RESMED, INC. SAN DIEGO, Jan. 22, 2015 /PRNewswire/ -- ResMed Inc. (NYSE: RMD) today announced results for its quarter ended December 31, 2014. Revenue for the quarter was $423.0 million, a 10 percent increase compared to the quarter ended December 31, 2013 (a 14 percent increase on a constant currency basis). Net income was $91.2 million, an increase of 5 percent compared to the quarter ended December 31, 2013. Diluted earnings per share for the quarter were $0.64, an increase of 7 percent compared to the quarter ended December 31, 2013.
"We are pleased to report strong double-digit revenue growth, demonstrating excellent progress with our new product launches," said Mick Farrell, ResMed's chief executive officer. "We achieved robust commercial performance across all regions, including double-digit growth in the Americas."
"During the quarter, we continued to roll out the ResMed Air Solutions Platform with the launch of our AirCurve(TM) 10 series of cloud-connected bilevel devices. We also continued the global roll-out of our new life support ventilation system, the Astral(TM) platform. We drove consumer awareness of sleep by launching the S+ by ResMed, the world's first non-contact sleep management solution that helps you monitor and improve your sleep health; we also integrated the S+ with Apple HealthKit. On the legal front, we won a patent infringement lawsuit as we defend our broad portfolio of over 5,000 patents and designs," said Farrell. "We drove top-line revenue growth in the first half of this fiscal year by launching a strong, innovative portfolio of products and solutions. Longer term, we are focused on our strategy to continue to grow our core sleep apnea market, as well as to invest in high-potential growth opportunities: helping patients with COPD, neuromuscular disease, and cardio-respiratory conditions. Our results this quarter show that our solutions continue to meet the needs of our key customer groups, including patients, physicians, healthcare providers and payers. We are executing to our mission: improving patient quality-of-life, lowering healthcare costs, and preventing chronic disease progression."
Analysis of second quarter results
In the second quarter of fiscal year 2015, revenue in the Americas was $231.0 million, a 12 percent increase over the prior year's quarter. Revenue in combined Europe and Asia Pacific was $192.0 million, an 8 percent increase compared to the quarter ended December 31, 2013 (a 16 percent increase on a constant currency basis).
Gross margin in the second quarter was 62.2 percent, lower than the prior year, mainly due to an unfavorable product mix and declines in average selling prices, which were partially offset by manufacturing and supply chain improvements.
Selling, general and administrative expenses were $122.5 million for the quarter, a 10 percent increase (a 15 percent increase on a constant currency basis) over the quarter ended December 31, 2013. SG&A expenses were 29.0 percent of revenue in the quarter, compared to 29.1 percent in the quarter ended December 31, 2013, primarily due to higher marketing costs associated with recent product releases and an increase in variable employee compensation costs.
Research and development expenses were $29.3 million for the quarter, or 6.9 percent of revenue. R&D expenses decreased by 1 percent (a 7 percent increase on a constant currency basis) compared to the quarter ended December 31, 2013.
Operating profit for the quarter was $109.1 million and cash flow from operations was $106.0 million.
Amortization of acquired intangible assets was $2.3 million ($1.7 million, net of tax) during the quarter. Stock-based compensation costs incurred during the quarter of $11.7 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, the company repurchased 667,000 shares at a cost of $33.5 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 February 12, 2015, payable on March 19, 2015. 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 February 10, 2015 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 February 10, 2015 through February 12, 2015, 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 38663898. The telephone replay will be available until February 5, 2015.
