ResMed Inc Announces Record Financial Results for the Quarter and Six Months Ended December 31, 2009
SAN DIEGO, Feb. 4 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income results for the quarter ended December 31, 2009. Revenue for the December 2009 quarter was $275.1 million, a 23% increase (a 17% increase on a constant currency basis) over the quarter ended December 31, 2008. For the quarter ended December 31, 2009, income from operations was $57.9 million and net income was $46.0 million, an increase of 34% and 36%, respectively, compared to the quarter ended December 31, 2008. Diluted earnings per share for the quarter ended December 31, 2009 were $0.60, an increase of 36% compared to the quarter ended December 31, 2008.
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SG&A costs were $84.1 million for the quarter ended December 31, 2009, an increase of $14.0 million or 20% (a 10% increase on a constant currency basis) over the quarter ended December 31, 2008. SG&A expenses were negatively impacted by the depreciation of the U.S. dollar against international currencies. The increase in SG&A was primarily due to expenses necessary to support sales growth. SG&A costs were 31% of revenue in the quarter ended December 31, 2009, consistent with 31% in the quarter ended December 31, 2008.
R&D expenses were $19.1 million for the quarter ended December 31, 2009, or approximately 7% of revenue. R&D expenses increased by 28% (a 1% increase on a constant currency basis) compared to the quarter ended December 31, 2008. R&D expenses were negatively impacted by the depreciation of the U.S. dollar against international currencies, particularly the Australian dollar.
Amortization of acquired intangibles was $2.1 million ($1.4 million, net of tax) for the quarter ended December 31, 2009. Stock-based compensation costs incurred during the quarter ended December 31, 2009 of $7.3 million ($5.2 million, net of tax) consisted of expenses associated with stock options and restricted stock units granted to employees and our employee stock purchase plan.
During the quarter ended December 31, 2009, the company donated $1.0 million ($0.6 million, net of tax) to the ResMed Foundation. The Foundation's primary mission is to promote research, as well as public and physician awareness of the importance of sleep and respiratory health throughout the world.
For the six months ended December 31, 2009, revenue was $522.1 million, an increase of 18% over the six months ended December 31, 2008. For the six months ended December 31, 2009, income from operations and net income were $110.6 million and $88.1 million, an increase of 38% and 42%, respectively, compared to the six months ended December 31, 2008. Diluted earnings per share for the six months ended December 31, 2009 were $1.15 per diluted share, an increase of 44% compared to the six months ended December 31, 2008.
Inventory, at $182.9 million, increased by $25.4 million compared to June 30, 2009. Accounts receivable days sales outstanding, at 70 days, decreased by 4 days compared to June 30, 2009.
Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the second quarter of fiscal 2010, we continued to show strong growth year over year. Our favorable mix of product sales and market share gains led to a 20% increase in the Americas over the prior year's quarter, resulting in $148.0 million in revenue. Sales outside the Americas increased by 27% to $127.1 million over the prior year's quarter, or a 14% increase on a constant currency basis. Cash flow from operations for the December quarter was $11.6 million. Operating cash flow was impacted by income tax payments totaling $61.7 million paid during the December quarter. Our robust revenue growth, recent product launches and exciting product pipeline continue to position us well for the future.
"As previously indicated, we are steadily introducing new products in what continues to be an exciting year for launching innovative treatment solutions for sleep-disordered breathing. This summer, we launched the ApneaLink™ Plus, our type 3 device for home sleep testing. More recently, we launched the Swift™ FX mask in Europe and the Mirage™ SoftGel mask in the Americas. These two new masks are receiving outstanding feedback from customers and patients as we continue their introduction ramp. In addition, we are proud to announce the release of our newest generation of flow generators – the ResMed S9 series. As is customary for ResMed, this initial introduction will be for the S9 AutoSet and S9 Elite products, expanding to other flow generators over time. We expect the launch will begin in both Europe and the Americas during the third quarter of this fiscal year. The S9 should deliver innovative and meaningful new features to the ResMed product family while providing an exciting new look and feel.
"We are also continuing to drive market expansion. We are taking steps to increase awareness of the health dangers of sleep-disordered breathing by sponsoring educational programs targeted at the primary care physician community. These efforts, driven both in concert with another industry participant and on our own, should further enlighten both doctors and patients about the relationship between sleep-disordered breathing/obstructive sleep apnea and co-morbidities such as cardiac disease, diabetes, hypertension and obesity. They should also support our efforts to inform the community of the dangers of sleep apnea with regard to occupational health and safety, especially in the transport industry."
