International Circuit
ResMed Inc. announces results for the fourth quarter of fiscal year 2020
ResMed Inc. (NYSE: RMD, ASX: RMD), a world-leading digital health company, today announced results for its quarter ended June 30, 2020.
Fourth Quarter 2020 Highlights
All comparisons are to the prior year period
- Revenue increased 9% to $770.3 million; up 10% on a constant currency basis
- GAAP gross margin of 58.3%; non-GAAP gross margin expanded 60 bps to 59.9%
- Net operating profit increased 84%; non-GAAP operating profit up 24%
- GAAP diluted earnings per share of $1.22; non-GAAP diluted earnings per share of $1.33
Full Year 2020 Highlights
All comparisons are to the prior year period
- Revenue increased 13% to $3.0 billion; up 15% on a constant currency basis
- GAAP gross margin of 58.1%; non-GAAP gross margin expanded 80 bps to 59.8%
- Net operating profit increased 40%; non-GAAP operating profit up 24%
- GAAP diluted earnings per share of $4.27; non-GAAP diluted earnings per share of $4.76
“Our fourth quarter results reflect the strength and resiliency of our business in today’s uncertain environment. We finished fiscal year 2020 with double-digit revenue growth to $3.0 billion and operating profit up 24% on a non-GAAP basis,” said Mick Farrell, ResMed’s CEO. “Throughout our fiscal fourth quarter, we continued to support the COVID-19 pandemic response through increased manufacturing of our ventilators, including bilevels, and ventilation mask systems while also supporting our customers with digital health solutions and other innovative tools to enable remote care for patients. Looking ahead, we are confident in our ability to navigate through the ongoing challenging clinical and economic environment to deliver for all our stakeholders. Sleep labs and physician practices are reopening across many geographies, and we’re seeing accelerated adoption of digital health solutions which supports our long-term strategy. We remain vigilant and thoughtful about the outlook for our business as we continue to serve our customers, and we believe our strong foundation will accelerate our growth over the longer term.”
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Financial Results and Operating Metrics |
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Unaudited; $ in millions, except for per share amounts |
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Three Months Ended |
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June 30, |
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June 30, |
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% Change |
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Constant |
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Revenue |
$ |
770.3 |
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$ |
705.0 |
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9 |
% |
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10 |
% |
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Gross margin (B) |
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58.3 |
% |
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57.1 |
% |
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2 |
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Non-GAAP gross margin (B) |
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59.9 |
% |
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59.3 |
% |
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1 |
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Selling, general and administrative expenses |
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165.4 |
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171.6 |
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(4) |
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0 |
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Research and development expenses |
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52.5 |
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51.1 |
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3 |
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4 |
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Income from operations |
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223.2 |
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121.1 |
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84 |
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Non-GAAP income from operations (B) |
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243.4 |
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196.2 |
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24 |
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Net income |
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177.8 |
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68.8 |
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158 |
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Non-GAAP net income (B) |
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193.3 |
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137.6 |
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40 |
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Diluted earnings per share |
$ |
1.22 |
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$ |
0.48 |
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154 |
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Non-GAAP diluted earnings per share (B) |
$ |
1.33 |
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$ |
0.95 |
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40 |
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Twelve Months Ended |
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June 30, |
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June 30, |
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% Change |
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Constant |
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Revenue |
$ |
2,957.0 |
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$ |
2,606.6 |
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13 |
% |
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15 |
% |
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Gross margin (B) |
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58.1 |
% |
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57.3 |
% |
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1 |
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Non-GAAP gross margin (B) |
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59.8 |
% |
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59.0 |
% |
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1 |
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Selling, general and administrative expenses |
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676.7 |
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645.0 |
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5 |
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7 |
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Research and development expenses |
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201.9 |
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180.7 |
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12 |
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14 |
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Income from operations |
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809.7 |
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579.3 |
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40 |
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Non-GAAP income from operations (B) |
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890.9 |
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716.3 |
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24 |
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Net income |
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621.7 |
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404.6 |
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54 |
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Non-GAAP net income (B) |
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692.8 |
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526.4 |
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32 |
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Diluted earnings per share |
$ |
4.27 |
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$ |
2.80 |
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53 |
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Non-GAAP diluted earnings per share (B) |
$ |
4.76 |
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$ |
3.64 |
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31 |
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(A) |
In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency basis,” which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP. |
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(B) |
See the reconciliation of non-GAAP financial measures in the table at the end of the press release. |
Discussion of Fourth Quarter Results
All comparisons are to the prior year period unless otherwise noted
- Revenue in the U.S., Canada, and Latin America, excluding Software as a Service, grew by 4 percent, driven by strong sales across our mask product portfolio and increased demand for our ventilators due to COVID-19, partially offset by a decrease in demand for our sleep devices.
