SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2003
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
0-26038
Commission file number
ResMed Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
98-0152841
(IRS Employer Identification No)
14040 Danielson St
Poway CA 92064-6857
United States Of America
(Address of principal executive offices)
(858) 746 2400
(Registrant’s telephone number including area code)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨
As of February 6, 2004, 33,607,791 shares of Common Stock ($0.004 par value) were outstanding. This number excludes 886,369 shares held by the registrant as treasury shares.
RESMED INC. AND SUBSIDIARIES
2
| Item 1 |
Condensed Consolidated Balance Sheets
(in US$ thousands, except share data)
| December 31, 2003 |
June 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 107,462 | $ | 114,491 | ||||
| Marketable securities available-for-sale |
9,698 | 6,533 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $2,669 at December 31, 2003 and $2,474 at June 30, 2003 |
58,165 | 56,694 | ||||||
| Inventories, net (note 4) |
56,864 | 49,386 | ||||||
| Deferred income taxes |
9,172 | 8,301 | ||||||
| Prepaid expenses and other current assets |
6,743 | 6,500 | ||||||
| Total current assets |
248,104 | 241,905 | ||||||
| Property, plant and equipment, net of accumulated amortization of $56,060 at December 31, 2003 and $45,379 at June 30, 2003 |
134,171 | 104,687 | ||||||
| Patents, net of accumulated amortization of $4,512 at December 31, 2003 and $3,437 at June 30, 2003 |
4,827 | 3,745 | ||||||
| Goodwill (note 6) |
108,154 | 102,160 | ||||||
| Other assets |
11,223 | 7,098 | ||||||
| Total non-current assets |
258,375 | 217,690 | ||||||
| Total assets |
$ | 506,479 | $ | 459,595 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 14,479 | $ | 19,368 | ||||
| Accrued expenses |
19,531 | 19,140 | ||||||
| Deferred revenue |
7,784 | 6,355 | ||||||
| Income taxes payable |
6,333 | 3,408 | ||||||
| Current portion of deferred profit on sale-leaseback |
2,579 | 2,312 | ||||||
| Total current liabilities |
50,706 | 50,583 | ||||||
| Non-current liabilities: |
||||||||
| Deferred revenue |
8,777 | 7,210 | ||||||
| Deferred profit on sale-leaseback |
1,075 | 2,119 | ||||||
| Convertible subordinated notes (note 7) |
113,250 | 113,250 | ||||||
| Total non-current liabilities |
123,102 | 122,579 | ||||||
| Total liabilities |
173,808 | 173,162 | ||||||
| Commitments and contingencies (note 8) |
— | — | ||||||
| Stockholders’ equity: |
||||||||
| Preferred Stock, $0.01 par value, 2,000,000 shares authorized; none issued |
— | — | ||||||
| Series A Junior Participating Preferred Stock, $0.01 par value, 250,000 shares authorized; none issued |
— | — | ||||||
| Common stock, $0.004 par value, 100,000,000 shares authorized; issued and outstanding 33,557,259 at December 31, 2003 and 33,370,885 at June 30, 2003 (excluding 886,369 and 415,365 shares held as Treasury Stock respectively) |
134 | 134 | ||||||
| Additional paid-in capital |
119,071 | 107,432 | ||||||
| Retained earnings |
186,772 | 160,372 | ||||||
| Treasury stock |
(30,440 | ) | (11,415 | ) | ||||
| Accumulated other comprehensive income (note 5) |
57,134 | 29,910 | ||||||
| Total stockholders’ equity |
332,671 | 286,433 | ||||||
| Total liabilities and stockholders’ equity |
$ | 506,479 | $ | 459,595 | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
| PART I - FINANCIAL INFORMATION |
Item 1 |
Condensed Consolidated Statements of Income (Unaudited)
(in US$ thousands, except per share data)
| Three Months Ended December 31 |
Six Months Ended December 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Net revenue |
$ | 82,292 | $ | 65,293 | $ | 155,170 | $ | 123,879 | ||||||||
| Cost of sales |
29,868 | 23,454 | 55,588 | 44,343 | ||||||||||||
| Gross profit |
52,424 | 41,839 | 99,582 | 79,536 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling, general and administrative |
25,765 | 20,931 | 47,952 | 38,722 | ||||||||||||
| Donation to research foundation |
500 | — | 500 | — | ||||||||||||
| Research and development |
6,766 | 4,836 | 12,783 | 9,231 | ||||||||||||
| Total operating expenses |
33,031 | 25,767 | 61,235 | 47,953 | ||||||||||||
| Income from operations |
19,393 | 16,072 | 38,347 | 31,583 | ||||||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest income (expense), net |
(368 | ) | (743 | ) | (762 | ) | (1,626 | ) | ||||||||
| Gain on extinguishment of debt |
— | 191 | — | 529 | ||||||||||||
| Other, net |
1,883 | (318 | ) | 1,231 | (1,285 | ) | ||||||||||
| Total other income (expense), net |
1,515 | (870 | ) | 469 | (2,382 | ) | ||||||||||
| Income before income taxes |
20,908 | 15,202 | 38,816 | 29,201 | ||||||||||||
| Income taxes |
(6,757 | ) | (4,818 | ) | (12,416 | ) | (9,246 | ) | ||||||||
| Net income |
$ | 14,151 | $ | 10,384 | $ | 26,400 | $ | 19,955 | ||||||||
| Basic earnings per share |
$ | 0.42 | $ | 0.31 | $ | 0.78 | $ | 0.61 | ||||||||
| Diluted earnings per share |
$ | 0.40 | $ | 0.30 | $ | 0.75 | $ | 0.58 | ||||||||
| Basic shares outstanding (000’s) |
33,663 | 32,994 | 33,658 | 32,939 | ||||||||||||
| Diluted shares outstanding (000’s) |
35,044 | 34,346 | 35,069 | 34,234 | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
4
| PART I - FINANCIAL INFORMATION |
Item 1 |
Unaudited Condensed Consolidated Statements of Cash Flows
(in US$ thousands)
| Six Months Ended December 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 26,400 | $ | 19,955 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
8,221 | 5,752 | ||||||
| Amortization of deferred borrowing costs |
406 | 450 | ||||||
| Provision for service warranties |
103 | 83 | ||||||
| Foreign currency options revaluations |
(1,895 | ) | 1,681 | |||||
| Gain on debt extinguishment |
— | (529 | ) | |||||
| Profit on sale and lease-back of building |
(1,184 | ) | (949 | ) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable, net |
(2,804 | ) | (1,713 | ) | ||||
| Inventories |
(5,184 | ) | (2,737 | ) | ||||
| Prepaid expenses and other current assets |
73 | (1,566 | ) | |||||
| Accounts payable, accrued expenses and other liabilities |
1,861 | (259 | ) | |||||
| Net cash provided by operating activities |
25,997 | 20,168 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchases of property, plant and equipment |
(27,035 | ) | (10,617 | ) | ||||
| Patent registration costs |
(1,324 | ) | (773 | ) | ||||
| Purchase of non-trading investments |
(917 | ) | (503 | ) | ||||
| Cash paid for acquisitions, including acquisition costs |
(184 | ) | (300 | ) | ||||
| Purchases of marketable securities – available-for-sale |
(37,908 | ) | (4,000 | ) | ||||
| Proceeds from sale or maturity of marketable securities – available-for-sale |
34,726 | 19,703 | ||||||
| Net cash provided by (used in) investing activities |
(32,642 | ) | ||||||