
%
Non-GAAP operating income/margin %
23.8
%
23.1
%
(1)
May not foot due to rounding.
(2)
Updated guidance provided July 27, 2021.
Prior guidance provided April 26, 2021.
(3)
Litigation related expenses, settlements
and awards includes legal expenses in 2021 related to a complaint
filed against Apple, Inc. with the U.S. International Trade
Commission (ITC).
(4)
Other adjustments includes a charge in the
second quarter of 2021 related to assisting a long-term OEM
customer with their medical device correction.
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:
http://www.directeventreg.com/registration/event/8737508
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 medical 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. Our mission is to 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.4 Masimo SET® has also been shown to
help clinicians reduce severe retinopathy of prematurity in
neonates,5 improve CCHD screening in newborns,6 and, when used for
continuous monitoring with Masimo Patient SafetyNet™ in
post-surgical wards, reduce rapid response team activations, ICU
transfers, and costs.7-10 Masimo SET® is estimated to be used on
more than 200 million patients in leading hospitals and other
healthcare settings around the world,1 and is the primary pulse
oximetry at 9 of the top 10 hospitals according to the 2020-21 U.S.
News and World Report Best Hospitals Honor Roll.3 Masimo continues
to refine SET® and in 2018, announced that SpO2 accuracy on RD SET®
sensors during conditions of motion has been significantly
improved, providing clinicians with even greater confidence that
the SpO2 values they rely on accurately reflect a patient’s
physiological status. In 2005, Masimo introduced rainbow® Pulse
CO-Oximetry technology, allowing noninvasive and continuous
monitoring of blood constituents that previously could only be
measured invasively, 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® and
Radius PPG™, 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
automation and connectivity solutions are centered around the
Masimo Hospital Automation™ platform, and include Iris® Gateway,
iSirona™, Patient SafetyNet, Replica™, Halo ION™, UniView™, UniView
:60™, and Masimo SafetyNet™. 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/.
ORi and RPVi have 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.
References
1.
Estimate: Masimo data on file.
2.
https://content.govdelivery.com/accounts/USFDA/bulletins/2c276cb.
3.
http://health.usnews.com/health-care/best-hospitals/articles/best-hospitals-honor-roll-and-overview.
4.
Published clinical studies on pulse
oximetry and the benefits of Masimo SET® can be found on our
website at http://www.masimo.com. Comparative studies include
independent and objective studies which are comprised of abstracts
presented at scientific meetings and peer-reviewed journal
articles.
5.
Castillo A et al. Prevention of
Retinopathy of Prematurity in Preterm Infants through Changes in
Clinical Practice and SpO2 Technology. Acta Paediatr. 2011
Feb;100(2):188-92.
6.
de-Wahl Granelli A et al. Impact of pulse
oximetry screening on the detection of duct dependent congenital
heart disease: a Swedish prospective screening study in 39,821
newborns. BMJ. 2009;Jan 8;338.
7.
Taenzer A et al. Impact of pulse oximetry
surveillance on rescue events and intensive care unit transfers: a
before-and-after concurrence study. Anesthesiology.
2010:112(2):282-287.
8.
Taenzer A et al. Postoperative Monitoring
– The Dartmouth Experience. Anesthesia Patient Safety Foundation
Newsletter. Spring-Summer 2012.
9.
McGrath S et al. Surveillance Monitoring
Management for General Care Units: Strategy, Design, and
Implementation. The Joint Commission Journal on Quality and Patient
Safety. 2016 Jul;42(7):293-302.
10.
McGrath S et al. Inpatient Respiratory
Arrest Associated With Sedative and Analgesic Medications: Impact
of Continuous Monitoring on Patient Mortality and Severe Morbidity.
J Patient Saf. 2020 14 Mar. DOI: 10.1097/PTS.0000000000000696.
