MASI - Earnings call transcript Q3 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to Masimo Third Quarter 2020 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 speaker’s remarks, there’ll be a question-and-answer session. I am pleased to introduce Eli Kammerman, Masimo Vice President of Business Development and Investor Relations.

Eli Kammerman

everyone. hello, and you, Thank

reflect Joining me Executive Officer, Joe and trends statements, and Young. of including our expectations are President of Chairman regarding which forward-looking Vice contain Financial XXXX. call CEO, current Finance judgment, This certain Kiani; in will today Masimo's and Micah Chief

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

Relations You will will to these find GAAP. section certain not these of financial discussion generally non-GAAP a as accordance website. in financial call or the accepted this in generally that principles, are Investor calculated We Also, refer of measures. measures our include with accounting

Form the to and of order underlying website. to our including XX-Q the consider all the together to to decisions. non-GAAP business earnings our intended uses measures an company's and measures and assess the performance In the results. reflect and recent release the transparency our informed assesses filed performance financial measures Investors these today, company's XX-K on investment investors make financial believes SEC, provide of company's such additional Reconciliation are indicator measures results business. the within included better ongoing sees increase results, same should with financial operating most measure these addition financial to of GAAP reports of The to our results these in enable these management and most non-GAAP as company statements with in the the that non-GAAP are GAAP measures way directly information financial to performance. comparable budget, supplementary information Management evaluate

afternoon. covering the content within today, website will Kiani. Investor Joe be supplement a addition call the presentation the to In now earnings we earnings pass of I'll the we to section release this issued posted quarterly have Relations our to

Joe Kiani

Masimo's Thank and XXXX you. afternoon earnings call. Good thank for for joining third quarter us you

It's the we've first As have patients Masimo caregivers October, into In as through than the have their and team our pandemic the broadly to lower much many achievements products historically encouraged increase we possible. the progress cost ability technology members as third hospitals more SafetyNet been cases contributed to have in by and in gratifying improve and and practitioners our of setting. treat when home COVID workloads and than at of care the Root to emerged. more increased quarter effectively used deployed streamline being been patient these to such breakthrough products to effectiveness

numbers. the for As

we and For third and increased the the monitoring the again two lockstep quarter procedure rebound shipped in use our XXX,XXX surgical a times $XXX to volumes. volume boards once to the we Similar second equipment revenues by our over accompanied in XX% our realized patient with demand single sensor typical quarter, and for product boards million rebound in instruments. technology technology by

detail. more Micah our in third ask quarter review I'll Now results to

Micah Young

and everyone. Joe, afternoon, good you, Thank

will on As measures a basis primarily covering a financial be reminder, the today will I non-GAAP noted otherwise. unless be

our results in as Investor reconciliations found release well GAAP be website. to as section earnings can Our today's Relations and the of non-GAAP

and since the customers. second and have basis. X% our rebounded from both of XX% due sales were patient procedures our compared recovered worldwide demand increased For in technology XX.X% growth the single direct use, and million decline the product OEM further a boards XX.X% third on as adhesives quarter, elective quarter. of Also up to were of X% instruments or Worldwide $XXX sales up of were growth currency our reflecting revenues constant to

grew the revenues reach XX% the year for grew direct to in in reach business OEM revenues compared distribution of quarter quarter product worldwide XX% to million business which $XXX represented $XX the prior to and and XX% total our quarter. million, XX% revenues Our our

times For run over normal the boards And quarter X.X end at quarter, quarter we which our the last we our of XXXX, approximately rate. base now estimate At instruments XXXX. a as and third XX we the years. result over have end shipped that X.X installed is the boards shipped and technology our the third base installed over grown has the million XXX,XXX third instruments, technology XX% of roughly

of Moving the on P&L. rest to the

primarily higher-than-usual and our period. technology Our was XX.X% the margin points revenue to quarter third year-over-year which to to the costs pandemic. we XXX for workforce our Also and gross from to margins demand COVID-related have and experienced to The of our year a than lower proportion decreased basis non-GAAP fill in prior due higher decline compared from XX.X% coming distribution have protect instruments, global the customers boards adhesive increased manufacturing our during the sensors.

compared of XX.X% enabled revenue product the same XX.X% our increasing driven investments Our points the year to and leverage was XXX non-GAAP strong which our The and improvement percentage growth, administrative to operating time sales a prior our at basis decreased expenses while selling, year-over-year to by in quarter. us in marketing advertising. general as expenses,

