Hill-Rom Reports Strong Fiscal Third Quarter Results and Raises Full-Year Adjusted Earnings Per Diluted Share Outlook

CHICAGO, Aug. 4, 2016 /PRNewswire/ -- Hill-Rom Holdings, Inc., (NYSE: HRC) today announced financial results for its fiscal third quarter ended June 30, 2016, and updated its full-year 2016 financial outlook. During the quarter, Hill-Rom reported earnings of $0.68 per diluted share, an increase of 106 percent, compared to $0.33 per diluted share in the prior-year period.

On an adjusted basis, earnings of $0.81 per diluted share rose 31 percent from $0.62 per diluted share in the prior-year period, and exceeded the company's previously-issued guidance of $0.75 to $0.77 per diluted share. These results reflect strong revenue, particularly in North America, and management's continued focus on operational execution and margin expansion. Adjustments to reported earnings are detailed in the reconciliation schedules provided.

"We delivered a strong quarter of revenue and earnings growth that exceeded our expectations, and as a result we have raised our full-year adjusted earnings outlook," said John J. Greisch, president and Chief Executive Officer of Hill-Rom. "This performance reflects the value of our diversified portfolio, our disciplined focus on commercial and operational execution, and our commitment to cost management and margin improvement across our businesses."

Third Quarter Financial Highlights

Hill-Rom's third quarter worldwide revenue of $655 million grew 38 percent (or 39 percent on a constant currency basis) compared to the prior-year period. On a pro-forma constant currency basis, revenue increased 2 percent. Domestic revenue of $451 million advanced 47 percent (or 6 percent on a pro forma basis), while revenue outside the United States of $204 million increased 23 percent (but declined 4 percent on a pro forma constant currency basis). Pro-forma revenue reflects the inclusion of Welch Allyn in both the current and prior-year periods.

Business highlights below reflect revised reporting segments as disclosed by Hill-Rom in the fiscal 2016 second quarter. Please refer to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, for additional details.

-- North America: North America revenue of $268 million advanced 6 percent on a reported and constant currency basis.   

-- Front Line Care: Front Line Care, which includes Welch Allyn and Respiratory Care, generated revenue of $193 million. On a pro-forma constant currency basis, Front Line Care revenue increased approximately 2 percent.

-- Surgical Solutions: Surgical revenue of $102 million increased 3 percent on a reported and constant currency basis. 

-- International: International revenue of $93 million declined 8 percent on a reported and constant currency basis.

-- Gross margin improved by 390 basis points to 48.1 percent; adjusted gross margin expanded by 340 basis points to 48.1 percent.

-- Operating margin improved by 230 basis points to 8.9 percent; adjusted operating margin expanded by 370 basis points to 15.2 percent.

-- Year-to-date operating cash flow increased $81 million, or 65 percent, to $205 million compared to the prior year.

Recent Highlights

• During the third quarter, the company introduced the VisiVest™ Airway Clearance System, a connected therapeutic solution for patients with chronic lung disease. The VisiVest System provides therapy adherence data that may help inform decisions caregivers make for their patients, resulting in reduced risk of respiratory infections, hospitalizations and medical costs.
• In continuation of Hill-Rom's global footprint optimization strategy, the company announced the closure of two European manufacturing facilities, which will be completed during 2017. In total, the company has now initiated or completed five facility closures.

Financial Outlook

For fiscal 2016, Hill-Rom now expects reported revenue to be approximately $2.65 billion, compared to $2.64 and $2.67 billion previously. This reflects:

• 2% to 3% pro forma constant currency growth, and
• Negative currency impact of approximately 2 percent at current rates

In addition, the company now expects full-year 2016 adjusted earnings to be $3.32 to $3.34 per diluted share, compared to the previous guidance range of $3.26 to $3.30 per diluted share. Cash flow from operations for the full year is now expected to be approximately $320 million, compared to $315 million previously, which includes outflows related to our ongoing restructuring and integration activities. Capital expenditures are now expected to be approximately $90 million, compared to $110 to $120 million previously.

