Closer to the Heart®
Closer to the
Heart
For over 20 years, Masimo has been the leader in developing
breakthrough noninvasive monitoring technologies. But what
sets Masimo apart is not just what we do, but why and how we
do it. We call it staying “Closer to the Heart”, an attitude and
philosophy that permeates everything we do.
Closer to the Heart means always doing what is right in our hearts – not just what
is immediately rewarding. By staying Closer to the Heart, we remain focused on:
> Solving unsolvable problems by getting to the heart of the issue
> Protecting patients by having the heart to go after the clinical solutions
that are needed – even when the path is long and uncharted
> Innovating for the future to allow clinicians to get at the heart
of what is wrong with their patients
2
3
A Letter from the Chairman & CEO
DELIVERING ON OUR MISSION AND GUIDING PRINCIPLES
Over 20 years ago, Masimo started with a bold mission to improve patient outcomes and reduce the
cost of care by taking noninvasive monitoring to new sites and applications. We also set forth guiding
principles that stay with us today:
> Remain faithful to your promises
> Strive to make each year better than the year
and responsibilities
before both personally and for the team
> Thrive on fascination and accomplishment
> Make each day as fun as possible
and not on greed and power
> Do what is best for patient care
In Masimo’s 20th anniversary year, we celebrated by launching more breakthrough noninvasive
measurements, growing the number of customers and partners, and expanding the markets for our
products. In the process, we delivered record 2009 fi nancial results in a challenging global economy.
STAYING CLOSER TO THE HEART
Much has changed since 1989, when I founded Masimo in
By standing and striving for truth while relentlessly pursuing
my home. But after two decades of technical innovation,
our mission and adhering to our guiding principles, we
broad clinical impact, and solid growth, one very important
have remained Closer to the Heart and focused on solving
thing has remained the same – our commitment to staying
unsolvable problems, protecting patients, and innovating
Closer to the Heart. From the outset, Masimo resolved to
for the future. In the process, we have built an enterprise in
be diff erent from any other company. We didn’t just set
which over 2,000 talented people deliver on their promises
out to create breakthrough technologies, we also wanted
in an environment where fascination, accomplishment,
to impact patient lives more signifi cantly than any patient
and fun can thrive.
monitoring company. And at the same time, by the way we
conducted ourselves, we truly hoped to improve the way
business is practiced in our industry.
‘89
Company founded by Massi Joe E. Kiani.
Mohamed Diab joins six months later and
Masimo (“Massi” + “Mo”) is formed
20 YEARS OF FIRSTS
Masimo’s innovation engine has fueled many
industry fi rsts over the past 20 years, signifi cantly
improving patient care in the process
Joe Kiani
Chairman & CEO
4
5
Installed Base
(estimated units)*
4,000
16,000
38,000
100,000
62,000
214,000
150,000
724,000
625,000
507,000
392,000
296,000
Revenues
(millions of dollars)
1.7
6.7
14.4
20.9
40.6
46.7
107.9
69.4
349.1
49.0
300.1
307.1
47.5
259.6
256.3
56.1
200.2
224.3
68.8
1111
155.5
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
* Excludes Handheld Devices
Product Revenues
Royalty Revenues
PROVING WE MEAN IT
lawsuit against Nellcor, we received enough funds to take
technological limitations of conventional pulse oximetry and
fi rst-ever noninvasive and continuous total hemoglobin
The pages of this annual report are full of innovations that are
advantage of the automatic stock redemption of early
made pulse oximetry accurate during challenging conditions.
(SpHb®) and oxygen content (SpOC™) monitor, which
testaments to everything we originally set out to accomplish.
investors. While this would have resulted in great personal
Masimo’s success in solving this previously “unsolvable”
we believe will have a profound impact on healthcare by
It has been said that the true test of character is what you
gain to some insiders, we instead let stockholders keep their
problem resulted in earning the trust and confi dence of
reducing unnecessary blood transfusions and allowing earlier
do when no one else is looking. While less noticeable, there
preferred shares and fully benefi t from a large dividend while
clinicians worldwide. Approximately 10 years after the
detection of bleeding for more timely intervention. At the
have been many other things that happened along Masimo’s
we geared up to take our company public.
introduction of Masimo SET, Masimo Rainbow® SET has
end of 2009, we received FDA clearance for our breakthrough
journey that also stand as proud examples of the promises
ushered in noninvasive and continuous measurements
Masimo Rainbow Acoustic Monitoring™ technology, which
we made to ourselves 20 years ago.
When other companies refused to provide their pulse
that previously required invasive procedures, allowing
provides noninvasive and continuous respiration rate (RRa™)
When we discovered our Rad-9® product (acquired in 2002
liabilities vis-à-vis high-risk patients, we decided to make our
patients in ways they never thought possible.
patient compliance. We believe Rainbow Acoustic Monitoring
oximeters for use in home care because of the potential
clinicians to make earlier and better decisions to care for
monitoring that is accurate, easy-to-use, and enhances
from one of our OEMs) could visually but not audibly alarm if
products available because we knew they provided the best
a sensor failed, we proactively issued a recall for the device
and sometimes only solution possible for patient care. When
to ensure the highest level of patient safety – while the FDA
we won the antitrust lawsuit against Nellcor in Federal Court,
stated it didn’t require one as the behavior met industry
we kept fi ghting for a fi nal ruling so our case could help other
standards. When no other pulse oximetry company put two
companies avoid what we experienced – instead of focusing
speakers in their devices to ensure that patient alarms would
on a possible large settlement. And when the fi nal rulings were
be heard, even in the rarest cases of component failure, we
in, instead of banking the legal proceeds, we used a signifi cant
looked beyond product costs and did it for all of our bedside
portion of those funds to set up the Masimo Foundation for
devices anyway. When we won the patent infringement
Ethics, Innovation, and Competition in Healthcare.
‘95
Masimo SET Pulse Oximetry
First Measure-through Motion and Low Perfusion
pulse oximetry – debuts at the Society for
Technology in Anesthesia and wins Excellence
in Technology Innovation Award
CONTINUING INNOVATION
Masimo’s innovation engine has fueled many industry fi rsts
over the past 20 years, which have signifi cantly improved
patient care and reduced costs. Masimo SET® overcame the
‘95
MS-1 Board™
Masimo SET overcame the
technological limitations of
conventional pulse oximetry and
made pulse oximetry accurate
during challenging conditions.
will make a signifi cant diff erence in the way healthcare is
provided by allowing more patients in all areas of the hospital
to be monitored more safely than ever before.
As 2009 drew to a close, we also received word that a
landmark study would soon be published showing that
Masimo SET pulse oximetry and Patient SafetyNet™ helped
clinicians caring for post-surgical patients on the general
fl oor dramatically improve patient care, decreasing rescue
In early 2009, we continued to enhance the value of our
events and intensive care transfers while also providing
Masimo Rainbow SET technology platform by adding new
a signifi cant positive fi nancial impact. We know that
measurements, starting with the full market release of the
many lives will be saved and unnecessary costs avoided
as Masimo’s technologies are used on the general fl oor in
hospitals worldwide.
‘95
Diagnostic-Quality Pleth Waveform
First true diagnostic-quality
pleth waveform
PI
‘95
Perfusion Index
First accurate quantifi cation
of amplitude of the pleth
waveform to 0.02%
6
7
THE MASIMO PRODUCT OFFERING
CIRCUIT BOARDS
MONITORS
PATIENT SAFETYNET SYSTEM
SENSORS/CABLES
The leading pulse oximetry solution, available in more than
100 OEM monitors from 50 leading brands.
A complete line of bedside and handheld monitors for clinicians
in acute and alternate care settings.
Wireless remote monitoring and clinician notifi cation system
designed to keep patients safe on general care fl oors.
Available for either single- or multi-patient use with over 100 diff erent
sensor and cable combinations for virtually every clinical need.
INCREASING MARKET ADOPTION FOR BETTER
disease in newborns, reduce medical errors in critical care,
CARE AT A LOWER COST
wean patients from the ventilator faster, improve fl uid
Hospitals around the world continue to see signifi cant
management, and save lives and costs on the general
advantages provided by Measure-through Motion and Low
fl oor. These improvements in the process of care have
Perfusion Masimo SET pulse oximetry. We shipped 111,000
resulted in real cost savings to hospitals using Masimo
drivers in 2009, increasing our estimated worldwide
technologies. In total, we estimate that U.S. hospitals
installed base to over 700,000 drivers. We believe we
alone could save over $5 billion when their clinicians
Rainbow measurements have
Rainbow measurements have
also allowed us to increasingly
extend Masimo’s reach beyond
the hospital.
results in what proved to be a challenging global economy.
