CHICAGO, May 5, 2015 /PRNewswire/ -- Hill-Rom Holdings, Inc. (NYSE: HRC) announced financial results for its second quarter ended March 31, 2015, and increased its 2015 financial outlook. Adjusted earnings per diluted share of $0.64 increased 12 percent from $0.57 in the prior year, while reported earnings per diluted share of $0.45 increased from a loss of $0.06. Adjustments to reported earnings are detailed in the reconciliation schedules provided.
Hill-Rom's quarterly revenue of $475 million increased 14 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, constant currency growth was 6 percent, driven primarily by 16 percent growth in the North America capital business. Domestic revenue was $297 million, up 13 percent, while revenue outside the United States of $178 million increased 36 percent on a constant currency basis.
Management Comments
"We are pleased to report another quarter of strong revenue and adjusted earnings growth. Organic revenue growth was the strongest in three years, as our North America and Surgical/Respiratory Care businesses performed well. In addition, we launched several important new products," said John Greisch, Hill-Rom President and Chief Executive Officer. "Despite incremental currency headwinds, we are raising our full-year outlook, reflecting our improved operational execution."
Second Quarter Financial Results and Operational Highlights
-- Revenue:
-- North America. North America revenue increased 10 percent to $247 million. Capital sales increased 16 percent, while rental revenue increased 5 percent, excluding the impact of the previously exited third party reimbursed home care rental business. As reported, rental revenue declined 2 percent.
-- International. International segment revenue was flat on a constant currency basis and down 14 percent on a reported basis to $108 million. On a constant currency basis, capital revenue was flat with the prior year while rental revenue increased 2 percent.
-- Surgical/Respiratory Care. Surgical and Respiratory Care revenue increased 83 percent to $120 million, reflecting 1 percent organic constant currency growth plus the addition of Trumpf Medical.
-- Year-to-date operating cash flow was $87 million compared to $78 million in the prior year.
-- Hill-Rom's investment in innovation resulted in the launch of two new bariatric products during the quarter:
-- Compella Bariatric Bed, Hill-Rom's latest advance in bariatric care, streamlines workflow, delivers safe patient care and enhances patient dignity. Features include the exclusive powered width expansion and IntelliDrive® XL powered transport system.
-- LikoGuard L/XL Overhead Lift System facilitates safe mobilization for patients up to 800 pounds/363 kg. Innovations such as a patented emergency lowering mechanism and a newly-designed slingbar provide confidence for the caregiver and security for the patient.
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 March 31, 2015.
Financial Guidance Summary
Revenue: For fiscal 2015, Hill-Rom expects reported revenue growth of 10 to 11 percent compared to 11 to 12 percent previously. This reflects:
- low to mid-single-digit constant currency organic growth; and
- negative currency impact of approximately 6 percent compared to 4 percent previously.
For the third quarter of fiscal 2015, Hill-Rom expects reported revenue growth of 13 to 15 percent. This reflects:
- mid-single-digit constant currency organic growth; and
- negative currency impact of approximately 8 percent.
Adjusted Earnings per Diluted Share: The Company expects full-year adjusted earnings per diluted share to be $2.50 to $2.54, compared to $2.44 to $2.50 previously.
Third quarter adjusted earnings per diluted share are expected to be $0.58 to $0.61.
Cash Flow: Hill-Rom expects cash flow from operations for the full year to be approximately $250 million, unchanged from prior guidance.
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://edge.media-server.com/m/p/nprwokdc. 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: 19694449. 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 May 11, 2015, domestically at 855-859-2056 and internationally at 404-537-3406. For the replay, callers will need to use confirmation code 19694449. 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 more than 7,000 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. Hill-Rom's people, products, and programs work towards one mission: Every day, around the world, we enhance 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.
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