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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.22 | 0.67% | 32.92 | 32.90 | 32.92 | 32.92 | 32.59 | 32.63 | 341,040 | 02:30:01 |
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 March 31, 2020.
Third Quarter 2020 Highlights
All comparisons are to the prior-year period
“We are operating during unprecedented times, and I am extremely proud of the way our global ResMed team has responded to the COVID-19 crisis,” said Mick Farrell, ResMed’s CEO. “Our primary goals are the safety and well-being of our team members, and the preservation of life – helping people breathe while their immune system fights this coronavirus. We have rapidly pivoted our business to respond by ramping up production of life support ventilators, non-invasive ventilators, and ventilation mask systems for the people who need them most, wherever they live.
“We continue to execute our long-term strategy, supporting customers around the world with digital health technologies and out-of-hospital management software, enabling them to continue to provide better care for those suffering from sleep apnea, COPD, asthma, and for people in out-of-hospital care settings. As we progress through the global COVID-19 pandemic, we are delivering world-leading solutions to governments, health authorities, hospitals, physicians, providers, and, most importantly, to patients.
“Looking ahead, we are confident in our ability to navigate through the challenging clinical and economic environment to deliver for all our stakeholders. Our culture, operational resilience, strong balance sheet, business continuity plans, and growth prospects have positioned us well. In the near term, we remain vigilant and thoughtful about the outlook for our business as we continue to serve our customers and successfully weather the crisis. Over the longer term, we believe our strong foundation will accelerate the adoption of much-needed digital health solutions in the field of respiratory medicine.”
Financial Results and Operating Metrics
Unaudited; $ in millions, except for per share amounts
Three Months Ended
March 31, 2020
March 31, 2019
% Change
Constant Currency (A)
Revenue
$
769.5
$
662.2
16
%
17
%
Gross margin (B)
58.4
%
57.5
%
2
Non-GAAP gross margin (B)
60.0
%
59.3
%
1
Selling, general and administrative expenses
172.4
164.5
5
7
Research and development expenses
51.4
47.6
8
11
Income from operations
217.5
157.0
39
Non-GAAP income from operations (B)
237.9
182.0
31
Net income
163.1
105.4
55
Non-GAAP net income (B)
187.9
128.1
47
Diluted earnings per share
$
1.12
$
0.73
53
Non-GAAP diluted earnings per share (B)
$
1.29
$
0.89
45
Nine Months Ended
March 31, 2020
March 31, 2019
% Change
Constant Currency (A)
Revenue
$
2,186.7
$
1,901.6
15
%
16
%
Gross margin (B)
58.0
%
57.4
%
1
Non-GAAP gross margin (B)
59.8
%
58.9
%
2
Selling, general and administrative expenses
511.3
473.4
8
1
Research and development expenses
149.4
129.5
15
-
Income from operations
586.4
458.2
28
Non-GAAP income from operations (B)
647.4
520.1
24
Net income
443.8
335.8
32
Non-GAAP net income (B)
499.5
388.8
28
Diluted earnings per share
$
3.05
$
2.33
31
Non-GAAP diluted earnings per share (B)
$
3.43
$
2.69
28
(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 Third 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 May 14, 2020, payable on June 18, 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 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 May 13, 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 May 13, 2020, through May 14, 2020, inclusive.
Webcast details
ResMed will discuss its third-quarter fiscal year 2020 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 “Q3 2020 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 +1 877-660-6853 (U.S.) or +1 201-612-7415 (outside U.S.) and entering the passcode 13701214. The telephone replay will be available until May 15, 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 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
Nine Months Ended
March 31, 2020
March 31, 2019
March 31, 2020
March 31, 2019
Net revenue
$
769,455
$
662,228
$
2,186,669
$
1,901,608
Cost of sales
307,657
270,318
880,633
782,874
Amortization of acquired intangibles (1)
12,136
10,940
37,623
27,095
Total cost of sales
$
319,793
$
281,258
$
918,256
$
809,969
Gross profit
$
449,662
$
380,970
$
1,268,413
$
1,091,639
Selling, general and administrative
172,441
164,529
511,304
473,410
Research and development
51,449
47,610
