Re: RMD - Resmed
RESMED INC. ANNOUNCES FINANCIAL RESULTS
FOR QUARTER AND YEAR ENDED JUNE 30, 2007
SYDNEY, Australia, August 8, 2007 - ResMed Inc. (ASX: RMD) today announced revenue and pro forma
income results for the quarter ended June 30, 2007. Revenue for the quarter was US$191.3 million, a 12%
increase over the quarter ended June 30, 2006. For the current quarter, pro forma income from operations
and pro forma net income were US$42.4 million and US$32.2 million (pro forma measures exclude the
impact of stock-based compensation costs, restructuring expenses, amortization of acquired intangible
assets and voluntary product recall expenses, as described below). Pro forma diluted earnings per share for
the quarter ended June 30, 2007 was US$0.41, compared to US$0.40 for the quarter ended June 2006.
GAAP operating income was US$36.0 million for the current quarter, while GAAP net income was US$27.7
million or US$0.35 per diluted share, compared with US$0.30 in the year ago quarter, an increase of 17%.
Gross margin was 61.3% for the quarter ended June 30, 2007.
Pro forma selling, general and administration (SG&A) costs for the quarter were US$61.3 million, an
increase of US$10.7 million, or 21%, over the same period in fiscal 2006. Pro forma SG&A costs were 32%
of revenue in the June quarter, compared to 30% in the same period in fiscal 2006. GAAP SG&A costs were
US$65.2 million for the quarter, an increase of US$11.5 million or 21% over the quarter ended June 30,
2006. The increase in SG&A was primarily due to the addition of selling and administration personnel and
related expenses to support sales growth.
Pro forma research & development expenditure during the June quarter was US$13.7 million. GAAP R&D
expense during the quarter was US$14.2 million or approximately 7% of revenue. GAAP R&D expenses
increased 28% year over year and are expected to remain between 6% and 7% of net revenue through fiscal
year 2008.
For the year ended June 30, 2007, revenue was US$716.3 million, an increase of 18% over the US$607.0
million for the year ended June 30, 2006. Pro forma income from operations and pro forma net income were
US$174.3 million and US$125.8 million, or US$1.59 per diluted share, an increase of 13% and 16%,
respectively. On a GAAP basis, income from operations was US$90.2 million, while net income for the year
ended June 30, 2007 was US$66.3 million or US$0.85 per diluted share.
Amortization of acquired intangibles of US$1.8 million (US$1.2 million net of tax), incurred during the quarter
ended June 30, 2007 consisted of amortization of acquired intangible assets associated with our acquisitions
of Resprecare, Hoefner, Saime, Pulmomed and PolarMed. Stock-based compensation costs incurred during
the quarter ended June 30, 2007 of US$4.5 million (US$3.3 million net of tax), consisted of expenses
associated with stock options granted to employees and the employee stock purchase plan.
The Company has provided tabular reconciliation of GAAP operating income and GAAP net income with pro
forma operating income and pro forma net income (excluding the impact of stock-based compensation costs,
restructuring expenses, amortization of acquired intangible assets, American Jobs Creation Act of 2004
(‘AJCA’) and voluntary product recall expenses) for the quarters and years ended June 30, 2007 and 2006.
Inventory at US$157.2 million as of June 30, 2007, was comparable to March 31, 2007 level of US$156.9
million. Accounts receivable days sales outstanding, at 77 days, increased from the March 31, 2007 quarter
of 73 days.
Peter C. Farrell Ph.D., Chairman and Chief Executive Officer, commented, "In the fourth quarter of fiscal
2007, overall Americas sales increased by 10%; excluding sales from our motor division, Americas sales
increased by 13% over the year ago quarter. Sales growth for the Americas were impacted by challenging
year ago comparables when we grew by 44% and a product recall initiated during the current year’s quarter.
Rest of world sales totaled US$92.8 million, a 14% increase over last year. Operating cash flow for the June
quarter was an encouraging US$27.1 million. While we are not satisfied with our Q407 results, we had a
robust fiscal year 2007, and we remain optimistic about our growth moving forward.