ResMed Inc. (NYSE: RMD, ASX: RMD) today announced results for its
quarter ended December 31, 2023.
Second Quarter 2024 HighlightsAll comparisons
are to the prior year period
- Revenue increased by
12% to $1.2 billion; up 11% on a constant currency basis
- Gross margin
contracted 50 bps to 55.6%; non-GAAP gross margin grew 10
bps to 56.9%
- Income from
operations decreased 2%; non-GAAP operating profit up
20%
- Operating cash flow
of $272.8 million
- Diluted earnings per share of
$1.42; non-GAAP diluted earnings per share of $1.88
“Our second-quarter fiscal year 2024 results reflect strong
double-digit growth across our combined device, masks and
accessories, and residential care software businesses, as well as
cost discipline to support an acceleration in profitability,” said
Mick Farrell, ResMed’s CEO. “We continue to expand the production
and delivery of our market-leading flow generator platforms, and we
are successfully launching our latest generation platform, AirSense
11, into new markets and geographies around the world. The strong
growth in patient flow we’ve seen over the past several quarters
has supported ongoing device growth, as well as augmented and
accelerated our replenishment programs for sustained mask and
accessories growth. Organic growth of our residential care software
business in home medical equipment, home health, home nursing, and
beyond, catalyzed by strategic acquisitions, continues to deliver
and complements our core mask and accessory business growth.
“As we look ahead, ResMed is well-positioned to lean into
leading the expansion and growth of sleep health and breathing
health. We are the clear leader in a very large and growing market;
I’m excited about ResMed’s future as we focus on delivering for our
stakeholders through product innovation, operational excellence,
and increasing brand awareness as we progress towards our goal of
improving 250 million lives in 2025.”
Financial Results and Operating
MetricsUnaudited; $ in millions, except for per share
amounts
| |
Three Months Ended |
| |
December 31,2023 |
|
December 31,2022 |
|
% Change |
|
ConstantCurrency (A) |
|
Revenue |
$ |
1,162.8 |
|
|
$ |
1,033.7 |
|
|
12 |
% |
|
11 |
% |
| Gross margin |
|
55.6 |
% |
|
|
56.1 |
% |
|
(1 |
) |
|
|
| Non-GAAP gross
margin (B) |
|
56.9 |
% |
|
|
56.8 |
% |
|
— |
|
|
|
| Selling, general, and
administrative expenses |
|
222.2 |
|
|
|
211.7 |
|
|
5 |
|
|
4 |
|
| Research and development
expenses |
|
73.9 |
|
|
|
69.9 |
|
|
6 |
|
|
6 |
|
| Income from operations |
|
275.1 |
|
|
|
280.2 |
|
|
(2 |
) |
|
|
| Non-GAAP income from
operations (B) |
|
365.5 |
|
|
|
305.5 |
|
|
20 |
|
|
|
| Net income |
|
208.8 |
|
|
|
224.9 |
|
|
(7 |
) |
|
|
| Non-GAAP net
income (B) |
|
277.3 |
|
|
|
244.4 |
|
|
13 |
|
|
|
| Diluted earnings per
share |
$ |
1.42 |
|
|
$ |
1.53 |
|
|
(7 |
) |
|
|
| Non-GAAP diluted earnings
per share (B) |
$ |
1.88 |
|
|
$ |
1.66 |
|
|
13 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Six Months Ended |
| |
December 31,2023 |
|
December 31,2022 |
|
% Change |
|
ConstantCurrency (A) |
|
Revenue |
$ |
2,265.1 |
|
|
$ |
1,984.0 |
|
|
14 |
% |
|
13 |
% |
| Gross margin |
|
55.1 |
% |
|
|
56.5 |
% |
|
(2 |
) |
|
|
| Non-GAAP gross
margin (B) |
|
56.4 |
% |
|
|
57.2 |
% |
|
(1 |
) |
|
|
| Selling, general, and
administrative expenses |
|
445.0 |
|
|
|
404.9 |
|
|
10 |
|
|
9 |
|
| Research and development
expenses |
|
149.6 |
|
|
|
133.1 |
|
|
12 |
|
|
13 |
|
| Income from operations |
|
564.1 |
|
|
|
555.9 |
|
|
1 |
|
|
|
| Non-GAAP income from
operations (B) |
|
684.3 |
|
|
|
596.3 |
|
|
15 |
|
|
|
| Net income |
|
428.2 |
|
|
|
435.4 |
|
|
(2 |
) |
|
|
| Non-GAAP net
income (B) |
|
518.5 |
|
|
|
466.5 |
|
|
11 |
|
|
|
| Diluted earnings per
share |
$ |
2.90 |
|
|
$ |
2.95 |
|
|
(2 |
) |
|
|
| Non-GAAP diluted earnings
per share (B) |
$ |
3.51 |
|
|
$ |
3.17 |
|
|
11 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
(A) In order to provide a framework for assessing how our
underlying businesses performed excluding, the effect of foreign
currency fluctuations, we provide certain financial information on
a “constant currency” basis, which is in addition to the actual
financial information presented. In order to calculate our constant
currency information, we translate the current period financial
information using the foreign currency exchange rates that were in
effect during the previous comparable period. However, constant
currency measures should not be considered in isolation or as an
alternative to U.S. dollar measures that reflect current period
exchange rates, or to other financial measures calculated and
presented in accordance with U.S. GAAP.
