April 30, 2021 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________________________________________________________

FORM 10-Q

______________________________________________________________________________________________

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number: 001-15317

______________________________________________________________________________________________

ResMed Inc.

(Exact name of registrant as specified in its charter)

______________________________________________________________________________________________

Delaware

(State or other jurisdiction of incorporation or organization)

98-0152841

(I.R.S. Employer Identification No.)

9001 Spectrum Center Blvd.

San Diego, CA 92123

United States of America

(Address of principal executive offices)

(858) 836-5000

(Registrant’s telephone number, including area code)

______________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.004 per share

RMD

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	¨
Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

At April 26, 2021, there were 145,517,832 shares of Common Stock ($0.004 par value) outstanding. This number excludes 41,836,234 shares held by the registrant as treasury shares.

Table of Contents

RESMED INC. AND SUBSIDIARIES

Index


Part I	Financial Information	3

Item 1	Financial Statements	3

	Condensed Consolidated Balance Sheets (Unaudited)	3

	Condensed Consolidated Statements of Operations (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	5

	Condensed Consolidated Statements of Changes in Equity (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows (Unaudited)	8

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	9

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4	Controls and Procedures	32

Part II	Other Information	33

Item 1	Legal Proceedings	33

Item 1A	Risk Factors	33

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3	Defaults Upon Senior Securities	34

Item 4	Mine Safety Disclosures	34

Item 5	Other Information	34

Item 6	Exhibits	35

	Signatures	36

Table of Contents


PART I – FINANCIAL INFORMATION	Item 1

Item 1. Financial Statements

RESMED INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

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



	March 31, ‎2021		June 30, ‎2020
Assets
Current assets:
Cash and cash equivalents	$	230,635	$	463,156
Accounts receivable, net of allowances of $32,811 and $28,508 ‎ at March 31, 2021 and June 30, 2020, respectively		525,014		474,643
Inventories (note 3)		484,061		416,915
Prepaid expenses and other current assets		226,440		168,745
Total current assets		1,466,150		1,523,459
Non-current assets:
Property, plant and equipment, net (note 3)		455,106		417,335
Operating lease right-of-use assets		128,755		118,348
Goodwill (note 4)		1,925,991		1,890,324
Other intangible assets, net (note 3)		409,559		448,168
Deferred income taxes		49,936		41,065
Prepaid taxes and other non-current assets		150,227		148,677
Total non-current assets		3,119,574		3,063,917
Total assets	$	4,585,724	$	4,587,376
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	117,222	$	135,786
Accrued expenses		304,693		270,353
Operating lease liabilities, current		22,499		21,263
Deferred revenue		105,342		98,617
Income taxes payable (note 6)		314,795		64,755
Short-term debt, net (note 8)		11,990		11,987
Total current liabilities		876,541		602,761
Non-current liabilities:
Deferred revenue		86,898		87,307
Deferred income taxes		12,474		13,011
Operating lease liabilities, non-current		115,266		101,880
Other long-term liabilities		6,067		8,347
Long-term debt, net (note 8)		719,046		1,164,133
Long-term income taxes payable (note 6)		60,198		112,910
Total non-current liabilities		999,949		1,487,588
Total liabilities		1,876,490		2,090,349
Commitments and contingencies (note 10)
Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued		-		-
Common stock, $0.004 par value, 350,000,000 shares authorized; ‎ 187,352,828 issued and 145,516,594 outstanding at March 31, 2021 and ‎ 186,723,407 issued and 144,887,175 outstanding at June 30, 2020		582		580
Additional paid-in capital		1,586,545		1,570,694
Retained earnings		2,941,336		2,832,991
Treasury stock, at cost, 41,836,234 shares at March 31, 2021 and June 30, 2020		(1,623,256)		(1,623,256)
Accumulated other comprehensive loss		(195,973)		(283,982)
Total stockholders’ equity		2,709,234		2,497,027
Total liabilities and stockholders’ equity	$	4,585,724	$	4,587,376

See the accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents


PART I – FINANCIAL INFORMATION	Item 1

RESMED INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

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



	Three Months Ended ‎March 31,				Nine Months Ended ‎March 31,
	2021		2020		2021		2020
Net revenue - Sleep and Respiratory Care products	$	674,931	$	679,895	$	2,042,909	$	1,923,513
Net revenue - Software as a Service		93,836		89,560		277,813		263,156
Net revenue		768,767		769,455		2,320,722		2,186,669

