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ResMed Inc. Announces Record Financial Results for the Quarter Ended September 30, 2009

SAN DIEGO, Nov. 5 /PRNewswire-FirstCall/ -- ResMed Inc. (NYSE: RMD) today announced record revenue and income results for the quarter ended September 30, 2009. Revenue for the September 2009 quarter was $247.0 million, a 13% increase (a 16% increase on a constant currency basis) over the quarter ended September 30, 2008. For the quarter ended September 30, 2009, income from operations was $52.7 million and net income was $42.1 million, an increase of 44% and 50%, respectively, compared to the quarter ended September 30, 2008. Diluted earnings per share for the quarter ended September 30, 2009 was $0.55, an increase of 53% compared to the quarter ended September 30, 2008.

SG&A costs were $76.8 million for the September 2009 quarter, an increase of $5.4 million or 8% (an 11% increase on a constant currency basis) over the same period in the prior fiscal year. SG&A expenses were favorably impacted by the appreciation of the US dollar against international currencies. The increase in SG&A was primarily due to expenses necessary to support sales growth. SG&A costs were 31% of revenue in the September 2009 quarter, compared to 33% in the same period in the prior fiscal year.

R&D expenses were $17.9 million for the September 2009 quarter, or approximately 7% of revenue. R&D expenses increased by 4% (a 9% increase on a constant currency basis) compared to the prior year quarter. R&D expenses were positively impacted by the appreciation of the US dollar against international currencies, particularly the Australian dollar. The increase in research and development outlays reflects 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 was $1.8 million ($1.2 million, net of tax) for the quarter ended September 30, 2009. Stock-based compensation costs incurred during the quarter ended September 30, 2009 of $6.5 million ($4.5 million, net of tax) consisted of expenses associated with stock options granted to employees and with our employee stock purchase plan.

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

Inventory, at $175.1 million, increased by $17.7 million compared to June 30, 2009. Accounts receivable days sales outstanding, at 77 days, increased by 3 days compared to June 30, 2009.

Kieran T. Gallahue, President and Chief Executive Officer, commented, "In the first quarter of fiscal 2010, we continued to show strong growth year over year. Our favorable mix of product sales and market share gains led to a 19% increase in the Americas over the prior year quarter, resulting in $134.7 million in revenue. Sales outside the Americas were impacted by currency movements, in particular the depreciation of the Euro against the US dollar. As a result, sales outside the Americas increased by 8% to $112.3 million, but were up 13% in constant currency terms. Cash flow from operations for the September quarter was $64.1 million. Our robust revenue growth, strong operating cash flows and exciting product pipeline continue to position us well for the future."

Mr. Gallahue continued, "As promised, we are steadily introducing new products in what proves to be a very exciting year for launching innovative treatment options for sleep-disordered breathing. This summer, we launched the ApneaLink(TM) Plus, our type 3 device for home sleep testing and more recently, we launched the Swift(TM) FX mask in Europe and the Mirage(TM) SoftGel mask in the Americas. These two new masks are receiving a great reception. We are also taking active steps, both in concert with another industry participant, and on our own, to drive further awareness in the primary care community of the health dangers of sleep-disordered breathing through educational programs. These efforts should further enlighten both doctors and patients especially with respect to the relationship between sleep-disordered breathing/obstructive sleep apnea and co-morbidities such as cardiac disease, diabetes, hypertension and obesity as well as the dangers of sleep apnea in regard to occupational health and safety, especially in the transport industry."

About 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

ResMed will host a conference call at 1:30 p.m. US Pacific Time today to discuss these quarterly results. Individuals wishing to access the conference call may do so via ResMed's Web site at or by dialing (866) 700-7173 (domestic) or +1 (617) 213-8838 (international) and entering conference I.D. No. 58367514. Please allow extra time prior to the call to visit the Web site and download the streaming media player (Windows 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. 96602021.

