P A T I E N T S A F E T Y T O T H E C O R E
2 0 1 9
A N N U A L R E P O R T
S E N I O R
M A N A G E M E N T
T E A M
Joe Kiani
Chief Executive Officer
& Chairman of the Board
Bilal Muhsin
Chief Operating Officer
Micah Young
Executive Vice President
& Chief Financial Officer
Tom McClenahan
Executive Vice President,
General Counsel
Tao Levy
Executive Vice President,
Business Development
Jon Coleman
President, Worldwide Sales,
Professional Services &
Medical Affairs
Yongsam Lee
Executive Vice President
& Chief Information Officer
Anand Sampath
Executive Vice President,
Operations & Clinical Research
Tetsuro Maniwa
President, Japan, Greater
China & South Korea
Stacey Orsat
President, EMEA
Matthew Anacone
Senior Vice President,
North America Sales
B O A R D O F
D I R E C T O R S
Joe Kiani
Chairman of the
Board of Directors
Steven J. Barker, MD, PhD
H Michael Cohen
Sanford Fitch
Thomas Harkin
Adam Mikkelson
Craig Reynolds
Julie A. Shimer, PhD
P A T I E N T S A F E T Y T O T H E C O R E
Letter from the Chairman and CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2019 Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Raising the Bar for Patient Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Live to Defeat the Opioid Epidemic with Masimo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Masimo Is Automating Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Why I Believe in Masimo: Q & A with Early Masimo Adopters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Innovation Never Stops: New Product Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
What Patient Safety Means to Me: Employee Spotlight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Integrating OEM Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A Global Citizen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2019 Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
L E T T E R F R O M T H E
C H A I R M A N A N D C E O
Patient Safety Is in Our DNA
In 1989, I founded Masimo with an ambitious goal: to
solve the “unsolvable” challenge of making pulse oxim-
etry accurate and reliable, even during patient motion
and low perfusion.
At the time, conventional pulse oximetry was plagued
by unreliability, delivering inaccurate data and exces-
sive false alarms due to patient movement and low per-
fusion. Lives were harmed and even lost because con-
ventional pulse oximeters failed to accurately monitor
those who needed it the most.
My dear friend and mentor, Dr. Jeremy Swan, described
conventional pulse oximetry as a fair-weather friend. I
believed a superior technology——one that would be
accurate and reliable during challenging conditions of
motion and low perfusion——was possible. In partnership
with another dear friend and fellow engineer Mohamed
Diab, we set out to make that goal a reality.
The Masimo Difference: Signal Extraction Technology®
In 1996, Masimo Signal Extraction Technology (SET®)
was introduced at the World Congress of Anaesthesi-
ologists in Australia. Over time, SET® transformed from
a breakthrough technology into the standard of care
for monitoring oxygen saturation and pulse rate at top
hospitals around the world. Since its launch, more than
100 independent and objective studies have shown that
Masimo SET® outperforms other pulse oximetry technol-
ogies, providing clinicians with unmatched sensitivity
and specificity to make critical patient care decisions.1
The legacy of Masimo SET ® is indelibly tied to enhanced patient safety.
As the underlying technology driving many of our
solutions, SET® remains as disruptive today as when it
launched. Just this past year, we’ve achieved significant
accuracy specification improvements with our new line
of eco- and patient-friendly RD SET® sensors. And, in line
with our unrelenting pursuit of perfecting pulse oximetry
for motion, we released Radius PPG™, a tetherless pulse
oximetry solution powered by Masimo SET®, providing
accurate monitoring for patients on the move.
From dramatically reducing the incidence of false alarms
and missed true alarms to enabling critical congenital
heart disease (CCHD) screening with SET® pulse oxim-
etry and helping save newborns’ eyesight, the legacy of
Masimo SET® is indelibly tied to enhanced patient safety.
4
5
2019 Highlights
Our 30th anniversary, 2019, was a milestone year for
Masimo in multiple ways. We grew our product reve-
nue by $106 million, achieving 13% product revenue
growth on a constant currency basis. 2019 also saw us
making significant headway in emerging markets and
welcoming many new customers from across the world,
resulting in our best year yet for global sales.
We believe that 2020 is poised to be a
year of momentum for SpHb® adoption
as a standard of care, just like SET ®.
Moreover, in 2019 we remained true to our commitment
to enhancing patient safety by bringing a range of inno-
vative products and solutions to market——each designed
to make meaningful clinical differences and help clini-
cians improve patient outcomes. From Radius PPG, a
tetherless, continuous pulse oximetry solution powered
by SET®, to Halo ION™, which offers care teams a com-
prehensive, personalized, continuous patient score, we
are rapidly expanding our portfolio of solutions to match
the evolving needs of modern, high-velocity healthcare.
Finally, 2019 also brought important new evidence to
demonstrate the clinical need for noninvasive, continu-
ous hemoglobin (SpHb) monitoring, which, like SET®, is
an area of continual innovation at Masimo.
While earlier studies showed that SpHb helped clinicians
reduce the frequency and volume of unnecessary blood
transfusions, both in high- and low-blood-loss surgery,
a landmark study conducted in Limoges, France, pub-
lished in 2019, reinforces what we have long believed:
SpHb has a significant impact on patient outcomes,
amounting in that study to a 33% reduction in mortality
at 30 days and 29% at 90 days after surgery.2
The evidence is becoming clearer: SpHb monitoring
makes a true clinical difference, helping enhance patient
safety, improve patient outcomes, and reduce the cost
of care. In 2019, we saw an inflection in the adoption of
SpHb by hospitals. We believe that 2020 is poised to be
a year of momentum for SpHb adoption as a standard of
care, just like SET®.
While these achievements alone are wonderful news
for all of our shareholders, we plan to build on the mo-
mentum of 2019 to make 2020 our best year for growth
ever——aiming to surpass $1 billion in revenue.
The Next Generation of Innovation at Masimo
At Masimo, we’ve cultivated a can-do environment populat-
ed by dedicated, ethical employees who thrive on passion
and curiosity and are committed to the common good. As
a mission-based medical technology company, we attract
team members who possess the brightest minds and the
biggest hearts, and give them a collaborative environment
where they have support to develop technologies and
solutions that are the best for patient care.
Just as we set out three decades ago to perfect pulse
oximetry, the next generation of visionary engineers,
clinicians, and leaders at Masimo are hard at work
addressing the most pressing healthcare technology
challenges of the 21st century——each with a profound
commitment to enhancing patient safety. They are here,
dedicating their considerable talents to our mission,
not for prestige or vanity, but in service to the legacy
forged by Masimo SET®. I call them the Masimo purists.
From tackling the opioid epidemic, to delivering au-
tomation solutions that will optimize the continuum of
great care, to developing clinically useful wearable and
home care devices, these purists are leading the charge
into the future of medicine.
Please read on to discover how these purists, and the
personal motivations that drive their fascination, deter-
mination, and commitment to patient safety, are shaping
the future of Masimo and our customers and partners——
and why we say we are patient safety to the core.
