ResMed Americas shines in fourth quarter

Friday, July 31, 2015

SAN DIEGO – ResMed’s flow generator sales increased 53% and mask sales rebounded to increase 5% in the fourth quarter ended June 30, 2015.

ResMed officials credit healthcare informatics platforms like U-Sleep, which allows providers to monitor and manage their businesses, with powering the company to generate $151.5 million in flow generator sales for the quarter.

“The analogy would be iTunes is such a great platform that people are buying a lot of iPhones and iPads,” said CEO Mick Farrell. “We do think that the growth of those flow generators is linked to really the changing of the basis of competition from just small, quieter, more comfortable, to smaller, quieter, more comfortable and more connected.”

For the Americas, ResMed reported total revenues of $273.7 million for the quarter, a 27% increase compared to the same period last year.

ResMed officials say they’ve seen “growing adoption” of U-Sleep and as the company adds to its healthcare informatics platform, thanks in part to recent acquisitions like Jaysec and CareTouch (rebranded ResMed Resupply), they expect to see even more widespread adoption.

“We will continue to drive that as we add more features to the platform,” said Jim Hollingshead, president, Americas.

The popularity of the company’s AirFit portfolio combined with stabilization in pricing spurred $122.2 million in sales for masks in the quarter.

“It was a great turnaround from Q3 to Q4, from minus 3% to plus 5% on the mask line,” Farrell said. “We do think that’s a sustainable turnaround. Good products, good pricing, good positioning, and we think the masks will continue to do well for the year ahead.”

Going into fiscal year 2016, ResMed has targeted three ways to improve efficiency: moving more of its shipping volume from air to sea freight; reducing supply chain costs with internal and external “cost-out programs”; and growing manufacturing volume in lower cost plants.

“I think all of those three elements will help move gross margin to the higher end of our guidance,” Farrell said.

Overall, ResMed reported revenues of $453.1 million for the quarter, a 9% increase compared to the same quarter last year. It reported a net income of $87.5 million, consistent with the same quarter last year.

ResMed reported revenues of $1.7 billion for fiscal year 2015, an 8% increase compared to last year. It reported a net income of $352.9 million, a 2% increase.

Results for the fourth quarter were impacted by two non-recurring items: expenses of $5 million associated with the field safety notice in response to results of the Serve-HF clinical trial; and donations of $6 million ($5 million to the University of California-San Diego to fund a center of excellence and endowed chair in the field of pulmonary and critical care medicine, and an incremental donation of $1 million to the ResMed Foundation).