(B) See the reconciliation of non-GAAP financial
measures in the table at the end of the press release.
Discussion of Second Quarter ResultsAll
comparisons are to the prior year period unless otherwise noted
- Revenue grew by 11 percent on a constant currency basis,
driven by increased demand for our sleep devices, as well as strong
growth across our mask product portfolio.
- Revenue in the U.S., Canada, and Latin America, excluding
Software-as-a-Service, grew by 9 percent.
- Revenue in Europe, Asia, and other markets, excluding
Software-as-a-Service, grew by 12 percent on a constant
currency basis.
- Software-as-a-Service revenue increased by 24 percent,
reflecting incremental revenue from our acquisition of MEDIFOX DAN
and continued organic growth in our SaaS portfolio.
- Gross margin decreased by 50 basis points mainly due to costs
associated with a field safety notification for masks with magnets.
Non-GAAP gross margin increased by 10 basis points, primarily
due to reduced freight costs and favorable foreign currency
movements, partially offset by an unfavorable product mix and
component cost increases.
- Selling, general, and administrative expenses increased by
4 percent on a constant currency basis. SG&A expenses
improved to 19.1 percent of revenue in the quarter, compared
with 20.5 percent in the same period of the prior year. The
increase in SG&A expenses was mainly due to increases in
employee-related expenses and incremental expenses associated with
our acquisition of MEDIFOX DAN.
- We recorded $64.2 million of restructuring related charges
associated with an evaluation of our existing operations to
increase operational efficiency, decrease costs, and increase
profitability. Restructuring charges were comprised of $28.6
million of employee severance and other one-time termination
benefits, $33.2 million of intangible asset impairments associated
with the wind down of certain business activities, and $2.4 million
of other miscellaneous asset impairments.
- Income from operations decreased by 2 percent,
and non-GAAP income from operations increased by 20
percent.
- Net income for the quarter was $208.8 million and diluted
earnings per share was $1.42. Non-GAAP net income
increased by 13% to $277.3 million, and non-GAAP diluted
earnings per share increased by 13% to $1.88, predominantly
attributable to strong sales and modest growth of operating
expenses.
- Operating cash flow for the quarter was $272.8 million,
compared to net income in the current quarter of $208.8 million and
non-GAAP net income of $277.3 million.
- During the quarter, we paid $70.7 million in dividends and
repurchased 335,000 shares for consideration of $50 million as part
of our ongoing capital management.
Other Business and Operational Highlights
- Introduced a new operating model with three new global
leadership positions designed to accelerate long-term profitable
growth. Operating model evolution intended to increase the velocity
of product development and sharpen focus on customers and brand
through a Product-led, Customer-centric, and Brand-enhanced
organization. Justin Leong appointed Chief Product Officer, Katrin
Pucknat became Chief Marketing Officer, and Mike Fliss named Chief
Revenue Officer.
- Announced the retirement of Rob Douglas, former President and
Chief Operating Officer, effective January 1, 2024. Rob remains as
a consultant and advisor to the CEO through 2024.
- Announced the results of a study on the global burden of
Chronic Obstructive Pulmonary Disease (COPD) published in the
Journal of the American Medical Association (JAMA) Network Open.
The study estimates a 23% increase in COPD by 2050, representing
600 million patients globally, with disproportionate increases
expected in women (47%) and low- and middle-income countries
(32%).
