UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2021

MASIMO CORPORATION

(Exact name of registrant as specified in its charter)

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DE			001-33642		33-0368882
(State or other jurisdiction<br>of incorporation)			(Commission<br>File Number)		(IRS Employer<br>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:
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☐	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:
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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.
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On April 26, 2021, Masimo Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended April 3, 2021. 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 April 26, 2021, the Company’s Chief Financial Officer will review supplemental information regarding the Company’s financial results for the quarter ended April 3, 2021. The Company’s supplemental information is furnished as Exhibit 99.2 to this Current Report.

In addition, the Company is making available to investors supplemental financial information for fiscal 2018, fiscal 2019, fiscal 2020 and the first quarter of fiscal 2021 pursuant to the materials furnished as Exhibit 99.3 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<br><br>No.	Description
99.1	Press Release, Dated April 26, 2021, Reporting First Quarter 2021 Financial Results
99.2	Masimo First Quarter 2021 Supplemental Earnings Presentation
99.3	Masimo Supplemental GAAP to Non-GAAP Financial Information
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: April 26, 2021	By:	/s/ MICAH YOUNG
		Micah Young
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

Document

Exhibit 99.1

Masimo Reports First Quarter 2021 Financial Results

First Quarter 2021 Highlights

■	Product revenue increased 10.9% to $299.0 million, or 9.5% on a constant currency basis;
■	GAAP net income per diluted share was $0.92; and
■	Non-GAAP net income per diluted share was $0.90.

Irvine, California, April 26, 2021 - Masimo (Nasdaq: MASI) today announced its financial results for the first quarter of 2021, ended April 3, 2021.

First Quarter 2021 Results:

Product revenue increased 10.9% to $299.0 million, or 9.5% on a constant currency basis, compared to $269.6 million in the first quarter of 2020. Excluding handheld and fingertip pulse oximeters, shipments of noninvasive technology boards and instruments were 66,000 in the first quarter of 2021, compared to 72,100 in the first quarter of 2020.

GAAP operating margin for the first quarter 2021 was 22.0% compared to 25.6% in the first quarter of 2020. First quarter 2021 non-GAAP operating margin was 22.9% compared to 26.3% in the first quarter of 2020.

For the first quarter of 2021, GAAP net income was $53.4 million, or $0.92 per diluted share compared to net income of $64.5 million, or $1.12 per diluted share, in 2020. Non-GAAP net income was $52.1 million, or $0.90 per diluted share, compared to net income of $55.9 million, or $0.97 per diluted share, in 2020.

The Company repurchased approximately 547,000 shares of Masimo common stock for a total cost of approximately $128.9 million during the first quarter of 2021. Total cash and cash equivalents were $552.0 million as of April 3, 2021.

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said “Our first quarter results illustrate the resiliency of our customers and our business. Following a year in 2020 where we achieved over 20% revenue growth and shipped over two times the usual number of drivers due to the rise of the COVID pandemic, we delivered double-digit revenue growth and driver shipments that exceeded expectations in the first quarter. We are happy to see signs of the pandemic receding in most states in the U.S. and in many countries with the successful development and deployment of vaccines, and expect hospital census to eventually return to pre-COVID levels. We met the moment in 2020 by not only fulfilling unprecedented demand for our products, but also by delivering new innovative products that are life savers. There are more advancements ahead which we believe will be well received by our existing and new customers around the world.”

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2021 Financial Guidance

The Company provided the following updated estimates for its full-year 2021 guidance:

	2021 Updated Guidance(1)						Prior 2021 Guidance(1)
(in millions, except percentages and earnings per share)	GAAP			Non-GAAP			GAAP			Non-GAAP
Total revenue	$	1,205.0		$	1,205.0		$	1,200.0		$	1,200.0
Product revenue	$	1,205.0		$	1,205.0		$	1,200.0		$	1,200.0
Percentage growth - as reported	5.4		%	N/A			4.9		%	N/A
Percentage growth - constant currency	N/A			4.5		%	N/A			3.6		%
Gross margin	66.7		%	67.0		%	66.8		%	67.0		%
Operating margin	23.2		%	24.5		%	23.5		%	24.5		%
Earnings per diluted share	$	3.83		$	3.83		$	3.81		$	3.80
Estimated tax rate	20.0		%	24.3		%	20.7		%	24.1%

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(1) Updated guidance provided April 26, 2021. Prior guidance provided February 23, 2021.

