Former Sound United Business Could Be “Discontinued” Next Year After Falling Revenues, No Buyer and Losses Claims New Director
Masimo executives are back calling their consumer audio business Sound United, with a senior executive on a conference call this week claiming that they will move the business into being a “discontinued operations” if and when the board decides “to no longer pursue a spin-off, of the this business into a publicly traded company” they claimed.
What “discontinued operation” actually meant was not rationalised or explained for their struggling consumer business that in the three months ending September 28, 2024, recorded a revenue decline to US$161.4 million vs $171.5 million in the same period in 2023.
The business that sells Bowers and Wilkins, Denon and Marantz sound systems with the full Denon range set to be sold at JB Hi Fi next year, reporting a net loss of $12.9 million during the quarter ending in September 2024.
In the same period in 2023 the Company reported a loss of $17.8 million.
Marantz Grand Horizon speaker (champagne).
For the nine months ended September 28, 2024, the Company recorded revenue of $465.6 million a fall from the $562.1 million in the prior year.
The net loss in the period was $31.3 million.
At a briefing to analysts this week Micah Young, Executive Vice President & Chief Financial Officer at Masimo said when asked about the future of the former Sound United business “We will continue to update the market on the work of the management team, in partnership with the board’s Business Review Committee”?
“We expect to provide the next update in January 2025. With regard to our strategic review process, the board has not made a final determination of the manner in which the consumer business will be separated. If, among other things, the board anticipate treating the consumer business as a discontinued operation. Upon those decisions being finalised, further, we would exclude the results for our non-GAAP earnings, and no longer provide guidance for this segment if it still remains with the company into the first quarter of 2025.”
ChannelNews understands that Masimo executives have spoken to several potential buyers but at this stage and due in part to falling revenues and losses have failed to find a buyer for the business.
Masimo, a hospital technology company bursts into the Hi-Fi market after buying Sound United’s brand portfolio for A$1.532B.
Denon Model 10 amplifier.
The move shocked the market with analysts claiming the acquisition was an “emotional buy” by the founder of Masimo Joe Kiani who has since been dumped as the CEO of the US Company.
Surprise was an understatement as Masimo was known more for non-invasive medical monitoring.
Kiani made compelling statements at the time about his company’s foray into consumer markets needing established distribution channels and supply chains for his consumer health tracking watches.
Masimo’s board who eventually turned on him remained unconvinced.
Investors on a conference call heard this week that the ‘The company is currently evaluating the structure of any potential separation of its consumer business and the method, structure, timing, and terms of any such potential separation are still under consideration and have not been determined, approved, or finalised.”
