RESMED Inc. Announces Results for the First Quarter of Fiscal Year 2015

First quarter revenue increased by 6% to $380 million

First quarter GAAP diluted earnings per share of $0.58

First quarter operating cash flow of $86.5 million

Company repurchased 835,000 shares in the first quarter

Company successfully launches AirSense 10 platform globally

Oct 23, 2014, 16:05 ET from ResMed Inc.

SAN DIEGO, Oct. 23, 2014 /PRNewswire/ -- ResMed Inc. (NYSE: RMD) today announced results for its quarter ended September 30, 2014. Revenue for the quarter was $380.4 million, a 6 percent increase compared to the quarter ended September 30, 2013 (also a 6 percent increase on a constant currency basis). Net income was $83.3 million, an increase of 3 percent compared to the quarter ended September 30, 2013. Diluted earnings per share for the quarter were $0.58, an increase of 4 percent compared to the quarter ended September 30, 2013. 

"We had a successful start to fiscal year 2015, as new product launches drove revenue growth," said Mick Farrell, ResMed's chief executive officer. "Our results showed very strong performance from our European and Asia Pacific regions, as well as solid growth in the Americas." 

"During the quarter, we launched innovative products for the sleep-disordered breathing market, including our new AirSense 10 platform, as well as a new life support ventilator for the U.S. respiratory care market, our new Astral platform. We have also recently made progress in building consumer awareness through two initiatives: an education and product-focused campaign called 'Better Sleep for Women'; and the recent launch of a new product 'S+ by ResMed', the first non-contact sleep wellness tracking device for individuals," said Farrell.

"We are delivering on our promise to drive top-line revenue growth this fiscal year by launching a strong portfolio of new products, services, and solutions. This portfolio will provide exceptional value to all key players in our value chain: physicians, providers, payors, and most importantly, to patients."

Analysis of first quarter results
In the first quarter of fiscal year 2015, revenue outside the Americas was $173.2 million, an 11 percent increase over the prior year's quarter (also an 11 percent increase on a constant currency basis). Revenue in the Americas was $207.2 million, a 3 percent increase compared to $201.5 million in the prior year's quarter.

Gross margin in the first quarter was 62.4 percent, 130 basis points lower than the prior year, mainly due to declines in average selling prices and an unfavorable product mix, which were partially offset by manufacturing and supply chain improvements.

Selling, general and administrative expenses were $110.5 million for the quarter, a 9 percent increase (also a 9 percent increase on a constant currency basis) over the quarter ended September 30, 2013. SG&A expenses were 29.1 percent of revenue in the quarter, compared to 28.3 percent in the quarter ended September 30, 2013, primarily due to higher marketing costs associated with recent new product releases, additional headcount to support our commercial activities and an increase in variable employee compensation costs.   

Research and development expenses were $30.0 million for the quarter, or 7.9 percent of revenue.  R&D expenses increased by 10 percent (a 9 percent increase on a constant currency basis) compared to the quarter ended September 30, 2013, primarily reflecting incremental investment in healthcare informatics and cardiology.

Operating profit for the quarter was $94.7 million and cash flow from operations was $86.5 million.

Amortization of acquired intangible assets was $2.1 million ($1.6 million, net of tax) during the quarter.  Stock-based compensation costs incurred during the quarter of $11.4 million ($8.1 million, net of tax) consisted of expenses associated with employee equity grants, and the company's employee stock purchase plan.  

Share repurchase program
During the quarter, ResMed repurchased 835,000 shares at a cost of $42.9 million, as part of its ongoing capital management program. 

Dividend program
The ResMed board of directors today declared a quarterly dividend of $0.28 per share. The dividend will have a record date of Nov. 20, 2014, payable on Dec. 18, 2014. The dividend will be paid in U.S. currency to holders of ResMed's common stock trading on the New York Stock Exchange. Holders of Chess Depositary Instruments trading on the Australian Securities Exchange will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and reflecting the 10:1 ratio between CDIs and NYSE shares. The ex-dividend date will be Nov. 18, 2014 for common stock holders and for CDI holders. ResMed has received a waiver from the ASX's settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from Nov. 18, 2014 through Nov. 20, 2014, inclusive. 

Webcast details
ResMed will discuss its financial and business results and its business outlook on its webcast at 1:30 p.m. U.S. Pacific Standard Time today. The live webcast of the call can be accessed on ResMed's website at www.resmed.com. Please allow extra time before the call to visit the website and download the streaming media player (Windows Media Player), required to listen to the internet broadcast. The online archive of the broadcast will be available after the live call on ResMed's website. In addition, a telephone replay of the conference call will be available approximately two hours after the call by dialing 630-652-3042 (U.S.) and +1 630-652-3042 (international) and entering a passcode of 38203727. The telephone replay will be available until Nov. 6, 2014.

About ResMed
ResMed changes lives by developing, manufacturing and distributing medical equipment for treating, diagnosing, and managing sleep-disordered breathing, chronic obstructive pulmonary disease, and other chronic diseases. We develop innovative products and solutions to improve the health and quality of life of those who suffer from these conditions, and we work to raise awareness of the potentially serious health consequences of untreated sleep-disordered breathing. For more information on ResMed, visit www.resmed.com.

