Masimo Reports Third Quarter 2009 Financial Results

Q3 2009 Highlights:

IRVINE, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Masimo Corporation (Nasdaq:
MASI), the inventor of Pulse CO-Oximetry(TM) and Measure-Through Motion and
Low-Perfusion pulse oximetry, today announced its financial results for the
third quarter of 2009.

For the third quarter of 2009, Masimo reported product revenues of $75.1
million representing a 14% increase over $66.1 million for the third quarter
of 2008. Including royalty revenues, Masimo reported total 2009 third quarter
revenues of $87.4 million compared to $78.1 million for the third quarter of
2008. For the third quarter of 2009, Masimo reported earnings per share of
$0.22 compared to $0.22 per share for the third quarter of 2008.

Masimo reported that it shipped 26,200 Masimo SET and Masimo Rainbow SET pulse
oximetry units, excluding handheld units, during the third quarter of 2009,
resulting in over 600,000 Masimo SET and Masimo Rainbow SET pulse oximeters in
use worldwide. In the third quarter of 2009, revenues from Masimo Rainbow SET
products increased to $6.0 million from $3.0 million in the same prior year
quarter.

For the first nine months of 2009, Masimo reported product revenues of $219.7
million representing a 17% increase over $188.0 million for the first nine
months of 2008. Including royalty revenues, Masimo reported total 2009 year to
date revenues of $256.5 million compared to $224.0 million for the prior year
period. For the first nine months of 2009, Masimo reported earnings per share
of $0.65, up 20% from $0.54 per share for the first nine months of 2008.

Joe E. Kiani, Chairman and Chief Executive Officer of Masimo, said, "We are
encouraged by the continuing growth of our business, especially during a
period of historical economic turmoil. We are seeing great enthusiasm combined
with solid growth for our latest innovation, Masimo Rainbow SET technology,
which has ushered in new noninvasive measurements, including hemoglobin and
carbon monoxide."

Masimo also reported that as of October 3, 2009, cash and cash equivalents
totaled $174.7 million, up from $146.9 million at January 3, 2009.

Conference Call
Masimo will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to
discuss the results. The dial-in numbers are (888) 520-7182 for domestic
callers and +1 (706) 679-9937 for international callers. The reservation
number for both dial-in numbers is 35275093. A live web cast of the
conference call will be available online from the "Investor Relations" page of
the Company's corporate website at www.masimo.com. After the live web cast,
the call will remain available on Masimo's website through December 3, 2009.
In addition, a telephonic replay of the call will be available until November
17, 2009. The replay dial-in numbers are (800) 642-1687 for domestic callers
and +1 (706) 645-9291 for international callers. Please use reservation code
35275093.

About Masimo
Masimo (NASDAQ: MASI) develops innovative 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 demonstrate Masimo SET provides the
most reliable SpO2 and pulse rate measurements even under the most challenging
clinical conditions, including patient motion and low peripheral perfusion. In
2005, Masimo introduced Masimo Rainbow SET® Pulse CO-Oximetry(TM), a
breakthrough noninvasive blood constituent monitoring platform that can
measure many blood constituents that previously required invasive procedures.
Rainbow SET continuously and noninvasively measures total hemoglobin
(SpHb(TM)), oxygen content (SpOC(TM)), carboxyhemoglobin (SpCO®),
methemoglobin (SpMet®), and PVI®, in addition to oxyhemoglobin (SpO2), pulse
rate (PR), and perfusion index (PI), allowing early detection and treatment of
potentially life-threatening conditions. Founded in 1989, Masimo has the
mission of "Improving Patient Outcomes and Reducing Cost of Care by Taking
Noninvasive Monitoring to New Sites and Applications." Additional information
about Masimo and its products may be found at www.masimo.com. Information on
the company's website does not form part of this press release.

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, prospects and business generally; and
expectations regarding our ability to design and deliver innovative new
noninvasive 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 new products and technologies of
ours; obtaining regulatory approval of our current and future products and
technologies, including the recently announced total hemoglobin measurement;
the risk that the implementation of our international realignment will not
produce the 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 impact of the decline in the
worldwide credit markets on us and our customers; 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"), 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.

Masimo Corporation

Investor Contact:
Mark P. de Raad
Executive Vice President and Chief Financial Officer
Masimo Corporation
(949) 297-7080
mderaad@masimo.com

Media Contact:
Dana Banks
Manager, Public Relations
Masimo Corporation
(949) 297-7348
dbanks@masimo.com

Masimo, SET, Signal Extraction Technology, Improving Outcomes and Reducing
Cost of Care by Taking Noninvasive Monitoring to New Sites and Applications,
Rainbow, SpHb, SpCO, SpMet, PVI, Pulse CO-Oximetry and Pulse CO-Oximeter are
trademarks or registered trademarks of Masimo Corporation.

