Integration begins for ResMed

Company acquired Inova, Brightree in less than three-month span
Friday, April 29, 2016

SAN DIEGO – It’s still early days for recent acquisitions to impact ResMed’s financial results, but Inova Technologies helped to boost the company’s revenues by 2% in the third quarter of fiscal year 2016.

ResMed reported $453.9 million in revenues for the third quarter compared to $422.5 million for the same period in 2015, a 9% increase on a constant currency basis.

“We had two months of Inova included in the quarter,” said Mick Farrell, president and CEO during a conference call on April 27. “We also had a full quarter of Curative, our acquisition in China. So when you combine the two months of Inova and three months of Curative, it probably contributed around 2% to global growth. So our 9% global growth was 7% organic and 2% acquisition driven.”

ResMed closed on its acquisition of Inova, a manufacturer of POCs, in late January. It closed on Curative, a manufacturer of medical devices for sleep-disordered breathing and COPD, in October.

ResMed has also bought Brightree, a provider of business management and clinical software applications, but because that deal didn’t close until early April, it didn’t impact third quarter financial results. It will impact fourth quarter financial results, however. In 2015, Brightree generated $113 million in revenues and more than $43 million in EBITDA.

“We haven’t fully integrated our go-to-market (strategy), but we do have a 90-180-360 (day) plan and will be able to provide, probably over the coming four quarters, further and further integrations, including financial integration, starting in Q4, with those numbers rolling in,” Farrell said.

For net income, ResMed reported $88.5 million for the third quarter compared to $91 million for the same period in 2015, a decrease of about 2.7%.

For the Americas, ResMed reported $282.2 million in revenues for the quarter, a 12% increase. Net income was $88.5 million, a 3% decrease.

Breaking down financial results by product category, ResMed saw 15% growth in flow generators for the Americas, and 10% growth for mask and accessories. The company’s AirSense 10 and AirCurve 10 platforms, powered by cloud-based Air Solutions software, including the U-Sleep and myAir apps, continues to drive flow gen growth.

“We are seeing a lot of uptake of our solutions across many customers, and we think that’s driving the persistent growth,” said Jim Hollingshead, president, Americas.