Form: 8-K

Current report filing

August 5, 2003

PRESS RELEASE

Published on August 5, 2003


Exhibit 99.1

ResMed Inc. Announces Record Financial Results

For Quarter and Year Ended June 30, 2003



SAN DIEGO, Aug. 5 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD)

announced record revenue and income results for the quarter and year ended

June 30, 2003. Revenue for the quarter was $80.7 million, an increase of 43%

over the quarter ended June 30, 2002. Income from operations and net income

for the June 30, 2003 quarter increased to $18.6 million and $13.5 million

respectively, an increase of 55% and 38%.

Selling, general and administration (SG&A) costs for the quarter were

$25.6 million, an increase of $6.6 million or 35%, over the same period in

fiscal 2002. The increase in SG&A related primarily to an increase in

selling and administration personnel to meet expanding opportunities in the

sleep-disordered breathing market and $1.0 million in legal costs

predominantly associated with outstanding patent infringement lawsuits against

competitors. SG&A expenditure as a percentage of revenue was 31.7% in the

June quarter compared to 33.8% for the same period in fiscal 2002.

Research and development expenditure, at 7.7% of revenues, increased

during the three months ended June 30, 2003 to $6.2 million from $4.1 million

in the quarter ended June 30, 2002. The increase of 51% 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, particularly in evolving hypertension,

stroke and congestive heart failure markets. The increase in research and

development expenditure, adjusted for the effect of a stronger Australian

dollar, was 31%. The R&D spend should continue at around 8% of revenues.

Company revenues for fiscal year 2003 were $273.6 million, an increase

of 34% over the year ended June 30, 2002. Net income for the year was

$45.7 million or $1.33 per share, on a diluted basis, compared with net income

of $37.5 million or $1.10 per share for fiscal year 2002. Net income

increased by 22%, while EPS, on a diluted basis, improved by 21%.

Inventories of $49.4 million were flat compared to March 2003 levels.

Inventory turnover improved 22 days from the March quarter. Accounts

receivable days sales outstanding at 62 days, improved by 6 days compared to

March 2003 quarter and continue to compare favorably to industry peers.

Peter C. Farrell, PhD, Chairman and Chief Executive Officer, commented,

"These record profit and revenue results for the June quarter and fiscal year

2003 reflect ResMed's continuing strong sales and profit growth. Our

operating cash flow for the June quarter, was a record-breaking $22.1 million.

Domestic sales increased by 28% over the June 2002 quarter to a record

$36.3 million, reflecting very healthy domestic demand for our

sleep-disordered breathing products. International sales increased by a

healthy 60%, over the June 2002 quarter, reflecting growth across all major

markets as well as a stronger Euro and SARS-related sales of approximately

$5.0 million."

Dr. Farrell also commented, "We were delighted with the way the Company

ended fiscal 2003, especially relating to our strong cash flow. We are making

encouraging progress in the cardiovascular market as we continue to develop

our strategic partnerships with Medcath Corporation and Guidant Corporation.

In addition, we have some exciting new products to be released during the next

two quarters as well as other products under development."

Looking forward, we project the overall market for our products to

continue to grow annually at approximately 20% over the next 12-18 months. We

continue to believe that our annual revenue growth will meet or exceed this

market growth rate, excluding the impact of any non-recurring issues, such as

the recent SARS epidemic.

ResMed is a leading developer, manufacturer, and marketer of medical

equipment for the diagnosis, treatment, and management of sleep-disordered

breathing, selling a comprehensive range of products in over 60 countries.

ResMed will host a conference call at 1:30 pm Pacific Daylight Time (PDT)

today to discuss these quarterly results. Individuals wishing to access the

conference call may do so via ResMed's Web site at www.resmed.com . Please

allow extra time prior to the call to visit the 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 ID No. 83532481.

Further information can be obtained by contacting David Pendarvis at

ResMed Inc. San Diego, on (858) 746-2568; Adrian Smith at ResMed Limited

Sydney on +61 (2) 9886-5407; 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 US Securities & Exchange Commission. Those reports are available on

the Company's Web site.



