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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________
FORM 8-K
________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2023
masimologoq32019b.jpg
MASIMO CORPORATION
(Exact name of registrant as specified in its charter)
________________________________________________
DE 001-33642 33-0368882
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
52 Discovery Irvine, CA 92618
(Address of Principal Executive Offices) (Zip Code)
(949)
297-7000
Registrant’s telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities Registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value MASI The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02. Results of Operations and Financial Condition.
On November 7, 2023, Masimo Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.
In accordance with General Instructions B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
In connection with the Company’s conference call scheduled to be held on November 7, 2023, the Company’s Chief Financial Officer will review supplemental information regarding the Company’s financial results for the third quarter ended September 30, 2023. In addition, the Company is making available to investors supplemental financial information for fiscal 2022 and the first, second and third quarters of fiscal 2023 pursuant to the materials furnished as Exhibit 99.2 to this Current Report.
In accordance with General Instructions B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) The following items are filed as exhibits to the Current Report on Form 8-K.
Exhibit
 No.
Description
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Masimo Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
MASIMO CORPORATION
Date: November 7, 2023 By:
/s/ MICAH YOUNG
Micah Young
Executive Vice President & Chief Financial Officer
(Principal Financial Officer)

EX-99.1 2 masi-20231107xex991.htm EX-99.1 Document

Exhibit 99.1
masimologoq2020.jpg
Masimo Reports Third Quarter 2023 Financial Results
Third Quarter 2023 Highlights
Consolidated revenue was $478.9 million;
Healthcare revenue was $307.8 million;
Non-healthcare revenue was $171.1 million;
GAAP net income per diluted share was $0.20; and
Non-GAAP net income per diluted share was $0.63.
Irvine, California, November 7, 2023 - Masimo Corporation (Nasdaq: MASI) today announced its financial results for the third quarter of 2023, ended September 30, 2023.
Third Quarter 2023 Financial Results
Consolidated revenue was $478.9 million, comprised of healthcare revenue of $307.8 million and non-healthcare revenue of $171.1 million.
Shipments of noninvasive technology boards and instruments were 63,100.
Consolidated GAAP operating income was $25.2 million. Consolidated non-GAAP operating income was $56.9 million. Consolidated GAAP net income was $10.6 million, or $0.20 per diluted share. Consolidated non-GAAP net income was $33.7 million, or $0.63 per diluted share.
Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “Our performance for the third quarter was within our guidance range communicated last quarter. That said, our healthcare business is navigating a clear transition away from COVID-era conditions. We are beginning to see that customer behavior and sensor purchasing patterns are shifting back to the pre-pandemic growth trend line we saw from 2017 to 2019. Together with our record contracting performance through the third quarter, this reinforces our conviction in the underlying long-term growth rate for our healthcare business. As we emerge from this transition year, these trends, along with our new product launches and rapid growth in our hearables category, are setting the stage for a strong 2024.”
For additional financial details, please visit the Investor Relations section of the Company’s website at investor.masimo.com to access the third quarter 2023 earnings presentation materials.
Updated Fourth-Quarter 2023 and Full-Year 2023 Financial Guidance
The Company provided the following updated estimates for its fourth-quarter 2023 and full-year financial guidance:
Guidance
Fourth-Quarter 2023(1)
Updated Full-Year 2023(1)
(in millions, except earnings per diluted share) GAAP Non-GAAP GAAP Non-GAAP
Consolidated revenue $526 to $576 $526 to $576 $2,025 to $2,075 $2,025 to $2,075
Healthcare revenue $320 to $345 $320 to $345 $1,255 to $1,280 $1,255 to $1,280
Non-healthcare revenue $206 to $231 $206 to $231 $770 to $795 $770 to $795
Consolidated operating income $45 to $59 $65 to $79 $138 to $152 $256 to $270
Consolidated net income per diluted share $0.45 to $0.65 $0.74 to $0.94 $1.34 to $1.54 $2.85 to $3.05
______________
(1)    Guidance provided November 7, 2023.
•For the healthcare segment, fourth-quarter 2023 revenue guidance includes year-over-year foreign currency tailwinds of $1 million and full-year 2023 revenue guidance includes year-over-year foreign currency headwinds of $6 million.
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•For the non-healthcare segment, fourth-quarter 2023 revenue guidance includes year-over-year foreign currency tailwinds of $3 million and full-year 2023 revenue guidance includes year-over-year foreign currency headwinds of $9 million.
Supplementary Non-GAAP Financial Information
For additional non-GAAP financial details, please visit the Investor Relations section of the Company’s website at investor.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 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 net operating results on an on-going basis: (i) constant currency 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 operating results with those of other companies. Management believes constant currency 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:
Constant currency revenue 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 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 revenue growth rate will continue to occur in future periods.
Acquisition, integration and related costs
These transactions represent gains, losses, and other related costs associated with acquisitions, integrations, investments, divestitures, assets impairments, and in-process research and development.
Acquired tangible asset amortization
These transactions represent amortization expense in connection with business or assets acquisitions associated with acquired tangible assets and asset valuation step-ups.
Acquired intangible asset amortization
These transactions represent amortization expense in connection with business or assets acquisitions associated with acquired intangible assets including, but not limited to customer relationships, intellectual property, trade names and non-competition agreements.
Business transition and related costs
These transactions represent gains, losses, and other related costs associated with business transition plans. These items may include but are not limited to severance, relocation, consulting, leasehold exit costs, asset impairment, and other related costs to rationalize our operational footprint and optimize business results.

