Masimo (MASI) 8-K Masimo Reports Third Quarter 2013 Financial Results

Exhibit 99.1

Masimo Reports Third Quarter 2013 Financial Results

Q3 2013 Highlights (compared to Q3 2012):

• Total revenue, including royalties, rose 10% to $131.4 million

• Product revenue rose 11% to $124.5 million

• Revenue from rainbow^® products rose 9% to $12.0 million

• SET^® and rainbow^® SET unit shipments rose 33% to 44,000

• GAAP earnings per share rose 13% to $0.27

Irvine, California, October 30, 2013– Masimo (NASDAQ: MASI) today announced its financial results for the third quarter ended September 28, 2013.

Masimo’s total third quarter revenue, including royalties, rose 10% to $131.4 million, compared to $119.1 million for the third quarter of 2012. Third quarter 2013 product revenue rose 11% to $124.5 million, compared to $112.1 million for the third quarter of 2012. The company’s worldwide direct product revenue grew 12% in the third quarter of 2013 and represented 85% of product revenue. OEM sales, which accounted for 15% of product revenue, rose 7% compared to the same period in 2012. Revenue from sales of Masimo rainbow products rose 9% to $12.0 million in the third quarter, compared to $11.0 million in the year-ago period. Third quarter 2013 rainbow revenue included $3.9 million in sales of total hemoglobin products.

Net income for the third quarter of 2013 was $15.6 million, or $0.27 per diluted share, compared to net income of $13.8 million, or $0.24 per diluted share, in the third quarter of 2012.

During the third quarter of 2013, the company shipped approximately 44,000 SET pulse oximetry and rainbow Pulse CO-Oximetry units, excluding handheld units, up 33% compared to approximately 33,100 in the same prior-year period. Masimo estimates its worldwide installed base as of September 28, 2013 to be 1,180,000 units, up 12% from 1,056,000 units as of September 29, 2012.

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “Masimo’s ability to innovate technology that improves care, increases patient safety and lowers overall healthcare costs is the key success factor driving our strong third quarter results. As evidenced by our strong quarterly pulse oximetry and Pulse CO-Oximetry shipments, we are consistently expanding our customer base and, as a result, we are optimistic about our future.”

As of September 28, 2013, Masimo’s cash and cash equivalents were $91.7 million, compared to $71.6 million as of December 29, 2012. The change reflects primarily net cash generated from operations, offset by $19.8 million in cash used to repurchase one million shares of Masimo common stock in the first nine months of 2013.

2013 Financial Guidance

Based on favorable year-to-date results and the outlook for the remainder of 2013, Masimo is providing updated 2013 financial guidance for earnings per share. The company now expects 2013 GAAP earnings per share to be $1.16, compared to prior guidance of $1.14. The company’s fiscal 2013 guidance for its other financial components, including total and product revenues, royalties, gross profit margins, operating expenses and tax rate components remains unchanged. Each of the components of Masimo’s guidance set forth above is an estimate only and actual performance could differ.

Conference Call

Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to discuss the results. A live webcast of the conference call will be available online from the investor relations page of the company’s corporate website atwww.masimo.com. The dial-in numbers are (888) 520-7182 for domestic callers and +1 (706) 758-3929 for international callers. The reservation code for both dial-in numbers is 87025552. After the live webcast, the call will be available on Masimo’s website through November 13, 2013. In addition, a telephonic replay of the call will be available through November 13, 2013. The replay dial-in numbers are (800) 585-8367 for domestic callers and +1 (855) 859-2056 for international callers. Please use reservation code 87025552.