•Product revenue increasing to $1.205 billion, which reflects reported growth of 5.4% and constant currency growth of 4.5%;

•GAAP earnings per diluted share increasing to $3.83;

•Non-GAAP earnings per diluted share increasing to $3.83;

•Included in our full-year 2021 revenue guidance is approximately $10.0 million of year-over-year currency tailwinds compared to $15.0 million of currency tailwinds in our prior guidance.

Supplementary Non-GAAP Financial Information

For additional non-GAAP financial details, please visit the Investor Relations section of the Company’s website at www.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 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 measures to assist investors in understanding the Company’s core net operating results on an on-going basis: (i) constant currency product 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 core operating results with those of other companies. Management believes constant currency product 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.

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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. 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 product 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 product revenue growth rate will continue to occur in future periods.

Royalty and other revenue, net of related costs.

We derive royalty and other revenue, net of related costs, from certain non-recurring contractual arrangements that we do not expect to continue in the future. We believe the exclusion of royalty and other revenue, net of related costs, associated with these non-recurring revenue streams is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.

Acquisition/Strategic investment-related costs, including depreciation and amortization.

In the event the Company acquires, invests in or divests certain business operations, there may be non-recurring gains, losses or expenses that will be recognized related to the assets and/or liabilities sold or acquired that are not representative of normal on-going cash flows. Furthermore, there may be depreciation and amortization related to the revaluation of assets and liabilities (primarily intangible assets, property, plant and equipment adjustments, inventory revaluation, lease liabilities, etc.) to fair value through purchase accounting related to value created by the seller prior to the acquisition/strategic investment that does not reflect the normal on-going costs of operating our core business. We believe that exclusion of these gains, losses or costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Depreciation and amortization related to the revaluation of acquisition related assets and liabilities will generally recur in future periods.

Litigation damages, awards and settlements.

In connection with litigation proceedings arising in the course of our business, we have recorded expenses as a defendant in such proceedings in the form of damages, as well as gains as a plaintiff in such proceedings in the form of litigation awards and settlement proceeds. Litigation matters can vary in their characteristics, frequency and significance to our operating results. We believe that exclusion of these gains (net of any related costs incurred in the period the award or settlement is recognized) and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. In this regard, we note that these expenses and gains are generally unrelated to our core business and/or are infrequent in nature.

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 other operating expenses. As the Company does not actively hedge these currency exposures, 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. Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. Realized and unrealized foreign currency gains and losses are likely to recur in future periods.

Excess tax benefits from stock-based compensation.

Current authoritative accounting guidance requires that excess tax benefits or costs recognized on stock-based compensation expense be reflected in our provision for income taxes rather than paid-in capital. Since we cannot control or predict when stock option awards will be exercised or the price at which such awards will be exercised, the impact of such guidance can create significant volatility in our effective tax rate from one period to the next. We believe that exclusion of these excess tax benefits or costs is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. These excess tax benefits or costs will generally recur in future periods as long as we continue to issue equity awards to our employees.

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First Quarter 2021 Actuals versus First Quarter 2020 Actuals

RECONCILIATION OF GAAP TO NON-GAAP CONSTANT CURRENCY PRODUCT REVENUE(1):
				Three Months Ended
(in thousands, except percentages)				April 3,<br>2021		March 28,<br>2020
GAAP product revenue				$	299,043	$	269,625
Non-GAAP constant currency adjustments:
	Constant currency F/X adjustments			(3,885)		N/A
		Total non-GAAP constant currency adjustments		(3,885)		N/A
			Non-GAAP constant currency product revenue	$	295,158	$	269,625	Product revenue growth %
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	GAAP	10.9	%
	Non-GAAP constant currency	9.5	%

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