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Litigation related expenses, settlements and awards
These transactions represent gains, losses, and other related costs associated with certain litigation matters, which can vary in their characteristics, frequency and significance to our operating results.
Other adjustments
In the event there are gains, losses and other adjustments which impact period-to-period comparability and do not represent the underlying ongoing results of the business, the Company may choose to exclude these from non-GAAP earnings.
Realized and unrealized gains or losses
These transactions represent gains, losses, and other related costs associated with foreign currency denominated transactions and investments. 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. Unrealized and realized gains and losses on investments may impact the Company’s reported results of operations for a period. These items are highly variable, difficult to predict and outside the control of those responsible for the underlying operations of the business. Other items also included here are mark-to-market gains and losses of derivative contracts that are not designated as hedging instruments or the ineffective portions of cash flow hedges.
Tax impact of non-GAAP adjustments
In order to reflect the tax effected impact of the non-GAAP adjustments, the Company will adjust the non-GAAP earnings by the approximate tax impact of these adjustments.
Excess tax benefits from stock-based compensation expense
GAAP requires that excess tax benefits recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. As these excess tax benefits may be highly variable from period-to-period, the Company may choose to exclude these tax benefits from non-GAAP earnings to facilitate comparability between periods and with peers.
Financing related adjustments
The Company may enter into various financial arrangements whereby costs are incurred and certain instrument features are valued and expensed accordingly but are not necessarily indicative of the on-going cash flow generation of the Company and therefore excludes these costs from non-GAAP earnings. For GAAP earnings per diluted share purposes, the Company cannot reflect the anti-dilutive impact, if applicable, in its diluted shares calculations. However, the Company believes that reflecting the anti-dilutive impact of these instruments in non-GAAP earnings per diluted share provides management and investors with useful information in evaluating the financial performance of the Company on a per share basis.
Third Quarter 2023 Actuals versus Third Quarter 2022 Actuals
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT CURRENCY REVENUE(1):
Three Months Ended
(in millions, except percentages) September 30,
2023
October 1,
2022
GAAP healthcare revenue $ 307.8  $ 327.2 
Constant currency revenue adjustments (0.7) N/A
Non-GAAP healthcare constant currency revenue $ 307.1  $ 327.2 
GAAP healthcare revenue growth % (5.9) %
Non-GAAP healthcare constant currency revenue growth % (6.1) %
__________________
(1)      May not foot due to rounding.
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RECONCILIATION OF NON-HEALTHCARE GAAP TO NON-GAAP CONSTANT CURRENCY REVENUE(1):
Three Months Ended
(in millions, except percentages) September 30,
2023
October 1,
2022
GAAP non-healthcare revenue 171.1  222.1 
Constant currency revenue adjustments (1.5) N/A
Non-GAAP non-healthcare constant currency revenue $ 169.6  $ 222.1 
GAAP non-healthcare revenue growth % (23.0) %
Non-GAAP non-healthcare constant currency revenue growth % (23.6) %
__________________
(1)      May not foot due to rounding.

RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING INCOME(1):
Three Months Ended
September 30,
2023
October 1,
2022
(in millions) $ $
GAAP operating income $ 25.2  $ 54.8 
Non-GAAP adjustments:
Acquired tangible asset amortization 0.9  8.8 
Acquired intangible asset amortization 9.4  4.6 
Acquisition, integration and related costs(2)
10.6  9.7 
Business transition and related costs 4.2  — 
Litigation related expenses, settlements and awards(3)
6.0  3.4 
Other adjustments 0.5  — 
Total non-GAAP adjustments 31.7  26.6 
Non-GAAP operating income $ 56.9  $ 81.3 
__________________
(1)     May not foot due to rounding.
(2)    Includes a $7.0 million impairment charge in Q3 2023 for certain indefinite-lived trademarks from the non-healthcare reporting unit.
(3)    Includes legal expenses associated with the Apple ITC proceedings and governance-related matters.

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RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Three Months Ended
September 30,
2023
October 1,
2022
(in millions, except per diluted share amounts) $ Per Diluted Share $ Per Diluted Share
GAAP net income $ 10.6  $ 0.20  $ 37.9  $ 0.70 
Non-GAAP adjustments:
Acquired tangible asset amortization 0.9  0.02  8.8  0.16 
Acquired intangible asset amortization 9.4  0.18  4.6  0.09 
Acquisition, integration and related costs(2)
10.6  0.20  9.7  0.18 
Business transition and related costs 4.2  0.08  —  — 
Litigation related expenses, settlements and awards(3)
6.0  0.11  3.4  0.06 
Other adjustments 0.5  0.01  (0.4) (0.01)
Realized and unrealized gains or losses (1.0) (0.02) (5.4) (0.10)
Financing related adjustments 0.5  0.01  0.5  0.01 
Tax impact of non-GAAP adjustments (8.0) (0.15) (4.9) (0.09)
Excess tax benefits from stock-based compensation expense
(0.2) —  (0.3) (0.01)
Total non-GAAP adjustments 22.9  0.43  16.0  0.30 
Non-GAAP net income $ 33.7  $ 0.63  $ 53.9  $ 1.00 
Weighted average shares outstanding-diluted 53.9  54.1 
__________________
(1)      May not foot due to rounding.
(2)    Includes a $7.0 million impairment charge in Q3 2023 for certain indefinite-lived trademarks from the non-healthcare reporting unit.
(3)    Includes legal expenses associated with the Apple ITC proceedings and governance-related matters.
Updated Fourth-Quarter 2023 and Full-Year 2023 Financial Guidance
RECONCILIATION OF HEALTHCARE GAAP TO NON-GAAP CONSTANT CURRENCY REVENUE(1):
Guidance(2)
(in millions, except percentages) Fourth-Quarter 2023 Updated
Full-Year 2023
GAAP healthcare revenue $320 to $345 $1,255 to $1,280
Constant currency revenue adjustments (1)
Non-GAAP healthcare constant currency revenue $319 to $344 $1,261 to $1,286
GAAP healthcare revenue growth % (9)% to (2)% (6)% to (4)%
Non-GAAP healthcare constant currency revenue growth % (9)% to (2)% (6)% to (4)%
__________________
(1)     May not foot due to rounding.
(2)    Guidance provided November 7, 2023.

