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 August 7, 2014, issued by the Corporation.
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HILL-ROM HOLDINGS, INC.
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||||
(Registrant)
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||||
DATE: August 7, 2014
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By:
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/s/ Michael S. Macek
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||
Name:
Title:
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Michael S. Macek
Vice President, Treasurer and
Interim 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 August 7, 2014, issued by the Corporation.
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Contact:
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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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·
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Third quarter revenue of $398 million declined 6 percent versus prior year
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·
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Adjusted diluted earnings per share for the third quarter of $0.59 compares to $0.57 in the prior year
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·
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Reported diluted earnings per share for the third quarter of $0.45 compares to $0.39 per share in the prior year
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·
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Year-to-date operating cash flow of $134 million compares to $168 million in the prior year
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·
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Full year adjusted earnings per share are expected to be $2.20 to $2.24
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·
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currency benefit of approximately 1 percent at current rates; and
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·
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incremental revenue from the Trumpf Medical acquisition.
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·
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currency benefit of approximately 1 percent at current rates; and
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·
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incremental revenue from the Trumpf Medical acquisition.
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Condensed Consolidated Statements of Income
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||||||||||||||||
(Dollars in millions except per share data)
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||||||||||||||||
Quarter Ended June 30
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Year To Date Ended June 30
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|||||||||||||||
2014
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2013
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2014
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2013
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|||||||||||||
Net revenue
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||||||||||||||||
Capital sales
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$ | 302.8 | $ | 323.1 | $ | 911.9 | $ | 965.8 | ||||||||
Rental revenue
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94.8 | 101.1 | 294.4 | 312.5 | ||||||||||||
Total revenue
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397.6 | 424.2 | 1,206.3 | 1,278.3 | ||||||||||||
Cost of revenue
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||||||||||||||||
Cost of goods sold
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168.2 | 187.5 | 508.9 | 558.1 | ||||||||||||
Rental expenses
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42.3 | 46.6 | 130.8 | 142.6 | ||||||||||||
Total cost of revenue
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210.5 | 234.1 | 639.7 | 700.7 | ||||||||||||
Gross profit
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||||||||||||||||
Capital
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134.6 | 135.6 | 403.0 | 407.7 | ||||||||||||
Rental
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52.5 | 54.5 | 163.6 | 169.9 | ||||||||||||
Total gross profit
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187.1 | 190.1 | 566.6 | 577.6 | ||||||||||||
As a percentage of total revenue
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47.1% | 44.8% | 47.0% | 45.2% | ||||||||||||
Research and development expenses
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17.5 | 16.7 | 50.3 | 52.2 | ||||||||||||
Selling and administrative expenses
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128.6 | 136.4 | 396.7 | 414.9 | ||||||||||||
Special charges
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3.0 | 0.8 | 32.4 | 3.7 | ||||||||||||
Operating profit
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38.0 | 36.2 | 87.2 | 106.8 | ||||||||||||
Other income/(expense), net
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(1.7 | ) | (2.3 | ) | (6.2 | ) | (7.6 | ) | ||||||||
Income tax expense
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10.2 | 10.5 | 45.0 | 29.5 | ||||||||||||
Net income
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$ | 26.1 | $ | 23.4 | $ | 36.0 | $ | 69.7 | ||||||||
Diluted earnings per share:
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||||||||||||||||
Earnings per share
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$ | 0.45 | $ | 0.39 | $ | 0.61 | $ | 1.15 | ||||||||
Average common shares outstanding - diluted (thousands)
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58,160 | 60,163 | 58,499 | 60,578 | ||||||||||||
Dividends per common share
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$ | 0.1525 | $ | 0.1375 | $ | 0.4425 | $ | 0.3875 |