1Published clinical studies on pulse oximetry and the benefits of Masimo SET® can
be found on our website at http://www.masimo.com. Comparative studies include
independent and objective studies which are comprised of abstracts presented
at scientific meetings and peer-reviewed journal articles. 2Cros et al. J Clin Monit
Comput. Aug 2019: 1-9.
Joe Kiani
Chairman and CEO
6
7
2 0 1 9 F I N A N C I A L H I G H L I G H T S
937.8
936.4
858.3
829.9
790.2
738.2
712.9
674.0
R E V E N U E S
In millions of dollars
Product revenues
Royalty and other revenues
439.0
406.5
405.4
356.4
630.1
599.3
586.6
556.8
547.2
517.4
493.2
464.9
$5.85
$3.49
E A R N I N G S P E R S H A R E
Non-recurring litigation settlement
$3.45
$3.44
$1.21
$1.05
$1.07
$1.02
$1.30
$2.23
$1.55
$2.36
49.0
2010
32.5
2011
28.3
29.8
29.8
2012
2013
2014
30.8
2015
38.9
2016
52.0
2017
1.4
28.4
2018
2019
2010
2011
2012
2013
2014
2015
1
2016
2017
2018
2019
8
9
F I N A N C I A L R E S U L T S S U M M A R Y
2 0 1 9 T o t a l R e v e n u e s
$937,837,000
2 0 1 9 E P S
$3.44
1 Included in the FY2016 Historical GAAP Earning Per Share was $3.49 per diluted share related to a $300.0 million litigation
settlement agreement, of which $270.0 million was recognized as a gain on the Statement of Operations on December 31, 2016.
R A I S I N G T H E B A R F O R P A T I E N T S A F E T Y
When you look back over the last 30 years
of innovation at Masimo, the profound clin-
ical impact of our breakthrough technologies comes
clearly into focus. What you see is a correlation be-
tween the development of a breakthrough Masimo
parameter and improved outcomes. Without a doubt,
we’ve helped raise the bar for patient safety, but we ar-
en’t done yet. We’ll continue to push the boundaries of
monitoring technologies because the evidence has
proven what we believed from the start—
accurate monitoring enhances patient safety.
Joe Kiani | Chief Executive Officer
For thirty years, Masimo has empowered clinicians with breakthrough
monitoring technologies designed to help them improve patient
outcomes. Revisit key highlights from our history to discover how
our products have made a clinical difference.
Y
T
E
F
A
S
T
N
E
I
T
A
P
R
O
F
R
A
B
E
H
T
G
N
I
S
I
A
R
SpHb
20 03
BREAKTHROUGH
STUDY
Masimo
Patient SafetyNet™*
Masimo Signal
Extraction Technology
(SET®) Pulse Oximetry
Founding
of Masimo
2019
BREAKTHROUGH
STUDY
Next Generation SedLine®
Brain Function Monitoring
2016
BREAKTHROUGH
STUDY
O3® Cerebral
Oximetry
rainbow®
ORi™†
2003
2010
2014
2016
2019
B R E A K T H R O U G H S T U D Y
Cedars-Sinai Medical Center
A landmark study links Masimo SET® to
reduced retinopathy of prematurity (ROP)
in neonatal patients.1
B R E A K T H R O U G H S T U D Y
Massachusetts General Hospital
A study shows SpHb monitoring helps
clinicians optimize blood management.2
B R E A K T H R O U G H S T U D Y
Children’s Hospital of Fudan University
A study shows Masimo SET®, when
combined with clinical assessment,
improves critical congenital heart disease
(CCHD) screening sensitivity to 93%.3
B R E A K T H R O U G H S T U D Y
Dartmouth-Hitchcock Medical Center
A study finds continuously monitoring adult
patients on a post-surgical floor using Patient
SafetyNet with Masimo bedside devices
resulted in a 60% reduction in rescue events
and a 50% reduction in unplanned transfers
to the ICU.4
B R E A K T H R O U G H S T U D Y
CHU Limoges
A study finds a 33% reduction in
mortality at 30 days and 29% at
90 days with the use of SpHb and
PVi® as part of a goal-directed
therapy protocol.5**
2014
BREAKTHROUGH
STUDY
Root® Patient
Monitoring and
Connectivity Platform
2010
BREAKTHROUGH
STUDY
Additional published clinical studies on Masimo technology can be found on our
website at http://www.masimo.com/evidence/featured-studies/feature/.
Comparative studies include independent and objective studies, which are comprised
of abstracts presented at scientific meetings and peer-reviewed journal articles.
1Chow L.C. et al. Pediatrics. 2003 Feb; 111(2):339-45. 2Ehrenfeld et al. J Blood Disorders Transf. 2014. 5:9.
3Zhao et al. Lancet. 2014 Aug 30;384(9945):747-54. 4McGrath et al. Jt Comm J Qual Patient Saf. 2016;42(7):293-
302. 5Cros et al. J Clin Monit Comput. Aug 2019: 1-9.
*The use of the trademark PATIENT SAFETYNET is under license from University HealthSystem Consortium.
**Study utilized a goal-directed fluid therapy protocol with PVi in conjunction with a blood transfusion protocol
based on SpHb. †ORi has obtained CE Mark. Not available in the US.
1989
1995
2003
2007
2008
2010
2013
2014
2016
2019
10
11
Live to Defeat the Opioid
Epidemic with Masimo
It’s well known that monitoring with Masimo SET ® can help prevent
harm from opioid-induced respiratory depression in hospitals.
We want to provide a similar level of safety to opioid users at home.
Tom McClenahan
Executive Vice President, General Counsel
Answering the Call
Closing the Gap on Opioid Safety
In 2017, the U.S. Department of
Health and Human Services (HHS)
officially declared the opioid epi-
demic a public health emergency. In
response, the FDA’s Center for Devic-
es and Radiological Health (CDRH)
launched an Innovation Challenge
to spur the development of medical
devices that could help curb the
rising death toll. We answered the
FDA’s call with a visionary approach
that combines hospital-proven pulse
oximetry technology with a novel
alert system.
From more than 250 submissions,
Masimo’s was one of eight propos-
als selected. We were also granted
“Breakthrough Device” status.
Since the late 1990s, opioids have
been prescribed to a wide variety
of patients for many different rea-
sons, including postoperative and
recovering
post-surgical patients
and healing at home as well as those
with chronic pain. Unfortunately, the
last two decades have also shown
how addictive opioids can be——with
opioid abuse contributing to a grow-
ing number of deaths.
This worrisome statistic reveals that
the opioid epidemic is impacting
many different patient groups, in-
cluding patients using non-prescrip-
tion opioids, such as heroin and
fentanyl, and those working through
recovery programs.
This designation gives us the oppor-
tunity to work closely with the FDA
to expedite the review process, so
our groundbreaking approach is
available to help reduce harm as
soon as possible.
While there are opioid risk mitiga-
tion strategies available to offset
or lessen the risk of overdose, they
leave significant gaps in protection.
Current strategies fail to account for
one of the most important consid-
erations: more than 50% of opioid
overdoses occur while a person is
alone and vulnerable.1
Though the healthcare industry is
actively seeking new approaches to
pain management, opioids remain
a valuable tool that clinicians rely on
to manage and alleviate pain——both
in the hospital and at home. For this
reason, among others, it is imper-
ative to develop new solutions to
enhance patient safety outside the
boundaries of the hospital.