About Masimo

Masimo (NASDAQ: MASI) is the global leader in innovative noninvasive monitoring technologies that significantly improve patient care—helping solve “unsolvable” problems. In 1995, the company debuted Measure-Through Motion and Low Perfusion pulse oximetry, known as Masimo SET^®, which virtually eliminated false alarms and increased pulse oximetry’s ability to detect life-threatening events. More than 100 independent and objective studies have shown that Masimo SET^® outperforms other pulse oximetry technologies, even under the most challenging clinical conditions, including patient motion and low peripheral perfusion. In 2005, Masimo introduced rainbow SET^® Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously required invasive procedures, including total hemoglobin (SpHb^®), oxygen content (SpOC^™), carboxyhemoglobin (SpCO^®), methemoglobin (SpMet^®), and Pleth Variability Index (PVI^®), in addition to SpO₂, pulse rate, and perfusion index (PI). In 2008, Masimo introduced Patient SafetyNet^™, a remote monitoring and wireless clinician notification system designed to help hospitals avoid preventable deaths and injuries associated with failure to rescue events. In 2009, Masimo introduced rainbow^® Acoustic Monitoring^™, the first-ever noninvasive and continuous monitoring of acoustic respiration rate (RRa^™). Masimo’s rainbow^® SET^® technology platform offers a breakthrough in patient safety by helping clinicians detect life-threatening conditions and helping guide treatment options. In 2010, Masimo acquired SEDLine^®, a pioneer in the development of innovative brain function monitoring technology and devices. And in 2012, Masimo acquired the assets of Spire Semiconductor, LLC, a maker of advanced light emitting diode (LED) and other advanced component-level technologies; and PHASEIN AB, a developer and manufacturer of ultra-compact mainstream and sidestream capnography, multigas analyzers, and handheld capnometry solutions. Masimo SET^® and Masimo rainbow^® SET^® technologies also can be found in over 100 multiparameter patient monitors from over 50 medical device manufacturers around the world. Founded in 1989, Masimo has the mission of “Improving Patient Outcome and Reducing Cost of Care … by Taking Noninvasive Monitoring to New Sites and Applications^®.” Additional information about Masimo and its products may be found atwww.masimo.com.

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, in particular, the statements about our financial condition, results of operations and business generally; expectations regarding our ability to design and deliver innovative new noninvasive technologies and reduce the cost of care; expectations for full fiscal year 2013 total and product revenues, royalties, gross profit margins, operating expenses, tax rate and GAAP earnings per share; and demand for our technologies. 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; 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; 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:Mike Drummond
(949) 297-7077	(949) 297-7434
ekammerman@masimo.com	mdrummond@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, Rainbow Acoustic Monitoring, RRa, Radical-7, Rad-87, Rad-57,Rad-8, Rad-5,Pulse CO-Oximetry, Pulse CO-Oximeter, and SEDLine are trademarks or registered trademarks of Masimo Corporation.

MASIMO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited) (in thousands)

	September 28, 2013			December 29, 2012
ASSETS
Current assets
Cash and cash equivalents	$	91,717		$	71,554
Accounts receivable, net of allowance for doubtful accounts		70,166			67,911
Royalties receivable		6,800			7,130
Inventories		59,460			47,358
Prepaid expenses		18,859			8,587
Deferred tax assets		12,003			12,911
Other current assets		2,928			3,896
Total current assets		261,933			219,347
Deferred cost of goods sold		61,214			52,103
Property and equipment, net		24,935			23,924
Intangible assets, net		28,032			27,363
Goodwill		22,959			22,824
Deferred tax assets		21,506			22,363
Other assets		7,190			8,022
Total assets	$	427,769		$	375,946
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	38,134		$	27,033
Accrued compensation		28,506			25,021
Accrued liabilities		15,943			16,648
Income taxes payable		1,042			1,504
Deferred revenue		19,644			19,278
Current portion of capital lease obligations		122			55
Total current liabilities		103,391			89,539
Deferred revenue		563			576
Capital lease obligations, less current portion		233			60
Other liabilities		9,683			10,103
Total liabilities		113,870			100,278
Equity
Masimo Corporation stockholders’ equity:
Common stock		57			57
Treasury stock		(83,454	)		(63,664	)
Additional paid-in capital		269,383			258,783
Accumulated other comprehensive income		4,425			3,542
Retained earnings		123,429			74,361
Total Masimo Corporation stockholders’ equity		313,840			273,079
Noncontrolling interest		59			2,589
Total equity		313,899			275,668
Total liabilities and equity	$	427,769		$	375,946

