Full Press Release Details
| For investors | For media | |
| Amy Wakeham | Jayme Rubenstein | |
| +1 858-836-5000 | +1 858-836-6798 | |
| investorrelations@resmed.com | news@resmed.com |
ResMed Inc. Announces Results for the First Quarter of Fiscal Year 2022
Note: A webcast of ResMed s conference call will be available at 4:30 p.m. ET today at
SAN DIEGO, October 28, 2021 ResMed Inc. (NYSE: RMD, ASX: RMD), a world-leading digital health company,
today announced results for its quarter ended September 30, 2021.
First Quarter 2022 Highlights
All comparisons are to the prior year period
Our first-quarter results demonstrate strong performance across our business with double-digit growth in both top-line and bottom-line metrics, driven by ongoing high demand for our sleep and respiratory care products, and steady growth across our software-as-a-service business, said Mick Farrell, ResMed CEO. It is through the extraordinary efforts of our global ResMed team that we were able to deliver products and solutions to our
customers amid unprecedented supply chain challenges that continue to restrict access to critical electronic components. As we navigate supply limitations and are forced to allocate products, we continue to ensure priority for highest-acuity and
highest-need patients first, as well as working with physicians, providers, and community systems to maintain a sustainable flow of medical devices and digital health solutions to patients who need care.
Despite constantly evolving market dynamics, we continue to pivot to meet the needs of our stakeholders, driving sustainable long-term growth, and
ensuring that we are investing strongly in medical device research and development, as well as digital health innovation that will unlock value for all of our customers. I m incredibly proud of our global teams that are working with providers
and physicians in the most unusual times across 140 countries, to get products directly into the hands of patients who need our solutions most.
Financial Results and Operating Metrics
Unaudited; $ in millions, except for per share amounts
| Three Months Ended | ||||||||||||||||
| September 30, 2021 | September 30, 2020 | % Change | Constant Currency (A) | |||||||||||||
| Revenue | $ | 904.0 | $ | 751.9 | 20 | % | 19 | % | ||||||||
| Gross margin (B) | 56.0 | % | 58.3 | % | (4 | ) | ||||||||||
| Non-GAAP gross margin (B) | 57.2 | % | 59.9 | % | (5 | ) | ||||||||||
| Selling, general, and administrative expenses | 176.7 | 159.0 | 11 | 10 | ||||||||||||
| Research and development expenses | 60.0 | 54.5 | 10 | 9 | ||||||||||||
| Income from operations | 261.9 | 216.9 | 21 | |||||||||||||
| Non-GAAP income from operations (B) | 280.7 | 237.1 | 18 | |||||||||||||
| Net income | 203.6 | 178.4 | 14 | |||||||||||||
| Non-GAAP net income (B) | 222.0 | 185.4 | 20 | |||||||||||||
| Diluted earnings per share | $ | 1.39 | $ | 1.22 | 14 | |||||||||||
| Non-GAAP diluted earnings per share (B) | $ | 1.51 | $ | 1.27 | 19 |
Discussion of First Quarter Results
All comparisons are to the prior year period unless otherwise noted
Other Business and Operational Highlights
The ResMed board of directors today declared a quarterly cash dividend of $0.42 per share. The dividend will have a record date of
November 11, 2021, payable on December 16, 2021. 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 10, 2021, 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 10, 2021, through November 11, 2021, inclusive.
ResMed will discuss its first quarter fiscal year 2022 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 2022 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 13723324. The
telephone replay will be available until November 11, 2021.