- Successfully defended patent infringement complaint brought
against ResMed by New York University; a significant victory that
protects ResMed’s innovation and ongoing investments to provide
patients with leading therapy solutions.
Dividend programThe ResMed board of directors
today declared a quarterly cash dividend of $0.48 per share. The
dividend will have a record date of February 8, 2024, payable
on March 14, 2024. 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 Interests (“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. The ex-dividend date will be February 7,
2024, for common stockholders 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, 2024, through
February 8, 2024, inclusive.
Webcast detailsResMed will discuss its second
quarter fiscal year 2024 results 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
2024 Earnings Webcast” to register and listen to the live webcast.
A replay of the earnings webcast will be accessible on the website
and available approximately two hours after the live webcast. In
addition, a telephone replay of the conference call will be
available approximately three hours after the webcast by dialing
+1 877-660-6853 (U.S.) or
+1 201-612-7415 (outside U.S.) and entering the passcode
13743530. The telephone replay will be available until February 7,
2024.
About ResMedAt ResMed (NYSE: RMD, ASX: RMD) we
pioneer innovative solutions that treat and keep people out of the
hospital, empowering them to live healthier, higher-quality lives.
Our digital health technologies and cloud-connected medical devices
transform care for people with sleep apnea, COPD, and other chronic
diseases. Our comprehensive out-of-hospital software
platforms support the professionals and caregivers who help people
stay healthy in the home or care setting of their choice. By
enabling better care, we improve quality of life, reduce the impact
of chronic disease, and lower costs for consumers and healthcare
systems in more than 140 countries. To learn more,
visit ResMed.com and follow @ResMed.
Safe harbor statementStatements 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,
new markets for its products, the integration of acquisitions, our
supply chain, domestic and international regulatory developments,
litigation, tax outlook, and macroeconomic conditions of our
business – 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.
| For
investors |
For
media |
| +1 858-836-5000 |
+1 619-510-1281 |
|
investorrelations@resmed.com |
news@resmed.com |
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations(Unaudited; $ in thousands, except for per share
amounts)
| |
Three Months Ended |
|
Six Months Ended |
| |
December 31,2023 |
|
December 31,2022 |
|
December 31,2023 |
|
December 31,2022 |
| |
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,162,801 |
|
|
$ |
1,033,744 |
|
|
$ |
2,265,122 |
|
|
$ |
1,984,038 |
|
| |
|
|
|
|
|
|
|
| Cost of sales |
|
501,259 |
|
|
|
446,724 |
|
|
|
986,702 |
|
|
|
849,834 |
|
| Amortization of acquired
intangibles(1) |
|
8,257 |
|
|
|
7,305 |
|
|
|
17,164 |
|
|
|
13,680 |
|
| Masks with magnets field
safety notification expenses(1) |
|
6,351 |
|
|
|
— |
|
|
|
6,351 |
|
|
|
— |
|
| Astral field safety
notification expenses(1) |
|
— |
|
|
|
— |
|
|
|
7,911 |
|
|
|
— |
|