Further information can be obtained by contacting Connie Bienfait at ResMed Inc., San Diego, at (858) 836-5971; Brett Sandercock at ResMed Limited, Sydney, on (+612) 8884-2090; or by visiting the Company's multilingual Web site at

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 US 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
                                                     September 30,
                                                   2009          2008
                                                   ----          ----

    Net revenue                                $246,992      $217,931
    Cost of sales                                96,814        90,804
    -------------                                ------        ------
    Gross profit                                150,178       127,127
    ------------                                -------       -------

    Operating expenses
    Selling, general and administrative          76,756        71,337
    Research and development                     17,914        17,293
    Amortization of acquired intangible assets    1,845         1,933
    Donation to Foundation                        1,000             -
    ----------------------                        -----           ---
    Total operating expenses                     97,515        90,563
    ------------------------                     ------        ------
    Income from operations                       52,663        36,564
    ----------------------                       ------        ------

    Other income (expense), net:
    Interest income (expense), net                2,125         3,231
    Other, net                                    3,118        (1,068)
    ----------                                    -----        ------
    Total other income (expense), net             5,243         2,163
    ---------------------------------             -----         -----

    Income before income taxes                   57,906        38,727
    Income taxes                                 15,804        10,701
    ------------                                 ------        ------
    Net income                                  $42,102       $28,026
    ----------                                  -------       -------

    Basic earnings per share                      $0.56         $0.37
    Diluted earnings per share                    $0.55         $0.36

    Basic shares outstanding                     75,394        75,613
    Diluted shares outstanding                   76,762        77,180
    --------------------------                   ------        ------

                       RESMED INC AND SUBSIDIARIES
                 Consolidated Balance Sheets (Unaudited)
            (In US$ thousands except share and per share data)

                                                September 30,  June 30,
                                                    2009         2009
                                                    ----         ----
    Current assets:
    Cash and cash equivalents                     $477,824    $415,650
    Accounts receivable, net                       208,825     212,096
    Inventories                                    175,108     157,431
    Deferred income taxes                           43,859      44,368
    Income taxes receivable                          4,998       2,067
    Prepaid expenses and other current assets       29,196      21,672
    -----------------------------------------       ------      ------
    Total current assets                           939,810     853,284
    --------------------                           -------     -------
    Property, plant and equipment, net             397,375     377,613
    Goodwill                                       221,186     213,169
    Other intangibles                               35,431      35,023
    Deferred Income taxes                           20,464      19,364
    Other assets                                     5,870       9,515
    ------------                                     -----       -----
    Total non-current assets                       680,326     654,684
    ------------------------                       -------     -------
    Total assets                                $1,620,136  $1,507,968
    ------------                                ----------  ----------
    Liabilities and Stockholders' Equity
    Current liabilities:
    Accounts payable                               $47,287     $48,293
    Accrued expenses                                75,297      67,018
    Deferred revenue                                31,192      28,881
    Income taxes payable                            69,808      56,972
    Deferred Income taxes                              416         391
    Current portion of long-term debt               68,296      67,545
    ---------------------------------               ------      ------
    Total current liabilities                      292,296     269,100
    -------------------------                      -------     -------
    Non Current Liabilities:
    Deferred income taxes                           11,548      11,137
    Deferred revenue                                14,878      15,238
    Income taxes payable                             3,395       3,110
    Long-term debt                                  95,093      94,191
    --------------                                  ------      ------
    Total non-current liabilities                  124,914     123,676
    -----------------------------                  -------     -------
    Total liabilities                              417,210     392,776
    -----------------                              -------     -------
    Stockholders' Equity:
    Common Stock                                       300         301
    Additional paid-in capital                     545,186     522,982
    Retained earnings                              736,893     694,791
    Treasury stock                                (244,342)   (208,659)
    Accumulated other comprehensive income         164,889     105,777
    --------------------------------------         -------     -------
    Total stockholders' equity                   1,202,926   1,115,192
    --------------------------                   ---------   ---------

    Total liabilities and stockholders' equity  $1,620,136  $1,507,968
                                                ----------  ----------

SOURCE ResMed Inc.

SOURCE ResMed Inc.
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