About ResMed
ResMed is a leading developer, manufacturer and contributor of medical equipment for the treatment and management of sleep-disordered breathing and other respiratory disorders. We are 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 (800) 659-2037 (domestic) or +1 (617) 614-2713 (international) and entering conference I.D. No. 11557939. 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. 60219495.
Further information can be obtained by contacting Connie 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
Consolidated Statements of Income (Unaudited)
(In US$ thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Net revenue $275,134 $222,980 $522,126 $440,911
Cost of sales 110,929 91,955 207,743 182,759
------------- ------- ------ ------- -------
Gross profit 164,205 131,025 314,383 258,152
------------ ------- ------- ------- -------
Operating expenses:
Selling, general and
administrative 84,094 70,086 160,850 141,424
Research and development 19,059 14,915 36,973 32,208
Amortization of acquired
intangible assets 2,130 1,694 3,975 3,627
Donation to Foundation 1,000 1,000 2,000 1,000
---------------------- ----- ----- ----- -----
Total operating expenses 106,283 87,695 203,798 178,259
------------------------ ------- ------ ------- -------
Income from operations 57,922 43,330 110,585 79,893
---------------------- ------ ------ ------- ------
Other income (expenses),
net:
Interest income (expense),
net 3,166 2,666 5,290 5,898
Other, net 2,009 985 5,127 (83)
---------- ----- --- ----- ---
Total other income
(expenses), net 5,175 3,651 10,417 5,815
------------------ ----- ----- ------ -----
Income before income taxes 63,097 46,981 121,002 85,708
Income taxes 17,114 13,128 32,917 23,829
------------ ------ ------ ------ ------
Net income $45,983 $33,853 $88,085 $61,879
---------- ------- ------- ------- -------
Basic earnings per share $0.61 $0.45 $1.17 $0.82
Diluted earnings per share $0.60 $0.44 $1.15 $0.80
Basic shares outstanding 75,123 75,742 75,272 75,678
Diluted shares outstanding 77,034 77,358 76,874 77,269
-------------------------- ------ ------ ------ ------
RESMED INC AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(In US$ thousands except share and per share data)
December 31, June 30,
2009 2009
---- ----
Assets
Current assets:
Cash and cash equivalents $451,431 $415,650
Accounts receivable, net 208,947 212,096
Inventories 182,870 157,431
Deferred income taxes 45,110 44,368
Income taxes receivable 6,762 2,067
Prepaid expenses and other current assets 32,513 21,672
----------------------------------------- ------ ------
Total current assets 927,633 853,284
-------------------- ------- -------
Property, plant and equipment, net 403,208 377,613
Goodwill 225,094 213,169
Other intangibles 39,486 35,023
Deferred Income taxes 20,166 19,364
Other assets 5,663 9,515
------------ ----- -----
Total non-current assets 693,617 654,684
------------------------ ------- -------
Total assets $1,621,250 $1,507,968
------------ ---------- ----------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $46,617 $48,293
Accrued expenses 81,548 67,018
Deferred revenue 31,954 28,881
Income taxes payable 27,005 56,972
Deferred Income taxes 2,970 391
Current portion of long-term debt 50,525 67,545
--------------------------------- ------ ------
Total current liabilities 240,619 269,100
------------------------- ------- -------
Non Current Liabilities:
Deferred income taxes 10,363 11,137
Deferred revenue 14,496 15,238
Income taxes payable 3,654 3,110
Long-term debt 94,599 94,191
-------------- ------ ------
Total non-current liabilities 123,112 123,676
----------------------------- ------- -------
Total liabilities 363,731 392,776
----------------- ------- -------
Stockholders' Equity:
Common Stock 301 301
Additional paid-in capital 580,099 522,982
Retained earnings 782,876 694,791
Treasury stock (274,488) (208,659)
Accumulated other comprehensive income 168,731 105,777
-------------------------------------- ------- -------
Total stockholders' equity 1,257,519 1,115,192
-------------------------- --------- ---------
Total liabilities and stockholders' equity $1,621,250 $1,507,968
SOURCE ResMed Inc.
Released February 4, 2010