Revenue increased 6% to $422 million; up 13% on a constant currency basis
GAAP diluted earnings per share of $0.64, or non-GAAP earnings per share of $0.65
Operating cash flow of $90.9 million
Company repurchased 300,000 shares in the third quarter
San Diego, April 23, 2015 – ResMed Inc. (NYSE: RMD) today announced results for its quarter ended March 31, 2015. Revenue for the quarter was $422.5 million, a 6 percent increase compared to the quarter ended March 31, 2014 (a 13 percent increase on a constant currency basis). Net income was $91.0 million, an increase of 1 percent compared to the quarter ended March 31, 2014. Diluted earnings per share for the quarter were $0.64, an increase of 2 percent compared to the quarter ended March 31, 2014. Non-GAAP diluted earnings per share for the quarter were $0.65, a 2 percent increase compared to the quarter ended March 31, 2014.
“We are pleased to report excellent progress with our new product launches, as we continued to see double-digit revenue growth,” said Mick Farrell, ResMed’s chief executive officer. “Strong demand for our new flow generator launches in the U.S. and continued growth in our Asia Pacific and Europe regions drove our results in the quarter.
“We saw strong customer adoption of our range of new flow generators: the Astral, AirSense™ 10 and the recently launched AirCurve™ 10 series of cloud-connected bilevel devices. This quarter, we continued to build our informatics capabilities with the acquisition of Jaysec, a provider of cloud-based software solutions for the home medical equipment industry, as well as the integration of our AirView patient management system with leading informatics partners.” Farrell concluded, “We are executing on our long-term strategy: growing our core sleep disordered breathing market and investing in future opportunities in chronic obstructive pulmonary disease as well as cardio-respiratory conditions. Our innovative products and solutions improve patient outcomes, lower healthcare costs, and reduce the impact of chronic disease.”
Analysis of third quarter results
In the third quarter of fiscal year 2015, revenue in the Americas was $250.9 million, a 16 percent increase over the prior year's quarter. Revenue in combined Europe and Asia Pacific was $171.6 million, a 6 percent decrease compared to the quarter ended March 31, 2014 (a 9 percent increase on a constant currency basis).
Gross margin in the third quarter was 59.5 percent, lower than the prior year, mainly due to declines in average selling prices, an unfavorable product and geographic mix, and an unfavorable impact from foreign exchange rate movements.
Selling, general and administrative expenses were $116.3 million for the quarter, a 1 percent increase (a 10 percent increase on a constant currency basis) over the quarter ended March 31, 2014. SG&A expenses improved to 27.5 percent of revenue in the quarter, compared to 28.9 percent in the quarter ended March 31, 2014.
Research and development expenses were $27.0 million for the quarter, or 6.4 percent of revenue. R&D expenses decreased by 8 percent (a 4 percent increase on a constant currency basis) compared to the quarter ended March 31, 2014.
Operating profit for the quarter was $105.9 million and cash flow from operations was $90.9 million.
Amortization of acquired intangible assets was $2.2 million ($1.6 million, net of tax) during the quarter. Stock-based compensation costs incurred during the quarter of $11.7 million ($8.2 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, the company repurchased 300,000 shares at a cost of $20.3 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 May 21, 2015, payable on June 18, 2015. 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 19, 2015 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 May 19, 2015 through May 21, 2015, 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 39335543. The telephone replay will be available until May 7, 2015.
The global team at ResMed (NYSE:RMD) is united in their commitment to changing lives with every breath. With more than 4,000 employees and a presence in over 100 countries, the company has been pioneering new and innovative devices and treatments for sleep-disordered breathing, chronic obstructive pulmonary disease, and other chronic diseases for more than 25 years. ResMed's world-leading products and innovative solutions improve the quality of life for millions of patients worldwide, reduce the impact of chronic disease, and save healthcare costs. For more information about ResMed and its businesses, visit www.resmed.com or follow @resmed on Twitter.
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