149,425
129,513
Amortization of acquired intangibles (1)
8,272
11,854
21,872
24,406
Litigation settlement expenses (1)
-
-
(600
)
-
Acquisition-related expenses (1)
-
-
-
6,123
Total operating expenses
$
232,162
$
223,993
$
682,001
$
633,452
Income from operations
217,500
156,977
586,412
458,187
Other income (expenses), net:
Interest income (expense), net
$
(9,852
)
$
(11,998
)
$
(30,414
)
$
(21,594
)
Loss attributable to equity method investments
(5,295
)
(5,996
)
(19,082
)
(9,371
)
Other, net
(10,698
)
(1,054
)
(15,922
)
(4,140
)
Total other income (expenses), net
(25,845
)
(19,048
)
(65,418
)
(35,105
)
Income before income taxes
$
191,655
$
137,929
$
520,994
$
423,082
Income taxes
28,518
32,513
77,155
87,291
Net income
$
163,137
$
105,416
$
443,839
$
335,791
Basic earnings per share
$
1.13
$
0.74
$
3.08
$
2.35
Diluted earnings per share
$
1.12
$
0.73
$
3.05
$
2.33
Non-GAAP diluted earnings per share (1)
$
1.29
$
0.89
$
3.43
$
2.69
Basic shares outstanding
144,638
143,316
144,112
142,907
Diluted shares outstanding
145,680
144,333
145,490
144,344
(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)
March 31, 2020
June 30, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
352,861
$
147,128
Accounts receivable, net
554,859
528,484
Inventories
358,772
349,641
Prepayments and other current assets
203,266
120,113
Total current assets
$
1,469,758
$
1,145,366
Non-current assets:
Property, plant and equipment, net
$
397,209
$
387,460
Operating lease right-of-use assets
126,277
-
Goodwill and other intangibles, net
2,349,421
2,378,399
Deferred income taxes and other non-current assets
167,878
196,457
Total non-current assets
$
3,040,785
$
2,962,316
Total assets
$
4,510,543
$
4,107,682
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable
$
116,148
$
115,725
Accrued expenses
235,201
266,359
Operating lease liabilities, current
22,795
-
Deferred revenue
97,110
88,667
Income taxes payable
68,278
73,248
Short-term debt
11,987
11,992
Total current liabilities
$
551,519
$
555,991
Non-current liabilities:
Deferred revenue
$
84,615
$
81,143
Deferred income taxes
25,441
11,380
Operating lease liabilities, non-current
107,251
-
Other long term liabilities
7,527
2,058
Long-term debt
1,364,849
1,258,861
Long-term income taxes payable
112,910
126,056
Total non-current liabilities
$
1,702,593
$
1,479,498
Total liabilities
$
2,254,112
$
2,035,489
STOCKHOLDERS’ EQUITY:
Common stock
$
579
$
575
Additional paid-in capital
1,533,905
1,511,473
Retained earnings
2,711,639
2,436,410
Treasury stock
(1,623,256
)
(1,623,256
)
Accumulated other comprehensive income
(366,436
)
(253,009
)
Total stockholders’ equity
$
2,256,431
$
2,072,193
Total liabilities and stockholders' equity
$
4,510,543
$
4,107,682
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited; $ in thousands)
Nine Months Ended
March 31, 2020
March 31, 2019
Cash flows from operating activities:
Net income
$
443,839
$
335,791
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation and amortization
116,341
108,203
Amortization of right-of-use-assets
19,524
-
Stock-based compensation costs
41,421
37,856
Loss attributable to equity method investments
19,082
9,371
Impairment of equity investments
14,519
8,801
Gain on previously held equity interest
-
(1,909
)
Changes in fair value of business combination contingent consideration
(7
)
(272
)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net
(34,140
)
(1,482
)
Inventories, net
(22,564
)
(55,002
)
Prepaid expenses, net deferred income taxes and other current assets
(68,724
)
(17,453
)
Accounts payable, accrued expenses and other
(57,301
)
(106,671
)
Net cash provided by operating activities
$
471,990
$
317,233
Cash flows from investing activities:
Purchases of property, plant and equipment
(77,360
)
(46,507
)
Patent registration costs
(7,391
)
(6,556
)
Business acquisitions, net of cash acquired
(27,910
)
(951,565
)
Purchases of investments
(31,616
)
(31,092
)
Proceeds / (Payments) on maturity of foreign currency contracts
(32,177
)
3,902
Net cash used in investing activities
$
(176,454
)
$
(1,031,818
)
Cash flows from financing activities:
Proceeds from issuance of common stock, net
26,112
15,346
Taxes paid related to net share settlement of equity awards
(45,106
)
(27,880
)
Purchases of treasury stock
-
(22,844
)
Payment of business combination contingent consideration
(302
)
(648
)
Proceeds from borrowings, net of borrowing costs
990,000
1,414,230
Repayment of borrowings
(883,012
)
(541,394
)
Dividends paid
(168,610
)
(158,592
)
