‼️ Today is a BIG Day! ‼️

Kex

Check the Spoiler if you dare! 😜

Masimo will report results for the quarter after the close of regular hours trading today.

Conference call around 1700H Eastern.

No talk of whether the sale of the consumer division, including Sound United, will be discussed.

Kex

Meanwhile…

MASI is close to a 52 week high today.

The all-time high, however, is double today’s trading price at more than $305 per share. The first actual numbers have just been released.

The market does not seem happy with those numbers. At the close of normal trading hours, MASI was trading for $151.56. Currently trading after hours for $141.18, a loss of almost 7% on the day, which is significant.

For the year to date, MASI has gained 32%, compared to the S&P 500 gain of 22%.

The conference call can frequently influences sentiment, either way, especially any upbeat or disappointing guidance, or any news about the sale of the consumer business.

Kex

Looks like a pretty solid quarter…

04:28 PM EST, 11/05/2024 (MT Newswires) -- Masimo (MASI) reported Q3 non-GAAP diluted earnings late Tuesday of $0.98 per share, up from $0.75 a year earlier.

Analysts polled by Capital IQ expected $0.84.

Revenue for the quarter ended Sept. 28 was $504.6 million, up from $478.9 million a year ago.

Analysts surveyed by Capital IQ expected $502.9 million.

The company said it expects Q4 non-GAAP earnings of between $1.35 and $1.50 per diluted share on revenue of $581 million to $611 million.

Analysts polled by Capital IQ expect $1.41 on revenue of $607.6 million.

The company now expects full-year non-GAAP earnings of $3.95 to $4.10 per share on revenue of $2.08 billion to $2.11 billion.

Its prior guidance was $3.80 to $4 per share on revenue of $2.09 billion to $2.14 billion.

Analysts surveyed by Capital IQ expect $3.88 on revenue of $2.10 billion.

Gardenstater

Q4 Revenue guidance misses the expectation at the midpoint, but only by 1.9%.

Toolfan66

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mrbigbluelight

Jstas

Was there a point here?

Kex

Well, the original post, with the spoiler, was a bit of a tongue in cheek tease because of what else is happening today…

But otherwise, Masimo results can provide insight regarding who will, or will not, buy the consumer division, including Sound United and Polk.

I couldn’t listen to the conference call today as I had other obligations at the time, but I’ll go over the transcript later and see if the potential for a sale was even mentioned.

So yeah… the point? The future of Polk. Nothing more. Nothing less.

Kex

From the earnings call transcript:

First, let me provide an update on the strategic review of the consumer business. As we previously announced, the Board has engaged Centerview Partners and Morgan Stanley as our financial advisors and Sullivan & Cromwell as a legal advisor to evaluate strategic alternatives for our consumer business. We will provide updates to the market when appropriate, but we want to assure you that this process is fully underway and we are focused on delivering the best outcomes for our shareholders.

That was from Michelle Brennan, interim CEO.

There was an analyst question on the topic later, but nothing substantive was said.

So basically, we still don’t know what’s happening to Sound United and Polk. 🤷‍♂️

Jstas

What do you mean we still don't know?

They've retained a Mergers and Acquisitions (M&A) partner in Centerview and Morgan Stanley is an investment bank and a financial services provider.

Morgan Stanley is a financial services corporation that, through its affiliates and subsidiaries, advises, and originates, trades, manages, and distributes capital for institutions, governments, and individuals. The company operates in three business segments: Institutional Securities, Wealth Management, and Investment Management.

In other words, Masimo is trying to divest under performing liabilities while minimizing financial impact. They need a partner with resources to help fund it (Morgan Stanley) and a partner to help broker it (Centerview Partners).

There's too much value in the Sound United brands to just pillage and shut down, besides, there's probably a disgusting amount of debt stacked on top of it and the assets are not valuable enough to cover the liabilities in a liquidation effort. So they are going to shop Sound United or even the individual brands around and eat it on the value just to unload the unsecured debt and get it off the books.

There's no question that Polk Audio and the other consumer level audio and tech brands are going to be sold off.

The only questions are how soon and is there enough "old school" Polk Audio culture still left at Polk Audio to embrace the user community to keep something like Club Polk going and seeing the value in the direct market contact it provides?

Kex

All of that was known (and described by me) weeks ago in another thread.

What I have stated above is that no new information was offered during this report about how that was to be accomplished. The margins for Sound United are half what they are for healthcare. Sales are dropping, whereas healthcare sales are growing.

They just haven’t found anyone willing to cough up the $1B Masimo paid to buy Sound United. They’d probably be happy to accept half that now just to get rid of it. The positive impact on share price and results would be worth it.