01—Abstract
Summary
Summary of the 10-K/A filed January 13, 2017. Cited figures are marked; the original filing is the authoritative source.
ResMed Inc. reported net revenue of $1,838,713 thousanda ($1.84 billion) for the fiscal year ended June 30, 2016, up from $1,678,912 thousand in fiscal 2015.
Gross profit was $1,066,497 thousandb and income from operations was $428,952 thousand, compared with $409,236 thousand a year earlier. Net income was $352,409 thousand, roughly flat with $352,886 thousand in fiscal 2015, and diluted earnings per share were $2.49 versus $2.47. Net cash provided by operating activities rose to $547,933 thousand from $383,180 thousand.
The most significant event of the year was the April 4, 2016 acquisition of Brightree LLC, a provider of cloud-based clinical and business management software for the post-acute care industry, for a total purchase consideration of $802 millionc. The company funded it with cash, an increase in its revolving credit facility from $700 million to $1 billion, and a $300 million one-year term loan. Total debt was $1,175,000 thousand at June 30, 2016, comprising $875,000 thousand of long-term debt and $300,000 thousand of short-term debt, and goodwill increased to $1,059,245 thousand from $264,261 thousand.
The company also completed several smaller acquisitions, including Curative Medical Technology, Maribo Medico, Bennett Precision Tooling and Inova Labs. The company stated that it operates predominantly in a single segment, sleep and respiratory disorders, and that Brightree's operations were not material to its results and were not separately reported. Device sales were $1,064.2 milliond and masks and other accessories were $745.6 million in fiscal 2016.
Dividends declared rose to $1.20 per share from $1.12, and share repurchases were suspended for the six months ended June 30, 2016 following the acquisitions. KPMG LLP issued an unqualified opinion on the financial statements and on internal control over financial reporting.
02—Key points
Key Highlights
- Net revenue reached $1,838,713 thousand in fiscal 2016, up from $1,678,912 thousand in fiscal 2015 and $1,554,973 thousand in fiscal 2014.
- Net income was $352,409 thousand and diluted EPS was $2.49, compared with net income of $352,886 thousand and diluted EPS of $2.47 in fiscal 2015.
- Operating cash flow increased to $547,933 thousand from $383,180 thousand in fiscal 2015.
- The Brightree LLC acquisition, completed April 4, 2016, carried a total purchase consideration of $802 million and added $602,090 thousand of goodwill in the preliminary allocation.
- Total debt rose to $1,175,000 thousand at June 30, 2016, including a $875.0 million revolving credit facility balance and a $300.0 million term loan.
- Dividends declared per share increased to $1.20 from $1.12, and the company repurchased 1.9 million shares for $102.1 million during fiscal 2016.
- The company early adopted ASU 2016-09 and recognized additional income tax benefits of $11.2 million in earnings and $14.5 million in operating cash flows for fiscal 2016.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, ResMed kept $0.19.
- Revenue$1.84B100.0%
- Cost of revenue−$772.2M42.0%
- Gross profit$1.07B58.0%
- Operating costs−$637.5M34.7%
- Operating income$429.0M23.3%
- Interest, other & tax−$76.5M4.2%
- Net income$352.4M19.2%
Where FY2016 revenue went
$1.84B- Cost of revenue: $772.2M, 42% of revenue
- SG&A: $488.1M, 27% of revenue
- Net income: $352.4M, 19% of revenue
- R&D: $118.7M, 6.5% of revenue
- Other operating costs: $30.8M, 1.7% of revenue
- Interest, other & tax: $76.5M, 4.2% of revenue
Kept 19% as net incomeOther operating costs $30.8M · 1.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2016filed January 13, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $1.84B$1.68B | +9.5% |
| Cost of Revenue | $772.22M$667.52M | +15.7% |
| Gross Profit | $1.07B$1.01B | +5.4% |
| R&D Expenses | $118.65M$114.86M | +3.3% |
| SG&A Expenses | $488.06M$478.63M | +2.0% |
| Operating Expenses | $637.54M$602.16M | +5.9% |
| Operating Income | $428.95M$409.24M | +4.8% |
| Interest Expense | $11.21M$5.78M | +93.9% |
| Net Income | $352.41M$352.89M | −0.1% |
| EPS (Basic) | $2.51$2.51 | 0.0% |
| EPS (Diluted) | $2.49$2.47 | +0.8% |
| Shares Outstanding (Basic) | 140.24M140.47M | −0.2% |
| Shares Outstanding (Diluted) | 141.67M142.69M | −0.7% |
05—Questions
Frequently Asked Questions
How did ResMed's revenue and profitability trend in fiscal 2016?
Net revenue grew to $1,838,713 thousand from $1,678,912 thousand, and income from operations rose to $428,952 thousand from $409,236 thousand. Net income was essentially flat at $352,409 thousand versus $352,886 thousand, and diluted EPS increased to $2.49 from $2.47.
What was the Brightree acquisition and how was it financed?
On April 4, 2016, ResMed acquired Brightree LLC, a provider of cloud-based clinical and business management software for the post-acute care industry, for a total purchase consideration of $802 million. It was funded through cash on hand, the revolving credit facility, which was increased from $700 million to $1 billion, and a $300 million senior unsecured one-year term loan.
How much debt does ResMed carry and when does it come due?
Total debt was $1,175,000 thousand at June 30, 2016. This included $875.0 million outstanding under the revolving credit facility, which terminates October 31, 2018, and $300.0 million under the term loan, which terminates April 3, 2017. Both bore interest at 2.0% at June 30, 2016.
What did ResMed do with capital returns to shareholders?
Dividends declared were $1.20 per share in fiscal 2016, up from $1.12 in fiscal 2015. The company repurchased 1.9 million shares for $102.1 million during fiscal 2016 but temporarily suspended its share repurchase program due to recent acquisitions, with 13.6 million shares still available under the approved program.
06—Continue