RESMED, INC. 
By SAN DIEGO, April 23, 2014 /PRNewswire/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income for the quarter ended March 31, 2014. Revenue for the quarter was $397.8 million, a 4 percent increase (a 3 percent increase on a constant currency basis) over the quarter ended March 31, 2013. Net income was $90.0 million, an increase of 6 percent compared to the quarter ended March 31, 2013. Diluted earnings per share for the quarter were $0.63, an increase of 9 percent compared to the quarter ended March 31, 2013.
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Selling, general and administrative expenses were $115.1 million for the quarter, an increase of 5 percent (a 7 percent increase on a constant currency basis) over the quarter ended March 31, 2013. SG&A costs were 28.9 percent of revenue in the quarter, compared to 28.6 percent in the quarter ended March 31, 2013.
Research and development expenses were $29.5 million for the quarter, or 7.4 percent of revenue. R&D expenses decreased by 5 percent (a 7 percent increase on a constant currency basis) compared to the quarter ended March 31, 2013. R&D expenses were favorably impacted by the depreciation of the Australian dollar against the U.S. dollar.
ResMed amortized acquired intangibles of $2.5 million ($1.9 million, net of tax) during the quarter. Stock-based compensation costs incurred during the quarter of $11.2 million ($8.1 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and the company's employee stock purchase plan.
For the nine months ended March 31, 2014, revenue was $1,139.8 million, an increase of 4 percent over the nine months ended March 31, 2013 (a 3 percent increase on a constant currency basis). For the nine months, net income was $257.5 million, an increase of 10 percent compared to the nine months ended March 31, 2013. Diluted earnings per share for the nine months were $1.78 per diluted share, an increase of 11 percent compared to the nine months ended March 31, 2013.
In the third quarter of fiscal year 2014, revenue outside the Americas was $181.6 million, an increase of 8 percent over the prior year's quarter. In constant currency terms, revenue outside the Americas increased by 6 percent. Revenue in the Americas, at $216.1 million, remained flat compared to the prior year's quarter of $215.2 million. Operating profit for the third quarter grew to $104.7 million, cash flow from operations was $101.1 million, while gross margin was 63.3 percent, all demonstrating robust operating performance. During the quarter, the company also repurchased 1.6 million shares at a cost of $72.5 million, as part of its ongoing capital management program.
"We are pleased with our third quarter results in the face of challenging market conditions, particularly in the U.S.," said ResMed chief executive officer Michael "Mick" Farrell. "Our Americas business showed encouraging trends and we continue to benefit from our globally diversified business, with constant currency revenue growth of 6 percent in combined Europe and Asia-Pacific businesses for the quarter. In particular, our European results were strong across the board, with most countries showing solid growth."
Highlighting ResMed's new products, Farrell continued, "At the beginning of the third quarter, we launched our new nasal pillows interface, the AirFit(TM) P10, in the U.S., and it's been very well received. In addition to its brisk adoption, we received global validation of our innovation and design excellence when the AirFit P10 won the prestigious 2014 Red Dot Product Design award, the world's largest design competition. Sales of the AirFit P10 have just begun in Europe and Asia-Pacific. Earlier this week, ResMed announced the U.S. launch of two additional new masks to kick-start the fourth quarter of its fiscal year: the AirFit F10, the lightest full-face mask on the market; and the AirFit N10, a new patient-preferred nasal mask. Both masks will be launched soon in other major countries.
"On the flow generator side, we are now in the full product launch phase of our new respiratory care platform in Europe. The Astral(TM) is our new generation of life support ventilators. Its competitive advantages are its small size and long battery life, making it an ultra-portable system. It showcases ResMed's growing strength in software design, with patient-friendly set-up and operation. These features allow adult and pediatric patients, who would otherwise be hospitalized, to be safely treated outside the hospital for various chronic diseases. The Astral platform also won a prestigious Red Dot Product Design award, and received positive reaction from patients, providers, and physicians during its controlled product launch in Europe during the third quarter. We are now ready for full commercial launch of this respiratory care platform in Europe and Asia-Pacific, and our U.S. launch is pending FDA clearance, which we anticipate later this year," Farrell said.
Farrell concluded, "We were also particularly pleased with our bottom-line results this quarter. Our operating profit, net income, and earnings per share all grew year-over-year at a faster pace than our revenue, with earnings per share up 9 percent. We expect to continue to take advantage of ongoing growth opportunities in sleep-disordered breathing, chronic obstructive pulmonary disease, and cardiorespiratory diseases. Our offerings improve patient outcomes and quality of life, while reducing costs for global healthcare systems."
