SAN DIEGO, Aug. 1, 2017 /PRNewswire/ -- ResMed Inc. (NYSE:
RMD) today announced results for its quarter ended June 30, 2017. Revenue for the quarter was $556.7
million, a 7 percent increase compared to the same period of the prior year. Excluding the contribution from the Brightree
business acquired in April 2016, revenue for the quarter was $520.5
million, a 6 percent increase.
"We finished the year with solid constant currency revenue growth, fuelled by sales of our devices, masks, and
software-as-a-service revenue from Brightree," said Mick Farrell, ResMed's chief executive
officer.
"During the quarter, we made two acquisitions to augment our Brightree solutions, we presented and published results from
clinical studies in sleep and COPD, and we launched two new products: AirTouch - the softest CPAP mask from ResMed;
and AirMini - the world's smallest CPAP."
Farrell concluded, "Our board of directors has declared a 6 percent increase in our dividend this quarter, reflecting
confidence in our long-term outlook and 2020 strategy. We are positioned for another great year ahead, as we deliver products and
solutions that improve patient outcomes, create efficiencies for our customers, lower overall healthcare system costs and deliver
cash to our shareholders."
Analysis of fourth quarter results
Fourth quarter revenue in the Americas was $350.2 million, an 8 percent increase over the same
period of the prior year. This included Brightree revenue of $36.2 million. Excluding Brightree,
revenue in the Americas was $314.0 million, a 6 percent increase over the prior year. Revenue in
combined EMEA and APAC was $206.5 million, an increase of 9 percent on a constant currency basis,
compared to the same period of the prior year.
Gross margin in the fourth quarter was 58.2 percent, higher than the prior year's quarter gross margin of 58.1 percent. The
improvement in gross margin compared to prior year's quarter was due to manufacturing and procurement efficiencies partially
offset by declines in average selling prices and changes in product mix.
Income from operations for the quarter was $127.4 million, a 7 percent increase compared with
the quarter ended June 30, 2016. Non-GAAP income from operations for the quarter was $139.1
million, a 3 percent increase compared to the same period of the prior year.
Selling, general and administrative expenses were $147.9 million, a 10 percent increase over the
same period in the prior year, also an 11 percent increase on a constant currency basis. SG&A expenses increased to 26.6
percent of revenue in the quarter, compared with 25.8 percent reported in the quarter ended June 30, 2016.
Research and development expenses were $36.7 million, or 6.6 percent of revenue. R&D
expenses increased by 7 percent compared with the same period last year, or a 6 percent increase on a constant currency
basis.
Amortization of acquired intangible assets was $11.8 million during the quarter, a decrease of
$0.9 million compared with the same period last year. Stock-based compensation costs incurred
during the quarter of $11.7 million consisted of expenses associated with employee equity grants,
and our employee stock purchase plan.
Net income for the quarter was $101.6 million, a 22 percent increase compared to the same period
of the prior year. Non-GAAP net income was $109.6 million, a 5 percent increase compared to the
prior year.
Non-GAAP measures adjust for amortization of acquired intangibles, the one-time deferred revenue fair value adjustment, the
SERVE-HF accrual release and acquisition related expenses.
GAAP diluted earnings per share for the quarter increased 20 percent to $0.71. Non-GAAP
diluted earnings per share of $0.77 were 4 percent higher compared with the same period of the
prior year.
Cash flow from operations for the quarter was $140.3 million compared to net income in the
current quarter of $101.6 million.
Analysis of fiscal year 2017 results
Revenue for the year increased 12 percent over the prior year to $2.1 billion, or a 13 percent
increase on a constant currency basis.
Income from operations for the year was $425.8 million, a 1 percent decrease over the prior
year. Non-GAAP income from operations for the year was $508.4 million, a 9 percent increase
compared to the prior year.
Non-GAAP measures adjust for amortization of acquired intangibles, the Astral battery field safety notification expenses,
restructuring expenses, litigation settlement expenses, acquisition related expenses, the one-time deferred revenue fair value
adjustment and the SERVE-HF accrual release.
Net income for the year was $342.3 million, a 3 percent decrease over the prior year. Non-GAAP
net income was $401.3 million, a 6 percent increase compared to the prior year.