XXX margin XX And basis period. and year in compared expenses points to XX.X% the period same our margin to our XX% the XX% to quarter. of year. third non-GAAP XX.X% last profit research decreased non-GAAP headwinds, XX.X% gross operating dollars operating to revenue in as Our basis points a development the the Despite in product percentage grew compared prior decreased

the further Moving P&L. down

$X.X by lower the rates our quarter, $XXX,XXX non-GAAP invested resulting cash The Our income, to interest Reserve comprised decrease compared yields to interest was actions income, Federal for which pandemic. primarily year from of the the driven interest non-operating period. is approximately prior to in realized on cut million XX% decreased during

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

year quarter X% the $XX.X in increased for to period. $XX.X outstanding the to compared shares average weighted million Our prior million

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

Turning comparison, GAAP share. of income diluted to our quarter or per quarter XXXX GAAP or million third diluted In for the $X.XX income third $XX.X per was XXXX net $X.XX share. GAAP results. million $XX.X net was

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

that achieving high-end growth the over which we revenues of of the revenue of result reflects we the in year $X,XXX,XXX,XXX a now provided third projecting XXXX, As are fiscal XX.X% quarter pre-announcement, our for range of prior year. product

guidance a over decrease represents results. our XXX basis margin gross product XX.X%, which non-GAAP point XXXX Our is

we projecting full reflects While fourth costs a time. returning towards the COVID-XX, unfavorable of over product improvement as for increased our to expect the sequential are related mix year levels to important guidance we to our traditional impact and product is quarter note that see it mix

full for of guidance guidance operating year year. headwinds, expense XX% year XXXX our XX.X% of operating point profit product a non-GAAP margin gross guidance dollar over reflects growth results. margin. XXXX full Our for operating the million fiscal And and our is operating year prior revenue, reflects profit Despite which basis our is over XXXX XX% or the $XXX improvement XX approximately

income. $X the in the of to prior reduction generate P&L, This non-operating environment. a expect resulting XXXX, approximately from is rate lower primarily from in million income further non-GAAP represents which year Moving down million interest interest we $X the comprised

are We is non-GAAP all achieving also by of needs the X%. ability XX.X% tax today's remain rapidly are our in operating the we our results projecting the income. value. customers, This these address in reduction Based call weighted third be non-GAAP we With the interest quarter I dollar which shares by creating health our conclude, projecting that average of shareholder challenging driven EPS significant EPS steadfast partially profit to environment. in our will of long-term rate assumptions, will year growth Joe. back our offset XX%, on their and by estimate of commitment that, To our objectives turn care and to We for reflect to recognition a million. outstanding $X.XX, reflects of $XX.X growth

Joe Kiani

Thank you, Micah.

over, been no a assisting been on who professionals our responsive improving have practices of the that exceptionally by dedicated been control highly is with things lines clear front pandemic the medical as it's to consistently and While infection team clinicians are has means Masimo knowledge increases customers' steadily needs. have instituted. immediate

value We great have deliver reducing that outcomes of care. for our patient improving cost repeatedly technologies the and proven

received One labeling in FDA a of of clearance proprietary those reducing technologies patients. we fluid the of to PVi. PVi our indicator of mission that up has as and improving for lived of mechanically QX, non-invasive care measurement adult continuous In dynamic responsiveness our ventilated promotion and is outcomes patient cost

responsiveness fluid expensive of line Before using is catheters. arterial typically the for and acquired availability invasive PVi, data

care protocols improve by and Recovery in more patient larger safety. of designed look XXX pulse Masimo using such data essential and Fluid utility CO-Oximetry patients a Goal-directed this identifying The be may fluid obtain Hospital Enhanced been as or can initiatives management clinicians Surgery fluid sensors. to demonstrated Therapy published as fluid-responsive. as of indicator part protocols PVi when balance with recommend than PVi management Now has responsiveness oximeter Pulse to independent fluids studies. After

and Masimo essential physician customers responsiveness, we're today's infusions determined challenges. patient In technology safety managing surgery. continue our providing increase for can patients fluid to in of our PVi confidence indicator valuable to in a As closing, despite fluid

portfolio of and technologies large a base have and solutions. We and growing expanding installed an

from fronts SET pulse and We business businesses. are our progress making many rainbow oximetry CO-Oximetry our automation Pulse on great to hospital

help FDA professionals. Masimo streamline to We care care clearance for of improve Masimo from to thousands lives been times to health with of home. many depression save over at are proven SafetyNet of have working obtain the opioid-induced workload products the respiratory tens patient and

Our difficult effectively time. and this global our serving during organization to patients committed customers is

mission the to care. of we'll With to patient to continue that, of call and We dedicate will cost our open outcomes the ourselves questions. reducing improving Operator?

