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ResMed Inc Announces Record Financial Results for the Quarter and Six Months Ended December 31, 2008
Date:2/5/2009

SAN DIEGO, Feb. 5 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income for the quarter ended December 31, 2008. Revenue for the December 2008 quarter was $223.0 million, a 10% increase (a 16% increase on a constant currency basis) over the quarter ended December 31, 2007. For the quarter ended December 31, 2008, income from operations was $43.3 million and net income was $33.9 million, an increase of 18% and 26%, respectively, compared to the quarter ended December 31, 2007. Diluted earnings per share for the quarter ended December 31, 2008 were $0.44, an increase of 29% compared to the quarter ended December 31, 2007.

SG&A expenses were $70.1 million for the December 2008 quarter, an increase of $2.4 million, or 4% (a 14% increase on a constant currency basis) over the same period in fiscal 2007. SG&A expenses were favorably impacted by the appreciation of the U.S. dollar against international currencies. This increase in SG&A was primarily due to expenses necessary to support sales growth. SG&A costs were 31% of revenue in the December 2008 quarter, compared to 33% in the same period in fiscal 2007.

R&D expenses were $14.9 million for the December 2008 quarter, or approximately 7% of revenue. R&D expenses were flat (a 27% increase on a constant currency basis) compared to the prior year quarter. R&D was also positively impacted by the appreciation of the U.S. dollar against international currencies, particularly the Australian dollar. R&D outlays reflect ResMed's continuing commitment to innovation within its product portfolio, as well as an ongoing commitment to clinical research and product development.

Amortization of acquired intangibles of $1.7 million ($1.1 million net of tax) incurred during the quarter ended December 31, 2008, consisted of amortization of assets associated with our acquisitions of Resprecare, Hoefner, Saime and PolarMed. Stock-based compensation costs incurred during the quarter ended December 31, 2008 of $6.8 million ($4.9 million net of tax) consisted of expenses associated with stock options granted to employees and our employee stock purchase plan.

During the December 2008 quarter, we donated $1.0 million ($0.6 million, net of tax) to the ResMed Foundation. The Foundation was established primarily to promote research into the deleterious medical consequences of untreated sleep-disordered breathing.

For the six months ended December 31, 2008, revenue was $440.9 million, an increase of 14% over the six months ended December 31, 2007. For the six months ended December 31, 2008, income from operations and net income were $79.9 million and $61.9 million, an increase of 16% and 21%, respectively, compared to the six months ended December 31, 2007. Diluted earnings per share for the six months ended December 31, 2008 were $0.80 per diluted share, an increase of 23% compared to the six months ended December 31, 2007.

Inventory, at $143.1 million, decreased by $15.2 million compared to June 30, 2008. Accounts receivable days sales outstanding, at 76 days, increased by 4 days compared to June 30, 2008.

Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the second quarter of fiscal 2009, we continued to show strong growth year over year. Sales in the Americas totaled $123.1 million, a 23% increase over the prior year quarter, while sales outside the Americas were $99.9 million, a decrease of 3% over the prior year quarter. As expected, sales outside of the Americas were impacted by currency movements, in particular the depreciation of the Euro against the U.S. dollar. In constant currency terms, sales outside of the Americas increased by 8% over the prior year quarter. Cash flow from operations for the December 2008 quarter was a very strong $56.5 million.

"Our new product cycle remains in full swing as we launched a number of new products during the second quarter. In the mask category, we launched the Activa(TM) LT, which offers patients superior performance, yet is quieter and less obtrusive. We also launched the Swift(TM) LT for Her, our first gender-specific product, targeted at the rapidly growing female segment of the therapy market. Our VPAP(TM) product line continues to gain momentum with the release of the complete family of bilevel devices in the smaller S8(TM) platform. Looking forward, our pipeline of products scheduled for release over the next 18 months remains full and demonstrates our ongoing commitment to bringing innovative technologies to market across both the mask and flow generator product lines.

"We were also very encouraged to see gross margin expand in Q2. We expect continued improvement over the course of fiscal 2009 as we benefit from accelerating sales of our high margin masks and VPAP products, continuing efforts to leverage cost efficiencies across our global organization and the depreciation of the Australian dollar. We remain well-positioned to execute our strategy of introducing innovative new products and driving adoption of sleep-disordered breathing therapies in this rapidly growing global market."

ResMed

ResMed is a leading manufacturer of medical equipment for the treatment and management of sleep-disordered breathing and other respiratory disorders. We are dedicated to developing innovative products to improve the lives of those who suffer from these conditions and to increasing awareness among patients and healthcare professionals of the potentially serious health consequences of untreated sleep-disordered breathing. For more information on ResMed, visit www.resmed.com.

