Masimo Corporation (MASI) posted a 19.2% rise in adjusted net earnings to 31 cents per share for the fourth quarter of 2013 from 26 cents for the same quarter of 2012 and met the Zacks Consensus Estimate. Adjusted net earnings rose 46.0% to $21.9 million from $15.0 million in the fourth quarter of 2012.
For full year 2013, adjusted earnings per share rose 11.5% to $1.16, in line with the Zacks Consensus Estimate. EPS for the year, in fact, is at the low end of the guidance provided by the company while announcing the 2013-third quarter results.
Revenues in the quarter (including royalties) scaled up 7.8% to $142.4 million, missing the Zacks Consensus Estimate of $145.0 million.
Product revenues grew 7.5% to $134.7 million while global direct product revenue rose 9% in the fourth quarter, representing 86% of total product revenue. OEM sales, which accounted for 14% of product revenues, fell 1% in the quarter.
Revenues from sales of MASI rainbow products spiked 34% to $14.8 million in the fourth quarter. Revenues from Royalty went up 12.4% to $7.7 million in the quarter.
MASI shipped about 42,000 SET pulse oximetry and rainbow Pulse CO-Oximetry units in the quarter (excluding handheld units), which was flat year-over-year. MASI expects worldwide installed base of 1,205,000 units as of Dec 28, 2013, up 11% from 1,088,000 units as of Dec 29, 2012.
For the full year, revenues increased 11.0% to $547.2 million, also lagging the Zacks Consensus Estimate of $550.0 million. Product revenues grew 11.3% to $517.4 million while Royalty revenues escalated 5.3% to $29.8 million in the year.
MASI had cash and cash equivalents of $95.5 million as of Dec 28, 2013, up 33.4% from $71.6 million as of Dec 29, 2012. Capital lease obligations increased nearly threefold to $336 thousand as of Dec 28, 2013 compared with $115 thousand as of Dec 29, 2012.
In 2013, cash flow from operating activities dipped 28.0% to $54.3 million from $75.4 million in 2012, mainly due to lower profits, higher inventories, decrease in deferred cost of goods sold, increase in prepaid expenses, and increase in prepaid income taxes. Capital expenditure decreased 16.1% to $9.1 million compared with $10.8 million a year ago.
For 2014, MASI expects revenues of $578 to $598 million, which includes Product revenues of $570 million and Royalty revenues between $8 and $28 million. Product revenue guidance includes rainbow revenues of $60 million. The current Zacks Consensus Estimate for 2014 revenues of $584 million lies within the guided range.
MASI also expects reported earnings in the range of $1.13 and $1.28 for 2014. This compares with the Zacks Consensus Estimate of $1.18.
MASI develops innovative monitoring technologies that significantly improve patient care — helping solve unsolvable problems. The company sells its products to hospitals, emergency medical response organizations, and alternate care market through its direct sales force and distributors, as well as to original equipment manufacturer partners. Currently, it retains a Zacks Rank #2 (Buy).
Other players that worth a look in the medical instruments industry include Cynosure, Inc. (CYNO), Natus Medical Inc. (BABY), and AngioDynamics Inc. (ANGO). Both Cynosure and Natus Medical carry a Zacks Rank #1 (Strong Buy), while AngioDynamics carries a Zacks Rank #2 (Buy).
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