MASI - Earnings call transcript Q3 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to Masimo’s Third Quarter 2019 Earnings Conference Call. The Company’s press release is available at www.masimo.com. At this time, all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

I’m pleased to introduce Eli Kammerman, Massimo’s Vice President of Business Development and Investor Relations.

Eli Kammerman

you. Thank everyone. Hello,

are Vice today Micah CEO, Kiani; Joe Joining of Chairman Finance Executive President Officer, and and me and Chief Young. Financial

current our will which financial call forward-looking judgment Masimo’s including This performance. certain regarding expectations contain of fiscal XXXX reflect statements,

are results uncertainties could filings However, forecasts from projections to results differ subject cause could that are risks Risk SEC. detail the and periodic materially. materially with differ factors to in discussed cause actual and they that to our our in actual our

these will of You Investor our website. in find the Relations section

Also, this to in refer certain are or call accordance will measures calculated generally of We these include as Principles a not Accounting GAAP. financial discussion non-GAAP with financial Accepted Generally that measures.

financial information operating provide and measures intended uses these indicator of non-GAAP Company’s In way to the measures the are to as performance Management an evaluate and investors Company’s the addition assess ongoing additional to performance. results assess business in management non-GAAP Company’s budget, to same to results, results. enable results the GAAP such measure sees these

financial order these in GAAP with SEC XX-Q financial including included the the believes these that informed business. information earnings should to consider recent together filed reports of XX-K all better make website. and directly supplementary performance on and Investors of non-GAAP underlying are investment today Company our our our of our measures, with the statements Reconciliation to Form decisions. and increase measures most most the reflect financial The measures the comparable transparency financial release within

of quarterly we Investor issued posted supplement release earnings the have covering our to section afternoon. will this be website within presentation content to a In addition the Relations earnings we the today,

to Now, Joe the I’ll call Kiani. pass

Joe Kiani

Thank you, Eli.

exceeded quarter and call. quarter earnings. that XXXX Good us thank again, Masimo’s to happy third for joining Once results for earnings report both expectations we’re you third for afternoon and revenue

and care improving existing of as our customers. value and reducing we innovative case products customers quarter won with patient performance of the demonstrates business third new the Our for cost our expanded

increased driven XXXX. by strong reflects to revenues technology. This revenue quarter, $XXX advantages our product realized product major in million, strong platforms. for approximately we reach guidance growth to performance Our Due we XX% breakthrough once our the performance of our and geographies the again the and across which are third earnings clinical was raising

discuss call the later today. I’ll more in developments

provide Now, Micah I’ll review guidance. you an ask in our on XXXX quarter update and more third to results our financial detail with

Micah Young

Joe, Thank you, everyone. and good afternoon,

measures remind primarily I that Before today our will non-GAAP will refer measures to noted basis covering the release, non-GAAP financial information quarterly for the regarding otherwise. today’s started, earnings X-K our you supplemental we well we the with as me reconciliations. Please Form for financial and presentation website let be be further earnings get on a unless the information SEC as filed and

mentioned, to happy Joe exceed once just again are not but we As meet expectations.

performance the quarter revenue for product operating another of quarter exceeded margin strong results Our expectations. expansion earnings and reflect third that growth,

XX,XXX drivers monitors, shipped quarter year. boards guidance roughly per with quarter, XX,XXX we the and our During this of technology consistent

For that rate roughly under quarter. note ASC the monitoring basis. million, the X% our approximately quarter XX.X% revenues growth product this to our for growth of of reflecting million included XX.X% our product recognized revenue, $XXX.X of currency equipment a third or XXXX, contributed constant XXX, Please on were revenues quarter X.X growth which

that the quarter growth and our performing rates strong performance was driven we better than platforms, laid geographies performance product this out in Our originally long-term had which revenue our are across plan. by major

to P&L. Moving the of rest on the

the mix, additional to points was XX.X% This XX.X% prior primarily by product customer gross compared reduction margins. increased product basis we’ve manufacturing to margin For favorable improvement cost driven efficiencies year activities and the third quarter, implemented the to our and improve in non-GAAP XXX period. increased

