Masimo who acquired the Sound United business 18 months ago and then last month created a separate entity has announced revenues for the division of $153.2 million for the last quarter ending March 31, 2024, this is 29% down on the previous period.

There was no breakout for the Masimo’s Asia Pacific audio business however ChannelNews understands that the local business is only down around 10%.

Masimo Consumers owns one world’s largest portfolio of audio brands including Bowers & Wilkins, Denon, Marantz, Polk Audio, Definitive Technology, Classé, HEOS, and Boston Acoustics.

Despite the positive outcome for Masimo’s healthcare business which is still in a fight with Apple over stolen Masimo patents, the Company admits that their audio business is facing challenges, due to the 29.8% decline in non-healthcare revenue.

They claim that the plunge in revenues reflects the broader volatility in the high-end consumer audio market.

They said that the company’s strategic adjustments and increased guidance for 2024 suggest a proactive approach to navigating the challenge this division is facing.

Consolidated revenue was US$492.8 million, comprised of healthcare revenue of $339.6 million and non-healthcare revenue of US$153.2 million.

Joe Kiani, Chairman and Chief Executive Officer of Masimo, said, “It’s good to see that our business is reaching a steady state after a period of robust growth during Covid and the wake of volatility that followed”.

Healthcare revenues were at the high end of our guidance range, driven by strong sensors orders in the U.S. and Europe.

He said that at the behest of the majority of our shareholders, we are pursuing a separation of our consumer business. Management is working diligently to finalize the proposed structure and options for our board of directors to review.

I am hopeful that we can create two businesses that can each achieve great results, and together improve life.”

On March 22, 2024, Masimo announced that its Board of Directors has authorised management to evaluate a proposed separation of its consumer business.

They claim that Masimo is committed to pursuing a separation that would result in two separate companies (consumer and professional healthcare). Masimo expects that any potential separation would result in a “full deconsolidation of the financial statements for the two businesses”.

There was no mention of a potential sale of the business despite rumours that several “Big players” are looking at a potential acquisition of the Masimo Consumer business that has a liability of US $876 million.

Masimo expects that the separated entity will include its consumer audio (including hearables) and consumer health products (including the Stork baby monitor and the Freedom smart watch and band).

Masimo healthcare will retain its professional healthcare and telehealth products.

Current management expects that the separation will improve the profitability of the healthcare business going forward.

This is based on the assumption, that a separation of the consumer business and a possible sale will result in the separate entity being able to pay down its current debt of US $876 million, while reducing their interest payments on the borrowings that currently stand at US$47 million, or 0.63 per share.

The separation costs include adjustments for cost of goods sold, research and development expenses, selling and marketing expenses, certain corporate expenses, and the assumed sharing of Apple litigation costs.