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RECONCILIATION OF NON-HEALTHCARE GAAP TO NON-GAAP CONSTANT CURRENCY REVENUE(1):
Guidance(2)
(in millions, except percentages) Fourth-Quarter 2023
GAAP non-healthcare revenue $206 to $231
Constant currency revenue adjustments (3)
Non-GAAP non-healthcare constant currency revenue $204 to $229
GAAP non-healthcare revenue growth % (22)% to (13)%
Non-GAAP non-healthcare constant currency revenue growth % (23)% to (14)%
__________________
(1)     May not foot due to rounding.
(2)    Guidance provided November 7, 2023.
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED OPERATING INCOME(1):
Guidance(2)
(in millions) Fourth-Quarter 2023 Updated
Full-Year 2023
GAAP operating income $45 to $59 $138 to $152
Non-GAAP adjustments:
Acquired tangible asset amortization
Acquired intangible asset amortization 38 
Acquisition, integration and related costs 20 
Business transition and related costs — 
Litigation related expenses, settlements and awards(3)
45 
Other adjustments(3)
— 
Total non-GAAP adjustments 20  118 
Non-GAAP operating income $65 to $79 $256 to $270
__________________
(1)     May not foot due to rounding.
(2)    Guidance provided November 7, 2023.
(3)    Includes legal expenses associated with the Apple ITC proceedings and governance-related matters.
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RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND NET INCOME PER DILUTED SHARE(1):
Guidance(2)
Fourth-Quarter 2023 Updated
Full-Year 2023
(in millions, except per diluted share amounts) $ Per Diluted Share $ Per Diluted Share
GAAP net income $24 to $35 $0.45 to $0.65 $72 to $83 $1.34 to $1.54
Non-GAAP adjustments:
Acquired tangible asset amortization 0.04  0.12 
Acquired intangible asset amortization 0.17  38  0.70 
Acquisition, integration and related costs 0.03  20  0.36 
Business transition and related costs —  0.01  0.08 
Litigation related expenses, settlements and awards(3)
0.12  45  0.83 
Other adjustments —  0.00 0.07 
Realized and unrealized gains or losses —  0.00 (7) (0.12)
Financing related adjustments —  0.01 0.03 
Tax impact of non-GAAP adjustments (4) (0.08) (27) (0.50)
Excess tax benefits from stock-based compensation expense
—  (0.01) (4) (0.07)
Total non-GAAP adjustments 16  0.29  82  1.52 
Non-GAAP net income $40 to $51 $0.74 to $0.94 $155 to $165 $2.85 to $3.05
Weighted average shares outstanding-diluted 54.2  54.2 
__________________
(1)     May not foot due to rounding.
(2)    Guidance provided November 7, 2023.
(3)    Includes legal expenses associated with the Apple ITC proceedings and governance-related matters.





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Conference Call:
The conference call to review the results will begin at 1:30 p.m. PT today (4:30 p.m. ET) and will be hosted by Joe Kiani, Chairman and Chief Executive Officer, and Micah Young, Executive Vice President and Chief Financial Officer.
To register for the conference call and receive the dial-in number, please use the link below. Upon registering, each participant will be provided with call details and a registrant ID number.
Conference Call Registration Link:
https://conferencingportals.com/event/nUSpRIEm
A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the Company’s website.
About Masimo
Masimo (Nasdaq: MASI) is a global technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, patient monitors, and automation and connectivity solutions. In addition, Masimo Consumer Audio is home to eight iconic audio brands, including Bowers & Wilkins®, Denon®, Marantz®, and Polk Audio®. Our mission is to improve life, improve patient outcomes; and reduce the cost of care. Masimo SET® Measure-through Motion and Low Perfusion™ pulse oximetry, introduced in 1995, has been shown in over 100 independent and objective studies to outperform other pulse oximetry technologies. Masimo SET® has also been shown to help clinicians reduce severe retinopathy of prematurity in neonates, improve CCHD screening in newborns, and, when used for continuous monitoring with Masimo Patient SafetyNet™ in post-surgical wards, reduce rapid response team activations, ICU transfers, and costs. Masimo SET® is estimated to be used on more than 200 million patients in leading hospitals and other healthcare settings around the world, and is the primary pulse oximetry at 9 of the top 10 hospitals as ranked in the 2022-23 U.S. News and World Report Best Hospitals Honor Roll. In 2005, Masimo introduced rainbow® Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively and intermittently, including total hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth Variability Index (Pvi®), RPVi™ (rainbow® Pvi), and Oxygen Reserve Index (Ori™). In 2013, Masimo introduced the Root® Patient Monitoring and Connectivity Platform, built from the ground up to be as flexible and expandable as possible to facilitate the addition of other Masimo and third-party monitoring technologies; key Masimo additions include Next Generation SedLine® Brain Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography with NomoLine® sampling lines. Masimo’s family of continuous and spot-check monitoring Pulse CO-Oximeters® includes devices designed for use in a variety of clinical and non-clinical scenarios, including tetherless, wearable technology, such as Radius-7®, Radius-PPG® and Radius VSM™, portable devices like Rad-67®, fingertip pulse oximeters like MightySat® Rx, and devices available for use both in the hospital and at home, such as Rad-97®. Masimo hospital and home automation and connectivity solutions are centered around Root and the Masimo Hospital Automation™ platform, and include Iris® Gateway, iSirona™, Patient SafetyNet, Replica®, Halo ION, UniView®, UniView :60™, and Masimo SafetyNet™. Masimo’s growing portfolio of health and wellness solutions include Radius T™ and the Masimo W1™ watch, Stork™, Opioid Halo™, Bridge™, and PerL™. Additional information about Masimo and its products may be found at www.masimo.com. Published clinical studies on Masimo products can be found at www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and are not available for sale in the United States. The use of the trademark Patient SafetyNet is under license from University HealthSystem Consortium.
Forward-Looking Statements
All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including our expectations regarding our updated third-quarter 2023 and full-year financial guidance, including consolidated revenue, healthcare revenue. non-healthcare revenue, consolidated operating income and consolidated earnings per diluted share; our ability to manage cost structure to preserve profitability; our expectations regarding the pace of recovery in inpatient volumes and weakness in the high-end consumer audio market, our contracting activity and new products and our ability to rebound and achieve long-term growth targets. These forward-looking statements are based on management’s current expectations and beliefs and are subject to uncertainties and factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to: our dependence on Masimo SET® and Masimo rainbow SET™ products and technologies for substantially all of our revenue; any failure in protecting our intellectual property exposure to competitors’ assertions of intellectual property claims; the highly competitive nature of the markets in which we sell our products and technologies; any failure to continue developing innovative products and technologies; our ability to successfully integrate Sound United’s brands into our business; our ability to address and expand into new markets; the lack of acceptance of any of our current or future products and technologies; obtaining regulatory approval of our current and future products and technologies; the risk that the implementation of our international realignment will not continue to produce anticipated operational and financial benefits, including a continued lower effective tax rate; the loss of our customers; the failure to retain and recruit senior management; product liability claims exposure; a failure to obtain expected returns from the amount of intangible assets we have recorded; the maintenance of our brand; the amount and type of equity awards that we may grant to employees and service providers in the future; our ongoing litigation and related matters; and other factors discussed in the “Risk Factors” section of our most recent periodic reports filed with the Securities and Exchange Commission (“SEC”), including our most recent Form 10-K and Form 10-Q, all of which you may obtain for free on the SEC’s website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
# # #
Investor Contact: Eli Kammerman Media Contact: Evan Lamb
(949) 297-7077 (949) 396-3376
ekammerman@masimo.com elamb@masimo.com
Masimo, SET, Signal Extraction Technology, Improving Patient Outcome and Reducing Cost of Care... by Taking Noninvasive Monitoring to New Sites and Applications, rainbow, SpHb, SpOC, SpCO, SpMet, PVI and ORI are trademarks or registered trademarks of Masimo Corporation.
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MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
September 30,
2023
December 31,
2022
ASSETS
Current assets
Cash and cash equivalents $ 124.4  $ 202.9 
Accounts receivable, net of allowance for credit losses 356.9  445.9 
Inventories 584.6  501.0 
Other current assets 171.6  158.8 
Total current assets 1,237.5  1,308.6 
Lease receivable, non-current 79.9  73.1 
Deferred costs and other contract assets 44.7  41.9 
Property and equipment, net 415.0  402.5 
Customer relationships, net 175.5  201.6 
Acquired technologies, net 129.3  160.1 
Other intangible assets, net - (Note 9) 100.7  98.9 
Trademarks 224.5  262.0 
Goodwill 400.1  445.4 
Deferred tax assets 88.2  102.5 
Other non-current assets 100.5  114.0 
Total assets $ 2,995.9  $ 3,210.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 283.5  $ 276.8 
Accrued compensation 55.9  89.3 
Deferred revenue and other contract liabilities, current 73.1  80.6 
Other current liabilities 166.3  183.3 
Total current liabilities 578.8  630.0 
Long-term debt 910.1  941.6 
Deferred tax liabilities 112.1  163.6 
Other non-current liabilities 119.3  136.5 
Total liabilities 1,720.3  1,871.7 
Commitments and contingencies
Stockholders’ equity
Preferred stock —  — 
Common stock 0.1  0.1 
Treasury stock (1,169.2) (1,169.2)
Additional paid-in capital 773.7  782.2 
Accumulated other comprehensive (loss) income (90.9) 11.5 
Retained earnings 1,761.9  1,714.3 
Total stockholders’ equity 1,275.6  1,338.9 
Total liabilities and stockholders’ equity $ 2,995.9  $ 3,210.6 