ResMed will host a conference call at 1:30 p.m. U.S. Pacific Standard Time today to discuss these quarterly results. Individuals wishing to access the conference call may do so via ResMed's Web site at www.resmed.com or by dialing (888) 396-2386 (domestic) or +1 (617) 847-8712 (international) and entering conference I.D. No. 28551812. Please allow extra time prior to the call to visit the Web site and download the streaming media player (Windows(R) Media Player) required to listen to the Internet broadcast. The online archive of the broadcast will be available approximately 90 minutes after the live call and will be available for two weeks. A telephone replay of the conference call is available by dialing (888) 286-8010 (domestic) and +1 (617) 801-6888 (international) and entering conference I.D. No. 50840361.

Further information can be obtained by contacting Connie Bienfait at ResMed Inc., San Diego, at (858) 746-2736; Brett Sandercock at ResMed Limited, Sydney, on (+612) 8884-2090; or by visiting the Company's multilingual Web site at www.resmed.com.

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 the Company's future revenue, earnings or expenses, new product development and new markets for the Company's 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. Those risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for its most recent fiscal year and in other reports the Company files with the U.S. Securities & Exchange Commission. Those reports are available on the Company's Web site.

                               ResMed Inc and Subsidiaries
                       Consolidated Statements of Income (Unaudited)
                         (In US$ thousands, except per share data)

                                  Three Months Ended     Six Months Ended
                                     December 31,          December 31,
                                   2008       2007       2008       2007

    Net revenue                 $222,980    $202,679   $440,911   $388,419
    Cost of sales                 91,955      81,348    182,759    155,311
    Gross profit                 131,025     121,331    258,152    233,108
    Operating expenses:
    Selling, general
     and administrative           70,086      67,644    141,424    130,527
    Research and development      14,915      14,919     32,208     27,932
    Amortization of acquired
     intangible assets             1,694       1,917      3,627      3,738
    Restructuring expenses             -          18          -      2,314
    Donation to Foundation         1,000           -      1,000          -
    Total operating expenses      87,695      84,498    178,259    164,511
    Income from operations        43,330      36,833     79,893     68,597
    Other income
    (expenses), net:
    Interest income
     (expense), net                2,666       2,354      5,898      4,668
    Other, net                       985        (340)       (83)      (606)
    Total other income
     (expenses), net               3,651       2,014      5,815      4,062
    Income before income taxes    46,981      38,847     85,708     72,659
    Income taxes                  13,128      11,986     23,829     21,673
    Net income                   $33,853     $26,861    $61,879    $50,986
    Basic earnings per share       $0.45       $0.35      $0.82      $0.66
    Diluted earnings per share     $0.44       $0.34      $0.80      $0.65
    Basic shares outstanding      75,742      77,445     75,678     77,507
    Diluted shares outstanding    77,358      78,599     77,269     78,770



                         ResMed Inc And Subsidiaries
                    Consolidated Balance Sheets (Unaudited)
              (In US$ thousands except share and per share data)

                                                   December 31,  June 30,
                                                      2008         2008
    ASSETS
    Current assets:
    Cash and cash equivalents                       $320,485     $321,078
    Accounts receivable, net                         185,733      192,200
    Inventories                                      143,064      158,251
    Deferred income taxes                             37,688       31,355
    Income taxes receivable                            2,098       17,115
    Prepaid expenses and other current assets         17,325       19,241
    Total current assets                             706,393      739,240
    Property, plant and equipment, net               328,110      357,057
    Goodwill                                         211,320      234,647
    Other intangibles                                 36,495       46,771
    Deferred Income taxes                             18,415       16,162
    Other assets                                       6,395       12,123
    Total non-current assets                         600,735      666,760
    Total assets                                  $1,307,128   $1,406,000
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                                 $54,456      $56,308
    Accrued expenses                                  53,942       61,338
    Deferred revenue                                  20,918       26,133
    Income taxes payable                              25,593        3,799
    Deferred Income taxes                              1,140        1,150
    Current portion of long-term debt                 67,553       43,865
    Total current liabilities                        223,602      192,593
    Non Current Liabilities:
    Deferred income taxes                             14,683       18,333
    Deferred revenue                                  16,064       15,673
    Income taxes payable                               3,856        3,837
    Long-term debt                                    85,350       93,789
    Total non-current liabilities                    119,953      131,632
    Total liabilities                                343,555      324,225
    STOCKHOLDERS' EQUITY:
    Common Stock                                         303          304
    Additional paid-in capital                       496,496      468,346
    Retained earnings                                610,222      548,343
    Treasury stock                                  (169,042)    (142,987)
    Accumulated other comprehensive income            25,594      207,769
    Total stockholders' equity                       963,573    1,081,775
    Total liabilities and stockholders' equity    $1,307,128   $1,406,000


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SOURCE ResMed Inc.
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