filings.toolsResMed 10-Q 2024-09-30
Filed 2024-10-25. 8 sections, 164K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______to _______
Commission File Number: 001-15317
ResMed Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
98-0152841
(I.R.S. Employer Identification No.)
9001 Spectrum Center Blvd.
San Diego, CA 92123
United States of America
(Address of principal executive offices, including zip code)
(858) 836-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Common Stock, par value $0.004 per share | RMD | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | x | Accelerated Filer | o | |||||||||||
| Non-Accelerated Filer | o | Smaller Reporting Company | o | |||||||||||
| Emerging Growth Company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
At October 21, 2024 there were 146,795,746 shares of Common Stock ($0.004 par value) outstanding. This number excludes 42,886,063 shares held by the registrant as treasury shares.
RESMED INC. AND SUBSIDIARIES
INDEX
| PART I – FINANCIAL INFORMATION | Item 1 |
Item 1. Financial Statements
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In US$ and in thousands, except share and per share data)
| September 30, 2024 | June 30, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 426,361 | $ | 238,361 | |||||||
| Accounts receivable, net of allowances of $23,600 and $21,132 at September 30, 2024 and June 30, 2024, respectively | 811,198 | 837,275 | |||||||||
| Inventories (note 3) | 917,982 | 822,250 | |||||||||
| Prepaid expenses and other current assets (note 3) | 485,584 | 459,833 | |||||||||
| Total current assets | 2,641,125 | 2,357,719 | |||||||||
| Non-current assets: | |||||||||||
| Property, plant and equipment, net (note 3) | 560,211 | 548,025 | |||||||||
| Operating lease right-of-use assets | 157,068 | 151,121 | |||||||||
| Goodwill (note 4) | 2,886,017 | 2,842,055 | |||||||||
| Other intangible assets, net (note 3) | 478,613 | 485,904 | |||||||||
| Deferred income taxes | 220,530 | 203,569 | |||||||||
| Prepaid taxes and other non-current assets | 278,853 | 284,001 | |||||||||
| Total non-current assets | 4,581,292 | 4,514,675 | |||||||||
| Total assets | $ | 7,222,417 | $ | 6,872,394 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 249,278 | $ | 237,728 | |||||||
| Accrued expenses | 365,749 | 377,678 | |||||||||
| Operating lease liabilities, current | 28,278 | 25,278 | |||||||||
| Deferred revenue | 157,188 | 152,554 | |||||||||
| Income taxes payable | 93,690 | 107,517 | |||||||||
| Short-term debt, net (note 6) | 9,896 | 9,900 | |||||||||
| Total current liabilities | 904,079 | 910,655 | |||||||||
| Non-current liabilities: | |||||||||||
| Deferred revenue | 144,453 | 137,343 | |||||||||
| Deferred income taxes | 83,521 | 79,339 | |||||||||
| Operating lease liabilities, non-current | 144,490 | 141,444 | |||||||||
| Other long-term liabilities | 83,270 | 42,257 | |||||||||
| Long-term debt, net (note 6) | 667,578 | 697,313 | |||||||||
| Total non-current liabilities | 1,123,312 | 1,097,696 | |||||||||
| Total liabilities | 2,027,391 | 2,008,351 | |||||||||
| Commitments and contingencies (note 8) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued | — | — | |||||||||
| Common stock, $0.004 par value, 350,000,000 shares authorized; 189,662,212 issued and 146,776,149 outstanding at September 30, 2024 and 189,565,112 issued and 146,901,045 outstanding at June 30, 2024 | 758 | 588 | |||||||||
| Additional paid-in capital | 1,924,584 | 1,896,604 | |||||||||
| Retained earnings | 5,225,111 | 4,991,647 | |||||||||
| Treasury stock, at cost, 42,886,063 shares at September 30, 2024 and 42,664,067 shares at June 30, 2024 | (1,823,272) | (1,773,267) | |||||||||
| Accumulated other comprehensive loss | (132,155) | (251,529) | |||||||||
| Total stockholders’ equity | 5,195,026 | 4,864,043 | |||||||||
| Total liabilities and stockholders’ equity | $ | 7,222,417 | $ | 6,872,394 |
See the accompanying notes to the unaudited condensed consolidated financial statements.