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MASIMO CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30,
2023
October 1,
2022
September 30,
2023
October 1,
2022
Revenue $ 478.9  $ 549.3  $ 1,499.2  $ 1,418.8 
Cost of goods sold 244.1  266.8  758.4  673.4 
Gross profit 234.8  282.5  740.8  745.4 
Operating expenses:
Selling, general and administrative 156.1  174.6  504.1  471.6 
Research and development 46.5  53.1  137.2  137.1 
Impairment charge 7.0  —  7.0  — 
Total operating expenses 209.6  227.7  648.3  608.7 
Operating income 25.2  54.8  92.5  136.7 
Non-operating (loss) income (11.2) (2.8) (27.5) 1.0 
Income before provision for income taxes 14.0  52.0  65.0  137.7 
Provision for income taxes 3.4  14.1  17.4  35.1 
Net income $ 10.6  $ 37.9  $ 47.6  $ 102.6 
Net income per share:
Basic $ 0.20  $ 0.72  $ 0.90  $ 1.90 
Diluted $ 0.20  $ 0.70  $ 0.88  $ 1.85 
Weighted-average shares used in per share calculations:
Basic 52.8  52.5  52.8  54.0 
Diluted 53.9  54.1  54.2  55.6 
The following table presents details of the stock-based compensation (benefit) expense that is included in each functional line item in the condensed consolidated statements of operations (in millions):
Three Months Ended Nine Months Ended
September 30,
2023
October 1,
2022
September 30,
2023
October 1,
2022
Cost of goods sold $ 0.2  $ 0.3  $ 0.8  $ 0.8 
Selling, general and administrative (2.4) 9.2  (7.1) 29.4 
Research and development 1.1  4.0  3.9  11.5 
Total $ (1.1) $ 13.5  $ (2.4) $ 41.7 


-10-


MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Nine Months Ended
September 30,
2023
October 1,
2022
Cash flows from operating activities:
Net income $ 47.6  $ 102.6 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 75.8  56.6 
Stock-based compensation (benefit) expense (2.4) 41.7 
Gain on disposal of equipment, intangibles and other assets 0.6  0.1 
Provision for credit losses 1.1  1.2 
Amortization of debt issuance cost 1.4  0.9 
Impairment charge 7.0  — 
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 84.8  (66.7)
(Increase) decrease in inventories (93.1) (71.0)
(Increase) decrease in other current assets (14.6) 11.7 
(Increase) decrease in lease receivable, net (6.8) (5.9)
(Increase) decrease in deferred costs and other contract assets (2.9) (31.6)
(Increase) decrease in other non-current assets (42.0) (22.2)
Increase (decrease) in accounts payable 3.6  69.6 
Increase (decrease) in accrued compensation (32.8) (6.9)
Increase (decrease) in accrued liabilities (19.5) (26.5)
Increase (decrease) in income tax payable (7.1) (8.4)
Increase (decrease) in deferred revenue and other contract-related liabilities (6.2) 19.7 
Increase (decrease) in other non-current liabilities 22.5  (28.9)
Net cash provided by operating activities 17.0  36.0 
Cash flows from investing activities:
Purchases of property and equipment, net (33.1) (36.0)
Increase in intangible assets (29.3) (13.9)
Business combinations, net of cash acquired 7.5  (985.0)
Other strategic investing activities (1.0) — 
Net cash used in investing activities (55.9) (1,034.9)
Cash flows from financing activities:
Borrowings under line of credit 139.5  1,050.6 
Repayments on line of credit (154.3) (96.3)
Debt issuance costs —  (9.3)
Proceeds from issuance of common stock 6.7  6.9 
Payroll tax withholdings on behalf of employees for vested equity awards (12.7) (25.4)
Repurchases of common stock —  (401.4)
Net cash (used in) provided by financing activities (20.8) 525.1 
Effect of foreign currency exchange rates on cash (17.6) (52.5)
Net decrease in cash, cash equivalents and restricted cash (77.3) (526.3)
Cash, cash equivalents and restricted cash at beginning of period 209.6  748.4 
Cash, cash equivalents and restricted cash at end of period $ 132.3  $ 222.1 

-11-
EX-99.2 3 masi-q32023earningpres.htm EX-99.2 masi-q32023earningpres
1 Third Quarter 2023 Earnings November 7, 2023


