RESMED, INC. SAN DIEGO, April 27, 2017 /PRNewswire/ -- ResMed Inc. (NYSE: RMD) today announced results for its quarter ended March 31, 2017. Revenue for the quarter was $514.2 million, a 13 percent increase compared to the same period of the prior year. Excluding the contribution from the Brightree business acquired in April 2016, revenue for the quarter was $479.2 million, a 6 percent increase.
"We had solid double-digit constant currency revenue growth in Q3, led by our Brightree software solutions as well as mask and device sales," said Mick Farrell, ResMed's chief executive officer. "This quarter we saw strong demand for our new AirFit 20 range of masks. We also made significant progress on software innovation with the launch of enhanced integration capabilities with Brightree and our AirSolutions cloud-based software platform. In our current quarter, we are launching our latest market-leading innovation: the ResMed AirMini - the world's smallest CPAP."
Farrell concluded, "Our focus on changing 20 million lives by 2020 has driven a pipeline of new products and connected care solutions that improve patient outcomes, create efficiencies for our homecare customers, and help physicians and providers better manage chronic disease while lowering healthcare costs."
Analysis of third quarter results
Third quarter revenue in the Americas was $332.1 million, an 18 percent increase over the same period of the prior year. This included Brightree revenue of $35.0 million. Excluding Brightree, revenue in the Americas was $297.1 million, a 5 percent increase over the prior year. Revenue in combined EMEA and APAC was $182.1 million, an increase of 9 percent on a constant currency basis, compared to the same period of the prior year.
Gross margin in the third quarter was 58.3 percent, higher than the prior year's quarter gross margin of 57.3 percent. The improvement in gross margin compared to prior year's quarter was due to manufacturing and procurement efficiencies and an incremental contribution from the Brightree acquisition.
Income from operations for the quarter was $107.4 million, a 3 percent increase compared with the quarter ended March 31, 2016. Non-GAAP income from operations for the quarter was $126.7 million, a 13 percent increase compared to the same period of the prior year.
Selling, general and administrative expenses were $137.9 million, a 16 percent increase over the same period in the prior year, also a 16 percent increase on a constant currency basis. SG&A expenses increased to 26.8 percent of revenue in the quarter, compared with 26.3 percent reported in the quarter ended March 31, 2016.
Research and development expenses were $35.1 million, or 6.8 percent of revenue. R&D expenses increased by 25 percent compared with the same period last year, or a 21 percent increase on a constant currency basis.
Amortization of acquired intangible assets was $11.4 million during the quarter, an increase of $6.8 million compared with the same period last year. The increase in amortization of acquired intangible assets was primarily due to the amortization expense associated with the Brightree acquisition. Stock-based compensation costs incurred during the quarter of $11.5 million consisted of expenses associated with employee equity grants, and our employee stock purchase plan.
Net income for the quarter was $87.8 million, a 3 percent decrease compared to the same period of the prior year. Non-GAAP net income was $100.7 million, a 3 percent increase compared to the prior year.
Non-GAAP measures adjust for amortization of acquired intangibles, acquisition related expenses and restructuring expenses.
GAAP diluted earnings per share for the quarter decreased 3 percent to $0.62. Non-GAAP diluted earnings per share of $0.71 were 3 percent higher compared with the same period of the prior year.
Cash flow from operations for the quarter was $67.6 million compared to net income in the current quarter of $87.8 million.
Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.33 per share. The dividend will have a record date of May 11, 2017, payable on June 15, 2017. 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 May 10, 2017 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 May 10, 2017 through May 11, 2017 inclusive.
Webcast details
ResMed will discuss its financial and business results and outlook on its webcast at 1:30 p.m. U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed's Investor Relations website at investor.resmed.com. Please go to this section of the website and click on the icon for the "Q3 2017 earnings webcast" to register and listen to the live webcast. The online archive of the broadcast will be available on ResMed's website after the live call. In addition, a telephone replay of the conference call will be available approximately two hours after the call by dialing 800-585-8367 (U.S.) and +1 416-621-4642 (international) and entering a passcode of 98293201. The telephone replay will be available until May 11, 2017.
About ResMed
ResMed (NYSE:RMD) changes lives with award-winning medical devices and cutting-edge cloud-based software applications that better diagnose, treat and manage sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. ResMed is a global leader in connected care, with more than 3 million patients remotely monitored every day. Our 5,000-strong team is committed to creating the world's best tech-driven medical device company - improving quality of life, reducing the impact of chronic disease, and saving healthcare costs in more than 100 countries.
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 and the integration of acquisitions - 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.
