Hill-Rom Reports Strong First Quarter Results Exceeding Previous Guidance and Increases Full Year Earnings Outlook

CHICAGO, Feb. 1, 2016 /PRNewswire/ -- Hill-Rom Holdings, Inc., (NYSE: HRC) announced financial results for its first quarter ended December 31, 2015, and updated its fiscal year 2016 financial outlook.  Adjusted earnings per diluted share of $0.68 represent an increase of 39 percent from $0.49 in the prior year, while reported earnings per diluted share decreased 67 percent from $0.21 to $0.07. Adjustments to reported earnings are detailed in the reconciliation schedules provided.

Hill-Rom's quarterly revenue of $661 million increased 42 percent compared to last year, or 47 percent on a constant currency basis, primarily due to the Welch Allyn acquisition and strong growth in North America.   Excluding Welch Allyn, constant currency revenue growth was 3 percent. Domestic revenue was $443 million, up 56 percent, while revenue outside the United States of $218 million increased 34 percent on a constant currency basis.     

Management Comments

"We are pleased to report another quarter of strong revenue and adjusted earnings growth and an improved full year outlook," said John J. Greisch, Hill-Rom's president and CEO. "We demonstrated solid execution of our plan to drive significant margin expansion, delivering a 430 basis point increase in adjusted operating margin this quarter. Our revenue performance in North America and Welch Allyn were ahead of our expectations, more than offsetting the challenges we continue to face in our international business."

First Quarter Highlights

-- Revenue:

-- North America. North America revenue increased 11 percent to $249 million. On a constant currency basis, capital sales increased 11 percent, while rental revenue increased 12 percent. 

-- Welch Allyn. Welch Allyn revenue was $198 million, which on a pro-forma basis represents approximately 7 percent constant currency growth year over year.

-- Surgical/Respiratory Care. Surgical and Respiratory Care revenue of $121 million was flat on a constant currency basis, or down 5 percent on a reported basis.

-- International. International segment revenue of $94 million was down 9 percent on a constant currency basis and 17 percent on a reported basis. 

-- Adjusted operating margin increased 430 basis points to 13.2 percent.

-- First quarter operating cash flow increased to $46 million from $31 million in the prior year.

-- On January 21, Hill-Rom and Intuitive Surgical announced U.S. FDA clearance for Integrated Table Motion, which seamlessly synchronizes the movements of the da Vinci® Xi®, Intuitive Surgical's latest robotic-assisted surgical system, and Trumpf Medical's advanced operating table, the TruSystem® 7000dv. Integrated Table Motion allows surgeons and anesthesiologists the real-time ability to reposition the operating table with the surgical robotic arms docked, a first-of-its-kind innovation.  

Please see the attached schedules for additional information and reconciliations of GAAP to adjusted financial measures. 

For a more complete review of Hill-Rom's results, please refer to the company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2015.

Financial Guidance Summary

Revenue: For fiscal 2016, Hill-Rom expects reported revenue to be between $2.66 and $2.70 billion. This reflects:

• low- to mid-single-digit constant currency organic growth;
• mid-single digit pro-forma constant currency growth from Welch Allyn, compared to 3 to 5 percent previously; and
• negative currency impact of 2 to 3 percent at current rates, compared to 1 to 2 percent previously.

For the second quarter of fiscal 2016, Hill-Rom expects reported revenue to be between $645 and $655 million. This reflects:

• low- to mid-single-digit constant currency organic growth;
• negative currency impact of 1 to 2 percent at current rates.

Adjusted Earnings per Diluted Share: The company expects full year adjusted earnings per diluted share to be $3.24 to $3.30, compared to $3.08 to $3.14 previously.  

Second quarter adjusted earnings per diluted share are expected to be $0.68 to $0.70. 

Cash Flow: Hill-Rom expects cash flow from operations for the full year to be approximately $315 million, which includes non-recurring outflows related to our ongoing restructuring and integration activities. Capital expenditures are expected to be approximately $110 to $120 million.

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 that the presentation provides useful information to investors. This measure excludes strategic developments, acquisition and integration costs, special charges or other unusual events. 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. 

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, earnings per share and other measures.    

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.

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 February 1, visit http://edge.media-server.com/m/p/ogipjy6m. 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 877-304-8969 domestic callers / 631-291-4543 international callers. The following confirmation code is required for both: 11376288. 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 February 6, 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 11376288. 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: Enhancing outcomes for patients and their caregivers.

www.hill-rom.com

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

SOURCE Hill-Rom Holdings, Inc.

Related Links

http://www.hill-rom.com