SAN DIEGO, Oct. 25, 2016 /PRNewswire/ -- ResMed Inc.
(NYSE: RMD) today announced results for its quarter ended
September 30, 2016. Revenue for the
quarter was $465.4 million, a 13
percent increase compared to the same period of the prior year.
Excluding the contribution from the Brightree acquisition, revenue
for the quarter was $432.4 million, a
5 percent increase.
"We had a solid start to our fiscal year with 13 percent
constant currency revenue growth led by our Brightree software
offerings and global device sales," said Mick Farrell, ResMed's chief executive officer.
"We continue to demonstrate the value of our solutions, and earlier
today, announced the world's largest study on patient adherence.
During the quarter, we drove consumer sleep awareness through a new
U.S. media partnership, and sponsored a positive clinical study
showing that non-invasive ventilation significantly reduces the
risk of re-hospitalization and death for COPD."
Farrell concluded, "In 2017, we continue to focus on developing
and commercializing new, innovative products and solutions that
improve patient outcomes, create efficiencies for our customers,
and help physicians and providers better manage chronic disease and
lower healthcare costs. We have an exciting pipeline of new
products, and look forward to bringing them to market."
Analysis of first quarter results
First quarter revenue in the Americas was $301.0 million, an 18 percent increase over the
same period of the prior year. This included Brightree revenue of
$33.1 million. Excluding
Brightree, revenue in the Americas was $267.9 million, a 5 percent increase over the
prior year. Revenue in combined EMEA and APAC was $164.5 million, an increase of 5 percent on a
constant currency basis compared to the same period of the prior
year.
Gross margin in the first quarter was 57.8 percent, which
included a field safety notification expense of $5.1 million relating to the battery in our
Astral ventilation device. Excluding the field safety
notification expense, the gross margin for Q1 FY17 was 58.9
percent, higher than the prior year's quarter, mainly due to
manufacturing and procurement efficiencies and an incremental
contribution from the Brightree acquisition, partly offset by
changes in product mix and average selling prices.
Income from operations for the quarter was $94.1 million, a 4 percent decline compared with
the quarter ended September 30, 2015.
Non-GAAP income from operations for the quarter was $111.0 million, an 11 percent increase compared
to the same period of the prior year.
Selling, general and administrative expenses were $128.9 million, a 16 percent increase over the
same period in the prior year, or a 15 percent increase on a
constant currency basis. SG&A expenses increased to 27.7
percent of revenue in the quarter, compared with 27.0 percent
reported in the quarter ended September
30, 2015.
Research and development expenses were $34.4 million, or 7.4 percent of revenue. R&D
expenses increased by 27 percent compared with the same period last
year, or a 21 percent increase on a constant currency basis.
Amortization of acquired intangible assets was $11.7 million during the quarter, an increase of
$9.4 million compared with the same
period last year. The increase in amortization of acquired
intangible assets was primarily due to the amortization expense
associated with our recent acquisitions, in particular Brightree,
Curative and Inova. Stock-based compensation costs incurred
during the quarter of $12.0 million
consisted of expenses associated with employee equity grants, and
our employee stock purchase plan.
Net income for the quarter was $76.1
million, an 8 percent decrease compared to the same period
of the prior year. Non-GAAP net income was $87.7 million, a 4 percent increase compared to
the prior year. Non-GAAP measures adjust for amortization of
acquired intangibles and the Astral battery field safety
notification expenses. GAAP diluted earnings per share for
the quarter decreased 7 percent to $0.54. Non-GAAP diluted earnings per share
increased 5 percent to $0.62.
Cash flow from operations for the quarter was $86.2 million compared to net income in the
current quarter of $76.1 million.
Dividend program
The ResMed board of directors today declared a quarterly cash
dividend of $0.33 per share. The
dividend will have a record date of November
10, 2016, payable on December 15,
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 November 8,
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 November
8, 2016 through November 10,
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 Time today. The live webcast of the call can be
accessed on ResMed's Investor Relations website at
investor.resmed.com. Please go to this section of the website
and click on the icon for the "Q1 2017 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 88567093. The telephone replay will be
available until November 8, 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 2 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.