For the fourth quarter of fiscal 2016, Hill-Rom expects reported revenue to be between $695 and $705 million. This reflects:

• Approximately flat pro forma constant currency growth, and
• Negative currency impact of approximately 1 percent at current rates

In addition, the company expects fourth quarter adjusted earnings to be $1.12 to $1.14 per diluted share.   

Discussion of Adjusted Financial Measures

Hill-Rom Holdings, Inc. routinely provides earnings per share results and guidance on an adjusted basis because the company's management believes this measures contributes to an understanding of our financial performance and provides an additional analytical tool to understand our results from core operations and reveal underlying trends. This measure excludes strategic developments, acquisition and integration costs, special charges or other unusual events. The company also excludes expenses associated with the amortization of intangible assets associated with prior business acquisitions. This adjustment is made to allow investors to evaluate and understand operating trends excluding the non-cash impact of acquired intangible amortization on operating income and earnings per share.    

Management uses these measures internally for planning, forecasting and evaluating the performance of the business. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

Reconciliations of GAAP measures to adjusted measures appear in the financial tables of this release.  Management does not include adjusted items in forward looking measures because some of these items can be highly variable and cannot be reasonably predicted. As such, prospective quantification of such items is not feasible and a reconciliation of non-GAAP earnings per share guidance to GAAP earnings per share has not been provided. 

Conference Call Webcast and Dial-in Information

As previously announced, the company will host a conference call and webcast today at 8:00 a.m. ET.

Webcast: To join the live webcast with audio on August 4, visit http://edge.media-server.com/m/p/6zke9akd. The webcast slide deck will be posted to the Hill-Rom website prior to the webcast.

Conference Call Audio Only Dial-in information:  To join the live conference call, dial 877-868-1829 domestic callers / 631-291-4543 international callers.  The following Confirmation Code is required for both: 43058042.  Callers will need to provide their name, company affiliation and telephone number to the conference operator.

A recording of the webcast/call audio will be available for telephone replay through August 9, 2016.  To access the replay, dial 855-859-2056 domestic callers / 404-537-3406 international callers.  For the replay, callers will need to use Confirmation Code 43058042.  If you are unable to listen to the live webcast or the telephone replay, the webcast will be archived at http://ir.hill-rom.com/events.cfm.

ABOUT HILL-ROM HOLDINGS, INC.

Hill-Rom is a leading global medical technology company with 10,000 employees worldwide. We partner with health care providers in more than 100 countries by focusing on patient care solutions that improve clinical and economic outcomes in five core areas: Advancing Mobility, Wound Care and Prevention, Clinical Workflow, Surgical Safety and Efficiency and Respiratory Health. Around the world, Hill-Rom's people, products, and programs work towards one mission: Every day, around the world, we enhance outcomes for patients and their caregivers. Visit www.hill-rom.com for more information.

Disclosure Regarding Forward Looking Statements

Certain statements herein contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the company's future plans, objectives, beliefs, expectations, representations and projections. It is important to note that forward-looking statements are not guarantees of future performance, and the company's actual results could differ materially from those set forth in any forward-looking statements. For a more in depth discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in the company's previously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The company assumes no obligation to update or revise any forward-looking statements.

 

 

 

 

Non-GAAP Financial Disclosures and Reconciliations

While Hill-Rom reports financial results in accordance with U.S. GAAP, this press release includes non-GAAP measures. Hill-Rom uses non-GAAP measures to evaluate and manage its operations and provides the information to assist investors in performing financial analysis that is consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

 

 

 

 

 

 

 

 

Logo - http://photos.prnewswire.com/prnh/20130123/DE47178LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hill-rom-reports-strong-fiscal-third-quarter-results-and-raises-full-year-adjusted-earnings-per-diluted-share-outlook-300308943.html

SOURCE Hill-Rom Holdings, Inc.