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 GravesDirector, 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 Six Months Ended
December 31, December 31,
2014 2013 2014 2013
---- ---- ---- ----
Net revenue $422,952 $384,341 $803,351 $742,003
Cost of sales 159,730 135,582 302,816 265,263
Gross profit 263,222 248,759 500,535 476,740
------------ ------- ------- ------- -------
Operating expenses:
Selling, general
and
administrative 122,520 111,748 233,041 213,071
Research and
development 29,294 29,537 59,318 56,900
Amortization of
acquired
intangible
assets 2,262 2,454 4,355 4,866
Total operating
expenses 154,076 143,739 296,714 274,837
--------------- ------- ------- ------- -------
Income from
operations 109,146 105,020 203,821 201,903
----------- ------- ------- ------- -------
Other income (expenses), net:
Interest income
(expense), net 5,418 6,752 11,003 13,166
Other, net 947 (2,311) 2,617 (3,539)
Total other
income
(expenses), net 6,365 4,441 13,620 9,627
---------------- ----- ----- ------ -----
Income before
income taxes 115,511 109,461 217,441 211,530
Income taxes 24,330 22,825 43,001 43,964
Net income $91,181 $86,636 $174,440 $167,566
---------- ------- ------- -------- --------
Basic earnings
per share $0.65 $0.61 $1.25 $1.18
Diluted earnings
per share $0.64 $0.60 $1.22 $1.15
Basic shares
outstanding 140,048 142,202 140,104 142,103
Diluted shares
outstanding 142,202 145,335 142,468 145,412
-------------- ------- ------- ------- -------
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited - In thousands)
December 31, June 30,
2014 2014
---- ----
Assets
Current assets:
Cash and cash
equivalents $880,695 $905,730
Accounts receivable, net 340,427 359,593
Inventories 218,062 165,418
Prepayments, deferred
income taxes and other
current assets 119,307 125,468
Total current assets 1,558,491 1,556,209
-------------------- --------- ---------
Property, plant and
equipment, net 408,219 434,277
Goodwill and other
intangible assets, net 320,966 334,510
Deferred income taxes
and other non-current
assets 38,886 35,966
Total non-current assets 768,071 804,753
------------------------ ------- -------
Total assets $2,326,562 $2,360,962
------------ ---------- ----------
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $80,004 $85,405
Accrued expenses 134,071 130,656
Deferred revenue 36,883 42,370
Income taxes payable 8,027 10,392
Deferred income taxes 625 717
Current portion of long-
term debt 0 18
------------------------ --- ---
Total current
liabilities 259,610 269,558
------------- ------- -------
Non-current liabilities:
Deferred income taxes 9,615 10,716
Deferred revenue 17,472 16,352
Income taxes payable 1,754 5,318
Non-current portion of
long-term debt 449,663 300,770
Total non-current
liabilities 478,504 333,156
----------------- ------- -------
Total liabilities 738,114 602,714
----------------- ------- -------
Stockholders' Equity:
Common stock 562 561
Additional paid-in
capital 1,161,335 1,117,644
Retained earnings 1,876,359 1,780,396
Treasury stock (1,368,308) (1,291,910)
Accumulated other
comprehensive income (81,500) 151,557
--------------------- ------- -------
Total stockholders'
equity $1,588,448 $1,758,248
------------------- ---------- ----------
Total liabilities and
stockholders' equity $2,326,562 $2,360,962
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited -
In thousands)
Six Months Ended Six Months Ended
December 31, December 31,
2014 2013
---- ----
Cash
flows
from
operating
activities:
Net
income $174,440 $167,566
Adjustment
to
reconcile
net
income
to net
cash
provided
by
operating
activities:
Depreciation
and
amortization 37,451 36,450
Gain on
disposal
of
business (709) -
Stock-
based
compensation
costs 23,084 21,460
Foreign
currency
revaluation 390 1,970
Excess
tax
benefit
from
stock-
based
compensation
arrangements (10,889) (9,486)
Changes
in
operating
assets
and
liabilities,
net of
effect
of
acquisitions:
Accounts
receivable,
net 11,067 22,061
Inventories,
net (64,406) (29,634)
Prepaid
expenses,
net
deferred
income
taxes
and
other
current
assets (4,309) 2,094
Accounts
payable,
accrued
expenses
and
other
liabilities 26,419 (37,891)
Net
cash
provided
by
operating
activities 192,538 174,590
----------- ------- -------
Cash
flows
from
investing
activities:
Purchases
of
property,
plant
and
equipment (39,675) (36,426)
Patent
registration
costs (4,810) (3,343)
Business
acquisitions,
net of
cash
acquired (17,781) (3,172)
Investments
in
cost-
method
investments (10,500) (1,525)
Proceeds
from
sale
of
business 468 -
Purchases
of
foreign
currency
options - (405)
Payments
on
maturity
of
foreign
currency
contracts (28,300) (4,079)
Net
cash
used
in
investing
activities (100,598) (48,950)
----------- -------- -------
Cash
flows
from
financing
activities:
Proceeds
from
issuance
of
common
stock,
net 9,931 10,136
Excess
tax
benefit
from
stock-
based
compensation
arrangements 10,889 9,486
Purchases
of
treasury
stock (84,055) (93,592)
Payment
of
business
combination
contingent
consideration (458) (442)
Proceeds
from
borrowings,
net of
borrowing
costs 149,000 492,908
Repayment
of
borrowings (19) (360,019)
Dividends
paid (78,477) (71,125)
--------- ------- -------
Net
cash
(used
in) /
provided
by
financing
activities 6,811 (12,648)
----------- ----- -------
Effect
of
exchange
rate
changes
on
cash (123,786) (16,365)
--------- -------- -------
Net
increase
/
(decrease)
in
cash
and
cash
equivalents (25,035) 96,627
Cash
and
cash
equivalents
at
beginning
of
period 905,730 876,048
Cash
and
cash
equivalents
at end
of
period 880,695 976,574
------------ ------- -------
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SOURCE ResMed Inc.
