SAN DIEGO, Oct. 22, 2015 /PRNewswire/ -- ResMed Inc. (NYSE:
RMD) today announced results for its quarter ended September 30, 2015. Revenue for the quarter was
$411.6 million, an 8 percent increase
compared with the quarter ended September
30, 2014 (a 15 percent increase on a constant currency
basis).
"Our global team was able to drive strong double-digit constant
currency growth in the first quarter of fiscal year 2016.
This result was led by 39 percent flow generator and 9 percent mask
growth in the Americas," said Mick
Farrell, ResMed's chief executive officer. "We are investing
for ongoing expansion and leadership in our high-growth regions. In
October, we completed the acquisition of Curative Medical, making
our combined ResMed and Curative business the market leader in
sleep-disordered breathing and respiratory care in China."
Farrell continued, "It has been a year since we launched our Air
Solutions Platform. We have made incredible progress, with over one
million patients with cloud-connected devices on bedside tables,
providing actionable data every day for patients, customers,
providers and payors. Our leading informatics capabilities enable
our global team to enhance and deliver the most innovative products
and solutions that improve patient outcomes, create efficiencies
for our customers, help providers better manage chronic disease and
lower healthcare costs. We have established ourselves as leaders in
the field of connected care and digital health."
Analysis of first quarter results
In the first
quarter of fiscal year 2016, revenue in the Americas was
$254.2 million, a 23 percent increase
over the prior year's quarter. Revenue in combined EMEA and APAC
was $157.5 million, a 9 percent
decrease compared with the quarter ended September 30, 2014 (a 5 percent increase on a
constant currency basis).
Gross margin was 58.0 percent in the first quarter of fiscal
year 2016, lower than the prior year's quarter mainly due to an
unfavorable product mix, declines in average selling prices and an
unfavorable geographic mix.
Income from operations for the quarter was $98.0 million, a 4 percent increase compared with
the quarter ended September 30, 2014.
Non-GAAP income from operations for the quarter was $100.3 million, a 4 percent increase compared
with the quarter ended September 30,
2014.
Selling, general and administrative expenses were $111.1 million for the first quarter of fiscal
year 2016, a 1 percent increase (an 11 percent increase on a
constant currency basis) over the quarter ended September 30, 2014. SG&A expenses improved to
27.0 percent of revenue in the quarter, compared with 29.1 percent
in the quarter ended September 30,
2014.
Research and development expenses were $27.2 million for the first quarter of fiscal
year 2016, or 6.6 percent of revenue. R&D expenses decreased by
9 percent (a 12 percent increase on a constant currency basis)
compared with the quarter ended September
30, 2014.
Amortization of acquired intangible assets was $2.3 million during the quarter. Stock-based
compensation costs incurred during the quarter of $12.4 million consisted of expenses associated
with employee equity grants, and the company's employee stock
purchase plan.
Net income for the quarter was $80.4
million, a 3 percent decrease compared with the quarter
ended September 30, 2014. Non-GAAP
net income for the quarter ended September
30, 2015 was $82.1 million, a
3 percent decrease compared with the quarter ended September 30, 2014 (non-GAAP measures exclude the
impact of amortization of acquired intangibles).
Diluted earnings per share for the quarter were $0.57. Non-GAAP diluted earnings per share for
the quarter were $0.58.
Cash flow from operations for the quarter was $122.1 million.
Share repurchase program
During the quarter, the company repurchased 1.2 million shares at a
cost of $62.0 million, as part of its
ongoing capital management program.
Dividend program
The ResMed board of directors
today declared a quarterly dividend of $0.30 per share. The dividend will have a record
date of November 19, 2015, payable on
December 17, 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
November 17, 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 November 18, 2015 through
November 19, 2015,
inclusive.
Webcast details
ResMed will discuss its financial and business results and 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 Investor Relations website at
investors.resmed.com. Please go to this section of the
website and click on the icon for the "Q1 2016 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
855-859-2056 (U.S.) and +1 404-537-3406 (international) and
entering a passcode of 43449699. The telephone replay will be
available until November 5, 2015.
