Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH, ASX:FPH) announced today that continuing strong growth in sales of its respiratory, acute care and obstructive sleep apnea (OSA) products contributed to record operating revenue of NZ$357.9 million or US$271.5 million for the year ended 31 March 2008.
Expanding activities in international markets and increasing demand, particularly for its masks, respiratory consumables, humidifier systems and neonatal devices all contributed to growth.
During the year the company derived approximately 58% of its operating revenue in US dollars. In US dollar terms, respiratory and acute care product group operating revenue increased by 19% and OSA product group operating revenue increased by 18%, compared to the prior year.
“We continued to gain share within the rapidly growing OSA treatment market, with total mask and flow generator operating revenue growth of 21% in US dollar terms.
Demand for respiratory humidifier systems inventory for major hospital Group Purchasing Organisation (GPO) contracts in the United States was high in the last quarter and we finished the year with substantial orders in hand. Sales of our neonatal care product range, which includes infant warmers, oxygen therapy systems and resuscitators, were also strong”, commented the company’s CEO, Mr Michael Daniell.
During the year the company continued to expand the application of its products and technologies to the care of patients beyond its traditional markets. These include patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery.
“We are very encouraged by the progress we are making in expanding the application of our devices to assist the care of an increasing range of patients. Approximately 20% of our respiratory and acute care consumables revenue for the year was generated by these new applications”, said Mr Daniell.
Operating profit for the year was NZ$58.1 million compared to NZ$79.3 million for the prior year. Profit after tax was NZ$35.3 million compared to NZ$50.5 million for the prior year. The reductions primarily reflect the effect of the weaker US dollar.
The company’s directors have approved a final dividend for the financial year ended 31 March 2008 of
7.0 NZ cents per ordinary share (2007: 7.0 cents), carrying 1.5 cents of imputation credit (50% imputed based on a 30% tax rate). Non-resident shareholders will receive a supplementary dividend of 0.618 NZ cents per share. The final dividend will be paid on 27 June 2008, with a record date of 18 June, and an ex-dividend date of 12 June for the ASX and 19 June for the NZSX.
Research & Development, SG&A
Research and development expenses increased by 17% to NZ$24.1 million representing 6.7% of operating revenue for the year ended 31 March 2008. The company continued to expand its research and development teams and current new product projects include flow generators, masks, a COPD humidifier system and additional respiratory consumables.
Selling, general and administrative (SG&A) expenses grew 2% to NZ$97.9 million, or 9% in constant currency terms, as the company continued to expand its operations and its sales teams in North America, Europe, Asia/Pacific and South America.
For the 2009 financial year the company expects a continuation of strong underlying revenue growth across its product range and expects that operating revenue will grow about 15% in US dollar terms to approximately US$310 million.
At an average NZD:USD exchange rate of 0.80 the company expects to achieve operating revenue of approximately NZ$388 million and an operating profit similar to that achieved for the year ended 31 March 2008. At an average NZD:USD exchange rate of 0.75 the company expects to achieve operating revenue of approximately NZ$415 million and an operating profit increase of approximately 20%.
“The company’s opportunities for growth continue to be very positive. Our US distribution partner, Cardinal Health, has secured another significant GPO contract and we have seen a very robust start to sales in the new financial year.
We have recently begun selling our new SleepStyle Auto flow generator for OSA treatment and have several new masks close to introduction. Demand for our respiratory humidifier systems continues to be very strong and we expect to see steady growth from new applications,” concluded Mr Daniell.
Financial Statements and Commentary
Attached to this news release are condensed NZ dollar financial statements and commentary. For convenience these have been translated into US dollars.
The company’s financial statements for the year ended 31 March 2008 and the comparative financial information for the year ended 31 March 2007 have been prepared under the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The notes to the financial statements include reconciliations and discussion of any significant differences between previous New Zealand GAAP and NZ IFRS.
Fisher & Paykel Healthcare will host a conference call to review the results and to discuss the outlook for the 2009 financial year. The conference call is scheduled to begin today at 10:00am NZST, 8:00am AEST (6:00pm USEDT) and will be broadcast simultaneously over the Internet.
To listen to the webcast access the company’s website at www.fphcare.com. Please allow extra time prior to the webcast to visit the site and download the streaming media software required. An online archive of the event will be available approximately two hours after the webcast and will remain onsite for two weeks.
Intending participants may register for the conference call prior to the event, using this link: http://www.fphcare.com/investor/conference/ . Once registered, participants will be assigned a conference passcode and user PIN. Registered participants can dial in to one of the numbers below and use their codes for instant access to the conference. Alternatively, dial in to one of the numbers below a few minutes prior to the scheduled call time and identify yourself to the operator:
New Zealand Toll Free 0800 449 118
Australia Toll Free 1800 500 686
USA Toll Free 1866 369 4113
International +61 3 9221 4420
An audio replay of the conference call will be available approximately 60 minutes after the call and will be accessible for two weeks at +61 3 9221 4752, access code 008642.
About Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of products and systems for use in respiratory care, acute care and the treatment of obstructive sleep apnea. The company’s products are sold in over 110 countries worldwide. For more information about the company visit www.fphcare.com
Contact: Michael Daniell MD/CEO on +64 9 574 0161 or Tony Barclay CFO on +64 9 574 0119.