SAN DIEGO, April 26, 2016 /PRNewswire/ -- ResMed Inc.
(NYSE: RMD) today announced results for its quarter ended
March 31, 2016. Revenue for the
quarter was $453.9 million, a 7
percent increase compared with the quarter ended March 31, 2015; this is a 9 percent increase on a
constant currency basis.
"We have seen sustained success with the execution of our
healthcare informatics strategy driving seven consecutive quarters
of device growth, since the Q1 2015 launch of our Air Solutions
platform. This quarter our team delivered strong double-digit
growth in the Americas region, with solid global constant currency
growth of 9%. Customers have responded to the value proposition of
our Air Solutions platform, including the efficiencies it brings to
their businesses and its ability to help them drive even better
patient outcomes through connected care," said Mick Farrell, ResMed's chief executive
officer.
"We continue to build on our offerings across our strategy for
both products and informatics solutions. This quarter we announced
the close of the Inova transaction, which allows us to expand our
respiratory care offerings to include portable oxygen
concentrators. With the acquisition of Brightree in April, we have
established ourselves as the outright leader for cloud-based
end-to-end solutions in HME, home health, and hospice
channels."
Farrell continued, "This expansion into new products and
informatics solutions allows ResMed to continue its global
leadership as a tech-driven medical device company. We are
liberating healthcare data and unlocking value by providing
actionable connected care solutions for patients, physicians,
providers, and payers."
Analysis of third quarter results
In the third quarter of fiscal year 2016, revenue in the
Americas was $282.2 million, a 12
percent increase over the prior year's quarter. Revenue in combined
EMEA and APAC was $171.7 million,
flat compared with the quarter ended March
31, 2015; this is a 3 percent increase on a constant
currency basis.
Gross margin in the third quarter was 57.3 percent; this is
lower than the prior year's quarter, mainly due to changes in
product mix, average selling prices and geographic mix.
Income from operations for the quarter was $104.3 million, a 1 percent decrease compared
with the quarter ended March 31,
2015. Non-GAAP income from operations for the quarter was
$112.4 million, a 4 percent increase
compared with the quarter ended March
31, 2015.
Selling, general and administrative expenses were $119.4 million for the third quarter of fiscal
year 2016, a 3 percent increase over the quarter ended March 31, 2015; this is a 5 percent increase on a
constant currency basis. SG&A expenses improved to 26.3 percent
of revenue in the quarter, compared with 27.5 percent in the
quarter ended March 31,
2015.
Research and development expenses were $28.1 million for the third quarter of fiscal
year 2016, or 6.2 percent of revenue. R&D expenses increased by
4 percent compared with the quarter ended March 31, 2015; this is an 11 percent increase on
a constant currency basis.
Amortization of acquired intangible assets was $4.6 million during the quarter. Stock-based
compensation costs incurred during the quarter of $10.9 million consisted of expenses associated
with employee equity grants, and the company's employee stock
purchase plan.
Net income for the quarter was $88.5
million, a 3 percent decrease compared with the quarter
ended March 31, 2015. Non-GAAP net
income for the quarter ended March 31,
2016 was $95.4 million, a 3
percent increase compared with the quarter ended March 31, 2015 (non-GAAP measures exclude
amortization of acquired intangibles and $3.6 million in acquisition expenses associated
with our acquisitions of Inova and Brightree).
GAAP diluted earnings per share for the quarter were
$0.63, a 2 percent decrease compared
with the quarter ended March 31,
2015. Non-GAAP diluted earnings per share for the quarter
were $0.68, a 5 percent increase
compared with the quarter ended March
31, 2015.
Cash flow from operations for the quarter was $122.1 million, an increase from the $90.9 million reported in the quarter ended
March 31, 2015 and net income in the
current quarter of $88.5 million.
Share repurchase program
As previously
announced, the company has temporarily suspended its share
repurchase program due to recent acquisitions. The company
did not repurchase any shares during the third quarter, however the
company may, at any time, elect to reinitiate the share repurchase
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 May 19, 2016, payable on
June 16, 2016. 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 17, 2016 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 18, 2016 through
May 19, 2016 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 "Q3
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 72407549. The telephone
replay will be available until May 9,
2016.
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 1 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.
ResMed.com | Facebook | Twitter | LinkedIn
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.