Progress has been made, but major
gaps in protection against opioid
risks remain. Masimo is leveraging
decades of industry-leading mon-
itoring expertise to deliver a con-
sumer home monitoring solution
that helps fill in those gaps.
12
13
Delivering Hospital-proven
Systems to the Home Setting
Opioids are powerful painkillers, but
they are also powerful respiratory
depressants. Even when taken as di-
rected under the care of physicians,
opioids can cause respiratory de-
pression (slow or shallow breathing),
which lowers blood oxygen to dan-
gerous levels, leading to brain injury
and death. Respiratory depression
is a serious risk for anyone using opi-
oids——and a key reason that patients
prescribed opioids in the hospital are
often continuously monitored for oxy-
genation (SpO2) with pulse oximetry.
Masimo is leveraging decades
of industry-leading monitoring
expertise to deliver a consumer
home monitoring solution.
Masimo Signal Extraction Technolo-
gy (SET®) is renowned for reliable,
accurate oxygenation monitoring
during challenging condi tions of
motion and low perfusion. A trusted
clinical tool that physicians rely on
as an indicator of a patient’s phys-
iological status, SET® has demon-
strated unmatched sensitivity and
specificity, with 3% missed true
alarms and 5% false alarms versus
43% and 28%, respectively, with
competitor technology.2
With more than 100 independent and
objective studies completed since its
launch, the clinical benefits of SET®——
including its ability to help care teams
reduce the risks associated with opi-
oid-induced respiratory depression
(OIRD)——have been documented.
In particular, a landmark study con-
ducted at Dartmouth-Hitchcock
Medical Center demonstrated that
by implementing continuous pa-
tient monitoring with Masimo SET®
and a clinician notification system,
researchers were able to elimi-
nate preventable deaths and brain
damage due to opioid overdose in
post-surgical wards, as well as re-
duce rapid rescue events by 60%,
ICU transfers by 50%, and cost by an
estimated $1.48 million annually.3-5
The Dartmouth-Hitchcock Medi-
cal Center study demonstrates the
measureable differ ence that reli-
able, continuous monitor ing, cou-
pled with a notification sys tem, can
have on patient outcomes.
In an effort to reduce the harm
caused by the opioid epidemic, we
are ex panding our leadership be-
yond the hospital and into the con-
sumer space, so that we can deliver
hos pital-proven systems in the home
setting directly to all at-risk patients.
Masimo SafetyNet*:
Opioid Safety Alert System
In clinical settings, care teams are
trained to respond to alarms and ad-
dress possible deterioration before
serious complications, such as brain
damage or death, occur. However,
the home setting is very different.
The unmatched sensitivity and spec-
ificity of Masimo SET®, in combina-
tion with a system that accounts for
those who may be alone, is key to
delivering the demonstrated ben-
efits of pulse oximetry in the home
setting. By leveraging similar alert
system protocols to those used at
Dartmouth-Hitchcock Medical Cen-
ter and other leading hospitals, we
are bringing hospital-proven solu-
tions to the home, enhancing patient
safety and, we hope, making a mea-
surable impact on the opioid crisis.
to
enhance
safety,
Designed
Masimo SafetyNet will marry power-
ful SET® pulse oximetry technology
with a novel alert system. Intended to
replicate the responsiveness of hos-
pital care teams, Masimo SafetyNet
provides crucial opportunities for
patients to self-recover or get help
when needed. Ideal for anyone us-
ing opioids, Masimo SafetyNet will
provide a level of safety and accura-
cy not available from other wearable
devices, fitness trackers, or smart-
phone applications.
1ODPRN. Opioid Mortality Surveillance Report.
Public Health Ontario. https://www.publichealthon-
tario.ca/-/media/documents/opioid-mortality-sur-
veillance-report.pdf?la=en. 2Shah et al. J Clin Anesth.
2012;24(5):385-91. 3Taenzer AH et al. Anesthe-
siology. 2010:112(2):282-287. 4Taenzer AH et al.
Anesthesia Patient Safety Foundation Newsletter.
2012. Available at: http://www.apsf.org/newsletters/
html/2012/spring/01_postop.htm. 5McGrath et al.
Jt Comm J Qual Patient Saf. 2016;42(7):293-302.
*Masimo SafetyNet pending FDA clearance. Product
not available.
R/IR
D I G I T I Z E D , F I L T E R E D , A N D N O R M A L I Z E D
R / I R
(Conventional Pulse Oximetry)
D S T ®
Adaptive Filter
F S T ®
S S T ™
Adaptive Filter
M S T ™
E V A L U A T I O N A N D A N A L Y S I S
P O S T P R O C E S S O R
M A S I M O S E T ® D S T 9 7 %
0
50% 66%
97% 100%
Conventional pulse oximetry uses the standard red-over-infrared algorithm to provide SpO2, while
Masimo SET® includes four additional algorithms, running in parallel. These algorithms distinguish
between the arterial signal and non-arterial and venous signal noise–—during motion and low perfusion–—
by identifying and isolating the non-arterial and venous noise SpO2 components (left peak, shown in
blue) from the true arterial SpO2 components (right peak, shown in red) in the signal.
14
15
M a s i m o I s
97 74
15 7.0
20 4.0
A u t o m a t i n g C a r e
Healthcare needs more than scalable, flexible connectivity solutions. My team is at the
forefront of invention and innovation at Masimo, working to provide a platform for
potential advancements such as centralized device control, decision support, and closed-
loop management. We believe that by supplying advanced connectivity solutions, combined
with best-in-class approaches, our automation platform will help clinicians reduce manual
steps and procedures—leading to enhanced patient safety and improved patient outcomes.
Omar Ahmed | Vice President, Software Engineering
The Masimo Difference:
Signal Extraction Technology
Masimo Signal Extraction Tech-
nology (SET®) is used to monitor
more than 700 million patients ev-
ery year.1 The primary pulse ox imetry
at 9 of the 10 hospitals that top the
2019-20 U.S. News and World Report
Best Hospitals Honor Roll, SET® is re-
nowned for accuracy and reliability,
even in challenging conditions of
motion and low perfusion.2
As the foundation of Masimo moni-
toring devices, SET® provides clini-
cians with quality patient data. Lead-
ing hos pitals and clinicians choose
SET® because they know that with
more accurate patient data, fewer
false alarms, and more true alarms,
they can focus on what truly matters:
de livering excellent, evidence-based
patient care.
With the rainbow® Pulse CO-Oxime-
ter®, Masimo combines the power
of SET® with the ability to monitor
additional advanced parameters, in-
cluding Total Hemoglobin (SpHb),
Perfusion Index (Pi), Pleth Variability
Index (PVi), Methemoglobin (SpMet®),
Carboxyhemoglobin (SpCO®), and
Acoustic Respiration Rate (RRa®)——
increasing the amount of continuous,
noninvasive patient data available
to clinicians to support informed
care decisions.
Masimo is automating care by mar-
rying the undisputed power of SET®
and rainbow® Pulse CO-Oximeters
with powerful automation features,
including expanded connectivity
and in teroperability solutions and a
variety of novel devices and systems.