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 expectations for full year
2021 financial guidance; our long-term outlook; demand for our
products; anticipated revenue and earnings growth; our financial
condition, results of operations and business generally;
expectations regarding our ability to design and deliver innovative
new noninvasive technologies and reduce the cost of care; 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: the completion of
customary quarterly financial statement review procedures; 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 amount and type of
equity awards that we may grant to employees and service providers
in the future; our ongoing litigation and related matters; risks
related to global economic and marketplace uncertainties related to
the impact of the COVID-19 pandemic; 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
thousands)
July 3, 2021
January 2, 2021
ASSETS
Current assets
Cash and cash equivalents
$
575,955
$
641,447
Accounts receivable, net of allowance for
credit losses
179,354
141,350
Inventories
206,607
215,952
Other current assets
89,920
102,416
Total current assets
1,051,836
1,101,165
Lease receivable, noncurrent
65,198
57,666
Deferred costs and other contract
assets
21,704
20,076
Property and equipment, net
274,723
272,511
Intangible assets, net
75,025
73,923
Goodwill
102,486
103,206
Deferred tax assets
39,312
39,363
Other non-current assets
51,404
44,642
Total assets
$
1,681,688
$
1,712,552
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
66,248
$
64,061
Accrued compensation
55,043
71,601
Deferred revenue and other contract
liabilities, current
44,158
44,935
Other current liabilities
54,580
53,239
Total current liabilities
220,029
233,836
Other non-current liabilities
70,424
71,076
Total liabilities
290,453
304,912
Commitments and contingencies
Stockholders’ equity
Common stock
55
55
Treasury stock
(767,653
)
(638,736
)
Additional paid-in capital
714,267
703,693
Accumulated other comprehensive (loss)
income
(267
)
1,413
Retained earnings
1,444,833
1,341,215
Total stockholders’ equity
1,391,235
1,407,640
Total liabilities and stockholders’
equity
$
1,681,688
$
1,712,552
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in thousands,
except per share amounts)
Three Months Ended
Six Months Ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Product revenue
$
305,118
$
300,953
$
604,161
$
570,578
Cost of goods sold
112,206
109,369
214,374
193,365
Gross profit
192,912
191,584
389,787
377,213
Operating expenses:
Selling, general and administrative
93,833
98,461
190,533
188,338
Research and development
33,943
30,878
68,454
58,119
Litigation settlements and (awards)
—
25
—
(474
)
Total operating expenses
127,776
129,364
258,987
245,983
Operating income
65,136
62,220
130,800
131,230
Non-operating income (loss)
80
1,405
(657
)
4,751
Income before provision for income
taxes
65,216
63,625
130,143
135,981
Provision for income taxes
14,981
7,853
26,525
15,753
Net income
$
50,235
$
55,772
$
103,618
$
120,228
Net income per share:
Basic
$
0.91
$
1.02
$
1.88
$
2.21
Diluted
$
0.88
$
0.96
$
1.80
$
2.08
Weighted-average shares used in per share
calculations:
Basic
55,032
54,764
55,116
54,316
Diluted
57,379
58,204
57,630
57,913
The following table presents details of the stock-based
compensation expense that is included in each functional line item
in the condensed consolidated statements of operations (in
thousands):
Three Months Ended
Six Months Ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Cost of goods sold
$
192
$
183
$
397
$
314
Selling, general and administrative
5,076
10,048
14,488
18,778
Research and development
2,994
2,957
6,085
5,368
Total
$
8,262
$
13,188
$
20,970
$
24,460
MASIMO CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
thousands)
Six Months Ended
July 3, 2021
June 27, 2020
Cash flows from operating
activities:
Net income
$
103,618
$
120,228
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
17,314
13,587
Stock-based compensation
20,970
24,460
Loss on disposal of equipment, intangibles
and other assets
166
196
Provision (Benefit) for credit losses
497
(170
)
Benefit from deferred income taxes
—
77
Changes in operating assets and
liabilities:
Increase in accounts receivable
(38,700
)
(41,295
)
Increase in lease receivable, net
(7,544
)
(2,183
)
Decrease (increase) in inventories
8,627
(37,548
)
Decrease (increase) in other current
assets
6,456
(12,004
)
Increase in deferred costs and other
contract assets
(1,652
)
(2,105
)
Increase in other non-current assets
(166
)
(442
)
Increase in accounts payable
1,974
32,798
Decrease in accrued compensation
(16,303
)
(2,025
)
(Decrease) increase in accrued
liabilities
(5,998
)
5,876
(Decrease) increase in income tax
payable
(2,034
)
248
(Decrease) increase in deferred revenue
and other contract-related liabilities
(1,231
)
6,920
Decrease in other non-current
liabilities
(736
)
(558
)
Net cash provided by operating
activities
85,258
106,060
Cash flows from investing
activities:
Maturities of short-term investments
—
70,000
Purchases of property and equipment,
net
(14,242
)
(51,263
)
Increase in intangible assets
(2,977
)
(4,322
)
Business combinations, net of cash
acquired
—
(78,310
)
Other strategic investing activities
—
(6,750
)
Net cash used in investing
activities
(17,219
)
(70,645
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
9,137
34,629
Payroll tax withholdings on behalf of
employees for vested equity awards
(16,724
)
(1,424
)
Repurchases of common stock
(128,917
)
(591
)
Net cash (used in) provided by
financing activities
(136,504
)
32,614
Effect of foreign currency exchange rates
on cash
804
(847
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(67,661
)
67,182
Cash, cash equivalents and restricted cash
at beginning of period
645,004
568,075
Cash, cash equivalents and restricted cash
at end of period
$
577,343
$
635,257
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210727006068/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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