SAN DIEGO, Jan. 21, 2016 /PRNewswire/ -- ResMed Inc.
(NYSE: RMD) today announced results for its quarter ended
December 31, 2015. Revenue for the
quarter was $454.5 million, a 7
percent increase compared with the quarter ended December 31, 2014; this is a 13 percent increase
on a constant currency basis.
"We remain focused on delivering strong long-term growth from
our sleep-disordered breathing and respiratory care
businesses. Our team continued to deliver double-digit
constant currency growth this quarter," said Mick Farrell, ResMed's chief executive officer.
"Our Americas region was a significant contributor this quarter, as
our customers continued to show their strong preference for our
offerings, including Air Solutions cloud-based software, AirSense
devices, and AirFit patient interface systems.
"We have expanded our respiratory care business into the field
of long-term oxygen therapy. Last week we announced a definitive
agreement to acquire Inova Labs in
Austin, Texas. This will add
portable oxygen concentrators, complementing our non-invasive
ventilators, and providing yet another ResMed therapy option for
patients with chronic obstructive pulmonary disease, or
COPD."
Farrell continued, "In the 15 months since we launched our
Air Solutions platform, ResMed has transformed into a tech-driven
medical device company. As the global leader of connected care
for medical devices, we are liberating healthcare data, improving
outcomes, and unlocking value by providing actionable information
for patients, physicians, providers and payors, literally
every morning."
Analysis of second quarter results
In the
second quarter of fiscal year 2016, revenue in the Americas was
$269.5 million, a 17 percent increase
over the prior year's quarter. Revenue in combined EMEA and APAC
was $185.0 million, a 4 percent
decrease compared with the quarter ended December 31, 2014; this is a 7 percent increase
on a constant currency basis.
Gross margin in the second quarter was 58.6 percent, but this
included a one-time benefit relating to the release of $2.4 million in accrued expenses associated with
the SERVE-HF field safety notice. Excluding this benefit,
gross margin for Q2 FY16 was 58.1 percent; this is lower than the
prior year's quarter, mainly due to declines in average selling
prices and an unfavorable geographic and product mix.
Income from operations for the quarter was $108.0 million, a 1 percent decrease compared
with the quarter ended December 31,
2014. Non-GAAP income from operations for the quarter was
$116.9 million, a 5 percent increase
compared with the quarter ended December
31, 2014.
Selling, general and administrative expenses were $118.2 million for the second quarter of fiscal
year 2016, a 4 percent decrease over the quarter ended December 31, 2014; this is a 4 percent increase
on a constant currency basis. SG&A expenses improved to 26.0
percent of revenue in the quarter, compared with 29.0 percent in
the quarter ended December 31,
2014.
Research and development expenses were $29.0 million for the second quarter of fiscal
year 2016, or 6.4 percent of revenue. R&D expenses decreased by
1 percent compared with the quarter ended December 31, 2014; this is a 14 percent increase
on a constant currency basis.
Amortization of acquired intangible assets was $4.4 million during the quarter. Stock-based
compensation costs incurred during the quarter of $11.5 million consisted of expenses associated
with employee equity grants, and the company's employee stock
purchase plan.
Net income for the quarter was $90.5
million, a 1 percent decrease compared with the quarter
ended December 31, 2014. Non-GAAP net
income for the quarter ended December 31,
2015 was $97.5 million, a 5
percent increase compared with the quarter ended December 31, 2014 (non-GAAP measures exclude the
SERVE-HF accrual release, amortization of acquired intangibles, and
$5.2 million in net restructuring
expenses associated with rationalizing our European
facilities).
GAAP diluted earnings per share for the quarter were
$0.64.
Non-GAAP diluted earnings per share for the quarter were
$0.69.
Cash flow from operations for the quarter was $147.4 million.
Share repurchase program
During the quarter,
the company repurchased 700,000 shares at a cost of $40.1 million, as part of its ongoing capital
management program.
Dividend program
The ResMed board of directors
today declared a quarterly dividend of $0.30 per share. The dividend will have a record
date of February 11, 2016, payable on
March 17, 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
February 9, 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 February 10, 2016 through
February 11, 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 Standard Time
today. The live webcast of the call can be accessed on ResMed's
Investor Relations website at investors.resmed.com. Please go
to this section of the website and click on the icon for the "Q2
2016 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 4360562. The telephone
replay will be available until February 4,
2016.
About ResMed
The global team at ResMed
(NYSE:RMD) is united in the commitment to change millions of lives
with every breath. With more than 4,000 employees and a
presence in over 100 countries, the company has been pioneering new
and innovative devices and treatments for sleep-disordered
breathing, chronic obstructive pulmonary disease, and other
chronic diseases for more than 25 years. ResMed's world-leading
products and innovative solutions improve the quality of life for
millions of patients worldwide, reduce the impact of chronic
disease, and save healthcare costs. For more information about
ResMed and its businesses, visit www.resmed.com or follow
@resmed on Twitter.
