ResMed Inc announced results for its quarter ended September 30, 2014. Revenue for the quarter was $380.4 million, a 6% increase compared to the quarter ended September 30, 2013 (also a 6% increase on a constant currency basis). Net income was $83.3 million, an increase of 3% compared to the quarter ended September 30, 2013.
“We had a successful start to fiscal year 2015, as new product launches drove revenue growth,” says Mick Farrell, ResMed’s CEO, in a release. “Our results showed very strong performance from our European and Asia Pacific regions, as well as solid growth in the Americas.
“During the quarter, we launched innovative products for the sleep-disordered breathing market, including our new AirSense 10 platform, as well as a new life support ventilator for the US respiratory care market, our new Astral platform. We have also recently made progress in building consumer awareness through two initiatives: an education and product-focused campaign called ‘Better Sleep for Women‘; and the recent launch of a new product ‘S+ by ResMed,‘ the first non-contact sleep wellness tracking device for individuals,” Farrell says.
“We are delivering on our promise to drive top-line revenue growth this fiscal year by launching a strong portfolio of new products, services, and solutions. This portfolio will provide exceptional value to all key players in our value chain: physicians, providers, payors, and, most importantly, to patients.”
Analysis of First Quarter Results
In the first quarter of fiscal year 2015, revenue outside the Americas was $173.2 million, an 11% increase over the prior year’s quarter. Revenue in the Americas was $207.2 million, a 3% increase compared to $201.5 million in the prior year’s quarter.
Gross margin in the first quarter was 62.4%, 130 basis points lower than the prior year, mainly due to declines in average selling prices and an unfavorable product mix, which were partially offset by manufacturing and supply chain improvements.
Selling, general, and administrative expenses were $110.5 million for the quarter, a 9% increase over the quarter ended September 30, 2013. SG&A expenses were 29.1% of revenue in the quarter, compared to 28.3% in the quarter ended September 30, 2013, primarily due to higher marketing costs associated with recent new product releases, additional head count to support commercial activities, and an increase in variable employee compensation costs.
Research and development expenses were $30.0 million for the quarter, or 7.9% of revenue. R&D expenses increased by 10% compared to the quarter ended September 30, 2013, primarily reflecting incremental investment in healthcare informatics and cardiology.
Operating profit for the quarter was $94.7 million and cash flow from operations was $86.5 million.