Masimo's total fourth quarter revenue increases 18% to $132.2 million

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.