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.
