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ResMed Inc. Announces Record Financial Results for the Quarter Ended September 30, 2010

SAN DIEGO, Oct. 28 /PRNewswire-FirstCall/ -- 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."

About ResMedResMed is a leading developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. The company is 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 Website at or by dialing (866) 783-2144 (domestic) or +1 (857) 350-1603 (international) and entering conference pass code no. 64219936. 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. 90239322.

Further information can be obtained by contacting Constance 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 U.S. Securities & Exchange Commission.  Those reports are available on the Company's Web site.ResMed Inc and SubsidiariesCondensed Consolidated Statements of Income (Unaudited)

(In US$ thousands, except per share data)Three Months Ended

September 30,2010

2009Net revenue


$246,992Cost of sales


96,814Gross profit


150,178Operating expensesSelling, general and administrative


76,756Research and development


17,914Amortization of acquired intangible assets


1,845Donation to Foundation


1,000Total operating expenses


97,515Income from operations


52,663Other income, net:Interest income, net


2,125Other, net


3,118Total other income, net


5,243Income before income taxes


57,906Income taxes


15,804Net income


$42,102Basic earnings per share


$0.28Diluted earnings per share


$0.27Basic shares outstanding


150,788Diluted shares outstanding


153,524All share and per share information has been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that was declared on August 5, 2010 and distributed on August 30, 2010.

ResMed Inc And SubsidiariesCondensed Consolidated Balance Sheets (Unaudited)

(In US$ thousands except share and per share data)September 30,

June 30,2010

2010ASSETSCurrent assets:Cash and cash equivalents


$488,776Accounts receivable, net




185,642Deferred income taxes


14,112Income taxes receivable


5,317Prepaid expenses and other current assets


64,583Total current assets


985,341Property, plant and equipment, net




198,625Other intangibles


30,925Deferred income taxes


19,042Other assets


5,316Total non-current assets


641,056Total assets


$1,626,397LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable


57,535Accrued expenses


80,883Deferred revenue


29,507Income taxes payable


22,656Deferred income taxes


402Current portion of long-term debt


121,689Total current liabilities


312,672Non-current liabilities:Deferred income taxes


10,793Deferred revenue


12,755Income taxes payable


2,641Total non-current liabilities


26,189Total liabilities


338,861Stockholders' Equity:Common stock


605Additional paid-in capital


660,185Retained earnings


884,876Treasury stock


(344,505)Accumulated other comprehensive income


86,375Total stockholders' equity


1,287,536Total liabilities and stockholders' equity



SOURCE ResMed Inc.
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