Our total revenues grew to $349.1 million while product
revenues rose 16% to $300.1 million and Rainbow revenues
rose 46% to $19.5 million. Net income grew from $31.9
million or $0.53 per diluted share in 2008 to $53.2 million
or $0.88 per diluted share in 2009. We anticipate that our
core business in Masimo SET pulse oximetry will continue
will see increased growth in our installed base as more
use Masimo technologies to their fullest potential.
GROWING OUR INTERNATIONAL FOOTPRINT
to grow steadily while Rainbow Pulse CO-Oximetry™ and
clinicians choose the Masimo Rainbow SET platform.
We estimate that U.S. hospitals
alone could save over $5 billion
when their clinicians use Masimo
technologies to their fullest potential.
EXPANDING TO NEW MARKETS
Masimo SET has allowed pulse oximetry to succeed in
markets where conventional pulse oximetry has failed,
including home and long-term acute care facilities.
Rainbow measurements have also allowed us to
increasingly extend Masimo’s reach beyond the hospital,
from the detection of carbon monoxide poisoning at the
Recognizing the growing international demand for our
Rainbow Acoustic Monitoring will increasingly contribute
products, we opened our new international operations
to our growth as more OEM partners integrate and more
center in Neuchâtel, Switzerland in 2009. Staff ed with a
hospitals adopt Rainbow technologies.
dedicated team in key business areas – all focused exclusively
on servicing our growing international customer base –
LOOKING TO THE FUTURE, BUILT ON THE
Neuchâtel will be the nerve center of our international
SOLID FOUNDATION OF THE PAST
operations. Ultimately, this will ensure that we are proactively
With a 20-year track record of industry fi rsts, a talented and
and aggressively working to meet the needs of healthcare
dedicated team of individuals, and a continued commitment
Masimo SET has been proven to help clinicians reduce
scene of a fi re to hemoglobin spot-check testing in the
providers and patients in international markets.
to staying Closer to the Heart, we are confi dent our greatest
retinopathy of prematurity and detect congenital heart
physician offi ce. And as more healthcare professionals
contributions lie ahead. Today we renew our pledge made
gain access to our products, we know that more lives
PERFORMING IN A CHALLENGING CLIMATE
in 1989 – to impact patient lives in a way that no patient
will be improved and saved.
By helping clinicians improve the quality and effi ciency of
monitoring company has done before and to continue to
patient care, we delivered another year of record fi nancial
change the way business is practiced in our industry.
‘97
Study shows Masimo SET sensitivity
and specifi city exceeds competing
pulse oximeter technologies1
‘96
LNOP® Sensors
Highest signal-to-noise ratio sensor with non-
absorbent material, rejuvenating adhesive,
and replaceable tapes – minimizing waste
‘98
Study shows Masimo LNOP
sensors last nearly twice as long
as the market leading adhesive
disposable sensors2
Best personal regards,
Best personal regards,
‘98
IVY 2000™ Pulse Oximeter
First blue LCD display
Joe Kiani
Joe Kiani
Chairman & CEO
8
9
Closer to the
Heart
of Solving
Unsolvable
Problems
10
11
Signal Extraction Technology®:
Solving the “Unsolvable”
Twenty years ago, two young engineers asked themselves why pulse oximetry
wouldn’t work during patient motion and low perfusion – and by doing so,
set a new course that created a revolution in patient monitoring.
OVERCOMING THE LIMITATIONS OF CONVENTIONAL PULSE OXIMETRY
Since its inception, pulse oximetry was
Conventional pulse oximetry works
pulsating component is arterial blood.
plagued by unreliability when it was
under the assumption that by looking
Unfortunately for conventional pulse
needed most – during patient motion
at only the pulse and normalizing the
oximetry, venous blood moves every
and low perfusion. The industry had
pulsating signal over the non-pulsating
time the patient moves or breathes.
given up and considered the problem
signal, oxygen saturation (SpO2) can
This causes conventional pulse
“unsolvable”. Clinicians were forced to
be measured without calibration.
oximeters to display false low or high
live with the results – excessive false
Although this was a big step forward in
SpO2 and pulse rates – resulting in
alarms, delayed notifi cation due to long
the evolution of pulse oximetry, it has
false alarms as high as 90% in ICUs
averaging times, inaccurate data, and
one major fl aw – it assumes the only
and recovery rooms.
an inability to obtain data on the most
critical patients. Patient care suff ered.
‘98
SmarTone™
Ability to maintain saturation
tones with variable pitch during
low signal-to-noise conditions
FALSE ALARM REDUCTION
LARM REDUCCTIOCTIO
LARM REDUC
S
Conventional pulse oximeters are
a fair-weather friend. Masimo SET
is a foul-weather friend. ”
JEREMY SWAN, MD
Former Chairman of Masimo’s Scientifi c Advisory Board and Chairman Emeritus
Cedars-Sinai Medical Center’s Division of Cardiology
LARM DETECCTIOCTIO
LARM DETEC
TRUE ALARM DETECTION
UNLEASHING BREAKTHROUGH PERFORMANCE
When Joe Kiani and Mohamed Diab looked at the same
Excellence in Technology Innovation Award. Thereafter,
pulse oximetry signal diff erently than anyone had before,
skeptical clinicians around the world sought actively
they created possibilities that never before existed.
to compare Masimo SET to the best pulse oximetry
By employing advanced signal processing techniques
technologies other companies had to off er. But in study
– including parallel engines and adaptive fi lters – they
after study, the breakthrough signal processing of
believed they could fi nd the true arterial signal that would
Masimo SET consistently resulted in signifi cantly fewer
allow accurate monitoring of arterial oxygen saturation and
false alarms and far superior true alarm detection.
pulse rate even during the most challenging conditions.
Signal Extraction Technology, or Masimo SET, assumes
With Masimo SET, false alarms have been reduced by over 95%
that both the arterial and venous blood can move and
while true alarm detection has increased to over 97%3 – even
uses parallel signal processing engines – DST,® SST,™ FST,®
during the challenging conditions of motion and low perfusion.
and MST™ – to separate the arterial signal from sources of
noise (including the venous signal) to measure SpO2 and
pulse rate accurately, even during motion.
After six years of dedicated and focused research and
development, Masimo SET debuted in 1995 at the Society
for Technology in Anesthesia and won the prestigious
‘98
SofTouch™
First sensors designed
for sensitive skin
of neonates
‘98
First FDA 510K clearance for
Measure-through Motion
pulse oximetry
‘98
ll
Datascope, along with multiple OEMs,
begins worldwide commercialization
of Masimo SET integrated in their
patient monitors
12
13
The Gold Standard
Pulse Oximetry Solution
Masimo SET is the world’s leading pulse oximetry technology, proven by
both independent and objective research and the real-world success of
our customers and partners.
THE CHOICE OF CLINICIANS IN THE WORLD’S LEADING HOSPITALS
Because of its unmatched accuracy and
Masimo SET pulse oximetry technology,
the patients who need the most
reliability, clinicians at well over 2,000
more are converting every day.
attention. With more trustworthy
hospitals around the world count on
measurements, clinicians can more
Masimo SET every day to help them
These hospitals and clinicians trust
tightly control oxygenation levels.
care for patients. And while more than
Masimo SET to help them deliver the
And with more timely detection of
half the hospitals on the U.S. News &
most eff ective and effi cient patient
true events, clinicians can intervene
World Report Honor Roll – including four
care possible. With signifi cantly fewer
earlier for better patient outcomes
of the top fi ve – have already integrated
false alarms, clinicians can focus on
and improved patient safety.
INTEGRATED IN MORE INDUSTRY-LEADING PRODUCTS
THAN ANY OTHER PULSE OXIMETRY TECHNOLOGY
Each company manufacturing
– available in more than 100 OEM
multiparameter monitors has a
monitors from 50 leading
choice as to which pulse oximetry
brands. In many of
technologies it off ers in its products.
these monitors,
Today, Masimo SET is integrated in
Masimo SET is the
more industry-leading products than
only pulse oximetry
any other pulse oximetry technology
technology provided.