 
2 Safe Harbor Statement 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,” “plan,” “estimate,” “project,” “assume,” “guide,” “target,” “forecast,” “see,” “seek,” “can,” “should,” “could,” “would,” “intend,” “predict,” “potential,” “strategy,” “is confident that,” “future,” “opportunity,” “work toward,” and similar expressions to identify forward-looking statements. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements speak only as of the date they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of these presentations are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in these presentations. The risks and uncertainties that may cause actual results to differ materially from Masimo’s current expectations are more fully described in Masimo’s reports filed with the U.S. Securities and Exchange Commission (SEC), including our most recent Form 10-K and Form 10-Q. Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, www.masimo.com or upon request. 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 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 financial measures to assist investors in understanding the Company’s core net operating results on an on-going basis: non-GAAP revenue (constant currency), non-GAAP revenue growth (constant currency), pro-forma non-GAAP revenue growth (constant currency), non-GAAP gross profit/margin %, non-GAAP SG&A expense, non-GAAP R&D expense, non-GAAP litigation settlements and (awards), non-GAAP impairment charge, non-GAAP operating expense %, non- GAAP operating income/margin %, non-GAAP non-operating income (expense), non-GAAP provision for income taxes, non-GAAP net income (loss), non-GAAP net income (loss) per share. 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 these non-GAAP financial measures are important in the evaluation of the Company’s performance and uses these measures to better understand and evaluate our business. For additional financial details, including GAAP to non-GAAP reconciliations, please visit the Investor Relations section of the Company’s website at www.masimo.com to access Supplementary Financial Information.


 
3 Financial Overview


 
4 Third Quarter 2023 Actual vs. Prior Year(1) (1) See Appendix for reconciliation of GAAP and non-GAAP measures, including constant currency (“CC”) and pro forma (“PF”) measures. All growth comparisons in this presentation relate to the corresponding period of last fiscal year unless otherwise noted. Numbers may not foot due to rounding. ($ in millions; ex cept EPS) Healthcare $308 (6% ) (6% ) Non-Heathcare $171 (23% ) (24% ) Revenue $479 (13%) (13%) GAAP Gross Profit $235 (17%) GAAP Gross Margin 49% (240) bps Non-GAAP Gross Profit $241 (17%) Non-GAAP Gross Margin 50% (220) bps GAAP Operating Profit $25 (54%) GAAP Operating Margin 5% (470) bps Non-GAAP Operating Profit $57 (30%) Non-GAAP Operating Margin 12% (290) bps GAAP Earnings Per share $0.20 (71%) Non-GAAP Earnings Per Share $0.63 (37%) vs. Prior Year Actual As Reported Constant Currency


 
5 Full Year 2023 Guidance vs. Prior Year(1) ($ in millions; ex cept EPS) Low - High Low - High Low - High Healthcare $1,255 - $1,280 (6% ) - (4% ) (6% ) - (4% ) Non-Heathcare $770 - $795 11% - 14% (18% ) - (16% ) Revenue $2,025 - $2,075 (1%) - 2% (11%) - (9%) GAAP Gross Profit $1,001 - $1,030 (5%) - (3%) GAAP Gross Margin 49% - 50% (260) - (240) bps Non-GAAP Gross Profit $1,027 - $1,056 (9%) - (6%) Non-GAAP Gross Margin 51% - 51% (440) - (420) bps GAAP Operating Profit $138 - $152 (34%) - (28%) GAAP Operating Margin 7% - 7% (350) - (300) bps Non-GAAP Operating Profit $256 - $270 (29%) - (25%) Non-GAAP Operating Margin 13% - 13% (520) - (480) bps GAAP Earnings Per Share $1.34 - $1.54 (48%) - (41%) Non-GAAP Earnings Per Share $2.85 - $3.05 (38%) - (34%) Updated Guidance(2) vs. Prior Year As Reported Pro Forma CC (1) See Appendix for reconciliation of GAAP and non-GAAP measures, including constant currency (“CC”) and pro forma (“PF”) measures. (2) Represents updated 2023 guidance as of November 7, 2023. All growth comparisons in this presentation relate to the corresponding period of last fiscal year unless otherwise noted. Numbers may not foot due to rounding.


 
6 Professional Healthcare Trends


 
7 $0 $50 $100 $150 $200 $250 $300 2017 2018 2019 2020 2021 2022 2023 (1) Represents total contract revenue over the multi-year term of the contracts. Includes contracts with new customers and incremental new contracted business with existing customers. Management uses this information to analyze business trends. Through the third quarter of each year Incremental Value of New Contracts(1) Worldwide ($ in Millions) Professional Healthcare


 
8 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2018 2019 2020 2021 2022 2023 (1) Represents Masimo’s Unrecognized Contract Revenue (as defined in Masimo’s Annual Report on Form 10-K filed March 1, 2023). As of the end of the third quarter of each year Unrecognized Contract Revenue(1) Worldwide ($ in Millions) Professional Healthcare


 
9 Revenue (As Reported) $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 2017 2018 2019 2020 2021 2022 2023 (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. These currency adjustments reconcile our GAAP reported revenue to our Non-GAAP revenue. See Appendix for reconciliation of GAAP and non-GAAP measures, including constant currency (“CC”). Through the third quarter of each year Total Revenue(1) Worldwide ($ in Millions) Professional Healthcare 9% CAGR (2017 – 2023) As Reported 10% CAGR (2017 – 2023) Constant Currency Constant Currency Adjustments Revenue (Constant Currency)


 
1 0 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2017 2018 2019 2020 2021 2022 2023 (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. Refer to slide 9 for the reconciliation of our constant currency revenue adjustments. Through the third quarter of each year Total Consumables Revenue(1) Worldwide ($ in Millions) Professional Healthcare 10% CAGR (2017 – 2023)


 
1 1 $0 $20 $40 $60 $80 $100 $120 $140 $160 2017 2018 2019 2020 2021 2022 2023 Through the third quarter of each year Rainbow and Hemodynamics Monitoring Revenue(1) Worldwide ($ in Millions) Professional Healthcare 20% CAGR (2017 – 2023) (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. Refer to slide 9 for the reconciliation of our constant currency revenue adjustments.


 
1 2 $0 $5 $10 $15 $20 $25 $30 $35 $40 2017 2018 2019 2020 2021 2022 2023 Through the third quarter of each year Brain Monitoring Revenue(1) Worldwide ($ in Millions) Professional Healthcare 27% CAGR (2017 – 2023) (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. Refer to slide 9 for the reconciliation of our constant currency revenue adjustments.