XX the was the to period. basis Non-GAAP primarily spend year cost prior compared expenses points XX.X% of selling, product care. innovative due project-related levels in period. revenue expenses reducing to technologies product while improved our XX.X% to increased staffing XX.X% to The year higher of commitment to revenue to XX reflecting in decreased outcomes, and Non-GAAP XX.X% prior patient points investing R&D and increased basis of research costs the compared and general in administrative and development

$X.X to For to the prior primarily non-GAAP the the period. third a increased income for an non-GAAP income. by increase the year prior in year period. $X.X compared in The XX% net compared our XX.X% points margin XXX interest million quarter to on basis quarter, was driven operating million basis Non-operating approximately in was increase

taxes. Turning to

expense resulting tax of non-GAAP in a $XX.X prior million, effective non-GAAP compared of third rate non-GAAP year quarter rate tax was a tax in XX.X% the period. the XX.X%, to Our in effective

weighted prior stock our average to in weighted share The the million million year that under has year primarily the the is Our price over shares increase were outstanding XX.X treasury due X% for impact dilutive higher prior the method. in quarter the compared count average period. the to XX.X stock

or EPS income quarter. over non-GAAP For XXXX million per $X.XX third or net comparison, our share. XX% diluted quarter, year was per This net was the growth diluted the quarter income $X.XX of reflects $XX.X $XX.X non-GAAP In share. third non-GAAP prior million

GAAP tax and per income GAAP million XXXX royalty $XX.X was results. per was the XXXX third income net exercises. primarily the stock In decrease from The due GAAP diluted third option for share. of our of diluted Turning quarter or $X.XX lower quarter benefits lower or was to revenues, to million comparison, shares. $XX.X net impact $X.XX

revenue our To of XXX of growth margin delivered points non-GAAP of and product EPS global XX.X%, expansion basis growth constant currency non-GAAP XX%. organization recap, operating

full XXXX Now, update I’d an like with provide to you on our guidance. financial year

revenue or our basis XX.X% of reported reflects product constant a million. our are above on now million are $XXX guidance. year-over-year XXX guidance XX.X% $XXX monitoring we million a on under ASC strong basis. our XXXX an year third year-over-year performance As represents of Please to increasing revenue increase full currency million, guidance $X we our in that of and approximately the note within currency quarter, revenue of result equipment headwinds a projecting which million growth of $X This of prior $X

Our project improvement represents margin the operating which XX.X%. And guidance our remains assumptions, guidance at of basis unchanged we non-GAAP year. prior remains unchanged non-GAAP product gross of Based points to XX.X% margins expense these on revenue. profit are of product over continuing XX%, non-GAAP XXX operating at

further P&L. Moving the down

in interest income. generate million We comprised expect of non-GAAP is to primarily non-operating in approximately which $XX XXXX, income

our for the year are shares a be outstanding unchanged Our weighted average remains XX.X non-GAAP and rate tax that at we shares. will roughly million XX%, estimating

above Based prior on our an guidance guidance to $X.XX. non-GAAP we $X.XX, of assumptions, these all are represents of increasing $X.XX which increase now our EPS

XX.X% a GAAP now projected is of result, prior tax $X.XX non-GAAP represents rate per XX% projecting $X.XX increase our $X.XX. guidance GAAP GAAP to which share in grow we of an are As from our year, for of from a XXXX. earnings EPS And perspective, and of a the

the per details additional today’s GAAP and full-year release for our website masimo.com. For please information earnings our at financial of on supplemental press XXXX relations share, section investor within guidance and to refer financial non-GAAP

call the back that, I’ll turn to With Joe.