VALIDATED BY INDEPENDENT AND OBJECTIVE RESEARCH
To date, more than 100 independent and objective
providing clinicians with unmatched sensitivity and
peer-reviewed studies have shown that Masimo SET
specifi city to make critical patient care decisions.
outperforms all other pulse oximetry technologies,
)
%
(
e
t
a
R
m
r
a
l
A
e
u
r
T
100
90
80
70
60
50
40
30
20
10
00
Philips 24C
Philips CMS-B
Datex-Ohmeda 3740
Nellcor N-395
Datex-Ohmeda AS-3
Datex-Ohmeda 3800
Datex-Ohmeda 3900
Nellcor N-200
Philips CMS
Nellcor N-295
GE 8000
Novametrix MARS
Nellcor NPB-190
Nellcor NPB-180
Novametrix 520A
Spacelabs 90308
Nonin 8600
BCI 3304
Criticare 5040
00
10
20
30
40
50
60
70
80
90
100
False Alarm Rate (%)
True and false SpO2 alarm rate of Masimo SET versus 19 competing pulse oximetry technologies.4
“ Masimo SET is advantageous because even though it signifi cantly reduces
false alarms, it doesn’t do that by ignoring physiological changes. ”
CHRISTIAN POETS, MD
Director, Neonatal Intensive Care Medical School, Hanover, Germany
‘99
First FDA 510K clearance
for Measure-through Low
Perfusion pulse oximetry
‘98
Max™ Sensitivity Setting
Allowing reliable measurement in
the most challenging conditions
of low perfusion
‘00
Radical® Pulse Oximeter
First 3-in-1 pulse oximeter – standalone device
for bedside monitoring with detachable handheld
unit with built-in rotational display for portable
monitoring, and SatShare interface to upgrade
conventional pulse oximetry in multi-parameter
patient monitors to Masimo SET
‘00
Signal IQ®
First to quantify signal quality and give clinicians
confi dence in the displayed SpO2 and pulse rate
values, even during motion and low perfusion
‘00
FastSat®
Enabling accurate tracking of rapid
saturation changes
14
15
Helping Change an Industry
Masimo has also helped change and improve healthcare by being a champion for
free choice in the market and the protection of new technology development.
FREEING HOSPITALS TO CHOOSE THE BEST TECHNOLOGY FOR PATIENT CARE
GROUP PURCHASING REFORM
and bringing a successful antitrust suit against Nellcor, a
A short decade ago, many hospitals wanted to choose
division of Tyco Healthcare (now Covidien). Masimo has also
Masimo SET pulse oximetry to provide the best care for their
worked diligently to overcome the decision of some patient
patients, but could not do so because their group purchasing
monitoring companies to limit access to technologies with
organization (GPO) did not off er Masimo SET – instead
proven patient care benefi ts.
engaging in exclusive arrangements with a competitor which
inhibited Masimo’s innovative technology from entering the
market. The struggles that hospitals endured fi ghting to
choose Masimo created broader awareness of the need for
GPO reform – leading to fewer exclusive arrangements for
higher-priced and sometimes even inferior products.
“ Masimo has led the industry’s
eff orts to encourage
innovation and free choice
by healthcare providers. ”
FIGHTING ANTICOMPETITIVE BEHAVIOR
When large medical technology companies tie discounts
MARK LEAHEY
President & CEO of the Medical Device Manufacturers Association
of unrelated products to the exclusive purchase of their
These eff orts are just a few examples of how Masimo has
products across multiple categories, it can be considered
stood for transparency and truth to open markets so that
anticompetitive if it is done in a large enough market.
medical products are judged on their individual merits
Masimo has fought hard to prevent this type of behavior,
rather than on artifi cial restraints on hospital purchasing.
testifying twice at Senate Hearings regarding these practices
With open competition in the pulse oximetry market, pulse
oximetry pricing has decreased by an estimated 30% or
more over the last decade while in the previous decade
prices were estimated to have hardly changed. But more
importantly, countless lives have either been saved or
improved as a direct result of access to Masimo SET.
‘00
FastStart™
SpO2 value in less than 10 seconds from
the time the instrument is turned on
16
“ Masimo’s victory against Nellcor buttresses the importance of
patenting in guarding the innovations of the emerging companies
against established market participants. ”
FROST AND SULLIVAN
ENABLING INNOVATION THROUGH PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
Innovation can fl ourish if companies have the ability to
some chose to mimic Masimo technology instead.
protect their inventions for the term of their patents.
Masimo was forced to defend its intellectual property
The patent system is designed to protect intellectual
from Nellcor, and the court ruled that Nellcor infringed
property rights, but some companies still infringe on
on Masimo’s patents and ordered that Nellcor’s infringing
legitimate patents of small companies who are unable to
products should be enjoined. The decision for Masimo
defend themselves. While Masimo made its revolutionary
served as a larger victory for stimulating innovation that
Masimo SET pulse oximetry available to every company,
is critical to advancing patient care in the future.
‘02
Study shows Masimo SET helps wean
patients from the ventilator faster
and reduce FiO2 levels6
‘00
Study shows Masimo SET helps increase
caregiver effi ciency and reduce arterial
blood gas measurements5
‘02
Study shows Masimo SET linked to
reduced medical errors in critical
care medicine7
17
Closer to the
Heart
of Protecting
Patients
18
19
Focusing on the Most Vulnerable
From the very beginning, we have kept infants and children closest to our hearts and
focused on how our technologies could improve their care – even though the market
is considered small. As a result, Masimo leads the industry in solutions designed
exclusively for these patients with the brightest future.
ENABLING CONGENITAL HEART DISEASE DETECTION
The breakthrough performance of Masimo SET is often
at the time of hospital discharge after birth. While pulse
most appreciated by the clinicians caring for fragile
oximetry off ers a simple and cost-eff ective method to
newborns. Up to 30% of all congenital heart disease (CHD)
screen newborns for CHD, only Masimo SET pulse oximetry
deaths occurring in the fi rst year of life are unrecognized
has been shown to reliably assist in the detection of CHD.8
“ Screening all well babies in maternity units
with Masimo SET pulse oximetry signifi cantly
improves detection of duct-dependent CHD. ”
ANNE DE-WAHL GRANELLI, PhD
Queen Silvia Children’s Hospital
Gothenburg, Sweden
“ Masimo has helped save countless babies’ lives and plays a critical
role in helping to virtually eliminate severe infant eye damage. ”
AUGUSTO SOLA, MD
American Academy of Pediatrics Christopherson Award Winner
r
for his contributions to International Child Health
REAL-TIME NEWBORN MONITORING AND ASSESSMENT
PREVENTION OF RETINOPATHY OF PREMATURITY
When each second matters during newborn resuscitation,
Premature infants requiring neonatal intensive care need
the Masimo Newborn Sensor ensures the fastest response
enough oxygen to preserve vital organ function, but too
time at the highest sensitivity – allowing clinicians to
much oxygen can cause severe eye damage from retinopathy
focus on real-time patient management instead of the
of prematurity (ROP). Using Masimo SET to help more tightly
device. In addition, Masimo SET is increasingly being used
control oxygen therapy has been shown to help clinicians
to supplement the standard APGAR score to more reliably
dramatically reduce ROP.10
assess general newborn health.
EMPOWERING CARE FOR THE TINIEST AND
MOST FRAGILE PATIENTS
In cyanotic infants, only the Masimo Blue™ Sensor has been
proven accurate in oxygen saturations as low as 60% –
enabling accurate maintenance of targeted low saturation
levels.9 And for very low birth weight babies, only the
Masimo NeoPt-500™ Sensors are designed for both size
and performance in infants as small as 500 grams.
Center
Severe ROP
(pre-policy change)
Severe ROP
(post-policy change)
#1
#2
11.1%
with Nellcor
13.0%
with Nellcor
6.0%
with Masimo
13.0%
with Nellcor
%
Reduction
in ROP
40%
0%
The protocol and caregivers were identical in each center, but only
Center #1 switched to Masimo SET.10
‘03
Adaptive Probe Off Detection™ (APOD™)
Reducing false display of SpO2 values by
83% when the probe is not on the patient,
compared to competing pulse oximeters
Birth Weight
500 to 749 g
750 to 999 g
1,000 to 1,249 g
Severe ROP
(pre-policy change
without Masimo)
38%
12 - 15%
12 - 15%
Severe ROP
(post-policy change
with Masimo)
10 - 12%
0%
0%
‘03
Study shows Masimo SET linked to
reduced retinopathy of prematurity
in neonatal patients11
‘03
Rad-9® Pulse Oximeter
20
21
Improving Safety on the General Floor
As part of our mission to take noninvasive monitoring to new sites and applications,
Masimo SET has enabled accurate and reliable monitoring in care areas where
conventional pulse oximetry has faltered, such as the general fl oor of hospitals.
