Masimo Corporation · NASDAQ:MASI
Masimo — Q4 2018 Earnings Presentation
24 slides from Masimo's earnings presentation, Feb 26, 2019
Slide 1: Fourth Quarter 2018 Earnings Presentation
Fourth Quarter 2018 Earnings Presentation February 26, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements All statements other than statements of historical facts contained herein that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements about our
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. generally accepted accounting principles (GAAP). The non-GAAP financial measures presented exclude certain items that are more fully
Slide 4: Fourth Quarter 2018 Highlights
Fourth Quarter 2018 Highlights 1,2 Revenue . Shipped 60,300 noninvasive technology boards and monitors . Total revenue, including royalty and NRE, of $223.1M . Product revenue up 12.8% to $221.4M, or 13.5% growth on a constant currency basis Operating margin % . GAAP operating margin of 24.2% .
Slide 5: Fourth Quarter 2018 Results
Fourth Quarter 2018 Results 1,2 GAAP Non-GAAP Total Non-GAAP Product (Including Royalty and NRE revenue) (Excluding Royalty and NRE revenue) vs. Prior Year vs. Prior Year Constant Constant In millions; except %'s and EPS Q4 2018 Q4 2018 Q4 2017 Reported Currency Q4 2018 Q4 2017 Reported Currency Pro
Slide 6: Fourth Quarter 2018 Results
Fourth Quarter 2018 Results 1,2 (Excluding Royalty and NRE revenue) Non-GAAP 1 Non-GAAP 1 Product Revenue Product Operating Margin Product EPS $221M 23.8% $0.81 $196M 17.4% $0.41 Constant Currency +13.5% Growth 1 +640 bps +98% 1 Please refer to the reconciliations of our GAAP to non-GAAP financial m
Slide 7: Full Year 2018 Highlights
Full Year 2018 Highlights 1,2 Revenue . Shipped 231,700 noninvasive technology boards and monitors . Total revenue, including royalty and NRE, of $858.3M . Product revenue up 12.4% to $829.9M, or 11.9% growth on a constant currency basis Operating margin % . GAAP operating margin of 24.2% . Non-
Slide 8: Full Year 2018 Results
Full Year 2018 Results 1,2 GAAP Non-GAAP Total Non-GAAP Product (Including Royalty and NRE revenue) (Excluding Royalty and NRE revenue) vs. Prior Year vs. Prior Year Constant Constant In millions; except %'s and EPS FY 2018 FY 2018 FY 2017 Reported Currency FY 2018 FY 2017 Reported Currency Product
Slide 9: Full Year 2018 Results
Full Year 2018 Results 1,2 (Excluding Royalty and NRE Revenue) Non-GAAP 1 Non-GAAP 1 Product Revenue Product Operating Margin Product EPS $830M 22.0% $2.65 $738M 18.6% $1.73 Constant Currency +11.9% Growth 1 +340 bps +53% 1 Please refer to the reconciliations of our GAAP to non-GAAP financial measur
Slide 10: Full Year 2018 Results: Free Cash Flow
Full Year 2018 Results 1,2 1 Non-GAAP Strong free cash flow generation of $222M in 2018 Total Free Cash Flow Cash conversion rate was 26% of total revenue $222M Significant working capital improvements . Days sales outstanding (DSO) improvement of 10 days . Q4 2018 = 45 days 26% . $87M of tota
Slide 11: Full Year 2019 Financial Guidance
Full Year 2019 Financial Guidance 1,2 Revenue . Product revenue up 9.9% to $912M, or 10.7% growth on a constant currency basis Operating margin % . GAAP operating margin of 23.8% . Non-GAAP Product operating margin, excluding the impact of royalty and NRE, up 200 bps to 24.0% Diluted earnings
Slide 12: Full Year 2019 Financial Guidance
Full Year 2019 Financial Guidance 1,2 GAAP Non-GAAP Total Non-GAAP Product (Including Royalty and NRE revenue) (Excluding Royalty and NRE revenue) vs. Prior Year vs. Prior Year Constant Constant In millions; except %'s and EPS FY 2019 FY 2019 FY 2018 Reported Currency FY 2019 FY 2018 Reported Curren
Slide 13: Full Year 2019 Financial Guidance
Full Year 2019 Financial Guidance 1,2 (Excluding Royalty and NRE Revenue) Non-GAAP 1 Non-GAAP 1 Product Revenue Product Operating Margin Product EPS $912M 24.0% $3.08 $830M 22.0% $2.65 Constant Currency +10.7% Growth 1 +200 bps +16% 1 Please refer to the reconciliations of our GAAP to non-GAAP finan
Slide 14: Appendices: GAAP to Non-GAAP Adjustments and Reconciliations
APPENDICES GAAP to Non-GAAP Adjustments and Reconciliations
Slide 15: 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 16: Description of Non-GAAP Adjustments (cont.)