Joe Kiani

Thank you, Michael.

guiding we We sometimes and despite have reduce do patient the for the The principles and and all, mission strong, of challenges care. unexpected. mission take first unfair care world quarters opportunity improve three been good seriously. and face cost of forget it we Through our XXXX to our to never

in which SpHb mark In first technology, is the August, adults for our time we of transfusion received breakthrough neonatologists mortality the U.S. CE This is hemoglobin to our to use blood shown outside continuous has a neonatal optimize monitoring reduce available technology. and in been

we way Masimo create announced to resuscitation specialty provides on oxygen after neonatal guiding protocol was first visualize monitoring for pulse and first to with the a newborn’s saturation resuscitation, Sensors. a minutes neonatal September, while Pathway Pathway, sensor feature continuously called rate XX software a during the the monitoring new hospital a We available clinicians for for company Newborn SpOX struggling a new Root resuscitation. recommended birth.

take the fragile of health our We’re delighted and care Pathway to patient very offer this promising now be pursuit of and population. to in clinicians first

indices in announced delta we delta delta Regional cerebral Also, on Oximetry September, deoxyhemoglobin available and oxyhemoglobin OX offering. that hemoglobin, our

providing the saturation provide with of as and visibility in oxygen clinicians well flow additional and into flow cerebral as OX indices, to oxyhemoglobin brain regulation by now oxygen total cerebral used in components hemoglobin relative in indicating calculate these With saturation the can blood underlying deoxyhemoglobin or addition changes to rSOX.

continuum hospital in Morocco, UniView, Portugal hospital well platform in o Replica third improve and to be Root achieved as seven systems our using and are Our for automation UAE. installations the in quarter customers the their hospitals. care These hospitals Kuwait, continues hospitals with SafetyNet America, of received at we Patient by automation

of by system SafetyNet is to Opioid strategic are year. this major targeting FDA well; other initiative end submission the still Our to progressing we the

will committed cases, We’re and caused for Opioid affordability for plan providing cover reimbursement code access to limited for broader existing We new apply use and to coverage. SafetyNet. we believe

for Masimo track great In new is closing, strong in ahead. finish and decade beginnings to on the XXXX

XXX XXX and technologies care improving million being over over available outcomes globally. people are Our on in breakthrough are and countries annually, reducing used of cost

safety, opportunity We including to amazing hope have improve caring shareholders. for value and and better stakeholders that the of world advantage long-term we all to to our will create take bit of patient a team, our the customers, continue and make

to With that, we’ll call open Operator? the questions.

Operator

comes question with Wise from first Your Instructions] [Operator you. Rick Stifel. Thank

Your line now is open.

Rick Wise

excellent another at about you. is seemed franchises, spending. on led on been multiple quarter. growth concern congratulations slower hospital which off and comments start that based big care but frankly everybody, to vague obviously comments, their suggested to Maybe some capital It or falling. spending Thank market level, the about connected afternoon Good to concerns general business, U.S. in which picture sort there of has Hi. just Philips

my it. to next that you you Not anything ahead. But, might incremental suggest or we don’t ahead are obviously So, delays, more suggest impact, any challenging -- are hospital quarter, XXXX, seeing Massimo. for as or just but the new times question that your seeing look might spending then is, cancellations results

Joe Kiani

different is comes business model. our blade, on to and our dollars spent, razor than SaaS capital capital, a But, more of more a model of and relies when is not. are We razor, Phillips heavily it Phillips. even model business

be between that Masimo’s and you’re why divergence might So, seeing outlook. Phillips results a and

Rick Wise

Joe. you, Thank

far me do to great us automation remind seven installations this help hospital next what’s if have you through year you have we date? got couple to just story the installed. you and with sustaining. see a that detail, so products. believe could of to color more It’s many to in How mean, not for again, there? growth as think be we that’s beyond. installed next? ramp an the incremental driver about Two, you, I’ve ahead to obviously and And look just think I remind how could, many platform Turning And little a us maybe how one, evolve,

Joe Kiani

Sure, Rick. best. I’ll do my

off all, of head, of of First my be available technology I wrong, different rates. might pieces at different this and the top are

technologies providing the OR alerting their connectivity, better as with automating Root, that’s issues discharged, care the their patient hospital where them as patients But, For are And own things convergence the and gets to reminded the locations in data so then Root a that SafetyNet, able hundreds of continuum not less both for from is and more whether information monitoring as of the for then, in them at UniView. central connected in and necessary the automation central being pathways that’s on the example, our is And in like full EMR being clinicians are to to to to more I’m all Patient way is like available followed, care. hospitals. to caring the as adhered the it, then, patient the systems it’s of room might sent mode well again or by patients to them these spot-check through team everything and display be, the least burdensome in the following logical with remotely, that system like hospitals. Replica. as a to in or on is networking hundred if referring it’s ICU, wherever checking is monitoring what home, patients, pieces. automated