Operator

line from James. Instructions] Keusch [Operator the of comes first from you. Lawrence Your Thank question Raymond

Your line is open.

Lawrence Keusch

technology $XXX,XXX questions. thinking afternoon, how just just a have you're the update know XQ? but time Joe, everyone. you're on to Good you that had to couple may thinking monitors now? was thinking about that I start, of might towards to And been that for at it boards the how Maybe and see it, XXXX. an want get just about hoping missed I get Thanks. of

Joe Kiani

which Thank boards -- a comments, it Micah prepared expect in sensors, the means little more of well, you. a needs mix normal have instruments and QX Larry stated to as we bit Yeah. XX,XXX and board expecting instruments us bring better which would that. and XX,XXX QX, boards XXX,XXX about instruments. to be would and instruments. up in now We're than Usually that boards in about

mentioned of been them. flow high on -- clinicians ventilation mostly the down XXX on XXX time are for best ventilators we back putting not of from is of the as people know, Some as cancellation last and that you that's seeing what's

XX% volume we're end XXXX, So from base last a the QX were helped higher good for news as as year, at Michael mentioned seeing year we of great of now. the assuming position in more than an normal put is us which QX next what procedures is we're really installed of perspective a which

So expect say are don't rest I And is at we nearly most two-folds what backs now which that hope that puts XXX,XXX likely boards. to the from be the again shelved. reduction to ventilators, of these on our instruments is good be helps. XXX,XXX way, than XXX,XXX shelved stated better normal very of drivers volume of after us vastly But again beginning COVID. and the the by news at we the And that had would probably

Lawrence Keusch

was Great. Okay. That helpful. super

of dovetailing this. Just of a off couple ones other

as some will face in one that very again, comps been COVID. start is Masimo's the know I company that to that granted So beneficial treating about, thinking are the and thing consider I've of products we XXXX

how for XXXX you comps tough have But XQ? some you understand are to investors are should how you as this thinking initial those place hit a and comps start at Micah, guess as for the observations maybe are going Joe you're particularly of any -- XQ that about we those be in in get into point I so any to planning And planning do good And XXXX? we and helping reason.

Micah Young

XXXX But providing still great call. working we're obviously that with from level, single it's planning too growth reestablished patient our a year. hope think, be sensors. to We're I outlook process, what provide Yeah. -- our through how earlier just is Larry as normally to high rates improving this use year-end consistent early our we guidance that we guidance but for do we question. on Well, expecting see to at

this out as next call. you sensor of how with really due be to to And But procedures base and tougher I to elective year -- our can continue we with of broken you with some our was, mentioned, of installed those offset and understand comps? large sensor by separate comparisons had continue extent revenues. As kind boards, could into how going installed Joe will dynamics to I the growing newly other we generating monitors helpful. that's that And be move recover there of incremental mentioned, stronger and the we from to as it's our we've mentioned, you the thinking year, and so traditional things, expecting still back we're believe inform to And boards have next kind of demand about to and this year And those we from that's information trending some we the say quarter Joe that's you think is instruments. We'll fourth levels year. growth is see more technology more on But as it. to information will the we're question that comparisons. what think goal year the next provide helpful instruments -- investors

Lawrence Keusch

Okay. Perfect.

Joe Kiani

we're up it so far in like where now this Larry, So, they're a that year elective surge are is France, Germany seeing not places Switzerland. the and procedures what seeing if holds stopping

going how for call guidance we we quarter to all XXXX at can the to back help that think fourth trend continues give if earnings ahead, So you results February. in intend and

So will I helpful. be think that

two Now continues a more to you of think to for the pattern, to be it's but see that three year. if we able guidance a we need this give should months

Lawrence Keusch

sensors. me And fast Okay. Perfect. just last one then super on for

give just worldwide and the U.S. but you be for that think helpful. growth, could U.S. number you OUS number us I would if a mentioned

Micah Young

growth Yeah. worldwide Larry, And QX. was to X% decline believe number in I U.S., compared the is right overall the that X% our near number.

