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Fascination
As a company that is powered by fascination and accomplishment, Masimo develops
breakthrough noninvasive patient monitoring solutions that elude others—resulting in
innovative technologies that solve “unsolvable” clinical problems. That’s because when
you focus on fascination and open yourself up to the unbridled exploration of what could
be, the results transcend what others believe is possible. From the invention and launch of
the world’s first measure-through motion and low perfusion pulse oximetry technology in
1995, to the introduction of noninvasive and continuous hemoglobin monitoring in 2008,
we have been continually driven to find new ways to do what is best for patient care.
Our latest breakthrough technologies
enabled us to achieve record results as
we helped clinicians around the world
provide better care for their patients
Joe E. Kiani
Chairman & CEO
Masimo Corporation
A LETTER FROM THE CHAIRMAN
hemoglobin (SpHb) under a limited market
is responsible for helping them identify carbon
in cash, after repaying $30.4 million to virtually
As we approach the two-year anniversary of
release in the third quarter of 2008, immediately
monoxide poisoning and save lives.
eliminate all of our debt.
our successful IPO, we are focusing attention
generating significant interest. By early 2009,
on one of our five guiding principles—thrive
50 hospitals around the world had realized
In 2008, the breakthrough measure-through
I am particularly proud that our accomplishments
on fascination and accomplishment, not on
the value of this breakthrough technology and
motion and low perfusion performance of
were achieved by adhering to our guiding
greed and power—to showcase how this simple
integrated it into their clinical practice.
Masimo Rainbow SET pulse oximetry, along
principles and staying focused on our long-
approach to business has allowed us to solve
with the Masimo Patient SafetyNet remote
standing mission of “improving patient
some very complex clinical and technological
In addition to the excitement generated by
monitoring and clinician notification system was
outcomes and reducing cost of care by taking
problems that others believed were unsolvable.
SpHb, prior Masimo innovations continue to fuel
shown to improve clinical outcomes, increase
noninvasive monitoring to new sites and
A YEAR OF INNOVATION AND GROWTH
our growth and expand our market potential.
Masimo PVI, an innovative noninvasive
patient safety and reduce costs on hospital
applications.” By remaining dedicated to
general care floors and in post-acute care
innovation and patient care, we have continually
2008 was a year of continued innovation and
measurement launched in 2007, was shown
facilities.
growth for Masimo, beginning with the first
in multiple 2008 studies to help predict fluid
quarter unveiling of what we believe to be the
responsiveness during surgery.
world’s first noninvasive hemoglobin monitor
DELIVERING RECORD RESULTS
dramatically improve existing ones by making
These and other milestones, built on the solid
them more accurate, reliable, and clinically
overcome technological challenges to develop
important new noninvasive measurements and
at the World Congress of Anesthesia in South
Also in 2008, key standards bodies in both
foundation of our gold standard pulse oximetry
relevant than thought possible.
Africa. Using more than seven wavelengths
the U.S. and the United Kingdom established
business, drove our strong financial performance
of light and a single sensor, Masimo Rainbow
SET technology can now measure hemoglobin
guidelines to make carbon monoxide screening
with Masimo Rainbow SET a standard of care
in 2008—allowing us to achieve record revenues
as we helped clinicians around the world provide
Our innovations have not only helped health
care professionals save the lives of patients—
noninvasively, continuously and immediately—
in fire department and emergency medical
better care for their patients. Our product
and the eyesight of premature infants—but have
without a painful needle stick or time-consuming
services (EMS) markets. Clinicians around the
revenues increased nearly 30% to a record
also opened up new markets for us. According to
laboratory analysis. We launched noninvasive
world continue to report how this technology
$258.9 million and we generated $50.2 million
industry analysts, our new technologies have
The Masimo Product Offering:
uit Boards
CirCirCCuit Boards
moNitors
PatiENt saFEtYNEt sYstEm
sENsors/CaBlEs
Pulse CO-Oximetry and the leading measure-through motion and
low perfusion pulse oximetry solution, available in more than 100
OEM monitors from over 50 leading brands.
A complete line of bedside and handheld devices delivering Masimo
SET pulse oximetry and Masimo Rainbow SET Pulse CO-Oximetry
to clinicians in acute care, alternate care, and EMS/fire settings.
Our innovative new wireless patient monitoring and clinician
notification system, along with Rainbow Masimo SET, has been
shown to help keep patients safe on general care floors.
Available for either single-patient or multi-patient use, we offer
more than 100 different sensor and cable combinations for virtually
any clinical need.
allowed us to expand our total market
blood constituents and fluid volume status
subsidiary in Neuchatel, Switzerland. By doing
Looking ahead, we anticipate that our latest
potential from $1 billion with pulse oximetry
that previously required invasive procedures. In
so, we believe we will be able to develop a more
revolutionary noninvasive technologies will make
in the critical care environments to as much
both cases, our dedicated team—with a shared
efficient and scalable international organization
significant clinical contributions in the hands of
as $4 billion by expanding adoption of
passion, vision, and single-minded focus to do
under one centralized management structure to
caring clinicians.
pulse oximetry into general care areas and
what is best for patient care—went beyond what
better serve our customers.
adding new measurements like noninvasive
others thought possible.
