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ResMed Annual Report, Year Ended Jun 30, 1996

Filing Date
Filed September 27, 1996
Period End
June 30, 1996
Securities
RMDRSMDF
In the record · 2016–202610-K1410-Q338-K85

RMD filed 14 annual reports (10-K), 33 quarterly reports (10-Q) and 85 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jan ’17Jan ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed September 27, 1996. Cited figures are marked; the original filing is the authoritative source.

ResMed Inc., a Delaware corporation, designs, manufactures and markets nasal CPAP equipment for the diagnosis and treatment of obstructive sleep apnea (OSA).

Its manufacturing is in Sydney, Australia, and its common stock began trading on NASDAQ on June 2, 1995 under the symbol "RESM". For fiscal 1996 (year ended June 30, 1996), net revenues rose to $34.6 milliona from $23.5 million, and net income rose to $4.5 million from $2.8 million, with primary earnings per share of $0.63 in both years. Gross margin declined slightly to 50.8% from 52.0%, which the company attributed to a stronger Australian dollar and price competition in the United States.

Selling, general and administrative expenses rose to $11.1 millionb, driven partly by the February 1996 acquisition of its German distributor. The company's acquisitions of its German distributor (Dieter W Priess Medtechnik, for $6.5 million) and French distributor (Premium Medical SARL, for $348,000) expanded its direct presence in Europe, where net revenues increased to $12.4 million from $6.8 million. Total assets grew to $46.9 million at June 30, 1996, and stockholders' equity reached $39.0 million.

Cash and marketable securities totaled $23.5 millionc. Product momentum included FDA clearances in July and August 1996 for the AutoSet Portable, AutoSet Clinical and VPAP II ST devices. The filing also discloses material risks.

The company's dominant Australian market share has declined after a 1994 revocation of its original Australian CPAP patent, and management expects further decline. ResMed is in patent litigation with Respironics, and Respironics has filed a Trade Practices Act claim seeking about $730,000d. The company relies on two single-source suppliers for key CPAP components and does not expect to pay cash dividends in the foreseeable future.

02—Key points

Key Highlights

  1. Fiscal 1996 net revenues were $34.6 million, up from $23.5 million in fiscal 1995, and net income was $4.5 million, up from $2.8 million.
  2. Europe net revenues rose to $12.4 million from $6.8 million, aided by the acquisitions of the German distributor (Priess, $6.5 million) and the French distributor (Premium Medical, $348,000).
  3. Gross profit margin declined to 50.8% from 52.0%, which the company attributed to a stronger Australian dollar and U.S. price competition.
  4. FDA clearances were received in July and August 1996 for the AutoSet Portable, AutoSet Clinical and VPAP II ST devices.
  5. Australian market share decreased after the May 1994 revocation of the company's original CPAP patent, and the company expects further decline.
  6. Patent infringement litigation against Respironics is ongoing, and Respironics has filed a claim of about $730,000 under the Australian Trade Practices Act.
  7. At June 30, 1996, the company had $23.5 million in cash and marketable securities, working capital of $30.5 million and stockholders' equity of $39.0 million.

03—Questions

Frequently Asked Questions

  1. How did ResMed's revenue and profitability trend in fiscal 1996?

    Net revenues increased to $34.6 million from $23.5 million, and net income increased to $4.5 million from $2.8 million. Primary earnings per share were $0.63 in both years. Gross profit increased to $17.6 million, although gross margin declined to 50.8% from 52.0%.

  2. What are the main risks to ResMed's Australian business?

    The 1994 revocation of the company's original Australian CPAP patent allowed competitors to enter the market, and the company's market share there decreased in 1995 and 1996 and is expected to keep decreasing. In May 1996 the company signed an exclusive distribution agreement with Medical Gases of Australia and agreed to stop direct sales in Australia.

  3. What litigation is ResMed involved in?

    ResMed filed a U.S. patent infringement complaint against Respironics in January 1995, and Respironics seeks a declaratory judgment of non-infringement and patent invalidity. In June 1996 ResMed filed a further action over its delayed timer continuation patent. Separately, Respironics and its Australian distributor sued ResMed in the Federal Court of Australia for about $730,000 under the Trade Practices Act. Management believes the continuation patent action will not have a material impact.

  4. Does ResMed pay dividends and how concentrated are its customers and suppliers?

    The company does not intend to declare cash dividends in the foreseeable future. Medical Gases of Australia accounted for 7% of net sales in 1996, and Priess accounted for 8%. The company purchases two key CPAP components from two single-source suppliers and is qualifying additional sources.

04—Continue

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