ResMed today announced results for its quarter ended September 30, 2017.
Revenue increased 13% to $523.7 million; up 11% on a constant currency basis
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SAN DIEGO, Oct. 26, 2017 /PRNewswire/ -- ResMed Inc. today announced results for its quarter ended September 30, 2017. Revenue for the quarter was $523.7 million, a 13 percent increase compared to the same period of the prior year. "We started the fiscal year with strong 11 percent constant currency revenue growth led by our masks, software-as-a-service solutions, and devices," said Mick Farrell, ResMed's chief executive officer. "Our new masks have performed well around the world, device sales are solid, and operating profit returned to double-digit growth in the quarter." Farrell concluded, "We are achieving share gains with new product innovation and delivering sustainable operating profit growth. We continue to pioneer products, services and solutions that improve patient outcomes, create efficiencies for our homecare providers, and help physicians and payers better manage chronic disease and lower long-term healthcare costs." Analysis of first quarter results First quarter revenue in the Americas, excluding Brightree, was $296.6 million, an 11 percent increase over the same period of the prior year. Brightree revenue for the first quarter was $38.1 million, an increase of 15 percent compared to the same period of the prior year. Revenue in combined EMEA and APAC was $189.0 million, an increase of 11 percent on a constant currency basis, compared to the same period of the prior year. Gross margin in the first quarter was 58.4 percent, higher than the prior year's quarter gross margin of 57.8 percent. The improvement in gross margin compared to prior year was due to manufacturing and procurement efficiencies and the prior year Astral field safety notification expenses, which were partially offset by declines in average selling prices. Income from operations for the quarter was $112.6 million, a 20 percent increase compared with the quarter ended September 30, 2016. Non-GAAP income from operations for the quarter was $124.3 million, a 12 percent increase compared to the same period of the prior year. Selling, general and administrative expenses were $143.9 million, a 12 percent increase over the same period in the prior year, or a 10 percent increase on a constant currency basis. SG&A expenses improved to 27.5 percent of revenue in the quarter, compared with 27.7 percent reported in the quarter ended September 30, 2016. Research and development expenses were $37.4 million, or 7.1 percent of revenue. R&D expenses increased by 9 percent compared with the same period last year, or a 6 percent increase on a constant currency basis. Amortization of acquired intangible assets was $11.8 million during the quarter, which is consistent with the same period last year. Stock-based compensation costs incurred during the quarter of $11.9 million consisted of expenses associated with employee equity grants, and our employee stock purchase plan. Net income for the quarter was $86.1 million, a 13 percent increase compared to the same period of the prior year. Non-GAAP net income was $94.1 million, a 7 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 increased by 11 percent to $0.60. Non-GAAP diluted earnings per share of $0.66 were 6 percent higher compared with the same period of the prior year. Cash flow from operations for the quarter was $94.0 million compared to net income in the current quarter of $86.1 million. During the quarter we paid $49.7 million in dividends and repaid $60.0 million of our outstanding debt. Dividend program The ResMed board of directors today declared a quarterly cash dividend of $0.35 per share. The dividend will have a record date of November 9, 2017, payable on December 14, 2017. 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, 2017 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, 2017 through November 9, 2017 inclusive. Webcast details ResMed will discuss its first quarter fiscal year 2018 results 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 2018 earnings webcast" to register and listen to the live webcast. A replay of the earnings webcast will be accessible on our website and available approximately two hours after the live webcast. In addition, a telephone replay of the conference call will be available approximately two hours after the webcast by dialing 800-585-8367 (U.S.) and +1 416-621-4642 (outside U.S.) and entering a passcode of 93203758. The telephone replay will be available until November 9, 2017. About ResMed ResMed (NYSE: RMD, ASX: 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 4 million patients remotely monitored every day. Our 6,000-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 120 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. For investors For media
Agnes Lee Alison Graves
O: 858-836-5971 O: 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,
2017 2016
---- ----
Net
revenue $523,659 $465,450
Cost of sales 218,054 191,196
Astral field
safety
notification
expenses (1) - 5,070
------------- --- -----
Gross profit 305,605 269,184
------------ ------- -------
Operating
expenses:
Selling, general
and
administrative 143,849 128,851
Research and
development 37,415 34,446
Amortization of
acquired
intangible
assets (1) 11,783 11,741
--------------- ------ ------
Total operating
expenses 193,047 175,038
--------------- ------- -------
Income from
operations (1) 112,558 94,146
--------------- ------- ------
Other income
(expenses), net:
Interest income
(expense), net (2,915) (2,493)
Other, net (1,158) 1,272
---------- ------ -----
Total other