MASIMO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

October 3, January 3,
2009 2009
---- ----
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $174,686 $146,910
Accounts receivable, net of
allowance for
doubtful accounts 39,222 30,715
Royalties receivable 11,434 11,375
Inventories 31,254 27,400
Prepaid expenses 7,267 4,780
Deferred tax assets 10,511 10,511
Other current assets 793 551
--- ---
Total current assets 275,167 232,242
Deferred cost of goods sold 27,600 28,431
Property and equipment, net 12,118 12,979
Deferred tax assets 8,817 8,781
Intangible assets, net 7,825 7,410
Other assets 4,462 3,505
----- -----
Total assets $335,989 $293,348
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $13,806 $15,914
Accrued compensation 17,051 15,607
Accrued liabilities 7,168 5,566
Income taxes payable 890 10,862
Deferred revenue 17,314 17,233
Current portion of long-term debt 226 465
--- ---
Total current
liabilities 56,455 65,647
Long-term debt, less current portion 187 157
Other liabilities 8,667 8,046
----- -----
Total liabilities 65,309 73,850

Stockholders' equity
Common stock 58 57
Treasury stock (1,209) (1,209)
Additional paid-in capital 190,832 179,666
Accumulated other comprehensive
income (loss) 120 (7)
Retained earnings 80,052 40,884
------ ------
Total Masimo Corporation
stockholders' equity 269,853 219,391
Noncontrolling interest 827 107
--- ---
Total stockholders' equity 270,680 219,498
------- -------
Total liabilities and
stockholders' equity $335,989 $293,348
======== ========

MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share information)
(unaudited)

Three Months Ended Nine Months Ended
------------------ -----------------
October 3, September 27, October 3, September 27,
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Product $75,146 $66,125 $219,690 $187,954
Royalty 12,295 12,007 36,812 36,054
------ ------ ------ ------
Total revenue 87,441 78,132 256,502 224,008
Cost of
goods sold 25,198 22,393 73,517 64,917
------ ------ ------ ------
Gross profit 62,243 55,739 182,985 159,091
Operating expenses:
Research and
development 7,742 6,020 22,761 18,298
Selling,
general and
administrative 33,476 29,167 99,122 89,062
Antitrust
litigation 185 46 228 491
--- --- --- ---
Total operating
expenses 41,403 35,233 122,111 107,851
------ ------ ------- -------
Operating income 20,840 20,506 60,874 51,240
Non-operating
income (expense):
Interest income 48 545 161 2,129
Interest expense (54) (19) (71) (722)
Other 301 (413) 286 (235)
--- ---- --- ----
Total non-operating
income (expense) 295 113 376 1,172
--- --- --- -----
Income before
provision for
income taxes 21,135 20,619 61,250 52,412
Provision for
income taxes 7,814 7,554 21,414 19,955
----- ----- ------ ------
Net income including
noncontrolling
interest 13,321 13,065 39,836 32,457
Net income
attributable to
the noncontrolling
interest (266) - (668) -
---- --- ---- ---
Net income
attributable
to Masimo
Corporation $13,055 $13,065 $39,168 $32,457
======= ======= ======= =======

Net income per
share attributable
to Masimo
Corporation
stockholders:
Basic $0.23 $0.23 $0.68 $0.58
===== ===== ===== =====
Diluted $0.22 $0.22 $0.65 $0.54
===== ===== ===== =====

The following table presents details of the share based compensation
expense that is included in each functional line item in the condensed
consolidated statements of income above (in thousands):

Three Months Ended Nine Months Ended
------------------ -----------------
October 3, September 27, October 3, September 27,
2009 2008 2009 2008
---- ---- ---- ----
Cost of goods sold $102 $55 $273 $159
Research and
development 645 608 1,878 1,627
Selling, general and
administrative $1,683 $1,328 $5,752 $3,952

MASIMO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

Nine Months Ended
-----------------
October 3, September 27,
2009 2008
---- ----
Cash flows from operating
activities:
Net income including
noncontrolling interest $39,836 $32,457
Adjustments to reconcile net
income including
noncontrolling interest to net
cash provided by operating
activities:
Depreciation and amortization 4,512 4,226
Share based compensation 7,903 5,738
Loss on disposal of
property and equipment 3 -
Provision for doubtful
accounts 682 20
Provision for obsolete
inventory 346 1,175
Provision for warranty costs 1,582 1,085
Income tax benefit from
exercise of stock options 1,403 14,488
Excess tax benefit from share
based payment arrangements (185) (2,449)
Changes in operating assets
and liabilities:
Increase in accounts
receivable (9,377) (2,428)
(Increase) decrease in
royalties receivable (59) 2,491
Increase in inventories (4,233) (7,287)
(Increase) decrease in
deferred cost of goods
sold 891 (797)
Increase in prepaid expenses (2,407) (887)
(Increase) decrease in other
assets (1,165) 1,422
Decrease in accounts payable (2,124) (126)
Increase in accrued
compensation 1,191 882
Decrease in accrued
liabilities (48) (1,397)
Increase (decrease) in
income taxes payable (9,781) 2,453
Increase (decrease) in
deferred revenue (99) 1,516
Increase in other liabilities 833 65
--- ---
Net cash provided by
operating activities 29,704 52,647
------ ------

Cash flows from investing
activities:
Purchases of property and
equipment (2,889) (5,344)
Increase in intangible assets (1,100) (2,195)
Increase in restricted cash (15) -
--- ---
Net cash used in investing
activities (4,004) (7,539)
------ ------

Cash flows from financing
activities:
Repayments on long-term debt (268) (30,310)
Proceeds from issuance of
common stock 1,834 8,477
Excess tax benefit from share
based payment arrangements 185 2,449
Dividends paid - (13)
--- ---
Net cash provided by (used in)
financing activities 1,751 (19,397)
Effect of foreign currency
exchange rates on cash 325 159
--- ---
Net increase in cash and
cash equivalents 27,776 25,870
Cash and cash equivalents at
beginning of period 146,910 96,733
------- ------
Cash and cash equivalents
at end of period $174,686 $122,603
======== ========

SOURCE Masimo Corporation

Investors, Mark P. de Raad , Executive Vice President and Chief Financial
Officer, +1-949-297-7080, mderaad@masimo.com, or Media, Dana Banks, Manager,
Public Relations, +1-949-297-7348, dbanks@masimo.com, both of Masimo
Corporation