October 29, 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 September 30, 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, including zip code)

(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 such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.:


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 October 25, 2021, there were 145,723,142 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	27

Item 4	Controls and Procedures	29

Part II	Other Information	30

Item 1	Legal Proceedings	30

Item 1A	Risk Factors	30

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3	Defaults Upon Senior Securities	30

Item 4	Mine Safety Disclosures	30

Item 5	Other Information	30

Item 6	Exhibits	31

	Signatures	32

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)



	September 30, ‎2021		June 30, ‎2021
Assets
Current assets:
Cash and cash equivalents	$	276,149	$	295,278
Accounts receivable, net of allowances of $29,917 and $32,138 ‎ at September 30, 2021 and June 30, 2021, respectively		575,554		614,292
Inventories (note 3)		506,644		457,033
Prepaid taxes		77,826		72,409
Prepaid expenses and other current assets		150,082		135,745
Total current assets		1,586,255		1,574,757
Non-current assets:
Property, plant and equipment, net (note 3)		467,344		463,490
Operating lease right-of-use assets		134,375		128,575
Goodwill (note 4)		1,922,037		1,927,901
Other intangible assets, net (note 3)		375,400		392,582
Deferred income taxes		80,765		79,904
Prepaid taxes and other non-current assets		162,991		160,916
Total non-current assets		3,142,912		3,153,368
Total assets	$	4,729,167	$	4,728,125
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	173,696	$	138,008
Accrued expenses		274,106		320,599
Operating lease liabilities, current		22,919		23,585
Deferred revenue		112,528		109,611
Income taxes payable (note 6)		28,909		307,963
Short-term debt, net (note 8)		12,000		12,000
Total current liabilities		624,158		911,766
Non-current liabilities:
Deferred revenue		93,255		91,496
Deferred income taxes		11,294		11,319
Operating lease liabilities, non-current		121,518		114,779
Other long-term liabilities		5,981		6,802
Long-term debt, net (note 8)		793,668		643,351
Long-term income taxes payable (note 6)		53,244		62,933
Total non-current liabilities		1,078,960		930,680
Total liabilities		1,703,118		1,842,446
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; ‎ 187,547,442 issued and 145,711,208 outstanding at September 30, 2021 and ‎ 187,484,592 issued and 145,648,358 outstanding at June 30, 2021		583		583
Additional paid-in capital		1,643,661		1,622,199
Retained earnings		3,222,064		3,079,640
Treasury stock, at cost, 41,836,234 shares at September 30, 2021 and June 30, 2021		(1,623,256)		(1,623,256)
Accumulated other comprehensive loss		(217,003)		(193,487)
Total stockholders’ equity		3,026,049		2,885,679
Total liabilities and stockholders’ equity	$	4,729,167	$	4,728,125

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 ‎September 30,
	2021		2020
Net revenue - Sleep and Respiratory Care products	$	806,499	$	659,801
Net revenue - Software as a Service		97,516		92,143
Net revenue		904,015		751,944

Cost of sales - Sleep and Respiratory Care products		349,681		268,990
Cost of sales - Software as a Service		36,986		32,314
Cost of sales (exclusive of amortization shown separately below)		386,667		301,304

Amortization of acquired intangible assets - Sleep and Respiratory Care products		900		1,955
Amortization of acquired intangible assets - Software as a Service		10,159		10,024
Amortization of acquired intangible assets		11,059		11,979
Total cost of sales		397,726		313,283
Gross profit		506,289		438,661

Selling, general, and administrative		176,719		158,989
Research and development		59,950		54,533
Amortization of acquired intangible assets		7,707		8,243
Total operating expenses		244,376		221,765
Income from operations		261,913		216,896
Other income (loss), net:
Interest (expense) income, net		(5,360)		(6,725)
Loss attributable to equity method investments (note 5)		(1,386)		(2,288)
Gain (loss) on equity investments (note 5)		5,612		8,476
Other, net		(1,991)		(505)
Total other income (loss), net		(3,125)		(1,042)
Income before income taxes		258,788		215,854
Income taxes		55,175		37,482
Net income	$	203,613	$	178,372
Basic earnings per share (note 9)	$	1.40	$	1.23
Diluted earnings per share (note 9)	$	1.39	$	1.22
Dividend declared per share	$	0.42	$	0.39
Basic shares outstanding (000's)		145,680		144,900
Diluted shares outstanding (000's)		146,860		146,100

‎

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 ‎September 30,
	2021		2020
Net income	$	203,613	$	178,372
Other comprehensive income (loss):
Foreign currency translation (loss) gain adjustments		(23,516)		43,791
Comprehensive income	$	180,097	$	222,163

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, 2021	187,485	$	583	$	1,622,199	(41,836)	$	(1,623,256)	$	3,079,640	$	(193,487)	$	2,885,679
Common stock issued on exercise of options	61		-		4,354	-		-		-		-		4,354
Common stock issued on vesting of restricted stock units, net of shares withheld for tax	1		-		(195)	-		-		-		-		(195)
Stock-based compensation costs	-		-		17,303	-		-		-		-		17,303
Other comprehensive income	-		-		-	-		-		-		(23,516)		(23,516)
Net income	-		-		-	-		-		203,613		-		203,613
Dividends declared ($0.42 per common share)	-		-		-	-		-		(61,189)		-		(61,189)
Balance, September 30, 2021	187,547	$	583	$	1,643,661	(41,836)	$	(1,623,256)	$	3,222,064	$	(217,003)	$	3,026,049

‎

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 (loss)	-		-		-	-		-		-		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 ($0.39 per common share)	-		-		-	-		-		(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

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 Cash Flows (Unaudited)

(In US$ and in thousands)



	Three Months Ended ‎September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	203,613	$	178,372
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		39,102		39,466
Amortization of right-of-use assets		8,517		10,422
Stock-based compensation costs		17,303		16,071
Loss attributable to equity method investments (note 5)		1,386		2,288
(Gain) loss on equity investments (note 5)		(5,612)		(8,476)
Changes in operating assets and liabilities:
Accounts receivable		33,704		16,110
Inventories		(55,976)		(52,396)
Prepaid expenses, net deferred income taxes and other current assets		(14,391)		3,415
Accounts payable, accrued expenses, income taxes payable and other		(293,303)		(61,273)
Net cash (used in) / provided by operating activities		(65,657)		143,999
Cash flows from investing activities:
Purchases of property, plant and equipment		(27,340)		(13,501)
Patent registration and acquisition costs		(4,453)		(5,237)
Purchases of investments (note 5)		(6,600)		(8,196)
(Payments) / proceeds on maturity of foreign currency contracts		(3,481)		4,824
Net cash used in investing activities		(41,874)		(22,110)
Cash flows from financing activities:
Proceeds from issuance of common stock, net		4,354		1,026
Taxes paid related to net share settlement of equity awards		(195)		227
Proceeds from borrowings, net of borrowing costs

Form: 10-Q

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