PRESS RELEASE
Published on August 5, 2004
Exhibit 99.1
RESMED INC. ANNOUNCES RECORD FINANCIAL RESULTS
FOR QUARTER AND YEAR ENDED JUNE 30, 2004
SAN DIEGO, California, August 5, 2004 ResMed Inc. (NYSE:RMD) announced record revenue and income results for the quarter and year ended June 30, 2004. Revenues for the June 30, 2004, quarter were $92.9 million, a 23% increase over the quarter ended June 30, 2003, excluding the impact of non-recurring revenues of approximately $5.0 million related to the Severe Acute Respiratory Syndrome (SARS) outbreak in China in fiscal 2003. Including SARS-related revenue in the quarter ended June 2003, revenues increased by 15%.
Income from operations and net income for the June 30, 2004, quarter grew to $24.5 million and $15.9 million respectively, an increase of 32% and 17%. Earnings per share, on a diluted basis, for the quarter ended June 30, 2004, were $0.45, up from $0.39 per share in the June 2003 quarter.
Selling, general and administration (SG&A) costs for the quarter were $28.6 million, or 31% of revenue in the June quarter, compared to 32% of revenue for the same period in fiscal 2003. The $3.0 million increase over the same period in fiscal 2003 was primarily related to an increase in selling and administration personnel to meet expanding opportunities in the sleep-disordered breathing market.
Research and development expenditure, at approximately 7% of revenues, increased during the three months ended June 30, 2004, to $6.5 million from $6.2 million in the quarter ended June 30, 2003. These R&D outlays primarily reflect ResMeds continuing commitment to clinical research and product development, particularly in the evolving cardiovascular area. ResMed expects to continue to spend approximately 7% of its revenues on R&D during fiscal year 2005.
Company revenues for fiscal year 2004 were $339.3 million, an increase of 24% over the year ended June 30, 2003. Excluding the impact of SARS-related product sales, revenues increased by 26%. Net income for the year was $57.3 million or $1.63 per share, on a diluted basis, compared with net income of $45.7 million or $1.33 per share for fiscal year 2003. Net income increased by 25% over the prior year.
Inventories, at $55.8 million, decreased marginally compared to March 2004 levels. Accounts receivable days sales outstanding, at 64 days, were consistent with the March 2004 quarter.
Peter C. Farrell, PhD., Chairman and Chief Executive Officer, commented, These record results for the June quarter and fiscal year 2004 reflect ResMeds continuing strong sales and profit growth in all major markets. Our operating cash flow for the June quarter was a robust $23.3 million. Domestic sales increased by 25% over the June 2003 quarter to a record $45.4 million, reflecting continuing strong domestic demand for our sleep-disordered breathing products. International sales increased by 21% to $47.5 million, excluding the impact of SARS-related sales in the June 2003 quarter, reflecting encouraging growth all in major international markets as well as a stronger Euro.
Dr. Farrell further continued, To build on our success, we will continue to introduce new products, increase our efforts to educate physicians and the public about sleep-disordered breathing, and also strengthen and deepen our presence in international markets. In June, at the annual meeting of the Associated Professional Sleep Societies, we previewed our Mirage Swift, which will round out our top-quality line of patient interfaces; it will be released in this quarter. We also expect to release this quarter our VPAP III ST-A bi-level flow generator in Japan, our largest market in Asia-Pacific. As part of our market development programs, we announced an initiative to educate physicians, who specialize in bariatric surgery, about the risks associated with untreated sleep apnea, which is prevalent in over 70% of that patient population. We believe that a substantial unmet clinical need exists in addressing SDB in this patient group and we expect to fully develop this sector over the next few years.
- More -
Dr. Farrell concluded, Finally, our financial performance was recognized once again in BusinessWeeks June 7, 2004, edition, which ranked ResMed as one of its 100 Hot Growth Companies. BusinessWeeks criteria are based on companies three-year results in sales growth, earnings growth, and return on invested capital. ResMed has made the list in five of the last six years.
ResMed will host a conference call at 1:30 p.m. Pacific Daylight Time (PDT) today to discuss these quarterly results. Individuals wishing to access the conference call may do so via ResMeds Web site at www.resmed.com or by dialing (800) 599-9829 (domestic) or +1 (617) 847-8703 (international) and entering confence ID No. 83583715. 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 96935996.
Further information can be obtained by contacting Hillary Theakston at ResMed Inc, San Diego, (858) 746-2610; Adrian Smith at ResMed Limited Sydney on +61 (2) 9886-5407; or by visiting the Companys 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 Companys future revenue, earnings or expenses, new product development and new markets for the Companys products, are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Those risks and uncertainties are discussed in the Companys 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 Companys Web site.