Net cash (used in) / provided by financing activities
$
(80,918
)
$
678,218
Effect of exchange rate changes on cash
$
(8,885
)
$
(5,821
)
Net increase / (decrease) in cash and cash equivalents
205,733
(42,188
)
Cash and cash equivalents at beginning of period
147,128
188,701
Cash and cash equivalents at end of period
$
352,861
$
146,513
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
Nine Months Ended
March 31, 2020
March 31, 2019
March 31, 2020
March 31, 2019
Revenue
$
769,455
$
662,228
$
2,186,669
$
1,901,608
Add back: Deferred revenue fair value adjustment (A)
-
2,254
2,102
4,283
Non-GAAP Revenue
$
769,455
$
664,482
$
2,188,771
$
1,905,891
GAAP Cost of sales
$
319,793
$
281,258
$
918,256
$
809,969
Less: Amortization of acquired intangibles (A)
(12,136
)
(10,940
)
(37,623
)
(27,095
)
Non-GAAP cost of sales
$
307,657
$
270,318
$
880,633
$
782,874
GAAP gross profit
449,662
380,970
1,268,413
1,091,639
GAAP gross margin
58.4
%
57.5
%
58.0
%
57.4
%
Non-GAAP gross profit
461,798
394,164
1,308,138
1,123,017
Non-GAAP gross margin
60.0
%
59.3
%
59.8
%
58.9
%
The measure “non-GAAP income from operations” is reconciled with GAAP income from operations below:
Three Months Ended
Nine Months Ended
March 31, 2020
March 31, 2019
March 31, 2020
March 31, 2019
GAAP income from operations
$
217,500
$
156,977
$
586,412
$
458,187
Amortization of acquired intangibles - cost of sales (A)
12,136
10,940
37,623
27,095
Amortization of acquired intangibles - operating expenses (A)
8,272
11,854
21,872
24,406
Deferred revenue fair value adjustment (A)
-
2,254
2,102
4,283
Litigation settlement expenses (A)
-
-
(600
)
-
Acquisition related expenses (A)
-
-
-
6,123
Non-GAAP income from operations
$
237,908
$
182,025
$
647,409
$
520,094
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
Nine Months Ended
March 31, 2020
March 31, 2019
March 31, 2020
March 31, 2019
GAAP net income
$
163,137
$
105,416
$
443,839
$
335,791
Amortization of acquired intangibles - cost of sales, net of tax (A)
9,287
8,441
28,765
20,963
Amortization of acquired intangibles - operating expenses, net of tax (A)
6,330
9,147
16,723
18,883
Deferred revenue fair value adjustment, net of tax (A)
-
1,727
1,610
3,281
Litigation settlement expenses, net of tax (A)
-
-
(528
)
-
Acquisition-related expenses (A)
-
-
-
5,362
Fair value impairment of investment (A)
9,100
-
9,100
-
U.S. tax reform
-
3,327
-
4,505
Non-GAAP net income (A)
$
187,854
$
128,058
$
499,509
$
388,785
Diluted shares outstanding
145,680
144,333
145,490
144,344
GAAP diluted earnings per share
$
1.12
$
0.73
$
3.05
$
2.33
Non-GAAP diluted earnings per share (A)
$
1.29
$
0.89
$
3.43
$
2.69
(A)
ResMed adjusts for the impact of the amortization of acquired intangibles, deferred revenue fair value adjustment, litigation settlement expenses, acquisition-related expenses, fair value impairment of investment and the impact of U.S. tax reform on income tax expense 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 thousands, except for per share amounts)
Three Months Ended
March 31, 2020 (A)
March 31, 2019 (A)
% Change
Constant Currency (B)
U.S., Canada and Latin America
Devices
$
196.5
$
181.3
8
%
Masks and other
197.1
168.7
17
Total Sleep and Respiratory Care
$
393.5
$
350.0
12
Software as a Service
89.6
79.9
12
Total
$
483.1
$
429.9
12
Combined Europe, Asia and other markets
Devices
$
195.0
$
155.2
26
%
29
%
Masks and other
91.3
77.1
18
22
Total Sleep and Respiratory Care
$
286.3
$
232.3
23
27
Global revenue
Devices
$
391.5
$
336.4
16
%
18
%
Masks and other
288.4
245.8
17
18
Total Sleep and Respiratory Care
$
679.9
$
582.3
17
18
Software as a Service
89.6
79.9
12
12
Total
$
769.5
$
662.2
16
17
Nine Months Ended
March 31, 2020 (A)
March 31, 2019 (A)
% Change
Constant Currency (B)
U.S., Canada and Latin America
Devices
$
586.9
$
540.2
9
%
Masks and other
584.9
494.8
18
Total Sleep and Respiratory Care
$
1,171.8
$
1,035.0
13
Software as a Service
263.2
190.6
38
Total
$
1,435.0
$
1,225.6
17
Combined Europe, Asia and other markets
Devices
$
509.3
$
463.1
10
%
13
%
Masks and other
242.4
213.0
14
17
Total Sleep and Respiratory Care
$
751.7
$
676.0
11
15
Global revenue
Devices
$
1,096.2
$
1,003.2
9
%
11
%
Masks and other
827.3
707.8
17
18
Total Sleep and Respiratory Care
$
1,923.5
$
1,711.0
12
14
Software as a Service
263.2
190.6
38
38
Total
$
2,186.7
$
1,901.6
15
16
(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/20200430005937/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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