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 June 30
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||||||||||||||||||||
2014
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Foreign Exchange
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2014
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2013
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Constant Currency
|
||||||||||||||||
As Reported
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Impact
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Adjusted
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As Reported
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Change
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||||||||||||||||
Capital sales
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$ | 302.8 | $ | 3.2 | $ | 299.6 | $ | 323.1 | -7.3% | |||||||||||
Rental revenue
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94.8 | 0.6 | 94.2 | 101.1 | -6.8% | |||||||||||||||
Total
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$ | 397.6 | $ | 3.8 | $ | 393.8 | $ | 424.2 | -7.2% | |||||||||||
North America
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$ | 211.6 | $ | (0.7 | ) | $ | 212.3 | $ | 238.9 | -11.1% | ||||||||||
Surgical and Respiratory Care
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66.2 | 0.7 | 65.5 | 61.9 | 5.8% | |||||||||||||||
International
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119.8 | 3.8 | 116.0 | 123.4 | -6.0% | |||||||||||||||
Total
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$ | 397.6 | $ | 3.8 | $ | 393.8 | $ | 424.2 | -7.2% | |||||||||||
Year To Date Ended June 30
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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
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As Reported
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Change
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||||||||||||||||
Capital sales
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$ | 911.9 | $ | 7.3 | $ | 904.6 | $ | 965.8 | -6.3% | |||||||||||
Rental revenue
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294.4 | 1.3 | 293.1 | 312.5 | -6.2% | |||||||||||||||
Total
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$ | 1,206.3 | $ | 8.6 | $ | 1,197.7 | $ | 1,278.3 | -6.3% | |||||||||||
North America
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$ | 641.6 | $ | (2.7 | ) | $ | 644.3 | $ | 713.3 | -9.7% | ||||||||||
Surgical and Respiratory Care
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195.1 | 1.2 | 193.9 | 182.1 | 6.5% | |||||||||||||||
International
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369.6 | 10.1 | 359.5 | 382.9 | -6.1% | |||||||||||||||
Total
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$ | 1,206.3 | $ | 8.6 | $ | 1,197.7 | $ | 1,278.3 | -6.3% |
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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||||||||||||||||||||||||
Quarter Ended June 30, 2014
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Quarter Ended June 30, 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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$ | 36.3 | $ | 10.2 | $ | 0.45 | $ | 33.9 | $ | 10.5 | $ | 0.39 | ||||||||||||
Adjustments:
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||||||||||||||||||||||||
Acquisition and integration costs
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2.8 | 1.0 | 0.03 | 1.2 | 0.4 | 0.01 | ||||||||||||||||||
Acquisition-related intangible asset amortization
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7.1 | 2.1 | 0.08 | 7.0 | 2.5 | 0.08 | ||||||||||||||||||
Field corrective actions
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(1.0 | ) | 0.2 | (0.02 | ) | 4.5 | 1.2 | 0.06 | ||||||||||||||||
Employee benefits change
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(1.2 | ) | (0.4 | ) | (0.01 | ) | - | - | - | |||||||||||||||
FDA remediation expenses
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1.1 | 0.5 | 0.01 | 2.2 | 0.8 | 0.02 | ||||||||||||||||||
Special charges
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3.0 | 0.2 | 0.05 | 0.8 | 0.2 | 0.01 | ||||||||||||||||||
Adjusted Earnings
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$ | 48.1 | $ | 13.8 | $ | 0.59 | $ | 49.6 | $ | 15.6 | $ | 0.57 | ||||||||||||
Year To Date Ended June 30, 2014
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Year To Date Ended June 30, 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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$ | 81.0 | $ | 45.0 | $ | 0.61 | $ | 99.2 | $ | 29.5 | $ | 1.15 | ||||||||||||
Adjustments:
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||||||||||||||||||||||||
Acquisition and integration costs
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6.4 | 2.2 | 0.07 | 6.9 | 2.3 | 0.08 | ||||||||||||||||||
Acquisition-related intangible asset amortization
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20.9 | 6.3 | 0.25 | 20.9 | 7.1 | 0.23 | ||||||||||||||||||
Field corrective actions
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(1.7 | ) | (0.6 | ) | (0.02 | ) | 12.2 | 4.0 | 0.14 | |||||||||||||||
Employee benefits change
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(13.4 | ) | (5.1 | ) | (0.14 | ) | - | - | - | |||||||||||||||
FDA remediation expenses
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2.8 | 1.1 | 0.03 | 4.1 | 1.5 | 0.04 | ||||||||||||||||||
Litigation charge
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- | - | - | 0.5 | 0.5 | - | ||||||||||||||||||
Special charges
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32.4 | 10.5 | 0.37 | 3.7 | 1.2 | 0.04 | ||||||||||||||||||
Foreign valuation allowance
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- | (19.6 | ) | 0.34 | - | - | - | |||||||||||||||||
Adjusted Earnings
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$ | 128.4 | $ | 39.8 | $ | 1.51 | $ | 147.5 | $ | 46.1 | $ | 1.67 | ||||||||||||