This unique combination provides
clinicians and care teams with an
abundance of accurate, noninva-
sive, continuous patient data along-
side advanced automation features
to improve workflow efficiencies.
Combined, our approach to auto-
mating care is helping clinicians de-
liver great care while also optimizing
the continuum of care.
Automating Care to Enhance
Patient Safety
As more patient information be-
comes available to clinicians through
continuous monitoring, new oppor-
tunities to enhance the care experi-
ence for both the clinician and the
patient abound.
We are addressing these opportu-
nities with a range of automation
solutions poised to revolutionize not
only the kind of patient data that can
be collected and moved throughout
the continuum of care, but also how
that information can be used to em-
power clinicians to deliver superior,
evidence-based care.
Automating care benefits patients
and clinicians in many ways. To un-
derstand the specific benefits for
each, it is imperative to outline our
approach to automation.
Continuously Monitor
Advanced Parameters
At the core of our approach to
automating care is our ability to
accurately monitor multiple ad-
vanced patient parameters. With
the Root Patient Monitoring and
Connectivity Platform, clinicians are
able to centralize noninvasive tech-
nologies usually found on multiple
separate devices in one comprehen-
including advanced
sive monitor,
rainbow SET® measurements, brain
function monitoring, regional oxime-
try, blood pressure, temperature, and
capnography——all on an easy-to-in-
terpret, customizable display.
Further, Root serves as a connectivi-
ty hub, drawing in patient data from
connected Masimo and third-party
devices and automating the elec-
tronic charting of this rich, compre-
hensive stream in electronic medical
records (EMR). By reducing the need
to manually document and copy
data, the chance of transcription er-
rors is minimized, helping clinicians
focus their full attention on deliv-
ering evidence-based care rather
than documentation.
16
17
I R I S C O N N E C T I V I T Y
A C R O S S T H E C O N T I N U U M O F C A R E
Iris Gateway®
Admissions, Discharges and Transfers (ADT)
Electronic Medical Records (EMR)
Continuously Monitor Advanced Patient Parameters
Centralize Patient Data to Streamline Workflows
Root
Patient Monitoring and Connectivity Platform Designed to Transform Care
UniView™
Intelligent Display for Next-Generation Data Aggregation and Alarm Visualization
Third-party
Devices
Anesthesia
Anesthesia
Machine
Machine
Infusion Pump
Pump
Monitor
Patient
Monitor
Ventilator
Ventilator
Iris Analytics™
Hospital-wide Patient Reporting
Patient SafetyNet
Supplemental Remote Monitoring and Clinician Alarm Notification
Use Patient Data to Inform Management Decisions
Replica™
Mobile Application for Supplemental Remote
Monitoring and Clinician Alarm Notification
Masimo is firmly
committed to the flow
of open data and, with
our scalable, flexible
automation solutions,
we adapt our advanced
connectivity tools
to meet the needs of
each hospital’s unique
device and network
infrastructure.
at home via Doctella™, we are ex-
panding what it means to provide
great care.
And we are far from done.
As we look forward, only one thing
is certain: we are committed to au-
tomating care for the benefit of cli-
nicians and patients alike——and will
pursue any avenue that drives us
closer to that goal.
1Estimate: Masimo data on file. 2http://health.usnews.
com/health-care/best-hospitals/articles/best-hospitals-
honor-roll-and-overview.
In addition to robust continuous
monitoring capabilities, Root offers
a versatile spot-check interface that
streamlines data input at the bed-
side, automating vital signs work-
flows and the calculation of early
warning scores (EWS). With easy-to-
follow prompts, cold-spot data
queueing, and intuitive data push
capabilities, care teams can more
easily collect quality data and trans-
fer it upstream for use by clinicians
throughout the hospital and beyond.
Iris Connectivity Across the
Continuum of Care
The Iris® platform enables connec-
tivity across the continuum of care
by seamlessly funneling all the data
collected at the bedside——including
third-party devices——into hospital
IT systems, promoting connectivity
and interoperability through stan-
dards-based protocols. Masimo is
firmly committed to the flow of open
data and, with our scalable, flexible
automation solutions, we adapt our
advanced connectivity tools to meet
the needs of each hospital’s unique
device and network infrastructure.
By breaking down data siloes and
automating how patient information
is collected and transferred, clini-
cians and care teams have access to
high quality, comprehensive infor-
mation about patient status through-
out the hospital——helping reduce
variability in bedside care and en-
hance patient safety and comfort.
Transforming Patient Data into
Actionable Insights
Automating care at Masimo is more
than accurate patient monitoring
and patient data management. To
maximize the use of quality patient
data, our state-of-the-art devices
and systems are designed to dis-
play that data in meaningful ways to
support care team workflows and
enhance patient safety.
For example, Patient SafetyNet is a
supplemental remote monitoring
and clinician notification system
that displays near real-time infor-
mation from connected Masimo
and third-party devices at a central
station. Combined with Replica,
these alarms and alerts travel from
bedside devices to a clinician’s tab-
let or smartphone.
In turn, Halo ION maximizes the
value of quality patient data col-
lected at the bedside. Specifically,
Halo ION aggregates trend data
from multiple physiologic parame-
ters into a single, continuous score
for each patient. Configured ac-
cording to hospital policy, and dis-
played and dynamically updated
at Patient SafetyNet central view
stations and on Replica mobile de-
vices, Halo ION allows clinicians to
leverage patient data to support
workflow and resource allocation.
Combined, the Masimo approach
to automating care offers clinicians
the ability to leverage quality data
to deliver evidence-based care
across the continuum. For patients,
this approach helps ensure en-
hanced care at the bedside and a
more consistent care experience.
The Relentless Pursuit
of Innovation
At Masimo, innovation is a way of life.
Nowhere is this more evident than in
our efforts to automate care. In ear-
ly 2020, we acquired NantHealth’s
Connected Care business (formerly
iSirona™), bolstering Masimo’s con-
nectivity solutions with DCX™ de-
vice connectivity software (formerly
known as DeviceConX™), VCX™ pa-
tient vitals software (formerly known
as VitalsConX™), and the HBox®
connectivity hub. These connectiv-
ity assets will help us expand and
strengthen our automation solutions
by promoting the free, open flow of
patient data across even more sys-
tems and devices.
By recognizing the value of open
data and scalable automation solu-
tions that allow more patients to
be continuously monitored on the
general floor, during transport, or
Transform Patient Data into Actionable Insights
18
19
W H Y I B E L I E V E I N
M A S I M O
Q & A w i t h E a r l y
M a s i m o A d o p t e r s
From the beginning, a devoted group of respected clinicians and
medical authorities has fiercely advocated for Masimo technology
to be made accessible to practioners everywhere. Their support
and scholarship have been integral to the successful adoption of
Masimo monitoring technologies around the globe.
We recently asked four of these early adopters for their candid
opinions on why they believe in Masimo technology.
