BATESVILLE, Ind., July 25, 2012 /PRNewswire/ -- Hill-Rom Holdings, Inc. (NYSE: HRC) announced financial results for its fiscal third quarter ended June 30, 2012 and lowered its outlook for 2012. Adjusted earnings per diluted share increased 19 percent to $0.56 from $0.47 due to stronger sales and cost reduction initiatives. Reported earnings per diluted share also increased to $0.37 from $0.02 in the prior year. Adjustments in the current period include previously announced items related to business restructuring, a gain associated with a continuing vendor product recall, a charge related to a field corrective action and costs associated with recent acquisitions. Adjustments in the prior year included a gain associated with a vendor product recall, restructuring charges and a litigation settlement.
Hill-Rom's quarterly revenue of $406 million increased 6 percent compared to last year or 9 percent on a constant currency basis. Domestic revenue decreased 6 percent to $258 million, while revenue outside the United States increased 34 percent to $148 million in the same period. Excluding the impact of foreign currency, Hill-Rom's international revenue increased 44 percent.
In addition, the Company today announced its acquisition of Aspen Surgical Products, a manufacturer of surgical consumable products.
"While we achieved solid growth in revenue and earnings this quarter, North American and European economic and healthcare environments continue to be challenging. We have experienced further deterioration in our North American capital business and have updated our outlook accordingly," stated John J. Greisch, President and CEO. "We continue to implement operational improvements and are taking prudent steps to diversify our portfolio, as demonstrated by our acquisition of Aspen Surgical."
Financial and Operational Highlights -- Third quarter revenue highlights include:
-- North America Acute Care. North America Acute Care revenue declined 5 percent to $226 million. Capital sales declined 5 percent due primarily to lower orders and shipments of patient support systems, while rental revenue declined 7 percent. Patient support systems sales declined 12 percent.
-- International. International segment revenue, which excludes Canada, increased 42 percent to $134 million, due primarily to growth in the Middle East and Eastern Europe and the impact of the Volker acquisition. Segment revenue increased 54 percent on a constant currency basis. Excluding Volker, International revenue increased 28 percent on a constant currency basis.
-- North America Post-Acute Care. North America Post-Acute Care revenue declined 11 percent to $46 million. Capital sales decreased 2 percent and rental revenue decreased 14 percent versus the prior year. Revenue declined in all three businesses, primarily across Home Care and Respiratory Care.
-- Year to date operating cash flow was $187 million, compared to $189 million in the prior year.
-- Hill-Rom recognized a pre-tax charge of $16 million in the quarter for a field corrective action on one of its med-surg product lines related to an intermittent circuit board connection issue. This voluntary action by the Company does not limit the manufacture, sale or ongoing use of these beds.
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 the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, which will be filed later this week.
Aspen Surgical Products AcquisitionToday, the Company announced the acquisition of Aspen Surgical Products. Aspen Surgical provides a portfolio of well-established surgical consumable and specialty medical products, focused on improving the safety of patients and health care professionals. The product lines include market leading Bard-Parker® conventional and safety scalpels and blades, Colby fluid collection products, Richard-Allan™ specialty needles, a variety of other operating room disposables and instrument care products as well as wound care dressings. The acquisition of Aspen Surgical further develops Hill-Rom's surgical business, adding a portfolio of consumable products and expanding its position in North American and European surgical markets. The transaction is expected to be accretive approximately $0.02 to fiscal year 2012 earnings per share, excluding non-recurring purchase accounting items and other acquisition and integration related costs.For further information, see the acquisition press release issued by the Company today.
Financial Guidance Summary For the fourth quarter of fiscal 2012, Hill-Rom expects reported revenue of $413 to $421 million. This reflects organic constant currency revenue decline of 10 to 12 percent, adverse impact from foreign currency of approximately 3 percent and revenue from 2012 acquisitions of approximately $45 million. Adjusted earnings per diluted share are expected to be $0.53 to $0.55 for the quarter.
