To ensure that Politan lies repeated over and over are not taken
as fact, Masimo Corporation (“Masimo” or the “Company”) (NASDAQ:
MASI) sets forth below facts in response to what we believe are
some of Politan’s and Quentin Koffey’s most egregious and
continuing misrepresentations.
These misrepresentations include Politan’s and Mr. Koffey’s
continuing efforts to sow mistrust and confusion regarding the
proposed consumer joint venture. In response, Masimo CEO Joe Kiani
has committed that he will not support the proposed joint venture
unless the entire Board, including Mr. Koffey, also supports
it.
We encourage our stockholders to vote FOR Joe Kiani and
Christopher Chavez using the GOLD proxy card to protect Masimo’s
future and the value of your investment.
Find more information on why your vote is so important at
www.ProtectMasimosFuture.com.
1. The Proposed Joint Venture Would Not Compete with Masimo
in the Healthcare Space and Will Not Benefit Mr. Kiani at the
Expense of Other Shareholders
- Politan has purposely sown mistrust among shareholders by
claiming that the proposed JV transaction would benefit Mr. Kiani
at the expense of other shareholders, and that Mr. Kiani has
refused to allow the Board to consider selling the consumer audio
business alone. Both of these claims are false.
- The JV would not be licensed to compete with Masimo in the
healthcare space using Masimo technology or intellectual
property.
- An independent intellectual property law firm will be used to
oversee the license.
- The Masimo trademark would not be transferred to the JV.
- The Board has already resolved not to move forward with the
proposed JV transaction or any other separation transaction before
the 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”)
without the unanimous approval of the entire Board.
- Because Mr. Koffey continues to spread false information about
the JV, Mr. Kiani has stated that he will not support the proposed
JV even after the 2024 Annual Meeting
unless the entire Board, including Mr. Koffey, also supports
it.
- Mr. Kiani is the largest individual shareholder of Masimo and
would not do anything to harm the Company.
2. The Masimo Directors, Unlike the Politan Directors, Are
Truly Independent
- Politan claims its directors and nominees are “truly
independent,” while the Masimo directors and nominee are not.
- In fact, the opposite is true. The Politan directors were
personally selected by Quentin Koffey and each has been or will be
paid $100,000 if elected.
- Politan director Michelle Brennan and nominee Bill Jellison are
serial activist nominees, and Ms. Brennan has voted in lockstep
with Mr. Koffey over the past year.
- Contrary to Politan’s claim that its nominees were identified
by “an independent, nationally recognized search firm,” Politan’s
law firm knew Mr. Jellison and helped him get appointed to the
board of Anika Therapeutics in May 2024.
- Politan has admitted that its directors and nominees will vote
in lockstep if elected to Masimo’s Board.
- Masimo used a nationally recognized search firm that presented
approximately 60 candidates for the Board, including CEOs, CFOs and
presidents of major university healthcare systems. Both Politan
directors were invited to review and interview any and all of the
candidates. The two Politan directors could not find one of the
nearly 60 candidates to support.
- Masimo directors Bob Chapek and Craig Reynolds, who have voted
independently on all issues, and nominee Chris Chavez are strong,
experienced, former CEOs. They are in high demand to serve on other
Boards and do not rely on activists to secure director
nominations.
- The fact that the independent directors have sided more often
with Mr. Kiani than with Mr. Koffey is not evidence of a lack of
independence. It is evidence of Mr. Koffey’s failure to present any
proposals or ideas to the Board that the independent directors can
support.
3. The Performance of the Healthcare Business Is
Strong
- Since going public in 2007, Masimo has delivered average annual
revenue growth of 12%, which is more than double the rate of market
growth.
- With the exception of last year, Masimo has achieved at least
high-single-digit revenue growth every year since going public (15
out of 16 years) and is on track to achieve that level of growth in
2024.
- Masimo has increased adjusted EBIT margins for the healthcare
business by ~500 basis points, from ~19% in 2017 to ~24% in
2024.
- Before the COVID pandemic, Masimo had increased its gross
margins by 300 basis points from 64% in 2017 to 67% in
2019.
- However, since the pandemic began, Masimo has experienced gross
margin headwinds due primarily to inflationary costs (minimum wage
increasing 20%+ per year) and currency headwinds associated with
our manufacturing in Mexico. As a result, we have shifted
much of our manufacturing to Malaysia in an effort to reach our
goals of 70% gross margins and 30% EBIT margins.
- Despite the gross margin headwinds, Masimo’s professional
healthcare EBIT margins (~24%) are higher than most peers today
(> 75th percentile), with a path to 30% EBIT margins clearly in
view (> 98th percentile).
- Masimo’s SG&A expenses are already lower than 70% of
industry peers, with many of those peers having much higher revenue
that provides a greater ability to scale operating expenses.