REDUCING RESCUES AND ICU TRANSFERS
For many years, clinicians have
that Masimo SET also improves
care in the OR, PACU, and ICU, we now
understood the risks of not
clinical outcomes in adults. After
believe that pulse oximetry will become
continuously monitoring patients on
implementing Masimo SET and Masimo
a standard of care on the general
the general fl oor. However, excessive
Patient SafetyNet remote monitoring
fl oor. With Masimo technologies on
false alarms due to patient motion
and wireless notifi cation in a post-
the general fl oor, clinicians can now
made improving the safety of these
surgical fl oor where only intermittent
be confi dent their patients are being
patients an elusive goal. In the
spot checking was used before,
watched even when they aren’t at
last decade, Masimo SET has been
Dartmouth-Hitchcock Medical Center
the bedside, while families can be
shown in multiple studies to improve
achieved 65% fewer rescue events,
assured their loved ones are receiving
the process of care in neonates
48% fewer ICU transfers, reduced
maximum protection.
and pediatric patients due to its
annualized ICU time by 135 days, and
Measure-through Motion and Low
had no sentinel events.12 Just as pulse
Perfusion performance, but a recent
oximetry has become a standard of
landmark study was the fi rst to show
DECREASE IN DISTRESS CODES AND
RESCUE ACTIVATIONS
DECREASE IN PATIENT TRANSFERS TO
INTENSIVE CARE UNITS
ICU DAYS SAVED ANNUALLY
In my opinion as Quality and Safety Offi cer, our study results strongly
demonstrate that continuous patient surveillance with Masimo
SET and Masimo Patient SafetyNet increases healthcare value by
signifi cantly improving clinical outcomes while reducing costs. ”
GEORGE BLIKE, MD
Dartmouth-Hitchcock Medical Center
PROVEN COST-EFFECTIVENESS
The landmark general fl oor study also demonstrated how
and reducing costs associated with emergency rescue
Masimo helped hospitals improve outcomes and decrease
events.13 With both the clinical and fi nancial rationale now
the cost of care. When translated into fi nancial benefi ts,
in place, hospitals are increasingly implementing general
the study showed that implementing Masimo SET and
fl oor monitoring with Masimo technologies.
Masimo Patient SafetyNet to more safely monitor post-
surgical patients could also have a signifi cant impact on
the hospital’s bottom line by increasing ICU bed availability
‘04
Rad-5® Handheld Pulse Oximeter
First handheld incorporating
Masimo SET
‘04
Blue™ Sensor
First sensor for accurate measurements
in cyanotic infants and children
‘04
Newborn™ Sensor
First sensor designed for
newborn monitoring
22
23
Expanding Impact Outside of the Hospital
Gold-standard Masimo SET is increasingly being used to enhance
the quality of patient care outside of the hospital.
A NEW LEVEL OF CARE IN THE HOME
For pediatric patients with life-threatening conditions requiring continuous pulse oximetry monitoring at home,
Masimo SET off ers the best pulse oximetry monitoring for parents caring for special needs children – dramatically
reducing false alarms that can complicate an already diffi cult situation.
“ I’m convinced that the Masimo
Rad-8® saved my baby’s life. ”
TIFFANY KELLOGG
Mother of Grayson, a child with severe medical problems
requiring home monitoring
“ Masimo technology has raised the bar in the
quality of care that can be delivered in a
post-acute setting – the right thing to
do for patient safety. ”
GENE GANTT, RRT
Linde Respiratory Support Services
ADDING A SAFETY NET IN POST-ACUTE CARE
As hospital costs rise, more patients are receiving care in long-
care facilities integrating Masimo SET bedside pulse oximeters
term acute care and skilled nursing facilities. A major challenge
and the Masimo Patient SafetyNet remote monitoring and
in these facilities is weaning patients off ventilator care, which
notifi cation system have experienced considerable reduction in
can put patients at increased risk of adverse events. Post-acute
rapid response activations as well as emergency “transfer outs”.
“ The sensitivity and motion
RELIABLE SLEEP LAB MONITORING
artifact rejection characteristics
of the non-Masimo SET pulse
oximeters we tested were not
adequate for a pediatric sleep
laboratory setting. ”
BOB BROUILLETTE, MD
Montreal Children’s Hospital
During sleep lab monitoring, conventional pulse oximetry
fails to provide the fi delity and accuracy required to help
clinicians detect signifi cant physiologic events. Masimo SET
technology is integrated in leading sleep lab monitoring
systems, enabling clinicians and patients to benefi t from its
unmatched reliability in this challenging environment.
‘04
LNCS® Sensors
Low noise cable sensor design enables mass market
appeal sensor for standardized connections to Masimo,
OEM, and a large number of competitor devices
‘05
Rainbow SET in MX-1® Board
First noninvasive blood
constituent platform
24
25
Breakthrough Noninvasive
Applications Made Possible
Our mission to take noninvasive monitoring to new sites and applications led us to
invent Rainbow technology and with it, Pulse CO-Oximetry, using more than seven
wavelengths of light and leveraging Masimo Signal Extraction Technology to detect
new blood constituents that previously required invasive procedures.
A DEADLY POISON REVEALED WITH SpCO®
Carbon monoxide (CO) poisoning is
SpCO is making an impact in
for hospitals that do have invasive
the most common cause of poisoning
emergency departments around
CO-testing capabilities, a large study
in industrialized countries, but is
the world, where many hospitals
showed that quick and painless SpCO
often misdiagnosed because its
do not even have on-site access
assessment helped clinicians identify
symptoms are similar to the fl u and
to a laboratory device that allows
60% more CO poisoning cases than
moderate poisoning is possible with
invasive CO measurement. And
with invasive testing alone.14
no symptoms at all. Our fi rst Rainbow
measurement was noninvasive
carboxyhemoglobin (SpCO), enabling
quick and easy assessment of CO
levels in the blood and faster detection
and treatment of CO poisoning.
“ We believe that all 50+ people in the hotel
would have been dead at dawn if it were not
for this lifesaving intervention from Masimo. ”
SKIP KIRKWOOD, MS, JD, EMT-P
Chief, EMS Division, Wake County Dept. of Emergency Services
Any fi refi ghter expo
“
CO poisoning or pres
with... symptoms
osed to
enting
s at an
incident where CO is p
should be assessed
poisoning with a
present
for CO
a Pulse
CO-Oxim
meter.
”
NATIONAL FIRE PROTECTION A
1584 FIRE REHAB
ASSOCIATION
B STANDARDS
SAVING LIVES EVERY DAY
In emergency medical services, SpCO is helping protect
brain damage. When even mild levels of CO are circulating in
both victims and fi rst responders from the dangers of
the blood, the heart and brain are robbed of critical oxygen.
CO poisoning. SpCO allows paramedics and emergency
This can cause mental confusion that leads to poor decision
medical technicians to quickly detect CO poisoning in
making and also increases the risk of heart disease or
homes, hotels, and places of work – enabling prompt
stroke – two conditions already accounting for nearly 50% of
treatment and removal of those exposed to deadly CO.
on-duty fi refi ghter deaths. These factors are why industry
leading organizations have recently lined up to support
SpCO is also helping fi refi ghters reduce the risk of CO
CO education and the National Fire Protection Association
poisoning that they face every day. Just one severe CO
(NFPA) introduced a new fi re rehabilitation standard – NFPA
poisoning nearly doubles the risk of premature death and
1584 – that requires on-scene CO assessment of fi refi ghters.
consistent CO exposure may cause long-term heart and
100%
Desat Index
Alarm Limit 93%
Low SpO2
Alarm Limit 90%
2
O
p
S
Time (in minutes)
20
40
60
80
‘05
3D Desat Index Alarm™
First alarm to alert clinicians to patterns
of transient desaturation that may
predict respiratory depression
SpCO
‘05
SpCO®
First noninvasive
carboxyhemoglobin
‘05
Rad-57™
First handheld capable of
noninvasively measuring carbon
monoxide levels in the blood
26
27
ENABLING QUICK TREATMENT WITH SpMet®
Masimo noninvasive methemoglobin (SpMet) allows
methemoglobinemia are used most often, such as
clinicians to rapidly detect methemoglobinemia
procedure labs and the operating room. This enables
and initiate immediate treatment to reduce patient
them to quickly adjust exposure to the dangerous
risk – especially in care areas where drugs that cause
drug and initiate potentially life-saving treatment.
# of Methemoglobinemia Cases
Patient Age
Care Areas
Fatalities
138
(2.5 cases per hospital per month)
4 days to
86 years
Surgery, intensive care, outpatient clinics, pediatrics,
emergency department, cardiac cath lab
1 fatality,
3 near fatalities
Results from a retrospective study at two teaching hospitals over a 28-month period, using laboratory CO-oximeter results and patient electronic
medical records.15
“ Masimo SpMet helps detect methemoglobinemia,
allowing clinicians to accurately diagnose and
treat this life-threatening condition. ”
MARK MACKNET, MD
Assistant Professor of Anesthesiology
Loma Linda University
Keeping Patients Safe From Hidden Dangers
Rainbow technology is also shielding patients from the unintended consequences of
drugs commonly given in hospitals and during certain procedures.