| Total cost of sales |
$ |
515,867 |
|
|
$ |
454,029 |
|
|
$ |
1,018,128 |
|
|
$ |
863,514 |
|
| Gross profit |
$ |
646,934 |
|
|
$ |
579,715 |
|
|
$ |
1,246,994 |
|
|
$ |
1,120,524 |
|
| |
|
|
|
|
|
|
|
| Selling, general, and
administrative |
|
222,155 |
|
|
|
211,672 |
|
|
|
445,029 |
|
|
|
404,860 |
|
| Research and development |
|
73,880 |
|
|
|
69,874 |
|
|
|
149,590 |
|
|
|
133,062 |
|
| Amortization of acquired
intangibles(1) |
|
11,577 |
|
|
|
9,563 |
|
|
|
24,056 |
|
|
|
17,513 |
|
| Restructuring expenses(1) |
|
64,228 |
|
|
|
— |
|
|
|
64,228 |
|
|
|
— |
|
| Acquisition related
expenses(1) |
|
— |
|
|
|
8,412 |
|
|
|
— |
|
|
|
9,157 |
|
| Total operating expenses |
$ |
371,840 |
|
|
$ |
299,521 |
|
|
$ |
682,903 |
|
|
$ |
564,592 |
|
| Income from operations |
$ |
275,094 |
|
|
$ |
280,194 |
|
|
$ |
564,091 |
|
|
$ |
555,932 |
|
| |
|
|
|
|
|
|
|
| Other income (expenses),
net: |
|
|
|
|
|
|
|
| Interest income (expense),
net |
$ |
(13,805 |
) |
|
$ |
(10,338 |
) |
|
$ |
(28,762 |
) |
|
$ |
(17,472 |
) |
| Gain (loss) attributable to
equity method investments |
|
739 |
|
|
|
(2,826 |
) |
|
|
(3,156 |
) |
|
|
(4,853 |
) |
| Gain (loss) on equity
investments(1) |
|
(1,888 |
) |
|
|
8,368 |
|
|
|
(2,491 |
) |
|
|
5,088 |
|
| Other, net |
|
(686 |
) |
|
|
(1,707 |
) |
|
|
1,963 |
|
|
|
(3,211 |
) |
| Total other income (expenses),
net |
|
(15,640 |
) |
|
|
(6,503 |
) |
|
|
(32,446 |
) |
|
|
(20,448 |
) |
| Income before income
taxes |
$ |
259,454 |
|
|
$ |
273,691 |
|
|
$ |
531,645 |
|
|
$ |
535,484 |
|
| Income taxes |
|
50,654 |
|
|
|
48,777 |
|
|
|
103,423 |
|
|
|
100,092 |
|
| Net income |
$ |
208,800 |
|
|
$ |
224,914 |
|
|
$ |
428,222 |
|
|
$ |
435,392 |
|
| |
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
1.42 |
|
|
$ |
1.53 |
|
|
$ |
2.91 |
|
|
$ |
2.97 |
|
| Diluted earnings per
share |
$ |
1.42 |
|
|
$ |
1.53 |
|
|
$ |
2.90 |
|
|
$ |
2.95 |
|
| Non-GAAP diluted earnings
per share(1) |
$ |
1.88 |
|
|
$ |
1.66 |
|
|
$ |
3.51 |
|
|
$ |
3.17 |
|
| |
|
|
|
|
|
|
|
| Basic shares outstanding |
|
147,132 |
|
|
|
146,704 |
|
|
|
147,104 |
|
|
|
146,568 |
|
| Diluted shares
outstanding |
|
147,545 |
|
|
|
147,405 |
|
|
|
147,572 |
|
|
|
147,367 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the reconciliation of non-GAAP financial
measures in the table at the end of the press release.
Condensed Consolidated Balance
Sheets(Unaudited; $ in thousands)
| |
December 31,2023 |
|
June 30,2023 |
| Assets |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
210,247 |
|
|
$ |
227,891 |
|
|
Accounts receivable, net |
|
729,740 |
|
|
|
704,909 |
|
|
Inventories |
|
933,214 |
|
|
|
998,012 |
|
|
Prepayments and other current assets |
|
504,876 |
|
|
|
437,018 |
|
| Total current assets |
$ |
2,378,077 |
|
|
$ |
2,367,830 |
|
| Non-current assets: |
|
|
|
|
Property, plant, and equipment, net |
$ |
551,734 |
|
|
$ |
537,856 |
|
|
Operating lease right-of-use assets |
|
153,473 |
|
|
|
127,955 |
|
|
Goodwill and other intangibles, net |
|
3,390,032 |
|
|
|
3,322,640 |
|
|
Deferred income taxes and other non-current assets |
|
431,772 |
|
|
|
395,427 |
|
|
Total non-current assets |
$ |
4,527,011 |
|
|
$ |
4,383,878 |
|
| Total assets |
$ |
6,905,088 |
|
|
$ |
6,751,708 |
|
| Liabilities and