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
2017 2016 2017 2016
---- ---- ---- ----
Net
revenue $514,204 $453,879 $1,510,051 $1,320,066
Cost of
sales 214,490 193,999 627,012 557,460
Astral
field
safety
notification
expenses
(1) - - 5,070 -
SERVE-HF
accrual
release
(1) - - - (2,402)
Gross
profit 299,714 259,880 877,969 765,008
------- ------- ------- ------- -------
Operating expenses:
Selling,
general
and
administrative 137,864 119,351 406,028 348,664
Research
and
development 35,130 28,109 107,761 84,271
Restructuring
expenses
(1) 7,945 - 12,358 6,914
Litigation
settlement
expenses
(1) - - 8,500 -
Acquisition
related
expenses
(1) - 3,550 10,076 3,550
Amortization
of
acquired
intangible
assets
(1) 11,378 4,558 34,809 11,294
Total
operating
expenses 192,317 155,568 579,532 454,693
---------- ------- ------- ------- -------
Income
from
operations
(1) 107,397 104,312 298,437 310,315
----------- ------- ------- ------- -------
Other income (expenses), net:
Interest
income
(expense),
net (2,911) 2,131 (7,841) 8,028
Other, net 3,504 2,553 6,525 3,791
Total
other
income
(expenses),
net 593 4,684 (1,316) 11,819
------------ --- ----- ------ ------
Income
before
income
taxes 107,990 108,996 297,121 322,134
------- ------- ------- ------- -------
Income
taxes
excluding
ASU
2016-09
(2) 21,601 20,538 60,336 62,757
Income
taxes
relating
to ASU
2016-09
(2) (1,434) (2,333) (3,887) (9,906)
Total
income
taxes 20,167 18,205 56,449 52,851
------- ------ ------ ------ ------
Net income
(1) $87,823 $90,791 $240,672 $269,283
---------- ------- ------- -------- --------
Basic
earnings
per share
(2) $0.62 $0.65 $1.70 $1.92
Diluted
earnings
per share
(2) $0.62 $0.64 $1.69 $1.90
Non-GAAP
diluted
earnings
per share
(1) (2) $0.71 $0.69 $2.05 $2.01
Basic
shares
outstanding 141,714 140,187 141,266 140,140
Diluted
shares
outstanding
(2) 142,724 141,232 142,363 141,666
------------ ------- ------- ------- -------
(1) See the reconciliation of non-GAAP
financial measures in the table at
the end of the press release.
(2) As a result of the adoption of ASU
2016-09 "Improvements to Employee
Share-Based Payment Accounting"
during the quarter ended June 30, 2016
we now recognize an income tax impact
relating to share-based payment
transactions. The income taxes for the
three and nine months ended March 31,
2016 have been restated to reflect the
adoption of the standard as the
benefit was previously recorded as a
reduction to Additional Capital.
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited - In thousands)
March 31, June 30,
2017 2016
---- ----
Assets:
Current assets:
Cash and cash
equivalents $827,310 $731,434
Accounts receivable, net 413,612 382,086
Inventories 259,870 224,456
Prepayments and other
current assets 104,569 81,743
Total current assets 1,605,361 1,419,719
-------------------- --------- ---------
Property, plant and
equipment, net 387,412 384,276
Goodwill 1,050,083 1,059,245
Other intangibles, net 267,404 299,808
Deferred income taxes
and other non-current
assets 112,303 93,657
Total non-current assets 1,817,202 1,836,986
------------------------ --------- ---------
Total assets $3,422,563 $3,256,705
------------ ---------- ----------
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $82,846 $92,571
Accrued expenses 169,896 156,805
Deferred revenue 48,682 50,009
Income taxes payable 34,854 39,166
Short-term debt - 299,438
Total current
liabilities 336,278 637,989
------------- ------- -------
Non-current liabilities:
Deferred income taxes 12,988 9,061
Deferred revenue 49,135 40,281
Other long-term
liabilities 856 1,211
Long-term debt 1,168,350 873,332
Total non-current
liabilities 1,231,329 923,885
----------------- --------- -------
Total liabilities 1,567,607 1,561,874
----------------- --------- ---------
Stockholders' Equity:
Common stock 567 563
Additional paid-in
capital 1,352,676 1,303,238
Retained earnings 2,261,425 2,160,299
Treasury stock (1,546,612) (1,546,611)
Accumulated other
comprehensive income (213,100) (222,658)
--------------------- -------- --------
Total stockholders'
equity $1,854,956 $1,694,831
------------------- ---------- ----------
Total liabilities and
stockholders' equity $3,422,563 $3,256,705
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited - In thousands)
Nine Months Ended
March 31,
2017 2016
---- ----
Cash flows from operating activities:
Net income $240,672 $269,283
Adjustment to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 83,989 59,827
Impairment of long-lived assets - 2,815
Stock-based compensation costs 34,263 34,779
Changes in fair value of business
combination contingent
consideration 10,076 (154)
Payment of business combination
contingent consideration (8,460) -
Impairment of cost-method
investments 588 750
Changes in operating assets and liabilities, net of effect of
acquisitions:
Accounts receivable, net (32,793) 2,798
Inventories, net (38,146) 26,012
