ResMed (NYSE:RMD) last week revealed a tentative, $40 million settlement with the U.S. Justice Dept. to resolve a three-year probe into its resupply business.
The San Diego-based respiratory company said it set aside $41.2 million to cover the $39.5 million settlement and any legal and administrative costs.
In July 2016 the Justice Dept. subpoenaed ResMed for information on its “industry offerings of patient resupply software to home medical equipment providers,” the company said at the time. During a conference call last week to discuss its fiscal 2019 results, general counsel David Pendarvis said the settlement, if consummated, would cover four main areas: resupply trial offers, marketing and financing issues and how it made its ApneaLink home sleep testing device available.
“Importantly, we’re not going to be required in this resolution to admit any wrongdoing. In fact, we believe that we’ve handled ourselves appropriately,” Pendarvis said. “But like in a lot of situations, you resolve matters on a consensual basis to get it behind you and we feel it’s the best resolution for our customers, our patients and for the company and our shareholders.”
ResMed last week reported profits of $68.8 million, or 48¢ per share, on sales of $705.0 million for the three months ended June 30, for a bottom-line slide of -37.3% on sales growth of 13.1% compared with fiscal Q4 2018. Adjusted to exclude one-time items, earnings per share were 95¢, 3¢ ahead of the consensus on Wall Street, where analysts were looking for sales of $701.6 million.
Fiscal 2019 profits were $404.6 million, or $2.80 per share, on sales of $2.61 billion, marking a 28.2% profit gain on sales growth of 11.4% compared with fiscal 2018. Adjusted EPS came in at $3.64, missing the consensus by 31¢; analysts were looking for sales of $2.87 billion.