ADDRESSING THE RISK OF DANGEROUS DRUG REACTIONS
Many drugs commonly used in hospitals – such as lidocaine,
it is often unrecognized and undiagnosed. If not detected and
benzocaine, dapsone, and nitrates – cause a dangerous
treated immediately, it can result in avoidable injury or death.
reaction known as acquired methemoglobinemia that
reduces the delivery of oxygen to the tissues. While
methemoglobinemia can occur in all care areas and patients,
“ Acquired methemogloobinemia
is fairly common and ccauses
morbidity and mortality
in both the inpatient aand
outpatient settings. AAcquired
methemoglobinemia is
often unrecognized annd
thus untreated. ”
RACHEEL ASH-BERNAL, MD15
and other researchers at Joohns Hopkins Hospital
Medications Known to Cause Methemoglobinemia: Benzocaine, Cetacaine,
Chloroquine, Dapsone, EMLA topical, Flutamide, Lidocaine, Metoclopramide, Nitrates,
Nitric oxide, Nitroglycerin, Nitroprusside, Nitrous oxide, Phenazopyridine (Pyridium),
Prilocaine, Primaquine, Riluzole, Silver Nitrate, Sodium Nitrate, Sulfonamides
x
e
d
n
I
n
o
i
s
u
f
r
e
P
1.0
0.9
0.8
0.7
0.6
0.5
0.4
PI Baseline determined by the Radical-7
PI Delta % Change = 25
(within a 1 hour period)
Time
Alarm triggered
‘05
3D Perfusion Index Delta Alarm™
First alarm to alert clinicians of changing
peripheral perfusion status that may
indicate worsening condition
‘05
Study shows screening with
Masimo SET improves congenital
heart disease detection in newborns8
SpMet
‘06
SpMet®
First ever noninvasive
methemoglobin
28
29
Helping Improve Fluid Management with PVI®
Fluid administration is one of the most common hospital interventions. Although it is
critical to improving patient status and enabling end organ preservation, unnecessary
fl uid administration is associated with increased morbidity and mortality.
ASSESSING FLUID RESPONSIVENESS
Masimo continuous and noninvasive Pleth Variability Index (PVI)
to help assess which patients will become hemodynamically
has been shown in multiple studies to help clinicians assess fl uid
unstable with the addition of Positive End Expiratory Pressure
responsiveness in adult surgical and intensive care patients
(PEEP), which may allow clinicians to more carefully select
under mechanical ventilation.16, 17 PVI has also been shown
ventilator settings and monitor eff ects more closely.
AIDING CLINICIANS IN PATIENT RISK REDUCTION
A recent randomized trial showed that compared to
risk – as evidenced by lower lactate levels.18 By helping
standard care without PVI, clinicians using PVI were able to
clinicians maintain appropriate fl uid and oxygen levels
improve fl uid management and as a result, reduce patient
in the blood, important organs are protected.
“ With Masimo PVI, I can predict when my patients will benefi t from
fl uid administration – and when it might harm them. ”
MAXIME CANNESSON, MD
University of California, Irvine
)
%
(
y
t
i
v
i
t
i
s
n
e
S
100
80
60
40
20
0
0
Pleth Variability Index (PVI)
Arterial Pulse Pressure (APP)
Cardiac Index (CI)
Pulmonary Capillary Wedge Pressure (PCWP)
Central Venous Pressure (CVP)
Masimo PVI has been shown to help assess fl uid responsiveness as reliably as
new invasive parameters and better than traditional invasive parameters.
20
40
60
80
100
Adapted from Cannesson et al.16
100-Specificity (%)
‘06
First easy fi eld upgradability of
software through sensor port
PVI
‘07
Pleth Variability Index (PVI)®
First noninvasive and continuous
fl uid responsiveness
‘05
Radical-7™
First bedside Pulse CO-Oximeter
featuring color display screen
30
31
)
L
d
/
g
(
l
i
n
b
o
g
o
m
e
H
SpHb Monitoring During Surgery
Lab CO-Oximeter
SpHb
10.7
10.7
Track the patients’ rising
hemoglobin levels
as they happen
11.7
9.6
7.9
8.2
6.5
12
11
10
9
8
7
6
11.1
Know when the patients’
hemoglobin levels are
dropping between
lab tests
7.5
6.4
6.7
00:00 01:00 02:00 03:00 04:00
Actual data from a liver transplant case shows the precision of Masimo SpHb, illustrating how real-time SpHb monitoring
may facilitate earlier and better decision making. In this research case, SpHb values were blinded to the clinicians so that the
frequency of lab measurements was unaff ected.
Time (hours)
“ In cases of severe hemorrhaging during and after childbirth, SpHb has enabled us to
immediately identify and continuously assess blood loss severity to better manage
internal bleeding, prevent overloading of fl uid, and decrease maternal death. ”
MADHAVA KARUNARATHNA, MD
OB/GYN, Balangoda Hospital, Sri Lanka
Earlier and Better Decisions to Improve Patient Care
With the expansion of Rainbow measurements to include total hemoglobin, Masimo
technologies can now aid some of the most common, costly, and critical decisions
made in healthcare.
REDUCING UNNECESSARY BLOOD TRANSFUSIONS
While blood transfusions are critical to avoid organ damage
“ Masimo SpHb is an impressive new
and sustain life when hemoglobin levels are unstable
or very low, mounting evidence shows that transfusions
increase 30-day mortality by up to 38% and 30-day
morbidity by up to 40%19, 20 – with a cost up to $1,200 per
unit.21 Clinicians using Masimo SpHb report that it plays an
important role in helping them continuously identify stable
and safe hemoglobin levels that prevent unnecessary
blood transfusions, especially during surgery.
tool. I believe that the ability to
continuously trend hemoglobin will
be of tremendous value to us and
help us more safely guide patients
in surgery through recovery. ”
RONALD D. MILLER, MD
Professor of Anesthesia & Perioperative Care,
University of California, San Francisco
EARLIER INDICATION OF POTENTIAL BLEEDING
Total hemoglobin is among the most common invasive
noninvasive hemoglobin (SpHb) allows real-time hemoglobin
laboratory measurements performed in and out of the
assessment, which clinicians indicate has enabled them to
hospital and directly aids the assessment of blood loss.
more quickly identify blood loss. In these situations, earlier
However, intermittent hemoglobin measurements often
identifi cation allows clinicians to act sooner to treat
detect bleeding late, sometimes even hours or days after
the patient, which can make an enormous diff erence in
it has begun. For the fi rst time, Masimo continuous and
recovery and the ICU.
“ Masimo SpHb and PVI allow us to more tightly and proactively manage both
hemoglobin and fl uid levels, which optimizes surgical status and health management. ”
THOMAS CRIMI, MD
Director Blood Conservation Program
Brookdale University Hospital and Medical Center
‘07
Patient SafetyNet™
First remote notifi cation system
capable of Rainbow measurements –
with optional central monitoring
‘08
National Fire Protection Association
Releases NFPA 1584 standards for
fi re rehab and includes CO screening
during fi re rehab
SpHb
‘08
SpHb®
First noninvasive and
continuous total hemoglobin
32
33
Closer to the
Heart
of Innovating
for the Future
34
35
From Light to Sound: A New Measurement
Emerges from a New Signal with Masimo’s
Breakthrough Signal Processing
To expand the Rainbow platform’s promise of breakthrough noninvasive
measurements, Masimo is growing our optically based technologies to include
clinical measurements derived from sound with Rainbow Acoustic Monitoring.
PROTECTING MORE PATIENTS BY MONITORING EVERY BREATH
Continuous monitoring of respiration
continuous oxygenation and ventilation
is accurate, easy-to-use, and enhances
rate is especially important for
monitoring in all patients receiving
patient compliance.23 Masimo Rainbow
post-surgical patients receiving
opioid-based pain medications.22
Acoustic Monitoring may enable earlier
patient-controlled analgesia for pain
However, current methods for
detection of respiratory compromise
management. Conscious sedation can
respiration rate monitoring are limited
and patient distress – off ering a
induce respiratory depression and place
by accuracy and patient tolerance.
breakthrough in patient safety for post-
patients at considerable risk of serious
Masimo Rainbow Acoustic Monitoring
surgical patients on the general fl oor
injury or death. The Anesthesia Patient
now provides noninvasive and
and for procedures requiring
Safety Foundation recommends
continuous respiration rate (RRa) that
conscious sedation.
