Masimo Corporation (Masimo), a US based medical devices company, has reported total revenues of $307 million for the full year of 2008, compared with the total revenues of $256.2 million in the previous year-end. It has also reported net income of $31.9 million, or $0.53 per diluted share, for the full year of 2008, compared with the net income of $42.2 million, or $0.60 per diluted share, in the previous year-end.
Q4 2008 Highlights:
Product revenues increased 29.4% to $71.4 million
Rainbow revenues increased 161% to $4.7 million
Over 31,700 Masimo SET and Masimo Rainbow SET pulse oximeter units were shipped in Q4 2008
International realignment results in a Q4 2008 tax charge of $0.25 per share and a Q4 2008 net loss of $0.01 per share; Q4 2008 earnings per share, excluding the tax charge, was $0.24 per share
Full Year 2008 Highlights:
Product revenues increased 29.7% to $258.9 million
Rainbow revenues increased 91% to $13.4 million
Over 120,000 Masimo SET and Masimo Rainbow SET pulse oximeter units were shipped in 2008
International realignment results in a Q4 2008 tax charge of $0.25 per share and full year 2008 earnings per share of $0.53; full year 2008 earnings per share, excluding the Q4 tax charge, was $0.78 per share
For the fiscal fourth quarter, Masimo reported product revenues of $71.4 million, up 29.4% increase over $55.2 million for the fourth quarter of 2007. Including royalty revenues, Masimo reported total 2008 fourth quarter revenues of $83.1 million against $69.3 million for the fourth quarter of 2007. For the fourth quarter, Masimo reported a loss of $0.01 per share, resulting from a $14.9 million, or $0.25 per share, tax charge related to the implementation of its new international business organization and structure. Excluding this tax charge, fourth quarter net income would have been $14.4 million, or $0.24 per diluted share, against $0.20 per common share for the fourth quarter of 2007. In addition, higher research and development tax credits added $0.03 per share in the fourth quarter of 2008 and $0.02 in the fourth quarter of 2007. Masimo also reported that it shipped 31,700 Masimo SET and Masimo Rainbow SET oximetry units, excluding handheld units, during the fourth quarter of 2008, up from 29,400 in the comparable prior year period, resulting in a new estimated worldwide installed base of 567,000 Masimo SET and Masimo Rainbow SET pulse oximeters.
During the fourth quarter of 2008, Masimo implemented a new international business organization and structure designed to better serve and support Masimo’s growing international business. By centralizing its international operations, including sales management, marketing, customer support, planning, logistics and administrative functions, Masimo believes it will be able to develop a more efficient and scalable international organization – capable of being even more responsive to the business needs of its international customers – all under one centralized management structure. As result of this realignment, in Q4 2008, Masimo incurred a one-time tax charge related to expenses for sharing in the costs of our ongoing research and development efforts as well as the prepayment of licensing commercial rights to utilize pre-existing intangibles. As a result of this new international business structure, Masimo believes that its future income tax rates will decline although future income tax rates will depend on various factors, including profits (losses) before taxes, changes to tax law and the geographic composition of pre-tax income.
For the fiscal year ended January 3, 2009, Masimo reported product revenues of $258.9 million, up 29.7% from $199.7 million in 2007. Including royalty revenues, Masimo’s total revenues were $307.1 million for the year ended January 3, 2009, up from $256.3 million in 2007. Excluding the Q4 2008 tax charge, net income would have been $46.8 million, or $0.78 per share against $0.60 per share in 2007. In the year ended January 3, 2009, Masimo shipped 120,100 Masimo SET and Masimo Rainbow SET pulse oximeter units, excluding handheld pulse oximeters, against 116,300 in 2007.
In the fourth quarter of 2008, revenues from Masimo Rainbow SET products up $4.7 million or 161% from $1.8 million in the same prior year quarter. For the year ended January 3, 2009, revenues from Masimo Rainbow SET products were $13.4 million, an increase of 91% against 2007. As a result, 2008 Masimo Rainbow SET revenues accounted for 5.2% of total product revenues up from 3.7% in 2007.
Joe E. Kiani, chairman and chief executive officer of Masimo, said, “We have been fortunate that, despite the very challenging economic environment, hospitals and physicians continue to focus on the quality and efficiency of their patients’ care and, as a result, continue to migrate to Masimo’s gold standard SET pulse oximetry and Rainbow SET Pulse CO-Oximetry platforms. Our on-going business model, which is based on both new product innovation and a recurring revenue stream, is continuing to show resilience in this difficult worldwide economic climate.”
As of January 3, 2009, cash and cash equivalents totaled $146.9 million, up from $96.7 million at December 29, 2007, including the previously announced first quarter 2008 repayment in full of a $26.7 million debt obligation which had been established in early fiscal 2007.
Financial Outlook
Masimo anticipates 2009 product revenues will be between $310 million and $315 million. Masimo also anticipates 2009 royalty revenues to be between $42 million to $46 million. As a result of these ranges, Masimo expects total 2009 revenues to be between $352 million and $361 million. For the full year 2009, Masimo expects its GAAP earnings per share to be between $0.83 and $0.87 per common share. Included in these 2009 earnings per share ranges are an expected reduction in year over year royalty payments, an expected increase in 2009 non-cash stock based compensation expenses of $11.9 million, up from $7.7 million in 2008 and the expected benefits from our new international business structure.