BATESVILLE, Ind., Jan. 26, 2011 /PRNewswire/ --
- Revenue of $374 million
grew 5 percent versus prior year
- Diluted earnings per share were $0.55 compared to $0.31 in the prior year, an increase of 77
percent
- Operating margin increased 360 basis points to 13.3
percent
- Fiscal year 2011 financial guidance increased:
Constant currency revenue is now expected to grow 5 to 7
percent and earnings are expected to be $2.18 to $2.26 per diluted share
Hill-Rom Holdings, Inc. (NYSE: HRC), announced strong financial
results for its fiscal first quarter ended December 31, 2010 and updated its outlook for
2011. Net income increased 78 percent to $35
million compared to $20
million in the first quarter of the prior year. Earnings per
diluted share increased 77 percent in the same period, to
$0.55 from $0.31. The improved financial performance was
primarily the result of increased revenue, gross margin expansion,
lower selling and administrative expenses, and a lower tax rate.
Hill-Rom's quarterly revenue of $374
million increased 5 percent on a reported basis compared to
last year and increased 6 percent on a constant currency basis. In
addition, domestic revenue increased 4 percent to $255 million, while international revenue
increased 8 percent to $119 million
in the same period. Excluding the impact of foreign currency,
Hill-Rom's international revenue increased 11 percent.
Management Comments
"We are pleased to report a solid first quarter, reflecting
continuing improvement in the Company's performance," stated
John J. Greisch, President and CEO
of Hill-Rom. "Our focus on operational improvement, expanding
margins and increasing revenue continues to yield results as we
successfully execute our plan. Despite some challenges, we are
confident that we are well positioned for the rest of the
year."
First quarter revenue highlights include:
-- North America Acute Care. North America Acute
Care revenue grew 6 percent to $218
million. Capital sales increased 12 percent due
primarily to higher sales of patient support systems, which grew 22
percent. Rental revenue declined 7 percent.
-- International. International revenue increased 7
percent to $104 million. On a
constant currency basis, revenue increased 11 percent, due to
strong performance in the Middle
East, Latin America and
Asia.
-- North America Post-Acute Care. North America
Post-Acute Care revenue declined 1 percent to $52 million. Capital sales declined 3 percent
while rental revenue was the same as the prior year.
Respiratory and Home Care gains were more than offset by
declines in the Extended Care business.
First Quarter Financial and Operational Highlights
-- Operating margin increased 360 basis points to 13.3 percent,
compared to 9.7 percent in the first quarter of last year.
-- Operating cash flow was $24
million, compared to $22
million in the first quarter of the prior year, as the
impact of stronger earnings was partially offset by increases in
working capital.
-- During the quarter the Company completed the acquisition of
the minority interest in the previously established Encompass joint
venture, enhancing our position in the surface replacement segment.
-- Diluted earnings per share reflect the favorable impact of a
lower tax rate, due in part to the reinstatement of the R&D tax
credit retroactively to January 1,
2010 and increased earnings in lower tax rate jurisdictions.
Please see the attached schedules for additional information,
including condensed financial information, summary balance sheet,
cash flow statement and segment sales summaries.
For a more complete review of Hill-Rom's results, please refer
to our Quarterly Report on Form 10-Q for the quarter ended
December 31, 2010, which will be
filed later this week.
Financial Guidance Summary for 2011
The Company increased 2011 financial guidance as follows.
Hill-Rom now expects constant currency revenue growth of between 5
and 7 percent, compared to the Company's previous guidance of 4 to
6 percent. The Company is increasing earnings guidance to
$2.18 to $2.26 per diluted share,
compared to the Company's previous guidance of $2.05 to $2.15. Cash flow from operations
for the full year is expected to be $225 to
$235 million, compared to the prior range of $220 to $230 million.
Hill-Rom Holdings, Inc. routinely provides earnings per share
results and guidance on an adjusted basis because the Company's
management believes that the presentation provides useful
information to investors. These measures exclude strategic
developments, special charges and the impact of significant
litigation. Such items may be highly variable, difficult to predict
and of a size that sometimes have substantial impact on the
Company's reported operations for a period. Often, prospective
quantification of such items is not feasible. 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.
Additional assumptions and discussion will be provided during
the Company's conference call to be held tomorrow morning.
Information to access the webcast is provided below.
Conference Call Replay and Webcast
The Company will sponsor a conference call and webcast for the
investing public at 8:00 a.m. EST, on
Thursday, January 27, 2011. The
webcast is available at http://ir.hill-rom.com/events.cfm or
http://ir.hill-rom.com/eventdetail.cfm?eventid=91099 and will be
archived on the Company's website for those who are unable to
listen live. A replay of the call is also available through
February 3, 2011 at 800-642-1687
(706-645-9291 International). Code 36454829 is needed to access the
replay.
ABOUT HILL-ROM HOLDINGS, INC.