For the full year, Hill-Rom expects reported revenue of $1,615 to $1,623 million. This reflects organic constant currency revenue decline of approximately 2 percent, adverse impact from foreign currency of approximately 2 percent and revenue from 2012 acquisitions of approximately $80 million. Adjusted earnings per diluted share are expected to be $2.21 to $2.23 compared to prior guidance of $2.45 to $2.50. Cash flow from operations for the full year is expected to be approximately $260 to $270 million compared with prior guidance of $290 to $300 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 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. 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 Webcast and Dial-in InformationAs previously announced, the company will host a conference call and webcast tomorrow morning on Thursday, July 26, 2012, at 8:00 a.m. ET.
Webcast: To join the live webcast with audio, go to http://ir.hill-rom.com/events.cfm or http://ir.hillrom.com/eventdetail.cfm?eventid=115107. 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: 90822300. 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 2, 2012, domestically at 855-859-2056 and internationally at 404-537-3406. For the replay, callers will need to use confirmation code 90822300. 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 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, surgical products 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.
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.
Hill-Rom Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Dollars in millions except per share data) Quarterly Period Ended June 30 Year To Date Period Ended June 30 2012201120122011Net revenuesCapital sales$
802.7Rental revenues105.9117.6334.6358.4Total revenues406.5384.81,202.71,161.1Cost of revenuesCost of goods sold188.1145.4505.1436.0Rental expenses45.751.8144.0154.4Total cost of revenues233.8197.2649.1590.4Gross profitCapital112.5121.8363.0366.7Rental60.265.8190.6204.0Total gross profit172.7187.6553.6570.7As a percentage of sales42.5%48.8%46.0%49.2%Research and development expenses16.117.348.248.3Selling and administrative expenses120.5124.6366.3375.1Impairment of other intangibles--8.0-Litigation charge-42.3-42.3Special charges1.7(1.2)9.71.4Operating profit34.44.6121.4103.6Other income/(expense), net(1.0)(1.0)(2.8)(4.5)Income tax expense 10.02.137.029.1Net income 23.41.581.670.0Less: Net income attributable to noncontrolling interest
---0.2Net income attributable to common shareholders$
9.8Diluted earnings per share:Earnings per share $
.09Average common shares outstanding - diluted (thousands)62,57064,21162,42364,139Dividends per common share$
.3175Non-GAAP Financial Disclosures and ReconciliationsWhile 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. and SubsidiariesRevenues - Constant Currency(Dollars in millions)Quarterly Period Ended June 302012Foreign Exchange 20122011Constant CurrencyAs ReportedImpactAdjustedAs ReportedChangeCapital sales$ 300.6$ (9.5)$ 310.1$ 267.216.1%Rental revenues105.9(1.5)107.4117.6-8.7%Total$ 406.5$ (11.0)$ 417.5$ 384.88.5%Acute Care$ 226.5$ (0.5)$ 227.0$ 239.1-5.1%Post-Acute Care46.0-46.051.6-10.9%International 134.0(10.5)144.594.153.6%Total $ 406.5$ (11.0)$ 417.5$ 384.88.5%Year To Date Period Ended June 302012Foreign Exchange 20122011Constant CurrencyAs ReportedImpactAdjustedAs ReportedChangeCapital sales$ 868.1$ (12.7)$ 880.8$ 802.79.7%Rental revenues334.6(2.1)336.7358.4-6.1%Total$ 1,202.7$ (14.8)$ 1,217.5$ 1,161.14.9%Acute Care$ 700.5$ (1.0)$ 701.5$ 708.5-1.0%Post-Acute Care145.6-145.6156.1-6.7%International 356.6(13.8)370.4296.524.9%Total $ 1,202.7$ (14.8)$ 1,217.5$ 1,161.14.9% Hill-Rom Holdings, Inc. and SubsidiariesReconciliation: Earnings Per Share(Dollars in millions except per share data)Quarterly Period Ended June 30, 2012Quarterly Period Ended June 30, 2011Income Before Income TaxesIncome Tax ExpenseDiluted EPS**Income Before Income Taxes Income Tax ExpenseDiluted EPSReported Earnings$