- Masimo already plans to reduce its R&D expenses from 9% to
8%, which is in line with industry peers.
- This is not a company that needs fixing. This is a
company that other companies have tried to emulate.
4. Politan Does Not Have a Credible Plan to Deliver Greater
Value Than Masimo’s Plan
- Masimo has a credible and detailed plan to achieve 30% EBIT
margins and $8 earnings per share by 2029, which would make Masimo
more profitable than 98% of its peers.
- Politan claims to be able to achieve 35% EBIT margins but has
offered no plan.
- Politan suggests that Masimo is wasting money with its
corporate headquarters and corporate aircraft. Yet Masimo’s
SG&A spending is lower than its peers, and Mr. Koffey will
likely spend substantially more on the consultants he intends to
hire to tell him how to run the Company.
- Politan seems to be relying on Masimo’s internal management
plan, while at the same time falsely claiming that the Politan
directors have not been provided financial information beyond what
Masimo has disclosed publicly.
- We believe Politan would sell consumer audio at a loss, has no
plan for consumer health, and would waste Masimo’s prior
investments and potential in the consumer health space.
- Masimo’s combined direct and OEM/licensing strategy for
consumer health has worked in the healthcare space and has made
Masimo one of the best medtech companies in the world.
5. Masimo Did Not Engage In “Empty Voting”
- Neither Mr. Kiani nor any other member of management nor the
non-Politan members of the Board had or has any agreement,
arrangement, or understanding with regard to the trading or voting
of Masimo stock by any third-party investor.
About Masimo
Masimo (NASDAQ: MASI) is a global medical technology company
that develops and produces a wide array of industry-leading
monitoring technologies, including innovative measurements,
sensors, patient monitors, and automation and connectivity
solutions. In addition, Masimo Consumer Audio is home to eight
legendary audio brands, including Bowers & Wilkins, Denon,
Marantz, and Polk Audio. Our mission is to improve life, improve
patient outcomes, and reduce the cost of care. Masimo SET®
Measure-through Motion and Low Perfusion™ pulse oximetry,
introduced in 1995, has been shown in over 100 independent and
objective studies to outperform other pulse oximetry technologies.1
Masimo SET® has also been shown to help clinicians reduce severe
retinopathy of prematurity in neonates,2 improve CCHD screening in
newborns3 and, when used for continuous monitoring with Masimo
Patient SafetyNet™ in post-surgical wards, reduce rapid response
team activations, ICU transfers, and costs.4-7 Masimo SET® is
estimated to be used on more than 200 million patients in leading
hospitals and other healthcare settings around the world,8 and is
the primary pulse oximetry at 9 of the top 10 hospitals as ranked
in the 2022-23 U.S. News and World Report Best Hospitals Honor
Roll.9 In 2005, Masimo introduced rainbow® Pulse CO-Oximetry
technology, allowing noninvasive and continuous monitoring of blood
constituents that previously could only be measured invasively,
including total hemoglobin (SpHb®), oxygen content (SpOC™),
carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth
Variability Index (PVi®), RPVi™ (rainbow® PVi), and Oxygen Reserve
Index (ORi™). In 2013, Masimo introduced the Root® Patient
Monitoring and Connectivity Platform, built from the ground up to
be as flexible and expandable as possible to facilitate the
addition of other Masimo and third-party monitoring technologies;
key Masimo additions include Next Generation SedLine® Brain
Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography
with NomoLine® sampling lines. Masimo’s family of continuous and
spot-check monitoring Pulse CO-Oximeters® includes devices designed
for use in a variety of clinical and non-clinical scenarios,
including tetherless, wearable technology, such as Radius-7®,
Radius PPG®, and Radius VSM™, portable devices like Rad-67®,
fingertip pulse oximeters like MightySat® Rx, and devices available
for use both in the hospital and at home, such as Rad-97® and the
Masimo W1® medical watch. Masimo hospital and home automation and
connectivity solutions are centered around the Masimo Hospital
Automation™ platform, and include Iris® Gateway, iSirona™, Patient
SafetyNet, Replica®, Halo ION®, UniView®, UniView :60™, and Masimo
SafetyNet®. Its growing portfolio of health and wellness solutions
includes Radius Tº®, Masimo W1 Sport, and Masimo Stork™. Additional
information about Masimo and its products may be found at
www.masimo.com. Published clinical studies on Masimo products can
be found at www.masimo.com/evidence/featured-studies/feature/.
RPVi has not received FDA 510(k) clearance and is not available
for sale in the United States. The use of the trademark Patient
SafetyNet is under license from University HealthSystem
Consortium.
References
- Published 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.
- Castillo A et al. Prevention of Retinopathy of Prematurity in
Preterm Infants through Changes in Clinical Practice and SpO2
Technology. Acta Paediatr. 2011 Feb;100(2):188-92.