carboxyhemoglobin (SpCO), methemoglobin
PATIENT-FOCUSED INNOVATION
technologies, and business model have allowed
Our guiding principles, breakthrough
(SpMet), fluid volume status (PVI) and
This team is not confined within the walls
At Masimo, we know that we are in the business
us to build a solid business. At the heart of our
hemoglobin (SpHb).
of Masimo, but is comprised of an extended
group of purists including passionate clinical
of patient care. We are cognizant of our business
business is a great innovation engine with a
goals but remain passionate and disciplined in
bright and talented team of purists eager to
A COMPANY POWERED BY FASCINATION
researchers, clinicians, biomedical engineers,
conducting our business from the perspective of
break new ground in noninvasive monitoring
Every day at Masimo, our talented team of
administrators, OEM partners and other
the patient. We never lose sight of the fact that
and do what is best for patient care. In so doing,
“purists”—people who do what they do because
stakeholders who love what they do and strive to
what we do has an impact on patients’ lives and
we will continue to expand our total market
of the passion they have for their chosen field,
improve patient care. As we continue to grow and
as a result we continually elevate the standards
opportunity and increase Masimo’s value to our
not merely for financial gain—looks at the world
expand, our greatest focus will be to continue to
to which we hold ourselves accountable.
customers, employees and shareholders.
customers, employees and shareholders.
customers, employees and shareholders.
from a different perspective than most. Powered
retain and attract Masimo purists.
by a keen sense of fascination, they go above and
beyond what is expected to deliver solutions to
NEW MARKETS, SITES, AND APPLICATIONS
what many have considered to be unsolvable
Each day, all over the world, our noninvasive
problems. This has led to a level of innovation
blood constituent and hemodynamic monitoring
and impact in noninvasive patient monitoring
technologies are helping caregivers save, extend,
technologies that is unmatched in the industry.
and improve the lives of people of all ages, in all
It all started with Masimo SET, the technology
walks of life.
that solved pulse oximetry’s “unsolvable”
As we continue to drive global adoption of these
problems of inaccurate arterial oxygen saturation
and other technologies for the betterment
and pulse rate measurements during motion and
of patient care, we have implemented a new
low perfusion.
international business organization and structure
to better serve and support our customers
Our team built on this success with the
outside the United States. In the fourth
development of Masimo Rainbow SET, the first
quarter of 2008, we realigned our international
and only technology to noninvasively measure
operations, including the establishment of a new
Joe E. Kiani
Chairman and CEo
567,000
470,000
377,000
292,000
213,000
150,000
600,000
500,000
400,000
300,000
200,000
100,000
104,000
0
307.1
256.3
258.9
224.3
155.1
199.7
300
250
200
150
100
50
0
107.9
69.4
46.7
38.3
2002
2003
2004
2005
2006
2007
2008
2002
2003
2004
2005
2006
2007
2008
Masimo SET Installed Base (estimated units)*
* Excludes Handheld Devices
Revenues (millions)
Royalty Revenues
Product Revenues
Fascination
leads to Discovery
The most complex discoveries often start with a very simple question: Why? Almost twenty years
ago, two young engineers asked why pulse oximetry wouldn’t work during patient motion and
low perfusion—and why clinicians had to be plagued by false alarms as a result. They wondered if
employing advanced signal processing technologies similar to those used in anti-submarine warfare
could free clinicians from these limitations and allow pulse oximetry to become a useful tool across
a broad spectrum of clinical applications. As a result of their curiosity, determination and hard work,
Masimo was born and one of the most daunting challenges in noninvasive patient monitoring was
solved with the introduction of Masimo SET, the world’s first measure-through motion and low
perfusion pulse oximetry technology.
The uninhibited exploration
of ideas and a focused sense
of determination can lead to
unexpected discoveries.
The breakthrough parallel processing algorithms and adaptive filters of Masimo SET
pulse oximetry technology provide unmatched accuracy and reliability.
SET
Proven clinical performance leads top hospitals
around the world to choose Masimo SET
As the gold standard in pulse oximetry, Masimo SET is at work in the world’s most
demanding clinical settings. Because of its unmatched accuracy and reliability, more
than half of the top hospitals in the United States listed on the US News & World
Report Honor Roll (including eight of the top ten) have adopted Masimo SET as their
primary pulse oximetry platform.
To provide maximum clinical flexibility, Masimo offers the largest array of sensors
and multiple handheld and bedside devices in addition to being integrated into more
than 100 multiparameter monitors and 50 monitoring brands.
An Initial Focus on Fascination Leads to the
“Gold Standard” in Pulse Oximetry—Masimo SET
Clinicians around the world
trust Masimo SET to help them
improve outcomes, efficiency
and patient safety while at the
same time decreasing costs.
After more than six years of determination
most accurate and reliable SpO2 and pulse rate
and perseverance, we debuted Masimo SET
measurements. Masimo SET has reduced false
measure-through motion and low perfusion
alarms by more than 90% while detecting true
pulse oximetry in 1995, and were rewarded for
alarms more than 97% of the time, even during
our efforts with the prestigious Excellence in
the most challenging clinical conditions.
Technology Innovation award from the Society
for Technology in Anesthesia (STA).