“ Breathing adequately is what matters most. Masimo Acoustic Respiration
Rate automatically and continuously monitors the breathing status of
post-surgical patients – alerting clinicians to the fi rst sign of an abnormal
or compromised breathing pattern. ”
MICHAEL RAMSAY, MD
Chief of the Department of Anesthesiology and Pain Management,
Baylor University Medical Center, Dallas, TX
Rainbow Acoustic Monitoring features
an innovative adhesive sensor with an
integrated acoustic transducer that is easily
and comfortably applied to the patient’s neck.
Using patented acoustic signal processing
that leverages Masimo’s revolutionary Signal
Extraction Technology (SET), the respiratory
signal is separated from background sounds
and processed to display continuous
respiration rate.
ALLOWING MORE PATIENTS TO BE MONITORED, MORE SAFELY THAN EVER BEFORE
When Masimo Rainbow Acoustic Monitoring is used in
SpO2, ventilation with the breakthrough RRa, circulation
conjunction with Masimo Rainbow SET Pulse CO-Oximetry
with Masimo Measure-through Motion pulse rate (PR), and
and the Masimo Patient SafetyNet Remote Monitoring
potential bleeding with Masimo continuous and noninvasive
and Clinician Notifi cation System, clinicians can follow key
hemoglobin (SpHb) – enabling clinicians to monitor more
indicators of oxygenation with Masimo ‘gold standard’
patients, more safely than ever before.
‘08
Study shows PVI predicts fl uid
responsiveness during surgery16
‘08
Study shows SpCO identifi es
unsuspected CO poisoning in the ER14
‘08
Rad-87™
First pulse oximeter with
integrated 802.11 wireless radio
36
37
Advancing the Gold Standard
Masimo’s newest innovations demonstrate that our commitment to pulse oximetry
technology has never been stronger.
MORE MEANINGFUL NOTIFICATION WITH ADAPTIVE THRESHOLD ALARM™
False and nuisance alarms can
100
98
96
94
92
90
88
86
84
82
80
desensitize clinicians. Masimo SET
broke through past barriers and
reduced false alarms by over 95% so
in an area like the ICU where up to
90% of all alarms were false, today,
%
2
O
p
S
with Masimo, they are only 5%.
Masimo Adaptive
Threshold Alarm can
reduce non-actionable
Sp02 alarms by
up to 86%.
(cid:116) (cid:116)
(cid:116) (cid:116)
100
150
200
250
Time in Minutes
Baseline
SpO2
Fixed Threshold Alarm Event
Adaptive Threshold Alarm Event
(cid:116)
Adaptive Threshold
Fixed Threshold
Alarm frequency of fi xed threshold alarm and Adaptive Threshold Alarm, both with 10 second delay.
(cid:116)(cid:116)(cid:116)(cid:116)
300
Despite the dramatic reduction in false
and delays sometimes reduce non-
notify clinicians only when signifi cant
alarms Masimo has brought forth, there
actionable alarms but with potentially
changes in physiology have occurred.
are still true alarms that are considered
delayed notifi cation of signifi cant events.
Evidence from over 32 million data
non-actionable by some clinicians.
points shows that Masimo Adaptive
Conventional approaches to alarm
With false alarm problems largely
Threshold Alarm can reduce non-
SUPERIOR CENTRAL MONITORING WITH THE
FIRST SINGLE-PATIENT-USE EAR SENSOR
Monitoring oxygenation centrally can be benefi cial,
but to date, the available single-patient-use sensors
for the head have been fraught with inaccuracy and
unreliability. That’s why, working with clinicians at the
University of California, San Diego, Masimo developed
the fi rst-ever, single-patient-use ear sensor that is
placed securely in the concha, so clinicians can combine
Masimo SET performance and central monitoring
to provide reliable and responsive assessment of
oxygenation during surgery and resuscitation.
ENHANCING COMFORT DURING LONG-TERM
MONITORING WITH CABLED SENSORS
In the past, single-use pulse oximeter sensors have been
limited in their comfort and fl exibility by the size of the
emitter and detector. After an intense development eff ort,
Masimo’s new SpO2 sensor components are nearly half the
thickness of those of our competitors – increasing patient
comfort by increasing sensor fl exibility and reducing bulk
while maintaining the Masimo SET performance that
management were developed mainly to
solved, Masimo’s Adaptive Threshold
actionable SpO2 alarms by up to 86%.24
clinicians expect.
address the problems of conventional
Alarm was designed to deal with non-
And together with Masimo SET, false
pulse oximetry’s inability to measure
actionable alarms, breaking through the
alarms and non-actionable alarms can
through motion. Fixed alarm thresholds
limited alarm paradigms of the past to
be reduced by up to 99%.
Relative size of new detector (left) and emitter (right)
‘08
NeoPt-500™
First sensor for extremely
low birth weight babies
‘08
SpCO and SpMet receive CPT
reimbursement codes and
Medicare pricing in the U.S.
‘09
Medtronic Physio-Control becomes fi rst
OEM to begin worldwide commercialization
of Masimo Rainbow SET SpCO & SpMet
integrated in their defi brillators
‘09
Study shows PVI improves fl uid
management and decreases lactate
levels in surgical patients18
‘09
Pronto®
First noninvasive spot-check
hemoglobin device
RRa
‘09
Rainbow Acoustic Monitoring (RAM™)
First noninvasive and continuous
respiration rate with acoustic sensor
38
39
Industry-Leading Green Solutions
Masimo off ers more products than any other pulse oximeter company to
help hospitals meet environmental objectives while reducing costs.
MULTIPLE OPTIONS TO REDUCE WASTE AND COST
GREEN DESIGNED IN™ WITH RESPOSABLE™ (REUSABLE + DISPOSABLE)
The Masimo ReSposable Sensor System is based on more
the best features of our LNOP, LNCS, M-LNCS, and Rainbow
than ten years of research and development stemming from
sensors into an innovative design that features a reusable
the feedback of hundreds of clinicians who told us what they
optical sensor (ROS™) for use over multiple patients and a
wanted most in a sensor – less waste and more value with
disposable optical sensor (DOS™) for single-patient use.
Masimo LNOP Sensors were the fi rst green single-use
For hospitals seeking the best in performance, convenience,
superior performance. The ReSposable system combines
sensors to work accurately through motion and low
waste reduction, and cost-eff ectiveness, our new ReSposable
perfusion. In addition, our reprocessed sensors are the only
Sensor line off ers a revolutionary combination of benefi ts –
reprocessed sensors guaranteed to provide new sensor
equivalent to 100% recycling at the point of care.
performance because we replace every emitter and detector.
Masimo ReSposable Sensors
can cut an average hospital’s
waste by 75% – over 1,700
pounds per year.25
Standard
Sensors
Masimo LNCS
Reprocessed
Sensors
Masimo LNOP
Sensors
Masimo
ReSposable
Sensors
Foundation for Ethics,
Foundation for Ethics,
Innovation, and Competition
in Health Care
‘10
Masimo foundation created
with $10 million gift
‘09
ReSposable™ Sensor System
Featuring performance of adhesive
sensors with Green Designed In™
‘10
Study shows Masimo SET and Masimo Patient
SafetyNet improve outcomes in adults on
the general fl oor – fewer rapid response
activations, ICU transfers, and ICU days12
‘10
Study shows PVI helps assess
which patients will become
hemodynamically unstable
with the addition of PEEP26
‘09
SpHb receives new CPT
reimbursement code and
Medicare pricing in the U.S.
40
41
Integrating Measurements to
Enable Meaningful Use
Quick and Painless
Anemia Assessment
Today’s challenging hospital environment exposes clinicians to increasing amounts of
Masimo Pronto-7™ is designed specifi cally for faster and more accurate
information with expanding documentation requirements. Masimo innovation simplifi es
noninvasive hemoglobin (SpHb) spot-check testing, along with
and automates this process, streamlining workfl ow and improving patient safety by
SpO2, pulse rate, and perfusion index.
empowering clinicians to focus on patients rather than technology.
WIRELESS DEVICES AND SYSTEMS TO KEEP CLINICIANS AND PATIENTS CONNECTED
New standards for hospitals require meaningful use of
information systems. The Masimo Connectivity Engine
the electronic health record (EHR) by charting changes
signifi cantly reduces the time and complexity to
in vital signs as well as documentation of interventions.
integrate and validate custom HL7 implementations,
Masimo enables automatic recording and transmission of
and demonstrates Masimo’s commitment to
key data into the EHR so clinicians spend their time caring
innovation that automates patient
for patients, not recording data. Masimo’s pulse oximeters
care with open, scalable,
also feature a built-in wireless radio for communication
and standards-based
through a hospital’s wireless network – with seamless
connectivity architecture.
integration to the EHR through either a Capsule
Technologies interface or a Cerner CareAware link.