- de-Wahl Granelli A et al. Impact of pulse oximetry screening on
the detection of duct dependent congenital heart disease: a Swedish
prospective screening study in 39,821 newborns. BMJ. 2009;Jan
8;338.
- Taenzer A et al. Impact of pulse oximetry surveillance on
rescue events and intensive care unit transfers: a before-and-after
concurrence study. Anesthesiology. 2010:112(2):282-287.
- Taenzer A et al. Postoperative Monitoring – The Dartmouth
Experience. Anesthesia Patient Safety Foundation Newsletter.
Spring-Summer 2012.
- McGrath S et al. Surveillance Monitoring Management for General
Care Units: Strategy, Design, and Implementation. The Joint
Commission Journal on Quality and Patient Safety. 2016
Jul;42(7):293-302.
- McGrath S et al. Inpatient Respiratory Arrest Associated With
Sedative and Analgesic Medications: Impact of Continuous Monitoring
on Patient Mortality and Severe Morbidity. J Patient Saf. 2020 14
Mar. DOI: 10.1097/PTS.0000000000000696.
- Estimate: Masimo data on file.
-
http://health.usnews.com/health-care/best-hospitals/articles/best-hospitals-honor-roll-and-overview.
Forward-Looking Statements
This press release includes forward-looking statements as
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
in connection with the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, among others,
statements regarding the 2024 Annual Meeting of Stockholders (the
“2024 Annual Meeting”) of Masimo and the potential stockholder
approval of the Board’s nominees, the proposed separation of
Masimo’s consumer business, including any proposed joint venture
transaction, and Masimo’s earnings per share, gross margin and EBIT
margin estimates and targets. These forward-looking statements are
based on current expectations about future events affecting Masimo
and are subject to risks and uncertainties, all of which are
difficult to predict and many of which are beyond Masimo’s control
and could cause its actual results to differ materially and
adversely from those expressed in its forward-looking statements as
a result of various risk factors, including, but not limited to (i)
uncertainties regarding a potential separation of Masimo’s consumer
business, including any proposed joint venture transaction, (ii)
uncertainties regarding future actions that may be taken by Politan
in furtherance of its nomination of director candidates for
election at the 2024 Annual Meeting, (iii) the potential cost and
management distraction attendant to Politan’s nomination of
director nominees at the 2024 Annual Meeting and (iv) factors
discussed in the “Risk Factors” section of Masimo’s most recent
periodic reports filed with the Securities and Exchange Commission
(“SEC”), which may be obtained for free at the SEC’s website at
www.sec.gov. Although Masimo believes that the expectations
reflected in its forward-looking statements are reasonable, the
Company does not know whether its expectations will prove correct.
All forward-looking statements included in this press release are
expressly qualified in their entirety by the foregoing cautionary
statements. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of today’s date.
Masimo does not undertake any obligation to update, amend or
clarify these statements or the “Risk Factors” contained in the
Company’s most recent reports filed with the SEC, whether as a
result of new information, future events or otherwise, except as
may be required under the applicable securities laws.
Additional Information Regarding the 2024 Annual Meeting of
Stockholders and Where to Find It
The Company has filed a definitive proxy statement containing a
form of GOLD proxy card with the SEC in connection with its
solicitation of proxies for its 2024 Annual Meeting. THE COMPANY’S
STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY
STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND
ACCOMPANYING GOLD PROXY CARD AS THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders may obtain the proxy statement, any
amendments or supplements to the proxy statement and other
documents as and when filed by the Company with the SEC without
charge from the SEC’s website at www.sec.gov.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in connection with
the solicitation of proxies from the Company’s stockholders in
connection with the matters to be considered at the 2024 Annual
Meeting. Information regarding the direct and indirect interests,
by security holdings or otherwise, of the Company’s directors and
executive officers in the Company is included in the Company’s
definitive proxy statement for the 2024 Annual Meeting (the “2024
Proxy Statement”), which can be found through the SEC’s website at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000937556/000121390024053125/ea0206756-05.htm.
Changes to the direct or indirect interests of Masimo’s securities
by directors and executive officers are set forth in SEC filings on
a Statement of Change in Ownership on Form 4 filed with the SEC on
June 28, 2024, which can be found through the SEC’s website at
https://www.sec.gov/Archives/edgar/data/937556/000093755624000053/xslF345X05/wk-form4_1719606794.xml.
Any other changes to the 2024 Proxy Statement may be found in any
amendments or supplements to the 2024 Proxy Statement and other
documents as and when filed by the Company with the SEC, which can
be found through the SEC’s website at www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240715145538/en/
Investor Contact: Eli Kammerman (949) 297-7077
ekammerman@masimo.com
Media Contact: Evan Lamb (949) 396-3376
elamb@masimo.com
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