Hill-Rom Holdings, Inc. (NYSE: HRC), announced solid financial results for its fiscal first quarter ended December 31, 2009, and updated its outlook for the full year. Net income grew 39 percent to $19.8 million from $14.2 million in the prior year. Earnings per diluted share of $0.31 increased 35 percent from $0.23 per diluted share in the same period of the prior year. On an adjusted basis, earnings per diluted share of $0.31 increased 24 percent from $0.25 in the prior year. The improved financial performance was the result of continued gross margin expansion in all of Hill-Rom's major business units.
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Hill-Rom's total revenue of $355.3 million increased 1.1 percent compared to the first quarter of last year. On a constant currency basis, revenue decreased 1.7 percent. Domestic sales declined 3.6 percent to $244.7 million, while international sales increased 13.1 percent to $110.6 million. Excluding the impact of foreign currency, Hill-Rom's international sales increased 3.3 percent.
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Management Comments
"I am pleased with the operating improvements that we delivered during the first quarter," stated John J. Greisch, president and CEO of Hill-Rom. "We have seen demand levels stabilize over the past several quarters, and despite a challenging macro-economic environment, we achieved solid earnings improvement through margin expansion across all of our major business units. Our improved margins have enabled us to increase investments in new product development and sales channels, while accelerating earnings."
Other first quarter revenue highlights regarding Hill-Rom business segments include:
Other First Quarter Financial and Operational Highlights
Please see the attached schedules for additional information, including reconciliations of earnings in accordance with U.S. generally accepted accounting principles ("GAAP") to as adjusted income and earnings per share, condensed financial information, summary balance sheet information and segment sales summaries.
For a more complete review of Hill-Rom's results, please refer to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2009, which will be filed later this week.
Financial Guidance Summary for 2010
The Company updated full year 2010 financial guidance as follows. Hill-Rom is reaffirming reported sales guidance of $1.45 to $1.50 billion. This represents an increase of approximately 4 to 8 percent compared to 2009, including a currency benefit of approximately 1 percent for the full year. The Company is increasing adjusted earnings guidance to $1.24 to $1.36 per diluted share. This compares to the company's previous guidance of $1.20 to $1.36 per share. On a reported basis, earnings per diluted share are expected to be $1.34 to $1.46, including a non-recurring tax benefit of $0.10 per share associated with a favorable tax audit resolution during the second quarter. Cash Flow from Operations for the full year is expected to be in the guidance range of $146 to $159 million.
Hill-Rom Holdings, Inc. 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, undetermined special charges and the impact of significant litigation. 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 Replay and Webcast
The company will sponsor a conference call and webcast for the investing public at 8:00 a.m. EST, 7:00 a.m. CST, on Thursday, February 4, 2010. The webcast is available at http://ir.hill-rom.com/events.cfm or http://ir.hill-rom.com/eventdetail.cfm?eventid=76959 and will be archived on the company's website for those who are unable to listen to the live webcast. A replay of the call is also available through February 12, 2010 at 888-203-1112 (719-457-0820 International). Code 2428159 is needed to access the replay.
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 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.
www.hill-rom.com
Disclosure Regarding Forward-Looking Statements
Certain statements in this press release 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. The Company has tried, wherever possible, to identify these forward-looking statements using words such as "intend," "anticipate," "believe," "plan," "encourage," "expect," "may," "goal," "become," "pursue," "estimate," "strategy," "will," "projection," "forecast," "continue," "accelerate," "promise," "increase," "higher," "lower," "reduce," "improve," "expand," "progress," "potential" or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. 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. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: the Company's dependence on its relationships with several large group purchasing organizations, whether the Company's new products are successful in the marketplace, impacts of healthcare reform, compliance with federal healthcare programs, collections of accounts receivable, compliance with FDA regulations, antitrust litigation, potential exposure to product liability or other claims, failure of the Company's announced or future strategic initiatives and restructuring and realignment activities to achieve expected growth, efficiencies or cost reductions, adverse consequences resulting from the spin-off of the funeral services business, failure of the Company to execute its acquisition and business alliance strategy through the consummation and successful integration of acquisitions or entry into joint ventures or other business alliances, increased costs or unavailability of raw materials, adverse changes in global economic conditions or disruptions of credit markets, labor disruptions, the ability to retain executive officers and other key personnel, liquidity of auction rate securities, and certain tax-related matters. For a more in depth discussion of these and other 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 Annual Report on Form 10-K for the period ended September 30, 2009, and the Quarterly Report on Form 10-Q for the quarter ended December 31, 2009, which will be filed later this week. 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. 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.
-- Revenue of $355 million grew 1.1 percent versus prior year
SOURCE Hill-Rom Holdings, Inc.
