Indiana
(State or other jurisdiction of
incorporation)
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1-6651
(Commission File Number)
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35-1160484
(IRS Employer Identification No.)
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1069 State Route 46 East
Batesville, Indiana
(Address of principal executive offices)
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47006-8835
(Zip Code)
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(812) 934-7777
(Registrant’s telephone number, including area code)
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99.1
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Press release, dated May 2, 2014, issued by the Corporation.
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HILL-ROM HOLDINGS, INC.
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||||
(Registrant)
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||||
DATE: May 2, 2014
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By:
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/s/ James Saccaro
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||
Name:
Title:
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James Saccaro
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
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Exhibit Number
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Exhibit Description
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99.1
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Press release, dated May 2, 2014, issued by the Corporation.
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Contact:
|
Blair A. (Andy) Rieth, Jr., Vice President, Investor Relations
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Phone:
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312-819-7259
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Email:
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andy.rieth@hill-rom.com
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Contact:
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Larry Baumann, Executive Director, Corporate Communications
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Phone:
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312-819-7248
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Email:
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larry.baumann@hill-rom.com
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HILL-ROM REPORTS FISCAL SECOND QUARTER RESULTS;
MAINTAINS FULL-YEAR EARNINGS PER SHARE GUIDANCE
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·
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Second quarter revenue of $415 million declined 2 percent versus prior year
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·
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Adjusted diluted earnings per share for the second quarter of $0.57 compares to earnings of $0.56 in the prior year
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·
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Reported diluted loss per share for the second quarter of $0.06 compares to earnings of $0.37 per share in the prior year
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·
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Year to date operating cash flow of $78 million compares to $113 million in the prior year
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·
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Full year adjusted earnings per share are expected to be $2.18 to $2.28
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--
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Year to date operating cash flow was $78 million compared to $113 million in the prior year.
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--
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Year to date adjusted EBITDA was $125 million, compared to $150 million in the prior year.
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--
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Share repurchases for the quarter amounted to approximately $29 million.
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--
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In a continuing effort to rationalize Hill-Rom’s portfolio and improve margins, the Company discontinued the remaining portion of its home care bed rental business in North America. This resulted in an incremental restructuring charge of $12 million, of which $8 million is non-cash, and is in addition to the restructuring programs announced last quarter.
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Condensed Consolidated Statements of Income (Loss)
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||||||||||||||||
(Dollars in millions except per share data)
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||||||||||||||||
Quarter Ended March 31
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Year To Date Ended March 31
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|||||||||||||||
2014
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2013
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2014
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2013
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|||||||||||||
Net revenue