GAAP diluted earnings per share decreased 4 percent to $2.40. Non-GAAP diluted earnings per
share for the year was $2.82, a 5 percent increase compared with the prior year.
Cash flow from operations for the year was $414.1 million. During the year we paid $186.3 million in dividends and repaid $95.0 million of our outstanding debt.
Dividend program
The ResMed board of directors today declared a 6 percent increase in the quarterly cash dividend to $0.35 per share. The dividend will have a record date of August 17, 2017, payable
on September 21, 2017. The dividend will be paid in U.S. currency to holders of ResMed's common
stock trading on the New York Stock Exchange. Holders of Chess Depositary Instruments 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. The ex-dividend date will be August 16, 2017 for
common stock holders and for CDI holders. ResMed has received a waiver from the ASX's settlement operating rules, which will
allow ResMed to defer processing conversions between its common stock and CDI registers from August 16,
2017 through August 17, 2017 inclusive.
Webcast details
ResMed will discuss its financial and business results and outlook on its webcast at 1:30 p.m.
U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed's Investor Relations website at investor.resmed.com. Please
go to this section of the website and click on the icon for the "Q4 2017 earnings webcast" to register and listen to the live
webcast. The online archive of the broadcast will be available on ResMed's website after the live call. In addition, a telephone
replay of the conference call will be available approximately two hours after the call by dialing 800-585-8367 (U.S.) and +1
416-621-4642 (outside U.S.) and entering a passcode of 48372777. The telephone replay will be available until August 15, 2017.
About ResMed
ResMed (NYSE:RMD) changes lives with award-winning medical devices and cutting-edge cloud-based software applications that
better diagnose, treat and manage sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. ResMed is
a global leader in connected care, with more than 3 million patients remotely monitored every day. Our 6,000-strong team is
committed to creating the world's best tech-driven medical device company – improving quality of life, reducing the impact of
chronic disease, and saving healthcare costs in more than 120 countries.
Safe harbor statement
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 ResMed's
projections of future revenue or earnings, expenses, new product development, new product launches and new markets for its
products and the integration of acquisitions – are subject to risks and uncertainties, which could cause actual results to
materially differ from those projected or implied in the forward-looking statements. Additional risks and uncertainties are
discussed in ResMed's periodic reports on file with the U.S. Securities & Exchange Commission. ResMed does not
undertake to update its forward-looking statements.
|
ResMed Inc and Subsidiaries
|
|
Condensed Consolidated Statements of Income (Unaudited)
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
$
|
556,686
|
|
$
|
518,647
|
|
$
|
2,066,737
|
|
$
|
1,838,713
|
|
|
Cost of sales
|
|
232,910
|
|
|
217,560
|
|
|
859,922
|
|
|
775,020
|
|
|
Astral field safety notification expenses (1)
|
|
-
|
|
|
-
|
|
|
5,070
|
|
|
-
|
|
|
SERVE-HF accrual release (1)
|
|
-
|
|
|
(402)
|
|
|
-
|
|
|
(2,804)
|
|
|
Gross profit
|
|
323,776
|
|
|
301,489
|
|
|
1,201,745
|
|
|
1,066,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