 
1 3 $0 $5 $10 $15 $20 $25 $30 $35 $40 2017 2018 2019 2020 2021 2022 2023 Through the third quarter of each year Capnography & Gas Monitoring Revenue(1) Worldwide ($ in Millions) Professional Healthcare 16% CAGR (2017 – 2023) (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. Refer to slide 9 for the reconciliation of our constant currency revenue adjustments.


 
1 4 Consumer Audio Trends


 
1 5 $0 $100 $200 $300 $400 $500 $600 $700 2021 2022 2023 Through the third quarter of each year Total Consumer Audio Revenue(1,2) Worldwide ($ in Millions) Consumer Audio (1) The information presented is based on actual exchange rates. Management uses this information to analyze business trends. These currency adjustments reconcile our GAAP reported revenue to our Non-GAAP revenue. See Appendix for reconciliation of GAAP and non-GAAP measures, including constant currency (“CC”). (2) 2021 and 2022 revenue is presented on a pro forma basis for year-over-year comparison purposes only. Pro forma financial information includes historical results for the acquired Sound United business prior to the transaction date on April 11, 2022. Revenue (As Reported) Constant Currency Adjustments Revenue (Constant Currency)


 
1 6 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2021 2022 2023 Through the third quarter of each year Hearables Revenue(1,2) Worldwide ($ in Millions) Consumer Audio 138% Growth Rate (2023 vs. 2022) Hearables product category includes earbuds and headphones (1) The information presented is based on constant currency exchange rates used by management for 2023 financial planning and analysis purposes. Management uses this information to analyze business trends. (2) 2021 and 2022 revenue is presented on a pro forma basis for year-over-year comparison purposes only. Pro forma financial information includes historical results for the acquired Sound United business prior to the transaction date on April 11, 2022.


 
1 7 Appendix GAAP to Non-GAAP Reconciliations


 
1 8 Consolidated Income Statement (1) Totals may not foot due to rounding. Annual reported amounts may vary from amounts previously reported due to rounding conventions. (2) 2023 Guidance provided on November 7, 2023. (3) Includes a $7.0 million impairment charge in Q3 2023 for certain indefinite-lived trademarks from the non-healthcare reporting unit. (Unaudited; in millions, except per share data) (1) Quarter to Date Full Year Q4 2023 Guidance (2) FY 2023 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 FY 2022 Low High Low High GAAP revenue $304.2 $565.3 $549.3 $617.0 $565.0 $455.3 $478.9 $2,035.8 $526 $576 $2,025 $2,075 GAAP gross profit $204.7 $258.2 $282.5 $313.3 $284.8 $221.2 $234.8 $1,058.8 $260 $289 $1,001 $1,030 Acquired tangible asset amortization - 46.2 6.4 - - - - 52.6 - - - - Acquired intangible asset amortization 0.6 4.9 0.1 5.6 5.2 5.4 6.2 11.2 6 6 22 22 Acquisition, integration and related costs 0.0 0.0 - 0.1 - - - 0.1 - - - - Other adjustments - - - - 2.5 0.9 0.5 - - - 4 4 Non-GAAP gross profit $205.4 $309.2 $289.1 $318.9 $292.6 $227.6 $241.4 $1,122.7 $266 $295 $1,027 $1,056 GAAP selling, general and administrative expenses $108.9 $188.3 $174.6 $185.5 $196.3 $151.7 $156.1 $657.4 Acquired tangible asset amortization - (2.1) (2.4) (2.4) (2.2) (1.0) (0.9) (6.8) Acquired intangible asset amortization (0.9) (4.4) (4.5) (4.5) (4.7) (4.2) (3.3) (14.3) Acquisition, integration and related costs (3.1) (19.7) (9.6) (5.1) (3.5) (3.9) (3.6) (37.5) Business transition and related costs - - - - - - (2.4) - Litigation related expenses and settlements (5.5) (7.2) (3.4) (12.6) (19.1) (13.4) (6.0) (28.7) Non-GAAP selling, general and administrative expenses $99.5 $154.9 $154.7 $160.8 $166.8 $128.9 $139.8 $569.8 GAAP research and development expenses $36.1 $47.8 $53.1 $54.3 $50.5 $40.2 $46.5 $191.4 Acquisition, integration and related costs - (0.1) (0.1) (0.6) (0.2) (0.2) - (0.7) Business transition and related costs - - - - - - ($1.8) $0.0 Non-GAAP research and development expenses $36.1 $47.8 $53.1 $53.7 $50.2 $40.1 $44.7 $190.7 GAAP litigation settlements and awards $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Litigation related expenses and settlements - - (0.0) - - - - (0.0) Non-GAAP litigation settlements and awards $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 GAAP impairment charge $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $7.0 $0.0 Acquisition, integration and related costs (3) - - - - - - ($7.0) (0.0) Non-GAAP impairment charge $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 GAAP operating expenses $145.0 $236.1 $227.7 $239.8 $246.8 $191.9 $209.6 $848.8 Acquired tangible asset amortization - (2.1) (2.4) (2.4) (2.2) (1.0) (0.9) (6.8) Acquired intangible asset amortization (0.9) (4.4) (4.5) (4.5) (4.7) (4.2) (3.3) (14.3) Acquisition, integration and related costs (3.1) (19.7) (9.7) (5.7) (3.7) (4.0) (10.6) (38.3) Business transition and related costs - - - - - - (4.2) - Litigation related expenses and settlements (5.5) (7.2) (3.4) (12.6) (19.1) (13.4) (6.0) (28.7) Non-GAAP operating expenses $135.6 $202.6 $207.8 $214.5 $217.1 $169.0 $184.6 $760.5 GAAP operating profit $59.7 $22.1 $54.8 $73.5 $38.0 $29.3 $25.2 $210.0 $45 $59 $138 $152 Acquired tangible asset amortization - 48.2 8.8 2.4 2.2 1.0 0.9 59.4 2 2 6 6 Acquired intangible asset amortization 1.5 9.3 4.6 10.1 9.9 9.6 9.4 25.5 9 9 38 38 Acquisition, integration and related costs 3.1 19.7 9.7 5.8 3.7 4.0 10.6 38.4 1 1 20 20 Business transition and related costs - - - - - - 4.2 - 0 0 4 4 Litigation related expenses and settlements 5.5 7.2 3.4 12.6 19.1 13.4 6.0 28.7 7 7 45 45 Other adjustments - - - - 2.5 0.9 0.5 - - - 4 4 Non-GAAP operating profit $69.8 $106.6 $81.3 $104.4 $75.5 $58.6 $56.9 $362.2 $65 $79 $256 $270


