Masimo Reports First Quarter 2021 Financial Results
Masimo (MASI) reported a strong first quarter 2021, with product revenue soaring by 10.9% to $299.0 million. Excluding certain products, noninvasive technology shipments were 66,000, down from 72,100 year-over-year. GAAP net income decreased to $53.4 million or $0.92 per diluted share, compared to $64.5 million or $1.12 in the previous year. For 2021, the company updated guidance to project total revenue of $1.205 billion, reflecting a 5.4% growth rate, and $3.83 earnings per diluted share.
- Product revenue increased by 10.9% to $299.0 million.
- Total cash and cash equivalents stood at $552.0 million as of April 3, 2021.
- Updated 2021 guidance projected total revenue at $1.205 billion, indicating a growth of 5.4%.
- GAAP net income fell to $53.4 million from $64.5 million year-over-year.
- GAAP operating margin decreased to 22.0% from 25.6% in Q1 2020.
- Shipments of noninvasive technology down to 66,000 from 72,100 year-over-year.
Masimo (Nasdaq: MASI) today announced its financial results for the first quarter of 2021, ended April 3, 2021.
First Quarter 2021 Results:
Product revenue increased
GAAP operating margin for the first quarter 2021 was
For the first quarter of 2021, GAAP net income was
The Company repurchased approximately 547,000 shares of Masimo common stock for a total cost of approximately
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “Our first quarter results illustrate the resiliency of our customers and our business. Following a year in 2020 where we achieved over
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 |
|
$ |
1,205.0 |
|
|
$ |
1,205.0 |
|
|
$ |
1,200.0 |
|
|
$ |
1,200.0 |
|
Product revenue |
|
$ |
1,205.0 |
|
|
$ |
1,205.0 |
|
|
$ |
1,200.0 |
|
|
$ |
1,200.0 |
|
Percentage growth - as reported |
|
5.4 |
% |
|
N/A |
|
|
4.9 |
% |
|
N/A |
|
||||
Percentage growth - constant currency |
|
N/A |
|
|
4.5 |
% |
|
N/A |
|
|
3.6 |
% |
||||
Gross margin |
|
66.7 |
% |
|
67.0 |
% |
|
66.8 |
% |
|
67.0 |
% |
||||
Operating margin |
|
23.2 |
% |
|
24.5 |
% |
|
23.5 |
% |
|
24.5 |
% |
||||
Earnings per diluted share |
|
$ |
3.83 |
|
|
$ |
3.83 |
|
|
$ |
3.81 |
|
|
$ |
3.80 |
|
Estimated tax rate |
|
20.0 |
% |
|
24.3 |
% |
|
20.7 |
% |
|
24.1 |
% |
||||
______________ |
||||||||||||||||
(1) Updated guidance provided April 26, 2021. Prior guidance provided February 23, 2021. |
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-
Product revenue increasing to
$1.20 5 billion, which reflects reported growth of5.4% and constant currency growth of4.5% ; -
GAAP earnings per diluted share increasing to
$3.83 ; -
Non-GAAP earnings per diluted share increasing to
$3.83 ; -
Included in our full-year 2021 revenue guidance is approximately
$10.0 million of year-over-year currency tailwinds compared to$15.0 million of currency tailwinds in 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 core 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 core 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 core 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 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/Strategic investment-related costs, including depreciation and amortization.
In the event the Company acquires, invests in or divests certain business operations, there may be non-recurring gains, losses or expenses that will be recognized related to the assets and/or liabilities sold or acquired that are not representative of normal on-going cash flows. Furthermore, there may be depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition/strategic investment that does not reflect the normal on-going costs of operating our core business. We believe that exclusion of these gains, losses or costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods.
Litigation damages, awards and settlements.
In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds. Litigation matters can vary in their characteristics, frequency and significance to our operating results. We believe that exclusion of these gains (net of any related costs incurred in the period the award or settlement is recognized) and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or are infrequent in nature.
Realized and unrealized gains or losses from foreign currency transactions.
We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs and other operating expenses. 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. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods.
Excess tax benefits from stock-based compensation.
Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees.