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||||||||||||||||
Capital sales
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$ | 313.6 | $ | 318.3 | $ | 609.1 | $ | 642.7 | ||||||||
Rental revenue
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101.7 | 107.4 | 199.6 | 211.4 | ||||||||||||
Total revenue
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415.3 | 425.7 | 808.7 | 854.1 | ||||||||||||
Cost of revenue
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||||||||||||||||
Cost of goods sold
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169.5 | 181.7 | 340.7 | 370.6 | ||||||||||||
Rental expenses
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43.1 | 47.9 | 88.5 | 96.0 | ||||||||||||
Total cost of revenue
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212.6 | 229.6 | 429.2 | 466.6 | ||||||||||||
Gross profit
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||||||||||||||||
Capital
|
144.1 | 136.6 | 268.4 | 272.1 | ||||||||||||
Rental
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58.6 | 59.5 | 111.1 | 115.4 | ||||||||||||
Total gross profit
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202.7 | 196.1 | 379.5 | 387.5 | ||||||||||||
As a percentage of total revenue
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48.8% | 46.1% | 46.9% | 45.4% | ||||||||||||
Research and development expenses
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16.4 | 18.3 | 32.8 | 35.5 | ||||||||||||
Selling and administrative expenses
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130.1 | 141.4 | 268.1 | 278.5 | ||||||||||||
Special charges
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28.4 | 2.9 | 29.4 | 2.9 | ||||||||||||
Operating profit
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27.8 | 33.5 | 49.2 | 70.6 | ||||||||||||
Other income/(expense), net
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(2.5 | ) | (3.5 | ) | (4.5 | ) | (5.3 | ) | ||||||||
Income tax expense
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28.6 | 7.7 | 34.8 | 19.0 | ||||||||||||
Net income (loss)
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$ | (3.3 | ) | $ | 22.3 | $ | 9.9 | $ | 46.3 | |||||||
Diluted earnings (loss) per share:
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||||||||||||||||
Earnings per share
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$ | (0.06 | ) | $ | 0.37 | $ | 0.17 | $ | 0.76 | |||||||
Average common shares outstanding - diluted (thousands)
|
57,303 | 60,612 | 58,612 | 60,818 | ||||||||||||
Dividends per common share
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$ | 0.1525 | $ | 0.1250 | $ | 0.2900 | $ | 0.2500 |
Hill-Rom Holdings, Inc. and Subsidiaries
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||||||||||||||||||||
Revenue - Constant Currency
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||||||||||||||||||||
(Dollars in millions)
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||||||||||||||||||||
Quarter Ended March 31
|
||||||||||||||||||||
2014
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Foreign Exchange
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2014
|
2013
|
Constant Currency
|
||||||||||||||||
As Reported
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Impact
|
Adjusted
|
As Reported
|
Change
|
||||||||||||||||
Capital sales
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$ | 313.6 | $ | 1.8 | $ | 311.8 | $ | 318.3 | -2.0% | |||||||||||
Rental revenue
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101.7 | 0.3 | 101.4 | 107.4 | -5.6% | |||||||||||||||
Total
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$ | 415.3 | $ | 2.1 | $ | 413.2 | $ | 425.7 | -2.9% | |||||||||||
North America
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$ | 224.5 | $ | (1.4 | ) | $ | 225.9 | $ | 239.7 | -5.8% | ||||||||||
Surgical and Respiratory Care
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65.6 | 0.5 | 65.1 | 61.2 | 6.4% | |||||||||||||||
International
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125.2 | 3.0 | 122.2 | 124.8 | -2.1% | |||||||||||||||
Total
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$ | 415.3 | $ | 2.1 | $ | 413.2 | $ | 425.7 | -2.9% | |||||||||||
Year To Date Ended March 31
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||||||||||||||||||||
2014 |
Foreign Exchange
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2014 | 2013 |
Constant Currency
|
||||||||||||||||
As Reported
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Impact
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Adjusted
|
As Reported
|
Change
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||||||||||||||||
Capital sales
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$ | 609.1 | $ | 4.1 | $ | 605.0 | $ | 642.7 | -5.9% | |||||||||||
Rental revenue
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199.6 | 0.7 | 198.9 | 211.4 | -5.9% | |||||||||||||||
Total
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$ | 808.7 | $ | 4.8 | $ | 803.9 | $ | 854.1 | -5.9% | |||||||||||
North America
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$ | 430.0 | $ | (2.0 | ) | $ | 432.0 | $ | 474.4 | -8.9% | ||||||||||
Surgical and Respiratory Care
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128.9 | 0.5 | 128.4 | 120.2 | 6.8% | |||||||||||||||
International