More than 100 independent and objective
peer-reviewed studies have shown that
Since then, Masimo SET has transformed the
Masimo’s revolutionary Signal Extraction
clinical landscape, using breakthrough signal-
Technology outperforms all other pulse
processing technologies—including parallel
oximetry technologies, providing clinicians with
engines and adaptive filters—to deliver the
unmatched specificity and sensitivity.
summary of independent and objective studies involving masimo sEt Pulse oximetry
0
20
40
60
80
100
120
FAvOR MASIMO: 118
NEUTRAL: 6
FAvOR ANOThER: 0
Detecting Congenital Heart Disease in the Tiniest Patients
Congenital heart disease (CHD) in neonatal
CHD2,3 and has been clinically proven to help
patients is often difficult for clinicians to detect.
clinicians improve CHD detection.
Although some infants with CHD do not have
signs or symptoms in the newborn period, they
In a recent study by researchers in Sweden,
will need immediate intervention because of the
Masimo SET was applied to 40,000 newborns
severity of their disease.
and results were compared to a cohort group of
100,000 newborns who were screened without
Up to 30% of all CHD deaths occurring in the
any pulse oximetry.4
first year of life are unrecognized at hospital
discharge after birth. Routine neonatal
Researchers said, “no baby died from
examination cannot detect all cases of CHD, but
undiagnosed duct dependent circulation” in
additional screening using echocardiography is
the Masimo group, while five babies from the
not feasible due to time and cost.1
cohort group died during the same period.
Previous efforts at screening newborns for CHD
While pulse oximetry offers a potential method
with another pulse oximetry technology failed
to screen newborns for CHD, only Masimo SET
due to the inability to provide accurate oxygen
pulse oximetry has been shown to be accurate
saturation measurements during motion and
and reliable enough for detection of critical
low perfusion.
“Screening all well babies in maternity units with Masimo SET pulse oximetry
significantly improves detection of duct dependent ChD.”
Dr. Anne de-Wahl Granelli, et al.
The Only Logical Choice for Cyanotic Infant Monitoring
Caring for cyanotic infants presents unique
that creates significant challenges for
challenges. This special population demands
conventional pulse oximetry technologies.
accurate and reliable pulse oximetry to titrate
Masimo SET with the Masimo Blue Sensor is
therapies and maintain target oxygen saturation
the only system designed for use with cyanotic
at low levels. Unfortunately, newborns with
neonates, infants, and children—with validated
cyanotic cardiac lesions have unique physiology
accuracy in oxygen saturations as low as 60%.5
Helping Clinicians Preserve Premature Infants’ Fragile
Eyesight through More Efficient Oxygen Management
The fragile nature of a premature baby’s eyesight
Using Masimo SET, researchers showed that
makes careful management of oxygen critical
ROP could be reduced from 15% to 0% on infants
to avoid blindness caused by retinopathy of
between 750 and 1,249 grams and from 38% to
prematurity (ROP).6
10% on those weighing between 100 and 749
grams.6 Recently, another study showed that
According to Vermont-Oxford Network, as many
using Masimo SET in conjunction with a change
as 12% of all babies in the neonatal intensive care
in clinical practice to control O2 delivery helped
unit (NICU) develop ROP, which is believed to be
reduce ROP by 40% compared to a 0% reduction
caused by an inability to sustain therapeutically
in ROP with the same practice change using
appropriate levels of oxygen.
another pulse oximetry technology.7
1 Mellander M, et al. Failure to Diagnose Critical Heart Malformations in Newborns Before Discharge - An Increasing Problem? Acta Paediatrica 2006;95:407-13.
2 de Wahl Granelli A, et al. Screening for Duct-Dependent Congenital Heart Disease with Pulse Oximetry: A Critical Evaluation of Strategies to Maximize Sensitivity. Acta Paediatrica 2005; 94: 1590-1596.
3 Granelli AW, et al. Noninvasive Peripheral Perfusion Index as a Possible Tool for Screening for Critical Left Heart Obstruction. Acta Paediatrica 2007; 96:1455-1459.
4 de Wahl Granelli A, et al. Impact of Pulse Oximetry Screening on the Detection of Duct Dependent Congenital Heart Disease: a Swedish Prospective Screening Study in 39,821 newborns. BMJ;2009; 338;a3037.
5 Tsutumi T, et al. Clinical evaluation of accuracy of Masimo LNOP blue sensor in cyanotic infants. Critical Care Medicine 2006; 34(12): A56.
6 Chow Lily C. , et al. Can Changes in Clinical Practice Decrease the Incidence of Severe Retinopathy of Prematurity in Very Low Birth Weight Infants? Pediatric Research 2001;49(4):400A/2081
7 Castillo Armando R., et al. Clinical Practice and SpO2 Technology in the Prevention of ROP in ELBW Infants. Publication 8440.7; 2007 Pediatric Academic Societies.
Discovery
leads to Innovation
Making a breakthrough discovery only leads to continued innovation when it changes the way you
look at things. At Masimo, developing the world’s first measure-through motion and low perfusion
pulse oximetry allowed us to approach the challenge of developing other noninvasive physiological
measurements without being constrained by prior conceptions of what is or is not possible. In
2005, after more than 10 years of research, we launched Masimo Rainbow SET Pulse CO-Oximetry,
the first and only technology to noninvasively and continuously measure blood constituents and
fluid responsiveness that previously required invasive procedures and time-consuming laboratory
analysis. Masimo Rainbow SET builds on the gold standard Masimo SET pulse oximetry technology
to give clinicians an unprecedented level of real-time information to make more informed and timely
clinical decisions.
Innovation comes from looking
beyond the obvious to find
solutions to challenges and
problems that others can’t see.
