SAN DIEGO, Jan. 23, 2017 /PRNewswire/ -- ResMed Inc.
(NYSE: RMD) today announced results for its quarter ended
December 31, 2016. Revenue for the
quarter was $530.4 million, a 17
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 $496.6 million, a 9 percent
increase.
"We had a strong quarter with 18 percent constant currency
revenue growth led by solid growth in our Brightree software
offerings and global device sales," said Mick Farrell, ResMed's chief executive officer.
"We continue to pioneer game-changing products and create value
with our solutions. This quarter we announced: FDA clearance for
the world's smallest travel CPAP; the creation of SleepScore Labs
to focus on consumer sleep wellness; reaching the milestone of one
billion nights of sleep data; and new research demonstrating that
the use of myAir™ significantly improves patient adherence to sleep
therapy in Europe."
Farrell concluded, "We are focused on our goal of changing the
lives of 20 million patients by 2020 and we continue to lead the
industry through an exciting pipeline of new products and connected
care solutions that improve patient outcomes, create efficiencies
for our homecare customers, and help physicians and providers
better manage chronic disease and lower healthcare costs."
Analysis of second quarter results
Second
quarter revenue in the Americas was $326.8
million, a 21 percent increase over the same period of the
prior year. This included Brightree revenue of $33.8 million. Excluding Brightree, revenue in
the Americas was $293.0 million, a 9
percent increase over the prior year. Revenue in combined EMEA and
APAC was $203.6 million, an increase
of 13 percent on a constant currency basis, compared to the same
period of the prior year.
Gross margin in the second quarter was 58.3 percent, higher than
the prior year's quarter gross margin of 58.1 percent, excluding
the prior year release of $2.4
million in accrued expenses associated with the SERVE-HF
field safety notice. The improvement in gross margin compared to
prior year's quarter was due to manufacturing and procurement
efficiencies and an incremental contribution from the Brightree
acquisition, partly offset by changes in product mix and declines
in average selling prices.
Income from operations for the quarter was $96.9 million, a 10 percent decline compared with
the quarter ended December 31, 2015.
Non-GAAP income from operations for the quarter was $131.6 million, a 13 percent increase compared to
the same period of the prior year.
Selling, general and administrative expenses were $139.3 million, an 18 percent increase over the
same period in the prior year, also an 18 percent increase on a
constant currency basis. SG&A expenses increased to 26.3
percent of revenue in the quarter, compared with 26.0 percent
reported in the quarter ended December
31, 2015.
Research and development expenses were $38.2 million, or 7.2 percent of revenue. R&D
expenses increased by 32 percent compared with the same period last
year, or a 28 percent increase on a constant currency basis.
Amortization of acquired intangible assets was $11.7 million during the quarter, an increase of
$7.3 million compared with the same
period last year. The increase in amortization of acquired
intangible assets was primarily due to the amortization expense
associated with the Brightree and Inova acquisitions.
Stock-based compensation costs incurred during the quarter of
$10.8 million consisted of expenses
associated with employee equity grants, and our employee stock
purchase plan.
Net income for the quarter was $76.7
million, a 20 percent decrease compared to the same period
of the prior year. Non-GAAP net income was $103.3 million, a 1 percent increase compared to
the prior year.
Non-GAAP measures adjust for amortization of acquired
intangibles, litigation settlement expenses, acquisition related
expenses associated with additional contingent consideration on
recent acquisitions and restructuring expenses.
GAAP diluted earnings per share for the quarter decreased 21
percent to $0.54. Non-GAAP
diluted earnings per share of $0.73
were consistent with the same period of the prior year.
Cash flow from operations for the quarter was $119.9 million compared to net income in the
current quarter of $76.7 million.