.02Adjustments:Vendor product recall(1.7)(0.7)(0.02)(0.6)(0.2)(0.01)Acquisition and integration costs1.90.70.02---Special charges1.70.60.02(1.2)(0.3)(0.01)Field corrective action16.05.90.16---Litigation charge---42.312.30.47Adjusted Earnings$
.47Year To Date Period Ended June 30, 2012Year To Date Period Ended June 30, 2011Income Before Income Taxes Income Tax ExpenseDiluted EPS**Income Before Income Taxes and NCI*Income Tax ExpenseDiluted EPS**Reported Earnings $
.09Adjustments:Vendor product recall(4.8)(1.9)(0.05)(1.4)(0.5)(0.01)Acquisition and integration costs5.51.50.06---Special charges126.96.36.199.40.70.01Impairment of other intangibles8.02.10.09---Field corrective action16.05.90.16---Litigation charge---42.312.30.47Adjusted Earnings$
.55* NCI refers to our noncontrolling interest in our former Encompass joint venture.** May not add due to rounding. Hill-Rom Holdings, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(Dollars in millions)June 30, 2012September 30, 2011AssetsCurrent AssetsCash and cash equivalents$
224.6Trade accounts receivable, net of allowances351.0386.2Inventories, net106.795.6Other current assets81.285.3Total current assets758.9791.7Property, plant and equipment, net227.2222.8Goodwill121.287.2Other assets193.1197.4Total Assets$
,299.1LiabilitiesCurrent LiabilitiesTrade accounts payable$
4.8Short-term borrowings45.0100.3Other current liabilities165.7168.9Total current liabilities272.2334.0Long-term debt50.050.8Other long-term liabilities167.2172.6Total Liabilities489.4557.4Shareholders' Equity811.0741.7Total Liabilities and Shareholders' Equity$
,299.1 Hill-Rom Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(Dollars in millions)Year To Date Period Ended June 30 20122011Operating ActivitiesNet income $ 81.6$ 70.0Adjustments to reconcile net income to net cash provided byoperating activities:Depreciation and amortization80.778.1Provision for deferred income taxes(9.9)1.8Loss on disposal of property, equipment leased to others,intangible assets and impairments7.71.7Stock compensation9.09.2Litigation charge-42.3Excess tax benefits from employee stock plans(1.3)(6.8)Change in working capital excluding cash, current investments,current debt and acquisitions and dispositions:Trade accounts receivable46.012.6Inventories(1.4)(0.6)Other current assets9.35.8Trade accounts payable(11.8)(20.0)Accrued expenses and other liabilities(16.7)(10.6)Other, net(5.8)5.7Net cash provided by operating activities187.4189.2Investing ActivitiesCapital expenditures and purchase of intangibles(55.9)(52.0)Proceeds on sales of property and equipment leased to others7.15.2Payment for acquisition of business, net of cash acquired(77.0)-Proceeds on investment sales and maturities4.50.4Net cash used in investing activities(121.3)(46.4)Financing ActivitiesChange in short-term debt(7.8)1.8Payment of long-term debt(47.5)-Purchase of noncontrolling interest(1.3)(11.5)Payment of cash dividends(22.5)(20.0)Proceeds on exercise of options6.242.0Proceeds from stock issuance2.22.1Excess tax benefits from employee stock plans1.36.8Treasury stock acquired(1.8)(70.0)Net cash used in financing activities(71.2)(48.8)Effect of exchange rate changes on cash0.54.0Total Cash Flows(4.6)98.0Cash and Cash Equivalents:At beginning of period224.6184.5At end of period$ 220.0$ 282.5
|SOURCE Hill-Rom Holdings, Inc.|
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