With breakthrough noninvasive measurements not available from any other
company, Masimo innovations provide maximum clinical impact.
SpHb
SpOC
SpCO
SpMet
PVI
The Innovation of Masimo Rainbow SET Allows
Clinicians to See More, Do More for Their Patients
Our noninvasive monitoring technologies
(SpCO), methemoglobin (SpMet) and PVI in
provide clinicians with valuable physiological
addition to oxygen saturation, pulse rate, and
data that they use to make more informed
perfusion index, Rainbow SET gave clinicians
clinical decisions that save lives.
a more complete picture of their patients’ true
physiological status.
As the first and only technology to both
noninvasively and continuously measure
This picture became even clearer with the
blood constituents and blood volume status
limited market release of hemoglobin (SpHb)
that previously required invasive procedures,
and oxygen content (SpOC) in 2008.
the launch of Masimo Rainbow SET in 2005
changed expectations of what could be
Initial research shows that the availability of
measured by a noninvasive sensor.
reliable noninvasive hemoglobin monitoring
Starting with the ability to noninvasively and
clinical decisions, improve patient safety and
continuously measure carboxyhemoglobin
decrease costs.
may allow clinicians to make earlier and better
Masimo Rainbow SET gives
Masimo Rainbow SET gives
clinicians a more complete
clinicians a more complete
picture of their patients’ true
picture of their patients’ true
physiological status.
Turning multiple wavelengths of
light into breakthrough noninvasive
measurements
Masimo Rainbow SET technology is based on the solid foundation of
Masimo SET pulse oximetry. But instead of using two wavelengths of light
to determine arterial oxygen saturation levels (SpO2) like Masimo SET does,
Rainbow SET uses more than seven wavelengths of light housed in a single,
simple-to-apply sensor to monitor a broad spectrum of clinically-useful
blood constituents. In addition to SpO2 and pulse rate, Masimo Rainbow SET
provides a range of measurements including:
> Total Hemoglobin (SpHb)—may help clinicians better manage
blood transfusions, identify occult bleeding and detect anemia.
> Oxygen Content (SpOC)—gives clinicians a more complete picture of
their patients’ oxygenation status, not just their O2 saturation level.
> Fluid Responsiveness (PVI)—helps clinicians noninvasively and
continuously determine whether to administer fluids.
> Methemoglobin (SpMet)—noninvasively and immediately diagnose,
monitor, and treat patients with acquired methemoglobinemia from
drugs commonly used in the hospital, such as benzocaine and dapsone.
> Carboxyhemoglobin (SpCO)—allows clinicians and first responders
to noninvasively and immediately diagnose, monitor, and treat carbon
monoxide poisoning.
These measurements provide clinicians with an enhanced level of clinical
data upon which to make more informed and timely decisions.
Noninvasive, Continuous and Immediate Hemoglobin
Makes its Debut in 2008
The Masimo Rainbow SET technology platform
Additionally, continuous monitoring of
provides clinicians with access to real-time
hemoglobin levels may provide clinicians
trending and tracking of a patient’s total
with an early warning of possible internal
hemoglobin status, helping them to more
hemorrhaging in the ICU, emergency, trauma
quickly and efficiently identify conditions of
and post-operative settings.
anemia or blood loss.
The availability of noninvasive and continuous
When patients undergo blood transfusions,
hemoglobin monitoring with the Masimo
clinicians are expected to be able to use Masimo
Rainbow SET platform promises to make
Rainbow SET SpHb to more effectively titrate
hemoglobin testing more convenient and
blood and maintain hemoglobin levels within
broadly available to medical personnel in both
acceptable ranges.
the acute and outpatient care settings.
Masimo Sphb will provide
clinicians with noninvasive
real-time information on their
patients’ hemoglobin levels for
the first time ever.
It is estimated that more than 400 million
It is estimated that more than 400 million
hemoglobin tests are done each year in the U.S.
hemoglobin tests are done each year in the U.S.
alone. Prior to Masimo Rainbow SET, invasive
alone. Prior to Masimo Rainbow SET, invasive
and time-consuming blood tests were the only
and time-consuming blood tests were the only
method available to determine total hemoglobin
method available to determine total hemoglobin
levels, providing delayed and intermittent data.
levels, providing delayed and intermittent data.
“Masimo Sphb is an impressive new
tool that helps us to more safely
guide patients in surgery through to
recovery. The ability to identify an
upward or downward hemoglobin
trend in real time on a continual
basis should be of tremendous
value to us.”
Ronald D. Miller, MD, Professor and Chairman of
Ronald D. Miller, MD, Professor and Chairman of
the Dept. of Anesthesia and Perioperative Care
the Dept. of Anesthesia and Perioperative Care
at the University of California, San Francisco
at the University of California, San Francisco
Innovation
leads to Opportunity
True innovation lights up the darkness in understanding, and illuminates pathways to create
unexpected solutions to problems. Masimo develops new and innovative noninvasive monitoring
technologies that help clinicians around the world provide better care to a wide range of patients in
diverse clinical settings. Whether it is keeping a firefighter safe by noninvasively measuring the carbon
monoxide levels in his blood right after he comes out of the fire, or performing a pain-free blood test on
an expectant mom in a physician’s office by measuring her hemoglobin levels without drawing a drop
of blood, our new technologies are making a difference in the lives of patients while creating continued
opportunities for growth. With more than 260 patents issued and another 178 pending worldwide, The
Wall Street Journal in 2008 said the industry impact of Masimo’s patent portfolio is “by far the highest
among all medtech companies, not to mention one of the highest among all companies tracked by the
Patent Board across 17 industries.”