MASIMO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited) (in thousands, except per share amounts)

	Three Months Ended					Nine Months Ended
	September 28, 2013			September 29, 2012		September 28, 2013			September 29, 2012
Revenue:
Product	$	124,522		$	112,108	$	382,725		$	339,644
Royalty		6,925			6,961		22,086			21,428
Total revenue		131,447			119,069		404,811			361,072
Cost of goods sold		43,968			40,736		136,519			122,002
Gross profit		87,479			78,333		268,292			239,070
Operating expenses:
Selling, general and administrative		53,090			48,260		159,536			142,381
Research and development		13,646			12,121		41,692			33,736
Total operating expenses		66,736			60,381		201,228			176,117
Operating income		20,743			17,952		67,064			62,953
Non-operating income (expense)		(676	)		912		(3,240	)		(132	)
Income before provision for income taxes		20,067			18,864		63,824			62,821
Provision for income taxes		4,581			5,301		17,288			15,724
Net income including noncontrolling interest		15,486			13,563		46,536			47,097
Net loss attributable to the noncontrolling interest		116			231		2,532			168
Net income attributable to Masimo Corporation stockholders	$	15,602		$	13,794	$	49,068		$	47,265
Net income per share attributable to Masimo Corporation stockholders:
Basic	$	0.28		$	0.24	$	0.86		$	0.82
Diluted	$	0.27		$	0.24	$	0.85		$	0.81
Weighted average shares used in per share calculations:
Basic		56,501			57,201		56,727			57,507
Diluted		57,404			58,145		57,506			58,454

MASIMO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in thousands)

	Nine Months Ended
	September 28, 2013			September 29, 2012
Cash flows from operating activities:
Net income including noncontrolling interest	$	46,536		$	47,097
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization		8,459			6,509
Share-based compensation		9,020			11,033
Loss on disposal of property and equipment		84			—
Provision for (benefit from) doubtful accounts		532			(5	)
Provision for obsolete inventory		957			617
Provision for warranty costs		2,134			1,866
Provision for (benefit from) deferred income taxes		1,687			(319	)
Income tax benefit from exercise of stock options granted prior to January 1, 2006		595			259
Excess tax deficit from share-based compensation arrangements		759			340
Realized foreign exchange loss on forward contracts		—			45
Changes in operating assets and liabilities:
Increase in accounts receivable		(2,773	)		(4,982	)
(Increase) decrease in royalties receivable		330			(67	)
Increase in inventories		(13,031	)		(1,700	)
(Increase) decrease in deferred cost of goods sold		(9,100	)		160
Increase in prepaid expenses		(10,304	)		(2,888	)
(Increase) decrease in other assets		1,777			(1,316	)
Increase (decrease) in accounts payable		11,091			(2,730	)
Increase in accrued compensation		3,544			2,344
Increase (decrease) in accrued liabilities		(2,807	)		820
Decrease in income taxes payable		(1,217	)		(419	)
Increase in deferred revenue		354			2,490
Decrease in other liabilities		(417	)		(2,196	)
Net cash provided by operating activities		48,210			56,958
Cash flows from investing activities:
Purchases of property and equipment		(6,910	)		(7,812	)
Increase in intangible assets		(2,986	)		(2,904	)
Cash paid for acquisitions		—			(37,399	)
Net cash used in investing activities		(9,896	)		(48,115	)
Cash flows from financing activities:
Repayments of capital lease obligations		(112	)		(12	)
Proceeds from issuance of common stock		1,746			1,034
Excess tax deficit from share-based compensation arrangements		(759	)		(340	)
Repurchases of common stock		(19,790	)		(26,268	)
Net proceeds from settlement of forward contracts		—			88
Net cash used in financing activities		(18,915	)		(25,498	)
Effect of foreign currency exchange rates on cash		764			(239	)
Net increase (decrease) in cash and cash equivalents		20,163			(16,894	)
Cash and cash equivalents at beginning of period		71,554			129,882
Cash and cash equivalents at end of period	$	91,717		$	112,988