January 28, 2022 - 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 December 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, 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 January 24, 2022 there were 146,234,244 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	33

Item 4	Mine Safety Disclosures	33

Item 5	Other Information	33

Item 6	Exhibits	34

	Signatures	35

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)



	December 31, ‎2021		June 30, ‎2021
Assets
Current assets:
Cash and cash equivalents	$	194,476	$	295,278
Accounts receivable, net of allowances of $28,215 and $32,138 ‎ at December 31, 2021 and June 30, 2021, respectively		526,036		614,292
Inventories (note 3)		592,146		457,033
Prepaid taxes		89,229		72,409
Prepaid expenses and other current assets		145,353		135,745
Total current assets		1,547,240		1,574,757
Non-current assets:
Property, plant and equipment, net (note 3)		477,778		463,490
Operating lease right-of-use assets		146,045		128,575
Goodwill (note 4)		1,951,459		1,927,901
Other intangible assets, net (note 3)		372,013		392,582
Deferred income taxes		74,669		79,904
Prepaid taxes and other non-current assets		165,538		160,916
Total non-current assets		3,187,502		3,153,368
Total assets	$	4,734,742	$	4,728,125
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	163,369	$	138,008
Accrued expenses		286,803		320,599
Operating lease liabilities, current		23,912		23,585
Deferred revenue		111,647		109,611
Income taxes payable (note 6)		23,333		307,963
Short-term debt, net (note 8)		12,000		12,000
Total current liabilities		621,064		911,766
Non-current liabilities:
Deferred revenue		94,427		91,496
Deferred income taxes		12,873		11,319
Operating lease liabilities, non-current		132,970		114,779
Other long-term liabilities		6,350		6,802
Long-term debt, net (note 8)		667,979		643,351
Long-term income taxes payable (note 6)		53,244		62,933
Total non-current liabilities		967,843		930,680
Total liabilities		1,588,907		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; ‎ 188,048,404 issued and 146,212,170 outstanding at December 31, 2021 and ‎ 187,484,592 issued and 145,648,358 outstanding at June 30, 2021		585		583
Additional paid-in capital		1,629,031		1,622,199
Retained earnings		3,362,570		3,079,640
Treasury stock, at cost, 41,836,234 shares at December 31, 2021 and June 30, 2021		(1,623,256)		(1,623,256)
Accumulated other comprehensive loss		(223,095)		(193,487)
Total stockholders’ equity		3,145,835		2,885,679
Total liabilities and stockholders’ equity	$	4,734,742	$	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 ‎December 31,				Six Months Ended ‎December 31,
	2021		2020		2021		2020
Net revenue - Sleep and Respiratory Care products	$	795,840	$	708,178	$	1,602,339	$	1,367,979
Net revenue - Software as a Service		99,034		91,833		196,551		183,976
Net revenue		894,874		800,011		1,798,890		1,551,955

Cost of sales - Sleep and Respiratory Care products		343,194		293,862		692,876		562,852
Cost of sales - Software as a Service		36,131		32,502		73,117		64,816
Cost of sales (exclusive of amortization shown separately below)		379,325		326,364		765,993		627,668

Amortization of acquired intangible assets - Sleep and Respiratory Care products		1,072		1,140		1,972		3,095
Amortization of acquired intangible assets - Software as a Service		10,159		10,024		20,317		20,048
Amortization of acquired intangible assets		11,231		11,164		22,289		23,143
Total cost of sales		390,556		337,528		788,282		650,811
Gross profit		504,318		462,483		1,010,608		901,144

Selling, general, and administrative		185,362		169,470		362,082		328,459
Research and development		62,507		54,935		122,457		109,468
Amortization of acquired intangible assets		7,738		7,689		15,445		15,932
Restructuring expenses (note 11)		-		8,673		-		8,673
Total operating expenses		255,607		240,767		499,984		462,532
Income from operations		248,711		221,716		510,624		438,612
Other income (loss), net:
Interest (expense) income, net		(5,948)		(5,792)		(11,308)		(12,517)
Loss attributable to equity method investments (note 5)		(1,914)		(2,640)		(3,300)		(4,928)
Gain (loss) on equity investments (note 5)		(4,404)		(3,700)		1,208		4,776
Other, net		841		1,008		(1,150)		503
Total other income (loss), net		(11,425)		(11,124)		(14,550)		(12,166)
Income before income taxes		237,286		210,592		496,074		426,446
Income taxes		35,535		31,078		90,710		68,560
Net income	$	201,751	$	179,514	$	405,364	$	357,886
Basic earnings per share (note 9)	$	1.38	$	1.24	$	2.78	$	2.47
Diluted earnings per share (note 9)	$	1.37	$	1.23	$	2.76	$	2.45
Dividend declared per share	$	0.42	$	0.39	$	0.84	$	0.78
Basic shares outstanding (000's)		145,990		145,246		145,835		145,053
Diluted shares outstanding (000's)		147,040		146,421		147,044		146,350

‎

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 ‎December 31,				Six Months Ended ‎December 31,
	2021		2020		2021		2020
Net income	$	201,751	$	179,514	$	405,364	$	357,886
Other comprehensive income (loss):
Foreign currency translation (loss) gain adjustments		(6,092)		77,040		(29,608)		120,831
Comprehensive income	$	195,659	$	256,554	$	375,756	$	478,717

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
Common stock issued on exercise of options	39		-		2,378	-		-		-		-		2,378
Common stock issued on vesting of restricted stock units, net of shares withheld for tax	361		2		(49,832)	-		-		-		-		(49,830)
Common stock issued on employee stock purchase plan	101		-		16,723	-		-		-		-		16,723
Stock-based compensation costs	-

Form: 10-Q

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