Round Table Participants
Mitchell Goldstein, MD
Professor of Pediatrics, Loma Linda University School of Medicine
Director, Neonatal ECMO Program
Division of Neonatology, Department of Pediatrics
Loma Linda University Children’s Hospital, Loma Linda, California
Augusto Sola, MD, FAAP
Vice President, Medical Affairs, Neonatology, Masimo
Medical Director, Iberoamerican Society of Neonatology
André Denault, MD, PhD, ABIM-CCM, FRCPC, FASE, FCCS
Professor of Anesthesiology and Critical Care
Department of Anesthesiology, Critical Care Division
Montréal Heart Institute and Centre Hospitalier de l’Université de Montréal
Université de Montréal, Montréal, Quebec, Canada
Michael A.E. Ramsay, MD, FRCA
Chairman, Department of Anesthesiology and Pain Management,
Baylor University Medical Center, and President of Baylor
Scott & White Research Institute, Dallas, Texas
Chairman, Patient Safety Movement Foundation
Question:
Thank you for your participation. As
early adopters, you have a unique
outlook on the value of Masimo tech-
nologies—both for the clinician and
the patient. From a clinical perspec-
tive, how do Masimo technologies
improve patient safety?
Dr. Goldstein:
Masimo technologies define patient
safety. What I mean by that is that Ma-
simo builds robust products that can
be trusted when the patient is coding
and nothing else is working.
In my patient population, fragile neo-
nates, who have low perfusion, high
motion, and multiple confounding
interfering extrinsic signals, reliable
pulse oximetry was not achievable
before Masimo. Without Masimo,
patient safety would just be a theory.
Dr. Sola:
As a clinical neonatologist for over
four decades, I have witnessed
several, but not many, technological
advancements that have been truly
useful in improving the safety of new-
borns. Masimo pulse oximetry is one.
Years ago, in a landmark study pub-
lished in Pediatrics, I showed that se-
vere retinopathy of prematurity (ROP)
and blindness in preterm babies was
much more prevalent than commonly
thought but that with the implementa-
tion of Masimo Signal Extraction Tech-
nology (SET®), from the time of birth,
rates of ROP decreased significantly.1
This technology has improved
patient safety——particularly in helping
to avoid the many types of damage
that excessive oxygen can cause. It’s
the main reason that, following the
ROP study, I chose to join Masimo. It’s
critical to educate others about how
pulse oximetry can improve patient
outcomes. Some of the adverse
effects of excess oxygen are very
serious, not only for children, but also
for pregnant women, their fetuses,
and even adults.
Going forward, the ability to monitor
the oxygenation of the neonatal brain
will significantly benefit efforts to
avoid central nervous system hypoxia
and hyperoxia.
Dr. Denault:
We started using SedLine in our insti-
tution, a cardiac center seeing 2,000
cases a year, in 2017. Before then, we
were skeptical about processed EEG
monitors and only used near-infrared
spectroscopy (beginning in 2002).
At first, we were quite surprised by
how differently our patients respond-
ed to anesthesia and how often we
observed over-sedation. We have
since significantly reduced our use
of intraoperative anesthesia agents.
For me, the major role of SedLine is to
personalize my anesthesia regimen
and avoid burst suppression from
overdosing, which by itself can lead
to unnecessary complications.
Dr. Ramsay:
Masimo provides innovative, accurate
noninvasive technology that gives
clinically relevant, real-time informa-
tion that improves patient safety and
treatment. Masimo has delivered
technology that is needed to detect
vital sign changes at a time interven-
tion can be made and before harm
can occur.
For example, Masimo technology
helps to prevent blindness in pre-
mature infants, reduce unnecessary
blood transfusions in major surgeries,
and support precise anesthesia in
enhanced recovery programs.
Finally, Masimo technology can help
reduce harm from opioid-induced
respiratory depression through early
detection. By aggregating patient
data collected in the ICU, clinicians
can quickly identify deterioration in a
patient at a time when an intervention
can be made to prevent harm.
Question:
What made you an advocate for
Masimo and how does the compa-
ny’s mission align with your own?
Dr. Goldstein:
Masimo gave me 2020 equipment
back in the 1990s. I am passionate
about doing everything I can to save
the most fragile neonates. Masimo
helps me do my job and more. When
I have had a question, a suggestion, a
thought, or just needed to discuss an
issue regarding patient care, Masimo
wanted to hear from me.
Unlike other companies in the field,
Masimo listened.
Dr. Sola:
Before SET®, SpO2 monitors had
significant false alarms and false
readings. The original innovation by
Masimo gave me the opportunity
to improve the care delivered in the
centers I directed, and subsequently,
in many centers around the world.
I have devoted most of my profes-
sional life to two issues: The first is
education. The second is finding
original ways to improve the quality
of infant care, to decrease morbidity,
and to improve survival without mor-
bidities or sequelae.
Masimo, in the field of noninvasive
monitoring, has shown a permanent
commitment to both.
Dr. Denault:
Masimo brings technologies togeth-
er and continually evaluates and
improves their products. The ability
to combine SedLine with O3 and
other noninvasive technology is really
unique and valuable.
Dr. Ramsay:
Masimo, as a company, is very re-
sponsive to physician needs and also
to patient safety needs. Their focus
on patient safety has resulted in very
positive results. The reliability of their
devices has reduced patient harm
and made our hospitals safer places
to be as a patient.
Question:
What are your thoughts on the next
generation of Masimo technologies
(i.e. automating care, advanced non-
invasive technologies, wearable and
home care solutions, etc.)? How
do you envision them improving
patient safety?
Dr. Goldstein:
With Masimo, innovative technol-
ogy will carry information back to
providers like me reliably, just in time,
and without false positives, helping
me extend my ability to monitor my
patients and save more lives.
Dr. Sola:
For noninvasive technologies in neo-
natal care, I believe the implementa-
tion of SpHb will lead to less expo-
sure from blood transfusion, but also
lead to more appropriate transfusion.
In addition, I believe the implemen-
tation of O3 in neonates will play a
major role in helping clinicians avoid
practices that can neg atively impact
the developing brain.
Dr. Denault:
I hope to see more technologies that
improve patient care become univer-
sally adopted, just as pulse oximetry
and bedside ultrasound have been.
I also hope to see, eventually, more
technology that is environmentally
responsible and affordable.
Dr. Ramsay:
No patient should be categorized
as a “Failure to Rescue.” This must
be made a major quality issue and
eliminated. Nearly every major event
is preceded by a change in vital signs.
Finally, more major surgery is being
done in an outpatient setting and
Masimo technology will enable home
monitoring with the ability to wirelessly
transmit to caregivers’ smart phones
when anomalies are detected, and
at a time when an intervention can
be made.
1Chow L.C., Wright K.W., Sola A.; CSMC Oxygen Adminis-
tration Study Group. Pediatrics. 2003 Feb;111(2):339-45.
20
21
Inno vation
Ne ve r Stops
Rad iu s PPG
At Masimo, innovation is a way of
life. It drives us to think differently
and pursue new ideas. That’s why, when I
look at the list of 2019 product highlights, I’m
incredibly proud of our achievements. They
prove that our relentless drive for innovation is
contributing to better patient care —
both in the hospital and at home.