Stockholders’ Equity |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
202,395 |
|
|
$ |
150,756 |
|
|
Accrued expenses |
|
332,136 |
|
|
|
365,660 |
|
|
Operating lease liabilities, current |
|
24,057 |
|
|
|
21,919 |
|
|
Deferred revenue |
|
148,897 |
|
|
|
138,072 |
|
|
Income taxes payable |
|
46,690 |
|
|
|
72,224 |
|
|
Short-term debt |
|
9,898 |
|
|
|
9,902 |
|
| Total current liabilities |
$ |
764,073 |
|
|
$ |
758,533 |
|
|
Non-current liabilities: |
|
|
|
|
Deferred revenue |
$ |
127,410 |
|
|
$ |
119,186 |
|
|
Deferred income taxes |
|
89,282 |
|
|
|
90,650 |
|
|
Operating lease liabilities, non-current |
|
140,649 |
|
|
|
116,853 |
|
|
Other long-term liabilities |
|
72,894 |
|
|
|
68,166 |
|
|
Long-term debt |
|
1,216,769 |
|
|
|
1,431,234 |
|
|
Long-term income taxes payable |
|
12,157 |
|
|
|
37,183 |
|
|
Total non-current liabilities |
$ |
1,659,161 |
|
|
$ |
1,863,272 |
|
| Total liabilities |
$ |
2,423,234 |
|
|
$ |
2,621,805 |
|
| Stockholders’ equity |
|
|
|
|
Common stock |
$ |
588 |
|
|
$ |
588 |
|
|
Additional paid-in capital |
|
1,822,918 |
|
|
|
1,772,083 |
|
|
Retained earnings |
|
4,539,963 |
|
|
|
4,253,016 |
|
|
Treasury stock |
|
(1,673,263 |
) |
|
|
(1,623,256 |
) |
|
Accumulated other comprehensive income |
|
(208,352 |
) |
|
|
(272,528 |
) |
| Total stockholders’
equity |
$ |
4,481,854 |
|
|
$ |
4,129,903 |
|
| Total liabilities and
stockholders’ equity |
$ |
6,905,088 |
|
|
$ |
6,751,708 |
|
| |
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows(Unaudited; $ in thousands)
| |
Three Months Ended |
|
Six Months Ended |
| |
December 31,2023 |
|
December 31,2022 |
|
December 31,2023 |
|
December 31,2022 |
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net income |
$ |
208,800 |
|
|
$ |
224,914 |
|
|
$ |
428,222 |
|
|
$ |
435,392 |
|
| Adjustment to reconcile net
income to cash provided by operating activities: |
|
|
|
|
|
|
|
| Depreciation and
amortization |
|
44,784 |
|
|
|
37,767 |
|
|
|
89,718 |
|
|
|
74,040 |
|
| Amortization
of right-of-use assets |
|
8,586 |
|
|
|
7,772 |
|
|
|
17,094 |
|
|
|
15,533 |
|
| Stock-based compensation
costs |
|
19,840 |
|
|
|
16,464 |
|
|
|
38,350 |
|
|
|
33,383 |
|
| (Gain) loss attributable to
equity method investments, net of dividends received |
|
(739 |
) |
|
|
2,826 |
|
|
|
3,156 |
|
|
|
4,853 |
|
| (Gain) loss on equity
investments |
|
1,888 |
|
|
|
(8,368 |
) |
|
|
2,491 |
|
|
|
(5,088 |
) |
| Non-cash restructuring
expenses |
|
33,239 |
|
|
|
— |
|
|
|
33,239 |
|
|
|
— |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
| Accounts receivable, net |
|
(26,802 |
) |
|
|
(19,585 |
) |
|
|
(20,269 |
) |
|
|
(75,823 |
) |
| Inventories, net |
|
50,184 |
|
|
|
(86,020 |
) |
|
|
77,095 |
|
|
|
(233,116 |
) |
| Prepaid expenses, net deferred
income taxes and other current assets |
|
(32,575 |
) |
|
|
(29,862 |
) |
|
|
(74,590 |
) |
|
|
(66,646 |
) |
| Accounts payable, accrued
expenses, income taxes payable and other |
|
(34,373 |
) |
|
|
(17,271 |
) |
|
|
(35,391 |
) |
|
|
(9,230 |
) |
| Net cash provided by operating
activities |
$ |
272,832 |
|
|
$ |
128,637 |
|
|
$ |
559,115 |
|
|
$ |
173,298 |
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
| Purchases of property, plant,
and equipment |
|
(23,353 |
) |
|
|
(27,350 |
) |
|
|
(53,388 |
) |
|
|
(56,406 |
) |