Dividend program
The ResMed board of directors
today declared a quarterly cash dividend of $0.33 per share. The dividend will have a record
date of February 9, 2017, payable on
March 16, 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
February 8, 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 February 7, 2017 through
February 9, 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 "Q2 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 855-859-2056 (U.S.) and +1 404-537-3406
(international) and entering a passcode of 40778584. The telephone
replay will be available until February 6,
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 2 million patients remotely monitored every day. Our
5,000-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 100 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
December
31,
|
Six Months
Ended
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Net
revenue
|
$530,397
|
$454,540
|
$995,846
|
$866,187
|
Cost of
sales
|
221,326
|
190,433
|
412,522
|
363,461
|
Astral field safety
notification expenses (1)
|
-
|
-
|
5,070
|
-
|
SERVE-HF accrual
release (1)
|
-
|
(2,402)
|
-
|
(2,402)
|
Gross
profit
|
309,071
|
266,509
|
578,254
|
505,128
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling, general and
administrative
|
139,307
|
118,219
|
268,158
|
229,314
|
Research and
development
|
38,190
|
28,970
|
72,637
|
56,162
|
Restructuring
expenses (1)
|
4,413
|
6,914
|
4,413
|
6,914
|
Litigation settlement
expenses (1)
|
8,500
|
-
|
8,500
|
-
|
Acquisition related
expenses (1)
|
10,076
|
-
|
10,076
|
-
|
Amortization of
acquired intangible assets (1)
|
11,690
|
4,429
|
23,431
|
6,736
|
Total operating
expenses
|
212,176
|
158,532
|
387,215
|
299,126
|
Income from
operations (1)
|
96,895
|
107,977
|
191,039
|
206,002
|
|
|
|
|
|
Other income
(expenses), net:
|
|
|
|
|
Interest income
(expense), net
|
(2,437)
|
2,476
|
(4,929)
|
5,898
|
Other, net
|
1,749
|
3,242
|
3,021
|
1,239
|
Total other income
(expenses), net
|
(688)
|
5,718
|
(1,908)
|
7,137
|
Income before income
taxes
|
96,207
|
113,695
|
189,131
|
213,139
|
Income taxes excluding
ASU 2016-09 (2)
|
19,439
|
23,178
|
38,735
|
42,220
|
Income taxes relating
to ASU 2016-09 (2)
|
25
|
(5,059)
|
(2,453)
|
(7,574)
|
Total income
taxes
|
19,464
|
18,119
|
36,282
|
34,646
|
Net income
(1)
|
$76,743
|
$95,576
|
$152,849
|
$178,493
|
|
|
|
|
|
Basic earnings per
share
|
$0.54
|
$0.68
|
$1.08
|
$1.27
|
Diluted earnings per
share
|
$0.54
|
$0.68
|
$1.08
|
$1.26
|
Non-GAAP diluted
earnings per share (1)
|
$0.73
|
$0.73
|
$1.34
|
$1.32
|
|
|
|
|
|
Basic shares
outstanding
|
141,310
|
139,926
|
141,048
|
140,118
|
Diluted shares
outstanding
|
142,097
|
141,423
|
141,982
|
141,837
|
|
|
|
|
|
|
|
(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 six months
ended December 31, 2015 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)
|
|
|
December
31,
|
June 30,
|
|
2016
|
2016
|
ASSETS:
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$788,146
|
$731,434
|
Accounts receivable,
net
|
383,992
|
382,086
|
Inventories
|
253,108
|
224,456
|
Prepayments and other
current assets
|
95,028
|
81,743
|
Total current
assets
|
1,520,274
|
1,419,719
|
Property, plant and
equipment, net
|
375,928
|
384,276
|
Goodwill
|
1,046,304
|
1,059,245
|
Other intangibles,
net
|
275,422
|
299,808
|
Deferred income taxes
and other non-current assets
|
104,642
|
93,657
|
Total non-current
assets
|
1,802,296
|
1,836,986
|
Total
assets
|
$3,322,570
|
$3,256,705
|
LIABILITIES AND
STOCKHOLDERS' EQUITY:
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$94,100
|
$92,571
|
Accrued
expenses
|
216,225
|
156,805
|
Deferred
revenue
|
46,389
|
50,009
|
Income taxes
payable
|
25,869
|
39,166
|
Short-term
debt
|
299,812
|
299,438
|
Total current
liabilities
|
682,395
|
637,989
|
Non-current
liabilities:
|
|
|
Deferred income
taxes
|
13,789
|
9,061
|
Deferred
revenue
|
46,682
|
40,281
|
Other long term
liabilities
|
864
|
1,211
|
Long-term
debt
|
868,690
|
873,332
|
Total non-current
liabilities
|
930,025
|
923,885
|
Total
liabilities
|
1,612,420
|
1,561,874
|
STOCKHOLDERS'
EQUITY:
|
|
|
Common
stock
|
566
|
563
|
Additional paid-in
capital
|
1,335,895
|
1,303,238
|
Retained
earnings
|
2,220,283
|
2,160,299
|
Treasury
stock
|
(1,546,611)
|
(1,546,611)
|
Accumulated other
comprehensive income
|
(299,983)
|
(222,658)
|
Total stockholders'
equity
|
$1,710,150
|
$1,694,831
|
|
|
|