Bilal Muhsin | Chief Operating Officer
Tetherless Radius PPG pulse oximetry represents a significant breakthrough in patient
monitoring, providing industry-leading Masimo SET® Measure-through Motion and Low
Perfusion™ technology without a cabled connection to a monitor——allowing patients to
move about freely and comfortably while remaining continuously and reliably monitored.
Featuring a feather-weight sensor with an adjustable wrist strap, each Radius PPG single-
patient-use sensor provides four days of battery life. Multiple sensor types are available to
support a variety of patient populations.
Designed to improve patient comfort and convenience while enhancing clinical workflows
and efficiency, Radius PPG is suitable for use anywhere patients can benefit from mobility.
22
23
Halo ION
Do ct el la
Halo ION aggregates trend data from multiple physio-
logic parameters into a single, continuous score for each
patient, configured according to hospital policy and dis-
played and dynamically updated at Patient SafetyNet
central view stations and on Replica mobile devices. By
displaying the relative contribution of each parameter to
the score, Halo ION provides a tool to help clinicians bet-
ter assess possible causes of patient deterioration.
Doctella is a secure, cloud-based patient engagement
and remote home care automation platform. Using intu-
itive, customizable CarePrograms, home device data ag-
gregation, and a web-based provider dashboard, Doctel-
la provides a complete end-to-end home care solution,
allowing clinicians to create, relay, and manage treatment
plans, patient schedules, and patient data flow.
24
25
Pathway ™
O3
Pathway, a newborn oxygenation visualization mode for
Root, provides clinicians with a way to visualize a hospital’s
recommended resuscitation protocol for a newborn’s
oxygen saturation (SpO2) while continuously monitoring
SpO2 and pulse rate (PR) during the first ten minutes after
birth. Pathway is intended to help streamline clinician
workflow and improve protocol adherence during this
critical period.
O3 Regional Oximetry is now indicated for use on
neonatal patients in the U.S. With this expansion,
the benefits of monitoring with O3 are now avail-
able to patients of all ages in the U.S. and beyond.
26
27
W H A T P A T I E N T S A F E T Y M E A N S T O M E
At the core of Masimo is a network of
dedicated employees committed to
enhancing patient safety. Their hard
work and unwavering commitment
drives us closer to reaching our goals
every day. In honor of our 30th anni-
versary, we asked employees at all lev-
els of our organization to tell us what
patient safety means to them and why
they have dedicated their working
lives to improving patient outcomes
and reducing the cost of care.
M I S S I O N S T A T E M E N T
Improving patient outcomes
and reducing the cost of care.®
G U I D I N G P R I N C I P L E S
Remain faithful to your
promises and responsibilities.
Thrive on fascination and
accomplishment and not
greed and power.
Strive to make each year better
than the year before, both
personally and for the team.
Make each day as fun as possible.
Do what is best for patient care.
Clockwise from top: Valery G. Telfort, Austin Pike,
Julie Jin-Cesana, Michelle Hahn, Faisal Kashif,
David Todd, and Crystal Wei. Not pictured:
Elisa Mulet and Andrea Walters.
28
“I appreciate Masimo’s mission in par-
ticular for its use of present progres-
sive verbs, ‘improving’ and ‘reducing.’
This is a reminder that we aren’t solely
focused on an end goal, but instead
on continuously striving for an ideal.
It’s the enduring effort that is im-
portant to me.”
A U S T I N P I K E
Senior Mechanical Engineer
“I feel a particularly strong connec-
tion to two of our guiding princi-
ples, ‘Do what is best for patient
care’ and ‘Strive to make each year
better than the year before, both
personally and for the team.’ These
principles align with my desire to
make a positive impact on the lives
of those in need. At Masimo, I have
the opportunity, every day, to work
toward our shared goal of enhanc-
ing patient safety and improving
patient outcomes, and that is deep-
ly important to me.”
C R Y S T A L W E I
Senior Manager, Project Management
“Every superhero fan knows the say-
ing, ‘With great power comes great
responsibility.’ At Masimo, we say,
‘Thrive on fascination and accom-
plishment and not greed and pow-
er.’ For me, this means that I must
do what is best for patient care at all
stages of the product development
cycle by continuously calibrating
our moral and ethical compass to
safeguard inalienable human rights.”
“Many people ask me, why Masimo?
Throughout the 10 years that I have
worked at Masimo, my answer re-
mains the same: our commitment
to improving healthcare and patient
safety. I love working for an organi-
zation where it is very clear that this
mission drives all of us on a daily ba-
sis. I want to ensure I do my part and
leave healthcare in a better place
for my family, friends, and loved
ones. We all have someone who is
impacted by healthcare. I am driven
to do what is best for patients, who
as we all know are ultimately some-
one’s family.”
M I C H E L L E H A H N
Area Vice President, West, Sales
“I want to know that when my
co-workers, friends, and loved ones
go to a hospital using Masimo, they
will be monitored with the best
technology money can buy. I know
every single Masimo team member
takes pride in their work and would
not allow a low-quality product to
leave the building.”
E L I S A M U L E T
Senior Legal Administrator
“For me, patient safety means saving
lives through developing innovative
technology, upholding the highest
standards, and delivering the best
solutions for patient care. I share
Masimo’s mission and value being
part of a bigger cause and movement
dedicated to improving patient care.”
V A L E R Y G . T E L F O R T
Vice President, Engineering
J U L I E J I N - C E S A N A
Vice President, Worldwide Tax
“20 years ago, my father nearly lost
his eyesight. Thanks to a new treat-
ment, they were able to prolong his
vision. It was at that point, when I
saw how medical technology could
make a difference, that I decided I
wanted to be part of something that
positively impacts the lives of pa-
tients and their families, just as it had
mine—–and that’s when I discovered
Masimo. Masimo technology not
only helps save lives and improve
patient outcomes, every day, but it
also makes a difference in the lives
of patients’ loved ones, too.”
A N D R E A W A L T E R S
Area Vice President, Northeast, Sales
“Patient safety means getting the
best products and services into the
hands of doctors who are respon-
sible for saving the lives of people
who may be going through the
most difficult time of their lives. I
believe that our products help
doctors make better decisions
based on trustworthy data.”
D A V I D T O D D
Senior Manager, IT Systems
“I have always been strongly re-
solved to contribute to patient care,
and have made my career decisions
based on this motivation, opting
to use my background for advanc-
ing noninvasive patient monitoring,
which I find more meaningful than
other applications of engineering. I
believe that passion is the most im-
portant factor in our pursuits, and I
share Masimo’s passion for saving
and improving people’s lives. These
shared values make me proud to be
a part of the Masimo family.”
F A I S A L K A S H I F
Director of Engineering
29
S E L E C T P A R T N E R S
Integrating Masimo
Technology into Leading
Multi-parameter Monitors
Masimo technologies are integrated into more than 200 third-party
monitors from 90 leading brands. Masimo SET® is more often inte-
grated than any other pulse oximetry technology. In addition, many of
our original equipment manufacturer (OEM) partners are enhancing
the capabilities of their monitoring solutions by integrating rainbow®
measurements and other advanced Masimo technologies, including
NomoLine capnography solutions.