| PART I – FINANCIAL INFORMATION | Item 1 |
RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(In US$ and in thousands, except per share data)
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Net revenue - Sleep and Breathing Health products | $ | 1,067,737 | $ | 963,037 | |||||||||||||||||||
| Net revenue - Residential Care Software | 156,772 | 139,284 | |||||||||||||||||||||
| Net revenue | 1,224,509 | 1,102,321 | |||||||||||||||||||||
| Cost of sales - Sleep and Breathing Health products | 451,312 | 444,460 | |||||||||||||||||||||
| Cost of sales - Residential Care Software | 48,308 | 48,893 | |||||||||||||||||||||
| Cost of sales (exclusive of amortization shown separately below) | 499,620 | 493,353 | |||||||||||||||||||||
| Amortization of acquired intangible assets - Sleep and Breathing Health products | 1,210 | 1,916 | |||||||||||||||||||||
| Amortization of acquired intangible assets - Residential Care Software | 6,460 | 6,992 | |||||||||||||||||||||
| Amortization of acquired intangible assets | 7,670 | 8,908 | |||||||||||||||||||||
| Total cost of sales | 507,290 | 502,261 | |||||||||||||||||||||
| Gross profit | 717,219 | 600,060 | |||||||||||||||||||||
| Selling, general, and administrative | 238,979 | 222,874 | |||||||||||||||||||||
| Research and development | 79,524 | 75,710 | |||||||||||||||||||||
| Amortization of acquired intangible assets | 11,404 | 12,479 | |||||||||||||||||||||
| Total operating expenses | 329,907 | 311,063 | |||||||||||||||||||||
| Income from operations | 387,312 | 288,997 | |||||||||||||||||||||
| Other income (loss), net: | |||||||||||||||||||||||
| Interest (expense) income, net | (1,661) | (14,957) | |||||||||||||||||||||
| Gain (loss) attributable to equity method investments (note 5) | 963 | (3,895) | |||||||||||||||||||||
| Gain (loss) on equity investments (note 5) | (680) | (602) | |||||||||||||||||||||
| Other, net | (2,437) | 2,648 | |||||||||||||||||||||
| Total other income (loss), net | (3,815) | (16,806) | |||||||||||||||||||||
| Income before income t |
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Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports made pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2024.
There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| PART II – OTHER INFORMATION | Item 1-6 |
RESMED INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1 Legal Proceedings
We are involved in various legal proceedings, claims, investigations and litigation that arise in the ordinary course of our business. We investigate these matters as they arise, and accrue estimates for resolution of legal and other contingencies in accordance with Accounting Standard Codification Topic 450, “Contingencies”. See note 8 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Litigation is inherently uncertain. Accordingly, we cannot predict with certainty the outcome of these matters. But we do not expect the outcome of these matters to have a material adverse effect on our consolidated financial statements when taken as a whole.
Item 1A. Risk Factors
The discussion of our business and operations should be read together with the risk factors contained in our annual report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC and describe various material risks and uncertainties to which we are or may become subject. As of September 30, 2024, there have been no further material changes to such risk factors.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Purchases of equity securities. The following table summarizes our purchases of common stock for the three months ended September 30, 2024:
| Period | Total Number of Shares Purchased | Average Price Paid per Share (USD) | Cumulative Number of Shares Purchased as Part of Publicly Announced Programs | Maximum Number of Shares that May Yet Be Purchased Under the Program | ||||||||||||||||||||||
| July 1 - 31, 2024 | — | — | 42,664,067 | 12,051,946 | ||||||||||||||||||||||
| August 1 - 31, 2024 | 221,996 | 225.23 | 42,886,063 | 11,829,950 | ||||||||||||||||||||||
| September 1 - 30, 2024 | — | — | 42,886,063 | 11,829,950 | ||||||||||||||||||||||
| Total | 221,996 | $ | 225.23 | 42,886,063 | 11,829,950 |
On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock. The program allows us to repurchase shares of our common stock from time to time for cash in the open market, or in negotiated or block transactions, as market and business conditions warrant and subject to applicable legal requirements. The share repurchase program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors. All share repurchases after February 21, 2014 have been executed under this program. Since approval of the share repurchase program in 2014 through September 30, 2024, we have repurchased a total of 8.2 million shares under this repurchase program for an aggregate of $612.7 million.
Item 3. Defaults Upon Senior Securities
None
Item 4 Mine Safety Disclosures
None
Item 5. Other Information
Rule 10b5-1 Trading Plans of Directors and Executive Officers
Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act and in compliance with guidelines specified by our insider trading policy. In accordance with Rule 10b5-1 and our insider trading
| PART II – OTHER INFORMATION | Item 1-6 |
RESMED INC. AND SUBSIDIARIES
policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our stock, including shares acquired pursuant to our equity incentive plans. Under a Rule 10b5-1 trading plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The use of these trading plans permits asset diversification as well as personal financial and tax planning. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with SEC rules, the terms of our insider trading policy and certain minimum holding requirements.
During the quarterly period ended September 30, 2024, none of our directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
| PART II – OTHER INFORMATION | Item 1-6 |
RESMED INC. AND SUBSIDIARIES
Item 6. Exhibits
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
| * | In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
| PART II – OTHER INFORMATION | Signatures |
RESMED INC. AND SUBSIDIARIES
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
October 24, 2024
| ResMed Inc. | |||||
| /s/ MICHAEL J. FARRELL | |||||
| Michael J. Farrell | |||||
| Chief Executive Officer | |||||
| (Principal Executive Officer) |
| /s/ BRETT A. SANDERCOCK | |||||
| Brett A. Sandercock | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) |