Hill-Rom is a leading worldwide manufacturer and provider of
medical technologies and related services for the health care
industry, including patient support systems, safe mobility and
handling solutions, non-invasive therapeutic products for a variety
of acute and chronic medical conditions, medical equipment rentals
and information technology solutions. Hill-Rom's
comprehensive product and service offerings are used by health care
providers across the health care continuum and around the world in
hospitals, extended care facilities and home care settings to
enhance the safety and quality of patient care.
Hill-Rom…enhancing outcomes for patients and their
caregivers.
www.hill-rom.com
Disclosure Regarding Forward-Looking Statements
Certain statements in this press release 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.
The Company has tried, wherever possible, to identify these
forward-looking statements using words such as "intend,"
"anticipate," "believe," "plan," "encourage," "expect," "may,"
"goal," "become," "pursue," "estimate," "strategy," "will,"
"projection," "forecast," "continue," "accelerate," "promise,"
"increase," "higher," "lower," "reduce," "improve," "expand,"
"progress," "potential" or the negative of those terms or other
variations of them or by comparable terminology. The absence
of such terms, however, does not mean that the statement is not
forward-looking. 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. Factors that could
cause actual results to differ from forward-looking statements
include but are not limited to: the Company's dependence on its
relationships with several large group purchasing organizations,
whether the Company's new products are successful in the
marketplace, impacts of healthcare reform, compliance with federal
healthcare programs, collections of accounts receivable, compliance
with FDA regulations, antitrust and other litigation, potential
exposure to product liability or other claims, failure of the
Company's announced or future strategic initiatives and
restructuring and realignment activities to achieve expected
growth, efficiencies or cost reductions, adverse consequences
resulting from the spin-off of the funeral services business,
failure of the Company to execute its acquisition and business
alliance strategy through the consummation and successful
integration of acquisitions or entry into joint ventures or other
business alliances, increased costs or unavailability of raw
materials, adverse changes in global economic conditions or
disruptions of credit markets, labor disruptions, the ability to
retain executive officers and other key personnel, and certain
tax-related matters. For a more in depth discussion of these
and other 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.
Hill-Rom
Holdings, Inc.
|
|
Condensed
Consolidated Statement of Income
|
|
(Dollars in
millions except share and per share data)
|
|
|
|
|
|
|
|
|
Quarterly
Period Ended
|
|
|
|
|
|
December 31,
2010
|
|
December 31,
2009
|
|
Net revenues
|
|
|
|
|
|
|
Capital sales
|
|
$
256.7
|
|
$
231.6
|
|
|
Rental revenues
|
|
117.5
|
|
123.7
|
|
|
|
Total revenues
|
|
374.2
|
|
355.3
|
|
Cost of revenues
|
|
|
|
|
|
|
Cost of goods sold
|
|
139.6
|
|
130.5
|
|
|
Rental expenses
|
|
50.1
|
|
54.0
|
|
|
|
Total cost of
revenues
|
|
189.7
|
|
184.5
|
|
Gross profit
|
|
|
|
|
|
|
Capital
|
|
117.1
|
|
101.1
|
|
|
Rental
|
|
67.4
|
|
69.7
|
|
|
|
Total gross profit
|
|
184.5
|
|
170.8
|
|
As a
percentage of sales
|
|
49.3%
|
|
48.1%
|
|
|
|
|
|
|
|
|
|
Research and development
expenses
|
|
14.8
|
|
14.9
|
|
Selling and administrative
expenses
|
|
120.0
|
|
121.6
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
49.7
|
|
34.3
|
|
|
|
|
|
|
|
|
|
Other income/(expense),
net
|
|
(2.1)
|
|
(1.6)
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
12.2
|
|
12.8
|
|
|
|
|
|
|
|
|
|
Net income
|
|
35.4
|
|
19.9
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling interest
|
|
0.2
|
|
0.1
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders
|
|
$
35.2
|
|
$
19.8
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share:
|
|
|
|
|
|
|
Earnings per share
|
|
$
0.55
|
|
$
0.31
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding - diluted (thousands)
|
64,244
|
|
63,205
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
0.1025
|
|
$
0.1025
|
|
|
|
|
|
|
|
|
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. These non-GAAP
measures are not in accordance with, nor are they a substitute for,
GAAP measures. Hill-Rom uses the 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.
Hill-Rom
Holdings, Inc.
