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