ResMed Inc Announces Record Financial Results for the Quarter Ended September 30, 2008
San Diego, Nov. 6 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income results for the quarter ended September 30, 2008. Revenue for the quarter was $217.9 million, a 17% increase over the quarter ended September 30, 2007. For the current quarter, income from operations was $36.6 million and net income was $28.0 million, an increase of 15% and 16%, respectively, compared to the quarter ended September 30, 2007. Diluted earnings per share for the quarter ended September 30, 2008 was $0.36, an increase of 16% compared to the quarter ended September 30, 2007.
SG&A costs were $71.3 million for the quarter, an increase of $8.5 million or 13% over the same period in fiscal 2007. The increase in SG&A was primarily due to expenses necessary to support sales growth and the net appreciation of international currencies against the US dollar. SG&A costs were 33% of revenue in the September 2008 quarter, compared to 34% in the same period in fiscal 2007.
R&D expenses during the quarter were $17.3 million, or approximately 8% of revenue. R&D expenses increased 33% year over year. The increase in research and development outlays reflects ResMed's continuing commitment to innovation within its product portfolio, as well as an ongoing commitment to clinical research and product development. The increase in R&D was also due to the net appreciation of international currencies against the US dollar.
Amortization of acquired intangibles of $1.9 million ($1.3 million net of tax) incurred during the quarter ended September 30, 2008, consisted of amortization of assets associated with our acquisitions of Resprecare, Hoefner, Saime and PolarMed. Stock-based compensation costs incurred during the quarter ended September 30, 2008 of $5.6 million ($3.9 million net of tax) consisted of expenses associated with stock options granted to employees and with our employee stock purchase plan.
Inventory, at $145.6 million, decreased by $12.7 million compared to June 30, 2008. Accounts receivable days sales outstanding, at 75 days, increased by 3 days compared to June 30, 2008.
Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the first quarter of fiscal 2009, we continued to show strong and balanced growth across the globe. Sales outside of the Americas totaled $104.3 million, an 18% increase over the prior year quarter, while sales in the Americas were $113.6 million, an increase of 16% over the prior year quarter. Cash flow from operations for the September quarter was a record $67.9 million. Our robust operating cash flows, in addition to our strong and conservative balance sheet, position us well in the current economic environment."
Mr. Gallahue continued, "As we move into the second quarter of fiscal 2009, we are well-positioned to grow revenues. We are encouraged by the sales growth of our S8II flow generator platform and Swift LT nasal pillows mask. Our new product release schedule remains active, particularly in both the mask and bilevel categories. We are introducing new masks in both Europe and the US during the second quarter, including the Americas release of Swift LT for Her. This is the first and only nasal pillows product designed and marketed specifically for female patients. Additionally, we released a series of new bilevels in Europe and the VPAP S in the Americas. All of these bilevels utilize our patented Easy-Breathe motor technology, providing unparalleled performance at up to 90% less noise than other leading competitors. We continue to invest aggressively in developing new technologies and products to serve the growing sleep-disordered breathing marketplace, while maintaining prudent fiscal management."
"Global progress in our efforts to educate and validate the role of sleep-disordered breathing in comorbid patient populations took a major step forward in the last three months. In September, the European Society of Cardiology published guidelines for the diagnosis and treatment of acute and chronic heart failure. For the first time, the guidelines noted that patients with symptomatic heart failure frequently have sleep-related disorders (central or obstructive sleep apnea) and recommended treatment with CPAP for patients diagnosed with obstructive sleep apnea. This follows just three months after the International Diabetes Federation issued a consensus statement on sleep-disordered breathing and type II diabetes, where the substantial value of identifying and treating diabetic patients suffering from sleep-disordered breathing was also recognized and recommended. The increasing awareness among comorbidity specialists augurs well for the efforts and investment we are making in new markets including diabetes, occupational health and cardiology."
About ResMed
ResMed is a leading manufacturer 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) 261-3417 (domestic) or +1 (617) 614-3673 (international) and entering conference I.D. No. 49480223. 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. 99471059.
Further information can be obtained by contacting Matthew Borer at ResMed Inc., San Diego, at (858) 746-2280; 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
September 30,
2008 2007
Net revenue $217,931 $185,740
Cost of sales 90,804 73,963
Gross profit 127,127 111,777
Operating expenses
Selling, general and administrative 71,337 62,882
Research and development 17,293 13,013
Amortization of acquired intangible assets 1,933 1,821
Restructuring expenses - 2,297
Total operating expenses 90,563 80,013
Income from operations 36,564 31,764
Other income (expense), net:
Interest income (expense), net 3,231 2,314
Other, net (1,068) (266)
Total other income (expense), net 2,163 2,048
Income before income taxes 38,727 33,812
Income taxes 10,701 9,687
Net income $28,026 $24,125
Basic earnings per share $0.37 $0.31
Diluted earnings per share $0.36 $0.31
Basic shares outstanding 75,613 77,569
Diluted shares outstanding 77,180 78,941
ResMed Inc And Subsidiaries
Consolidated Balance Sheets (Unaudited)
(In US$ thousands except share and per share data)
September 30, June 30,
2008 2008
Assets
Current assets:
Cash and cash equivalents $302,074 $321,078
Accounts receivable, net 175,831 192,200
Inventories 145,595 158,251
Deferred income taxes 36,086 31,355
Income taxes receivable 11,959 17,115
Prepaid expenses and other current assets 15,262 19,241
Total current assets 686,807 739,240
Property, plant and equipment, net 329,131 357,057
Goodwill 213,274 234,647
Other intangibles 39,330 46,771
Deferred Income taxes 16,470 16,162
Other assets 7,685 12,123
Total non-current assets 605,890 666,760
Total assets $1,292,697 $1,406,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $48,480 $56,308
Accrued expenses 51,340 61,338
Deferred revenue 24,323 26,133
Income taxes payable 14,036 3,799
Deferred Income taxes 1,122 1,150
Current portion of long-term debt 36,647 43,865
Total current liabilities 175,948 192,593
Non Current Liabilities:
Deferred income taxes 15,684 18,333
Deferred revenue 14,540 15,673
Income taxes payable 3,796 3,837
Long-term debt 108,480 93,789
Total non-current liabilities 142,500 131,632
Total liabilities 318,448 324,225
Stockholders' Equity:
Common Stock 304 304
Additional paid-in capital 486,022 468,346
Retained earnings 576,369 548,343
Treasury stock (167,082) (142,987)
Accumulated other comprehensive income 78,636 207,769
Total stockholders' equity 974,249 1,081,775
Total liabilities and stockholders' equity $1,292,697 $1,406,000
SOURCE ResMed Inc.
Released November 6, 2008