147,940
|
|
|
133,929
|
|
|
553,968
|
|
|
482,593
|
|
|
Research and development
|
|
36,706
|
|
|
34,380
|
|
|
144,467
|
|
|
118,651
|
|
|
Restructuring expenses (1)
|
|
-
|
|
|
-
|
|
|
12,358
|
|
|
6,914
|
|
|
Litigation settlement expenses (1)
|
|
-
|
|
|
-
|
|
|
8,500
|
|
|
-
|
|
|
Acquisition related expenses (1)
|
|
-
|
|
|
1,914
|
|
|
10,076
|
|
|
5,464
|
|
|
Amortization of acquired intangible assets (1)
|
|
11,769
|
|
|
12,629
|
|
|
46,578
|
|
|
23,923
|
|
|
Total operating expenses
|
|
196,415
|
|
|
182,852
|
|
|
775,947
|
|
|
637,545
|
|
|
Income from operations (1)
|
|
127,361
|
|
|
118,637
|
|
|
425,798
|
|
|
428,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net
|
|
(3,310)
|
|
|
(2,374)
|
|
|
(11,151)
|
|
|
5,654
|
|
|
Other, net
|
|
(2,428)
|
|
|
1,168
|
|
|
4,096
|
|
|
4,960
|
|
|
Total other income (expenses), net
|
|
(5,738)
|
|
|
(1,206)
|
|
|
(7,055)
|
|
|
10,614
|
|
|
Income before income taxes
|
|
121,623
|
|
|
117,431
|
|
|
418,743
|
|
|
439,566
|
|
|
Income taxes excluding ASU 2016-09 (2)
|
|
22,194
|
|
|
35,572
|
|
|
82,530
|
|
|
98,329
|
|
|
Income taxes relating to ASU 2016-09 (2)
|
|
(2,184)
|
|
|
(1,267)
|
|
|
(6,071)
|
|
|
(11,172)
|
|
|
Total income taxes
|
|
20,010
|
|
|
34,305
|
|
|
76,459
|
|
|
87,157
|
|
|
Net income (1)
|
$
|
101,613
|
|
$
|
83,126
|
|
$
|
342,284
|
|
$
|
352,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (2)
|
$
|
0.72
|
|
$
|
0.59
|
|
$
|
2.42
|
|
$
|
2.51
|
|
|
Diluted earnings per share (2)
|
$
|
0.71
|
|
$
|
0.59
|
|
$
|
2.40
|
|
$
|
2.49
|
|
|
Non-GAAP diluted earnings per share (1) (2)
|
$
|
0.77
|
|
$
|
0.74
|
|
$
|
2.82
|
|
$
|
2.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic shares outstanding
|
|
142,019
|
|
|
140,551
|
|
|
141,360
|
|
|
140,242
|
|
|
Diluted shares outstanding (2)
|
|
143,119
|
|
|
141,654
|
|
|
142,453
|
|
|
141,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See the reconciliation of non-GAAP financial measures in the table at
the end of the press release.
|
|
|
|
(2)
|
As a result of the adoption of ASU 2016-09 "Improvements to
Employee Share-Based Payment Accounting" during the quarter ended June 30, 2016 we now recognize an income tax impact
relating to share-based payment transactions. The income taxes for the three and twelve months ended June 30, 2016 have
been restated to reflect the adoption of the standard as the benefit was previously recorded as a reduction to Additional
Capital.
|
|
ResMed Inc And Subsidiaries
|
|
Condensed Consolidated Balance Sheets (Unaudited - In thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
821,935
|
|
$
|
731,434
|
|
|
Accounts receivable, net
|
|
450,530
|
|
|
382,086
|
|
|
Inventories
|
|
268,319
|
|
|
224,456
|
|
|
Prepayments and other current assets
|
|
103,219
|
|
|
81,743
|
|
|
Total current assets
|
|
1,644,003
|
|
|
1,419,719
|
|
|
Property, plant and equipment, net
|
|
394,241
|
|
|
384,276
|
|
|
Goodwill
|
|
1,064,874
|
|
|
1,059,245
|
|
|
Other intangibles, net
|
|
261,800
|
|
|
299,808
|
|
|
Deferred income taxes and other non-current assets
|
|
103,569
|
|
|
93,657
|
|
|
Total non-current assets
|
|
1,824,484
|
|
|
1,836,986
|
|
|
Total assets
|
$
|
3,468,487
|
|
$
|
3,256,705
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
92,763
|
|
|
92,571
|
|
|
Accrued expenses
|
|
186,295
|
|
|
156,805
|
|
|
Deferred revenue
|
|
51,918
|
|
|
50,009
|
|
|
Income taxes payable
|
|
29,150
|
|
|
39,166
|
|
|
Short-term debt
|
|
-
|
|
|
299,438
|
|
|
Total current liabilities
|
|
360,126
|
|
|
637,989
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