Bright ideas get attention and
provide the chance to explore
new and exciting opportunities.
Breakthrough measurements allow Masimo to continue to bring
noninvasive monitoring to new sites and new applications.
SpCO
SpHb
New Sites and New Applications Provide
Opportunities to Enhance Patient Care
Masimo’s focus on fascination, and the
And sometimes it is by inventing new
And sometimes it is by inventing new
breakthrough innovations that have resulted
noninvasive measurements. Masimo Rainbow
because of it, provides opportunities to
SET noninvasively detects carbon monoxide
positively impact patient care in new and
in the blood and determines a patient’s
exciting ways.
hemoglobin levels without a painful needle stick
or time-consuming laboratory analysis. This
Sometimes it is by bringing an existing
gives clinicians a chance to make more timely
technology to a new care area. The sensitivity
and informed decisions that impact the lives of
and specificity of Masimo SET virtually
patients in a wide range of clinical settings.
eliminates false alarms, now making it possible
to monitor patients in a hospital’s general
Both are examples of Masimo’s long-standing
wards, where previous attempts have failed
mission of taking noninvasive monitoring to
because of excessive false alarms.
new sites and new applications.
The ability to take noninvasive
hemoglobin measurements
(Sphb) with Masimo Rainbow SET
provides real-time availability of
one of the most frequently ordered
blood measurements in the world.
Making a difference in more care
areas than ever before
Masimo technologies are at work around the world in a diverse range
of clinical settings. From our traditionally strong positions in critical
care—from surgery, to post-anesthesia care, to intensive care and
neonatal intensive care units—we have expanded our market presence
by remaining true to our mission of bringing noninvasive monitoring to
new sites and new applications.
Today, you’ll find Masimo products and technologies at work throughout
the hospital—including the emergency department and the general
ward—and in non-hospital settings like physicians’ offices, ambulatory
surgery centers, outpatient clinics, long-term acute care facilities, and
home care settings, as well as fire and EMS departments.
Noninvasive Carbon Monoxide Monitoring Becoming Standard
of Care in Fire and Emergency Medical Services Departments
As the recognition of the dangers of
> National Fire Protection Association (NFPA)
In addition to fire and EMS applications, leading
misdiagnosing carbon monoxide poisoning in
patients and firefighters grows, many leading
industry groups are advocating adoption of
Masimo Rainbow SET technology as a new
standard of care to fight this silent killer.
The organizations advocating the adoption of
this life-saving technology include:
> National Association of Emergency Medical
Technicians (NAEMT)
> International Association of Firefighters (IAFF)
> National Association of EMS Educators
(NAEMSE)
> UK House of Commons All Party
Parliamentary Gas Safety Group (APPGSG)
With these recommendations, more firefighters
and emergency medical professionals will gain
access to our life-saving technology.
The ability to noninvasively
and immediately measure
carbon monoxide levels in the
blood helps clinicians speed
treatment and save lives.
medical professionals around the world are
calling for the adoption of routine CO screening
with Masimo Rainbow SET in the emergency
departments of hospitals in order to improve
detection and treatment of CO poisoning
in patients who present with ambiguous
flu-like symptoms that might otherwise be
misdiagnosed.
“Carbon monoxide is a silent killer—
the ability to detect CO noninvasively
with Masimo Rainbow SET provides
us with significant clinical benefits
that will help save lives.”
Neil B. Hampson, M.D., Pulmonologist,
Department of Hyperbaric Medicine,
Virginia Mason Medical Center
Masimo Patient SafetyNet Shown to Significantly Reduce
Distress Codes, Rescue Activations and ICU Transfers
A comprehensive evaluation by a team of
> Accurate identification of cardiac
clinicians at Dartmouth-Hitchcock Medical Center,
abnormalities.
covering 2,841 patients over 9,978 monitoring
days, showed that the Masimo Patient SafetyNet
> A 70% decrease in distress codes and
system provides early warning detection of
rescue activations.
impending patient deterioration on the general
care floor, which helped keep patients safer.
> A 50% decrease in transfers
Specific findings of the study showed the system
to intensive care units
provided:
(ICU) resulting in 163
ICU days saved.
> Early identification of patients with sedation
or analgesia-induced respiratory depression.
Masimo Provides Patient SafetyNet on General
Care Floors
With the Masimo Patient
SafetyNet system, qualified
clinicians are instantly alerted
to potentially deadly changes
in their patients’ condition,
allowing for more timely and
appropriate intervention while
reducing ICU transfers.
The last thing you expect when patients are
clinicians and their patients can rest easier
admitted to the hospital for routine procedures
knowing that if an unobserved patient is
is that they won’t go home due to a sentinel
in trouble, accurate, actionable alarms will
event—an unobserved, unexpected death.
instantly be sent directly to assigned clinicians,
Unfortunately, an increase in patient-controlled
allowing for more timely and appropriate clinical
analgesics and a reduction in direct patient
intervention.
observation due to lower staff-to-patient ratios
make it less likely that a clinician will be there to
Upgrading the Patient SafetyNet system to
observe an avoidable adverse event.
enable Masimo Rainbow SET noninvasive
hemoglobin (SpHb) monitoring through a simple
With Masimo Rainbow SET measure-through
software upgrade may further improve patient
motion and low perfusion pulse oximetry
safety by providing clinicians with an earlier
and the Masimo Patient SafetyNet remote
indication of undetected internal bleeding.
monitoring and clinician notification system,
“The Masimo Patient SafetyNet
system makes it possible to identify
patient distress earlier—preventing
codes and rescues—and initiate
appropriate intervention more
rapidly to improve patient outcomes,
recoveries and clinician efficiencies.
