PRESS RELEASE
Published on October 25, 2012
Exhibit 99.1
RESMED INC. ANNOUNCES RECORD FINANCIAL RESULTS FOR THE
QUARTER ENDED SEPTEMBER 30, 2012
SAN DIEGO, California, October 25, 2012 ResMed Inc. (NYSE: RMD) today announced record results for the quarter ended September 30, 2012. Revenue for the quarter ended September 30, 2012 was $339.7 million, an 8% increase (a 12% increase on a constant currency basis) over the quarter ended September 30, 2011. For the quarter ended September 30, 2012, net income was $71.3 million, an increase of 41% compared to the quarter ended September 30, 2011. Diluted earnings per share for the quarter ended September 30, 2012 were $0.49, a robust 48% increase compared to the quarter ended September 30, 2011.
SG&A expenses were $98.3 million for the quarter ended September 30, 2012, an increase of $4.1 million, or 4% (a 9% increase on a constant currency basis) compared to the quarter ended September 30, 2011. SG&A costs were 28.9% of revenue in the quarter ended September 30, 2012, compared to 29.9% for the quarter ended September 30, 2011. SG&A expenses were favorably impacted by the depreciation of the Australian dollar and euro against the U.S. dollar.
R&D expenses were $27.2 million for the quarter ended September 30, 2012, or 8.0% of revenue. R&D expenses increased by 4% (a 6% increase on a constant currency basis) compared to the quarter ended September 30, 2011. R&D expenses were favorably impacted by the depreciation of the Australian dollar against the U.S. dollar.
The company amortized acquired intangibles of $2.6 million ($2.0 million, net of tax) during the quarter ended September 30, 2012. Stock-based compensation costs incurred during the quarter ended September 30, 2012 of $7.9 million ($5.9 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and our employee stock purchase plan.
Inventory, at $193.2 million, increased by $18.8 million compared to June 30, 2012. Accounts receivable days sales outstanding, at 71 days, increased by three days compared to June 30, 2012.
Additionally, the Board of Directors has today declared a quarterly dividend of $0.17 per share, which will have a record date of November 20, 2012, and be payable on December 18, 2012. The dividend will be paid in U.S. currency to holders of ResMeds common stock trading on the New York Stock Exchange (NYSE). Holders of Chess Depositary Instruments (CDIs) trading on the Australian Securities Exchange, will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and reflecting the 10:1 ratio between CDIs and NYSE shares. Because the two exchanges have different settlement and transfer procedures, the ex-dividend periods before the record date will be different for common stock and for CDIs. The ex-dividend date will be November 14, 2012 for CDI holders and November 16, 2012 for common stock holders. As a result of these differences, ResMed has requested a waiver from the ASXs settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from November 14, 2012 through November 20, 2012, inclusive.
Peter C. Farrell Ph.D, chairman and chief executive officer, commented, In the first quarter of fiscal 2013 we showed strong year-over-year growth on the top and bottom lines, and both our flow generator and mask categories did well. Revenue in the Americas increased by 15% to $194.4 million over the prior years quarter. Revenue outside the Americas was $145.4 million, a 9% increase on a constant currency basis over the prior years quarter. Operating profit for the September quarter was $80.5 million, cash flow from operations was $78.3 million, while gross margin was an encouraging 61.4%, all demonstrating excellent operating performance. There was also a continuing shift to higher valued flow generators, like S9 Autoset and S9 bilevels, and mask sales remained strong.
Evidence also continues to mount supporting the role of sleep-disordered breathing (SDB) therapy for disease prevention, improvement of quality of life and healthcare cost reduction, what I call the Holy Grail of medicine. The following studies provide additional proof of the serious public health concerns relating to untreated SDB:
| | In a ResMed-sponsored study recently published in Population Health Management involving 22,000 members on the Union Pacific Railroad health plan, findings suggest that a low-cost, patient-focused SDB education campaign can improve healthcare outcomes and reduce medical expenses. First, the study showed that members of the Union Pacific plan who had untreated SDB had higher medical expenses than employees without the disease and, second, it demonstrated that treatment of SDB with positive airway pressure (PAP) therapy reduced medical costs, in-patient costs and hospital admissions. After the campaign was initiated, the healthcare plan realized cost savings of $4.9 million over a two-year period. |
| | A study published in the June issue of the American Journal of Managed Care demonstrated that newly diagnosed SDB patients who initiated PAP therapy had significantly lower hospitalization risk and lower all-cause healthcare costs compared to patients who did not use PAP. |
| | In the July issue of the Journal of Cardiac Failure, a study showed that central sleep apnea and severe obstructive sleep apnea are independent risk factors for six-month cardiac hospital readmission. |
All these findings offer tangible data to payors, providers and patients on the beneficial effect on both clinical and economic outcomes of treating sleep-disordered breathing. The bottom line is that screening, diagnosis, treatment and monitoring adherence to therapy for patients presents a significant opportunity to improve health and quality of life, as well as contain healthcare costs.
