Masimo Corporation · NASDAQ:MASI
Masimo — Q3 2019 Earnings Presentation
20 slides from Masimo's earnings presentation, Oct 30, 2019
Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Improving Patient Outcomes Earnings Presentation | October 30, 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. generally accepted accounting principles (GAAP). The non-GAAP financial measures presented exclude certain items that are more fully
Slide 4: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights Total revenue, including royalty and other revenue, was $229.0 million Revenue Product revenue increased 13.3% to $228.9 million, or 13.6% on a constant currency basis(1) Shipments Shipments of noninvasive technology boards and monitors increased 2.7% to 60,700
Slide 5: Third Quarter 2019 Results – GAAP
Third Quarter 2019 Results – GAAP (1) (in millions; except % and EPS) Q3 2019 Q3 2018 vs. Prior Year Comments Product revenue includes leased equipment revenues under ASC 842, which Product Revenue $228.9 $202.1 13.3% were ~$2.7M in Q3 2019. GAAP results include royalty and other (non-recurring) rev
Slide 6: Third Quarter 2019 Results – Non-GAAP
Third Quarter 2019 Results – Non-GAAP (1) vs. Prior Year Constant (in millions; except % and EPS) Q3 2019 Q3 2018 Reported Comments Currency Product revenue includes leased equipment revenues Product Revenue $228.9 $202.1 13.3% 13.6% under ASC 842, which were ~$2.7M in Q3 2019. Non-GAAP results excl
Slide 7: Third Quarter 2019 Results – Non-GAAP
Third Quarter 2019 Results – Non-GAAP (1) Non-GAAP (1) Non-GAAP (1) Product Revenue Operating Margin EPS $229M 23.0% $0.76 $202M 20.4% $0.60 Constant Currency +13.6%Growth (1) +260 bps +26.7% Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 (1) Non-GAAP measures shown exclude the impact of Royalty an
Slide 8: Full Year 2019 Financial Guidance
Full Year 2019 Financial Guidance Total revenue, including royalty and other revenue, of $933.4 million Revenue Product revenue increasing 12.3% to $932.0 million, or 13.1% on a constant currency basis(1) GAAP operating margin of 23.8% Profitability Non-GAAP operating margin(1) of 24.0% GA
Slide 9: Full Year 2019 Financial Guidance – GAAP
Full Year 2019 Financial Guidance – 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 $932.0 $829.9 12.3% are projected to be ~$8M in FY 2019. GAAP results include royalty and other
Slide 10: Full Year 2019 Financial Guidance – Non-GAAP
Full Year 2019 Financial Guidance – 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 $932.0 $829.9 12.3% 13.1% under ASC 842, which are projected to be ~$8M in FY 2019. N
Slide 11: Full Year 2019 Financial Guidance – Non-GAAP
Full Year 2019 Financial Guidance – Non-GAAP (1) Non-GAAP (1) Non-GAAP (1) Product Revenue Operating Margin EPS $932M 24.0% $3.18 22.0% $830M $2.65 Constant Currency +13.1%Growth (1) +200 bps +20.0% FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 (1) Non-GAAP measures shown exclude the impact of Roy
Slide 12: 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 13: 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 14: 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 15: Constant Currency Product Revenue
Constant Currency Product Revenue (1),(2) RECONCILIATION OF GAAP PRODUCT REVENUE GROWTH TO CONSTANT CURRENCY PRODUCT REVENUE GROWTH (3) (in thousands, except percentages) Q3 2018 FY 2018 Q3 2019 2019 Guidance GAAP product revenue $ 202,068 $ 829,874 $ 228,916 $ 932,000 Constant currency F/X adjustme
Slide 16: Non-GAAP Gross Margin %
Non-GAAP Gross Margin % (1),(2) RECONCILIATION OF GAAP GROSS PROFIT/MARGIN TO NON-GAAP GROSS PROFIT/MARGIN: 2019 Full Year (3) Q3 2018 FY 2018 Q3 2019 Guidance GAAP gross profit/margin$ 140,753 $ 574,892 $ 156,268 $ 623,796 Non-GAAP adjustments: Royalty and other revenue, net of related costs (8,364
Slide 17: Non-GAAP Operating Expense %
Non-GAAP Operating Expense % (1),(2) RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES: 2019 Full Year Q3 2018 FY 2018 Q3 2019 Guidance (3) GAAP selling, general and administrative operating expenses$ 71,037 $ 285,417 $ 80,354 Non-GAAP adjustments: Acquisition & investment rel
Slide 18: Non-GAAP Operating Margin %
Non-GAAP Operating Margin % (1),(2) RECONCILIATION OF GAAP OPERATING INCOME/MARGIN TO NON-GAAP OPERATING INCOME/MARGIN: 2019 Full Year Q3 2018 FY 2018 Q3 2019 Guidance (3) GAAP operating income/margin$ 48,641 $ 208,044 $ 51,632 $ 221,946 Non-GAAP adjustments: Royalty and other revenue, net of relate
Slide 19: 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: 2019 Full Year (3) Q3 2018 FY 2018 Q3 2019 Guidance GAAP net income$ 57,126 $ 193,543 $ 49,085 $ 193,022 Non-GAAP adjustments: Royalty and other revenue, net of related costs (8,364) (27,704) (57) (
Slide 20: Adjusted Free Cash Flow
Adjusted Free Cash Flow (1),(2) RECONCILIATION OF FREE CASH FLOW TO ADJUSTED FREE CASH FLOW Q3 2018 FY 2018 Q3 2019 Net cash provided by operating activities Net cash provided by operating activities$ 48,406 $ 239,527 $ 50,637 Purchases of property and equipment, net (2,869) (17,126) (8,741) Free ca