NomoLine® ISA™
Capno Module
S E L E C T P A R T N E R S
MX-7™
Low power rainbow®
OEM board
MSX™
Very low power SET®
OEM board
30
31
DIGICARE A G L O B A L C I T I Z E N
H E A D Q U A R T E R S
Corporate Headquarters
52 Discovery
Irvine, CA 92618, USA
Tel: 949 297 7000
I N T E R N A T I O N A L
O P E R A T I O N S
International Headquarters
Puits-Godet 10
2000 Neuchâtel
Switzerland
Tel: +41 32 720 1111
R & D C E N T E R S
52 Discovery
Irvine, CA 92618, USA
25 Sagamore Park Rd,
Hudson, NH 03051, USA
1021 West Hastings Street Unit 500
Vancouver, BC V6E 0C3, Canada
430 W. 5th St. #800
Panama City, FL 32401, USA
Svärdvägen 15, 182 33
Danderyd, Sweden
M A N U F A C T U R I N G C E N T E R S
U .S . Manufacturing
15776 Laguna Canyon Rd,
Irvine, CA 92618, USA
Mexico Manufacturing
Industrial Vallera De Mexicali, S.A. de C.V.
Calzada Del Oro No. 2001
Modulo-6, Mexicali, 21395, Mexico
Industrial Vallera de Mexicali S.A. de C.V.
Calle José López Portillo, 104-A, Parque
Industrial, Código Postal 83455,
San Luis Rio Colorado, Sonora, Mexico
Sweden Manufacturing
Svärdvägen 15,
182 33 Danderyd, Sweden
C O U N T R Y O F F I C E S
Asia Pacific
31 Ubi Road 1, #04-05
Singapore 408694
Tel: +65-6521-6700
G L O B A L R E A C H
As a global company, Masimo
employs over 5,500 people
worldwide and maintains
operations in North America,
Europe, Latin America, the
Middle East, Asia, and Australia.
Australia
Suite 5.04, Level 5
Avaya House, 123 Epping Road
North Ryde, NSW 2113, Australia
Tel: 1300 627466
Austria
Masimo Österreich GmbH
Mariahilfer Straße 136
1150 Wien, Austria
Tel: +43 (0)1 533 7361
Brazil
Rua Gal. Fernando Vasconcellos Cavalcanti
de Albuquerque, 80
Salas 402 e 404 Bloco A
Cotia - SP, Brazil, 06711-020
Tel: + 55 11 3149 8181
Canada
1021 West Hastings Street Unit 500
Vancouver, BC V6E 0C3, Canada
Tel: 1-888-336-0043
China
Unit 4905, Office Tower of Raffles City,
No. 268 Xizang Road(M), Huangpu District,
Shanghai 200001 P.R.C.
Tel: +86 (21) 6378 8998
Masimo’s mission and guiding principles ar-
en’t restricted by borders; we are focused on
ensuring global access to the technologies and health-
care that we’d want for our own loved ones. We are
proud of the customer relationships we have built and
the patients we reached internationally in 2019, yet
there are still five billion people in this world who don’t
have access to safe surgery. In 2020, we will pursue all
possible opportunities to do what is right for every pa-
tient, everywhere, and to make a difference in all peoples’
lives. Patient safety, love, dignity, and respect
for all is a goal we must never stop pursuing.
Stacey Orsat | President, EMEA
R&D Center
Manufacturing Centers
Country Offices
Masimo Distributors
Masimo OEM Partners
Masimo Capnography OEMs
Dubai
DSO-DDP-Office-A4-401-407-408
Dubai Silicon Oasis
Dubai – UAE
Tel: +971 50 929 7 939
France
Celtic Parc - Le Bois des Côtes
304 Route Nationale 6
69760 Limonest, France
Tel: +33 (0) 4 72 17 93 70
Germany
Niederlassung, Deutschland
Lindberghstr 11, 82178
Puchheim, Germany
Tel: +49 89 800 65 899-0
Hong Kong
22/F Unit 6, Tower 1, Millennium City 1
No. 388 Kwun Tong Road
Kwun Tong, Kowloon, Hong Kong
Tel: +852-2326-3011
India
1 Floor, Billor’s Pladium, No. 19/3
Cunningham Road,
Bengaluru-560052, Karnataka, India
Tel: +91 80 453 88888
Italy
Via Domenico Scarlatti 30,
20124 Milano, Italy
Tel: +39 02 4507 6308
Japan
Shinjuku Front Tower, 24F2-21-1 Kitashinjuku,
Shinjuku-ku, Tokyo, 169-0074, Japan
Tel: +(81) 3-3868-5201
Korea
Platinum Tower 2F, Seochodae-ro 398,
Seochu-gu, Seoul, South Korea
Tel: +82 2 597 4900
Latin America
Paseo de la Reforma 404, Piso 6-602
Edificio Moncayo, Col. Juárez
México, D.F. 06600, Delegación Cuauhtémoc
Tel: +52 5511-2799
Netherlands
Hart van Brabantlaan 12-14-16
5038 JL Tilburg, Netherlands
Tel: +31 135 832 479
Poland
Plac Kontytucji 5/17,
00-657 Warszawa, Poland
Tel: +48 510 036 367
Saudi Arabia
King Khalid Road, The Walk
Unit no. 15
Riyadh, Kingdom of Saudi Arabia
Tel +966 558 866 513
Spain
Ronda de Poniente, 12 2F
28760 Tres Cantos, Madrid, Spain
Tel: +34 91 8049734
Turkey
Mustafa Kemal Mah. 2125. Sok
Kolbay Is Merkezi C Blok No. 6/10
Cankaya / Ankara, Turkey
Tel: +90 312 219 54 38
United Kingdom
Matrix House, Basing View
Basingstoke-Hampshire RG21 4DZ, U.K.