All of this contributes to a safer
general care floor for our patients.”
George T. Blike, M.D., Medical Director, Patient
Safety, Dartmouth-Hitchcock Medical Center
Products & Technology Overview
masimo’s missioN
masimo moNitors:
PPatiatiENENtt sasaFEFEttYNEYNEtt F Foror GENE
GENEralral Wards:
sElECt masimo oEm PartNErs
“Improving patient outcomes and reducing the
cost of care by taking noninvasive monitoring to
new sites and new applications.”
masimo’s GuidiNG PriNCiPlEs
> Remain faithful to your promises and
responsibilities.
> Thrive on fascination and accomplishment
and not on greed and power.
> Strive to make each year better than the year
before both personally and for the team.
Masimo Radical-7™ Color Screen
Masimo Radical-7™ Color Screen
Complete Masimo Rainbow SET capability, upgradable,
full color auto rotational screen with SatShare and
detatchable handheld unit
Masimo Radical-7 Blue Screen
Masimo Radical-7 Blue Screen
Complete Masimo Rainbow SET capability, upgradable,
monochrome blue auto rotational screen with SatShare
and detatchable handheld unit
> Make each day as fun as possible.
> Do what is best for patient care.
Masimo Rad-87™
Complete Masimo Rainbow SET capability, upgradable,
bright white LED display
masimo tECHNoloGiEs:
Because Masimo technology is integrated into more than
100 multiparameter monitors from more than 50 different
monitoring brands, we’re easy to integrate into virtually any
clinical workflow—from EMS and transport to the ED, OR,
ICU, step-down units and even general care floors. Some of
our OEM Partners include:
Masimo Patient SafetyNet™
Masimo Patient SafetyNet™
Remote monitoring and clinician notification system
designed to keep patients safe on general care floors
masimo sENsors:
Masimo SET Sensors:
Masimo SET Sensors:
SpO2, Pulse Rate, Perfusion Index, PVI
Masimo Rad-8®
Masimo SET, LED display
Masimo Rainbow SET Sensors:
SpO2, Pulse Rate, Perfusion Index, PVI, SpCO, SpMet
Masimo SET®
Measure-through motion and low perfusion pulse oximetry.
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Oxygen Saturation (SpO
2)
Pulse Rate (PR)
Perfusion Index (PI)
Fluid Responsiveness (PVI™)
Masimo Rad-57™
Masimo Rainbow SET, SpCO, SpMet
Masimo Rainbow SET®
Noninvasive blood constituent and functional
hemodynamic monitoring.
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Oxygen Saturation (SpO
Perfusion Index (PI), Fluid Responsiveness (PVI), plus:
2), Pulse Rate (PR) ,
Hemoglobin (SpHb™)
Oxygen Content (SpOC™)
Carboxyhemoglobin (SpCO
®)
Methemoglobin (SpMet
®)
Masimo Rad-5®
Masimo SET
Masimo Rad-5v
Masimo SET
Masimo Rainbow SET Sphb Sensors:
SpO2, Pulse Rate, Perfusion Index, PVI, SpHb, SpOC, SpMet
Masimo Facility
OEM Partner Facility
Distribution Partner
Masimo’s Global Reach
Our team of purists is committed to providing gold standard,
breakthrough technologies and the best service to meet the needs of
clinicians and care providers around the world. With more than 1,800
employees and contractors worldwide, Masimo has operations in
North America, Europe, Latin America, Asia, and Australia.
masimo CorPoratE
HEadquartErs
40 Parker
Irvine, CA 92618
USA
masimo iNtErNatioNal
sÁrl
Puits-Godet 10
2000 Neuchatel
Switzerland
masimo asia PaCiFiC
572A Serangoon Road
Singapore 218187
masimo australia
PtY ltd
ABN 71 124 372 701
Suite 5, Building 5
49 Frenchs Forest Rd.
Frenchs Forest NSW 2086
Australia
masimo CaNada ulC
5003 Levy St., Suite 100
St-Laurent, QC H4R 2N9
Canada
masimo EuroPE
dEutsCHlaNd ltd
Niederlassung Deutschland
Lindberghstraße 3
82178 Puchheim
Germany
masimo EuroPE EsPaña
Ronda de Poniente 12 2F
28760 Tres Cantos
Madrid
Spain
masimo EuroPE italia
Filiale Italiana
Piazza Duca D’Aosta 8
20124 Milano
Italy
masimo EuroPE
uNitEd KiNGdom
Unit Q,
Loddon Business Centre
Roentgen Road.
Basingstoke. Hants.