Remember when everything I we implementation, hospital wrong, to full year, full we the the I launched care. suite don’t much optimizes continuum this bottom think So, the number be is the number. comes of early of but think it line, that automation seven that more may than

Rick Wise

just two you, Micah, and me, turn I’ll And to Thank Joe. maybe last you. Okay. for

off you a for sort Maybe be -- time, a next I XX,XXX more that could of the the us a level so the we’re it number highlighted but number that in going us understand understand You that. to board past, first reported. it’s mean little little driver of seeing looking you line folks the your to and maybe understand at up? could driver, us obviously relative with Help I what’s guidance. why give bit -- who’re for this color. But leg next there what’s number. Maybe that’s speak it’s great to the sequentially, help

Micah Young

Yes.

back launched years between revenue XX% Rick, X% years been the have it’s that So, not rainbow. we’ve generating Oximetry disposals growth per and around our OX you if being now more But, few with at X% year. reason and go several because years. is was brain like over and if as We monitoring, there over and this SET, parameters now it’s we’re our higher, out but you driver to generating driver. It’s revenue this three that last last X% advance on function range. the with Over seeing has those well Cerebral somewhere period, SedLine, average as growth overall more ago, growth the rates look just revenue capnography.

our So, base we’re -- in and as customers. we’re add able penetrate to into revenue customer per generate we’re driver more to able deeper new pulling

Rick Wise

and change now, year to -- of when just on do? end still everything excitement Maybe that you mean on plans you as what’s be still track last seems no opportunity potential there? ability with story I just, us about for by your manufacturing ramp to and as the help the And And and me -- to understand your left opioid next are optimistic your basically your you are Thank you. is for the XXXX. about submission story, and Okay. contemplate track we in connected

Joe Kiani

on still basically it. Sure, Rick. are about we track, optimistic Yes,

epidemic, you selected we’ve really by As been for means XXX as the we’ve opioid the monitoring company were getting that. the guidance. the excellent that to we one been deal FDA only of eight of and out closely over with And know, FDA working companies

it on So, FDA the the hopefully from benefit working clear requested been they prescription but the model a for users things could to of really supplying is we’ve it. for illicit only information even that not

product of finally is Anesthesiologists it looking Radius thousand of production looking a now themselves. product major anesthesiologists good. which everything is So, is couple the good, Society full of was One the PPG, try for capacity at piece about American the at we’re that

are So, looking all signals good.

Rick Wise

Joe. Thank you so much,

Joe Kiani

Rick. you, Thank

Operator

of Piper question next Your comes from Bill Quirk Jaffray.

is open. line now Your

Bill Quirk

thanks. afternoon, Good Great, All right. everyone.

guess, update? first SafetyNet. models. Rick’s know terms you of in thinking I guess, following off, on the questions. you model of of now one I for couple last a But, couple So, I kicking up on Can Opioid give distribution that? different where, an out us are you’re

Joe Kiani

haven’t yet we it. finalized Well,

biggest our think, getting word is challenge out. I the

need when today know try potential that. to figure how potential to But, have message out trying we space. there and to of it comes We prescribers. elevate and users to they we’re get to nice best course a footprint So, don’t the Masimo, consumer, the out average clinical in to

some use distribution, get websites the meeting depending and as prescribe Amazons other through is physicians get most hope like hands sales there the direct opioids if hospitals changed. Obviously, the be retail to maybe and product we illicit also and with with in people. website, own even far pharmacies of the we it force, to how will towards hasn’t but our our that As model

Bill Quirk

to up follow just Joe, And so, on that.

reasonable different rather. it to options really have that in approval the down then the breadth several of FDA assume and the you is It So, comes place? of kind perhaps claim