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
March 31,
|
Nine Months
Ended
March 31,
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
Net
revenue
|
$453,879
|
$422,497
|
$1,320,066
|
$1,225,848
|
|
Cost of
sales
|
193,999
|
171,066
|
557,460
|
473,882
|
|
SERVE-HF accrual
release(1)
|
-
|
-
|
(2,402)
|
-
|
|
Gross
profit
|
259,880
|
251,431
|
765,008
|
751,966
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
119,351
|
116,336
|
348,664
|
349,377
|
|
Research and
development
|
28,109
|
27,024
|
84,271
|
86,342
|
|
Restructuring
expenses(1)
|
-
|
-
|
6,914
|
-
|
|
Acquisition
expenses(1)
|
3,550
|
-
|
3,550
|
-
|
|
Amortization of
acquired intangible assets(1)
|
4,558
|
2,203
|
11,294
|
6,558
|
|
Total operating
expenses
|
155,568
|
145,563
|
454,693
|
442,277
|
|
Income from
operations(1)
|
104,312
|
105,868
|
310,315
|
309,689
|
|
|
|
|
|
|
Other income
(expenses), net:
|
|
|
|
|
|
Interest income
(expense), net
|
2,131
|
4,761
|
8,028
|
15,765
|
|
Other, net
|
2,553
|
3,729
|
3,791
|
6,346
|
|
Total other income
(expenses), net
|
4,684
|
8,490
|
11,819
|
22,111
|
|
|
|
|
|
|
Income before income
taxes
|
108,996
|
114,358
|
322,134
|
331,800
|
|
Income
taxes
|
20,538
|
23,375
|
62,757
|
66,376
|
|
Net
income(1)
|
$88,458
|
$90,983
|
$259,377
|
$265,424
|
|
|
|
|
|
|
Basic earnings per
share
|
$0.63
|
$0.65
|
$1.85
|
$1.89
|
|
Diluted earnings per
share
|
$0.63
|
$0.64
|
$1.83
|
$1.86
|
|
Non-GAAP diluted
earnings per share(1)
|
$0.68
|
$0.65
|
$1.95
|
$1.90
|
|
|
|
|
|
|
Basic shares
outstanding
|
140,187
|
140,792
|
140,140
|
140,341
|
|
Diluted shares
outstanding
|
141,040
|
142,813
|
141,399
|
142,614
|
|
|
|
|
|
|
(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)
|
|
|
March 31
|
June 30,
|
|
2016
|
2015
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$718,495
|
$717,249
|
|
Accounts receivable,
net
|
358,171
|
362,568
|
|
Inventories
|
232,930
|
246,859
|
|
Prepayments and other
current assets
|
90,498
|
81,168
|
|
Total current
assets
|
1,400,094
|
1,407,844
|
|
Property, plant and
equipment, net
|
386,771
|
387,758
|
|
Goodwill and other
intangible assets, net
|
572,900
|
311,403
|
|
Deferred income taxes
and other non-current assets
|
84,845
|
74,769
|
|
Total non-current
assets
|
1,044,516
|
773,930
|
|
Total
assets
|
$2,444,610
|
$2,181,774
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$77,642
|
$81,112
|
|
Accrued
expenses
|
152,403
|
132,976
|
|
Deferred
revenue
|
38,481
|
36,097
|
|
Income taxes
payable
|
17,982
|
16,278
|
|
Total current
liabilities
|
286,508
|
266,463
|
|
Non-current
liabilities:
|
|
|
|
Deferred income
taxes
|
8,297
|
6,372
|
|
Deferred
revenue
|
36,509
|
19,284
|
|
Income taxes
payable
|
1,754
|
1,754
|
|
Other long term
liabilities
|
2,522
|
-
|
|
Long-term
debt
|
435,609
|
300,594
|
|
Total non-current
liabilities
|
484,691
|
328,004
|
|
Total
liabilities
|
771,199
|
594,467
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
561
|
562
|
|
Additional paid-in
capital
|
1,290,929
|
1,228,795
|
|
Retained
earnings
|
2,109,371
|
1,976,020
|
|
Treasury
stock
|
(1,546,611)
|
(1,444,554)
|
|
Accumulated other
comprehensive income
|
(180,839)
|
(173,516)
|
|
Total stockholders'
equity
|
$1,673,411
|
$1,587,307
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$2,444,610
|
$2,181,774
|
|
|
|
|
ResMed Inc And
Subsidiaries
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
Nine Months
Ended
March 31,
|
|
2016
|
2015
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$259,377
|
$265,424
|
|
Adjustment to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
59,827
|
55,310
|
|
Impairment of
long-lived asset
|
2,815
|
-
|
|
Gain on disposal of
business
|
-
|
(709)
|
|
Stock-based
compensation costs
|
34,779
|
34,802
|
|
Excess tax benefit