RG24 8NG
United Kingdom
masimo EuroPE
FraNCE ltd
Le Bois des Côtes II,
304 RN6
69760 Limonest
France
masimo JaPaN
CorPoratioN
World Times Bldg., 4F, 10-7,
Ichiban-Cho
Chiyoda-Ku, Tokyo
102-0082
Japan
Financial Performance
CONSOLIDATED BALANCE ShEETS (in thousands, except share information)
assEts
Current assets
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $1,300 and $1,370 at January 3, 2009, and
December 29, 2007, respectively
Royalties receivable
Accounts receivable from related parties
Inventories
Prepaid expenses
Prepaid income taxes
Deferred tax assets
Other current assets
Total current assets
Deferred cost of goods sold
Property and equipment, net
Deferred tax assets
Restricted cash
Intangible assets, net
Goodwill
Other assets
Total assets
liaBilitiEs aNd stoCKHoldErs’ EquitY
Current liabilities
Accounts payable
Accounts payable to related parties
Accrued compensation
Accrued liabilities
Dividends payable
Income taxes payable
Deferred revenue
Current portion of long-term debt
Current portion of long-term debt to related parties
Current portion of capital lease obligation
Total current liabilities
Deferred revenue
Long-term debt, less current portion
Capital lease obligation, less current portion
Other liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity
January 3,
2009
december 29,
2007
$146,910
30,715
11,375
—
27,400
3,908
872
10,511
551
232,242
28,431
12,979
8,781
577
7,410
448
2,480
$293,348
$15,914
—
15,607
5,396
170
10,862
17,233
395
—
70
65,647
213
—
157
7,940
73,957
$96,733
23,917
13,866
3,053
23,110
3,837
3,247
14,334
1,543
183,640
26,249
11,164
5,332
513
5,589
448
2,576
$235,511
$14,057
583
12,409
6,211
183
—
16,827
11,470
7
62
61,809
366
19,294
208
3,768
85,445
Preferred stock, $0.001 par value; 5,000,000 shares authorized at January 3, 2009, and
December 29, 2007; 0 shares issued and outstanding at January 3, 2009, and December 29, 2007
Common stock, $0.001 par value, 100,000,000 shares authorized at January 3, 2009, and December 29,
2007, 57,326,527 and 54,692,232 shares issued and outstanding at January 3, 2009, and December 29,
2007, respectively
Treasury stock, 156,240 shares at January 3, 2009, and December 29, 2007
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
—
—
57
(1,209)
179,666
(7)
40,884
219,391
$293,348
55
(1,209)
143,297
(1,034)
8,957
150,066
$235,511
Masimo Technologies Garner
National and International Awards for Excellence
1995 STA Excellence in Technology Innovation
2005 Innovative Product / Technology
2000 SCCM Technology Excellence Award
2006 Application of Technology Award
2000 Outstanding Medical Device Company
2006 Medical Design Excellence Award
2001 Audie Lewis Mark of Excellence (Independent Auditors)
2007 STA Excellence in Technology Innovation
2001 Innovation Product / Technology
2007 Groundbreaking Innovation of Rainbow SET Technology
2001 Distinguished Leadership Award
2007 Patient Monitoring Technology Leadership of the Year Award
2001 Excellence in Leadership Award
2007 Brand Development Strategy Leadership Award
2001 Medical Design Excellence Award
2008 Excellence in Medical Technology
2003 New Standard of Care Award
2008 Outstanding Growth Award
2003 Technology of the Year Patient Monitoring Award
2008 Outstanding Medical Device Company Award
2003 Platform ABBY for Innovations in Healthcare
2008 Best in Class Award
Financial Performance
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share information)
Year ended
January 3, 2009
Year ended
december 29, 2007
Revenue:
Product1
Royalty and license fee2
Total revenue
Cost of goods sold
Gross profit
Operating expenses:
Research and development
Selling, general and administrative
Antitrust litigation
Total operating expenses
Operating income
Non-operating income (expense):
Interest income
Interest expense
Other
Total non-operating income (expense)
Income before provision for income taxes
Provision for income taxes
Net income
Accretion of preferred stock
Undistributed income attributable to preferred stockholders
Net income attributable to common stockholders
Net income per common share:
Basic
Diluted
Weighted-average number of common shares:
Basic – Two class method
Diluted – Two class method
Basic – Single class method
Diluted – Single class method
$258,895
48,179
307,074
89,454
217,620
25,495
120,069
706
146,270
71,350
2,305
(753)
(511)
1,041
72,391
40,464
31,927
—
—
$31,927
$0.57
$0.53
$199,684
56,602
256,286
73,606
182,680
22,960
91,234
1,537
115,731
66,949
2,361
(2,475)
1,287
1,173
68,122
25,867
42,255
(4,837)
(14,339}
$23,079
$0.71
$0.60
N/A
N/A
56,320,712
60,190,335
16,654,586
20,732,872
54,660,216
59,829,198
1
2
Includes related party product revenue of $0, and $20,100 for the years ended January 3, 2009, and December 29, 2007, respectively.
Includes related party royalty revenue of $0, and $321 for the years ended January 3, 2009, and December 29, 2007, respectively.