| Patent registration and
acquisition costs |
|
(1,205 |
) |
|
|
(4,320 |
) |
|
|
(12,036 |
) |
|
|
(7,636 |
) |
| Business acquisitions, net of
cash acquired |
|
(7,504 |
) |
|
|
(992,125 |
) |
|
|
(110,688 |
) |
|
|
(1,011,225 |
) |
| Purchases of investments |
|
(3,625 |
) |
|
|
(12,841 |
) |
|
|
(7,305 |
) |
|
|
(17,132 |
) |
| Proceeds from exits of
investments |
|
— |
|
|
|
— |
|
|
|
250 |
|
|
|
— |
|
| (Payments) / proceeds on
maturity of foreign currency contracts |
|
(5,456 |
) |
|
|
10,223 |
|
|
|
(6,956 |
) |
|
|
7,181 |
|
| Net cash used in investing
activities |
$ |
(41,143 |
) |
|
$ |
(1,026,413 |
) |
|
$ |
(190,123 |
) |
|
$ |
(1,085,218 |
) |
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
| Proceeds from issuance of
common stock, net |
|
19,524 |
|
|
|
22,056 |
|
|
|
20,507 |
|
|
|
24,666 |
|
| Purchases of treasury
stock |
|
(50,007 |
) |
|
|
— |
|
|
|
(50,007 |
) |
|
|
— |
|
| Taxes paid related to net
share settlement of equity awards |
|
(7,797 |
) |
|
|
(29,654 |
) |
|
|
(8,022 |
) |
|
|
(29,713 |
) |
| Payments of business
combination contingent consideration |
|
— |
|
|
|
— |
|
|
|
(1,293 |
) |
|
|
— |
|
| Proceeds from borrowings, net
of borrowing costs |
|
— |
|
|
|
1,020,000 |
|
|
|
105,000 |
|
|
|
1,070,000 |
|
| Repayment of borrowings |
|
(130,000 |
) |
|
|
(15,000 |
) |
|
|
(315,000 |
) |
|
|
(45,000 |
) |
| Dividends paid |
|
(70,678 |
) |
|
|
(64,500 |
) |
|
|
(141,275 |
) |
|
|
(128,931 |
) |
| Net cash (used in) / provided
by financing activities |
$ |
(238,958 |
) |
|
$ |
932,902 |
|
|
$ |
(390,090 |
) |
|
$ |
891,022 |
|
| Effect of exchange rate
changes on cash |
$ |
8,416 |
|
|
$ |
10,910 |
|
|
$ |
3,454 |
|
|
$ |
387 |
|
| Net increase / (decrease) in
cash and cash equivalents |
|
1,147 |
|
|
|
46,036 |
|
|
|
(17,644 |
) |
|
|
(20,511 |
) |
| Cash and cash equivalents at
beginning of period |
|
209,100 |
|
|
|
207,163 |
|
|
|
227,891 |
|
|
|
273,710 |
|
| Cash and cash
equivalents at end of period |
$ |
210,247 |
|
|
$ |
253,199 |
|
|
$ |
210,247 |
|
|
$ |
253,199 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited; $ in thousands, except for per share
amounts)
The measures “non-GAAP gross profit”
and “non-GAAP gross margin” exclude amortization expense
from acquired intangibles and restructuring expense related to cost
of sales and are reconciled below:
| |
Three Months Ended |
|
Six Months Ended |
| |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
|
|
|
|
|
Revenue |
$ |
1,162,801 |
|
|
$ |
1,033,744 |
|
|
$ |
2,265,122 |
|
|
$ |
1,984,038 |
|
| |
|
|
|
|
|
|
|
| GAAP cost of sales |
$ |
515,867 |
|
|
$ |
454,029 |
|
|
$ |
1,018,128 |
|
|
$ |
863,514 |
|
| Less:Amortization of acquired
intangibles(A) |
|
(8,257 |
) |
|
|
(7,305 |
) |
|
|
(17,164 |
) |
|
|
(13,680 |
) |
| Less: Masks with magnets field
safety notification expenses(A) |
|
(6,351 |
) |
|
|
— |
|
|
|
(6,351 |
) |
|
|
— |
|
| Less: Astral field safety
notification expenses(A) |
|
— |
|
|
|
— |
|
|
|
(7,911 |
) |
|
|
— |
|
| Non-GAAP cost of
sales |
$ |
501,259 |
|
|
$ |
446,724 |
|
|
$ |
986,702 |
|
|
$ |
849,834 |
|
| |
|
|
|
|
|
|
|
| GAAP gross profit |
$ |
646,934 |
|
|
$ |
579,715 |
|
|
$ |
1,246,994 |
|
|
$ |
1,120,524 |
|
| GAAP gross margin |
|
55.6 |
% |
|
|
56.1 |
% |
|
|
55.1 |
% |
|
|
56.5 |
% |
| Non-GAAP gross