from stock-based compensation arrangements
|
(13,312)
|
(20,738)
|
|
Impairment of cost
method investment
|
750
|
-
|
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
Accounts receivable,
net
|
2,798
|
(14,814)
|
|
Inventories,
net
|
26,012
|
(80,793)
|
|
Prepaid expenses, net
deferred income taxes and other current assets
|
99
|
(3,487)
|
|
Accounts payable,
accrued expenses and other liabilities
|
18,516
|
48,484
|
|
Net cash provided by
operating activities
|
391,661
|
283,479
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
property, plant and equipment
|
(44,133)
|
(50,266)
|
|
Patent registration
costs
|
(6,891)
|
(7,109)
|
|
Business
acquisitions, net of cash acquired
|
(242,645)
|
(26,956)
|
|
Investments in
cost-method investments
|
(8,215)
|
(10,500)
|
|
Proceeds from sale of
business
|
-
|
468
|
|
Payments on maturity
of foreign currency contracts
|
(5,711)
|
(25,232)
|
|
Net cash used in
investing activities
|
(307,595)
|
(119,595)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
issuance of common stock, net
|
16,937
|
23,176
|
|
Excess tax benefit
from stock-based compensation arrangements
|
13,312
|
20,738
|
|
Purchases of treasury
stock
|
(102,058)
|
(103,295)
|
|
Payment of business
combination contingent consideration
|
(1,228)
|
(458)
|
|
Proceeds from
borrowings, net of borrowing costs
|
310,000
|
160,000
|
|
Repayment of
borrowings
|
(193,092)
|
(1,527)
|
|
Dividends
paid
|
(126,026)
|
(117,862)
|
|
Net cash (used in) /
provided by financing activities
|
(82,155)
|
(19,228)
|
|
Effect of exchange
rate changes on cash
|
(665)
|
(184,061)
|
|
Net increase /
(decrease) in cash and cash equivalents
|
1,246
|
(39,405)
|
|
Cash and cash
equivalents at beginning of period
|
717,249
|
905,730
|
|
Cash and cash
equivalents at end of period
|
$718,495
|
$866,325
|
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited)
|
|
(In US$ 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
March 31,
|
Nine Months
Ended
March 31,
|
|
2016
|
2015
|
2016
|
2015
|
|
GAAP income from
operations
|
$104,312
|
$105,868
|
$310,315
|
$309,689
|
|
SERVE-HF accrual
release (A)
|
-
|
-
|
(2,402)
|
-
|
|
Restructuring
expenses (A)
|
-
|
-
|
6,914
|
-
|
|
Acquisition expenses
(A)
|
3,550
|
-
|
3,550
|
-
|
|
Amortization of
acquired intangible assets (A)
|
4,558
|
2,203
|
11,294
|
6,558
|
|
Non-GAAP income from
operations (excluding the impact of SERVE-HF accrual release,
restructuring expenses, acquisition expenses and amortization of
acquired intangible assets)
|
$112,420
|
$108,071
|
$329,671
|
$316,247
|
|
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
March 31,
|
Nine Months
Ended
March 31,
|
|
2016
|
2015
|
2016
|
2015
|
|
GAAP net
income
|
$88,458
|
$90,983
|
$259,377
|
$265,424
|
|
SERVE-HF accrual
release, net of tax (A)
|
-
|
-
|
(1,682)
|
-
|
|
Restructuring
expenses, net of tax (A)
|
-
|
-
|
5,204
|
-
|
|
Acquisition expenses,
net of tax (A)
|
3,550
|
-
|
3,550
|
-
|
|
Amortization of
acquired intangible assets, net of tax
(A)
|
3,416
|
1,643
|
8,572
|
4,951
|
|
Non-GAAP net income
(A)
|
$95,424
|
$92,626
|
$275,021
|
$270,375
|
|
Diluted shares
outstanding
|
141,040
|
142,813
|
141,399
|
142,614
|
|
GAAP diluted earnings
per share
|
$0.63
|
$0.64
|
$1.83
|
$1.86
|
|
Non-GAAP diluted
earnings per share (A)
|
$0.68
|
$0.65
|
$1.95
|
$1.90
|
|
(A)
|
ResMed excludes the
impact of release of SERVE-HF accrual, restructuring expenses,
acquisition-related expenses and 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
non-GAAP diluted earnings per share, which exclude the impact of
the SERVE-HF accrual release, restructuring expenses,
acquisition-related expenses and 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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SOURCE ResMed Inc.