About ResMed
The global team at ResMed
(NYSE:RMD) is united in the commitment to change millions of lives
with every breath. With more than 4,000 employees and a
presence in over 100 countries, the company has been pioneering new
and innovative devices and treatments for sleep-disordered
breathing, chronic obstructive pulmonary disease, and other
chronic diseases for more than 25 years. ResMed's world-leading
products and innovative solutions improve the quality of life for
millions of patients worldwide, reduce the impact of chronic
disease, and save healthcare costs. For more information about
ResMed and its businesses, visit www.resmed.com or follow
@resmed on Twitter.
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 Graves
Director, 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
September
30,
|
|
2015
|
2014
|
|
|
|
Net
revenue
|
$411,647
|
$380,399
|
Cost of
sales
|
173,028
|
143,086
|
Gross
profit
|
238,619
|
237,313
|
|
|
|
Operating
expenses
|
|
|
Selling, general and
administrative
|
111,095
|
110,520
|
Research and
development
|
27,192
|
30,024
|
Amortization of
acquired intangible assets
|
2,307
|
2,094
|
Total operating
expenses
|
140,594
|
142,638
|
Income from
operations(1)
|
98,025
|
94,675
|
|
|
|
Other income
(expenses), net:
|
|
|
Interest income,
net
|
3,422
|
5,584
|
Other, net
|
(2,003)
|
1,671
|
Total other income,
net
|
1,419
|
7,255
|
|
|
|
Income before income
taxes
|
99,444
|
101,930
|
Income
taxes
|
19,041
|
18,670
|
Net
income(1)
|
$80,403
|
$83,260
|
|
|
|
Basic earnings per
share
|
$0.57
|
$0.59
|
Diluted earnings per
share
|
$0.57
|
$0.58
|
Non-GAAP diluted
earnings per share, excluding the impact of amortization of
acquired intangible assets(1)
|
$0.58
|
$0.59
|
|
|
|
Basic shares
outstanding
|
140,309
|
140,127
|
Diluted shares
outstanding
|
141,946
|
142,683
|
|
(1) See the reconciliation of
non-GAAP financial measures in the table at the end of the press
release.
|
RESMED INC AND
SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets (Unaudited - In thousands)
|
|
|
September
30,
|
June 30,
|
|
2015
|
2015
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$822,053
|
$717,249
|
Accounts receivable,
net
|
327,168
|
362,568
|
Inventories
|
258,609
|
246,859
|
Prepayments, deferred
income taxes and other current assets
|
124,970
|
117,506
|
Total current
assets
|
1,532,800
|
1,444,182
|
Property, plant and
equipment, net
|
368,984
|
387,758
|
Goodwill and other
intangible assets, net
|
305,418
|
311,403
|
Deferred income taxes
and other non-current assets
|
47,477
|
40,917
|
Total non-current
assets
|
721,879
|
740,078
|
Total
assets
|
$2,254,679
|
$2,184,260
|
Liabilities and
Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$77,482
|
$81,112
|
Accrued
expenses
|
117,651
|
132,976
|
Deferred
revenue
|
34,848
|
36,097
|
Income taxes
payable
|
26,550
|
16,278
|
Deferred income
taxes
|
776
|
796
|
Total current
liabilities
|
257,307
|
267,259
|
Non-current
liabilities:
|
|
|
Deferred income
taxes
|
7,968
|
8,062
|
Deferred
revenue
|
23,446
|
19,284
|
Income taxes
payable
|
1,754
|
1,754
|
Other long term
liabilities
|
2,804
|
-
|
Non-current portion
of long-term debt
|
500,587
|
300,594
|
Total non-current
liabilities
|
536,559
|
329,694
|
Total
liabilities
|
793,866
|
596,953
|
Stockholders'
Equity:
|
|
|
Common
stock
|
558
|
562
|
Additional paid-in
capital
|
1,248,077
|
1,228,795
|
Retained
earnings
|
2,014,344
|
1,976,020
|
Treasury
stock
|
(1,506,542)
|
(1,444,554)
|
Accumulated other
comprehensive income
|
(295,624)
|
(173,516)
|
Total stockholders'
equity
|
$1,460,813
|
$1,587,307
|
|
|
|
