ResMed ( RMD) F1Q 2012 Results October 24, 2011 4:30 p.m. ET Executives Peter Farrell - Founder, Chairman, and CEO Don Darkin - President, SDB Strategic Business Unit Brett Sandercock - CFO Geoff Neilson - President, Respiratory Care Strategic Business Unit Analysts Matthew Prior - Merrill Lynch Ben Andrew - William Blair David Clair - Piper Jaffray Michael Matson - Mizuho Securities Dan Hurren - UBS David Low - Deutsche Bank Presentation Operator
First, the finance. We finished with what we think is a very solid quarter. Global revenue grew 12% to $315 million, or 8% on a constant currency basis. Revenue in the Americas grew by 9% year over year to $169.3 million, and ROW revenue increased by 15% to $145.5 million, which was 7% on a constant currency basis.US GAAP EPS decreased to $0.33 for the quarter, but let me quickly mention this was primarily impacted by forex and Brett will go into that in a little more detail. But it was a significant impact. And if we exclude amortization of acquired intangibles, the hybrid EPS was $0.35, which matched First Call’s expectations. In looking at product category performance, let me start first with masks and accessories. The results in this category continue to perform well across the globe, and we continue to take share. The three new mask offerings, the 4X trilogy, the Quattro, the Mirage, and the Swift FX, continue to do very well. We also just recently launched versions of all of the FX series masks for women, in our Choices for Her program. This popular family of masks, which are lightweight, unobtrusive, and comfortable, offers female-friendly versions of all three categories with fitting and comfort options especially with women in mind. And I believe we are the first company to design a mask simply for female patients. We also launched the first pediatric mask in the industry, developed specifically for the treatment of sleep disordered breathing in children, in this case age 2 and older. This is not just a scaled-down adult mask. Every feature of the new Pixie was designed to address and improve comfort acceptance with both child and caregiver in mind. With the new Pixie nasal mask, we now have three options to meet the needs of children with sleep disordered breathing. And, by combining the new Stellar 100 ventilator with the Pixie nasal mask, we now offer an ideal pediatric therapy solution, particularly in either a hospital or institutional care setting.
One reason we continue to see strong growth in masks and accessories other than our new products is that even in this very challenging economy there is excellent business in the resupply or replenishment of masks to existing patients, and we are working with our customers, the HMEs, to leverage this significant business opportunity.Now, moving to devices, our global growth in sleep therapy devices was mainly driven by sales of the S9 AutoSet, as well as our adaptive servo ventilation offerings the VPAP Adapt and the AutoSet CS. Growth in the rest of the flow generator segment was problematic, especially in the low-end products, as was reported for the previous couple of quarters. This continues to be a challenging environment, especially in the Americas, as everybody knows in the medtech space. But on top of that, we had tough comps, and in addition, the Q1 for us, the September quarter, is always a challenge because of France and Germany vacation issues. So it’s a difficult macroeconomic environment, but one of the key reasons for some impact on the top line was that we chose to walk away from business because it was uneconomic. So in other words, we intentionally left significant potential revenue on the top line. We left money on the table, but we think it was the right call. However, while flow generator sales were softer than expected in the Americas, Europe still posted fairly good results. A few weeks ago, ResMed introduced the S9 AutoSet for Her, within the Choices for Her program. Offering the quiet comfort of the S9, the Easy Breathe motor, and the enhanced AutoSet algorithm, the S9 for Her ensures that the sleep environment for a woman will remain quiet and peaceful. And in addition, there is the H5i, the humidifier with climate control, which also has been designed with her in mind. It’s also interesting to note that we think the timing on this makes a lot of sense, because the latest statistics show that 40% of the newly diagnosed sleep patients are actually women. Read the rest of this transcript for free on seekingalpha.com