Joe Kiani

only or… about talking sensors You're

Micah Young

Yeah.

about Larry growth? You're talking sensor

Lawrence Keusch

growth. yes, Sensor,

Micah Young

worldwide U.S. the growth was to X% Sensor Yeah. similar that very close growth. growth and same

Lawrence Keusch

it. Got Okay.

Appreciate Okay. Thanks it. guys.

Joe Kiani

Thank you.

Operator

from comes Stifel. next the Rick from of Wise Your question line

Your line is open.

Rick Wise

unfolded. went briefly the said clearly third helpful on you correctly Good trend of the Maybe if well mid-July quarter don't the as second remember Hi, just to Hi, right extrapolate through questions, Basing afternoon. third or might quarter this sort Micah. Joe. second call us I pulse Hi. quarter the back what the quarterly the be to quarter. in on to understand better

appreciate are a the caution one always your most? thinking I in to careful it just accelerate through While quarter? environment, and understand: And to we're volatile surprised what you trying how Just certain we Did and now be could Does trajectory fourth we quarter? slowing understand frame if it stepping that'd trends could into you that the just so the a are -- better or accelerating? little great. continue

Micah Young

you, absolutely. Thank Rick. Yeah,

past. was then worldwide whenever seen One of of at better-than-expected X%, our and in the levels our things rest sensor we're our steadily to of were to volumes quarter. we're and the in we those And that's sensor starting it that to those be we that U.S. course, the indicated throughout now see compared in improve May, shipping that rest And were I than improve in to and last mentioned implied then we saw down where we volumes fourth traditional they coming to looking over call, drivers as quarter. the of is to the expecting down improved off year. X% closer volumes June back orders early and we the what and were in the think in we're quarter we're our as the second started sensor Joe move we the think -- being more we've will guidance seeing And going saw up trends was which

product getting of saw we're we mix, the that to our to So I mix. think in pre-COVID back the starting terms see levels

Rick Wise

Thank you.

Joe Kiani

when Rick physicians their really they it's our wash helped they wear customers safe. noticing when the keep hands, helping is masks, they're What's

and them when weren't it's I learning which So we not. to our allowed we open or elective up guidance gave the that think has hospitals more certain time, to happen going have procedures, if last

Rick Wise

Got you. Joe. Got Thanks, you.

here better. help and boards would Is Just be XXXX level not more result? face Thank about XXXX numbers as outlook follow-ups, it sold could. have me thinking so forward that maybe I you XXXX? the in And you again And of understand you? we pulling the sold have what's board about the than just high at to message in a comp challenging was more this -- board to if are other you. couple a it's a going the going and now, but tough I'm cheaper excellent talking I XXXX

Joe Kiani

the Well our as XXXX for QX. feel we'll at Micah projections end and said, obviously, about much better numbers of

to quarter going that better toward than our best estimate been a that. XX,XXX normal instruments However, volumes currently, slightly and roughly which boards maybe is go has

we're that's So what I expecting. think of kind

what next very won't normal. think a It being healthy normal. like despite XXXX normally we decline we from be our will So year do,

Rick Wise

you. about very you've quarters recent helpful. national Joe safety That's Got Last talked and accounts. quarter

XXX I think you second quarter, you in have mentioned that the accounts.

updates give accounts just over any there are it's X,XXX Now that color interested. SafetyNet can you Any us? And on interested? front? the Maybe

Joe Kiani

We utilizing sure. have now Masimo XXX Sure, SafetyNet. customers

So the increased. number has

interest expect again, We be unfortunately there a will for lot system. search with of customers SafetyNet unfolds. Once Masimo the new the as

We have been are it. evaluating customers nearly X,XXX that

So that's can hope to all I you. for, what know but I don't tell

Rick Wise

you you Got What's initiatives just next to What's installed been front next? us quick as expected? for And capnography offered Has this you've on capnography your being maybe you. capnography? And the now much. update -- so launch just base? performing the in last during on me of it -- Thank and your entire COVID there. one consumables is just have sold

Joe Kiani

in QX there given room have came And we it Well, again. late. believe I growth we our that into capnography very of business for grew strong lot a

especially very was strong have with expect QX. But for increasing we the to best and technology continue footprint year, it whole the in capnography. We our

Rick Wise

Thank you.

