Masimo Corporation · NASDAQ:MASI
Masimo — Q4 2019 Earnings Presentation
24 slides from Masimo's earnings presentation, Feb 19, 2020
Slide 1: Fourth Quarter 2019 Earnings Presentation
Fourth Quarter 2019 Improving Patient Outcomes Earnings Presentation | February 19, 2019 Reducing the Cost of Care®
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS These presentations contain forward-looking statements within the meaning of federal securities laws, including, among others, statements about our expectations, plans, strategies or prospects. We generally use the words “may,” “will,” “expect,” “believe,” “anticipate,” “p
Slide 3: Non-GAAP Financial Measures
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 certain items that are more fully described in the Appendix. Management belie
Slide 4: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights Total revenue, including royalty and other revenue, was $247.5 million Revenue Product revenue increased 11.8% to $247.4 million, or 12.0% on a constant currency basis(1) Shipments Shipments of noninvasive technology boards and monitors were 61,400 GAAP operati
Slide 5: Fourth Quarter 2019 Results – GAAP
Fourth Quarter 2019 Results – GAAP(1) (in millions; except % and EPS) Q4 2019 Q4 2018 vs. Prior Year Comments Product revenue includes leased equipment revenues under ASC 842, which Product Revenue $247.4 $221.4 11.8% were ~$3M in Q4 2019. GAAP results include royalty and other (non-recurring) reven
Slide 6: Fourth Quarter 2019 Results – Non-GAAP
Fourth Quarter 2019 Results – Non-GAAP(1) vs. Prior Year Constant (in millions; except % and EPS) Q4 2019 Q4 2018 Reported Comments Currency Product revenue includes leased equipment revenues Product Revenue $247.4 $221.4 11.8% 12.0% under ASC 842, which were ~$3M in Q4 2019. Non-GAAP results exclud
Slide 7: Fourth Quarter 2019 Results – Non-GAAP
Fourth Quarter 2019 Results – Non-GAAP(1) Non-GAAP(1) Non-GAAP(1) Product Revenue Operating Margin EPS $247M 25.7% $0.91 23.8% $221M $0.81 Constant Currency +12.0% Growth(1) +190 bps +12.3% Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 (1) Non-GAAP measures shown have been adjusted for certain ite
Slide 8: Full Year 2019 Highlights
Full Year 2019 Highlights Total revenue, including royalty and other revenue, was $937.8 million Revenue Product revenue increased 12.8% to $936.4 million, or 13.6% on a constant currency basis(1) Shipments Shipments of noninvasive technology boards and monitors were 246,200 GAAP operating m
Slide 9: Full Year 2019 Results – GAAP
Full Year 2019 Results – GAAP(1) (in millions; except % and EPS) FY 2019 FY 2018 vs. Prior Year Comments Product revenue includes leased equipment revenues under ASC 842, which Product Revenue $936.4 $829.9 12.8% were ~$10M in FY 2019. GAAP results include royalty and other (non-recurring) revenue.
Slide 10: Full Year 2019 Results – Non-GAAP
Full Year 2019 Results – Non-GAAP(1) vs. Prior Year Constant (in millions; except % and EPS) FY 2019 FY 2018 Reported Comments Currency Product revenue includes leased equipment revenues Product Revenue $936.4 $829.9 12.8% 13.6% under ASC 842, which were ~$10M in FY 2019. Non-GAAP results exclude ro
Slide 11: Full Year 2019 Financial Results – Non-GAAP
Full Year 2019 Financial Results – Non-GAAP(1) Non-GAAP(1) Non-GAAP(1) Product Revenue Operating Margin EPS $936M 24.0% $3.22 22.0% $830M $2.65 Constant Currency +13.6% Growth(1) +200 bps +21.5% FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 (1) Non-GAAP measures shown have been adjusted for certai
Slide 12: Full Year 2020 Financial Guidance