Description of Non-GAAP Adjustments (cont.) 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
Slide 17: Constant Currency Product Revenue
Constant Currency Product Revenue1 RECONCILIATION OF GAAP PRODUCT REVENUE GROWTH TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH FY2019 (in thousands, except percentages) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance GAAP product revenue $ 196,353 $ 738,242 $ 221,413 $ 829,874 $ 912,000 Constant currency F
Slide 18: Non-GAAP Gross Margin %
Non-GAAP Gross Margin %1 RECONCILIATION OF GAAP GROSS PROFIT/MARGIN TO NON-GAAP TOTAL AND PRODUCT GROSS PROFIT/MARGIN FY2019 (in thousands, except percentages) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance Product revenue $ 196,353 $ 738,242 $ 221,413 $ 829,874 $ 912,000 Royalty and other revenue 11,58
Slide 19: Non-GAAP Operating Expense %
Non-GAAP Operating Expense %1 RECONCILIATION OF GAAP OPERATING EXPENSE % TO NON-GAAP OPERATING EXPENSE % FY2019 (in thousands, except percentages) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance GAAP product revenue $ 196,353 $ 738,242 $ 221,413 $ 829,874 $ 912,000 GAAP royalty and other revenue 11,586 5
Slide 20: Non-GAAP Operating Margin %
Non-GAAP Operating Margin %1 RECONCILIATION OF GAAP OPERATING INCOME/MARGIN TO NON-GAAP TOTAL AND PRODUCT OPERATING INCOME/MARGIN FY2019 (in thousands, except percentages) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance Product revenue $ 196,353 $ 738,242 $ 221,413 $ 829,874 $ 912,000 Royalty and other r
Slide 21: Non-GAAP Net Income and Diluted EPS
Non-GAAP Net Income and Diluted EPS1 RECONCILIATION OF GAAP NET INCOME AND EPS TO NON-GAAP NET INCOME AND EPS FY2019 (in thousands, except per share amounts) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance GAAP net income $ (7,735) $ 124,789 $ 46,934 $ 193,543 $ 184,126 Weighted average shares outstandin
Slide 22: Non-GAAP Product Net Income and Diluted EPS
Non-GAAP Product Net Income and Diluted EPS1 RECONCILIATION OF GAAP PRODUCT NET INCOME AND EPS TO NON-GAAP PRODUCT NET INCOME AND EPS FY2019 (in thousands, except per share amounts) 4Q2017(1) FY2017(1) 4Q2018 FY2018 Guidance Product net income(2) $ (13,379) $ 94,538 $ 45,547 $ 172,166 $ 184,126 Roya
Slide 23: Adjusted Free Cash Flow
Adjusted Free Cash Flow 1 RECONCILIATION OF FREE CASH FLOW TO ADJUSTED FREE CASH FLOW (in thousands, except percentages) 4Q2017(1) FY2017(1) 4Q2018 FY2018 GAAP total revenue $ 207,939 $ 790,248 $ 223,132 $ 858,289 Net cash provided by operating activities 48,681 56,062 63,222 239,527 Purchases of pr
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