* 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 June 30
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Year To Date Ended June 30
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|||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Adjusted income before income taxes
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$ | 48.1 | $ | 49.6 | $ | 128.4 | $ | 147.5 | ||||||||||||||||
Add back:
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||||||||||||||||||||||||
Other expense
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1.7 | 2.3 | 6.2 | 7.6 | ||||||||||||||||||||
Depreciation and amortization
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18.5 | 21.6 | 59.1 | 67.9 | ||||||||||||||||||||
Adjusted EBITDA
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$ | 68.3 | $ | 73.5 | $ | 193.7 | $ | 223.0 |
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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||||||||
June 30, 2014
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September 30, 2013
|
|||||||
Assets
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||||||||
Current Assets
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||||||||
Cash and cash equivalents
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$ | 111.9 | $ | 127.4 | ||||
Trade accounts receivable, net of allowances
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331.8 | 361.8 | ||||||
Inventories, net
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122.1 | 118.3 | ||||||
Other current assets
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72.9 | 80.5 | ||||||
Total current assets
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638.7 | 688.0 | ||||||
Property, plant and equipment, net
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218.4 | 234.3 | ||||||
Goodwill
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353.0 | 342.8 | ||||||
Other assets
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276.8 | 321.7 | ||||||
Total Assets
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$ | 1,486.9 | $ | 1,586.8 | ||||
Liabilities
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||||||||
Current Liabilities
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||||||||
Trade accounts payable
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$ | 71.7 | $ | 80.8 | ||||
Short-term borrowings
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80.0 | 81.2 | ||||||
Other current liabilities
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157.5 | 183.4 | ||||||
Total current liabilities
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309.2 | 345.4 | ||||||
Long-term debt
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214.8 | 225.8 | ||||||
Other long-term liabilities
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132.3 | 156.9 | ||||||
Total Liabilities
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656.3 | 728.1 | ||||||
Shareholders' Equity
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830.6 | 858.7 | ||||||
Total Liabilities and Shareholders' Equity
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$ | 1,486.9 | $ | 1,586.8 |
Hill-Rom Holdings, Inc. and Subsidiaries
|
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Condensed Consolidated Statements of Cash Flows
|
||||||||
(Dollars in millions)
|
||||||||
Year to Date Ended June 30
|
||||||||
|
||||||||
2014
|
2013
|
|||||||
Operating Activities
|
||||||||
Net income
|
$ | 36.0 | $ | 69.7 | ||||
Adjustments to reconcile net income to net cash provided by
|
||||||||
operating activities:
|
||||||||
Depreciation
|
49.5 | 54.1 | ||||||
Amortization
|
9.6 | 13.8 | ||||||
Acquisition-related intangible asset amortization
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20.9 | 20.9 | ||||||
Provision for deferred income taxes
|
4.6 | (15.9 | ) | |||||
Loss on disposal of property, equipment leased to others,
|
||||||||
intangible assets and impairments
|
7.3 | 0.4 | ||||||
Stock compensation
|
13.2 | 11.3 | ||||||
Excess tax benefits from employee stock plans
|
0.5 | (0.4 | ) | |||||
Change in working capital excluding cash, current investments,
|
||||||||
current debt, acquisitions and dispositions:
|
||||||||
Trade accounts receivable
|
29.8 | 31.4 | ||||||
Inventories
|
(1.2 | ) | 3.9 | |||||
Other current assets
|
(4.2 | ) | (2.4 | ) | ||||
Trade accounts payable
|
(9.4 | ) | (15.1 | ) | ||||
Accrued expenses and other liabilities
|
(23.1 | ) | (1.9 | ) | ||||
Other, net
|
0.7 | (2.1 | ) | |||||
Net cash provided by operating activities
|
134.2 | 167.7 | ||||||
Investing Activities
|
||||||||
Capital expenditures and purchases of intangible assets
|
(44.4 | ) | (49.7 | ) | ||||
Proceeds on sale of property and equipment leased to others
|
1.8 | 5.3 | ||||||
Payment for acquisition of businesses, net of cash acquired
|
(15.5 | ) | (3.0 | ) | ||||
Refund on acquisition of businesses
|
4.6 | 2.8 | ||||||
Other
|
3.2 | - | ||||||
Net cash used in investing activities
|
(50.3 | ) | (44.6 | ) | ||||
Financing Activities
|
||||||||
Net change in short-term debt
|
(0.2 | ) | (0.1 | ) | ||||
Borrowings on revolving credit facility
|
35.0 | - | ||||||
Payments on revolving credit facility
|
(40.0 | ) | (20.0 | ) | ||||
Proceeds from long-term debt
|
0.6 | - | ||||||
Payment of long-term debt
|
(7.6 | ) | (8.0 | ) | ||||
Purchase of noncontrolling interest
|
(1.3 | ) | (1.3 | ) | ||||
Payment of cash dividends
|
(25.4 | ) | (23.1 | ) | ||||
Proceeds on exercise of stock options
|
10.2 | 6.0 | ||||||
Proceeds from stock issuance
|
1.8 | 2.1 | ||||||
Excess tax benefits from employee stock plans
|
(0.5 | ) | 0.4 | |||||
Treasury stock acquired
|
(71.6 | ) | (69.9 | ) | ||||
Net cash used in financing activities
|
(99.0 | ) | (113.9 | ) | ||||
Effect of exchange rate changes on cash
|
(0.4 | ) | (2.2 | ) | ||||
Net Cash Flows
|
(15.5 | ) | 7.0 | |||||
Cash and Cash Equivalents:
|
||||||||
At beginning of period
|
127.4 | 84.3 | ||||||
At end of period
|
$ | 111.9 | $ | 91.3 |
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