About ResMed
ResMed is a global leader in the development, manufacturing and marketing of medical products for the diagnosis, treatment and management of respiratory disorders, with a focus on sleep-disordered breathing. The company is dedicated to developing innovative products to improve the lives of those who suffer from these conditions and to increasing awareness among patients and healthcare professionals of the potentially serious health consequences of untreated sleep-disordered breathing. For more information on ResMed, visit www.resmed.com.
ResMed will host a conference call at 1:30 p.m. U.S. Pacific Time today to discuss these quarterly results. Individuals wishing to access the conference call may do so via ResMeds Website at www.resmed.com or by dialing 847-585-4405 (domestic) or +1 847-585-4405 (international) and entering conference pass code no. 33442422. Please allow extra time prior to the call to visit the Website 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 30 minutes after the live call and will be available for two weeks. A telephone replay of the conference call is available by dialing 630-652-3042 (domestic) and +1 630-652-3042 (international) and entering conference I.D. No. 33442422.
Further information can be obtained by contacting Constance Bienfait at ResMed Inc., San Diego, at 858-836-5971; Brett Sandercock at +612-8-884-2090; or by visiting the Companys multilingual Website 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 materially differ 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 Website.
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RESMED INC AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(In US$ thousands, except per share data)
| Three Months Ended September 30, |
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| 2012 | 2011 | |||||||
| Net revenue |
$ | 339,731 | $ | 314,774 | ||||
| Cost of sales |
131,083 | 129,720 | ||||||
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| Gross profit |
208,648 | 185,054 | ||||||
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| Operating expenses: |
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| Selling, general and administrative |
98,303 | 94,203 | ||||||
| Research and development |
27,220 | 26,206 | ||||||
| Amortization of acquired intangible assets |
2,636 | 3,771 | ||||||
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| Total operating expenses |
128,159 | 124,180 | ||||||
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| Income from operations |
80,489 | 60,874 | ||||||
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| Interest income (expense), net |
8,471 | 6,924 | ||||||
| Other, net |
1,941 | (1,301 | ) | |||||
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| Total other income (expenses), net |
10,412 | 5,623 | ||||||
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| Income before income taxes |
90,901 | 66,497 | ||||||
| Income taxes |
19,636 | 15,979 | ||||||
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| Net income |
$ | 71,265 | $ | 50,518 | ||||
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| Basic earnings per share |
$ | 0.50 | $ | 0.34 | ||||
| Diluted earnings per share |
$ | 0.49 | $ | 0.33 | ||||
| Basic shares outstanding |
142,651 | 150,366 | ||||||
| Diluted shares outstanding |
146,055 | 154,051 | ||||||
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RESMED INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (UnauditedIn US$ thousands)
| September 30, 2012 |
June 30, 2012 |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 890,629 | $ | 809,541 | ||||
| Accounts receivable, net |
266,537 | 283,160 | ||||||
| Inventories |
193,172 | 174,351 | ||||||
| Deferred income taxes |
24,754 | 19,590 | ||||||
| Income taxes receivable |
3,091 | 2,282 | ||||||
| Prepaid expenses and other current assets |
72,034 | 72,227 | ||||||
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| Total current assets |
1,450,217 | 1,361,151 | ||||||
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| Property, plant and equipment, net |
438,357 | 434,363 | ||||||
| Goodwill |
273,280 | 256,209 | ||||||
| Other intangibles |
59,666 | 54,827 | ||||||
| Deferred income taxes |
17,543 | 23,500 | ||||||
| Other assets |
5,596 | 7,819 | ||||||
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| Total non-current assets |
794,442 | 776,718 | ||||||
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| Total assets |
$ | 2,244,659 | $ | 2,137,869 | ||||
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| LIABILITIES AND STOCKHOLDERS EQUITY |
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| Current liabilities: |
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| Accounts payable |
52,914 | 55,006 | ||||||
| Accrued expenses |
132,100 | 127,381 | ||||||
| Deferred revenue |
42,978 | 41,563 | ||||||
| Income taxes payable |
24,326 | 27,777 | ||||||
| Deferred income taxes |
660 | 1,073 | ||||||
| Current portion of long-term debt |
53 | 52 | ||||||
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| Total current liabilities |
253,031 | 252,852 | ||||||
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| Deferred income taxes |
9,167 | 8,843 | ||||||
| Deferred revenue |
14,301 | 14,384 | ||||||
| Income taxes payable |
3,452 | 3,380 | ||||||
| Non-current portion of long-term debt |
265,785 | 250,783 | ||||||
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| Total non-current liabilities |
292,705 | 277,390 | ||||||
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| Total liabilities |
545,736 | 530,242 | ||||||
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| STOCKHOLDERS EQUITY: |
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| Common stock |
572 | 568 | ||||||
| Additional paid-in capital |
933,249 | 899,717 | ||||||
| Retained earnings |
1,413,711 | 1,366,712 | ||||||
| Treasury stock |
(903,922 | ) | (895,826 | ) | ||||
| Accumulated other comprehensive income |
255,313 | 236,456 | ||||||
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| Total stockholders equity |
1,698,923 | 1,607,627 | ||||||
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| Total liabilities and stockholders equity |
$ | 2,244,659 | $ | 2,137,869 | ||||
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