ResMed Revenue Up 6% to $422 Million
ResMed Inc’s revenue for the third quarter ended March 31, 2015, was $422.5 million, a 6% increase compared to the quarter ended March 31, 2014. Net income was $91.0 million, an increase of 1% compared to the quarter ended March 31, 2014. Diluted earnings per share for the quarter were $0.64, an increase of 2% compared to the quarter ended March 31, 2014. Non-GAAP diluted earnings per share for the quarter were $0.65, a 2% increase compared to the quarter ended March 31, 2014.
“We are pleased to report excellent progress with our new product launches, as we continued to see double-digit revenue growth,” says Mick Farrell, ResMed’s CEO, in a release. “Strong demand for our new flow generator launches in the US and continued growth in our Asia Pacific and Europe regions drove our results in the quarter.
“We saw strong customer adoption of our range of new flow generators: the Astral, AirSense 10, and the recently launched AirCurve 10 series of cloud-connected bilevel devices. This quarter, we continued to build our informatics capabilities with the acquisition of Jaysec, a provider of cloud-based software solutions for the home medical equipment industry, as well as the integration of our AirView patient management system with leading informatics partners.”
Farrell adds: “We are executing on our long-term strategy: growing our core sleep-disordered breathing market and investing in future opportunities in chronic obstructive pulmonary disease as well as cardio-respiratory conditions. Our innovative products and solutions improve patient outcomes, lower healthcare costs, and reduce the impact of chronic disease.”
Analysis of Third Quarter Results
In the third quarter of fiscal year 2015, revenue in the Americas was $250.9 million, a 16% increase over the prior year’s quarter. Revenue in combined Europe and Asia Pacific was $171.6 million, a 6% decrease compared to the quarter ended March 31, 2014 (a 9% increase on a constant currency basis).
Gross margin in the third quarter was 59.5%, lower than the prior year, mainly due to declines in average selling prices, an unfavorable product and geographic mix, and an unfavorable impact from foreign exchange rate movements.
Selling, general, and administrative expenses were $116.3 million for the quarter, a 1% increase over the quarter ended March 31, 2014. SG&A expenses improved to 27.5 percent of revenue in the quarter, compared to 28.9 percent in the quarter ended March 31, 2014.
Research and development expenses were $27.0 million for the quarter, or 6.4 percent of revenue. R&D expenses decreased by 8% compared to the quarter ended March 31, 2014.
Operating profit for the quarter was $105.9 million and cash flow from operations was $90.9 million.
Amortization of acquired intangible assets was $2.2 million ($1.6 million, net of tax) during the quarter. Stock-based compensation costs incurred during the quarter of $11.7 million ($8.2 million, net of tax) consisted of expenses associated with employee equity grants, and the company’s employee stock purchase plan.