The Masimo logo is displayed at Masimo headquarters on December 27, 2023 in Irvine, California.Health-technology firm Masimo, facing the imminent threat of litigation and a second proxy contest, offered a settlement to Politan Capital's Quentin Koffey on Thursday that would fill a vacant board seat with one of the activist's proposed directors.Masimo's lead independent director Craig Reynolds said he hoped adding Politan's nominee William Jellison to the company's board would help "avoid the significant dis ...

Politan Capital's Quentin Koffey sent a letter to Masimo CEO Joe Kiani on Wednesday, demanding information about the health-tech company's proposed spinoff of its consumer business.Koffey, who won a seat on Masimo's board last year through a proxy fight, said that, despite his "repeated requests," he has "not received information as basic and fundamental as even the name of the contemplated JV partner," weeks after the company first announced it was exploring a split.Masimo acquired consumer audio company S ...

Masimo Corporation (MASI) delivered adjusted earnings per share (EPS) of 77 cents in the first quarter of 2024, down 11.5% year over year. The figure, however, beat the Zacks Consensus Estimate by 8.5%.The adjustments include acquisition, integration and related costs, and litigation-related expenses, settlements and awards, among others.GAAP EPS was 35 cents, down 10.3% from the year-earlier figure.Revenues in DetailMasimo registered revenues of $492.8 million, down 12.8% year over year on a reported basis ...

Financial Data and Key Metrics - Consolidated revenue for Q1 2024 was $493 million, with healthcare revenues at $340 million, representing a 2% decline YoY [50] - Non-GAAP operating profit for Q1 was $68 million, with non-GAAP EPS of $0.77 [34] - Operating cash flow for Q1 was $46 million, used to pay down $28 million of debt [34] - Full-year 2024 revenue guidance updated to $2.055 billion to $2.165 billion, with healthcare segment revenue projected at $1.355 billion to $1.385 billion [28] - Non-GAAP gross margin guidance for 2024 increased to 52%, with healthcare gross margin at 62.4% and non-healthcare at 32%-33% [35] Business Line Data and Key Metrics - Healthcare segment saw strong sensor orders in the US and Europe, with record contracting from hospital customers, achieving over $100 million in true incremental contract value in Q1 [31] - Non-healthcare segment revenues were $153 million, a 29% decline YoY on a constant currency basis, impacted by macroeconomic conditions [52] - SET pulse oximetry consumables grew 2%, capnography disposables grew 27%, and brain monitoring sensors grew 17% in Q1 [51] - Transition of sensor manufacturing to Malaysia is ahead of schedule, with 2/3 of production already moved, contributing to improved gross margins [31][49] Market Data and Key Metrics - Driver shipments hit a low point of 50,000 in Q1 but are expected to increase to 55,000 in Q2 and 60,000 in the back half of 2024 [23][28] - Consumable revenue per driver remains higher than pre-COVID levels, indicating strong utilization of the installed base [20] - Hospital census growth is reported at up to 3%, which could provide upside for the year [67] Company Strategy and Industry Competition - The company is evaluating the separation of its consumer business, with potential options including a spin-off or sale of a majority stake [36][39] - The separation is expected to improve healthcare non-GAAP operating margins by 220 to 380 basis points, moving closer to the long-term goal of 30% [29] - The transition to Malaysia is expected to drive gross margin improvements, with an initial 60 basis points improvement in 2024 and potential for over 100 basis points in the long term [9][63] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the healthcare business, citing strong contracting and market share gains, with expectations for accelerating growth and expanding margins [72] - The company is focused on reducing product costs, improving manufacturing efficiency, and leveraging the installed base to drive profitability [22][64] - Management expects the separation of the consumer business to provide both businesses with the appropriate capital structures and resources for long-term success [29][43] Other Important Information - The company provided a preliminary estimate of carve-out costs for the separation, ranging from $28 million to $51 million, with 50% of Apple litigation expenses also expected to be split [3][5] - The timeline for the separation process is expected to progress significantly over the next 30 to 45 days, with a final decision to be made by the Board [37][81] Q&A Session Summary Question: Drivers and COVID-driven demand - Management explained the low point in driver shipments in Q1, attributing it to a slower replacement cycle and soft OEM orders, but expects a recovery to 55,000 in Q2 and 60,000 in the back half of 2024 [23][28] - The majority of driver shipments come from OEMs, which saw a significant pullback post-COVID, but the company is offsetting this with strong true incremental growth from hospital conversions [65] Question: Gross margin improvements from Malaysia transition - The transition to Malaysia is ahead of schedule, with 2/3 of production already moved, contributing to a 60 basis points improvement in gross margin guidance for 2024 [9][14] - Long-term, the company expects over 100 basis points of improvement from increased efficiencies and lower labor costs in Malaysia [9][63] Question: Operating margin uplift from consumer audio separation - The separation is expected to improve healthcare operating margins by 220 to 380 basis points, driven by the carve-out of R&D and selling/marketing expenses related to consumer health products [59] Question: Timeline for separation options - Management is working through internal processes and expects to make significant progress on the separation options within the next 30 to 45 days [81] Question: Cash flow and debt reduction - The company generated $46 million in operating cash flow in Q1, used to pay down $28 million of debt, and expects to continue improving cash flow generation [34][79]

Masimo (MASI) reported $492.8 million in revenue for the quarter ended March 2024, representing a year-over-year decline of 12.8%. EPS of $0.77 for the same period compares to $0.87 a year ago.The reported revenue represents a surprise of +0.95% over the Zacks Consensus Estimate of $488.18 million. With the consensus EPS estimate being $0.71, the EPS surprise was +8.45%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street exp ...

First Quarter 2024 Highlights: Exhibit 99.1 Masimo Reports First Quarter 2024 Financial Results Irvine, California, May 7, 2024 - Masimo Corporation (Nasdaq: MASI) today announced its financial results for the first quarter ended March 30, 2024. First Quarter 2024 Results: Consolidated revenue was $492.8 million, comprised of healthcare revenue of $339.6 million and non-healthcare revenue of $153.2 million. Excluding handheld and fingertip pulse oximeters, shipments of noninvasive technology boards and inst ...

Billionaire Masimo founder Joe Kiani, best known for his successful legal fight against Apple and his friendship with President Joe Biden, has borrowed against half of his $660 million stake in the health-technology company rather than sell his stock, according to corporate filings from earlier this week.Borrowing against that much of a stake is unusual for executives, but may be helpful as the company prepares for a fight with an activist aiming to take control of the board. The move allows Kiani, the comp ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Masimo (MASI) , which belongs to the Zacks Medical - Instruments industry, could be a great candidate to consider.When looking at the last two reports, this medical technology company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 19.18%, on average, in the last two quarters.For the last reported quar ...

Masimo Corporation (MASI) is well-poised for growth in the coming quarters, courtesy of its research and development (R&D) efforts. The optimism led by a solid fourth-quarter 2023 performance and its solid product portfolio are expected to contribute further. However, concerns regarding overdependence on its Signal Extraction Technology (SET) and macroeconomic concerns persist.Over the past year, this Zacks Rank #3 (Hold) stock has lost 30% compared with the industry’s 0.4% decline. The S&P 500 has witnesse ...

Masimo (MASI) is witnessing strong momentum, with its shares having rallied 17.9% year to date compared with 3.4% growth of the industry. The S&P 500 Composite has risen 6.3% during the same time frame.With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.Headquartered in Irvine, CA, Masimo develops, manufactures and markets a family of non-invasive monitoring systems. The company derives the majority ...