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249.8 | 6.3 | 243.5 | 259.5 | -6.2% | |||||||||||||||
Total
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$ | 808.7 | $ | 4.8 | $ | 803.9 | $ | 854.1 | -5.9% |
Hill-Rom Holdings, Inc. and Subsidiaries
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||||||||||||||||||||||||
Reconciliation: Earnings Per Share
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||||||||||||||||||||||||
(Dollars in millions except per share data)
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||||||||||||||||||||||||
Quarterly Period Ended March 31, 2014
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Quarterly Period Ended March 31, 2013
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|||||||||||||||||||||||
Income Before
Income Taxes
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Income Tax
Expense
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Diluted EPS *
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Income Before
Income Taxes
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Income Tax
Expense
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Diluted EPS*
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|||||||||||||||||||
GAAP Earnings
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$ | 25.3 | $ | 28.6 | $ | (0.06 | ) | $ | 30.0 | $ | 7.7 | $ | 0.37 | |||||||||||
Adjustments:
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||||||||||||||||||||||||
Acquisition and integration costs
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1.7 | 0.6 | 0.02 | 2.2 | 0.7 | 0.02 | ||||||||||||||||||
Acquisition-related intangible asset amortization
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6.9 | 2.0 | 0.09 | 6.7 | 2.4 | 0.07 | ||||||||||||||||||
Field corrective actions
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(1.9 | ) | (1.2 | ) | (0.01 | ) | 5.2 | 1.9 | 0.05 | |||||||||||||||
Employee benefits change
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(12.2 | ) | (4.7 | ) | (0.13 | ) | - | - | - | |||||||||||||||
FDA remediation expenses
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0.8 | 0.2 | 0.01 | 1.9 | 0.7 | 0.02 | ||||||||||||||||||
Litigation charge
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- | - | - | (0.5 | ) | 0.1 | (0.01 | ) | ||||||||||||||||
Special charges
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28.4 | 9.9 | 0.32 | 2.9 | 1.0 | 0.03 | ||||||||||||||||||
Foreign valuation allowance
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- | (19.6 | ) | 0.34 | - | - | - | |||||||||||||||||
Adjusted Earnings
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$ | 49.0 | $ | 15.8 | $ | 0.57 | $ | 48.4 | $ | 14.5 | $ | 0.56 | ||||||||||||
Year To Date Period Ended March 31, 2014
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Year To Date Period Ended March 31, 2013
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|||||||||||||||||||||||
Income Before
Income Taxes
|
Income Tax
Expense
|
Diluted EPS
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Income Before
Income Taxes
|
Income Tax
Expense
|
Diluted EPS*
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|||||||||||||||||||
GAAP Earnings
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$ | 44.7 | $ | 34.8 | $ | 0.17 | $ | 65.3 | $ | 19.0 | $ | 0.76 | ||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Acquisition and integration costs
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3.6 | 1.2 | 0.04 | 5.7 | 1.9 | 0.06 | ||||||||||||||||||
Acquisition-related intangible asset amortization
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13.8 | 4.2 | 0.16 | 13.9 | 4.6 | 0.15 | ||||||||||||||||||
Field corrective actions
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(0.7 | ) | (0.8 | ) | - | 7.7 | 2.8 | 0.08 | ||||||||||||||||
Employee benefits change
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(12.2 | ) | (4.7 | ) | (0.13 | ) | - | - | - | |||||||||||||||
FDA remediation expenses
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1.7 | 0.6 | 0.02 | 1.9 | 0.7 | 0.02 | ||||||||||||||||||
Litigation charge
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- | - | - | 0.5 | 0.5 | - | ||||||||||||||||||
Special charges
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29.4 | 10.3 | 0.33 | 2.9 | 1.0 | 0.03 | ||||||||||||||||||
Foreign valuation allowance
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- | (19.6 | ) | 0.34 | - | - | - | |||||||||||||||||
Adjusted Earnings
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$ | 80.3 | $ | 26.0 | $ | 0.93 | $ | 97.9 | $ | 30.5 | $ | 1.11 | ||||||||||||
* Does not add due to rounding.
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||||||||||||||||||||||||
Reconciliation: Adjusted EBITDA
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||||||||||||||||||||||||
(Dollars in millions)
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||||||||||||||||||||||||
Quarter Ended March 31
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Year To Date Ended March 31
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|||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Adjusted income before income taxes
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$ | 49.0 | $ | 48.4 | $ | 80.3 | $ | 97.9 | ||||||||||||||||
Add back:
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||||||||||||||||||||||||