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 Operations
(Unaudited; $ in thousands, except for per share amounts)
| Three Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Net revenue | $ | 904,015 | $ | 751,944 | ||||
| Cost of sales | 386,667 | 301,304 | ||||||
| Amortization of acquired intangibles (1) | 11,059 | 11,979 | ||||||
| Restructuring - cost of sales (1) | ||||||||
| Total cost of sales | $ | 397,726 | $ | 313,283 | ||||
| Gross profit | $ | 506,289 | $ | 438,661 | ||||
| Selling, general, and administrative | 176,719 | 158,989 | ||||||
| Research and development | 59,950 | 54,533 | ||||||
| Amortization of acquired intangibles (1) | 7,707 | 8,243 | ||||||
| Total operating expenses | $ | 244,376 | $ | 221,765 | ||||
| Income from operations | 261,913 | 216,896 | ||||||
| Other income (expenses), net: | ||||||||
| Interest income (expense), net | $ | (5,360 | ) | $ | (6,725 | ) | ||
| Loss attributable to equity method investments | (1,386 | ) | (2,288 | ) | ||||
| Other, net | 3,621 | 7,971 | ||||||
| Total other income (expenses), net | (3,125 | ) | (1,042 | ) | ||||
| Income before income taxes | $ | 258,788 | $ | 215,854 | ||||
| Income taxes | 55,175 | 37,482 | ||||||
| Net income | $ | 203,613 | $ | 178,372 | ||||
| Basic earnings per share | $ | 1.40 | $ | 1.23 | ||||
| Diluted earnings per share | $ | 1.39 | $ | 1.22 | ||||
| Non-GAAP diluted earnings per share (1) | $ | 1.51 | $ | 1.27 | ||||
| Basic shares outstanding | 145,680 | 144,900 | ||||||
| Diluted shares outstanding | 146,860 | 146,100 |
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| September 30, 2021 | June 30, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 276,149 | $ | 295,278 | ||||
| Accounts receivable, net | 575,554 | 614,292 | ||||||
| Inventories | 506,644 | 457,033 | ||||||
| Prepayments and other current assets | 227,908 | 208,154 | ||||||
| Total current assets | $ | 1,586,255 | $ | 1,574,757 | ||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | $ | 467,344 | $ | 463,490 | ||||
| Operating lease right-of-use assets | 134,375 | 128,575 | ||||||
| Goodwill and other intangibles, net | 2,297,437 | 2,320,483 | ||||||
| Deferred income taxes and other non-current assets | 243,756 | 240,820 | ||||||
| Total non-current assets | $ | 3,142,912 | $ | 3,153,368 | ||||
| Total assets | $ | 4,729,167 | $ | 4,728,125 | ||||
| LIABILITIES AND STOCKHOLDERS EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 173,696 | $ | 138,008 | ||||
| Accrued expenses | 274,106 | 320,599 | ||||||
| Operating lease liabilities, current | 22,919 | 23,585 | ||||||
| Deferred revenue | 112,528 | 109,611 | ||||||
| Income taxes payable | 28,909 | 307,963 | ||||||
| Short-term debt | 12,000 | 12,000 | ||||||
| Total current liabilities | $ | 624,158 | $ | 911,766 | ||||
| Non-current liabilities: | ||||||||
| Deferred revenue | $ | 93,255 | $ | 91,496 | ||||
| Deferred income taxes | 11,294 | 11,319 | ||||||
| Operating lease liabilities, non-current | 121,518 | 114,779 | ||||||
| Other long-term liabilities | 5,981 | 6,802 | ||||||
| Long-term debt | 793,668 | 643,351 | ||||||
| Long-term income taxes payable | 53,244 | 62,933 | ||||||
| Total non-current liabilities | $ | 1,078,960 | $ | 930,680 | ||||
| Total liabilities | $ | 1,703,118 | $ | 1,842,446 | ||||
| STOCKHOLDERS EQUITY: | ||||||||
| Common stock | $ | 583 | $ | 583 | ||||
| Additional paid-in capital | 1,643,661 | 1,622,199 | ||||||
| Retained earnings | 3,222,064 | 3,079,640 | ||||||
| Treasury stock | (1,623,256 | ) | (1,623,256 | ) | ||||
| Accumulated other comprehensive income | (217,003 | ) | (193,487 | ) | ||||
| Total stockholders equity | $ | 3,026,049 | $ | 2,885,679 | ||||
| Total liabilities and stockholders equity | $ | 4,729,167 | $ | 4,728,125 |
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited; $ in thousands)
| Three Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 203,613 | $ | 178,372 | ||||
| Adjustment to reconcile net income to cash provided by operating activities: | ||||||||
| Depreciation and amortization | 39,102 | 39,466 | ||||||
| Amortization of right-of-use assets | 8,517 | 10,422 | ||||||
| Stock-based compensation costs | 17,303 | 16,071 | ||||||
| Loss attributable to equity method investments | 1,386 | 2,288 | ||||||
| (Gain) loss on equity investment | (5,612 | ) | (8,476 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | 33,704 | 16,110 | ||||||
| Inventories, net | (55,976 | ) | (52,396 | ) | ||||