Joe Kiani

we we established opioids, on then, prescribed have and illicit the the believe use, in channel We if But some And facing opioids. us we’ll more to that they able opioids be does, albeit chronic go leverage, FDA use, what don’t need be an chronic is there get of users is there think the naïve one. the and say naïve illicit reinforcement. for that model. will then pending give consumer of Correct, the Bill. [ph] do And tonsillectomy who user

Bill Quirk

got of Okay, questions I couple may. if for And a then, Micah, it.

you’ve can historically, growth they’re above about just laid products. at or rainbow First three wondering of perform give across I’m just talked you’ve and out? groups continuing of SET, some sense the you the to pace off, if us Micah, expectations the other

secondly, is to impact. Certainly, I margin appreciate comments. then, there mix the the magnitude was going look things a back I on few And gross come favorable given year-over-year It your like to the of chopping does other increase. there,

was So, could I Thanks, guys. upon hoping expand that. you

Micah Young

Yes.

the on question first your answer to So, revenue. product

we’re range above performing our and all prepared performing were our in our long we major our So, mentioned rainbow parameters, SET, product across the plan also those remarks, advanced platforms well geographies. and seeing as targets. We

targets we to those continuing we’re see performance So, growth at the Day, Investor ranges. out laid above

other we’re with capnography and coming us too that’s gas, the in see that and now from that we’ve was parameters NomoLine OX. starting advanced disposable better thing to now The And those launched we’re as quarter such strength to the SedLine, allowing see even our perform to happy line. even

above to seeing good our targets, the So, recap, again, results it range across growth long just we’re geographies. major and

On what and seeing we’re is the favorable front, margin product customer I mix. before mentioned gross

Some that of timing. is And that of too XXX. gets seeing lot too we’re from benefit some into

ebb lot as the for coming results delivering had strong flow from on year, and and cost products. results seeing well throughout very contribution we’ve through quarter, of our the that we’ve are as a good designed So, us manufacturing procurement our initiatives but of also our and in the initiatives reducing some seen for that

Bill Quirk

you. Thank guys. it, Got

Operator

Raymond from question James. comes from next Larry Keusch Your

Your line is now open.

Larry Keusch

Thank for or this or you. I both. Joe Micah if know is don’t

where about thinking we just to there that next puts year? curious any contemplate about XXXX, we as business goes is as takes Just we if be think the start also should or

Micah Young

Yes.

Investor back to I think, Day. go Larry, I

is be heading, long-term laid about into want growth As out business our thoughtful and guidance very we head year. the again, to we’ve as we target prudent our next where

be We’re call. profile that on guidance that the we we not not -- that laid of we out X% range. going We’ve high guiding exceed. revenue thoughtful our give of and guidance can But, that only want We’ve to we more growth XX%. but provide recently this meet at to can confident can end always feel to we been

of basis operating kind to we’re XXX the average of we So, that’s year think goal about would XX%. said long-term And going it. that how be march to trying per we’ve margin points towards as we

So, that’s too. that’s where kind what laid out we of sticking we’re and

Larry Keusch

Okay, perfect.

Joe, -- as talking think to I quick you about alluded of opioid sort gates. Just couple you might been there? share of have potential some other of get you you ones. the more upon Could what a little reimbursement safety, out you

Joe Kiani

certainly. reimbursable remote introduced potentially Yes, of this January monitoring year, was service. In patient a as

But, to that it’s so, prescription advantage for the with our designed access the reimbursement. going possible product for channels that a afterwards. status, it and usage, be breakthrough have review take talks looking of There that technology from that immediate product reimbursement code the give and years looking is three specific been at product at that administration patients some And other has way the to we’re allow is to reimbursement can system. our also

come be something could That that well. to take as can advantage So, of effect. does we

Larry Keusch

it is all predicated a does And would or that that be product this not matter? prescription

Joe Kiani

for product. That Yes. just prescription the would

of a is plan it one for for FDA two to model. and subject use usages. to different over-the-accented type course clearing for of illicit Our both prescription create products, And one

Larry Keusch

ones Okay. here. then Just two quick lastly, And Perfect.