profit |
$ |
661,542 |
|
|
$ |
587,020 |
|
|
$ |
1,278,420 |
|
|
$ |
1,134,204 |
|
| Non-GAAP gross
margin |
|
56.9 |
% |
|
|
56.8 |
% |
|
|
56.4 |
% |
|
|
57.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The measure “non-GAAP income from operations” is
reconciled with GAAP income from operations below:
| |
Three Months Ended |
|
Six Months Ended |
| |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
|
|
|
|
|
GAAP income from operations |
$ |
275,094 |
|
$ |
280,194 |
|
$ |
564,091 |
|
$ |
555,932 |
| Amortization of acquired
intangibles—cost of sales (A) |
|
8,257 |
|
|
7,305 |
|
|
17,164 |
|
|
13,680 |
| Amortization of acquired
intangibles—operating expenses (A) |
|
11,577 |
|
|
9,563 |
|
|
24,056 |
|
|
17,513 |
| Restructuring (A) |
|
64,228 |
|
|
— |
|
|
64,228 |
|
|
— |
| Masks with magnets field safety
notification expenses (A) |
|
6,351 |
|
|
— |
|
|
6,351 |
|
|
— |
| Astral field safety notification
expenses (A) |
|
— |
|
|
— |
|
|
7,911 |
|
|
— |
| Acquisition-related
expenses (A) |
|
— |
|
|
8,412 |
|
|
483 |
|
|
9,157 |
| Non-GAAP income from
operations |
$ |
365,507 |
|
$ |
305,474 |
|
$ |
684,284 |
|
$ |
596,282 |
| |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited; $ in thousands, except for per share
amounts)
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 |
|
Six Months Ended |
| |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
| |
|
|
|
|
|
|
|
|
GAAP net income |
$ |
208,800 |
|
|
$ |
224,914 |
|
|
$ |
428,222 |
|
|
$ |
435,392 |
|
| Amortization of acquired
intangibles—cost of sales(A) |
|
8,257 |
|
|
|
7,305 |
|
|
|
17,164 |
|
|
|
13,680 |
|
| Amortization of acquired
intangibles—operating expenses(A) |
|
11,577 |
|
|
|
9,563 |
|
|
|
24,056 |
|
|
|
17,513 |
|
| Restructuring expenses(A) |
|
64,228 |
|
|
|
— |
|
|
|
64,228 |
|
|
|
— |
|
| Masks with magnets field safety
notification expenses(A) |
|
6,351 |
|
|
|
— |
|
|
|
6,351 |
|
|
|
— |
|
| Astral field safety notification
expenses(A) |
|
— |
|
|
|
— |
|
|
|
7,911 |
|
|
|
— |
|
| Acquisition-related
expenses(A) |
|
— |
|
|
|
8,412 |
|
|
|
483 |
|
|
|
9,157 |
|
| Income tax effect on non-GAAP
adjustments(A) |
|
(21,868 |
) |
|
|
(5,812 |
) |
|
|
(29,886 |
) |
|
|
(9,272 |
) |
| Non-GAAP net income(A) |
$ |
277,345 |
|
|
$ |
244,382 |
|
|
$ |
518,529 |
|
|
$ |
466,470 |
|
| |
|
|
|
|
|
|
|
| GAAP diluted shares
outstanding |
|
147,545 |
|
|
|
147,405 |
|
|
|
147,572 |
|
|
|
147,367 |
|
| GAAP diluted earnings per
share |
$ |
1.42 |
|
|
$ |
1.53 |
|
|
$ |
2.90 |
|
|
$ |
2.95 |
|
| Non-GAAP diluted earnings
per share(A) |
$ |
1.88 |
|
|
$ |
1.66 |
|
|
$ |
3.51 |
|
|
$ |
3.17 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) ResMed adjusts for the impact of the amortization of
acquired intangibles, restructuring expenses, field safety
notification expenses, acquisition-related expenses, and associated
tax effects from their evaluation of ongoing operations, and
believes that 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 that 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 when evaluating
ResMed’s performance from core operations and provides consistent
financial reporting. The use of non-GAAP measures is
intended to supplement, and not to replace, the 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.