ResMed Inc. and Subsidiaries

Consolidated Statements of Income

(In US$ thousands, except per share data)



Three Months Ended Year Ended

June 30, June 30,

2003 2002 2003 2002

(unaudited) (unaudited)



Net revenue 80,695 56,247 273,570 204,076

Cost of sales 30,331 19,439 100,483 70,827



Gross profit 50,364 36,808 173,087 133,249



Operating expenses:

Selling, general and

administrative 25,578 19,014 85,313 64,481

Research and

development 6,235 4,140 20,534 14,910

In process R&D written

off on acquisition -- 350 -- 350

Donation to Foundations -- 1,349 -- 2,349



Total operating

expenses 31,813 24,853 105,847 82,090



Income from operations 18,551 11,955 67,240 51,159



Other:

Interest income

(expense), net (418) (763) (2,549) (3,224)

Other income

(expense), net 1,786 (363) 1,907 108

Gain on extinguishment

of debt -- 3,560 529 6,549



Total other income

(expenses), net 1,368 2,434 (113) 3,433



Income before income

taxes 19,919 14,389 67,127 54,592

Income taxes 6,395 4,579 21,398 17,086



Net income 13,524 9,810 45,729 37,506



Basic earnings

per share $0.41 $0.30 $1.38 $1.17

Diluted earnings

per share $0.39 $0.29 $1.33 $1.10



Basic shares

outstanding 33,275 32,714 33,054 32,174

Diluted shares

outstanding 34,726 34,011 34,439 34,080





ResMed Inc. And Subsidiaries

Consolidated Balance Sheets

(In US$ thousands except share and per share data)



June 30, 2003 June 30, 2002

(unaudited)

Assets

Current assets:

Cash and cash equivalents $114,491 $72,860

Marketable securities - available for sale 6,533 19,979

Accounts receivable, net 56,694 46,199

Inventories 49,386 41,173

Deferred income taxes 8,301 9,289

Prepaid expenses and other current assets 6,500 4,213



Total current assets 241,905 193,713



Property, plant and equipment, net of

accumulated depreciation 104,687 79,279

Patents, net of accumulated amortization 3,745 2,653

Goodwill 102,160 92,536

Other assets 7,098 8,010



Total assets $459,595 $376,191



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $19,368 $11,605

Accrued expenses 19,140 15,273

Income taxes payable 3,408 6,905

Deferred revenue 6,355 3,636

Payable for property purchase -- 11,552

Current portion of deferred profit

on sale leaseback 2,312 1,933



Total current liabilities 50,583 50,904



Non current liabilities:

Deferred revenue 7,210 5,402

Deferred profit on sale and leaseback 2,119 3,705

Convertible Subordinated Notes 113,250 123,250



Total non-current liabilities 122,579 132,357



Total liabilities $173,162 $183,261



Stockholders' Equity:

Preferred stock, $0.01 par value,

2,000,000 shares authorized; none issued -- --

Series A Junior Participating preferred

stock, $0.01 par value, 250,000 shares

authorized; none issued -- --

Common Stock $0.004 par value

100,000,000 shares authorized; issued and

outstanding 33,370,885 at June 30,2003 and

32,818,160 at June 30, 2002 (excluding

415,365 and 290,047 shares held as Treasury

stock respectively) 133 132

Additional paid-in capital 107,433 94,153

Retained earnings 160,372 114,643

Treasury Stock (11,415) (7,873)

Accumulated other comprehensive

income (loss) 29,910 (8,125)



Total stockholders' equity 286,433 192,930



Commitments and contingencies -- --

Total liabilities and stockholders' equity $459,595 $376,191





SOURCE ResMed Inc.

-0- 08/05/2003

/CONTACT: David Pendarvis of ResMed Inc., +1-858-746-2568; or Adrian

Smith of ResMed Limited Sydney, +61 (2) 9886-5407/

/Web site: http://www.resmed.com /

(RMD)



CO: ResMed Inc.

ST: California

IN: MTC BIO HEA

SU: ERN CCA MAV