income
(expenses), net (4,073) (1,221)
---------------- ------ ------
Income before
income taxes 108,485 92,925
Income taxes 22,360 16,818
------------ ------ ------
Net
income
(1) $86,125 $76,107
------- ------- -------
Basic
earnings
per
share $0.61 $0.54
Diluted
earnings
per
share $0.60 $0.54
Non-
GAAP
diluted
earnings
per
share
(1) $0.66 $0.62
Basic shares
outstanding 142,247 140,785
Diluted shares
outstanding 143,480 142,090
(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,
2017 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $811,102 $821,935
Accounts receivable, net 431,354 450,530
Inventories 300,472 268,319
Prepayments and other current
assets 115,018 103,219
----------------------------- ------- -------
Total current assets 1,657,946 1,644,003
-------------------- --------- ---------
Property, plant and equipment, net 400,795 394,241
Goodwill 1,072,298 1,064,874
Other intangibles, net 251,025 261,800
Deferred income taxes and other
non-current assets 107,553 103,569
------------------------------- ------- -------
Total non-current assets 1,831,671 1,824,484
------------------------ --------- ---------
Total assets $3,489,617 $3,468,487
------------ ---------- ----------
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Current liabilities:
Accounts payable 85,082 92,763
Accrued expenses 179,228 186,295
Deferred revenue 53,294 51,918
Income taxes payable 33,981 29,150
Total current liabilities 351,585 360,126
------------------------- ------- -------
Non-current liabilities:
Deferred revenue 55,692 53,235
Deferred income taxes 11,566 13,822
Other long term liabilities 2,375 2,427
Long-term debt 1,018,871 1,078,611
-------------- --------- ---------
Total non-current liabilities 1,088,504 1,148,095
----------------------------- --------- ---------
Total liabilities 1,440,089 1,508,221
----------------- --------- ---------
STOCKHOLDERS' EQUITY:
Common stock 569 569
Additional paid-in capital 1,395,576 1,379,130
Retained earnings 2,352,664 2,316,237
Treasury stock (1,546,611) (1,546,611)
Accumulated other comprehensive
income (152,670) (189,059)
------------------------------- -------- --------
Total stockholders' equity $2,049,528 $1,960,266
-------------------------- ---------- ----------
Total liabilities and stockholders'
equity $3,489,617 $3,468,487
----------------------------------- ---------- ----------
RESMED INC AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited - In thousands)
Three Months Ended
September 30,
2017 2016
---- ----
Cash flows from
operating activities:
Net income $86,125 $76,107
Adjustment to reconcile
net income to cash
provided by operating
activities:
Depreciation and
amortization 29,571 27,775
Stock-based
compensation costs 11,948 12,049
Impairment of cost-
method investments 962 -
Changes in operating
assets and liabilities,
net of effect of
acquisitions:
Accounts receivable, net 23,317 36,207
Inventories, net (26,942) (28,073)
Prepaid expenses, net
deferred income taxes
and other current
assets (15,408) (19,115)
Accounts payable,
accrued expenses and
other (15,590) (18,707)
--------------------- ------- -------
Net cash provided by
operating activities 93,983 86,243
--------------------- ------ ------
Cash flows from
investing activities:
Purchases of property,
plant and equipment (16,030) (14,560)
Patent registration
costs (2,242) (2,471)
Business acquisitions,
net of cash acquired - (3,090)
Investments in cost-
method investments (3,225) (2,758)
Proceeds /(Payments) on
maturity of foreign
currency contracts 6,073 9,710
----------------------- ----- -----
Net cash used in
investing activities (15,424) (13,169)
--------------------- ------- -------
Cash flows from
financing activities:
Proceeds from issuance
of common stock, net 3,615 6,330
Proceeds from
borrowings, net of
borrowing costs 50,000 25,000
Repayment of borrowings (110,000) (25,000)
Dividends paid (49,698) (46,378)
-------------- ------- -------
Net cash (used in) /
provided by financing
activities (106,083) (40,048)
---------------------- -------- -------
Effect of exchange rate
changes on cash 16,691 17,198
----------------------- ------ ------
Net increase /
(decrease) in cash and
cash equivalents (10,833) 50,224
Cash and cash
equivalents at
beginning of period 821,935 731,434
-------------------- ------- -------
Cash and cash
equivalents at end of
period $811,102 $781,658
---------------------- -------- --------
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In US$ 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,
2017 2016
---- ----
GAAP income from
operations $112,558 $94,146
Astral battery field safety
notification expenses (A) - 5,070
Amortization of acquired
intangible assets (A) 11,783 11,741
------------------------ ------ ------
Non-GAAP income
from operations $124,341 $110,957
---------------- -------- --------
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,
2017 2016
---- ----
GAAP net income $86,125 $76,107
Astral battery field safety
notification expenses (A) - 3,549
Amortization of acquired
intangible assets, net of
tax (A) 8,013 8,006
-------------------------- ----- -----
Non-GAAP net
income (A) $94,138 $87,662
------------ ------- -------
Diluted shares outstanding 143,480 142,090
-------------------------- ------- -------
GAAP diluted
earnings per
share $0.60 $0.54
------------- ----- -----
Non-GAAP diluted
earnings per
share (A) $0.66 $0.62
---------------- ----- -----
(A) ResMed adjusts for the impact of
the amortization of acquired
intangible assets and Astral
battery field safety
notification expenses 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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Company Codes: NYSE:RMD, OTC-PINK:RSMDF, Australia:RMD |
