ResMed third quarter revenue increases 17% to $282.0 million

ResMed Inc. (NYSE: RMD) today announced record revenue and income for the quarter ended September 30, 2010.  Revenue for the quarter ended September 30, 2010 was $282.0 million, a 14% increase (a 17% increase on a constant currency basis) over the quarter ended September 30, 2009.  For the quarter ended September 30, 2010, income from operations was $66.4 million and net income was $56.7 million, an increase of 26% and 35%, respectively, compared to the quarter ended September 30, 2009.  Diluted earnings per share for the quarter ended September 30, 2010 were $0.36, an increase of 33% compared to the quarter ended September 30, 2009.  

SG&A expenses were $84.8 million for the quarter ended September 30, 2010, an increase of $8.0 million, or 10% (a 12% increase on a constant currency basis) over the quarter ended September 30, 2009.  The increase in SG&A was primarily due to expenses necessary to support sales growth.  SG&A costs were 30% of revenue in the quarter ended September 30, 2010, compared to 31% in the quarter ended September 30, 2009.    

R&D expenses were $19.7 million for the quarter ended September 30, 2010, or 7% of revenue.  R&D expenses increased by 10% (a 6% increase on a constant currency basis) compared to the quarter ended September 30, 2009.  R&D expenses were negatively impacted by the depreciation of the U.S. dollar against the Australian dollar.

The company amortized acquired intangibles of $2.0 million ($1.4 million, net of tax) during the quarter ended September 30, 2010. Stock-based compensation costs incurred during the quarter ended September 30, 2010 of $8.4 million ($6.1 million, net of tax) consisted of expenses associated with stock options, restricted stock units, and our employee stock purchase plan.  

Inventory, at $214.2 million, increased by $28.6 million compared to June 30, 2010.  Accounts receivable days sales outstanding, at 70 days, decreased by 1 day compared to June 30, 2010.

Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the first quarter of fiscal 2011 we continued to show strong growth year-over-year across the globe.  Our favorable mix of product sales and market share gains led to a 16% revenue increase in the Americas over the prior year's quarter, resulting in $155.6 million in sales. Revenue outside the Americas increased by 13% to $126.4 million over the prior year's quarter, or a 19% increase on a constant currency basis.  Globally, our growth in flow generators was driven by strong sales of the new S9™ AutoSet and Elite products and the late quarter release of the S9 Escape series. Mask sales were strong this quarter across all markets.  Operating profit for the September quarter was $66.4 million and cash flow from operations was $59.1 million, demonstrating excellent operating performance.

"The findings from recent clinical studies continue to demonstrate the importance of diagnosing and treating sleep-disordered breathing (SDB). There is abundant evidence supporting the correlation of SDB with heart failure, stroke, atrial fibrillation, diabetes, hypertension and even the dementia associated with Alzheimer's disease.  Increasingly, there is evidence coming to light that early intervention in the treatment of SDB may slow or prevent the progression of these co-morbidities. In addition, studies have been conducted at institutions such as Harvard Medical School showing that a lack of sleep negatively affects perception and judgment in the workplace, including the transportation industry, which can result in reduced efficiency, productivity and increased errors and accidents. The increase in awareness of the role that SDB plays in these costly and debilitating co-morbidities and in the reduction in workplace safety and productivity, should continue to be a major driver of market expansion."