Tel: +44 (0)1256 479988
T H I R D P A R T I E S
Masimo Distributors
Masimo OEMS
Masimo Capnography OEMS
32
33
F I N A N C I A L P E R F O R M A N C E
A S S E T S • L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y • R E V E N U E
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
A S S E T S
Current assets
Cash and cash equivalents
Short-term investments
Trade accounts receivable, net of allowance for doubtful accounts
Inventories
Other current assets
Total current assets
Lease receivable, non-current
Deferred costs and other contract assets
Property and equipment, net
Intangible assets, net
Goodwill
Deferred tax assets
Other non-current assets
Total assets
December 28, 2019 December 29, 2018
$567,687
120,000
132,433
115,871
60,071
996,062
49,936
16,214
219,552
27,251
22,350
35,972
28,791
$552,490
—
109,629
94,732
32,426
789,277
—
122,906
165,972
27,924
23,297
21,210
4,232
$1,396,128
$1,154,818
L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y
December 28, 2019 December 29, 2018
Current liabilities
Accounts payable
Accrued compensation
Deferred revenue and other contract-related liabilities, current
Other current liabilities
Total current liabilities
Other non-current liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity
Preferred stock
Common stock
Treasury stock
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Total stockholders’ equity
$54,548
54,705
25,939
37,027
172,219
56,035
228,254
—
54
(526,580)
600,624
(6,718)
1,100,494
1,167,874
$40,388
49,486
32,054
24,627
146,555
39,198
185,753
—
53
(489,026)
533,164
(6,199)
931,073
969,065
Total liabilities and stockholders’ equity
$1,396,128
$1,154,818
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
R E V E N U E
Product
Royalty and other revenue
Total revenue
Cost of goods sold
Gross profit
Operating expenses:
Selling, general, and administrative
Research and development
Litigation settlement, award and/or defense costs
Total operating expenses
Operating income
Non-operating income
Income before provision for income taxes
Provision for income taxes
Net income
Net income per share:
Basic
Diluted
Weighted-average shares used in per share calculations:
Basic
Diluted
Year ended
December 28, 2019
Year ended
December 29, 2018
$936,408
1,429
937,837
308,665
629,172
314,661
93,295
—
407,956
221,216
12,950
234,166
37,950
$829,874
28,415
858,289
283,397
574,892
285,417
81,006
425
366,848
208,044
5,732
213,776
20,233
$196,216
$193,543
$3.67
$3.44
53,434
57,100
$3.70
$3.45
52,296
56,039
34
35
F I N A N C I A L P E R F O R M A N C E
C A S H F L O W S
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
Stock-based compensation
Loss on disposal of equipment, intangibles and other assets
Provision (benefit) for doubtful accounts
Benefit for amount due from former foreign agent
Benefit from deferred income taxes
Changes in operating assets and liabilities:
(Increase) decrease in trade accounts receivable
Increase in inventories
(Increase) decrease in other current assets
Increase in lease receivable, net
Decrease (increase) in deferred costs and other
contract assets
(Increase) decrease in other non-current assets
Increase in accounts payable
Increase in accrued compensation
Increase in deferred revenue and other
contract-related liabilities
Increase (decrease) in income taxes payable
Increase in accrued liabilities
Increase (decrease) in other non-current liabilities
Net cash provided by operating activities
Year ended
December 28, 2019
Year ended
December 29, 2018
$196,216
$193,543
23,487
39,233
357
687
—
(5,965)
(23,580)
(21,257)
(8,536)
(11,958)
3,308
(226)
9,934
5,338
7,739
4,079
746
2,038
221,640
21,127
27,417
949
(439)
(2,016)
(8,274)
10,826
(1,885)
3,843
—
(17,935)
407
5,211
10,195
1,420
(1,208)
3,923
(7,577)
239,527
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Cash flows from investing activities:
Purchases of short-term investments
Purchases of property and equipment
Increase in intangible assets
(Purchases of) proceeds from strategic investments
Business acquisition, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issuance of common stock
Repurchases of common stock
Other
Net cash provided by (used in) financing activities
Effect of foreign currency exchange rates on cash
Net increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
Year ended
December 28, 2019
Year ended
December 29, 2018
(120,000)
(68,375)
(4,117)
(5,189)
—
(197,681)
28,339
(37,555)
(123)
(9,339)
814
15,434
552,641
—
(17,126)
(5,557)
453
(3,922)
(26,152)
44,748
(18,478)
(490)
25,780
(1,997)
237,158
315,483
Cash, cash equivalents and restricted cash at end of period
$568,075
$ 552,641
36
37
F O R W A R D – L O O K I N G S T A T E M E N T S
All statements other than statements of historical facts
management; product
liability claims exposure; a
included in this annual report that address activities,
failure to obtain expected returns from the amount of
events or developments that we expect, believe, or
intangible assets we have recorded; the maintenance
anticipate will or may occur in the future are forward-
of our brand; the amount and type of equity awards
looking
statements. Forward-looking
statements
that we may grant to employees and service providers
include statements which are predictive in nature,
in the future; our ongoing
litigation and related
which depend upon or refer to future events or
matters; and other factors discussed in the “Risk
conditions, or which include words such as “expects,”
Factors” section of our most recent periodic reports
“anticipates,” “intends,” “plans,” “believes,” “estimates”
filed with the Securities and Exchange Commission
or the negative of these words or other similar terms
(“SEC”), including our most recent Annual Report
or expressions that concern our expectations, strategy,
on Form 10-K, Quarterly Reports on Form 10-Q and
plans or intentions. These forward-looking statements
Current Reports on Form 8-K, all of which you may
are based on management’s current expectations
obtain for free on the SEC’s website at www.sec.gov.
and beliefs and are subject to uncertainties and
Although we believe that the expectations reflected
factors, all of which are difficult to predict and many of
in our forward-looking statements are reasonable,
which are beyond our control and could cause actual
we do not know whether our expectations will prove
results to differ materially and adversely from those
correct. You are cautioned not to place undue reliance
described in the forward-looking statements. These
on these forward-looking statements, which speak
risks include, but are not limited to, those related
only as of the date hereof, even if subsequently made
to: our dependence on Masimo SET®, products and
available by us on our website or otherwise. We do not
technologies for substantially all of our revenue; any
undertake any obligation to update, amend or clarify
failure in protecting our intellectual property; exposure
these forward-looking statements, whether as a result
to competitors’ assertions of
intellectual property
of new information, future events or otherwise, except
claims; the highly competitive nature of the markets
as may be required under applicable securities laws.
in which we sell our products and technologies; any
failure to continue developing innovative products
and technologies; the lack of acceptance of any of our
NOTE REGARDING THIS ANNUAL REPORT
Please note that this annual report does not constitute
current or future products and technologies; obtaining
our “annual report to security holders” for purposes of
regulatory approval of our current and future products
the requirements of the SEC. For a copy of our annual
and technologies; the risk that the implementation
report to security holders required under Rule 14a-3 of
of our international realignment will not continue to
Regulation 14A of the Securities Exchange Act of 1934, as
produce anticipated operational and financial benefits,
amended, please refer to our Annual Report on Form 10-K
including a continued lower effective tax rate; the loss
for the fiscal year ended December 28, 2019, which you
of our customers; the failure to retain and recruit senior
may obtain for free on the SEC‘s website at www.sec.gov.
38
M A S I M O • 5 2 D I S C O V E R Y • I R V I N E , C A 9 2 6 1 8 • T E L : 9 4 9 2 9 7 7 0 0 0
© 2020 Masimo, SET, rainbow, rainbow SET, RD SET, DCX, DeviceConX, Doctella, DST, Halo ION, HBox, Iris, Iris Analytics, Iris Gateway, ISA, iSirona, Masimo SafetyNet,
Measure-through Motion and Low Perfusion, MST, MSX, MX-7, NomoLine, O3, Oxygen Reserve Index, ORi, Pathway, Pulse CO-Oximeter, PVi, Radius-PPG, Replica, Root,
RRa, SedLine, Signal Extraction Technology, SpCO, SpHb, SpMet, SpOC, SST, UniView, VCX, VitalsConX, and Improving patient outcomes and reducing the cost of care are
trademarks, registered trademarks, or service marks of Masimo Corporation. All other products, logos, or company names mentioned herein may be trademarks and/or
registered trademarks of their respective companies.
REGULATORY NOTICE
Not all Masimo features and/or products included in this Annual Report are available in all markets .
61129/PLM-11616A-0320