Safe harbor statement
Statements contained in this release that are not historical facts are "forward-looking" statements as contemplated by the Private Securities Litigation Reform Act of 1995. These forward-looking statements -- including statements regarding ResMed's projections of future revenue or earnings,  expenses, new product development, new product launches and new markets for its products --  are subject to risks and uncertainties, which could cause actual results to materially differ from those projected or implied in the forward-looking statements. Additional risks and uncertainties are discussed in ResMed's periodic reports on file with the U.S. Securities & Exchange Commission.  ResMed does not undertake to update its forward-looking statements.

Investors:
Agnes Lee
Senior Director, Investor Relations
(858) 836-5971
investorrelations@resmed.com

News Media:
Alison Graves
Director, Global Corporate Communications
(858) 836-6789
news@resmed.com

 

RESMED INC AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)



Three Months Ended

September 30,


2014

2013




Net revenue

$380,399

$357,662

Cost of sales

143,086

129,680

Gross profit

237,313

227,982




Operating expenses



Selling, general and administrative

110,520

101,323

Research and development

30,024

27,363

Amortization of acquired intangible assets

2,094

2,412

Total operating expenses

142,638

131,098

Income from operations

94,675

96,884




Other income (expenses), net:



Interest income, net

5,584

6,414

Other, net

1,671

(1,228)

Total other income, net

7,255

5,186




Income before income taxes

101,930

102,070

Income taxes

18,670

21,140

Net income

$83,260

$80,930




Basic earnings per share

$0.59

$0.57

Diluted earnings per share

$0.58

$0.56




Basic shares outstanding

140,127

142,005

Diluted shares outstanding

142,683

145,456

 

RESMED INC AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited - In thousands)



September 30,

June 30,


2014

2014

Assets



Current assets:



Cash and cash equivalents

$881,694

$905,730

Accounts receivable, net

328,591

359,593

Inventories

197,226

165,418

Prepayments, deferred income taxes and other current assets

127,239

125,468

Total current assets

1,534,750

1,556,209

Property, plant and equipment, net

419,786

434,277

Goodwill and other intangible assets, net

323,746

334,510

Deferred income taxes and other non-current assets

31,171

35,966

Total non-current assets

774,703

804,753

Total assets

$2,309,453

$2,360,962

Liabilities and Stockholders' Equity



Current liabilities:



Accounts payable

$76,248

$85,405

Accrued expenses

124,235

130,656

Deferred revenue

39,543

42,370

Income taxes payable

13,619

10,392

Deferred income taxes

651

717

Current portion of long-term debt

0

18

Total current liabilities

254,296

269,558

Non-current liabilities:



Deferred income taxes

10,002

10,716

Deferred revenue

14,489

16,352

Income taxes payable

1,754

5,318

Non-current portion of long-term debt

375,701

300,770

Total non-current liabilities

401,946

333,156

Total liabilities

656,242

602,714

Stockholders' Equity:



Common stock

559

561

Additional paid-in capital

1,136,528

1,117,644

Retained earnings

1,824,457

1,780,396

Treasury stock

(1,334,782)

(1,291,910)

Accumulated other comprehensive income

26,449

151,557

Total stockholders' equity

$1,653,211

$1,758,248




Total liabilities and stockholders' equity

$2,309,453

$2,360,962




 

RESMED INC AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited - In thousands)



September 30,

September 30,


2014

2013

Cash flows from operating activities:



Net income

$83,260

$80,930

Adjustment to reconcile net income to net cash provided by operating activities:



Depreciation and amortization

18,582

17,870

Gain on disposal of business

(709)

-

Stock-based compensation costs

11,367

10,816

Foreign currency revaluation

451

(1,653)

Excess tax benefit from stock-based compensation arrangements

(2,575)

(2,241)

Changes in operating assets and liabilities, net of effect of acquisitions:



Accounts receivable, net

20,804

40,268

Inventories, net

(37,897)

(26,847)

Prepaid expenses, net deferred income taxes and other current assets

(15,168)

(4,451)

Accounts payable, accrued expenses and other liabilities

8,421

(24,267)

Net cash provided by operating activities

86,536

90,425

Cash flows from investing activities:



Purchases of property, plant and equipment

(20,681)

(16,752)

Patent registration costs

(2,366)

(1,679)

Business acquisitions, net of cash acquired

(7,318)

-

Investments in cost-method investments

(500)

(675)

Proceeds from sale of business

468

-

Payments on maturity of foreign currency contracts

(11,206)

(2,486)

Net cash used in investing activities

(41,603)

(21,592)

Cash flows from financing activities:



Proceeds from issuance of common stock, net

4,930

6,470

Excess tax benefit from stock-based compensation arrangements

2,575

2,241

Purchases of treasury stock

(46,803)

(22,822)

Payment of business combination contingent consideration

(458)

(442)

Proceeds from borrowings, net of borrowing costs

75,000

60,000

Repayment of borrowings

(10)

(9)

Dividends paid

(39,199)

(35,478)

Net cash (used in) / provided by financing activities

(3,965)

9,960




Effect of exchange rate changes on cash

(65,004)

21,733

Net increase / (decrease) in cash and cash equivalents

(24,036)

100,526

Cash and cash equivalents at beginning of period

905,730

876,048

Cash and cash equivalents at end of period

881,694

976,574

 

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SOURCE ResMed Inc.



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http://www.resmed.com