ResMed Inc.ResMed Inc., a world-leading connected health company, announced results for its quarter ended September 30, 2019.
- Year-over-year revenue grows 16%, non-GAAP operating profit up 22%
- Balanced growth across product portfolio and global markets
Note: A webcast of ResMed’s conference call will be available at 4:30 p.m. ET today at http://investor.resmed.com
SAN DIEGO--(BUSINESS WIRE)-- ResMed Inc.ResMed Inc. (NYSE: RMD, ASX: RMD), a world-leading connected health company, today announced results for its quarter ended September 30, 2019.
First Quarter 2020 Highlights
- Revenue increased 16% to $681.1 million; up 17% on a constant currency basis
- Gross margin expanded 120 bps to 59.5%
- Net operating profit increased 19%; non-GAAP operating profit up 22%
- GAAP diluted earnings per share of $0.83; non-GAAP diluted earnings per share of $0.93
“Our global ResMed team delivered another quarter of strong performance in the first quarter of fiscal year 2020 with double-digit topline revenue growth, balanced growth across our businesses and regions, and further improvements in operating leverage resulting in double-digit growth at the bottom line,” said Mick Farrell, ResMed’s CEO. “We were particularly pleased that strong customer demand for our new products drove high-teens growth in the mask category during the quarter. Through organic growth and targeted acquisitions, we’re driving forward every facet of our business, leading the innovation of devices and software that improve health outcomes, create efficiencies, and reduce overall healthcare system costs. We’re well on our way to improving 250 million lives in out-of-hospital healthcare in 2025.”
Financial Results and Operating Metrics Unaudited; $ in millions, except for per share amounts |
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Three Months Ended |
||||||||||||||
September 30, |
September 30, |
% Change |
Constant Currency (A) |
|||||||||||
Revenue |
$ |
681.1 |
$ |
588.3 |
16 |
% |
17 |
% |
||||||
Gross margin |
59.5 |
% |
58.3 |
% |
2 |
|||||||||
Selling, general and administrative expenses |
167.4 |
147.3 |
14 |
16 |
||||||||||
Research and development expenses |
48.0 |
38.8 |
24 |
27 |
||||||||||
Income from operations |
171.1 |
144.1 |
19 |
|||||||||||
Non-GAAP income from operations (B) |
191.0 |
157.0 |
22 |
|||||||||||
Net income |
120.1 |
105.7 |
14 |
|||||||||||
Non-GAAP net income (B) |
135.4 |
116.3 |
16 |
|||||||||||
Diluted earnings per share |
$ |
0.83 |
$ |
0.73 |
14 |
|||||||||
Non-GAAP diluted earnings per share (B) |
$ |
0.93 |
$ |
0.81 |
15 |
|||||||||
(A) |
In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis,” which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP. |
|
(B) |
See the reconciliation of non-GAAP financial measures in the table at the end of the press release. |
Discussion of First Quarter Results
- Revenue in the U.S., Canada, and Latin America, excluding Software as a Service, grew by 13 percent compared to the prior year period, driven by strong sales across our mask and device product portfolios.
- Revenue in combined Europe, Asia and other markets grew by 8 percent on a constant currency basis compared to the same period of the prior year. Mask sales were strong across these markets. As expected, device sales in France and Japan were impacted as customers manage their fleets following the completion of their connected device upgrade programs. Device sales outside France and Japan grew well.
- Software as a Service revenue increased by 83 percent, compared to the prior year period, due to continued growth in Brightree service offerings and incremental contribution from the acquisition of MatrixCare, which closed in the second quarter of fiscal year 2019.
- Gross margin expanded by 120 basis points over the prior year period, primarily due to benefits from manufacturing and procurement efficiencies, and higher margin contribution from MatrixCare.
- Selling, general, and administrative expenses increased by 14 percent compared to the prior year period, or by 16 percent on a constant currency basis. Excluding the impact of recent acquisitions, selling, general, and administrative expenses increased by 6 percent on a constant currency basis. SG&A expenses improved to 24.6 percent of revenue in the quarter, compared with 25.0 percent in the same period of the prior year.
- Income from operations increased by 19 percent and non-GAAP income from operations increased by 22 percent compared to the prior year period.
- Net income and diluted earnings per share both grew by 14 percent, predominantly attributable to strong sales, particularly in masks, coupled with controlled operating costs compared to the prior year quarter.
- Non-GAAP net income grew by 16 percent and non-GAAP diluted earnings per share grew by 15 percent compared with the prior year quarter.
- Cash flow from operations for the quarter was $162.4 million, compared to net income in the current quarter of $120.1 million. During the quarter we paid $56.1 million in dividends.
Other Business and Operational Highlights
- The Lancet Respiratory Medicine published a multinational analysis by ResMed and 12 academic leaders in sleep research indicating more than 936 million people have obstructive sleep apnea.
- Completed a $500M private placement debt offering, significantly lengthening average debt maturity profile and providing improved visibility into long-term funding costs. Net proceeds were used to pay down current borrowings on ResMed’s senior unsecured revolving credit facility.
- Named Dealmaker of the Year by Medtech Insight, an award that recognizes the company most adept at advancing its business through investment deals. During the entry period (June 2018–June 2019), ResMed announced the acquisition of five companies to advance its mission to help keep millions of people healthy and out of the hospital.
- Celebrated 20 years listed on the New York Stock Exchange (NYSE) and 30 years in business by ringing the Opening Bell ® at the NYSE on its listing anniversary.
Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.39 per share. The dividend will have a record date of November 7, 2019, payable on December 12, 2019. 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 6, 2019, for common stockholders 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 6, 2019, through November 7, 2019, inclusive.
Webcast details
ResMed will discuss its first quarter fiscal year 2020 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 2020 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 +1 800-585-8367 (U.S.) or +1 416-621-4642 (outside U.S.) and entering the passcode 1076268. The telephone replay will be available until November 7, 2019.
About ResMed
At ResMed (NYSE: RMD, ASX: RMD) we pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our cloud-connected medical devices transform care for people with sleep apnea, COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, we improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 120 countries. To learn more, visit ResMed.com and follow @ResMed.
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, new markets for its products, the integration of acquisitions, litigation, and tax outlook – 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.
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Contacts
For investors
Amy Wakeham
+1 858-836-5000
investorrelations@resmed.com
For media
Jayme Rubenstein
+1 858-836-6798
news@resmed.com
Source: ResMed Inc.
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