13,822
|
|
|
9,061
|
|
|
Deferred revenue
|
|
53,235
|
|
|
40,281
|
|
|
Other long term liabilities
|
|
2,427
|
|
|
1,211
|
|
|
Long-term debt
|
|
1,078,611
|
|
|
873,332
|
|
|
Total non-current liabilities
|
|
1,148,095
|
|
|
923,885
|
|
|
Total liabilities
|
|
1,508,221
|
|
|
1,561,874
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
Common stock
|
|
569
|
|
|
563
|
|
|
Additional paid-in capital
|
|
1,379,130
|
|
|
1,303,238
|
|
|
Retained earnings
|
|
2,316,237
|
|
|
2,160,299
|
|
|
Treasury stock
|
|
(1,546,611)
|
|
|
(1,546,611)
|
|
|
Accumulated other comprehensive income
|
|
(189,059)
|
|
|
(222,658)
|
|
|
Total stockholders' equity
|
$
|
1,960,266
|
|
$
|
1,694,831
|
|
|
Total liabilities and stockholders' equity
|
$
|
3,468,487
|
|
$
|
3,256,705
|
|
|
ResMed Inc And Subsidiaries
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
|
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
342,284
|
|
$
|
352,409
|
|
|
Adjustment to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
112,157
|
|
|
86,849
|
|
|
Impairment of long-lived asset
|
|
-
|
|
|
2,815
|
|
|
Stock-based compensation costs
|
|
45,925
|
|
|
46,408
|
|
|
Changes in fair value of business combination contingent
consideration
|
|
10,076
|
|
|
(2,986)
|
|
|
Payment of business combination contingent consideration
|
|
(8,460)
|
|
|
-
|
|
|
Impairment of cost-method investments
|
|
1,955
|
|
|
750
|
|
|
Changes in operating assets and liabilities, net of effect of
acquisitions:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
(63,604)
|
|
|
(27,307)
|
|
|
Inventories, net
|
|
(41,599)
|
|
|
30,492
|
|
|
Prepaid expenses, net deferred income taxes and other current
assets
|
|
(19,257)
|
|
|
12,121
|
|
|
Accounts payable, accrued expenses and other
|
|
34,576
|
|
|
46,382
|
|
|
Net cash provided by operating activities
|
|
414,053
|
|
|
547,933
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
(62,219)
|
|
|
(58,534)
|
|
|
Patent registration costs
|
|
(9,257)
|
|
|
(9,295)
|
|
|
Business acquisitions, net of cash acquired
|
|
(7,274)
|
|
|
(1,041,864)
|
|
|
Investments in cost-method investments
|
|
(6,464)
|
|
|
(8,965)
|
|
|
Proceeds from sale of business
|
|
-
|
|
|
468
|
|
|
Proceeds / (Payments) on maturity of foreign currency contracts
|
|
3,324
|
|
|
(7,564)
|
|
|
Net cash used in investing activities
|
|
(81,890)
|
|
|
(1,125,754)
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net
|
|
30,161
|
|
|
27,694
|
|
|
Purchases of treasury stock
|
|
-
|
|
|
(102,058)
|
|
|
Payment of business combination contingent consideration
|
|
(11,682)
|
|
|
(1,228)
|
|
|
Proceeds from borrowings, net of borrowing costs
|
|
450,000
|
|
|
1,140,000
|
|
|
Repayment of borrowings
|
|
(545,000)
|
|
|
(283,694)
|
|
|
Dividends paid
|
|
(186,346)
|
|
|
(168,130)
|
|
|
Net cash (used in) / provided by financing activities
|
|
(262,867)
|
|
|
612,584
|
|
|
Effect of exchange rate changes on cash
|
|
21,205
|
|
|
(20,578)
|
|
|
Net increase / (decrease) in cash and cash equivalents
|
|
90,501
|
|
|
14,185
|
|
|
Cash and cash equivalents at beginning of period
|
|
731,434
|
|
|
717,249
|
|
|
Cash and cash equivalents at end of period
|
$
|
821,935
|
|
$
|
731,434
|
|
|
Reconciliation of Non-GAAP Financial Measures (Unaudited)
|
|
(In US$ thousands, except share and per share data)
|
|
|
The measure, "non-GAAP income from operations" is reconciled with GAAP
income from operations below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
GAAP income from operations
|
$
|
127,361
|
|
$
|
118,637
|
|
$
|
425,798
