ResMed Inc. Announces Record Financial Results for the Quarter Ended September 30, 2010
SAN DIEGO, Oct. 28 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income for the quarter ended September 30, 2010. Revenue for the quarter ended September 30, 2010 was $282.0 million, a 14% increase (a 17% increase on a constant currency basis) over the quarter ended September 30, 2009. For the quarter ended September 30, 2010, income from operations was $66.4 million and net income was $56.7 million, an increase of 26% and 35%, respectively, compared to the quarter ended September 30, 2009. Diluted earnings per share for the quarter ended September 30, 2010 were $0.36, an increase of 33% compared to the quarter ended September 30, 2009.
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SG&A expenses were $84.8 million for the quarter ended September 30, 2010, an increase of $8.0 million, or 10% (a 12% increase on a constant currency basis) over the quarter ended September 30, 2009. The increase in SG&A was primarily due to expenses necessary to support sales growth. SG&A costs were 30% of revenue in the quarter ended September 30, 2010, compared to 31% in the quarter ended September 30, 2009.
R&D expenses were $19.7 million for the quarter ended September 30, 2010, or 7% of revenue. R&D expenses increased by 10% (a 6% increase on a constant currency basis) compared to the quarter ended September 30, 2009. R&D expenses were negatively impacted by the depreciation of the U.S. dollar against the Australian dollar.
The company amortized acquired intangibles of $2.0 million ($1.4 million, net of tax) during the quarter ended September 30, 2010. Stock-based compensation costs incurred during the quarter ended September 30, 2010 of $8.4 million ($6.1 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and our employee stock purchase plan.
Inventory, at $214.2 million, increased by $28.6 million compared to June 30, 2010. Accounts receivable days sales outstanding, at 70 days, decreased by 1 day compared to June 30, 2010.
Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the first quarter of fiscal 2011 we continued to show strong growth year-over-year across the globe. Our favorable mix of product sales and market share gains led to a 16% revenue increase in the Americas over the prior year's quarter, resulting in $155.6 million in sales. Revenue outside the Americas increased by 13% to $126.4 million over the prior year's quarter, or a 19% increase on a constant currency basis. Globally, our growth in flow generators was driven by strong sales of the new S9™ AutoSet and Elite products and the late quarter release of the S9 Escape series. Mask sales were strong this quarter across all markets. Operating profit for the September quarter was $66.4 million and cash flow from operations was $59.1 million, demonstrating excellent operating performance.
"The findings from recent clinical studies continue to demonstrate the importance of diagnosing and treating sleep-disordered breathing (SDB). There is abundant evidence supporting the correlation of SDB with heart failure, stroke, atrial fibrillation, diabetes, hypertension and even the dementia associated with Alzheimer's disease. Increasingly, there is evidence coming to light that early intervention in the treatment of SDB may slow or prevent the progression of these co-morbidities. In addition, studies have been conducted at institutions such as Harvard Medical School showing that a lack of sleep negatively affects perception and judgment in the workplace, including the transportation industry, which can result in reduced efficiency, productivity and increased errors and accidents. The increase in awareness of the role that SDB plays in these costly and debilitating co-morbidities and in the reduction in workplace safety and productivity, should continue to be a major driver of market expansion."
About ResMed
ResMed is a leading developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. 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. US 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 (866) 783-2144 (domestic) or +1 (857) 350-1603 (international) and entering conference pass code no. 64219936. Please allow extra time prior to the call to visit the Web site 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 90 minutes after the live call and will be available for two weeks. A telephone replay of the conference call is available by dialing (888) 286-8010 (domestic) and +1 (617) 801-6888 (international) and entering conference I.D. No. 90239322.
Further information can be obtained by contacting Constance Bienfait at ResMed Inc., San Diego, at (858) 836-5971; Brett Sandercock at ResMed Limited, Sydney, on (+612) 8884-2090; or by visiting the Company's multilingual Web site 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 Web site.
ResMed Inc and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In US$ thousands, except per share data)
Three Months Ended
September 30,
2010 2009
Net revenue $282,012 $246,992
Cost of sales 108,058 96,814
Gross profit 173,954 150,178
Operating expenses
Selling, general and administrative 84,791 76,756
Research and development 19,739 17,914
Amortization of acquired intangible assets 2,030 1,845
Donation to Foundation 1,000 1,000
Total operating expenses 107,560 97,515
Income from operations 66,394 52,663
Other income, net:
Interest income, net 5,097 2,125
Other, net 5,063 3,118
Total other income, net 10,160 5,243
Income before income taxes 76,554 57,906
Income taxes 19,846 15,804
Net income $56,708 $42,102
Basic earnings per share $0.37 $0.28
Diluted earnings per share $0.36 $0.27
Basic shares outstanding 151,474 150,788
Diluted shares outstanding 156,752 153,524
All share and per share information has been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that was declared on August 5, 2010 and distributed on August 30, 2010.
ResMed Inc And Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In US$ thousands except share and per share data)
September 30, June 30,
2010 2010
ASSETS
Current assets:
Cash and cash equivalents $540,004 $488,776
Accounts receivable, net 225,836 226,911
Inventories 214,208 185,642
Deferred income taxes 14,525 14,112
Income taxes receivable 12,165 5,317
Prepaid expenses and other current assets 61,773 64,583
Total current assets 1,068,511 985,341
Property, plant and equipment, net 423,940 387,148
Goodwill 222,327 198,625
Other intangibles 49,985 30,925
Deferred income taxes 20,170 19,042
Other assets 7,297 5,316
Total non-current assets 723,719 641,056
Total assets $1,792,230 $1,626,397
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 43,071 57,535
Accrued expenses 84,770 80,883
Deferred revenue 35,455 29,507
Income taxes payable 28,779 22,656
Deferred income taxes 440 402
Current portion of long-term debt 93,800 121,689
Total current liabilities 286,315 312,672
Non-current liabilities:
Deferred income taxes 11,344 10,793
Deferred revenue 14,741 12,755
Income taxes payable 2,985 2,641
Total non-current liabilities 29,070 26,189
Total liabilities 315,385 338,861
Stockholders' Equity:
Common stock 606 605
Additional paid-in capital 684,696 660,185
Retained earnings 941,584 884,876
Treasury stock (362,377) (344,505)
Accumulated other comprehensive income 212,336 86,375
Total stockholders' equity 1,476,845 1,287,536
Total liabilities and stockholders' equity $1,792,230 $1,626,397
SOURCE ResMed Inc.
Released October 28, 2010