 
1 9 Consolidated Income Statement (1) Totals may not foot due to rounding. Annual reported amounts may vary from amounts previously reported due to rounding conventions. (2) 2023 Guidance provided on November 7, 2023. (Unaudited; in millions, except per share data) (1) Quarter to Date Full Year Q4 2023 Guidance (2) FY 2023 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 FY 2022 Low High Low High GAAP non-operating income (expense) ($0.6) $4.5 ($2.8) ($17.6) ($11.8) ($4.5) ($11.2) ($16.6) ($14) ($14) ($42) ($42) Realized and unrealized gains or losses 0.8 (8.2) (5.4) 7.3 0.7 (6.5) (1.0) (5.5) (0) (0) (7) (7) Financing related adjustments - 0.6 0.5 0.5 0.5 0.5 0.5 1.5 0 0 2 2 Other adjustments - (0.5) (0.4) - - - - (0.9) - - - - Non-GAAP non-operating income (expense) $0.2 ($3.6) ($8.2) ($9.8) ($10.7) ($10.5) ($11.6) ($21.4) ($14) ($14) ($47) ($47) GAAP provision for income taxes $12.5 $8.5 $14.1 $14.9 $4.9 $9.1 $3.4 $49.9 $7 $10 $24 $28 Tax impact of non-GAAP adjustments 2.5 19.5 4.9 8.2 10.0 4.8 8.0 35.2 4 4 27 27 Excess tax benefits from stock-based compensation 1.7 0.2 0.3 0.2 2.4 0.5 0.2 2.4 0 0 4 4 Non-GAAP provision for income taxes $16.8 $28.2 $19.3 $23.3 $17.4 $14.4 $11.5 $87.6 $12 $15 $55 $58 GAAP net income (loss) $46.6 $18.1 $37.9 $41.1 $21.3 $15.7 $10.6 $143.5 $24 $35 $72 $83 Acquired tangible asset amortization - 48.2 8.8 2.4 2.2 1.0 0.9 59.4 2 2 6 6 Acquired intangible asset amortization 1.5 9.3 4.6 10.1 9.9 9.6 9.4 25.5 9 9 38 38 Acquisition, integration and related costs 3.1 19.7 9.7 5.8 3.7 4.0 10.6 38.4 1 1 20 20 Business transition and related costs - - - - - - 4.2 - 0 0 4 4 Litigation related expenses and settlements 5.5 7.2 3.4 12.6 19.1 13.4 6.0 28.7 7 7 45 45 Other adjustments - (0.5) (0.4) - 2.5 0.9 0.5 (0.9) - - 4 4 Realized and unrealized gains or losses 0.8 (8.2) (5.4) 7.3 0.7 (6.5) (1.0) (5.5) (0) (0) (7) (7) Financing related adjustments - 0.6 0.5 0.5 0.5 0.5 0.5 1.5 0 0 2 2 Tax impact of non-GAAP adjustments (2.5) (19.5) (4.9) (8.2) (10.0) (4.8) (8.0) (35.2) (4) (4) (27) (27) Excess tax benefits from stock-based compensation (1.7) (0.2) (0.3) (0.2) (2.4) (0.5) (0.2) (2.4) (0) (0) (4) (4) Non-GAAP net income (loss) $53.2 $74.8 $53.9 $71.3 $47.5 $33.7 $33.7 $253.2 $40 $51 $155 $165 GAAP net income (loss) per share $0.81 $0.33 $0.70 $0.76 $0.39 $0.29 $0.20 $2.60 $0.45 $0.65 $1.34 $1.54 Acquired tangible asset amortization 0.00 0.87 0.16 0.04 0.04 0.02 0.02 1.08 0.04 0.04 0.12 0.12 Acquired intangible asset amortization 0.03 0.17 0.09 0.19 0.18 0.18 0.18 0.46 0.17 0.17 0.70 0.70 Acquisition, integration and related costs 0.05 0.36 0.18 0.11 0.07 0.07 0.20 0.70 0.03 0.03 0.36 0.36 Business transition and related costs 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.00 0.01 0.01 0.08 0.08 Litigation related expenses and settlements 0.10 0.13 0.06 0.23 0.35 0.25 0.11 0.52 0.12 0.12 0.83 0.83 Other adjustments 0.00 (0.01) (0.01) 0.00 0.05 0.02 0.01 (0.02) 0.00 0.00 0.07 0.07 Realized and unrealized gains or losses 0.01 (0.15) (0.10) 0.14 0.01 (0.12) (0.02) (0.10) (0.00) (0.00) (0.12) (0.12) Financing related adjustments 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.03 0.01 0.01 0.03 0.03 Tax impact of non-GAAP adjustments (0.04) (0.35) (0.09) (0.15) (0.18) (0.09) (0.15) (0.64) (0.08) (0.08) (0.50) (0.50) Excess tax benefits from stock-based compensation (0.03) (0.00) (0.01) (0.00) (0.04) (0.01) (0.00) (0.04) (0.01) (0.01) (0.07) (0.07) Non-GAAP net income (loss) per share $0.93 $1.35 $1.00 $1.32 $0.87 $0.62 $0.63 $4.59 $0.74 $0.94 $2.85 $3.05 Weighted average shares outstanding - Diluted 57.3 55.3 54.1 54.1 54.4 54.4 53.9 55.2 54.2 54.2 54.2 54.2