|
|
$
|
428,952
|
|
|
Deferred revenue fair value adjustment (A)
|
|
-
|
|
|
2,332
|
|
|
-
|
|
|
2,332
|
|
|
SERVE-HF accrual release (A)
|
|
-
|
|
|
(402)
|
|
|
-
|
|
|
(2,804)
|
|
|
Astral battery field safety notification expenses
(A)
|
|
-
|
|
|
-
|
|
|
5,070
|
|
|
-
|
|
|
Restructuring expenses (A)
|
|
-
|
|
|
-
|
|
|
12,358
|
|
|
6,914
|
|
|
Litigation settlement expenses (A)
|
|
-
|
|
|
-
|
|
|
8,500
|
|
|
-
|
|
|
Acquisition related expenses (A)
|
|
-
|
|
|
1,914
|
|
|
10,076
|
|
|
5,464
|
|
|
Amortization of acquired intangible assets (A)
|
|
11,769
|
|
|
12,629
|
|
|
46,578
|
|
|
23,923
|
|
|
Non-GAAP income from operations
|
$
|
139,130
|
|
$
|
135,110
|
|
$
|
508,380
|
|
$
|
464,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The measures "non-GAAP net income" and "non-GAAP diluted earnings per
share" are reconciled with GAAP net income and GAAP diluted earnings per share in the table below:
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
GAAP net income
|
$
|
101,613
|
|
$
|
83,126
|
|
$
|
342,284
|
|
$
|
352,409
|
|
|
Deferred revenue fair value adjustment (A)
|
|
-
|
|
|
1,478
|
|
|
-
|
|
|
1,478
|
|
|
SERVE-HF accrual release, net of tax (A)
|
|
-
|
|
|
(281)
|
|
|
-
|
|
|
(1,963)
|
|
|
Astral battery field safety notification expenses
(A)
|
|
-
|
|
|
-
|
|
|
3,549
|
|
|
-
|
|
|
Restructuring expenses, net of tax (A)
|
|
-
|
|
|
-
|
|
|
8,295
|
|
|
5,204
|
|
|
Litigation settlement expenses, net of tax (A)
|
|
-
|
|
|
-
|
|
|
5,392
|
|
|
-
|
|
|
Acquisition related expenses (A)
|
|
-
|
|
|
1,393
|
|
|
10,076
|
|
|
4,943
|
|
|
Amortization of acquired intangible assets, net of tax
(A)
|
|
7,999
|
|
|
8,794
|
|
|
31,679
|
|
|
17,366
|
|
|
Cumulative ASU 2016-09 income tax benefit not reflected in the quarter
ended June 30, 2016 (A)
|
|
-
|
|
|
9,905
|
|
|
-
|
|
|
-
|
|
|
Non-GAAP net income (A)
|
$
|
109,612
|
|
$
|
104,415
|
|
$
|
401,275
|
|
$
|
379,437
|
|
|
Diluted shares outstanding
|
|
143,119
|
|
|
141,654
|
|
|
142,453
|
|
|
141,669
|
|
|
GAAP diluted earnings per share
|
$
|
0.71
|
|
$
|
0.59
|
|
$
|
2.40
|
|
$
|
2.49
|
|
|
Non-GAAP diluted earnings per share (A)
|
$
|
0.77
|
|
$
|
0.74
|
|
$
|
2.82
|
|
$
|
2.68
|
|
|
|
|
(A)
|
ResMed adjusts for the impact of the Astral battery field safety
notification expenses, release of SERVE-HF accrual, restructuring expenses, litigation settlement expenses, one-time
deferred revenue fair value adjustment acquisition related expenses and amortization of acquired intangible assets from
their evaluation of ongoing operations and believes investors benefit from adjusting these items to facilitate a more
meaningful evaluation of current operating performance.
|
|
|
|
ResMed believes that non-GAAP diluted earnings per share is an additional
measure of performance investors can use to compare operating results between reporting periods. ResMed uses non-GAAP
information internally in planning, forecasting, and evaluating the results of operations in the current period and in
comparing it to past periods. ResMed believes this information provides investors better insight in evaluating ResMed's
performance from core operations and provides consistent financial reporting. Our use of non-GAAP measures is intended to
supplement, and not to replace, our presentation of net income and other GAAP measures. Like all non-GAAP measures,
non-GAAP earnings are subject to inherent limitations because they do not include all the expenses that must be included
under GAAP.
|
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SOURCE ResMed Inc.