Total liabilities and
stockholders' equity
|
$2,254,679
|
$2,184,260
|
|
|
|
RESMED INC AND
SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
Three Months
Ended
September
30,
|
|
2015
|
2014
|
Cash flows from
operating activities:
|
|
|
Net income
|
$80,403
|
$83,260
|
Adjustment to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
18,403
|
18,582
|
Gain on disposal of
business
|
-
|
(709)
|
Stock-based
compensation costs
|
12,383
|
11,367
|
Excess tax benefit
from stock-based compensation arrangements
|
(2,536)
|
(2,575)
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
Accounts receivable,
net
|
30,498
|
20,804
|
Inventories,
net
|
(17,194)
|
(37,897)
|
Prepaid expenses, net
deferred income taxes and other current assets
|
(3,526)
|
(15,168)
|
Accounts payable,
accrued expenses and other liabilities
|
3,641
|
8,872
|
Net cash provided by
operating activities
|
122,072
|
86,536
|
Cash flows from
investing activities:
|
|
|
Purchases of
property, plant and equipment
|
(16,403)
|
(20,681)
|
Patent registration
costs
|
(2,423)
|
(2,366)
|
Business
acquisitions, net of cash acquired
|
-
|
(7,318)
|
Investments in
cost-method investments
|
(4,582)
|
(500)
|
Proceeds from sale of
business
|
-
|
468
|
Payments on maturity
of foreign currency contracts
|
(39,341)
|
(11,206)
|
Net cash used in
investing activities
|
(62,749)
|
(41,603)
|
Cash flows from
financing activities:
|
|
|
Proceeds from
issuance of common stock, net
|
4,352
|
4,930
|
Excess tax benefit
from stock-based compensation arrangements
|
2,536
|
2,575
|
Purchases of treasury
stock
|
(57,857)
|
(46,803)
|
Payment of business
combination contingent consideration
|
-
|
(458)
|
Proceeds from
borrowings, net of borrowing costs
|
200,000
|
75,000
|
Repayment of
borrowings
|
(8)
|
(10)
|
Dividends
paid
|
(42,079)
|
(39,199)
|
Net cash (used in) /
provided by financing activities
|
106,944
|
(3,965)
|
Effect of exchange
rate changes on cash
|
(61,463)
|
(65,004)
|
Net increase /
(decrease) in cash and cash equivalents
|
104,804
|
(24,036)
|
Cash and cash
equivalents at beginning of period
|
717,249
|
905,730
|
Cash and cash
equivalents at end of period
|
822,053
|
881,694
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited)
|
(In US$ thousands,
except share and per share data)
|
|
The measure,
"non-GAAP operating income" is reconciled with GAAP income from
operations below:
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
2015
|
2014
|
GAAP income from
operations
|
|
|
98,025
|
94,675
|
Amortization of
acquired intangible assets (A)
|
|
|
2,307
|
2,094
|
Non-GAAP operating
income (excluding the impact of amortization of acquired intangible
assets)
|
|
|
100,332
|
96,769
|
|
|
|
|
|
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
September 30,
|
|
|
|
2015
|
2014
|
GAAP net
income
|
|
|
80,403
|
83,260
|
Amortization of acquired intangible assets, net of
tax (A)
|
|
|
1,717
|
1,601
|
Non-GAAP net income
(A)
|
|
|
82,120
|
84,861
|
Diluted shares outstanding
|
|
|
141,946
|
142,683
|
GAAP diluted earnings
per share
|
|
|
$0.57
|
$0.58
|
Non-GAAP diluted
earnings per share (A)
|
|
|
$0.58
|
$0.59
|
|
|
(A)
|
ResMed excludes
amortization of acquired intangible assets from their evaluation of
ongoing operations and believes investors benefit from excluding
these charges to facilitate a more meaningful evaluation of current
operating performance.
|
|
|
|
ResMed believes that
diluted earnings per share, which exclude the impact of the
amortization of acquired intangible assets, 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.
|
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