Joe Kiani

Thank you.

Operator

from the comes UBS. line of question from Matt Taylor next The

is line open. Your

Matt Taylor

for afternoon, guys. Good Thanks the taking Hi. question.

weren't much wondering automation hospital Masimo growth the they now? talk are last like to addition guess I'm one the that can be of product And I material? new plan, those just that? off pivot materiality of have SafetyNet, of on thoughts things the how that there. And If other in offer you in the about I'll that. to So offerings you any you could your year next especially contributing could some

Joe Kiani

not out break yet. chosen have to We it

And get a SET with pretty not consists those. strong. Masimo is which on apologize What I more to tell I I'm SafetyNet that you going technology. sensor can been oximeter PPG, of pulse Radius So wearable that's granular our

If you hospital then is then automation NomoLine and it bulk business rainbow of OX. probably and look capnography from the it's SET at Masimo's and

Matt Taylor

Okay. was, other had seeing question a Got you. ICU those monitoring. past. the I with I boards The wonder the hospital as I will excess guess this if productive you're bit key year think seeing little with you've that productive more as talked and you placing about growth this trend? installed productive base potentially being in additive And ones similarly in had past broader you if in OR that board still setting? the you're be that the to that you're

Joe Kiani

Time concerned of midst drop were consuming we The business, sockets. will were expected about we that particularly them tell fortunately, COVID the And ventilators. were the the of the which the ones in the Board that regular in being come suspicious drop has we that obviously. from that and

shipping going think of to these now, So go our prediction to after the we use COVID. best even are that into normal drivers right we're

Matt Taylor

Thanks Okay. Joe. a lot, Great.

Joe Kiani

you. Thank

Operator

Sandler. of line comes the Piper Bednar Your Jason from next question from

open. line is Your

Jason Bednar

-- get to afternoon. a maybe Maybe bit Good bit sorry started. here a real-time you. question just Thank a of

here the OEM I sensor trends latest seen whether you've as kind this from or goes same a up in of this your wave of latest margin over COVID in picking on Europe? a or change wave we've seen activity unfold, the in really your business have guess the U.S. As procedure result on you seen any or And partners? pull either pickup utilization

Joe Kiani

Yes.

business in direct have but Europe seen a more We perspective. demand, from a

the getting is with So focus hospitals to seeing Germany, patients up. more they just wanting cross-contamination. we've interactions requiring minimize on bombarded and and We're U.S. limit Italy, pickup attention and Switzerland, strong because seen demand. patients force East sales France, want once to also in and products The Coast again picking

again. up So unfortunately it seems to be picking

Jason Bednar

Okay. right. couple a That's guess then more And I helpful All me. Joe. for

ads of get brand. the medical plan You've efforts And bigger measure and DTC and you care been move Would how or just to success the landed the running these some a you Micah have kind assessment your Masimo home-based love build promoting to over channel into to early time? time. on here establishing Joe market precursor over this out how as presumably

Joe Kiani

Yes.

the we're an on becoming think oasis. I or used We for see if oasis beginning a sure Well working not to an mirage. to years it's consumer we're this we were market. say

T so road and for we well trending, with in bringing to have hospital as map products already think as be more for that We picking And on and other useful. product right you're that marketplace. together it parents Radius for national the campaign have now a iSpOX continue about continuous lot campaign the eight Together few a Sleep I of the kids reasons. thermometer think brand in MightySat now in for products days consumers market. started very of and and spikes patients. consumer latest which we It's our get have market can't I a that at and fever But a lasts that ad then our We get into Masimo probably as performance is off up our from: the allows who could Especially into for all our aware signs the which become right home. worry hospital, I products competitive do

Jason Bednar

of back last organic Joe me. that? you'd that if helpful. just peel maybe All -- willing for you to try an acquisition the contribution that's if maybe had Micah provide a really to I number wondering quarter more in be right. -- just any growth one just And then

Micah Young

Yes.

roughly contribution Jason I had X% from we year think acquisitions. coming into communicated the

of slightly right Maybe the terms in ballpark that just So in quarter. in it's above that. contribution

Jason Bednar

Okay, perfect. Thanks so much.

Okay. Thanks.