we’re the about earlier, of automation this as are, comprehensive so you up Joe, to placement, on page, noted in talk obviously, lot you hospital definition, there this will different a have. because start and When all you that same that offering of the just future. So, aspects come

it is, and a Is mean also well? that guys the but or about sure whether matters, but have to you And on that? UniView correctly. of and is the or then, those it’s again, all this, end safety, does not as early next may want wrong of end make right talk Root, portion expecting the I some to year. opioid you when anticipation thinking was been thought define by what placement that? that and that year, clearance automation year was I hospital way question, the Replica I second I of So, are And Iris, just that were this about subscription that separately just the based And it it

Joe Kiani

FDA. Rad-XX, to monitoring at could continuum about of control is think and That our Iris, is end this When the have patient we of in also to But of that home time that we of about that. clearly thought, we could we eight But, is since home, as going that’s regular what follow opioid could year. the three the that which dialogue If yes by is think of hospital the help the Yes. care correct. I’m say I it we’ve one UniView, is thinking and academic. all first a That designated, had far automation, Replica. hands to for still Root, clearance original think the That’s the questions. it thought get for And possible. given thinking Doctella, we the obviously, as FDA something would that they can’t add hub. your telehealth then, example, patient products

working it effective way shortly. and will hand product hopefully, and in safe it will been testing in have a find, clear that and making and FDA hand a We

Operator

so you much. Thank

Your Taylor next question comes UBS. from of Matt

is open. line now Your

Matt Taylor

taking Thanks Hi. for the question.

these on advanced than all faster of used products? other to single and we is to digit and do hard that wanted rainbow on where penetration follow go to. think to I comment saw parameters whether see don’t could start that up that little comment because revenue years you increased Micah, as materially growing past, you mid you in But, per the the sort of some rates of the driver. calculate a per driver disclosures So, now It’s give on any revenue your you

Micah Young

as We steady a see that ramp.

rates technology. And core higher those SET are time at and of our business as to growth mix our expand we continue becomes of faster and the -- products advanced over growing than We’re parameters. more rainbow

think of that’s pace steady driver. revenue that we per So, a

revenues an internally per driver. in seeing are increase We

we on is given that where product continue of and ticking number, but those to up, it’s specific definitely in mix tick-up moving forward from, based haven’t that the coming expect just lines. We our growth

Matt Taylor

And advanced you update some general that to parameters the Phillips incorporate then, boards, of going just that. the us on Philips any expect current kind on things arrangement? to those how you of just related remind just are Could timelines for with other and

Micah Young

Yes.

So, have mentioned the Matt, we three the by we the that the year earlier that half would two year. of in second integrated of

technologies monitors. This into quarter, integrate we did their devices our or

Now, next capnography, launching But, a just ramped it’s is matter NomoLine two that everything three far and getting as in of of oximetry. been OX we of probably expect well start as up as that integrated, we’ll terms as that yes, QX, early year, volumes. cerebral have the

Operator

Thank you.

next comes Mike Needham. from question with Matson Your

Your now line open. is

Mike Matson

Hi. of Thanks just ones. pipeline guess, couple questions. a for I my taking related

report So, parameter new in on you at Investor May? oxygen talked the partial Day the guess, I first, malaria about pressure to product anything PaOX of or the that

Joe Kiani

we finally I but room. on, those answer your report it things. Partial on of clinical operating for gotten have to beginning on question studies patients oxygen, the in two planning were prepared can pressure We Yes. clearance

should days the max. few in XX next So, that days start to

On affected countries for we’re the up product field begin to the trials in in project, clinical the malaria XXXX. and malaria buttoning

Mike Matson

Okay. accounting about ask wanted change. ASC Thanks. to I just XXX

to is into this be impact So, it’s to going what when XXXX? growth get year, we the adding

Micah Young

point a constant look about there. top results XX% then, full so year, currency course of growth Yes. Mike, guiding at we’re line. if about of year, on far the point adding growth our the and it’s growth of a you’ll And adding it’s you this see

