ResMed Announces Results For The Third Quarter Of Fiscal Year 2017
SAN DIEGO, April 27, 2017 /PRNewswire/ -- ResMed Inc. (NYSE: RMD) today announced results for its quarter ended March 31, 2017. Revenue for the quarter was $514.2 million, a 13 percent increase compared to the same period of the prior year. Excluding the contribution from the Brightree business acquired in April 2016, revenue for the quarter was $479.2 million, a 6 percent increase.
"We had solid double-digit constant currency revenue growth in Q3, led by our Brightree software solutions as well as mask and device sales," said Mick Farrell, ResMed's chief executive officer. "This quarter we saw strong demand for our new AirFit 20 range of masks. We also made significant progress on software innovation with the launch of enhanced integration capabilities with Brightree and our AirSolutions cloud-based software platform. In our current quarter, we are launching our latest market-leading innovation: the ResMed AirMini the world's smallest CPAP."
Farrell concluded, "Our focus on changing 20 million lives by 2020 has driven a pipeline of new products and connected care solutions that improve patient outcomes, create efficiencies for our homecare customers, and help physicians and providers better manage chronic disease while lowering healthcare costs."
Analysis of third quarter results
Third quarter revenue in the Americas was $332.1 million, an 18 percent increase over the same period of the prior year. This included Brightree revenue of $35.0 million. Excluding Brightree, revenue in the Americas was $297.1 million, a 5 percent increase over the prior year. Revenue in combined EMEA and APAC was $182.1 million, an increase of 9 percent on a constant currency basis, compared to the same period of the prior year.
Gross margin in the third quarter was 58.3 percent, higher than the prior year's quarter gross margin of 57.3 percent. The improvement in gross margin compared to prior year's quarter was due to manufacturing and procurement efficiencies and an incremental contribution from the Brightree acquisition.
Income from operations for the quarter was $107.4 million, a 3 percent increase compared with the quarter ended March 31, 2016. Non-GAAP income from operations for the quarter was $126.7 million, a 13 percent increase compared to the same period of the prior year.
Selling, general and administrative expenses were $137.9 million, a 16 percent increase over the same period in the prior year, also a 16 percent increase on a constant currency basis. SG&A expenses increased to 26.8 percent of revenue in the quarter, compared with 26.3 percent reported in the quarter ended March 31, 2016.
Research and development expenses were $35.1 million, or 6.8 percent of revenue. R&D expenses increased by 25 percent compared with the same period last year, or a 21 percent increase on a constant currency basis.
Amortization of acquired intangible assets was $11.4 million during the quarter, an increase of $6.8 million compared with the same period last year. The increase in amortization of acquired intangible assets was primarily due to the amortization expense associated with the Brightree acquisition. Stock-based compensation costs incurred during the quarter of $11.5 million consisted of expenses associated with employee equity grants, and our employee stock purchase plan.
Net income for the quarter was $87.8 million, a 3 percent decrease compared to the same period of the prior year. Non-GAAP net income was $100.7 million, a 3 percent increase compared to the prior year.
Non-GAAP measures adjust for amortization of acquired intangibles, acquisition related expenses and restructuring expenses.
GAAP diluted earnings per share for the quarter decreased 3 percent to $0.62. Non-GAAP diluted earnings per share of $0.71 were 3 percent higher compared with the same period of the prior year.
Cash flow from operations for the quarter was $67.6 million compared to net income in the current quarter of $87.8 million.
Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.33 per share. The dividend will have a record date of May 11, 2017, payable on June 15, 2017. 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 10, 2017 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 10, 2017 through May 11, 2017 inclusive.
Webcast details
ResMed will discuss its financial and business results and outlook 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 2017 earnings webcast" to register and listen to the live webcast. The online archive of the broadcast will be available on ResMed's website after the live call. In addition, a telephone replay of the conference call will be available approximately two hours after the call by dialing 800-585-8367 (U.S.) and +1 416-621-4642 (international) and entering a passcode of 98293201. The telephone replay will be available until May 11, 2017.
About ResMed
ResMed (NYSE:RMD) changes lives with award-winning medical devices and cutting-edge cloud-based software applications that better diagnose, treat and manage sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. ResMed is a global leader in connected care, with more than 3 million patients remotely monitored every day. Our 5,000-strong team is committed to creating the world's best tech-driven medical device company improving quality of life, reducing the impact of chronic disease, and saving healthcare costs in more than 100 countries.
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.
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