Masimo Patient SafetyNet incorporates the Masimo
Adaptive Connectivity Engine,™ which enables two-
way, HL7-based connectivity to clinical/hospital
A REVOLUTIONARY DEVICE FOR A VARIETY OF CLINICAL SETTINGS
Hemoglobin is one of the most commonly ordered tests in both hospital and non-hospital
settings because it is critical to assessing anemia. However, traditional lab testing
requires a painful needle stick for the patient, time-consuming blood draws for the
clinician, and typically provides delayed results.
The Pronto-7 represents a breakthrough new solution for measuring hemoglobin
in just 45 seconds – without needles, time-consuming laboratory analysis, or the
risk of blood contamination or hazardous medical waste. The Pronto-7 is also the
fi rst Masimo device to feature Rainbow 4D™ technology for faster and more
accurate spot-check hemoglobin measurements.
The palm-sized Masimo Pronto-7 – with dimensions at just 5.1” x 2.8” x 1”
and weight of 10.5 ounces – puts the power of noninvasive hemoglobin
spot-check testing into any clinician’s hands in almost any environment,
including hospitals, clinics, blood donation centers, and emergency
medical services. Operation is easy and intuitive with the Pronto-
7’s touch-screen interface. And because of the
device’s embedded 802.11 b/g and Bluetooth
communication capability, wireless printing or
emailing of test results is available today –
with future upgrades to allow for wireless
transmission to EHR systems.
‘10
Pronto-7™
First device designed from the start
for noninvasive spot checking of
SpHb – featuring touchscreen and
wireless communication and printing
‘10
New Radical-7
Featuring touch screen display,
wireless capability, external
display functionality
‘10
Adaptive Threshold Alarm™
First dynamic physiologic alarm
threshold based on changes from
each patient’s baseline value
42
43
Products & Technology Overview
MASIMO TECHNOLOGIES
SELECT MASIMO SENSORS
Below are just some of the over 100 diff erent sensors that Masimo off ers.
Masimo SET
Measure-through Motion and Low
Masimo Rainbow Pulse CO-Oximetry
Noninvasive blood constituent and fl uid
Masimo Rainbow Acoustic Monitoring (RAM)
Noninvasive acoustic monitoring
Perfusion pulse oximetry.
responsiveness monitoring.
> Respiration rate (RRa)
> Oxygen Saturation (SpO2),
> Carboxyhemoglobin (SpCO),
Pulse Rate (PR), Perfusion Index (PI)
Methemoglobin (SpMet), Pleth Variability
Index (PVI), Total Hemoglobin (SpHb),
and Oxygen Content (SpOC)
MASIMO MONITORS
Masimo SET Sensors
SpO2, PR, PI, PVI
Masimo Rainbow SET Sensors
SpO2, PR, PI, PVI, SpHb, SpOC,
SpCO, SpMet
Masimo Rainbow Acoustic Sensors
RRa
Masimo Rad-5v®
Masimo SET
Masimo Rad-57™
Masimo Rainbow SET
Pulse CO-Oximetry
Masimo Pronto®
Masimo Rainbow SET
with SpHb spot-check
Masimo Pronto-7™
Masimo Rainbow 4D
with SpHb spot-check
SELECT MASIMO OEM PARTNERS
Masimo Rad-8®
Masimo SET, LED display
Masimo Rad-87™
Complete Masimo Rainbow SET
Pulse CO-Oximetry and Rainbow
Acoustic Monitoring, upgradable,
LED display, optional wireless radio
Masimo Radical-7™
Complete Masimo Rainbow SET Pulse
CO-Oximetry and Rainbow Acoustic
Monitoring, upgradable, color touchscreen
display, optional wireless radio
MASIMO PATIENT SAFETYNET SYSTEM
Remote monitoring and notifi cation system
> Direct alarms to nurse via pager
> Leverages hospital’s existing wireless network
> Central monitoring option
> Open-architecture with HL7 interface to hospital EHR
44
45
Masimo’s Global Reach
Masimo is committed to improving patient care
globally, with more than 2,000 talented people
worldwide and operations in North America,
Europe, Latin America, Asia, and Australia.
Headquarters
International Operations Center
Regional Offices
OEM Partners
Distributors
ff
HEADQUARTERS
MASIMO CORPORATE
HEADQUARTERS
40 Parker
Irvine, CA 92618
USA
Tel: 949 297 7000
INTERNATIONAL OPERATIONS CENTER
MASIMO INTERNATIONAL SARL
Puits-Godet 10
2000 Neuchâtel
Switzerland
Tel: +41 327201111
COUNTRY OFFICES
MASIMO CANADA
4901 Levy St
Saint-Laurent,
QC H4R 2P9
Canada
Tel: 888 336 0043
MASIMO SPAIN
Ronda de Poniente
12 2F
28760 Tres Cantos
Spain
Tel: +34 918049734
MASIMO UK
Unit Q, Loddon
Business Centre
Roentgen Road
Basingstoke. Hants.
RG24 8NG
United Kingdom
Tel: +44 01256479988
MASIMO FRANCE
Le Bois des Côtes II
304 RN6
69760 Limonest
France
Tel: +33 0472179370
MASIMO NETHERLANDS
Hart van Brabantlaan
12-14-16
5038 JL Tilburg
Netherlands
Tel: +31 135832479
MASIMO AUSTRIA
Rotenturmstrasse 13
1010 Wien
Austria
Tel: +43 15337361
MASIMO ITALY
Filiale Italiana
Piazza Duca
D’Aosta 8
20124 Milano
Italy
Tel: +39 0245076308
MASIMO GERMANY
Niederlassung
Deutschland
Lindberghstr 11
82178 Puchheim
Germany
Tel: +49 89800658990
MASIMO ASIA PACIFIC
572A Serangoon Road
Singapore 218187
Singapore
Tel: +65 63924085
MASIMO CHINA
Room 502, Building 6,
170 Beiyuan Road,
Chaoyang District,
Beijing 100101
China
Tel: +86 1058236155
MASIMO JAPAN
World Times Building
4F, 10-7, Ichiban-Cho
Chiyoda-Ku,
Tokyo 102-0082
Japan
Tel: +81 338685201
MASIMO AUSTRALIA
ABN 71 124 372 701
Suite 5, Building 5
49 Frenchs Forest Road
Frenchs Forest NSW 2086
Australia
Tel: +61 294523763
46
47
Masimo’s National and International Awards for Excellence
Financial Performance
1995 STA Excellence in Technology Innovation
2007 STA Excellence in Technology Innovation
2000 SCCM Technology Excellence
2000 Outstanding Medical Device Company
2007 Ground-breaking Innovation of
Rainbow SET Technology
2007 Patient Monitoring Technology
Leadership of the Year
2001 Innovative Product and Technology
2007 Brand Development Strategy Leadership
2001 Distinguished Leadership
2008 Excellence in Medical Technology
2001 Excellence in Leadership
2008 Outstanding Growth
2001 Medical Design Excellence
2008 Outstanding Medical Device Company
2003 New Standard of Care
2008 Best in Class
2003 Technology of the Year in
Patient Monitoring
2003 Platform ABBY for Innovations
in Healthcare
2008 AARC Zenith Award
American Association for Respitory Care
2009 Best in Class
2005 Innovative Product and Technology
2009 AARC Zenith Award
American Association for Respitory Care
2006 Application of Technology
2009 Patient Monitoring CEO of the Year
2006 Medical Design Excellence
2009 Masimo SET and the Patient SafetyNet System
help Dartmouth-Hitchcock Medical Center win the
4th Annual Health Devices Achievement Award
“ While leading innovation and industry change, Masimo and Mr. Kiani
have also been guided by the highest principles and ethics, resulting
in recognition by customers and partners alike for their integrity in
conducting business. ”
FROST AND SULLIVAN
2009 CEO of the Year Award
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Year ended
January 2, 2010
Year ended
January 3, 2009
ASSETS
Current assets
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$132,054
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,989
Accounts receivable, net of allowance for doubtful accounts of $1,972 and $1,300
at January 2, 2010 and January 3, 2009, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,897
Royalties receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,559
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,742
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,705
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,585
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,357
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289,388
Deferred cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,163
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,682
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,829
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,742
$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
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $356,345
$293,348
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,716
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17,793
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,754
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,641
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –––
Current portion of capital lease obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,441
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270
Capital lease obligation, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,775
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $66,657
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.001 par value; 5,000,000 shares authorized at
January 2, 2010 and January 3, 2009; 0 shares issued and outstanding
at January 2, 2010 and January 3, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –––
Common stock, $0.001 par value; 100,000,000 shares authorized at January 2, 2010
and January 3, 2009; 57,876,450 and 57,326,527 shares issued and outstanding at
January 2, 2010 and January 3, 2009, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Treasury stock, 156,240 shares at January 2, 2010 and January 3, 2009 . . . . . . . . . . . . . . . . . . . . . . (1,209)
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,690
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,112
Total Masimo Corporation stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .288,714
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289,688
Total liabilities and stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $356,345
$15,914
15,607
5,566
10,862
17,233
395
70
65,647
213
157
7,833
$73,850
–––
57
(1,209)
179,666
(7)
40,884
219,391
107
219,498
$293,348
48
49
Financial Performance
CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT SHARE INFORMATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Year ended
January 2, 2010
Year ended
January 3, 2009
Year ended
January 2, 2010
Year ended
January 3, 2009
Revenue
Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,143
Royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,972
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .349,115
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,313
Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,802
Operating expenses:
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,701
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,577
Antitrust litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,576
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,226
Non-operating income (expense):
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (75)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (149)
Total non-operating income (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46)
Income before provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,180
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,158
Net income including noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,022
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (794)
Net income attributable to Masimo Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,228
Net income per common share attributable to Masimo Corporation Stockholders:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$0.92
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$0.88
$259,592
47,482
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
Weighted-average number of common shares:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,602,646
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,170,848
56,320,712
60,190,335
Cash fl ows from operating activities:
Net income including noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,022
Adjustments to reconcile net income including noncontrolling
interest to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,979
Share-based payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,674
Loss on disposal of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733
Provision for obsolete inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
Provision for warranty costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,220
Provision (benefi t) for deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,566)
Income tax benefi t from exercise of stock options granted prior to January 1, 2006. . . . . . . . . . . . . . . . . 2,758
Excess tax benefits from share-based payment arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (215)
Changes in operating assets and liabilities:
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,982)
(Increase) decrease in royalties receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (125)
Decrease in accounts receivable from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –––
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,929)
(Increase) decrease in deferred cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
(Increase) decrease in prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
(Increase) decrease in prepaid income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (833)
(Increase) decrease in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,065)
Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777
Decrease in accounts payable to related parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –––
Increase in accrued compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,926
Increase (decrease) in accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,935
Increase (decrease) in income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,169)
Increase (decrease) in deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(2,518)
Increase (decrease) in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,244)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,121
Cash fl ows from investing activities:
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,636)
Purchase of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,989)
Increase in intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,851)
Increase in restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(15)
Cash paid in acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,981)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,472)
Cash fl ows from fi nancing activities:
Repayments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (450)
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,575
Excess tax benefi ts from share-based payment arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –––
Net cash provided by (used in) fi nancing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,340
Eff ect of foreign currency exchange rates on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,856)
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,910
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$132,054
$31,927
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
50
51
FORWARD-LOOKING STATEMENTS
MASIMO EXECUTIVE MANAGEMENT TEAM
MASIMO BOARD OF DIRECTORS
Joe Kiani
Chief Executive Offi cer
Tony Allan
Chief Operating Offi cer
Jon Coleman
President, International
Yongsam Lee
Executive Vice President,
Regulatory Aff airs &
Chief Information Offi cer
Michael O’Reilly, MD, MS
Executive Vice President,
Medical Aff airs
Mark de Raad
Executive Vice President &
Chief Financial Offi cer
Stephen Paul
Executive Vice President,
U.S. Acute Care Sales
Anand Sampath
Executive Vice President,
Engineering
Rick Fishel
President of Worldwide
OEM Business, Business
Development, & Masimo
America
Paul Jansen
Executive Vice President,
Marketing
Joe Kiani
Chairman of the Board of Directors
Steven Barker, MD, PhD
Director
Edward Cahill
Director
Robert Coleman, PhD
Director
Sanford Fitch
Director
Jack Lasersohn
Director
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), RAM (RRa), and the general fl oor monitoring market. These forward-looking statements are based on current expectations about future
events aff ecting us and are subject to uncertainties and factors, all of which are diffi cult 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 suffi cient 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 2, 2010, fi led with the
Securities and Exchange Commission (SEC) on February 16, 2010. Although we believe that the expectations refl ected 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 April 23, 2010. 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 2, 2010, 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 SEC. 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 fi scal year ended January 2, 2010, available in the Investor Information section
of our website at www.masimo.com.
REGULATORY NOTICE
Some of the products featured in this Annual Report are currently or planned to be marketed worldwide by Masimo. Not all products or features profi led in this report
have US FDA 510k or other regulatory agencies clearances (such as EU, Canada, Japan, etc.) at the time of printing. As of April 23, 2010, the following products/
features have not been FDA cleared for sales and marketing in the US: New Radical-7 (as featured on page 8, 23, 29, 31, 32, 33, 37, 43, and 44), ReSposable sensors
(page 9, 41, and 45), Single-patient-use Ear sensor (page 39 and 45), Pronto-7 (page 43 and 44), Adaptive Threshold Alarm (page 38 and 43), and PVI as an IFU for
Fluid Management (page 30, 31, 37, and 44). Submissions for these products or features either have been fi led or plan to be fi led for all regulated markets.
CITATIONS
1 Barker SJ et al. Anesthesiology. 1997;86(1):101-108. 2 Thomas A et al. Respir Care. 1998;43(10):860. 3 Shah N et al. Anesthesiology. 2006;105:A929. 4 Barker
SJ. Anesth Analg. 2002;95(4):967-972. 5 Durbin CG et al. Anesthesiology. 2000;B14:93. 6 Durbin CG et al. Crit Care Med. 2002;30(8):1735-1740. 7 Durbin CG et
al. Anesth Analg. 2002;94:S81-S83. 8 Granelli AW et al. Acta Paediatr. 2005;94:1590-1596. 9 Cox PN et al. Anesthesiology. 2007;107:A1540. 10 Castillo AR et al.
Pediatric Academic Societies Annual Meeting. 2007. 11 Chow L et al. Pediatrics. 2003;111(20):339-345. 12 Taenzer AH et al. Anesthesiology. 2010;112(2):282-287.
13 Morgan JA et al. International Anesthesia Research Society Meeting. 2010:S-249. 14 Suner S et al. J Emerg Med, 2008;34(4):441-450. 15 Ash-Bernal RA et al.
Medicine. 2004;83:265-273. 16 Cannesson M et al. Br J Anaesth. 2008;101(2):200-6. 17 Feissel M et al. Critical Care. 2009;13(1):P205. 18 Forget P et al. Critical
Care. 2009;13(1):P204. 19 Bernard AC et al. J Am Coll Surg. 2009;208:931-937. 20 Surgenor SD et al. Anesthesia & Analgesia 2009;108:1741-1746. 21 Shander A
et al. Transfusion. 2010;50(4):753-765. 22 Weinger MB. APSF Newsletter, 2006. 23 Macknet MR et al. Anesthesiology 2007;107:A84. 24 Masimo Internal Report.
Masimo Adaptive Threshold Alarm Analysis. 2010. 25 Sensor waste reduction estimates based on yearly waste from 50,000 adult sensors, butterfl y type,
assuming 50% yield from reprocessed sensors. 26 Desebbe OB et al. Anesthesia & Analgesia. 2010;10(3):792-798.
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Masimo Corporation : : 40 Parker • Irvine, CA 92618 : : Tel: 949 297 7000 : : www.masimo.com
© 2010 Masimo Corporation. Masimo, SET, Rainbow, Rainbow Acoustic Monitoring, RRa, RAM, SpHb, SpCO, SpMet, SpOC, PVI, Adaptive Connectivity Engine, Adaptive Threshold Alarm, Adaptive Probe Off Detection,
APOD, Green Designed In, Measure-through Motion and Low Perfusion Pulse Oximetry, Pulse CO-Oximetry, Signal Extraction Technology, Signal IQ, Patient SafetyNet, Radical, Radical-7, Rad-87, Rad-57, Pronto, Pronto-7,
Rad-8, Rad-5, Rad-5v, Rad-9, Blue, LNCS, LNOP, Max, NeoPT-500, Newborn, MS-1, MX-1, MX-3, DST, SST, FST, MST, RAS, DOS, ROS, Rainbow 4D, ReSposables, SatShare, SmarTone, FastSat, FastStart, Sof Touch, Improve
patient outcomes and reduce the cost of care by taking noninvasive monitoring to new sites and new applications, and Closer to the Heart are trademarks, registered trademarks, or servicemarks of Masimo Corporation.
All rights reserved. All other products or logos are trademarks and/or registered trademarks of each respective company.
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