XX% So, our without implied year. that is the growth for about guidance full

working and where relatively the because in a variability to flat. installations that But As putting there, of out it’s moment, we’re is going the because we really year, think about customers. related of to it’s there expect still next be that through equipment lot we timing our at we’re

you this our repeating. why be year and that that growth contribution X So, the because next to flat year reason And point not another provide that we’re is Hopefully it see it’d disclosure helps. wouldn’t we next year. expect providing

Mike Matson

Thank Yes. right. have. That’s All you. I all

Joe Kiani

One have Thank today. more you us all for Do sorry. we joining Okay. anymore? question,

Operator

Your Berenberg Markets. comes Capital Misra from next Ravi of

Your line is open. now

Ravi Misra

taking it I’ll for question. keep my Thanks Hi. brief.

capnography, Just is across where commentary looks coming? three about us stronger quarters. or is this mean, those those of strength Have on from Joe, of could night. activations the you kind growth of or is great an that new existing think core of that of growth kind or sensors from driver increase boards. help line Thanks. increases a in the I or business rainbow licensing SedLine coming Micah

Joe Kiani

XXXX Sure. but geography really, earlier, than XXXX, the -- excuse as and the we’re lines The Yes. and me, only XXXX It’s It’s our said major of Thank -- quarter SET doing QX you. all walk sensor of last our Australia QX into and have full you a through stronger if above. product well. matches, XXXX of to like season, growing me. base is not of know, multiple And it excuse solid. which about very install happens, what I the is be fourth as volumes business could even been well,

strength is hemoglobin the all yes, picking well. So, very doing is around, up, so rainbow’s

as as customer well performance. incredible and clinically both results getting We’re from demand some

So, board. the all across it’s

Operator

Thank you.

Rick Stifel. a question have of from We Wise follow-up

Your line is now open.

Rick Wise

Hey.

- for more, going use installations just and track everything I was you actually the single a the is just would Sorry to And, with products. on And those board rolling after getting and we you Philips hoping -- contracts indirectly. contracts bother assume should well. with where now we out you get But couple hinted the obviously are quarter. at, excellent that

Joe Kiani

Phillips been last of we some is released would well. I things If year. end behind, would’ve say are OX have going expected and NomoLine

falling get It’s behind. line overall, IP looks and are how litigation like after got supposed now have we along year, And as it’ll to don’t but we’re the learning started and SET we kick was know So, Business, relationship can. a get in this successful that doing we next NomoLine OX. to introduce you into year, settlement. complaints. best we’re

Rick Wise

strategic thoughts, And to balance I updates the sheet latest update just quickly. one more in asked. Micah, be to hate thinking. any ones. And Joe? your last who quick two ask any But,

Joe Kiani

think, Micah like -- I Well, would answer that. to Micah

Micah. ahead, go So,

Micah Young

Yes.

So, -- our on how capital our just on you’re asking an assuming a and balance your Rick, sheet. on deploying the I’m cash question update we’re

Our strategy changed there. hasn’t

reinvest business. to in continuing We’re the

our R&D think to seen we for can we think extremely internally this do. internally You’ve what the make revenue of percentage investments continue of XX.X% high it I quarter, bar’s because was

that acquisitions And -- that’s primarily Cash are the continue to We so then, aligned are for. now of we things we’re But we And share to selective some want evaluating. strategy. on acquisitions looking also as about be is at the those, third we’re that our execute think our things repurchases. most bolt-on that with would really, right of use

have place remaining X.X on right have We about And we share program that a shares repurchase program. now. in million

kind think about we cash. So, that’s our how of

just critical leverage -- at. then, the just we the look leverage we we our side think which as are want with things more capability of capability that to our core footprint strategy business, And competencies, is of our acquisition broad as as some and about or signal processing strengths our manufacturing well

it So, that summarizes hopefully

Rick Wise

Very helpful. Thank Yes. you.

Eli Kammerman

Look to much. for Halloween, those all so all. Those you don’t, Thanks joining talking a again week. the nice who Thank We goblins you Happy watch in you, Halloween; for and you out February. us. running around. Thank guys forward ghouls to wish who celebrate

Operator

Ladies and conference gentlemen, this call. today’s concludes

You may now disconnect.

Masimo (MASI) 30 Oct 192019 Q3 Earnings call transcript