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:
Agnes Lee
Senior Director, Investor Relations
(858) 836-5971
investorrelations@resmed.com
News Media:
Alison Graves
Director, Global Corporate Communications
(858) 836-6789
news@resmed.com
ResMed Inc and
Subsidiaries
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In thousands, except
per share data)
|
|
|
Three Months
Ended
December
31,
|
Six Months
Ended
December
31,
|
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
Net
revenue
|
$454,540
|
$422,952
|
$866,187
|
$803,351
|
Cost of
sales
|
190,433
|
159,730
|
363,461
|
302,816
|
SERVE-HF accrual
release(1)
|
(2,402)
|
-
|
(2,402)
|
-
|
Gross
profit
|
266,509
|
263,222
|
505,128
|
500,535
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling, general and
administrative
|
118,219
|
122,520
|
229,314
|
233,041
|
Research and
development
|
28,970
|
29,294
|
56,162
|
59,318
|
Restructuring
expenses(1)
|
6,914
|
-
|
6,914
|
-
|
Amortization of
acquired intangible assets(1)
|
4,429
|
2,262
|
6,736
|
4,355
|
Total operating
expenses
|
158,532
|
154,076
|
299,126
|
296,714
|
Income from
operations(1)
|
107,977
|
109,146
|
206,002
|
203,821
|
|
|
|
|
|
Other income
(expenses), net:
|
|
|
|
|
Interest income
(expense), net
|
2,476
|
5,418
|
5,898
|
11,003
|
Other, net
|
3,242
|
947
|
1,239
|
2,617
|
Total other income
(expenses), net
|
5,718
|
6,365
|
7,137
|
13,620
|
|
|
|
|
|
Income before income
taxes
|
113,695
|
115,511
|
213,139
|
217,441
|
Income
taxes
|
23,178
|
24,330
|
42,220
|
43,001
|
Net
income(1)
|
$90,517
|
$91,181
|
$170,919
|
$174,440
|
|
|
|
|
|
Basic earnings per
share
|
$0.65
|
$0.65
|
$1.22
|
$1.25
|
Diluted earnings per
share
|
$0.64
|
$0.64
|
$1.21
|
$1.22
|
Non-GAAP diluted
earnings per share(1)
|
$0.69
|
$0.65
|
$1.27
|
$1.25
|
|
|
|
|
|
Basic shares
outstanding
|
139,926
|
140,048
|
140,118
|
140,104
|
Diluted shares
outstanding
|
141,148
|
142,202
|
141,532
|
142,468
|
|
(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)
|
|
|
December
31
|
June 30,
|
|
2015
|
2015
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$658,804
|
$717,249
|
Accounts receivable,
net
|
331,747
|
362,568
|
Inventories
|
237,463
|
246,859
|
Prepayments, deferred
income taxes and other current assets
|
122,827
|
117,506
|
Total current
assets
|
1,350,841
|
1,444,182
|
Property, plant and
equipment, net
|
375,224
|
387,758
|
Goodwill and other
intangible assets, net
|
466,418
|
311,403
|
Deferred income taxes
and other non-current assets
|
46,528
|
40,917
|
Total non-current
assets
|
888,170
|
740,078
|
Total
assets
|
$2,239,011
|
$2,184,260
|
Liabilities and
Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$67,580
|
$81,112
|
Accrued
expenses
|
147,662
|
132,976
|
Deferred
revenue
|
36,101
|
36,097
|
Income taxes
payable
|
12,427
|
16,278
|
Deferred income
taxes
|
815
|
796
|
Short-term
debt
|
985
|
-
|
Total current
liabilities
|
265,570
|
267,259
|
Non-current
liabilities:
|
|
|
Deferred income
taxes
|
15,665
|
8,062
|
Deferred
revenue
|
28,928
|
19,284
|
Income taxes
payable
|
1,754
|
1,754
|
Other long term
liabilities
|
2,232
|
-
|
Long-term
debt
|
400,591
|
300,594
|
Total non-current
liabilities
|
449,170
|
329,694
|
Total
liabilities
|
714,740
|
596,953
|
Stockholders'
Equity:
|
|
|
Common
stock
|
560
|
562
|
Additional paid-in
capital
|
1,268,374
|
1,228,795
|
Retained
earnings
|
2,062,885
|
1,976,020
|
Treasury
stock
|
(1,546,611)
|
(1,444,554)
|
Accumulated other
comprehensive income
|
(260,937)
|
(173,516)
|
Total stockholders'
equity
|
$1,524,271
|
$1,587,307
|
|
|
|
Total liabilities and
stockholders' equity
|
$2,239,011
|
$2,184,260
|
|
|
|
ResMed Inc And
Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
Six Months
Ended
December
31,
|
|
2015
|
2014
|
Cash flows from
operating activities:
|
|
|
Net income
|
$170,919
|
$174,440
|
Adjustment to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
39,920
|
37,451
|
