CHICAGO, Nov. 5, 2014 /PRNewswire/ -- Hill-Rom Holdings, Inc. (NYSE: HRC) announced financial results for its fiscal fourth quarter ended September 30, 2014 and announced its fiscal year 2015 financial outlook. Adjusted earnings per diluted share of $0.74 increased 4 percent from $0.71 in the prior year, while reported earnings per diluted share of $0.42 decreased 29 percent from $0.59. Adjustments to reported earnings are detailed in the reconciliation schedules provided.
Hill-Rom’s quarterly revenue was $480 million, a 10 percent increase compared to last year on both a reported and constant currency basis, primarily due to the Trumpf Medical acquisition which closed on August 1, 2014. Domestic revenue was $304 million, up 5 percent, while revenue outside the United States increased 18 percent on a constant currency basis to $176 million.
For the full year, revenue was $1,686 million compared to $1,716 million for the prior year, a decrease of 2 percent on both a reported and constant currency basis. Adjusted earnings per diluted share for fiscal 2014 were $2.25 compared to $2.38 in 2013, a decrease of 5 percent. Reported earnings per diluted share for the full year were $1.04 compared to $1.74 for the prior year.
Management Comments
“We are pleased to report 10 percent revenue growth and adjusted earnings ahead of our guidance for the quarter,” said John Greisch, Hill-Rom President and Chief Executive Officer. “We delivered on our commitments for the quarter and finished the year with strength in our key North America core business. Our guidance for 2015 reflects continued improvement, but a cautious outlook with respect to Europe and the North America hospital capital spending environment.”
Fourth Quarter Financial and Operational Results
-- Revenue:
-- North America. North America revenue increased 1 percent to $247 million. Capital revenue increased 5 percent. Rental revenue declined 9 percent, or 2 percent excluding the impact of the third party reimbursed home care rental business, which Hill-Rom has exited.
-- International. International segment revenue declined 3 percent to $126 million (down 2 percent on a constant currency basis) with strength in Asia Pacific, Latin America and the Middle East, offset by lower revenue in Europe. Capital revenue declined 3 percent while rental revenue increased 3 percent on a constant currency basis.
-- Surgical/Respiratory Care. Surgical and Respiratory Care revenue increased 67 percent reflecting continuing growth across all legacy businesses plus the addition of Trumpf Medical revenue.
-- Full-year operating cash flow was $210 million compared to $263 million in the prior year.
-- Hill-Rom appointed Carlyn Solomon to the position of Chief Operating Officer and Steven J. Strobel was named Chief Financial Officer. Both are seasoned executives with significant global experience.
Please see the attached schedules for additional information, including condensed financial information, summary balance sheet, 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 Annual Report on Form 10-K which will be filed in November.
Financial Guidance Summary
Revenue: For fiscal 2015, Hill-Rom expects reported revenue growth of approximately 11 to 13 percent. This reflects:
- low single-digit constant currency organic growth;
- negative currency impact of approximately 1 to 2 percent at current rates; and
- revenue contribution from Trumpf Medical.
For the first quarter of fiscal 2015, Hill-Rom expects reported revenue growth of 14 to 16 percent. This reflects:
- low single-digit constant currency organic growth;
- negative currency impact of approximately 2 percent at current rates; and
- revenue contribution from Trumpf Medical.
Adjusted Earnings per Diluted Share: The Company’s guidance for full year adjusted earnings per diluted share is $2.42 to $2.48.
First quarter adjusted earnings per diluted share are expected to be $0.44 to $0.48.
Cash Flow: Hill-Rom expects cash flow from operations for the full year to be approximately $250 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, 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, go to http://ir.hill-rom.com/events.cfm or http://www.media-server.com/m/p/v2nckqig. 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: 11026172. 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 November 11, 2014, domestically at 855-859-2056 and internationally at 404-537-3406. For the replay, callers will need to use confirmation code 11026172.
To read full press release, please click here.
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