San Diego, Oct 23, 2014 – ResMed Inc. (NYSE: RMD) today announced results for its quarter ended September 30, 2014. Revenue for the quarter was $380.4 million, a 6 percent increase compared to the quarter ended September 30, 2013 (also a 6 percent increase on a constant currency basis). Net income was $83.3 million, an increase of 3 percent compared to the quarter ended September 30, 2013. Diluted earnings per share for the quarter were $0.58, an increase of 4 percent compared to the quarter ended September 30, 2013.
“We had a successful start to fiscal year 2015, as new product launches drove revenue growth,” said Mick Farrell, ResMed’s chief executive officer. “Our results showed very strong performance from our European and Asia Pacific regions, as well as solid growth in the Americas.”
“During the quarter, we launched innovative products for the sleep-disordered breathing market, including our new AirSense 10 platform, as well as a new life support ventilator for the U.S. respiratory care market, our new Astral platform. We have also recently made progress in building consumer awareness through two initiatives: an education and product-focused campaign called ‘Better Sleep for Women’; and the recent launch of a new product ‘S+ by ResMed’, the first non-contact sleep wellness tracking device for individuals,” said Farrell.
“We are delivering on our promise to drive top-line revenue growth this fiscal year by launching a strong portfolio of new products, services, and solutions. This portfolio will provide exceptional value to all key players in our value chain: physicians, providers, payors, and most importantly, to patients.”
Analysis of first quarter results
In the first quarter of fiscal year 2015, revenue outside the Americas was $173.2 million, an 11 percent increase over the prior year's quarter (also an 11 percent increase on a constant currency basis). Revenue in the Americas was $207.2 million, a 3 percent increase compared to $201.5 million in the prior year's quarter.
Gross margin in the first quarter was 62.4 percent, 130 basis points lower than the prior year, mainly due to declines in average selling prices and an unfavorable product mix, which were partially offset by manufacturing and supply chain improvements.
Selling, general and administrative expenses were $110.5 million for the quarter, a 9 percent increase (also a 9 percent increase on a constant currency basis) over the quarter ended September 30, 2013. SG&A expenses were 29.1 percent of revenue in the quarter, compared to 28.3 percent in the quarter ended September 30, 2013, primarily due to higher marketing costs associated with recent new product releases, additional headcount to support our commercial activities and an increase in variable employee compensation costs.
Research and development expenses were $30.0 million for the quarter, or 7.9 percent of revenue. R&D expenses increased by 10 percent (a 9 percent increase on a constant currency basis) compared to the quarter ended September 30, 2013, primarily reflecting incremental investment in healthcare informatics and cardiology.
Operating profit for the quarter was $94.7 million and cash flow from operations was $86.5 million.
Amortization of acquired intangible assets was $2.1 million ($1.6 million, net of tax) during the quarter. Stock-based compensation costs incurred during the quarter of $11.4 million ($8.1 million, net of tax) consisted of expenses associated with employee equity grants, and the company’s employee stock purchase plan.
Share repurchase program
During the quarter, ResMed repurchased 835,000 shares at a cost of $42.9 million, as part of its ongoing capital management program.
The ResMed board of directors today declared a quarterly dividend of $0.28 per share. The dividend will have a record date of Nov. 20, 2014, payable on Dec. 18, 2014. 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 Nov. 18, 2014 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 Nov. 18, 2014 through Nov. 20, 2014, inclusive.
ResMed will discuss its financial and business results and its business outlook on its webcast at 1:30 p.m. U.S. Pacific Standard Time today. The live webcast of the call can be accessed on ResMed's website at www.resmed.com. Please allow extra time before the call to visit the website and download the streaming media player (Windows Media Player), required to listen to the internet broadcast. The online archive of the broadcast will be available after the live call on ResMed’s website. In addition, a telephone replay of the conference call will be available approximately two hours after the call by dialing 630-652-3042 (U.S.) and +1 630-652-3042 (international) and entering a passcode of 38203727. The telephone replay will be available until Nov. 6, 2014.
ResMed changes lives by developing, manufacturing and distributing medical equipment for treating, diagnosing, and managing sleep-disordered breathing, chronic obstructive pulmonary disease, and other chronic diseases. We develop innovative products and solutions to improve the health and quality of life of those who suffer from these conditions, and we work to raise awareness of the potentially serious health consequences of untreated sleep-disordered breathing. For more information on ResMed, visit www.resmed.com.
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 -- 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.
Senior Director, Investor Relations
Director, Global Corporate Communications