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:
|
News
Media:
|
Agnes Lee
|
Alison
Graves
|
Senior Director,
Investor Relations
|
Director, Global
Corporate Communications
|
(858)
836-5971
|
(858)
836-6789
|
investorrelations@resmed.com
|
news@resmed.com
|
RESMED INC AND
SUBSIDIARIES
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In thousands, except
per share data)
|
|
|
Three Months
Ended
September
30,
|
|
2016
|
2015
|
|
|
|
Net
revenue
|
$465,450
|
$411,647
|
Cost of
sales
|
191,196
|
173,028
|
Astral field safety
notification expenses (1)
|
5,070
|
-
|
Gross
profit
|
269,184
|
238,619
|
|
|
|
Operating
expenses
|
|
|
Selling, general and
administrative
|
128,851
|
111,095
|
Research and
development
|
34,446
|
27,192
|
Amortization of
acquired intangible assets
|
11,741
|
2,307
|
Total operating
expenses
|
175,038
|
140,594
|
Income from
operations (1)
|
94,146
|
98,025
|
|
|
|
Other income
(expenses), net:
|
|
|
Interest income
(expense), net
|
(2,493)
|
3,422
|
Other, net
|
1,272
|
(2,003)
|
Total other income
(expense), net
|
(1,221)
|
1,419
|
|
|
|
Income before income
taxes
|
92,925
|
99,444
|
Income
taxes
|
16,818
|
16,527
|
Net income
(1)
|
$76,107
|
$82,917
|
|
|
|
Basic earnings per
share
|
$0.54
|
$0.59
|
Diluted earnings per
share
|
$0.54
|
$0.58
|
Non-GAAP diluted
earnings per share (1)
|
$0.62
|
$0.59
|
|
|
|
Basic shares
outstanding
|
140,785
|
140,309
|
Diluted shares
outstanding
|
142,090
|
142,280
|
|
|
(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,
|
|
2016
|
2016
|
ASSETS:
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$781,658
|
$731,434
|
Accounts receivable,
net
|
347,137
|
382,086
|
Inventories
|
253,828
|
224,456
|
Prepayments and other
current assets
|
92,229
|
81,743
|
Total current
assets
|
1,474,852
|
1,419,719
|
Property, plant and
equipment, net
|
390,797
|
384,276
|
Goodwill
|
1,062,758
|
1,059,245
|
Other intangibles,
net
|
289,673
|
299,808
|
Deferred income taxes
and other non-current assets
|
104,184
|
93,657
|
Total non-current
assets
|
1,847,412
|
1,836,986
|
Total
assets
|
$3,322,264
|
$3,256,705
|
LIABILITIES AND
STOCKHOLDERS' EQUITY:
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$80,489
|
$92,571
|
Accrued
expenses
|
153,969
|
156,805
|
Deferred
revenue
|
47,665
|
50,009
|
Income taxes
payable
|
38,807
|
39,166
|
Short-term
debt
|
299,625
|
299,438
|
Total current
liabilities
|
620,555
|
637,989
|
Non-current
liabilities:
|
|
|
Deferred income
taxes
|
8,920
|
9,061
|
Deferred
revenue
|
45,736
|
40,281
|
Other long term
liabilities
|
974
|
1,211
|
Long-term
debt
|
873,511
|
873,332
|
Total non-current
liabilities
|
929,141
|
923,885
|
Total
liabilities
|
1,549,696
|
1,561,874
|
STOCKHOLDERS'
EQUITY:
|
|
|
Common
stock
|
564
|
563
|
Additional paid-in
capital
|
1,321,522
|
1,303,238
|
Retained
earnings
|
2,190,028
|
2,160,299
|
Treasury
stock
|
(1,546,611)
|
(1,546,611)
|
Accumulated other
comprehensive income
|
(192,935)
|
(222,658)
|
Total stockholders'
equity
|
$1,772,568
|
$1,694,831
|
|
|
|
Total liabilities and
stockholders' equity
|
$3,322,264
|
$3,256,705
|
|
|
|
RESMED INC AND
SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