Operator

Ravi Misra the Your from of Berenberg next comes Markets. question from line Capital

is open. line Your

Ravi Misra

put I'll upfront. Hi, my questions two both afternoon. I good guess

commentary. adjusted think there I to hospitals real-time build be capacity? impact that impact versus to mentioned start mean your should you guidance then I kind up of board for your of picking understand out that cases Joe upside if Micah, we numbers go you've wanted what potential kind on us the could the to as just about just was XXX,XXX. on that do and sensor might COVID Or you break of given margin that How If first The secondly demand the Thanks. to think gross complexity help away help you normalizes? And the that? manufacturing us might have

Joe Kiani

Sure.

Let want me dealing touch will on I come think way continues, of directly the met first SafetyNet the to the to one. central or a a radically in additional patient. allowing Yes move really with sockets bulk while they a is cuts drivers by that that just floor and by the the there drivers or want surge the to down wearable new problem back to the monitoring they as communicate a to into keep of their could general be new different sensor Whether be home, the will some them out demand it system. putting the to which them by need hotel in of cloud Masimo on

So SafetyNet. a surge therefore met for And couple worldwide thousand are more be I about hospitals of at will of it. I with Masimo looking mentioned as COVID demand probably the think a

let I'll question answer your As for manufacturing that. Micah

Micah Young

Yes great question.

of well about place contribution a costs, look manufacturing. really if from with put safety other distribution, that things costs And the I you to COVID-related think protect are if our distancing related at quarter And the to workforce. was costs as manufacturing, the measures as and and lot for just we COVID-related the to measures asked in you there's our the social think what indirectly those due So then our costs? overall measures, you margins shipping was question

as is you through I -- call rest look estimate our if it hitting X% So basis impact mix between of margins. at XXX would points. costs margins our now somewhere primarily to due mix the those are gross think the right mix And And about -- maybe to impact. those costs, XXX being roughly the

Operator

Your & next the of line question Matson comes Mike Needham from from Company.

open. Your line is

Mike Matson

taking understand I m you're try. forum, any guess but for the you would Can I Apple if start litigation. would I with thanks on update it this of patent there? provide Hi, comment I question. thought to in reluctant sort

Joe Kiani

Apple sued We and infringement. for Certainly. secret trade patent

On not moved there to that trade because that he likely on have preliminary of felt we but did taken from we our side, injunction not prove irreparably preliminary it's we our ex-engineers the secrets. did issuance a trade The would patents grant secret believe taken. find who that are we secrets our the judge further be us injunction stop that harmed, were judge trade will

currently our our The to worked second on stay trade on to that. partes as with stay, we're our case patent process. inter be moved which patent dealing the patents, moving the thing while secret against filed Apple is the IPRs is patents while reexamination going delay probably granted through side case has forward. XX by that about filed case, XX Normally, court Apple The months. patent we they going and to

from not We're for looking we said we're Apple So because we're a did time looking with from done Medtronic. I think what just long for not takes thing. little these cases the previously stop as a they've looking Philips to and like -- we beginning

So stay tuned and we'll continue.

Mike Matson

Thanks. about That helpful. was question then And Europe. a just

pandemic? summer sensors So the was previously once you the they continue the infection obviously, past on they're during your forward, a had the sensors disposable use if had eased? them when of switched do going the that from you rates more disposable think the use move height reusable disposable get of but the vaccine sensors to And seen we again, up sensors? And over and I to going curious kind think, going pandemic, are kind pandemic to the even to of continue I

Joe Kiani

historically I question wish, probe to Great I I patient had for they used on that. answer address people places I don't. more the try because to do time, wearable next you. homework PPG, will see Sensor at believe And where going more of for you. I we're Tetherless adhesive question. think, this I worldwide using some do an Radius probes. single But I can point that reusable the in

the the for I'll with Given But they're our at business, to QX you. continuing had in adhesive. and of future least we've get growth using the use as now in we what sensor they back as will believe volume far

Mike Matson

Okay. Fair you. enough. Thank

Joe Kiani

you. Thank

Operator

of comes Baird. Michael question from Polark the Next line from

Your open. line is

Michael Polark

line? Hi. work more Hoping the the lot perhaps little Any updated Any the expectations better about opioid had just be in color year. remarks know heard Any us. unpack on on prepared to that they've Good you a on time a their plate comment product. there evening. on your for I continuing FDA sense could would I with this helpful. a bandwidth, FDA

Joe Kiani

Yes, sure.

