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ResMed's (RMD) CEO Mick Farrell on Q3 2016 Results - Earnings Call Transcript

Q3 2016 Earnings Conference Call

April 26, 2015 4:30 pm ET

Executives

Agnes Lee - Senior Director-Investor Relations

Mick Farrell - Chief Executive Officer

Brett Sandercock - Chief Financial Officer

Jim Hollingshead - President-Americas

Rob Douglas - President and Chief Operating Officer

Analysts

Ian Abbott - Goldman Sachs

Matt Taylor - Barclays

Andrew Goodsall - UBS

Margaret Kaczor - William Blair

Will Dunlop - Merrill Lynch

Mike Matson - Needham & Company

Matth O’Brien - Piper Jaffray

Saul Hadassin - Credit Suisse

Anthony Petrone - Jefferies

Victor Windeyer - Citi

Chris Kallos - Morningstar

Suraj Kalia - Northland Securities

Operator

Welcome to the Q3 Fiscal Year 2016 ResMed Inc. Earnings Conference Call. My name is Andrew and I will your operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Agnes Lee, Senior Director of Investor Relations. Agnes you may begin.

Agnes Lee

Thank you, Andrew and thank you for attending ResMed’s live webcast. Joining me on the call today are Mick Farrell, our CEO; and Brett Sandercock, our CFO. Other members of the management team will also be available during the Q&A portion of the call. If you have not had a chance to review the earnings release it can be found on our website at investors.resmed.com. I want to remind our listeners that our discussion today may include forward-looking statements, including but not limited to statements about future expectations, plans and prospects for the company, corporate strategy and performance.

We believe these statements are based on reasonable assumptions but actual results may differ materially from those indicated. Important factors, which could cause actual results to differ materially from those in the forward-looking statements are detailed in the filings made by ResMed with the SEC.

I will now hand the call over to Mick Farrell.

Mick Farrell

Thanks Agnes and thank you to all of our shareholders for joining us today as we summarize our results for the third quarter of Fiscal Year 2016. We delivered solid global growth this quarter led by strong double-digit growth in the Americas region. We made progress executing on our respiratory care strategy by closing our acquisition of Inova Labs early in the quarter.

We also made significant progress executing on our connected care strategy by closing our acquisition of Brightree on April 4. For the call today, I’ll first review our top and bottom-line results. I’ll then outline some regional highlights from our business, and finally, I’ll review our ResMed 2020 growth strategy. After that I will hand the call over to Brett to walk you through our financials in greater detail.

We have seen strong ongoing success with our global leadership in connected care. For the seventh quarter in a row, our global team achieved market beating topline revenue growth. We exhibited continued strength in the Americas region with robust double-digit growth at 12% year-on-year. These results were fueled by the ongoing success of Air Solutions, our cloud based connected care software system, as well as the AirSense 10 and the AirCurve 10 medical device platforms.

We achieved steady growth in our combined EMEA and APAC regions, despite the headwind for macroeconomic conditions in Europe. At the bottom line, our diluted earnings-per-share was $0.68 on a non-GAAP basis, which represents 5% year-on-year growth. We continue to balance solid revenue growth with ongoing investments in R&D innovation and our global focus on operating excellence. This quarter we gained operating leverage in SG&A keeping its growth well below our topline revenue growth.