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ResMed Inc. Announces Record Financial Results For The Quarter Ended And Six Months Ended December 31, 2012

January 24, 2013

SAN DIEGO, Jan. 24, 2013 /PRNewswire/ — ResMed Inc. (NYSE: RMD) today announced record revenue and income for the quarter ended December 31, 2012. Revenue for the quarter ended December 31, 2012 was $376.5 million, a 13% increase (a 14% increase on a constant currency basis) over the quarter ended December 31, 2011. For the quarter ended December 31, 2012, net income was $77.9 million, an increase of 24% compared to the quarter ended December 31, 2011. Diluted earnings per share for the quarter ended December 31, 2012 were $0.53, an increase of 26% compared to the quarter ended December 31, 2011.

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

SG&A expenses were $107.8 million for the quarter ended December 31, 2012, an increase of 7% (an 8% increase on a constant currency basis) over the quarter ended December 31, 2011. The increase in SG&A was primarily due to expenses necessary to support sales growth. SG&A costs were 28.6% of revenue in the quarter ended December 31, 2012, compared to 30.2% in the quarter ended December 31, 2011.

R&D expenses were $30.3 million for the quarter ended December 31, 2012, or 8.1% of revenue. R&D expenses increased by 11% (also an 11% increase on a constant currency basis) compared to the quarter ended December 31, 2011.

The company amortized acquired intangibles of $2.5 million ($1.9 million, net of tax) during the quarter ended December 31, 2012. Stock-based compensation costs incurred during the quarter ended December 31, 2012 of $9.5 million ($6.5 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and our employee stock purchase plan.

For the six months ended December 31, 2012, revenue was $716.3 million, an increase of 11% over the six months ended December 31, 2011 (a 13% increase on a constant currency basis). For the six months ended December 31, 2012, net income was $149.2 million, an increase of 32% compared to the six months ended December 31, 2011. Diluted earnings per share for the six months ended December 31, 2012 were $1.02 per diluted share, an increase of 36% compared to the six months ended December 31, 2011.

Inventory, at $194.8 million, increased by $20.5 million compared to June 30, 2012. Accounts receivable days sales outstanding, at 68 days, remained unchanged compared with 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 February 19, 2013, and be payable on March 19, 2013. 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 February 13, 2013 for CDI holders and February 15, 2013 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 February 13, 2013 through February 19, 2013, inclusive.

Peter C. Farrell Ph.D, chairman and chief executive officer, commented, “In the second quarter of fiscal 2013 we showed strong year-over-year growth on both top and bottom lines. Revenue in the Americas increased by 16%, to $211.8 million over the prior year’s quarter. Revenue outside the Americas was $164.7 million, an increase of 10% over the prior year’s quarter. In constant currency terms, revenue outside the Americas increased by 12%. Operating profit for the December quarter was $92.1 million, cash flow from operations was $93.6 million, while gross margin was 61.8%, all demonstrating excellent operating performance. There was also a continuing shift to higher value flow generators, like S9 Autoset(TM) and S9 bilevels, and mask and accessory sales remained strong. During the quarter, we also repurchased 1.0 million shares, at a cost of $40.0 million, as part of our ongoing capital management program.

“We had a solid quarter across the board. And we believe we are in the early stages of an exciting market dynamic for sleep-disordered breathing (SDB), which we have been pioneering for many years, by offering full solutions to therapy providers and critical information for the reimbursement community. In short, we don’t just provide high quality flow generators and a highly regarded range of comfortable, effective and preferred masks and accessories, we offer robust data solutions that drive compliance and adherence. This combination is a significant value proposition for home medical equipment providers, because these solutions drive efficiencies and create additional business opportunities. And by providing valuable clinical and economic data to payors, we strive to help them more fully appreciate SDB therapy’s positive effect on health and cost benefit outcomes. We believe that our continuing advocacy for screening, diagnosis, treatment, and monitoring patient adherence to SDB therapy presents a significant opportunity to improve health and quality of life, contain healthcare costs, and curtail the development of multiple co-morbidities, many of which are far more devastating and costly than SDB.”

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 passcode no. 33995965. 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. 33995965.

