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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Resmed Inc | ASX:RMD | Australian Stock Exchange | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.37 | -1.12% | 32.59 | 32.57 | 32.68 | 32.91 | 32.49 | 32.85 | 1,769,152 | 07:16:18 |
Year-over-year revenue grows 10%, non-GAAP operating profit up 24%
Note: A webcast of ResMed’s conference call will be available at 4:30 p.m. ET today at http://investor.resmed.com
ResMed Inc. (NYSE: RMD, ASX: RMD), a world-leading digital health company, today announced results for its quarter ended September 30, 2020.
First Quarter 2021 Highlights All comparisons are to the prior year period
“Our first quarter results reflect solid performance and positive trends across our business,” said Mick Farrell, ResMed’s CEO. “During the quarter, we continued to support the global COVID-19 pandemic response, providing ventilators, masks, and circuits to countries in need around the world. In our core markets of sleep apnea, COPD and asthma, we are encouraged by the sequential improvement in new patient volume, as well as the ongoing strong adoption of our mask and accessories resupply programs. We have accelerated the launch of digital health solutions to help clinicians remotely diagnose, treat, and manage patients during the pandemic and beyond. Our global team is effectively managing SG&A expenses, while investing in broad-based R&D programs to help accelerate our ResMed 2025 growth strategy: improving 250 million lives in out-of-hospital healthcare in 2025.”
Financial Results and Operating Metrics Unaudited; $ in millions, except for per share amounts
Three Months Ended
September 30, 2020
September 30, 2019
% Change
Constant Currency (A)
Revenue
$
751.9
$
681.1
10
%
9
%
Gross margin (B)
58.3
%
57.5
%
1
Non-GAAP gross margin (B)
59.9
%
59.6
%
1
Selling, general and administrative expenses
159.0
167.4
(5
)
(7
)
Research and development expenses
54.5
48.0
14
12
Income from operations
216.9
171.1
27
Non-GAAP income from operations (B)
237.1
191.0
24
Net income
178.4
120.1
48
Non-GAAP net income (B)
185.4
135.4
37
Diluted earnings per share
$
1.22
$
0.83
47
Non-GAAP diluted earnings per share (B)
$
1.27
$
0.93
37
(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 First Quarter Results All comparisons are to the prior year period unless otherwise noted
Other Business and Operational Highlights
Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.39 per share. The dividend will have a record date of November 12, 2020, payable on December 17, 2020. 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 November 11, 2020, 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 November 11, 2020, through November 12, 2020, inclusive.
Webcast details
ResMed will discuss its first quarter fiscal year 2021 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 “Q1 2021 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 two hours after the webcast by dialing +1 800-585-8367 (U.S.) or +1 416-621-4642 (outside U.S.) and entering the passcode 2192036. The telephone replay will be available until November 12, 2020.
About ResMed
At 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 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, new markets for its products, the integration of acquisitions, litigation, and tax outlook – 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 for per share amounts)
Three Months Ended
September 30, 2020
September 30, 2019
Net revenue
$
751,944
$
681,056
Cost of sales
301,304
276,001
Amortization of acquired intangibles (1)
11,979
13,436
Total cost of sales
$
313,283
$
289,437
Gross profit
$
438,661
$
391,619
Selling, general and administrative
158,989
167,440
Research and development
54,533
48,033
Amortization of acquired intangibles (1)
8,243
5,044
Total operating expenses
$
221,765
$
220,517
Income from operations
216,896
171,102
Other income (expenses), net:
Interest income (expense), net
$
(6,725
)
$
(10,543
)
Loss attributable to equity method investments
(2,288
)
(6,863
)
Other, net
7,971
(3,109
)
Total other income (expenses), net
(1,042
)
(20,515
)
Income before income taxes
$
215,854
$
150,587
Income taxes
37,482
30,439
Net income
$
178,372
$
120,148
Basic earnings per share
$
1.23
$
0.84
Diluted earnings per share
$
1.22
$
0.83
Non-GAAP diluted earnings per share (1)
$
1.27
$
0.93
Basic shares outstanding
144,900
143,719
Diluted shares outstanding
146,100
145,099
(1)
See the reconciliation of non-GAAP financial measures in the table at the end of the press release.
