Hill-Rom, Inc. Reports Fiscal First Quarter Results; Updates Fiscal 2015 Financial Outlook

CHICAGO, Feb. 3, 2015 /PRNewswire/ -- Hill-Rom Holdings, Inc. (NYSE: HRC) announced financial results for its fiscal first quarter ended December 31, 2014 and updated its fiscal year 2015 financial outlook.  Adjusted earnings per diluted share of $0.49 increased 36 percent from $0.36 in the prior year, while reported earnings per diluted share of $0.21 decreased 5 percent from $0.22.  Adjustments to reported earnings are detailed in the reconciliation schedules provided.

Hill-Rom's quarterly revenue of $465 million increased 18 percent compared to last year, or 21 percent on a constant currency basis, primarily due to the Trumpf Medical acquisition and strong North America capital revenue growth.  Excluding the benefit of Trumpf, our constant currency growth was 5 percent.  Domestic revenue was $284 million, up 14 percent, while revenue outside the United States increased 34 percent on a constant currency basis to $181 million.     

Management Comments

"We are pleased to report solid revenue and adjusted earnings growth for the quarter, while also accelerating investment in the future growth of the business," said John Greisch, Hill-Rom President and Chief Executive Officer.  "Both the North America capital and Surgical/Respiratory Care businesses performed well, while our International business continues to face a challenging environment.  Despite incremental revenue headwinds of $40 to $50 million due to foreign exchange, we are raising our full-year adjusted earnings guidance.  We are committed to driving revenue growth while improving operating margin and maintaining a disciplined approach to capital allocation."

First Quarter Financial and Operational Results

-- Revenue:

-- North America.  North America revenue increased 10 percent to $225 million.  Capital sales increased 19 percent, while rental revenue declined 9 percent, or 1 percent excluding the impact of the previously exited third party reimbursed home care rental business. 

-- International.  International segment revenue declined 9 percent to $114 million (down 3 percent on a constant currency basis) with strength in Asia Pacific offset by lower revenue in Europe.  Capital revenue declined 2 percent while rental revenue declined 6 percent on a constant currency basis.

-- Surgical/Respiratory Care.  Surgical and Respiratory Care revenue doubled to $126 million reflecting 6 percent organic growth plus the addition of Trumpf Medical revenue. 

-- First quarter operating cash flow was $31 million compared to $42 million in the prior year.

-- Share repurchases for the quarter amounted to approximately $57 million.

-- Hill-Rom recently acquired access to two new technologies in our clinical focus areas of respiratory care and surgical safety and efficiency:

-- We acquired an early-stage portable therapeutic device that provides chest physiotherapy (CPT). This device allows patient mobility during therapy and is an ideal complement to our Respiratory Care portfolio.

-- The Company obtained the exclusive distribution rights to the Thermedx FluidSmart System, a fluid management system used in minimally invasive gynecology, urology and arthroscopy surgical procedures.   

Please see the attached schedules for additional information, including condensed financial information, a summary balance sheet, a cash flow statement 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, 2014.

Financial Guidance Summary

Revenue:  For fiscal 2015, Hill-Rom expects reported revenue growth of 11 to 12 percent compared to 11 to 13 percent previously.  This reflects:

• low single-digit constant currency organic growth; and
• negative currency impact of approximately 4 percent compared to 1 to 2 percent previously.

For the second quarter of fiscal 2015, Hill-Rom expects reported revenue growth of 13 to 15 percent.  This reflects:

• low to mid-single-digit constant currency organic growth; and
• negative currency impact of approximately 4 percent.

Adjusted Earnings per Diluted Share:  The Company's guidance for full year adjusted earnings per diluted share is $2.44 to $2.50 compared to $2.42 to $2.48 previously.  

Second quarter adjusted earnings per diluted share are expected to be $0.57 to $0.60. 

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