Further information can be obtained by contacting Constance Bienfait at ResMed Inc., San Diego, at (858) 836-5971; Brett Sandercock at ResMed Limited, Sydney, 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         Six Months Ended
                                              December 31,              December 31,
                                              2012        2011        2012        2011
                                              ----        ----        ----        ----

    Net revenue                           $376,537    $332,738    $716,269    $647,513
    Cost of sales                          143,825     134,023     274,909     263,743
    Gross profit                           232,712     198,715     441,360     383,770
    ------------                           -------     -------     -------     -------

    Operating expenses:
    Selling, general and
     administrative                        107,815     100,552     206,118     194,755
    Research and
     development                            30,326      27,218      57,546      53,424
    Amortization of
     acquired intangible
     assets                                  2,501       3,691       5,138       7,462
    Total operating
     expenses                              140,642     131,461     268,802     255,641
    ---------------                        -------     -------     -------     -------
    Income from
     operations                             92,070      67,254     172,558     128,129
    -----------                             ------      ------     -------     -------

    Other income (expenses), net:
    Interest income
     (expense), net                          8,498       7,181      16,970      14,103
    Other, net                              (2,168)      8,496        (227)      7,196
    Total other income
     (expenses), net                         6,330      15,677      16,743      21,299
    ------------------                       -----      ------      ------      ------

    Income before income
     taxes                                  98,400      82,931     189,301     149,428
    Income taxes                            20,458      20,059      40,094      36,038
    Net income                             $77,942     $62,872    $149,207    $113,390
    ----------                             -------     -------    --------    --------

    Basic earnings per
     share                                   $0.54       $0.43       $1.04       $0.76
    Diluted earnings per
     share                                   $0.53       $0.42       $1.02       $0.75

    Basic shares
     outstanding                           143,214     146,369     142,931     148,368
    Diluted shares
     outstanding                           146,689     149,515     146,382     151,835
    --------------                         -------     -------     -------     -------

                                           ResMed Inc And Subsidiaries
                       Condensed Consolidated Balance Sheets (Unaudited - In US$ thousands)
                       -------------------------------------------------------------------
                                                      December 31,                      June 30,
                                                                       2012                            2012
                                                                       ----                            ----
    Assets
    Current assets:
    Cash and cash
     equivalents                                                   $958,280                        $809,541
    Accounts receivable, net                                        281,439                         283,160
    Inventories                                                     194,804                         174,351
    Prepayments, deferred
     income taxes and other
     current assets                                                  95,328                          94,099
    Total current assets                                          1,529,851                       1,361,151
    --------------------                                          ---------                       ---------
    Property, plant and
     equipment, net                                                 439,575                         434,363
    Goodwill                                                        279,384                         256,209
    Other intangibles                                                58,198                          54,827
    Deferred income taxes
     and other non-current
     assets                                                          23,367                          31,319
    Total non-current assets                                        800,524                         776,718
    ------------------------                                        -------                         -------
    Total assets                                                 $2,330,375                      $2,137,869
    ------------                                                 ----------                      ----------
    Liabilities and
     Stockholders' Equity
    Current liabilities:
    Accounts payable                                                 52,119                          55,006
    Accrued expenses                                                135,372                         127,381
    Deferred revenue                                                 43,784                          41,563
    Income taxes payable                                             18,955                          27,777
    Deferred income taxes                                               784                           1,073
    Current portion of long-
     term debt                                                           54                              52
    ------------------------                                            ---                             ---
    Total current
     liabilities                                                    251,068                         252,852
    -------------                                                   -------                         -------
    Non-current liabilities:
    Deferred income taxes                                             9,373                           8,843
    Deferred revenue                                                 14,055                          14,384
    Income taxes payable                                              3,569                           3,380
    Non-current portion of
     long-term debt                                                 300,798                         250,783
    Total non-current
     liabilities                                                    327,795                         277,390
    -----------------                                               -------                         -------
    Total liabilities                                               578,863                         530,242
    -----------------                                               -------                         -------
    Stockholders' Equity:
    Common stock                                                        574                             568
    Additional paid-in
     capital                                                        960,109                         899,717
    Retained earnings                                             1,467,230                       1,366,712
    Treasury stock                                                 (943,877)                       (895,826)
    Accumulated other
     comprehensive income                                           267,476                         236,456
    ---------------------                                           -------                         -------
    Total stockholders'
     equity                                                       1,751,512                       1,607,627
    -------------------                                           ---------                       ---------

    Total liabilities and
     stockholders' equity                                        $2,330,375                      $2,137,869

SOURCE ResMed Inc.


Source: PR Newswire