Three Months
Ended
September
30,
|
|
2016
|
2015
|
Cash flows from
operating activities:
|
|
|
Net income
|
$76,107
|
$82,917
|
Adjustment to
reconcile net income to cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
27,775
|
18,403
|
Stock-based
compensation costs
|
12,049
|
12,383
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
Accounts receivable,
net
|
36,207
|
30,498
|
Inventories,
net
|
(28,073)
|
(17,194)
|
Prepaid expenses, net
deferred income taxes and other current assets
|
(19,115)
|
(3,526)
|
Accounts payable,
accrued expenses and other liabilities
|
(18,707)
|
1,127
|
Net cash provided by
operating activities
|
86,243
|
124,608
|
Cash flows from
investing activities:
|
|
|
Purchases of
property, plant and equipment
|
(14,560)
|
(16,403)
|
Patent registration
costs
|
(2,471)
|
(2,423)
|
Business
acquisitions, net of cash acquired
|
(3,090)
|
-
|
Investments in
cost-method investments
|
(2,758)
|
(4,582)
|
Proceeds / (Payments)
on maturity of foreign currency contracts
|
9,710
|
(39,341)
|
Net cash used in
investing activities
|
(13,169)
|
(62,749)
|
Cash flows from
financing activities:
|
|
|
Proceeds from
issuance of common stock, net
|
6,330
|
4,352
|
Purchases of treasury
stock
|
-
|
(57,857)
|
Proceeds from
borrowings, net of borrowing costs
|
25,000
|
200,000
|
Repayment of
borrowings
|
(25,000)
|
(8)
|
Dividends
paid
|
(46,378)
|
(42,079)
|
Net cash (used in) /
provided by financing activities
|
(40,048)
|
104,408
|
Effect of exchange
rate changes on cash
|
17,198
|
(61,463)
|
Net increase /
(decrease) in cash and cash equivalents
|
50,224
|
104,804
|
Cash and cash
equivalents at beginning of period
|
731,434
|
717,249
|
Cash and cash
equivalents at end of period
|
$781,658
|
$822,053
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited)
|
(In US$ 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
September
30,
|
|
|
|
2016
|
2015
|
GAAP income from
operations
|
|
|
94,146
|
98,025
|
Astral battery field
safety notification expenses (A)
|
|
|
5,070
|
-
|
Amortization of
acquired intangible assets (A)
|
|
|
11,741
|
2,307
|
Non-GAAP operating
income
|
|
|
110,957
|
100,332
|
|
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,
|
|
|
|
2016
|
2015
|
GAAP net
income
|
|
|
76,107
|
82,917
|
Astral battery field
safety notification expenses, net of tax
(A)
|
|
|
3,549
|
-
|
Amortization of
acquired intangible assets, net of tax
(A)
|
|
|
8,006
|
1,717
|
Non-GAAP net income
(A)
|
|
|
87,662
|
84,634
|
Diluted shares
outstanding
|
|
|
142,090
|
142,280
|
GAAP diluted earnings
per share
|
|
|
$0.54
|
$0.58
|
Non-GAAP diluted
earnings per share (A)
|
|
|
$0.62
|
$0.59
|
|
|
(A)
|
ResMed adjusts for
the impact of the Astral battery field safety notification expenses
and amortization of acquired intangible assets from their
evaluation of ongoing operations and believes investors benefit
from adjusting these items to facilitate a more meaningful
evaluation of current operating performance.
|
|
|
|
ResMed believes that
non-GAAP diluted earnings per share 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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