|
|
Revenues -
Constant Currency
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Period Ended
|
|
|
December
31,
|
|
Y/Y
Foreign
|
|
December
31
|
|
December
31,
|
|
Adj/Actual
|
|
|
2010 -
Actual
|
|
Exchange
|
|
2010 -
Adjusted
|
|
2009 -
Actual
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital sales
|
|
$
256.7
|
|
$
(2.7)
|
|
$
259.4
|
|
$
231.6
|
|
12.0%
|
|
Rental revenues
|
|
117.5
|
|
(0.8)
|
|
118.3
|
|
123.7
|
|
-4.4%
|
|
Total
|
|
$
374.2
|
|
$
(3.5)
|
|
$
377.7
|
|
$
355.3
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care
|
|
$
218.1
|
|
$
0.5
|
|
$
217.6
|
|
$
205.6
|
|
5.8%
|
|
Post-Acute Care
|
|
52.3
|
|
-
|
|
52.3
|
|
52.6
|
|
-0.6%
|
|
International
|
|
103.8
|
|
(4.0)
|
|
107.8
|
|
97.1
|
|
11.0%
|
|
Total
|
|
$
374.2
|
|
$
(3.5)
|
|
$
377.7
|
|
$
355.3
|
|
6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Hill-Rom
Holdings, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2010
|
|
September
30, 2010
|
|
Assets
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
182.4
|
|
$
184.5
|
|
|
Trade accounts receivable, net
of allowances
|
|
352.1
|
|
353.1
|
|
|
Inventories
|
|
112.9
|
|
108.5
|
|
|
Other current assets
|
|
83.2
|
|
93.1
|
|
|
|
Total current assets
|
|
730.6
|
|
739.2
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
233.9
|
|
243.7
|
|
Goodwill
|
|
|
81.1
|
|
81.1
|
|
Other assets
|
|
178.0
|
|
181.6
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
1,223.6
|
|
$
1,245.6
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
67.9
|
|
$
80.6
|
|
|
Short-term borrowings
|
|
108.3
|
|
53.1
|
|
|
Other current
liabilities
|
|
126.8
|
|
155.0
|
|
|
|
Total current
liabilities
|
|
303.0
|
|
288.7
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
50.0
|
|
98.5
|
|
Other long-term
liabilities
|
|
141.8
|
|
142.6
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
494.8
|
|
529.8
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
-
|
|
8.3
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
728.8
|
|
707.5
|
|
|
|
|
|
|
|
|
|
Total Liabilities,
Noncontrolling Interest
and Shareholders'
Equity
|
|
$
1,223.6
|
|
$
1,245.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hill-Rom
Holdings, Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Period Ended
|
|
|
|
|
|
December 31,
2010
|
|
December 31,
2009
|
|
Operating
Activities
|
|
|
|
|
|
|
Net income
|
|
$
35.4
|
|
$
19.9
|
|
|
Adjustments to reconcile net
income to net cash flows from operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
25.4
|
|
24.4
|
|
|
|
Provision for deferred income
taxes
|
|
(1.6)
|
|
(5.4)
|
|
|
|
Loss on disposal of property,
equipment leased to others,
|
|
|
|
|
|
|
|
intangible
assets and impairments
|
|
(0.1)
|
|
0.8
|
|
|
|
Stock compensation
|
|
2.6
|
|
3.6
|
|
|
|
Excess tax benefits from
employee stock plans
|
|
(3.6)
|
|
-
|
|
|
|
Change in working capital
excluding cash, current investments,
|
|
|
|
|
|
|
|
current debt, acquisitions
and dispositions:
|
|
|
|
|
|
|
|
Trade accounts
receivable
|
|
1.7
|
|
4.2
|
|
|
|
Inventories
|
|
(4.3)
|
|
(2.2)
|
|
|
|
Other current
assets
|
|
11.3
|
|
(4.4)
|
|
|
|
Trade accounts
payable
|
|
(12.8)
|
|
(11.4)
|
|
|
|
Accrued expenses and other
liabilities
|
|
(31.0)
|
|
(7.4)
|
|
|
|
Other, net
|
|
0.5
|
|
(0.5)
|
|
Net cash provided by operating
activities
|
|
23.5
|
|
21.6
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital expenditures and
purchase of intangibles
|
|
(12.5)
|
|
(11.6)
|
|
|
Proceeds on sales of property
and equipment leased to others
|
|
2.1
|
|
0.1
|
|
|
Acquisitions of businesses, net
of cash acquired
|
|
-
|
|
(7.1)
|
|
|
Proceeds on investment
sales/maturities
|
|
0.2
|
|
0.5
|
|
Net cash used in investing
activities
|
|
(10.2)
|
|
(18.1)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
Change in short-term
debt
|
|
7.0
|
|
1.6
|
|
|
Payment on revolver
|
|
-
|
|
(45.0)
|
|
|
Purchase of noncontrolling
interest
|
|
(10.6)
|
|
-
|
|
|
Payment of cash
dividends
|
|
(6.5)
|
|
(6.4)
|
|
|
Proceeds on exercise of
options
|
|
19.1
|
|
0.2
|
|
|
Proceeds from stock
issuance
|
|
0.8
|
|
0.7
|
|
|
Excess tax benefits from
employee stock plans
|
|
3.6
|
|
-
|
|
|
Treasury stock
acquired
|
|
(28.8)
|
|
(0.8)
|
|
Net cash used in financing
activities
|
|
(15.4)
|
|
(49.7)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
Total Cash Flows
|
|
(2.1)
|
|
(46.8)
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents:
|
|
|
|
|
|
|
At beginning of
period
|
|
184.5
|
|
170.6
|
|
|
At end of period
|
|
$ 182.4
|
|
$
123.8
|
|
|
|
|
|
|
|
|
SOURCE Hill-Rom Holdings, Inc.