know only some we're from this -- our FDA of you -- working been eight we're nearly epidemic with they a our the we how And a SafetyNet products they us that think chose the this it's help wish capabilities to we We're history. project one deal I product deal working can has working potentially know we're which years additional get with relationship. on. two uniquely with We've breakthrough them. out opioid But data opioid great on know not XXX. technology, issue. about over and of working for but and FDA the could with as FDA

delayed I night. will O’clock us XX you COVID think their much, at don't know and examiners responses I know has. but XX things situation has send I said people at literally definitely as how O’clock, the slightly. it

plate. succeed. think good lot is we pretty just of eventually don't you. path the from a that lack But When? feel it's I to their on So tell I can't going effort

Michael Polark

Yeah.

Joe Kiani

but we're hopeful soon. So --

Michael Polark

the end deployment M&A capital program this things for updated bigger about perhaps curious what to all We're year series balance the sheet as this that market smaller saw here live looking just you're then new seeing some And then I'd in a and how be or learn fortress-like. is return this continuing did maybe the thoughts XXXX. we interest looking Masimo earlier at we and brief at year. the maybe a The there little of has of a thinking generally bit in normal. your deals follow-up. events some year than earlier M&A still to hinted approaching

Micah Young

you, Yes. Mike. Thank

the back. of examples of M&A. strategy. be NantHealth at And you more And believe forward. in if where strategically that of about home. medical some think we're can those to to as you areas So that thinking that's really to augment hospital great that where I deployment from we'll that the two in the the capital think type examples is how automation business as We well similar of we'll it grow we're you great greatest as our business about are interested technologies our of are TNI acquisition. in be two and moving it acquisition terms some These far areas connected hospital look get going companies if is our priorities as that are forward the of one course two And care moving returns looking saw of those

Joe Kiani

Okay.

We have operator. time for one more question,

Operator

you. Thank

the Your BTIG. comes line from of from Marie Thibault next question

line Your is open.

Marie Thibault

Hi. really squeezing this it. Thanks for evening. me appreciate I in

Joe Kiani

Hi, Marie.

Marie Thibault

bit trends about little there. I parameters. to know been ask here. higher these monitoring ASPs some I that of questions wanted sensor A recent and any seeing with a newer ASPs you've few

was on into from to there's X%. revenue. that overall played believe the given. any that number if that how I I volume been a wanted impact ASP you've wondering So see

Joe Kiani

been have ASPs steady.

increased sensor you're our them, LED our eight it's and rainbow sensors. a rise Radius PPG If in demand for because seeing LED for of wearable four

is no, -- decline. there no but, So

$X case a a a We have compelling can by We to using million technology. show make $X year with very million hospital our XXX-bed hospitals. saving

disciplined. that we're of So because

what price, even entered do, market, there. lower. we that go was but given was there, on And compete them though price, think can reduction. it it us better XX% a I fair thought we out we order at with for competition a to when just We especially the not than save what technology help can babies, in when began, technology lives priced trying magnitude the our was what for of blindness reduce not and do did help cost we to in had patients'

Marie Thibault

at markets? of then those SafetyNet. know you've this to in hospital. us developing to frequent of about there on one can new markets tell Last I spoken being the readmitted your Anything keep Great in kind in home work using about the to hear. flyers you instead past perhaps

Joe Kiani

yes. Yes,

campaigns. you've ad I our national think seen

hub on the pneumonia. is demand that of oximetry ill not track put turns for problem get the a that lung, can and help I a pulse think with and COVID patients. really real heart just Obviously for severely COPD, the into for keep spotlight patients but patients both flu

out, we So, we are apps you well around using and keep to consumer customers going line and consumers home. we're out how real drive And and the both our karma Masimo it well. need product the us opportunity said, that only serve the that think sensors product get thing augmenting that was new with tech new as will good as that to given and business and let's we all to there further clinicians and you're and companies, our

Marie Thibault

you. Thank

Joe Kiani

Thank day look times Halloween guys you know you weekend, in call. least busy next appreciate talking Thank I crazy seeing forward week, much. everyone to much. happy out to Happy you getting this schedules and election I you so so and on or here. at February.

Operator

you this concludes call. Thank today's conference gentlemen, and for Ladies participating.

now You may disconnect.

Masimo (MASI) 27 Oct 202020 Q3 Earnings call transcript