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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________
FORM 10-Q
________________________________________________
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 001-33642
masimologoq32019.jpg
________________________________________________
MASIMO CORPORATION
(Exact Name of Registrant as Specified in its Charter)
________________________________________________
Delaware33-0368882
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification Number)
52 DiscoveryIrvine,California92618
(Address of Principal Executive Offices)(Zip Code)
(949)297-7000
(Registrant’s Telephone Number, Including Area Code)
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
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.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)     
Yes☐
No
☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class
Number of Shares Outstanding as of
June 29, 2024
Common stock, $0.001 par value
53,196,747

MASIMO CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 29, 2024
TABLE OF CONTENTS
 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 5.
Item 6.

2
PART I. FINANCIAL INFORMATION
Item 1.     Financial Statements
MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except par values)
June 29,
2024		December 30,
2023
ASSETS
Current assets
Cash and cash equivalents$129.6 $163.0 
Trade accounts receivable, net of allowance for credit losses of $4.9 million and $4.8 million at June 29, 2024 and December 30, 2023, respectively
337.7 355.5 
Inventories513.0 545.0 
Other current assets161.9 168.4 
Total current assets1,142.2 1,231.9 
Lease receivable, non-current66.5 71.4 
Deferred costs and other contract assets58.8 57.3 
Property and equipment, net413.9 424.4 
Customer relationships, net - (Note 9)162.2 177.7 
Acquired technologies, net - (Note 9)112.0 129.4 
Other intangible assets, net - (Note 9)116.3 112.8 
Trademarks - (Note 9)215.6 232.4 
Goodwill389.0 407.7 
Deferred tax assets107.0 107.2 
Other non-current assets110.4 89.3 
Total assets$2,893.9 $3,041.5 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$216.0 $251.5 
Accrued compensation72.2 62.6 
Deferred revenue and other contract liabilities, current79.8 87.3 
Other current liabilities178.2 162.4 
Total current liabilities546.2 563.8 
Long-term debt746.5 871.7 
Deferred tax liabilities102.1 111.7 
Other non-current liabilities130.3 129.5 
Total liabilities1,525.1 1,676.7 
Commitments and contingencies - (Note 24)
Stockholders’ equity
Preferred stock, $0.001 par value; 5.0 million shares authorized; 0 shares issued and outstanding
— — 
Common stock, $0.001 par value; 100.0 million shares authorized; 53.2 million and 52.8 million shares issued and outstanding at June 29, 2024 and December 30, 2023, respectively
0.1 0.1 
Treasury stock, 19.5 million and 19.5 million shares at June 29, 2024 and December 30, 2023, respectively
(1,169.2)(1,169.2)
Additional paid-in capital810.6 783.4 
Accumulated other comprehensive loss(103.4)(45.3)
Retained earnings1,830.7 1,795.8 
Total stockholders’ equity1,368.8 1,364.8 
Total liabilities and stockholders’ equity$2,893.9 $3,041.5 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions, except per share amounts)
 
Three Months EndedSix Months Ended
June 29,
2024		July 1,
2023		June 29,
2024		July 1,
2023
Revenue$496.3 $455.3 $989.1 $1,020.3 
Cost of goods sold241.5 234.1 492.6 514.3 
Gross profit254.8 221.2 496.5 506.0 
Operating expenses:
Selling, general and administrative177.5 151.7 337.4 348.0 
Research and development49.0 40.2 96.8 90.7 
Total operating expenses226.5 191.9 434.2 438.7 
Operating income28.3 29.3 62.3 67.3 
Non-operating loss(8.4)(4.5)(17.5)(16.3)
Income before provision for income taxes19.9 24.8 44.8 51.0 
Provision for income taxes3.9 9.1 9.9 14.0 
Net income$16.0 $15.7 $34.9 $37.0 
Net income per share:
Basic$0.30 $0.30 $0.66 $0.70 
Diluted$0.29 $0.29 $0.64 $0.68 
Weighted-average shares used in per share calculations:
Basic53.1 52.8 53.1 52.7 
Diluted54.3 54.4 54.3 54.3 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited, in millions)
 
Three Months EndedSix Months Ended
June 29,
2024		July 1,
2023		June 29,
2024		July 1,
2023
Net income$16.0 $15.7 $34.9 $37.0 
Other comprehensive loss, net of tax:
Unrealized losses from foreign currency translation adjustments(27.5)(34.6)(63.1)(57.4)
       Change in pension benefits— (0.8)0.7 (3.0)
       Unrealized (loss) gain on cash flow hedges(0.6)5.6 4.3 1.3 
Total comprehensive loss$(12.1)$(14.1)$(23.2)$(22.1)


The accompanying notes are an integral part of these condensed consolidated financial statements.
5

MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)
Three and Six Months Ended June 29, 2024
Common StockTreasury StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive (Loss)
Retained
Earnings		Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 30, 202352.8 $0.1 19.5 $(1,169.2)$783.4 $(45.3)$1,795.8 $1,364.8 
Stock options exercised0.2 — — — 7.2 — — 7.2 
Restricted/Performance stock units vested0.1 — — — — — — — 
Shares paid for tax withholding— — — — (5.3)— — (5.3)
Stock-based compensation— — — — 9.6 — — 9.6 
Net income— — — — — — 18.9 18.9 
Foreign currency translation adjustment— — — — — (35.6)— (35.6)
Change in pension benefits— — — — — 0.7 — 0.7 
Unrealized gain on cash flow hedge— — — — — 4.9 — 4.9 
Balance at March 30, 202453.1 0.1 19.5 (1,169.2)794.9 (75.3)1,814.7 1,365.2 
Stock options exercised0.1 — — — 2.7 — — 2.7 
Shares paid for tax withholding— — — — (0.5)— — (0.5)
Stock-based compensation— — — — 13.5 — — 13.5 
Net income— — — — — — 16.0 16.0 
Foreign currency translation adjustment— — — — — (27.5)— (27.5)
Unrealized (loss) on cash flow hedge— — — — — (0.6)— (0.6)
Balance at June 29, 202453.2 $0.1 19.5 $(1,169.2)$810.6 $(103.4)$1,830.7 $1,368.8 

6
Three and Six Months Ended July 1, 2023
Common StockTreasury StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings		Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 202252.5 $0.1 19.5 $(1,169.2)$782.2 $11.5 $1,714.3 $1,338.9 
Stock options exercised0.1 — — — 4.3 — — 4.3 
Restricted/Performance stock units vested0.2 — — — — — — — 
Shares paid for tax withholding— — — — (12.2)— — (12.2)
Stock-based compensation— — — — 7.3 — — 7.3 
Net income— — — — — — 21.3 21.3 
Foreign currency translation adjustment— — — — — (22.8)— (22.8)
Change in pension benefits— — — — — (2.2)— (2.2)
Unrealized loss on cash flow hedge— — — — — (4.3)— (4.3)
Balance at April 1, 202352.8 0.1 19.5 (1,169.2)781.6 (17.8)1,735.6 1,330.3 
Stock options exercised— — — — 1.1 — — 1.1 
Shares paid for tax withholding— — — — (0.4)— — (0.4)
Stock-based compensation— — — — (8.6)— — (8.6)
Net income— — — — — — 15.7 15.7 
Foreign currency translation adjustment— — — — — (34.6)— (34.6)
Change in pension benefits— — — — — (0.8)— (0.8)
Unrealized gain on cash flow hedge— — — — — 5.6 — 5.6 
Balance at July 1, 202352.8 $0.1 19.5 $(1,169.2)$773.7 $(47.6)$1,751.3 $1,308.3 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Six Months Ended
June 29,
2024		July 1,
2023
Cash flows from operating activities:
Net income$34.9 $37.0 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization48.2 51.3 
Stock-based compensation expense23.1 (1.3)
Provision for credit losses0.4 0.5 
Amortization of debt issuance cost0.9 0.9 
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable13.1 95.9 
Decrease (increase) in inventories7.6 (45.5)
Decrease (increase) in other current assets3.4 (8.8)
Decrease (increase) in lease receivable, net4.9 (4.4)
Decrease (increase) in deferred costs and other contract assets(1.6)(0.4)
Decrease (increase) in other non-current assets(1.4)(24.4)
Increase (decrease) in accounts payable(22.5)(11.8)
Increase (decrease) in accrued compensation10.3 (39.0)
Increase (decrease) in accrued liabilities17.1 (19.7)
Increase (decrease) in income tax payable(1.3)5.0 
Increase (decrease) in deferred revenue and other contract-related liabilities(7.1)(6.8)
Increase (decrease) in other non-current liabilities(9.7)(4.5)
Net cash provided by (used in) operating activities120.3 24.0 
Cash flows from investing activities:
Purchases of property and equipment(15.8)(20.4)
Proceeds from sale of property and equipment10.8 — 
Increase in intangible assets(16.1)(19.9)
Business combinations, net of cash acquired— 7.5 
Other strategic investing activities(0.1)(0.7)
Net cash (used in) provided by investing activities(21.2)(33.5)
Cash flows from financing activities:
Borrowings under line of credit64.0 79.0 
Repayments on line of credit(185.6)(112.4)
Proceeds from issuance of common stock9.9 6.0 
Payroll tax withholdings on behalf of employees for vested equity awards(5.8)(12.7)
Net cash (used in) provided by financing activities(117.5)(40.1)
Effect of foreign currency exchange rates on cash(14.2)(1.4)