 
2 0 Revenue (1) Totals may not foot due to rounding. Annual reported amounts may vary from amounts previously reported due to rounding conventions. (2) 2023 Guidance provided on November 7, 2023. (3) Constant currency adjustments are intended to reflect revenue at prior year foreign exchange rates for comparison purposes. (4) Represents pro forma financial information, which is being provided for year-over-year comparison purposes only. Pro forma financial information includes historical results for the acquired Sound United business prior to the transaction date on April 11, 2022. (Unaudited; in millions, except percentages) (1,3) Quarter to Date Full Year Q4 2023 Guidance (2) FY 2023 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 FY 2022 Low High Low High Revenue Healthcare 304.2 357.0 327.2 351.9 346.7 281.1 307.8 1,340.3 320 345 1,255 1,280 Non-Healthcare - 208.3 222.1 265.1 218.3 174.2 171.1 695.5 206 231 770 795 GAAP revenue $304.2 $565.3 $549.3 $617.0 $565.0 $455.3 $478.9 $2,035.8 $526 $576 $2,025 $2,075 Healthcare 4.3 6.0 11.1 8.6 5.6 2.0 (0.7) 30.0 (1) (1) 6 6 Non-Healthcare N/A N/A N/A N/A N/A N/A (1.5) N/A (3) (3) 9 9 Constant currency adjustments $4.3 $6.0 $11.1 $8.6 $5.6 $2.0 ($2.2) $30.0 ($3) ($3) $15 $15 Healthcare 308.6 363.0 338.3 360.5 352.3 283.1 307.1 1,370.4 319 344 1,261 1,286 Non-Healthcare - 208.3 222.1 265.1 218.3 174.2 169.6 695.5 204 229 779 804 Non-GAAP revenue (constant currency) $308.6 $571.3 $560.4 $625.6 $570.6 $457.3 $476.7 $2,065.9 $522 $572 $2,040 $2,090 Healthcare 1.7% 17.0% 6.4% 7.4% 14.0% -21.3% -5.9% 8.2% -9% -2% -6% -4% Non-Healthcare N/A N/A N/A N/A N/A N/A -23.0% N/A -22% -13% 11% 14% GAAP revenue growth 1.7% 85.3% 78.7% 88.3% 85.7% -19.5% -12.8% 64.3% -15% -7% -1% 2% Healthcare 3.2% 19.0% 10.0% 10.1% 15.8% -20.7% -6.1% 10.6% -9% -2% -6% -4% Non-Healthcare N/A N/A N/A N/A N/A N/A -23.6% N/A -23% -14% 12% 16% Non-GAAP revenue growth (constant currency) 3.2% 87.2% 82.3% 91.0% 87.6% -19.1% -13.2% 66.7% -15% -7% 0% 3% Pro Forma Revenue (4) Healthcare 304.2 357.0 327.2 351.9 346.7 281.1 307.8 1,340.3 320 345 1,255 1,280 Non-Healthcare 250.6 215.2 222.1 265.1 218.3 174.2 171.1 953.0 206 231 770 795 GAAP revenue $554.9 $572.2 $549.3 $617.0 $565.0 $455.3 $478.9 $2,293.4 $526 $576 $2,025 $2,075 Healthcare 4.3 6.0 11.1 8.6 5.6 2.0 (0.7) 30.0 (1) (1) 6 6 Non-Healthcare 7.3 12.2 16.9 21.9 9.5 3.5 (1.5) 58.3 (3) (3) 9 9 Constant currency adjustments $11.6 $18.2 $28.0 $30.5 $15.1 $5.5 ($2.2) $88.3 ($3) ($3) $15 $15 Healthcare 308.6 363.0 338.3 360.5 352.3 283.1 307.1 1,370.4 319 344 1,261 1,286 Non-Healthcare 257.9 227.4 239.0 287.0 227.8 177.7 169.6 1,011.3 204 229 779 804 Non-GAAP revenue (constant currency) $566.5 $590.5 $577.3 $647.5 $580.1 $460.8 $476.7 $2,381.7 $522 $572 $2,040 $2,090 Healthcare 1.7% 17.0% 6.4% 7.4% 14.0% -21.3% -5.9% 8.2% -9% -2% -6% -4% Non-Healthcare 18.7% 4.3% -2.3% 0.4% -12.9% -19.0% -23.0% 4.9% -22% -13% -19% -17% GAAP revenue growth 8.8% 11.9% 2.7% 4.3% 1.8% -20.4% -12.8% 6.8% -15% -7% -12% -10% Healthcare 3.2% 19.0% 10.0% 10.1% 15.8% -20.7% -6.1% 10.6% -9% -2% -6% -4% Non-Healthcare 22.2% 10.2% 5.2% 8.7% -9.1% -17.4% -23.6% 11.3% -23% -14% -18% -16% Non-GAAP revenue growth (constant currency) 11.1% 15.4% 8.0% 9.5% 4.6% -19.5% -13.2% 10.9% -15% -7% -11% -9%


 
2 1 Segment Reporting (1) Totals may not foot due to rounding. Annual reported amounts may vary from amounts previously reported due to rounding conventions. (2) 2023 Guidance provided on November 7, 2023. (Unaudited; in millions) (1) Quarter to Date Full Year Q4 2023 Guidance (2) FY 2023 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 FY 2022 Low High Low High Revenue Healthcare 304.2 357.0 327.2 351.9 346.7 281.1 307.8 1,340.3 320 345 1,255 1,280 Non-Healthcare - 208.3 222.1 265.1 218.3 174.2 171.1 695.5 206 231 770 795 GAAP revenue $304.2 $565.3 $549.3 $617.0 $565.0 $455.3 $478.9 $2,035.8 $526 $576 $2,025 $2,075 Gross profit Healthcare 205.4 236.7 211.4 216.7 214.8 169.0 185.6 870.2 197 215 767 785 Non-Healthcare - 72.5 77.7 102.2 77.8 58.5 55.8 252.5 68 80 261 272 Other (0.6) (51.1) (6.5) (5.6) (7.7) (6.4) (6.6) (63.9) (6) (6) (26) (26) GAAP gross profit $204.7 $258.2 $282.5 $313.3 $284.8 $221.2 $234.8 $1,058.8 $260 $289 $1,001 $1,030 Acquired tangible asset amortization - 46.2 6.4 - - - - 52.6 - - - - Acquired intangible asset amortization 0.6 4.9 0.1 5.6 5.2 5.4 6.2 11.2 6 6 22 22 Acquisition, integration and related costs 0.0 0.0 - 0.1 - - - 0.1 - - - - Other adjustments - - - - 2.5 0.9 0.5 - - - 4 4 GAAP adjustments $0.6 $51.1 $6.5 $5.6 $7.7 $6.4 $6.6 $63.9 $6 $6 $26 $26 Healthcare 205.4 236.7 211.4 216.7 214.8 169.0 185.6 870.2 197 215 767 785 Non-Healthcare - 72.5 77.7 102.2 77.8 58.5 55.8 252.5 68 80 261 272 Other - - - - - - - - - - - - Non-GAAP gross profit $205.4 $309.2 $289.1 $318.9 $292.6 $227.6 $241.4 $1,122.7 $266 $295 $1,027 $1,056