The ResMed board of directors has today declared a quarterly dividend of $0.25 per share, which will have a record date of May 20, 2014, and be payable on June 17, 2014. 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. 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 May 14, 2014 for CDI holders and May 16, 2014 for common stock holders. As a result of these differences, 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 14, 2014 through May 20, 2014, inclusive.
About ResMed
ResMed changes lives by developing, manufacturing and distributing medical equipment for treating, diagnosing, and managing sleep-disordered breathing, COPD, and other chronic diseases. We develop innovative products and solutions to improve the health and quality of life of those who suffer from these conditions, and we work to raise awareness 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. 36956405. 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. 36956405.
For Investors: Further information can be obtained by contacting David Pendarvis at ResMed Inc., San Diego, at (858) 836-5000; Brett Sandercock at ResMed Limited, Sydney, at (+612) 8884-2090; or by visiting the company's multilingual website at www.resmed.com.
For News Media: Contact Gretchen Griswold, director of Global Corporate Communications at (858) 836-6789.
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.
ResMed Inc and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine months Ended
March 31, March 31,
2014 2013 2014 2013
---- ---- ---- ----
Net revenue $397,758 $383,581 $1,139,762 $1,099,850
Cost of sales 145,970 144,132 411,234 419,041
Gross profit 251,788 239,449 728,528 680,809
------------ ------- ------- ------- -------
Operating expenses:
Selling,
general and
administrative 115,101 109,628 328,172 315,745
Research and
development 29,530 31,189 86,430 88,735
Amortization of
acquired
intangible
assets 2,459 2,533 7,325 7,671
Total operating
expenses 147,090 143,350 421,927 412,151
--------------- ------- ------- ------- -------
Income from
operations 104,698 96,099 306,601 268,658
----------- ------- ------ ------- -------
Other income (expenses), net:
Interest income
(expense), net 6,015 8,078 19,182 25,047
Other, net 2,199 3,815 (1,340) 3,587
Total other
income
(expenses),
net 8,214 11,893 17,842 28,634
------------ ----- ------ ------ ------
Income before
income taxes 112,912 107,992 324,443 297,292
Income taxes 22,943 23,079 66,908 63,172
Net income $89,969 $84,913 $257,535 $234,120
---------- ------- ------- -------- --------
Basic earnings
per share $0.64 $0.59 $1.82 $1.64
Diluted
earnings per
share $0.63 $0.58 $1.78 $1.60
Basic shares
outstanding 140,959 143,293 141,774 143,049
Diluted shares
outstanding 143,375 146,643 144,758 146,479
-------------- ------- ------- ------- -------
ResMed Inc And Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited - In thousands)
March 31, June 30,
2014 2013
---- ----
Assets
Current assets:
Cash and cash
equivalents $938,563 $876,048
Accounts receivable,
net 337,572 318,349
Inventories 164,888 145,847
Prepayments, deferred
income taxes and
other current assets 122,879 108,605
Total current assets 1,563,902 1,448,849
-------------------- --------- ---------
Property, plant and
equipment, net 429,049 411,433
Goodwill 290,785 274,829
Other intangibles 46,153 49,639
Deferred income taxes
and other non-
current assets 34,677 25,971
Total non-current
assets 800,664 761,872
----------------- ------- -------
Total assets $2,364,566 $2,210,721
------------ ---------- ----------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $55,483 $60,688
Accrued expenses 142,082 137,674
Deferred revenue 42,182 44,953
Income taxes payable 6,353 30,090
Deferred income taxes 774 627
Current portion of
long-term debt 18 300,017
------------------ --- -------
Total current
liabilities 246,892 574,049
------------- ------- -------
Non-current liabilities:
Deferred income taxes 10,081 9,895
Deferred revenue 15,585 11,928
Income taxes payable 5,318 3,564
Non-current portion
of long-term debt 395,785 769
Total non-current
liabilities 426,769 26,156
----------------- ------- ------
Total liabilities 673,661 600,205
----------------- ------- -------
Stockholders' Equity:
Common stock 561 568
Additional paid-in
capital 1,084,502 1,025,064
Retained earnings 1,727,789 1,576,641
Treasury stock (1,251,482) (1,083,845)
Accumulated other
comprehensive income 129,535 92,088
--------------------- ------- ------
Total stockholders'
equity $1,690,905 $1,610,516
------------------- ---------- ----------
Total liabilities and
stockholders' equity $2,364,566 $2,210,721
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SOURCE ResMed Inc.