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited; $ in thousands)
September 30, 2020
June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
421,414
$
463,156
Accounts receivable, net
464,892
474,643
Inventories
478,006
416,915
Prepayments and other current assets
178,297
168,745
Total current assets
$
1,542,609
$
1,523,459
Non-current assets:
Property, plant and equipment, net
$
424,819
$
417,335
Operating lease right-of-use assets
124,473
118,348
Goodwill and other intangibles, net
2,332,637
2,338,492
Deferred income taxes and other non-current assets
196,306
189,742
Total non-current assets
$
3,078,235
$
3,063,917
Total assets
$
4,620,844
$
4,587,376
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
$
117,589
$
135,786
Accrued expenses
269,859
270,353
Operating lease liabilities, current
21,329
21,263
Deferred revenue
102,035
98,617
Income taxes payable
68,053
64,755
Short-term debt
11,988
11,987
Total current liabilities
$
590,853
$
602,761
Non-current liabilities:
Deferred revenue
$
83,887
$
87,307
Deferred income taxes
13,007
13,011
Operating lease liabilities, non-current
111,183
101,880
Other long term liabilities
8,568
8,347
Long-term debt
1,044,435
1,164,133
Long-term income taxes payable
90,051
112,910
Total non-current liabilities
$
1,351,131
$
1,487,588
Total liabilities
$
1,941,984
$
2,090,349
STOCKHOLDERS’ EQUITY:
Common stock
$
580
$
580
Additional paid-in capital
1,588,018
1,570,694
Retained earnings
2,953,709
2,832,991
Treasury stock
(1,623,256
)
(1,623,256
)
Accumulated other comprehensive income
(240,191
)
(283,982
)
Total stockholders’ equity
$
2,678,860
$
2,497,027
Total liabilities and stockholders' equity
$
4,620,844
$
4,587,376
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited; $ in thousands)
Three Months Ended
September 30, 2020
September 30, 2019
Cash flows from operating activities:
Net income
$
178,372
$
120,148
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization
39,466
37,954
Amortization of right-of-use-assets
10,422
5,963
Stock-based compensation costs
16,071
13,256
Loss attributable to equity method investments
2,288
6,863
(Gain) loss on equity investment
(8,476
)
2,590
Changes in fair value of business combination contingent consideration
-
(8
)
Changes in operating assets and liabilities:
Accounts receivable, net
16,110
28,286
Inventories, net
(52,396
)
(14,204
)
Prepaid expenses, net deferred income taxes and other current assets
3,415
(8,407
)
Accounts payable, accrued expenses and other
(61,273
)
(30,078
)
Net cash provided by operating activities
$
143,999
$
162,363
Cash flows from investing activities:
Purchases of property, plant and equipment
(13,501
)
(22,671
)
Patent registration costs
(5,237
)
(2,069
)
Business acquisitions, net of cash acquired
-
-
Purchases of investments
(8,196
)
(2,741
)
Proceeds / (Payments) on maturity of foreign currency contracts
4,824
(5,743
)
Net cash used in investing activities
$
(22,110
)
$
(33,224
)
Cash flows from financing activities:
Proceeds from issuance of common stock, net
1,026
5,609
Taxes paid related to net share settlement of equity awards
227
(326
)
Payment of business combination contingent consideration
-
(302
)
Proceeds from borrowings, net of borrowing costs
55,000
565,000
Repayment of borrowings
(175,000
)
(614,003
)
Dividends paid
(56,511
)
(56,052
)
Net cash used in financing activities
$
(175,258
)
$
(100,074
)
Effect of exchange rate changes on cash
$
11,627
$
(4,039
)
Net increase / (decrease) in cash and cash equivalents
(41,742
)
25,026
Cash and cash equivalents at beginning of period
463,156
147,128
Cash and cash equivalents at end of period
$
421,414
$
172,154
RESMED INC. AND SUBSIDIARIES
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” excludes amortization expense from acquired intangibles related to cost of sales and are reconciled below:
Three Months Ended
September 30, 2020
September 30, 2019
Revenue
$
751,944
$
681,056
Add back: Deferred revenue fair value adjustment (A)
-
1,445
Non-GAAP Revenue
$
751,944
$
682,501
GAAP Cost of sales
$
313,283
$
289,437
Less: Amortization of acquired intangibles (A)
(11,979
)
(13,436
)
Non-GAAP cost of sales
$
301,304
$
276,001
GAAP gross profit
438,661
391,619
GAAP gross margin
58.3
%
57.5
%
Non-GAAP gross profit
450,640
406,500
Non-GAAP gross margin
59.9
%
59.6
%
The measure “non-GAAP income from operations” is reconciled with GAAP income from operations below:
Three Months Ended
September 30, 2020
September 30, 2019
GAAP income from operations
$
216,896
$
171,102
Amortization of acquired intangibles - cost of sales (A)
11,979
13,436
Amortization of acquired intangibles - operating expenses (A)
8,243
5,044
Deferred revenue fair value adjustment (A)
-
1,445
Non-GAAP income from operations
$
237,118
$
191,027
RESMED INC. AND SUBSIDIARIES
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
September 30, 2020
September 30, 2019
GAAP net income
$
178,372
$
120,148
Amortization of acquired intangibles - cost of sales, net of tax (A)
9,169
10,267
Amortization of acquired intangibles - operating expenses, net of tax (A)
6,309
3,855
Deferred revenue fair value adjustment, net of tax (A)
-
1,107
(Gain) loss on equity investments (A)
(8,476
)
-
Non-GAAP net income (A)
$
185,374
$
135,377
Diluted shares outstanding
146,100
145,099
GAAP diluted earnings per share
$
1.22
$
0.83
Non-GAAP diluted earnings per share (A)
$
1.27
$
0.93
(A)
ResMed adjusts for the impact of the amortization of acquired intangibles, deferred revenue fair value adjustment and the (gain) loss on equity investments 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.
RESMED INC. AND SUBSIDIARIES
Revenue by Product and Region
(Unaudited; $ in millions, except for per share amounts)
Three Months Ended
September 30, 2020 (A)
September 30, 2019 (A)
% Change
Constant Currency (B)
U.S., Canada and Latin America
Devices
$
197.4
$
186.9
6
%
Masks and other
205.8
183.4
12
Total Sleep and Respiratory Care
$
403.2
$
370.3
9
Software as a Service
92.1
86.9
6
Total
$
495.3
$
457.2
8
Combined Europe, Asia and other markets
Devices
$
176.0
$
151.9
16
%
11
%
Masks and other
80.6
72.0
12
8
Total Sleep and Respiratory Care
$
256.6
$
223.9
15
10
Global revenue
Devices
$
373.4
$
338.8
10
%
8
%
Masks and other
286.4
255.4
12
11
Total Sleep and Respiratory Care
$
659.8
$
594.2
11
9
Software as a Service
92.1
86.9
6
6
Total
$
751.9
$
681.1
10
9
(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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006230/en/
For investors Amy Wakeham +1 858-836-5000 investorrelations@resmed.com
For media Jayme Rubenstein +1 858-836-6798 news@resmed.com
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