Prepaid expenses, net deferred
income taxes and other current
assets (28,554) 99
Accounts payable, accrued expenses
and other 12,105 8,764
Net cash provided by operating
activities 273,740 404,973
------------------------------ ------- -------
Cash flows from investing activities:
Purchases of property, plant and
equipment (43,857) (44,133)
Patent registration costs (6,980) (6,891)
Business acquisitions, net of cash
acquired (3,394) (242,645)
Investments in cost-method
investments (6,464) (8,215)
Proceeds /(Payments) on maturity
of foreign currency contracts 10,085 (5,711)
Net cash used in investing
activities (50,610) (307,595)
-------------------------- ------- --------
Cash flows from financing activities:
Proceeds from issuance of common
stock, net 15,255 16,937
Purchases of treasury stock - (102,058)
Payment of business combination
contingent consideration (11,682) (1,228)
Proceeds from borrowings, net of
borrowing costs 350,000 310,000
Repayment of borrowings (355,000) (193,092)
Dividends paid (139,546) (126,026)
-------------- -------- --------
Net cash (used in) /provided by
financing activities (140,973) (95,467)
------------------------------- -------- -------
Effect of exchange rate changes on
cash 13,719 (665)
---------------------------------- ------ ----
Net increase /(decrease) in cash
and cash equivalents 95,876 1,246
Cash and cash equivalents at
beginning of period 731,434 717,249
Cash and cash equivalents at end of
period $827,310 $718,495
----------------------------------- -------- --------
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In US$ thousands, except share and per share data)
The measure, "non-GAAP income from operations" is reconciled with GAAP income from operations below:
Three Months Ended Nine Months Ended
March 31 March 31,
2017 2016 2017 2016
---- ---- ---- ----
GAAP income from
operations $107,397 $104,312 $298,437 $310,315
SERVE-HF accrual
release (A) - - - (2,402)
Astral battery
field safety
notification
expenses (A) - - 5,070 -
Restructuring
expenses (A) 7,945 - 12,358 6,914
Litigation
settlement
expenses (A) - - 8,500 -
Acquisition related
expenses (A) - 3,550 10,076 3,550
Amortization of
acquired
intangible assets
(A) 11,378 4,558 34,809 11,294
Non-GAAP income
from operations $126,720 $112,420 $369,250 $329,671
---------------- -------- -------- -------- --------
The measures "non-GAAP net income" and "non-GAAP diluted earnings per share" are reconciled with GAAP net income and GAAP
diluted earnings per share in the table below:
Three Months Ended Nine Months Ended
March 31, March 31,
2017 2016 2017 2016
---- ---- ---- ----
GAAP net income $87,823 $90,791 $240,672 $269,283
SERVE-HF accrual
release, net of
tax (A) - - - (1,682)
Astral battery
field safety
notification
expenses (A) - - 3,549 -
Restructuring
expenses, net of
tax (A) 5,210 - 8,295 5,204
Litigation
settlement
expenses, net of
tax (A) - - 5,392 -
Acquisition related
expenses (A) - 3,550 10,076 3,550
Amortization of
acquired
intangible assets,
net of tax (A) 7,704 3,416 23,679 8,572
Non-GAAP net
income (A) $100,737 $97,757 $291,663 $284,927
Diluted shares
outstanding 142,724 141,232 142,363 141,666
GAAP diluted
earnings per share $0.62 $0.64 $1.69 $1.90
------------------- ----- ----- ----- -----
Non-GAAP diluted
earnings per share
(A) $0.71 $0.69 $2.05 $2.01
------------------- ----- ----- ----- -----
(A) ResMed adjusts for the impact of
the Astral battery field safety
notification expenses, release
of SERVE-HF accrual,
restructuring expenses,
litigation settlement expenses,
acquisition related expenses and
amortization of acquired
intangible assets from their
evaluation of ongoing operations
and believes investors benefit
from adjusting these items to
facilitate a more meaningful
evaluation of current operating
performance.
ResMed believes that non-GAAP
diluted earnings per share is an
additional measure of
performance investors can use to
compare operating results
between reporting periods.
ResMed uses non-GAAP
information internally in
planning, forecasting, and
evaluating the results of
operations in the current period
and in comparing it to past
periods. ResMed believes this
information provides investors
better insight in evaluating
ResMed's performance from core
operations and provides
consistent financial reporting.
Our use of non-GAAP measures is
intended to supplement, and not
to replace, our presentation of
net income and other GAAP
measures. Like all non-GAAP
measures, non-GAAP earnings are
subject to inherent limitations
because they do not include all
the expenses that must be
included under GAAP.
Contacts:
For Investors For News Media
Agnes Lee Alison Graves
O: 858-836-5971 O: 858-836-6789
investorrelations@resmed.com news@resmed.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/resmed-inc-announces-results-for-the-third-quarter-of-fiscal-year-2017-300447546.html
SOURCE ResMed Inc.