Total liabilities and
stockholders' equity
|
$3,322,570
|
$3,256,705
|
|
|
|
RESMED INC AND
SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows (Unaudited - In
thousands)
|
|
|
Six Months
Ended
December
31,
|
|
2016
|
2015
|
Cash flows from
operating activities:
|
|
|
Net income
|
$152,849
|
$178,493
|
Adjustment to
reconcile net income to cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
55,504
|
39,920
|
Impairment of
long-lived asset
|
-
|
2,815
|
Stock-based
compensation costs
|
22,802
|
23,841
|
Changes in fair value
of business combination contingent consideration
|
10,076
|
-
|
Impairment of
cost-method investments
|
206
|
750
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
Accounts receivable,
net
|
(7,080)
|
24,533
|
Inventories,
net
|
(36,104)
|
8,751
|
Prepaid expenses, net
deferred income taxes and other current assets
|
(15,197)
|
14,398
|
Accounts payable,
accrued expenses and other
|
23,086
|
(13,279)
|
Net cash provided by
operating activities
|
206,142
|
280,222
|
Cash flows from
investing activities:
|
|
|
Purchases of
property, plant and equipment
|
(29,247)
|
(30,934)
|
Patent registration
costs
|
(4,603)
|
(4,902)
|
Business
acquisitions, net of cash acquired
|
(3,184)
|
(152,118)
|
Investments in
cost-method investments
|
(3,867)
|
(7,582)
|
Proceeds / (Payments)
on maturity of foreign currency contracts
|
8,209
|
(28,326)
|
Net cash used in
investing activities
|
(32,692)
|
(223,862)
|
Cash flows from
financing activities:
|
|
|
Proceeds from
issuance of common stock, net
|
9,816
|
8,066
|
Purchases of treasury
stock
|
-
|
(102,058)
|
Payment of business
combination contingent consideration
|
-
|
(1,120)
|
Proceeds from
borrowings, net of borrowing costs
|
75,000
|
200,000
|
Repayment of
borrowings
|
(80,000)
|
(100,160)
|
Dividends
paid
|
(92,865)
|
(84,054)
|
Net cash (used in) /
provided by financing activities
|
(88,049)
|
(79,326)
|
Effect of exchange
rate changes on cash
|
(28,689)
|
(35,479)
|
Net increase /
(decrease) in cash and cash equivalents
|
56,712
|
(58,445)
|
Cash and cash
equivalents at beginning of period
|
731,434
|
717,249
|
Cash and cash
equivalents at end of period
|
$788,146
|
$658,804
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited) (In US$ 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
December
31
|
Six Months
Ended
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
GAAP income from
operations
|
$96,895
|
$107,977
|
$191,039
|
$206,002
|
SERVE-HF accrual
release (A)
|
-
|
(2,402)
|
-
|
(2,402)
|
Astral battery field
safety notification expenses (A)
|
-
|
-
|
5,070
|
-
|
Restructuring
expenses (A)
|
4,413
|
6,914
|
4,413
|
6,914
|
Litigation settlement
expenses (A)
|
8,500
|
-
|
8,500
|
-
|
Acquisition related
expenses (A)
|
10,076
|
-
|
10,076
|
-
|
Amortization of
acquired intangible assets (A)
|
11,690
|
4,429
|
23,431
|
6,736
|
Non-GAAP income from
operations
|
$131,574
|
$116,918
|
$242,529
|
$217,250
|
|
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
December
31,
|
Six Months
Ended
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
GAAP net
income
|
$76,743
|
$95,576
|
$152,849
|
$178,493
|
SERVE-HF accrual
release, net of tax (A)
|
-
|
(1,682)
|
-
|
(1,682)
|
Astral battery field
safety notification expenses (A)
|
-
|
-
|
3,549
|
-
|
Restructuring
expenses, net of tax (A)
|
3,085
|
5,204
|
3,085
|
5,204
|
Litigation settlement
expenses, net of tax (A)
|
5,392
|
-
|
5,392
|
-
|
Acquisition related
expenses (A)
|
10,076
|
-
|
10,076
|
-
|
Amortization of
acquired intangible assets, net of tax
(A)
|
7,968
|
3,439
|
15,975
|
5,156
|
Non-GAAP net income
(A)
|
$103,264
|
$102,537
|
$190,926
|
$187,171
|
Diluted shares
outstanding
|
142,097
|
141,423
|
141,982
|
141,837
|
GAAP diluted earnings
per share
|
$0.54
|
$0.68
|
$1.08
|
$1.26
|
Non-GAAP diluted
earnings per share (A)
|
$0.73
|
$0.73
|
$1.34
|
$1.32
|
(A)
|
ResMed adjusts for
the impact of the Astral battery field safety notification
expenses, release of SERVE-HF accrual, restructuring expenses,
litigation settlement expenses, 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.
|
Contacts:
|
|
For
Investors
|
For News
Media
|
Agnes
Lee
|
Alison
Graves
|
O:
858-836-5971
|
O:
858-836-6789
|
investorrelations@resmed.com
|
news@resmed.com
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/resmed-inc-announces-results-for-the-second-quarter-of-fiscal-year-2017-300394955.html
SOURCE ResMed Inc.