Impairment of
long-lived asset
|
2,815
|
-
|
Changes in fair value
of business combination contingent consideration
|
(105)
|
(132)
|
Gain on disposal of
business
|
-
|
(709)
|
Stock-based
compensation costs
|
23,841
|
23,084
|
Excess tax benefit
from stock-based compensation arrangements
|
(10,710)
|
(10,889)
|
Impairment of cost
method investment
|
750
|
-
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
Accounts receivable,
net
|
24,533
|
11,067
|
Inventories,
net
|
8,751
|
(64,406)
|
Prepaid expenses, net
deferred income taxes and other current assets
|
14,398
|
(4,309)
|
Accounts payable,
accrued expenses and other liabilities
|
(5,600)
|
26,941
|
Net cash provided by
operating activities
|
269,512
|
192,538
|
Cash flows from
investing activities:
|
|
|
Purchases of
property, plant and equipment
|
(30,934)
|
(39,675)
|
Patent registration
costs
|
(4,902)
|
(4,810)
|
Business
acquisitions, net of cash acquired
|
(152,118)
|
(17,781)
|
Investments in
cost-method investments
|
(7,582)
|
(10,500)
|
Proceeds from sale of
business
|
-
|
468
|
Payments on maturity
of foreign currency contracts
|
(28,326)
|
(28,300)
|
Net cash used in
investing activities
|
(223,862)
|
(100,598)
|
Cash flows from
financing activities:
|
|
|
Proceeds from
issuance of common stock, net
|
8,066
|
9,931
|
Excess tax benefit
from stock-based compensation arrangements
|
10,710
|
10,889
|
Purchases of treasury
stock
|
(102,058)
|
(84,055)
|
Payment of business
combination contingent consideration
|
(1,120)
|
(458)
|
Proceeds from
borrowings, net of borrowing costs
|
200,000
|
149,000
|
Repayment of
borrowings
|
(100,160)
|
(19)
|
Dividends
paid
|
(84,054)
|
(78,477)
|
Net cash (used in) /
provided by financing activities
|
(68,616)
|
6,811
|
Effect of exchange
rate changes on cash
|
(35,479)
|
(123,786)
|
Net increase /
(decrease) in cash and cash equivalents
|
(58,445)
|
(25,035)
|
Cash and cash
equivalents at beginning of period
|
717,249
|
905,730
|
Cash and cash
equivalents at end of period
|
658,804
|
880,695
|
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
December
31,
|
Six Months
Ended
December
31,
|
|
2015
|
2014
|
2015
|
2014
|
GAAP income from
operations
|
$107,977
|
$109,146
|
$206,002
|
$203,821
|
SERVE-HF accrual
release (A)
|
(2,402)
|
-
|
(2,402)
|
-
|
Restructuring
expenses (A)
|
6,914
|
-
|
6,914
|
-
|
Amortization of
acquired intangible assets (A)
|
4,429
|
2,262
|
6,736
|
4,355
|
Non-GAAP income from
operations (excluding the impact of SERVE-HF accrual release,
restructuring expenses and amortization of acquired intangible
assets)
|
$116,918
|
$111,408
|
$217,250
|
$208,176
|
|
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
December
31,
|
Six Months
Ended
December
31,
|
|
2015
|
2014
|
2015
|
2014
|
GAAP net
income
|
$90,517
|
$91,181
|
$170,919
|
$174,440
|
SERVE-HF accrual
release, net of tax (A)
|
(1,682)
|
-
|
(1,682)
|
-
|
Restructuring
expenses, net of tax (A)
|
5,204
|
-
|
5,204
|
-
|
Amortization of
acquired intangible assets, net of tax
(A)
|
3,439
|
1,707
|
5,156
|
3,308
|
Non-GAAP net income
(A)
|
$97,478
|
$92,888
|
$179,597
|
$177,748
|
Diluted shares
outstanding
|
141,148
|
142,202
|
141,532
|
142,468
|
GAAP diluted earnings
per share
|
$0.64
|
$0.64
|
$1.21
|
$1.22
|
Non-GAAP diluted
earnings per share (A)
|
$0.69
|
$0.65
|
$1.27
|
$1.25
|
|
(A)
|
ResMed excludes the
impact of release of SERVE-HF accrual, restructuring expenses and
amortization of acquired intangible assets from their evaluation of
ongoing operations and believes investors benefit from excluding
these charges to facilitate a more meaningful evaluation of current
operating performance.
|
|
|
|
ResMed believes that
diluted earnings per share, which exclude the impact of the
SERVE-HF accrual release, restructuring expenses and amortization
of acquired intangible assets, 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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