CareFusion Corp. (CFN) entered into a multi-year technology licensing agreement with Masimo Corp. (MASI) regarding the use of Masimo Rainbow SET Pulse CO-Oximetry technology in CareFusion infusion and respiratory products, which are presently under development. The agreement enables CareFusion’s future infusion and respiratory products to non-invasively and continuously measure multiple blood constituents to more accurately assess [...]

(CFN) CareFusion Corporation Enters Agreement with Masimo

CareFusion Corp. (CFN) entered into a multi-year technology licensing agreement with Masimo Corp. (MASI) regarding the use of Masimo Rainbow SET Pulse CO-Oximetry technology in CareFusion infusion and respiratory products, which are presently under development. 
 
The agreement enables CareFusion’s future infusion and respiratory products to non-invasively and continuously measure multiple blood constituents to more accurately assess dyshemoglobins affecting oxygenation, predict fluid responsiveness, and provide earlier identification of respiratory compromise.
 
CareFusion’s ventilators and infusion pumps facilitate earlier detection, diagnosis and treatment of potentially life-threatening conditions by accessing total hemoglobin (SpHb), oxygen content (SpOC), carboxyhemoglobin (SpCO), methemoglobin (SpMet), and PVI for fluid responsiveness, in addition to oxyhemoglobin (SpO2), perfusion index (PI), and pulse rate.
 
CareFusion is a medical technology company formed recently by the spin-off of the Clinical and Medical Products business of Cardinal Health, Inc. (CAH). The spin-off was completed in September 2009 through a pro rata distribution of roughly 81% of CareFusion’s common stock.
 
Masimo develops, manufactures and markets a family of non-invasive blood monitoring systems that consist of a monitor, circuit board and sensors. The systems are primarily used to monitor blood oxygen saturation levels and protect against hypoxemia and hyperoxemia. Hypoxemia, low blood-oxygen levels, can result in brain damage and death. Hyperoxemia, high-blood oxygen levels, can result in permanent eye-damage and blindness. If infusion and respiratory products are developed successfully, the agreement enables CareFusion to use Masimo’s expertise in pulse oximetry technology. This will boost demand for CareFusion infusion and respiratory products which will expand the company’s top-line.
 
Masimo is a market leader in the pulse oximetry monitoring equipment market industry. The company's closest competitors are Haemonetics Corp. (HAE) and Becton, Dickinson and Co. (BDX).
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Masimo Corporation (MASI) reported third quarter fiscal 2009 results. Earnings per share were 22 cents, beating the Zacks Consensus Estimate of 21 cents. However, earnings were flat year over year. 

Total revenues in the reported quarter increased roughly 12% year over year to $87.4 million. Product revenues increased 14% year over year to $75.1 million. Royalty revenues increased roughly 2% year over year to $12.3 million. Growth in product revenue can be attributed to higher demand for Masimo SET and Masimo Rainbow SET monitors. 

Masimo SET revenues increased approximately 10% year over year to $69.1 million as a result of an expansion in the company’s client base of hospitals. Masimo Rainbow SET revenues doubled year over year to $6.0 million. Growth can be primarily attributed to strong demand for Rainbow licensed parameters, especially SpCO and SpHb, and higher sale of Rainbow consumables. 

Gross margin in the reported quarter declined 10 basis points (bps) year over year to 71.2%. Selling, general and administrative expenses as a percentage of sales increased 100 bps year over year to 38.3%. Research and development expenses as a percentage of sales increased 120 bps year over year to 8.9%. 

Higher operating expenses were primarily responsible for lower operating and net margins. Operating margin declined 240 bps year over year to 23.8%. Net margin declined 180 bps year over year to 14.9%. 

Masimo ended the quarter with cash and cash equivalents of $174.7 million, an increase of roughly 19% year-to-date. Cash flow from operations was approximately $18.6 million. 

Masimo Corporation develops, manufactures and markets a family of non-invasive blood monitoring systems that consist of a monitor, circuit board and sensors. The systems are primarily used to monitor blood oxygen saturation levels and protect against hypoxemia and hyperoxemia. Hypoxemia − low blood-oxygen levels − can result in brain damage and death. Hyperoxemia − high-blood oxygen levels − can result in permanent eye-damage and blindness. 

Masimo is a leader in the pulse oximetry monitoring equipment market. The company's closest competitors are Haemonetics Corporation (HAE) and Becton, Dickinson and Company (BDX).
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Haemonetics Corporation (HAE) reported strong results for the second quarter of fiscal 2010. Earnings per share were 69 cents, beating the Zacks Consensus Estimate of 65 cents and the year-ago earnings of 58 cents. Sales Total revenues in the reported quarter were $157 million, increasing 8% year over year. Excluding a favorable foreign currency translation (FX), revenues [...]

(HAE) Haemonetics Corporation Reports Strong Earnings Results

Haemonetics Corporation (HAE) reported strong results for the second quarter of fiscal 2010. Earnings per share were 69 cents, beating the Zacks Consensus Estimate of 65 cents and the year-ago earnings of 58 cents.

Sales

Total revenues in the reported quarter were $157 million, increasing 8% year over year. Excluding a favorable foreign currency translation (FX), revenues increased 6% year over year. On a geographic basis, U.S. sales represented roughly 48% of total sales and increased 12.5% year over year. International sales increased 3.5% year over year.

Plasma disposables revenues increased 19% year over year to $59 million. Growth can be attributed to higher global demand for plasma collections, higher pricing and implementation of several long-term contracts with customers in the reported quarter. Platelet disposables revenues increased 3% year over year to $37 million due to the company’s strong distribution network in different key markets.

Red Cell disposables revenues declined 2% year over year to $11 million. The decline was primarily due to lower demand for red cells from hospitals as a result of a reduction in elective surgeries owing to the global recession. Hospital disposables revenues increased 2% year over year to roughly $30 million.

Margins

Haemonetics reported an expansion in margins. Gross margin increased 30 basis points (bps) year over year to 51.5%. Research and development (R&D) expenses as a percentage of sales increased 50 bps year over year to 4.1%. Selling, general and administrative (SG&A) expenses as a percentage of sales declined 120 bps year over year to 30.2%.

Higher gross margin coupled with lower SG&A expenses as a percentage of sales increased the operating margin 100 bps year over year to 17.2%.

Balance Sheet & Cash Flow

Haemonetics ended the quarter with cash and cash equivalents of approximately $178 million. The company’s outstanding debt stood at $20 million at the end of the quarter. Free cash flow was $24 million for the quarter.

Guidance

Haemonetics affirmed its full fiscal 2010 guidance. For the year, sales growth is expected in the range of 8% to 11% year over year. Operating income should grow in the range of 12% to 15% year over year. Earnings per share should be between $2.75 and $2.85.

Haemonetics Corporation is the market leader in developing and manufacturing blood collection and processing technology. Haemonetics operates in a very competitive environment, both for manual and automated systems, which includes big players like Baxter International Inc. (BAX), Abbott Laboratories (ABT) and Medtronic Inc. (MDT).
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