ResMed posts ‘solid’ fiscal year results

Friday, August 3, 2012

SAN DIEGO – ResMed officials, during an earnings call Aug. 2, downplayed competitive bidding and a new re-supply rule, saying neither would have much impact on the company.

Officials said there has been “no material impact” on ResMed from Round 1 of competitive bidding, which kicked off in nine cities in January 2011. In fact, the company has been able to grow its market share among the contract suppliers in those areas, they said.

“It seems to spook people out in the market—analysts particularly—but it doesn’t spook us out,” said Peter Farrell, chairman and CEO.

Officials said they recognize, however, that competitive bidding has been difficult on providers, and they continue to support them through a variety of resources.

As for the new re-supply rule, which requires providers to prove that a supply item, like a CPAP mask, is non-functioning before replacing it, Farrell called it “a storm in a teacup.”

“It’s a sensible approach by the government—if patients aren’t using the masks, (providers) shouldn’t be sending them out,” he said. “We are seeing less than two masks per year being used per device and CMS allows four. It’s not something we’re concerned about.”

Officials commended providers for their swift response to the rule by taking steps like adding new scripts that address functionality to their automated re-supply programs.

“There’s a lot of runway left for growth (in re-supplies),” said Mick Farrell, president of ResMed Americas. “It has been a good business conversation.”

During the call, ResMed reported revenue of $371.9 million for the quarter ended June 30, 2012, a 9% increase over the same period last year. It reported income of $76. 8 million, a 31% increase.

ResMed reported revenue of $1.37 billion for the fiscal year ended June 30, 2012, a 10% increase over last year. It reported income of $254.9 million, a 12% increase.

“We’ve had an extremely solid quarter and fiscal year,” Peter Farrell said.