| Prepaid expenses, net deferred income taxes, and other current assets | (14,391 | ) | 3,415 | |||||
| Accounts payable, accrued expenses, income taxes payable, and other | (293,303 | ) | (61,273 | ) | ||||
| Net cash (used in) / provided by operating activities | $ | (65,657 | ) | $ | 143,999 | |||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant, and equipment | (27,340 | ) | (13,501 | ) | ||||
| Patent registration and acquisition costs | (4,453 | ) | (5,237 | ) | ||||
| Purchases of investments | (6,600 | ) | (8,196 | ) | ||||
| (Payments) / proceeds on maturity of foreign currency contracts | (3,481 | ) | 4,824 | |||||
| Net cash used in investing activities | $ | (41,874 | ) | $ | (22,110 | ) | ||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock, net | 4,354 | 1,026 | ||||||
| Taxes paid related to net share settlement of equity awards | (195 | ) | 227 | |||||
| Proceeds from borrowings, net of borrowing costs | 150,000 | 55,000 | ||||||
| Repayment of borrowings | (175,000 | ) | ||||||
| Dividends paid | (61,189 | ) | (56,511 | ) | ||||
| Net cash (used in) / provided by financing activities | $ | 92,970 | $ | (175,258 | ) | |||
| Effect of exchange rate changes on cash | $ | (4,568 | ) | $ | 11,627 | |||
| Net increase / (decrease) in cash and cash equivalents | (19,129 | ) | (41,742 | ) | ||||
| Cash and cash equivalents at beginning of period | 295,278 | 463,156 | ||||||
| Cash and cash equivalents at end of period | $ | 276,149 | $ | 421,414 |
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 exclude amortization expense from acquired intangibles related to cost of sales and are reconciled below:
| Three Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| Revenue | $ | 904,015 | $ | 751,944 | ||||
| GAAP cost of sales | $ | 397,726 | $ | 313,283 | ||||
| Less: Amortization of acquired intangibles (A) | (11,059 | ) | (11,979 | ) | ||||
| Non-GAAP cost of sales | $ | 386,667 | $ | 301,304 | ||||
| GAAP gross profit | $ | 506,289 | $ | 438,661 | ||||
| GAAP gross margin | 56.0 | % | 58.3 | % | ||||
| Non-GAAP gross profit | $ | 517,348 | $ | 450,640 | ||||
| Non-GAAP gross margin | 57.2 | % | 59.9 | % |
The measure non-GAAP income from operations is reconciled with GAAP income
from operations below:
| Three Months Ended | ||||||||
| September 30, 2021 | September 30, 2020 | |||||||
| GAAP income from operations | $ | 261,913 | $ | 216,896 | ||||
| Amortization of acquired intangibles - cost of sales (A) | 11,059 | 11,979 | ||||||
| Amortization of acquired intangibles - operating expenses (A) | 7,707 | 8,243 | ||||||
| Non-GAAP income from operations | $ | 280,679 | $ | 237,118 |
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, 2021 | September 30, 2020 | |||||||
| GAAP net income | $ | 203,613 | $ | 178,372 | ||||
| Amortization of acquired intangibles - cost of sales, net of tax (A) | 8,435 | 9,169 | ||||||
| Amortization of acquired intangibles - operating expenses, net of tax (A) | 5,878 | 6,309 | ||||||
| Reserve for disputed tax position (A) | 4,111 | |||||||
| (Gain) loss on equity investments (A) | (8,476 | ) | ||||||
| Non-GAAP net income (A) | $ | 222,037 | $ | 185,374 | ||||
| GAAP diluted shares outstanding | 146,860 | 146,100 | ||||||
| GAAP diluted earnings per share | $ | 1.39 | $ | 1.22 | ||||
| Non-GAAP diluted earnings per share (A) | $ | 1.51 | $ | 1.27 |
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
millions, except for per share amounts)
| Three Months Ended | ||||||||||||||||
| September 30, 2021 (A) | September 30, 2020 (A) | % Change | Constant Currency (B) | |||||||||||||
| U.S., Canada, and Latin America | ||||||||||||||||
| Devices | $ | 275.9 | $ | 197.4 | 40 | % | ||||||||||
| Masks and other | 215.1 | 205.8 | 5 | |||||||||||||
| Total Sleep and Respiratory Care | $ | 491.0 | $ | 403.2 | 22 | |||||||||||
| Software as a Service | 97.5 | 92.1 | 6 | |||||||||||||
| Total | $ | 588.6 | $ | 495.3 | 19 | |||||||||||
| Combined Europe, Asia, and other markets | ||||||||||||||||
| Devices | $ | 218.2 | $ | 176.0 | 24 | % | 22 | % | ||||||||
| Masks and other | 97.2 | 80.6 | 21 | 18 | ||||||||||||
| Total Sleep and Respiratory Care | $ | 315.5 | $ | 256.6 | 23 | 21 | ||||||||||
| Global revenue | ||||||||||||||||
| Devices | $ | 494.2 | $ | 373.4 | 32 | % | 31 | % | ||||||||
| Masks and other | 312.3 | 286.4 | 9 | 8 | ||||||||||||
| Total Sleep and Respiratory Care | $ | 806.5 | $ | 659.8 | 22 | 21 | ||||||||||
| Software as a Service | 97.5 | 92.1 | 6 | 6 | ||||||||||||
| Total | $ | 904.0 | $ | 751.9 | 20 | 19 |