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ResMed Inc. Announces Record Financial Results for the Quarter Ended September 30, 2012

October 25, 2012

SAN DIEGO, Oct. 25, 2012 /PRNewswire/ — ResMed Inc. (NYSE: RMD) today announced record results for the quarter ended September 30, 2012. Revenue for the quarter ended September 30, 2012 was $339.7 million, an 8% increase (a 12% increase on a constant currency basis) over the quarter ended September 30, 2011. For the quarter ended September 30, 2012, net income was $71.3 million, an increase of 41% compared to the quarter ended September 30, 2011. Diluted earnings per share for the quarter ended September 30, 2012 were $0.49, a robust 48% increase compared to the quarter ended September 30, 2011.

(Logo: http://photos.prnewswire.com/prnh/20100203/RESMEDLOGO)

SG&A expenses were $98.3 million for the quarter ended September 30, 2012, an increase of $4.1 million, or 4% (a 9% increase on a constant currency basis) compared to the quarter ended September 30, 2011. SG&A costs were 28.9% of revenue in the quarter ended September 30, 2012, compared to 29.9% for the quarter ended September 30, 2011. SG&A expenses were favorably impacted by the depreciation of the Australian dollar and euro against the U.S. dollar.

R&D expenses were $27.2 million for the quarter ended September 30, 2012, or 8.0% of revenue. R&D expenses increased by 4% (a 6% increase on a constant currency basis) compared to the quarter ended September 30, 2011. R&D expenses were favorably impacted by the depreciation of the Australian dollar against the U.S. dollar.

The company amortized acquired intangibles of $2.6 million ($2.0 million, net of tax) during the quarter ended September 30, 2012. Stock-based compensation costs incurred during the quarter ended September 30, 2012 of $7.9 million ($5.9 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and our employee stock purchase plan.

Inventory, at $193.2 million, increased by $18.8 million compared to June 30, 2012. Accounts receivable days sales outstanding, at 71 days, increased by three days compared to June 30, 2012.

Additionally, the Board of Directors has today declared a quarterly dividend of $0.17 per share, which will have a record date of November 20, 2012, and be payable on December 18, 2012. The dividend will be paid in U.S. currency to holders of ResMed’s common stock trading on the New York Stock Exchange (NYSE). Holders of Chess Depositary Instruments (CDIs) 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. Because the two exchanges have different settlement and transfer procedures, the ex-dividend periods before the record date will be different for common stock and for CDIs. The ex-dividend date will be November 14, 2012 for CDI holders and November 16, 2012 for common stock holders. As a result of these differences, ResMed has requested 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 November 14, 2012 through November 20, 2012, inclusive.

Peter C. Farrell Ph.D, chairman and chief executive officer, commented, “In the first quarter of fiscal 2013 we showed strong year-over-year growth on the top and bottom lines, and both our flow generator and mask categories did well. Revenue in the Americas increased by 15% to $194.4 million over the prior year’s quarter. Revenue outside the Americas was $145.4 million, a 9% increase on a constant currency basis over the prior year’s quarter. Operating profit for the September quarter was $80.5 million, cash flow from operations was $78.3 million, while gross margin was an encouraging 61.4%, all demonstrating excellent operating performance. There was also a continuing shift to higher valued flow generators, like S9 Autoset(TM) and S9 bilevels, and mask sales remained strong.

“Evidence also continues to mount supporting the role of sleep-disordered breathing (SDB) therapy for disease prevention, improvement of quality of life and healthcare cost reduction, what I call the Holy Grail of medicine. The following studies provide additional proof of the serious public health concerns relating to untreated SDB:

  • In a ResMed-sponsored study recently published in Population Health Management involving 22,000 members on the Union Pacific Railroad health plan, findings suggest that a low-cost, patient-focused SDB education campaign can improve healthcare outcomes and reduce medical expenses. First, the study showed that members of the Union Pacific plan who had untreated SDB had higher medical expenses than employees without the disease and, second, it demonstrated that treatment of SDB with positive airway pressure (PAP) therapy reduced medical costs, in-patient costs and hospital admissions. After the campaign was initiated, the healthcare plan realized cost savings of $4.9 million over a two-year period.
  • A study published in the June issue of the American Journal of Managed Care demonstrated that newly diagnosed SDB patients who initiated PAP therapy had significantly lower hospitalization risk and lower all-cause healthcare costs compared to patients who did not use PAP.
  • In the July issue of the Journal of Cardiac Failure, a study showed that central sleep apnea and severe obstructive sleep apnea are independent risk factors for six-month cardiac hospital readmission.

“All these findings offer tangible data to payors, providers and patients on the beneficial effect on both clinical and economic outcomes of treating sleep-disordered breathing. The bottom line is that screening, diagnosis, treatment and monitoring adherence to therapy for patients presents a significant opportunity to improve health and quality of life, as well as contain healthcare costs.”

About ResMed

ResMed is a global leader in the development, manufacturing and marketing of medical products for the diagnosis, treatment and management of respiratory disorders, with a focus on sleep-disordered breathing. The company is dedicated to developing innovative products to improve the lives of those who suffer from these conditions and to increasing awareness among patients and healthcare professionals of the potentially serious health consequences of untreated sleep-disordered breathing. For more information on ResMed, visit www.resmed.com.

ResMed will host a conference call at 1:30 p.m. U.S. Pacific Time today to discuss these quarterly results. Individuals wishing to access the conference call may do so via ResMed’s Website at www.resmed.com or by dialing 847-585-4405 (domestic) or +1 847-585-4405 (international) and entering conference pass code no. 33442422. Please allow extra time prior to 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 approximately 30 minutes after the live call and will be available for two weeks. A telephone replay of the conference call is available by dialing 630-652-3042 (domestic) and +1 630-652-3042 (international) and entering conference I.D. No. 33442422.