- Revenue in combined Europe, Asia, and other markets grew by 22 percent on a constant currency basis, primarily driven by sales across our device product portfolio, including increased demand for our ventilators due to COVID-19.
- Software as a Service revenue increased by 7 percent, due to continued growth in resupply service offerings and stabilizing patient flow in out-of-hospital care settings.
- Gross margin expanded by 120 basis points while non-GAAP gross margin expanded by 60 basis points. These expansions were primarily due to benefits from product mix changes, partially offset by declines in manufacturing and procurement efficiencies driven by higher air freight costs.
- Selling, general, and administrative expenses decreased by 4 percent or consistent on a constant currency basis. SG&A expenses improved to 21.5 percent of revenue in the quarter, compared with 24.3 percent in the same period of the prior year. These changes in SG&A expenses were mainly due to savings in travel and other cost management as a result of the COVID-19 pandemic.
- Income from operations increased by 84 percent and non-GAAP income from operations increased by 24 percent.
- Net income grew by 158 percent and diluted earnings per share grew by 154 percent, largely attributable to the impact of legal settlement expenses in the prior year. Non-GAAP net income grew by 40 percent and non-GAAP diluted earnings per share grew by 40 percent, predominantly attributable to strong ventilator device sales and controlled operating costs.
- Cash flow from operations for the quarter was $330.3 million, compared to net income in the current quarter of $177.8 million. During the quarter we paid $56.5 million in dividends.
Other Business and Operational Highlights
- Accelerated the launch of cloud-based remote monitoring software for ventilators and Lumis devices across Europe, via the AirView platform. Through the new release, clinicians and care providers can remotely monitor patients’ respiratory rate and blood oxygen saturation, two key indicators to track changes in a respiratory patient’s condition.
- Launched ResMed MaskSelector, a digital tool to make remote patient mask selection and sizing easier and more effective, helping patients receive the care they need from home. ResMed MaskSelector creates personalized ResMed mask recommendations based on a patient’s sleep attributes and facial measurements enabling HMEs to support patients when they can’t physically set them due to physical distancing.
Dividend program
The ResMed board of directors today declared a quarterly cash dividend of $0.39 per share. The dividend will have a record date of August 20, 2020, payable on September 24, 2020. The dividend will be paid in U.S. currency to holders of ResMed’s common stock trading on the New York Stock Exchange. Holders of CHESS Depositary Interests (“CDIs”) trading on the Australian Securities Exchange will receive an equivalent amount in Australian currency, based on the exchange rate on the record date, and reflecting the 10:1 ratio between CDIs and NYSE shares. The ex-dividend date will be August 19, 2020, for common stockholders and for CDI holders. ResMed has received a waiver from the ASX’s settlement operating rules, which will allow ResMed to defer processing conversions between its common stock and CDI registers from August 19, 2020, through August 20, 2020, inclusive.
Webcast details
ResMed will discuss its fourth quarter fiscal year 2020 results on its webcast at 1:30 p.m. U.S. Pacific Time today. The live webcast of the call can be accessed on ResMed’s Investor Relations website at investor.resmed.com. Please go to this section of the website and click on the icon for the “Q4 2020 Earnings Webcast” to register and listen to the live webcast. A replay of the earnings webcast will be accessible on the website and available approximately two hours after the live webcast. In addition, a telephone replay of the conference call will be available approximately two hours after the webcast by dialing +1 833-241-4253 (U.S.) or +1 647-689-4204 (outside U.S.) and entering the passcode 2498310. The telephone replay will be available until August 19, 2020. –Businesswire
