Masimo Corporation (MASI) has reported 43.72 percent jump in profit for the quarter ended Oct. 01, 2016. The company has earned $27.77 million, or $0.52 a share in the quarter, compared with $19.32 million, or $0.36 a share for the same period last year.
Revenue during the quarter grew 9.86 percent to $167.62 million from $152.58 million in the previous year period. Gross margin for the quarter contracted 131 basis points over the previous year period to 65.70 percent. Total expenses were 78.16 percent of quarterly revenues, down from 81.56 percent for the same period last year. This has led to an improvement of 339 basis points in operating margin to 21.84 percent.
Operating income for the quarter was $36.60 million, compared with $28.14 million in the previous year period.
Joe Kiani, chairman and chief executive officer of Masimo, said, "We are happy to report third quarter product revenues and earnings per share that exceeded our projections. Product revenues benefited from continued strength in our consumable business and new product sales. We continue to believe that these results are due to both our superior technologies and the increasing awareness of both hospitals and clinicians who recognize that our technologies can both improve patient care and reduce the cost of delivering that care. Because of our strong Q3 results and the increased demand we continue to see for our products, I am happy that we will be able to once again increase our financial guidance for the year."
For financial year 2016, Masimo Corp expects revenue to be in the range of $692 million to $689 million. The company projects diluted earnings per share to be in the range of $2.13 to $2.01.
Operating cash flow improves significantly
Masimo Corporation has generated cash of $87.83 million from operating activities during the nine month period, up 57.59 percent or $32.10 million, when compared with the last year period.
The company has spent $18.43 million cash to meet investing activities during the nine month period as against cash outgo of $44.01 million in the last year period.
The company has spent $75.35 million cash to carry out financing activities during the nine month period as against cash outgo of $40.76 million in the last year period.
Cash and cash equivalents stood at $125.99 million as on Oct. 01, 2016, up 21.63 percent or $22.41 million from $103.58 million on Oct. 03, 2015.
Working capital decreases marginally
Masimo Corporation has witnessed a decline in the working capital over the last year. It stood at $180.29 million as at Oct. 01, 2016, down 2.95 percent or $5.49 million from $185.78 million on Oct. 03, 2015. Current ratio was at 2.25 as on Oct. 01, 2016, down from 2.66 on Oct. 03, 2015.
Cash conversion cycle (CCC) has decreased to 48 days for the quarter from 120 days for the last year period. Days sales outstanding went up to 46 days for the quarter compared with 45 days for the same period last year.
Days inventory outstanding has decreased to 53 days for the quarter compared with 131 days for the previous year period. At the same time, days payable outstanding went down to 51 days for the quarter from 55 for the same period last year.
Debt comes down
Masimo Corporation has recorded a decline in total debt over the last one year. It stood at $152.50 million as on Oct. 01, 2016, down 19.81 percent or $37.68 million from $190.18 million on Oct. 03, 2015. Total debt was 23.85 percent of total assets as on Oct. 01, 2016, compared with 32.92 percent on Oct. 03, 2015. Debt to equity ratio was at 0.46 as on Oct. 01, 2016, down from 0.71 as on Oct. 03, 2015.
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