Other expense
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2.5 | 3.5 | 4.5 | 5.3 | ||||||||||||||||||||
Depreciation and amortization
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19.7 | 22.3 | 40.6 | 46.3 | ||||||||||||||||||||
Adjusted EBITDA
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$ | 71.2 | $ | 74.2 | $ | 125.4 | $ | 149.5 |
Hill-Rom Holdings, Inc. and Subsidiaries
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||||||||
Condensed Consolidated Balance Sheets
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||||||||
(Dollars in millions)
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||||||||
March 31, 2014
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September 30, 2013
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|||||||
Assets
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||||||||
Current Assets
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||||||||
Cash and cash equivalents
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$ | 120.3 | $ | 127.4 | ||||
Trade accounts receivable, net of allowances
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346.0 | 361.8 | ||||||
Inventories, net
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120.0 | 118.3 | ||||||
Other current assets
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75.0 | 80.5 | ||||||
Total current assets
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661.3 | 688.0 | ||||||
Property, plant and equipment, net
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222.4 | 234.3 | ||||||
Goodwill
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351.6 | 342.8 | ||||||
Other assets
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285.0 | 321.7 | ||||||
Total Assets
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$ | 1,520.3 | $ | 1,586.8 | ||||
Liabilities
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||||||||
Current Liabilities
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||||||||
Trade accounts payable
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$ | 66.5 | $ | 80.8 | ||||
Short-term borrowings
|
124.7 | 81.2 | ||||||
Other current liabilities
|
166.9 | 183.4 | ||||||
Total current liabilities
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358.1 | 345.4 | ||||||
Long-term debt
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218.6 | 225.8 | ||||||
Other long-term liabilities
|
139.3 | 156.9 | ||||||
Total Liabilities
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716.0 | 728.1 | ||||||
Shareholders' Equity
|
804.3 | 858.7 | ||||||
Total Liabilities and Shareholders' Equity
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$ | 1,520.3 | $ | 1,586.8 |
Hill-Rom Holdings, Inc. and Subsidiaries
|
||||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||
(Dollars in millions)
|
||||||||
Year to Date Period Ended March 31
|
||||||||
2014
|
2013
|
|||||||
Operating Activities
|
||||||||
Net income
|
$ | 9.9 | $ | 46.3 | ||||
Adjustments to reconcile net income to net cash provided by
|
||||||||
operating activities:
|
||||||||
Depreciation
|
33.6 | 36.9 | ||||||
Amortization
|
7.0 | 9.4 | ||||||
Acquisition-related intangible asset amortization
|
13.8 | 13.9 | ||||||
Provision for deferred income taxes
|
6.5 | (9.4 | ) | |||||
Loss on disposal of property, equipment leased to others,
|
||||||||
intangible assets and impairments
|
7.8 | 0.3 | ||||||
Stock compensation
|
9.0 | 7.6 | ||||||
Excess tax benefits from employee stock plans
|
0.6 | (0.3 | ) | |||||
Change in working capital excluding cash, current investments,
|
||||||||
current debt and acquisitions and dispositions:
|
||||||||
Trade accounts receivable
|
15.8 | 33.3 | ||||||
Inventories
|
0.9 | (3.8 | ) | |||||
Other current assets
|
(1.3 | ) | (7.8 | ) | ||||
Trade accounts payable
|
(14.5 | ) | (6.5 | ) | ||||
Accrued expenses and other liabilities
|
(14.6 | ) | (3.1 | ) | ||||
Other, net
|
3.4 | (4.1 | ) | |||||
Net cash provided by operating activities
|
77.9 | 112.7 | ||||||
Investing Activities
|
||||||||
Capital expenditures and purchases of intangible assets
|
(31.4 | ) | (34.4 | ) | ||||
Proceeds on sale of property and equipment leased to others
|
1.3 | 4.8 | ||||||
Payment on acquisition of businesses, net of cash acquired
|
(9.7 | ) | (0.2 | ) | ||||
Net cash used in investing activities
|
(39.8 | ) | (29.8 | ) | ||||
Financing Activities
|
||||||||
Net change in short-term debt
|
(0.2 | ) | - | |||||
Borrowings (payments) on revolving credit facility
|
41.0 | (20.0 | ) | |||||
Proceeds from long-term debt
|
0.6 | - | ||||||
Payment of long-term debt
|
(5.0 | ) | (5.3 | ) | ||||
Purchase of noncontrolling interest
|
(1.0 | ) | (1.0 | ) | ||||
Payment of cash dividends
|
(16.7 | ) | (15.0 | ) | ||||
Proceeds on exercise of stock options
|
7.4 | 5.0 | ||||||
Proceeds from stock issuance
|
1.3 | 1.3 | ||||||
Excess tax benefits from employee stock plans
|
(0.6 | ) | 0.3 | |||||
Treasury stock acquired
|
(71.6 | ) | (44.0 | ) | ||||
Net cash used in financing activities
|
(44.8 | ) | (78.7 | ) | ||||
Effect of exchange rate changes on cash
|
(0.4 | ) | (1.2 | ) | ||||
Net Cash Flows
|
(7.1 | ) | 3.0 | |||||
Cash and Cash Equivalents:
|
||||||||
At beginning of period
|
127.4 | 84.3 | ||||||
At end of period
|
$ | 120.3 | $ | 87.3 |
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