First Quarter 2021 Actuals versus First Quarter 2020 Actuals
RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY PRODUCT REVENUE(1): |
|||||||||
|
|
Three Months Ended |
|||||||
(in thousands, except percentages) |
|
April 3,
|
|
March 28,
|
|||||
GAAP product revenue |
|
$ |
299,043 |
|
|
$ |
269,625 |
|
|
Non-GAAP constant currency adjustments: |
|
|
|
|
|||||
Constant currency F/X adjustments |
|
(3,885 |
) |
|
N/A |
|
|||
Total non-GAAP constant currency adjustments |
|
(3,885 |
) |
|
N/A |
|
|||
Non-GAAP constant currency product revenue |
|
$ |
295,158 |
|
|
$ |
269,625 |
|
|
Product revenue growth % |
|
|
|
||||||
GAAP |
|
10.9 |
% |
|
|
||||
Non-GAAP constant currency |
|
9.5 |
% |
|
|
||||
__________________ |
|||||||||
(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 |
||||||||||||||||||
|
|
|
April 3,
|
|
March 28,
|
||||||||||||||||
(in thousands, except per share amounts) |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|||||||||||||
GAAP net income |
|
$ |
53,383 |
|
|
|
$ |
0.92 |
|
|
|
$ |
64,456 |
|
|
|
$ |
1.12 |
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|||||||||||||
|
Acquisition/strategic investment related costs |
|
2,788 |
|
|
|
0.05 |
|
|
|
2,447 |
|
|
|
0.04 |
|
|
||||
|
Litigation damages, awards and settlements |
|
— |
|
|
|
— |
|
|
|
(499 |
) |
|
|
(0.01 |
) |
|
||||
|
Non-operating other (income) expense |
|
799 |
|
|
|
0.01 |
|
|
|
(588 |
) |
|
|
(0.01 |
) |
|
||||
|
Tax impact of pre-tax non-GAAP adjustments above |
|
(598 |
) |
|
|
(0.01 |
) |
|
|
(318 |
) |
|
|
(0.01 |
) |
|
||||
|
Excess tax benefits from stock-based compensation |
|
(4,302 |
) |
|
|
(0.07 |
) |
|
|
(9,609 |
) |
|
|
(0.17 |
) |
|
||||
|
Total non-GAAP adjustments |
|
(1,313 |
) |
|
|
(0.02 |
) |
|
|
(8,568 |
) |
|
|
(0.15 |
) |
|
||||
Non-GAAP net income |
|
$ |
52,070 |
|
|
|
$ |
0.90 |
|
|
|
$ |
55,889 |
|
|
|
$ |
0.97 |
|
|
|
Weighted average shares outstanding - diluted |
|
|
|
57,901 |
|
|
|
|
|
57,585 |
|
|
|||||||||
__________________ |
|||||||||||||||||||||
(1) May not foot due to rounding. |
|||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP OPERATING MARGIN(1): |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
April 3,
|
March 28,
|
|||||||||
(in thousands, except percentages) |
|
$ |
$ |
|||||||||
GAAP operating income/margin |
|
$ |
65,664 |
|
|
$ |
69,010 |
|
|
|||
Non-GAAP adjustments: |
|
|
|
|
||||||||
Acquisition/strategic investment related costs |
|
2,788 |
|
|
2,447 |
|
|
|||||
Litigation damages, awards and settlements |
|
— |
|
|
(499 |
) |
|
|||||
Total non-GAAP adjustments |
|
2,788 |
|
|
1,948 |
|
|
|||||
Non-GAAP operating income/margin |
|
$ |
68,452 |
|
|
$ |
70,958 |
|
|
|||
|
|
|
|
|
||||||||
GAAP operating income/margin % |
|
22.0 |
% |
|
25.6 |
% |
||||||
Non-GAAP operating income/margin % |
|
22.9 |
% |
|
26.3 |
% |
||||||
__________________ |
||||||||||||
(1) May not foot due to rounding. |
||||||||||||
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 |
$ |
1,205,000 |
|
|
$ |
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 |
$ |
1,195,000 |
|
|
$ |
1,143,744 |
|
Product revenue growth %: |
|
|
|||||
GAAP |
5.4 |
% |
|
|
|||
Non-GAAP constant currency |
4.5 |
% |
|
|
|||
__________________ |
|||||||
(1) May not foot due to rounding. |
|||||||
(2) Updated guidance provided April 26, 2021. Prior guidance provided February 23, 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 |
$ |
223,500 |
|
|
|
$ |
3.83 |
|
|
|
$ |
240,302 |
|
|
|
$ |
4.14 |
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|||||||||||||
|
Acquisition/strategic investment related costs |
15,000 |
|
|
|
0.26 |
|
|
|
8,286 |
|
|
|
0.14 |
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FAQ
What were Masimo's Q1 2021 earnings results?
Masimo reported Q1 2021 earnings of $53.4 million, or $0.92 per diluted share, down from $64.5 million or $1.12 per diluted share in Q1 2020.
What is Masimo's 2021 financial guidance?
For 2021, Masimo updated its guidance to total revenue of $1.205 billion, reflecting a growth of 5.4%.
How did Masimo's product revenue perform in Q1 2021?
Masimo's product revenue increased by 10.9% to $299.0 million in Q1 2021.
What are Masimo's earnings per share for 2021?
Masimo's earnings per diluted share for 2021 are projected to be $3.83.
Masimo Corporation
NASDAQ:MASIMASI RankingsMASI Latest NewsMASI Stock Data
9.11B
49.16M
8.19%
94.87%
6.25%
Medical Devices
Electromedical & Electrotherapeutic Apparatus
United States of America
IRVINE
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