CONSOLIDATED STATEMENTS OF CASh FLOWS (in thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Year ended
January 3, 2009
Year ended
december 29, 2007
$31,927
$42,255
Depreciation and amortization
Share-based payment
Loss on disposal of property and equipment
Provision for doubtful accounts
Provision for obsolete inventory
Provision for warranty costs
Provision for deferred income taxes
Income tax benefit from exercise of stock options
Excess tax benefits from share based payment arrangements
Changes in operating assets and liabilities:
Increase in accounts receivable
(Increase) decrease in royalties receivable
(Increase) decrease in accounts receivable from related parties
Increase in inventories
Increase in deferred cost of goods sold
Increase in prepaid expenses
(Increase) decrease in prepaid income taxes
(Increase) decrease in other assets
Increase in accounts payable
Increase (decrease) in accounts payable to related parties
Increase in accrued compensation
Increase (decrease) in accrued liabilities
Increase (decrease) in income taxes payable
Increase in deferred revenue
Increase in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
Increase in intangible assets
Increase in restricted cash
Cash paid for acquisition
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from initial public offering, net of proceeds
Proceeds from issuance of long-term debt
Repayments on long-term debt
Proceeds from issuance of common stock
Excess tax benefits from share based payment arrangements
Dividends paid
Purchase of treasury stock
Net cash provided by (used in) financing activities
Effect of foreign currency exchange rates on cash
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
5,745
7,716
91
108
1,352
1,646
447
17,201
(1,889)
(6,244)
2,491
3,053
(5,588)
(2,232)
(54)
2,376
1,163
1,847
(583)
3,121
(2,485)
12,754
111
4,104
78,178
(6,852)
(2,523)
(67)
—
(9,442)
—
—
(30,436)
9,755
1,889
(13)
—
(18,805)
246
50,177
96,733
$146,910
5,263
3,892
—
(25)
1,155
1,482
2,696
60
(144)
(3,269)
(12,577)
(953)
(7,021)
(4,306)
(1,727)
(3,247)
(2,210)
4,345
99
53
19
(1,110)
2,784
1,309
28,823
(5,325)
(1,641)
—
(187)
(7,153)
47,849
20,075
(10,158)
831
144
(37,350)
(581)
20,810
(1,129)
41,351
55,382
$96,733
NOTE: The Consolidated Balance Sheets, Consolidated Statements of Income, and Consolidated Statements of Cash Flows are derived from our Audited
Consolidated Financial Statements, as published in our Form 10-K filed with the Securities and Exchange Commission on March 4, 2009.
Forward-looking Statements
This document may include forward-looking statements. These statements include but are not limited to: statements
regarding our goals and focus; estimates about our future market potential; our belief that we will continue to develop
“breakthrough” technologies; and statements regarding expectations for total hemoglobin (SpHb). These forward-looking
statements are based on current expectations about future events affecting us and are subject to uncertainties and
factors, all of which are difficult to predict and many of which are beyond our control, including but not limited to: risks
related to obtaining regulatory approval from the U.S. Food and Drug Administration (FDA) and other regulatory agencies;
dependence on our patents and proprietary rights; the development or availability of competitive products or technologies;
our assumption that Masimo SET and Masimo Rainbow SET will deliver a sufficient level of clinical improvement over
alternative pulse oximetry and patient-monitoring systems to allow for rapid adoption of the technology; and other factors
discussed in the “Risk Factors” section of our annual report on Form 10-K for the year ended January 3, 2009, filed with
the Securities and Exchange Commission (SEC) on March 4, 2009. 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. We do
not undertake any obligation to update, amend, or clarify these forward-looking statements or the risk factors contained in
our annual report on Form 10-K for the year ended January 3, 2009, whether as a result of new information, future events,
or otherwise, except as may be required under the federal securities laws.
NOTE REGARDING THIS ANNUAL REPORT:
Please note that this annual report does not constitute the Company’s “annual report to security holders” for purposes
of the requirements of the Securities and Exchange Commission. For a copy of the Company’s annual report to security
holders required under Rule 14a-3 of Regulation 14A of the Securities Exchange Act of 1934, as amended, please refer to the
Company’s annual report on Form 10-K for the fiscal year ended January 3, 2009.
masimo ExECutivE maNaGEmENt tEam
masimo Board oF dirECtors
Joe E. Kiani
Chief Executive Officer
Ammar Al-Ali
Chief Technical Officer
Olivier Berthon
President, Masimo Europe
Jon Coleman
President, International
Mark P. de Raad
Executive Vice President &
Chief Financial Officer
Rick Fishel
President of Masimo Americas &
Global OEM Business
David Goodman, MD, MSE
Executive Vice President,
Business Development
Paul Jansen
Executive Vice President, Marketing
Joe E. Kiani
Chairman of the Board of Directors
Steven J. Barker, M.D., Ph.D.
Director
Edward L. Cahill
Director
Robert Coleman, Ph.D.
Director
Sanford Fitch
Director
Jack Lasersohn
Director
Yongsam Lee
Executive Vice President, Operations
& Chief Information Officer
Tetsuro Maniwa
President, Masimo Japan
Stephen M. Moran, Esq.
General Counsel and Secretary;
Executive Vice President, Human
Resources
Michael O’Reilly, MD, MS
Executive Vice President,
Medical Affairs
Stephen Paul
Vice President, US Hospital Sales
Anand Sampath
Executive Vice President,
Engineering
40 Parker
Irvine, CA 92618
Tel: 949.297.7000
www.masimo.com
© 2009 Masimo Corporation. Masimo, SET, Rainbow SET, SpHb, SpCO, SpMet, SpOC, PVI, Signal Extraction Technology, Pulse CO-Oximetry, Patient SafetyNet, Radical-7,
Rad-87, Rad-57, Rad-8, Rad-5, Rad-5v, SatShare and Powered by Fascination are trademarks, registered trademarks or servicemarks of Masimo Corporation. All rights reserved.
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