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ResMed Annual Report, Year Ended Jun 30, 2012

Filing Date
Filed August 14, 2012
Period End
June 30, 2012
Securities
RMDRSMDF
One revenue dollarkept$0.19
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 August 14, 2012. Cited figures are marked; the original filing is the authoritative source.

ResMed Inc. (NYSE: RMD) is a developer, manufacturer and distributor of medical equipment for treating, diagnosing and managing sleep-disordered breathing (SDB) and other respiratory disorders, with its core products being CPAP, bilevel and ventilation flow generators, masks, and diagnostic devices.

For fiscal year ended June 30, 2012, net revenues rose 10% to $1,368.5 milliona, gross profit increased 11% to $820.7 million, and gross margin held at 60%. Net income was $254.9 million, or $1.71 per diluted share, up 19% on a per-share basis, aided by share repurchases and a lower effective tax rate of 23.2%. The company reported growth in North and Latin America (up 13%) and in markets outside that region (up 7%), with flow generators up 5% and masks, motors and other accessories up 16%.

The company's balance sheet and cash position remained strong. Cash and cash equivalents were $809.5 millionb at June 30, 2012, of which $747.8 million was held by non-U.S. subsidiaries and indefinitely invested outside the United States. Operating cash flow was $383.2 million.

Long-term debt rose to $250.8 millionc, consisting of $250.0 million outstanding under a credit facility. During the year ResMed repurchased 13.6 million shares for $391.2 million. In August 2012 the board declared its first quarterly dividend, $0.17 per share, to begin in fiscal 2013.

The filing highlights several risks for investors. Medicare competitive bidding is expected to expand to 91 competitive bidding areas in the summer of 2013, after a first round that reduced CPAP and respiratory device payment rates by an average of approximately 32%d.

The PPACA imposes a 2.3% excise tax on medical device sales beginning in 2013. The company also faces FDA 510(k) process reforms, product liability exposure, a University of Sydney lawsuit that the company does not expect to have a material adverse effect, and a substantial portion of its assets located outside the United States.

02—Key points

Key Highlights

  1. Net revenues increased 10% to $1,368.5 million in fiscal 2012, with North and Latin America revenue up 13% to $749.0 million and revenue outside North and Latin America up 7% to $619.5 million.
  2. Gross profit rose 11% to $820.7 million, with gross margin at 60%, consistent with fiscal 2011, supported by product mix and manufacturing and supply chain cost savings.
  3. Net income was $254.9 million, or $1.71 per diluted share, compared with $227.0 million, or $1.44 per diluted share, in fiscal 2011; the effective income tax rate decreased to 23.2% from 25.3%.
  4. Research and development spending was $109.7 million, or 8% of revenues, and the company launched several new masks and flow generators during fiscal 2012, including Swift FX Bella, Pixi pediatric mask and EasyCare 1.0.
  5. Cash and cash equivalents were $809.5 million at June 30, 2012, while long-term debt was $250.8 million, including $250.0 million drawn under a $400 million revolving credit facility after a January 2012 amendment.
  6. ResMed repurchased 13.6 million shares for $391.2 million during fiscal 2012, and its board declared a first quarterly dividend of $0.17 per share on August 2, 2012, payable September 28, 2012.
  7. Medicare competitive bidding is set to expand to 91 competitive bidding areas in summer 2013, after a first round that reduced CPAP and respiratory device payment rates by an average of approximately 32%, and the PPACA imposes a 2.3% medical device excise tax beginning in 2013.

03—One dollar

Follow one dollar

Of each $1.00 of revenue in FY2012, ResMed kept $0.19.

  1. Revenue$1.37B100.0%
  2. Cost of revenue−$547.8M40.0%
  3. Gross profit$820.7M60.0%
  4. Operating costs−$526.3M38.5%
  5. Operating income$294.4M21.5%
  6. Interest, other & tax−$39.6M2.9%
  7. Net income$254.8M18.6%
Computed from 10-KFY2012filed August 14, 2012Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

Where FY2012 revenue went

$1.37B
  • Cost of revenue: $547.8M, 40% of revenue
  • SG&A: $402.6M, 29% of revenue
  • Net income: $254.8M, 19% of revenue
  • R&D: $109.7M, 8.0% of revenue
  • Other operating costs: $14.0M, 1.0% of revenue
  • Interest, other & tax: $39.6M, 2.9% of revenue

Kept 19% as net incomeOther operating costs $14.0M · 1.0%

Full revenue history →

04—Financials

Financial Highlights

Figures from 10-KFY2012filed August 14, 2012
Revenue$1.37B60.0% Gross MarginNet Income$254.85M18.6% Net MarginEPS (Diluted)$1.71Total Assets$2.14BCash & Equivalents$809.54MFree Cash Flow$336.02M

Financial Statements

FY2012 against FY2011

Line itemFY2012FY2011Change
Revenue$1.37B$1.24B+10.1%
Cost of Revenue$547.78M$501.82M+9.2%
Gross Profit$820.74M$741.33M+10.7%
R&D Expenses$109.73M$92.01M+19.3%
SG&A Expenses$402.62M$372.25M+8.2%
Operating Expenses$526.33M$474.40M+10.9%
Operating Income$294.41M$266.92M+10.3%
Interest Expense$4.79M$1.76M+172.2%
Net Income$254.85M$226.99M+12.3%
EPS (Basic)$1.75$1.49+17.4%
EPS (Diluted)$1.71$1.44+18.8%
Shares Outstanding (Basic)145.90M152.47M−4.3%
Shares Outstanding (Diluted)149.32M157.19M−5.0%

05—Questions

Frequently Asked Questions

  1. How did ResMed perform financially in fiscal 2012?

    Net revenues were $1,368.5 million, up 10% from $1,243.1 million in fiscal 2011. Gross profit was $820.7 million, up 11%, and net income was $254.9 million, or $1.71 per diluted share, compared with $1.44 in fiscal 2011. The company described fiscal 2012 as a record year for financial results.

  2. Where does ResMed generate its revenue?

    North and Latin America accounted for 55% of net revenues in fiscal 2012, Europe for 35% and Asia Pacific for 10%. The company manufactures substantially all of its products outside the United States and expects sales outside North and Latin America to be about 50% of net revenues in the foreseeable future.

  3. What are the main risks related to U.S. reimbursement?

    Medicare's competitive bidding program reduced CPAP and respiratory device payments by an average of approximately 32% in the first round, effective January 1, 2011. The second round, covering 91 competitive bidding areas, is scheduled for summer 2013, and by 2016 the program must be nationalized or non-competitive area prices adjusted to match competitive bidding prices. The company said it cannot predict the impact on its business.

  4. Is ResMed paying a dividend and buying back stock?

    ResMed had not paid cash dividends since its initial public offering. On August 2, 2012, its board declared a quarterly dividend of $0.17 per share, with a record date of September 7, 2012 and payment on September 28, 2012, funded from operating cash flows and existing loan facilities. During fiscal 2012 it repurchased 13.6 million shares for $391.2 million, and 8.8 million shares remained available under its repurchase program.

06—Continue

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