Cost of sales - Sleep and Respiratory Care products		270,351		277,065		833,203		790,858
Cost of sales - Software as a Service		40,234		30,592		105,050		89,775
Cost of sales (exclusive of amortization shown separately below)		310,585		307,657		938,253		880,633

Amortization of acquired intangible assets - Sleep and Respiratory Care products		900		2,152		3,995		6,609
Amortization of acquired intangible assets - Software as a Service		10,024		9,984		30,071		31,015
Amortization of acquired intangible assets		10,924		12,136		34,066		37,623
Total cost of sales		321,509		319,793		972,319		918,256
Gross profit		447,258		449,662		1,348,403		1,268,413

Selling, general, and administrative		160,446		172,441		488,904		511,304
Research and development		55,941		51,449		165,409		149,425
Amortization of acquired intangible assets		7,445		8,272		23,377		21,872
Restructuring expenses (note 11)		-		-		8,673		-
Litigation settlement expenses		-		-		-		(600)
Total operating expenses		223,832		232,162		686,363		682,001
Income from operations		223,426		217,500		662,040		586,412
Other income (loss), net:
Interest income		55		116		303		766
Interest expense		(5,878)		(9,968)		(18,644)		(31,180)
Loss attributable to equity method investments (note 5)		(4,969)		(5,295)		(9,895)		(19,082)
Other, net		5,371		(10,698)		10,647		(15,922)
Total other income (loss), net		(5,421)		(25,845)		(17,589)		(65,418)
Income before income taxes		218,005		191,655		644,451		520,994
Income taxes		296,486		28,518		365,046		77,155
Net income (loss)	$	(78,481)	$	163,137	$	279,405	$	443,839
Basic earnings (loss) per share (note 9)	$	(0.54)	$	1.13	$	1.92	$	3.08
Diluted earnings (loss) per share (note 9)	$	(0.54)	$	1.12	$	1.91	$	3.05
Dividend declared per share	$	0.39	$	0.39	$	1.17	$	1.17
Basic shares outstanding (000's)		145,513		144,638		145,217		144,112
Diluted shares outstanding (000's)		145,513		145,680		146,394		145,490

‎

See the accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents


PART I – FINANCIAL INFORMATION	Item 1

RESMED INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In US$ and in thousands)


	Three Months Ended ‎March 31,				Nine Months Ended ‎March 31,
	2021		2020		2021		2020
Net income (loss)	$	(78,481)	$	163,137	$	279,405	$	443,839
Other comprehensive income (loss):
Foreign currency translation (loss) gain adjustments		(32,822)		(120,318)		88,009		(113,427)
Comprehensive income (loss)	$	(111,303)	$	42,819	$	367,414	$	330,412

See the accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents


PART I – FINANCIAL INFORMATION	Item 1

RESMED INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(In US$ and in thousands)



	Common Stock			Additional ‎Paid-in		Treasury Stock			Retained		Accumulated ‎Other ‎ Comprehensive
	Shares	Amount		Capital		Shares	Amount		Earnings		Income (Loss)		Total
Balance, June 30, 2020	186,723	$	580	$	1,570,694	(41,836)	$	(1,623,256)	$	2,832,991	$	(283,982)	$	2,497,027
Common stock issued on exercise of options	18		-		1,026	-		-		-		-		1,026
Common stock issued on vesting of restricted stock units, net of shares withheld for tax	3		-		227	-		-		-		-		227
Stock-based compensation costs	-		-		16,071	-		-		-		-		16,071
Other comprehensive income	-		-		-	-		-		-		43,791		43,791
Cumulative effect adjustment from adoption of the credit loss standard, net of tax	-		-		-	-		-		(1,143)		-		(1,143)
Net income	-		-		-	-		-		178,372		-		178,372
Dividends declared	-		-		-	-		-		(56,511)		-		(56,511)
Balance, September 30, 2020	186,744	$	580	$	1,588,018	(41,836)	$	(1,623,256)	$	2,953,709	$	(240,191)	$	2,678,860
Common stock issued on exercise of options	29		-		1,857

Form: 10-Q

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