Further information can be obtained by contacting Constance Bienfait at ResMed Inc., San Diego, at 858-836-5971; Brett Sandercock at +612-8884-2090; or by visiting the Company’s multilingual Website at www.resmed.com.

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 the Company’s future revenue, earnings or expenses, new product development and new markets for the Company’s 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. Those risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K for its most recent fiscal year and in other reports the Company files with the U.S. Securities & Exchange Commission. Those reports are available on the Company’s Website.

                                                                 RESMED INC AND SUBSIDIARIES
                                                   Condensed Consolidated Statements of Income (Unaudited)
                                                          (In US$ thousands, except per share data)

                                                                                                                                                                       Three Months Ended
                                                                                                                                                                         September 30,
                                                                                                                                                                       2012     2011
                                                                                                                                                                       ----     ----
    Net revenue                                                                                                                                                    $339,731           $314,774
    Cost of sales                                                                                                                                                   131,083            129,720
                                                                                                                                                                    -------
    Gross profit                                                                                                                                                    208,648            185,054
                                                                                                                                                                    -------            -------
    Operating expenses:
    Selling, general and
     administrative                                                                                                                                                  98,303             94,203
    Research and development                                                                                                                                         27,220             26,206
    Amortization of acquired
     intangible assets                                                                                                                                                2,636              3,771
    Total operating expenses                                                                                                                                        128,159            124,180
                                                                                                                                                                    -------            -------
    Income from operations                                                                                                                                           80,489             60,874
                                                                                                                                                                     ------             ------
    Interest income (expense), net                                                                                                                                    8,471              6,924
    Other, net                                                                                                                                                        1,941             (1,301)
                                                                                                                                                                      -----
    Total other income (expenses), net                                                                                                                               10,412              5,623
    Income before income taxes                                                                                                                                       90,901             66,497
    Income taxes                                                                                                                                                     19,636             15,979
                                                                                                                                                                     ------
    Net income                                                                                                                                                      $71,265            $50,518
                                                                                                                                                                    -------            -------
    Basic earnings per share                                                                                                                                          $0.50              $0.34
    Diluted earnings per share                                                                                                                                        $0.49              $0.33
    Basic shares outstanding                                                                                                                                        142,651            150,366
    Diluted shares outstanding                                                                                                                                      146,055            154,051
                                                                RESMED INC AND SUBSIDIARIES
                                            Condensed Consolidated Balance Sheets (Unaudited - In US$ thousands)

                                                                                                                                                            September 30,     June 30,
                                                                                                                                                                     2012         2012
    ASSETS
    Current assets:
    Cash and cash equivalents                                                                                                                                    $890,629                 $809,541
    Accounts receivable, net                                                                                                                                      266,537                  283,160
    Inventories                                                                                                                                                   193,172                  174,351
    Deferred income taxes                                                                                                                                          24,754                   19,590
    Income taxes receivable                                                                                                                                         3,091                    2,282
    Prepaid expenses and other current assets                                                                                                                      72,034                   72,227
    Total current assets                                                                                                                                        1,450,217                1,361,151
                                                                                                                                                                ---------                ---------
    Property, plant and equipment, net                                                                                                                            438,357                  434,363
    Goodwill                                                                                                                                                      273,280                  256,209
    Other intangibles                                                                                                                                              59,666                   54,827
    Deferred income taxes                                                                                                                                          17,543                   23,500
    Other assets                                                                                                                                                    5,596                    7,819
    Total non-current assets                                                                                                                                      794,442                  776,718
                                                                                                                                                                  -------                  -------
    Total assets                                                                                                                                               $2,244,659               $2,137,869
                                                                                                                                                               ----------               ----------
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                                                                                                                                               52,914                   55,006
    Accrued expenses                                                                                                                                              132,100                  127,381
    Deferred revenue                                                                                                                                               42,978                   41,563
    Income taxes payable                                                                                                                                           24,326                   27,777
    Deferred income taxes                                                                                                                                             660                    1,073
    Current portion of long-term debt                                                                                                                                  53                       52
    Total current liabilities                                                                                                                                     253,031                  252,852
                                                                                                                                                                  -------                  -------
    Deferred income taxes                                                                                                                                           9,167                    8,843
    Deferred revenue                                                                                                                                               14,301                   14,384
    Income taxes payable                                                                                                                                            3,452                    3,380
    Non-current portion of long-term debt                                                                                                                         265,785                  250,783
    Total non-current liabilities                                                                                                                                 292,705                  277,390
                                                                                                                                                                  -------                  -------
    Total liabilities                                                                                                                                             545,736                  530,242
                                                                                                                                                                  -------                  -------
    STOCKHOLDERS' EQUITY:
    Common stock                                                                                                                                                      572                      568
    Additional paid-in capital                                                                                                                                    933,249                  899,717
    Retained earnings                                                                                                                                           1,413,711                1,366,712
    Treasury stock                                                                                                                                               (903,922)                (895,826)
    Accumulated other comprehensive income                                                                                                                        255,313                  236,456
    Total stockholders' equity                                                                                                                                  1,698,923                1,607,627
                                                                                                                                                                ---------                ---------
    Total liabilities and stockholders' equity                                                                                                                 $2,244,659               $2,137,869
                                                                                                                                                               ----------               ----------

SOURCE ResMed Inc.


Source: PR Newswire