ResMed Inc. Announces Financial Results for the Quarter Ended September 30, 2011

10/24/2011

SAN DIEGO, Oct. 24, 2011 /PRNewswire via COMTEX/ --

ResMed Inc. (NYSE: RMD) today announced results for the quarter ended September 30, 2011. Revenue for the quarter ended September 30, 2011 was a record $314.8 million, a 12% increase (an 8% increase on a constant currency basis) over the quarter ended September 30, 2010. For the quarter ended September 30, 2011, net income was $50.5 million. Largely as a result of currency exchange rate movements, net income decreased 11% compared to the quarter ended September 30, 2010. Diluted earnings per share for the quarter ended September 30, 2011 were $0.33, a decrease of 8% compared to the quarter ended September 30, 2010.

 

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

SG&A expenses were $94.2 million for the quarter ended September 30, 2011, an increase of $9.4 million, or 11% (a 5% increase on a constant currency basis) compared to the quarter ended September 30, 2010. SG&A costs were 29.9% of revenue in the quarter ended September 30, 2011, compared to 30.1% for the quarter ended September 30, 2010. SG&A expenses were negatively impacted by the appreciation of the Australian dollar and euro against the U.S. dollar.

R&D expenses were $26.2 million for the quarter ended September 30, 2011, or 8.3% of revenue. R&D expenses increased by 33% (an 18% increase on a constant currency basis) compared to the quarter ended September 30, 2010 reflecting ongoing investment in our product pipeline. Additionally, R&D expenses were negatively impacted by the appreciation of the Australian dollar against the U.S. dollar.

The company amortized acquired intangibles of $3.8 million ($2.7 million, net of tax) during the quarter ended September 30, 2011. Amortization of acquired intangibles increased primarily as a result of our recent acquisitions of BiancaMed Ltd. and Grundler GmbH. The ongoing integration of these units is going well. Stock-based compensation costs incurred during the quarter ended September 30, 2011 of $7.2 million ($5.3 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and the employee stock purchase plan.

Inventory, at $188.0 million, decreased by $12.8 million compared to June 30, 2011. Accounts receivable days sales outstanding, at 71 days, increased by 2 days compared to June 30, 2011.

Peter C. Farrell Ph.D, chairman and chief executive officer, commented, "Revenue in Americas increased by 9% to $169.3 million over the prior year's quarter. Revenue outside Americas increased by 15% to $145.5 million over the prior year's quarter, or a 7% increase on a constant currency basis. Worldwide, our growth in flow generators was mainly driven by sales of the S9 AutoSet(TM) and VPAP Adapt SV(TM). Patient interface sales continue to perform strongly in all regions. Operating profit for the September quarter was $60.9 million and cash flow from operations was a record $89.5 million, demonstrating excellent operating performance. During the quarter, we also repurchased 4.4 million shares, at a cost of $124.7 million, as part of our ongoing capital management program.

"Awareness of sleep-disordered breathing and its impact on other disease states continues to grow. Just last week, at the Congress of the World Sleep Federation, in Kyoto, Japan, the connection between sleep-disordered breathing and both heart failure and type 2 diabetes mellitus was highlighted, with particular emphasis on the need to address sleep-disordered breathing diagnosis and treatment for patients with type 2 diabetes. In fact, both Japanese cardiologists and endocrinologists are initiating their own sleep studies to simplify the diagnostic procedures for sleep-disordered breathing.

"Three new product initiatives also demonstrate our commitment to meeting patient needs. First, during October 2011, we released our line of CPAP therapy products for women, known as "Choices for Her." The offering includes three masks from ResMed's FX Series specially designed for women, as well as the S9 AutoSet for Her therapy device. ResMed is the first company to design a mask for female patients, understanding that women have unique needs when it comes to CPAP therapy, particularly with mask choice and fit.

"Second, in September, we launched the new Pixi(TM) nasal mask, the first pediatric mask in the industry developed specifically for the treatment of obstructive sleep apnea in children aged two and older, a patient population traditionally overlooked. This is not just a scaled-down adult mask; every feature on the Pixi was carefully designed to address and improve comfort, acceptance and the overall therapy experience for both the child and caregiver.

"And finally, ResMed has recently begun an initiative to engage existing patients by lowering the emotional barriers to therapy through an exclusive arrangement with Skinit® for our CPAP devices. Skins can provide a unique opportunity to connect patients personally with their machine early in the process, reconnect with patients who have abandoned therapy, and provide an accessories revenue stream for the home care dealer."

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 dialling 617-801-9715 (domestic) or +1 617-801-9715 (international) and entering conference pass code no. 99214751. 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 617-801-6888 (domestic) and +1 617-801-6888 (international) and entering conference I.D. No. 92613651.

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

September 30,




2011


2010

Net revenue

$

314,774


$

282,012


Cost of sales


129,720



108,058


Gross profit


185,054



173,954


Operating expenses:





Selling, general and administrative


94,203



84,791


Research and development


26,206



19,739


Amortization of acquired intangible assets


3,771



2,030


Donation to Foundation


0



1,000


Total operating expenses


124,180



107,560


Income from operations


60,874



66,394


Other income (expenses), net:





Interest income (expense), net


6,924



5,097


Other, net


(1,301)



5,063


Total other income (expenses), net


5,623



10,160


Income before income taxes


66,497



76,554


Income taxes


15,979



19,846


Net income

$

50,518


$

56,708


Basic earnings per share

$

0.34


$

0.37


Diluted earnings per share

$

0.33


$

0.36


Basic shares outstanding


150,366



151,474


Diluted shares outstanding


154,051



156,752



RESMED INC AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited- In US$ thousands)




September 30,
2011


June 30,

2011

ASSETS





Current assets:





Cash and cash equivalents

$

610,063


$

735,267


Accounts receivable, net


251,103



274,352


Inventories


187,950



200,777


Prepayments, deferred income taxes and other current assets


93,683



82,056


Total current assets


1,142,799



1,292,452


Property, plant and equipment, net


432,687



462,107


Goodwill


267,688



235,487


Other intangibles


63,940



47,911


Deferred income taxes


19,804



18,922


Other assets


8,374



12,043


Total non-current assets


792,493



776,470


Total assets

$

1,935,292


$

2,068,922


LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable

$

46,688


$

55,194


Accrued expenses


103,274



103,787


Deferred revenue


41,918



45,125


Income taxes payable


29,146



3,931


Deferred income taxes


593



640


Current portion of long-term debt


4,095



163


Total current liabilities


225,714



208,840


Deferred income taxes


9,465



8,051


Deferred revenue


16,979



17,237


Income taxes payable


4,116



4,057


Non-current portion of long-term debt


130,000



100,000


Total non-current liabilities


160,560



129,345


Total liabilities


386,274



338,185


STOCKHOLDERS' EQUITY:





Common stock


591



607


Additional paid-in capital


815,174



798,461


Retained earnings


1,162,380



1,111,862


Treasury stock


(629,338)



(504,625)


Accumulated other comprehensive income


200,211



324,432


Total stockholders' equity


1,549,018



1,730,737


Total liabilities and stockholders' equity

$

1,935,292


$

2,068,922



SOURCE ResMed Inc.

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