- More -
RESMED INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(In US$ thousands, except per share data)
|
Three Months Ended June 30, |
Year Ended June 30, |
|||||||||||||||
|
2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Net revenue |
92,891 | 80,695 | 339,338 | 273,570 | ||||||||||||
| Cost of sales |
33,287 | 30,331 | 122,602 | 100,483 | ||||||||||||
| Gross profit |
59,604 | 50,364 | 216,736 | 173,087 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling, general and administrative |
28,553 | 25,578 | 104,706 | 85,313 | ||||||||||||
| Research and development |
6,528 | 6,235 | 26,169 | 20,534 | ||||||||||||
| Donation to Foundations |
| | 500 | | ||||||||||||
| Total operating expenses |
35,081 | 31,813 | 131,375 | 105,847 | ||||||||||||
| Income from operations |
24,523 | 18,551 | 85,361 | 67,240 | ||||||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest income (expense), net |
(484 | ) | (418 | ) | (1,683 | ) | (2,549 | ) | ||||||||
| Other, net |
(452 | ) | 1,786 | 990 | 1,907 | |||||||||||
| Gain on extinguishment of debt |
| | | 529 | ||||||||||||
| Total other income (expenses), net |
(936 | ) | 1,368 | (693 | ) | (113 | ) | |||||||||
| Income before income taxes |
23,587 | 19,919 | 84,668 | 67,127 | ||||||||||||
| Income taxes |
(7,732 | ) | (6,395 | ) | (27,384 | ) | (21,398 | ) | ||||||||
| Net income |
15,855 | 13,524 | 57,284 | 45,729 | ||||||||||||
| Basic earnings per share |
$ | 0.47 | $ | 0.41 | $ | 1.70 | $ | 1.38 | ||||||||
| Diluted earnings per share |
$ | 0.45 | $ | 0.39 | $ | 1.63 | $ | 1.33 | ||||||||
| Basic shares outstanding |
33,825 | 33,275 | 33,694 | 33,054 | ||||||||||||
| Diluted shares outstanding |
35,311 | 34,726 | 35,125 | 34,439 | ||||||||||||
- More -
RESMED INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In US$ thousands except share and per share data)
|
JUNE 30, 2004 |
JUNE 30, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 128,907 | $ | 114,491 | ||||
| Marketable securities - available for sale |
12,021 | 6,533 | ||||||
| Accounts receivable, net |
67,242 | 56,694 | ||||||
| Inventories |
55,797 | 49,386 | ||||||
| Deferred income taxes |
7,041 | 8,301 | ||||||
| Prepaid expenses and other current assets |
6,821 | 6,500 | ||||||
| Total current assets |
277,829 | 241,905 | ||||||
| Property, plant and equipment, net of accumulated depreciation |
147,268 | 104,687 | ||||||
| Patents, net of accumulated amortization |
4,814 | 3,745 | ||||||
| Goodwill |
106,075 | 102,160 | ||||||
| Other assets |
8,173 | 7,098 | ||||||
| Total assets |
$ | 544,159 | $ | 459,595 | ||||
| LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 18,574 | $ | 19,368 | ||||
| Accrued expenses |
22,939 | 19,140 | ||||||
| Income taxes payable |
7,538 | 3,408 | ||||||
| Deferred revenue |
8,759 | 6,355 | ||||||
| Current portion of deferred profit on sale leaseback |
2,197 | 2,312 | ||||||
| Total current liabilities |
60,007 | 50,583 | ||||||
| Non current liabilities: |
||||||||
| Deferred revenue |
9,403 | 7,210 | ||||||
| Deferred profit on sale and leaseback |
| 2,119 | ||||||
| Convertible Subordinated Notes |
113,250 | 113,250 | ||||||
| Total non-current liabilities |
122,653 | 122,579 | ||||||
| Total liabilities |
$ | 182,660 | $ | 173,162 | ||||
| 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 33,912,944 at June 30,2004 and 33,370,885 at June 30, 2003 (excluding 886,369 and 415,365 shares held as Treasury stock respectively) |
136 | 133 | ||||||
| Additional paid-in capital |
132,874 | 107,433 | ||||||
| Retained earnings |
217,656 | 160,372 | ||||||
| Treasury Stock |
(30,440 | ) | (11,415 | ) | ||||
| Accumulated other comprehensive income (loss) |
41,273 | 29,910 | ||||||
| Total stockholders equity |
361,499 | 286,433 | ||||||
| Total liabilities and stockholders equity |
$ | 544,159 | $ | 459,595 | ||||
- End -