Full Year 2020 Financial Guidance Total revenue, including royalty and other revenue, of $1.035 billion Revenue Product revenue increasing 10.5% to $1.035 billion, or 11.0% on a constant currency basis(1) GAAP operating margin of 24.0% Profitability Non-GAAP operating margin(1) of 24.7% GA
Slide 13: Full Year 2020 Financial Guidance – GAAP
Full Year 2020 Financial Guidance – GAAP(1) (in millions; except % and EPS) FY 2020 FY 2019 vs. Prior Year Comments Masimo expects that the Connected Care transaction will contribute Product Revenue $1,035.0 $936.4 10.5% approximately one percentage point to its full-year 2020 revenue growth rate. G
Slide 14: Full Year 2020 Financial Guidance – Non-GAAP
Full Year 2020 Financial Guidance – Non-GAAP(1) vs. Prior Year Constant (in millions; except % and EPS) FY 2020 FY 2019 Reported Comments Currency Masimo expects that the Connected Care transaction Product Revenue $1,035.0 $936.4 10.5% 11.0% will contribute approximately one percentage point to its
Slide 15: Full Year 2020 Financial Guidance – Non-GAAP
Full Year 2020 Financial Guidance – Non-GAAP(1) Non-GAAP (1) Non-GAAP (1) Product Revenue Operating Margin EPS $1,035M 24.7% $3.56 24.0% $936M $3.22 Constant Currency +11.0% Growth(1) +70 bps +10.6% FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 (1) Non-GAAP measures shown have been adjusted for ce
Slide 16: Appendices: GAAP to Non-GAAP Adjustments and Reconciliations
APPENDICES Improving Patient Outcomes GAAP to Non-GAAP Reducing the Cost of Care® Adjustments and Reconciliations
Slide 17: Description of Non-GAAP Adjustments
Description of Non-GAAP Adjustments 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.
Slide 18: Description of Non-GAAP Adjustments
Description of Non-GAAP Adjustments 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 othe
Slide 19: Constant Currency Product Revenue
Constant Currency Product Revenue(1),(2) RECONCILIATION OF GAAP PRODUCT REVENUE GROWTH TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH 2020 Full Year (in thousands, except percentages) Q4 2018 FY 2018 Q4 2019 FY 2019 Guidance (3) GAAP product revenue $ 221,413 $ 829,874 $ 247,434 $ 936,408 $ 1,035,000 C
Slide 20: Non-GAAP Gross Margin %
Non-GAAP Gross Margin %(1),(2) RECONCILIATION OF GAAP GROSS PROFIT/MARGIN TO NON-GAAP GROSS PROFIT/MARGIN: (in thousands, except percentages) 2020 Full Year Q4 2018 FY 2018 Q4 2019 FY 2019 Guidance (3) GAAP gross profit/margin $ 148,331 $ 574,892 $ 166,923 $ 629,172 $ 700,400 Non-GAAP adjustments: R
Slide 21: Non-GAAP Operating Expense %
Non-GAAP Operating Expense %(1),(2) RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES: (in thousands, except percentages) 2020 Full Year Q4 2018 FY 2018 Q4 2019 FY 2019 Guidance (3) GAAP selling, general and administrative operating expenses $ 73,713 $ 285,417 $ 81,943 $ 314,6
Slide 22: Non-GAAP Operating Margin %
Non-GAAP Operating Margin %(1),(2) RECONCILIATION OF GAAP OPERATING INCOME/MARGIN TO NON-GAAP OPERATING INCOME/MARGIN: (in thousands, except percentages) 2020 Full Year Q4 2018 FY 2018 Q4 2019 FY 2019 Guidance (3) GAAP operating income/margin $ 53,906 $ 208,044 $ 61,557 $ 221,216 $ 248,000 Non-GAAP
Slide 23: Non-GAAP Net Income and Diluted EPS
Non-GAAP Net Income and Diluted EPS(1),(2) RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME: (in thousands, except percentages) 2020 Full Year Q4 2018 FY 2018 Q4 2019 FY 2019 Guidance (3) GAAP net income $ 46,934 $ 193,543 $ 52,921 $ 196,216 $ 210,500 Non-GAAP adjustments: Royalty and other
Slide 24: Adjusted Free Cash Flow
Adjusted Free Cash Flow(1),(2) RECONCILIATION OF FREE CASH FLOW TO ADJUSTED FREE CASH FLOW (in thousands, except percentages) Q4 2018 FY 2018 Q4 2019 FY 2019 Net cash provided by operating activities Net cash provided by operating activities $ 63,222 $ 239,527 $ 70,224 $ 221,640 Purchases of propert