Revenue by Product and Region(Unaudited; $ in
millions, except for per share amounts)
| |
Three Months Ended |
| |
December 31,2023 |
(A) |
December 31,2022 |
(A) |
% Change |
|
ConstantCurrency (B) |
| U.S., Canada, and
Latin America |
|
|
|
|
|
|
|
| Devices |
$ |
371.3 |
|
$ |
345.5 |
|
7 |
% |
|
|
| Masks and other |
|
298.0 |
|
|
269.7 |
|
10 |
|
|
|
| Total U.S., Canada and Latin
America |
$ |
669.3 |
|
$ |
615.3 |
|
9 |
|
|
|
| |
|
|
|
|
|
|
|
| Combined Europe, Asia,
and other markets |
|
|
|
|
|
|
|
|
Devices |
$ |
234.7 |
|
$ |
197.3 |
|
19 |
% |
|
16 |
% |
| Masks and other |
|
113.9 |
|
|
104.4 |
|
9 |
|
|
4 |
|
| Total Combined Europe, Asia
and other markets |
$ |
348.5 |
|
$ |
301.7 |
|
16 |
|
|
12 |
|
| |
|
|
|
|
|
|
|
| Global
revenue |
|
|
|
|
|
|
|
| Total Devices |
$ |
606.0 |
|
$ |
542.8 |
|
12 |
% |
|
11 |
% |
| Total Masks and other |
|
411.9 |
|
|
374.2 |
|
10 |
|
|
9 |
|
| Total Sleep and
Respiratory Care |
$ |
1,017.9 |
|
$ |
917.0 |
|
11 |
|
|
10 |
|
| |
|
|
|
|
|
|
|
|
Software-as-a-Service |
|
144.9 |
|
|
116.8 |
|
24 |
|
|
|
| Total |
$ |
1,162.8 |
|
$ |
1,033.7 |
|
12 |
|
|
11 |
|
| |
|
|
|
|
|
|
|
| |
Six Months Ended |
| |
December 31,2023 |
(A) |
December 31,2022 |
(A) |
%Change |
|
ConstantCurrency (B) |
| U.S., Canada, and
Latin America |
|
|
|
|
|
|
|
| Devices |
$ |
717.2 |
|
$ |
685.1 |
|
5 |
% |
|
|
| Masks and other |
|
590.5 |
|
|
508.3 |
|
16 |
|
|
|
| Total U.S., Canada and Latin
America |
$ |
1,307.7 |
|
$ |
1,193.4 |
|
10 |
|
|
|
| |
|
|
|
|
|
|
|
| Combined Europe, Asia,
and other markets |
|
|
|
|
|
|
|
|
Devices |
$ |
453.5 |
|
$ |
375.3 |
|
21 |
% |
|
18 |
% |
| Masks and other |
|
219.7 |
|
|
192.8 |
|
14 |
|
|
9 |
|
| Total Combined Europe, Asia
and other markets |
$ |
673.2 |
|
$ |
568.1 |
|
19 |
|
|
15 |
|
| |
|
|
|
|
|
|
|
| Global
revenue |
|
|
|
|
|
|
|
| Total Devices |
$ |
1,170.7 |
|
$ |
1,060.4 |
|
10 |
% |
|
9 |
% |
| Total Masks and other |
|
810.2 |
|
|
701.0 |
|
16 |
|
|
14 |
|
| Total Sleep and
Respiratory Care |
$ |
1,980.9 |
|
$ |
1,761.4 |
|
12 |
|
|
11 |
|
| |
|
|
|
|
|
|
|
|
Software-as-a-Service |
|
284.2 |
|
|
222.6 |
|
28 |
|
|
|
| Total |
$ |
2,265.1 |
|
$ |
1,984.0 |
|
14 |
|
|
13 |
|
(A) Totals and subtotals may not add due to rounding.
(B) In order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency fluctuations, we provide certain financial information on
a “constant currency basis,” which is in addition to the actual
financial information presented. In order to calculate our constant
currency information, we translate the current period financial
information using the foreign currency exchange rates that were in
effect during the previous comparable period. However, constant
currency measures should not be considered in isolation or as an
alternative to U.S. dollar measures that reflect current period
exchange rates, or to other financial measures calculated and
presented in accordance with U.S. GAAP.
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