Indiana
(State or other jurisdiction of
incorporation)
|
1-6651
(Commission File Number)
|
35-1160484
(IRS Employer Identification No.)
|
Two Prudential Plaza
Suite 4100
Chicago, IL
(Address of principal executive
offices)
|
60601
(Zip Code)
|
|
(312) 819-7200
(Registrant’s telephone number, including area code)
|
Item 2.02.
|
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
Item 9.01.
|
FINANCIAL STATEMENTS AND EXHIBITS.
|
|
99.1
|
Press release, dated April 29, 2016, issued by the Corporation.
|
HILL-ROM HOLDINGS, INC.
|
|||
(Registrant)
|
|||
DATE: April 29, 2016
|
By:
|
/s/ Steven J. Strobel
|
|
Name:
Title:
|
Steven J. Strobel
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
|
Exhibit Number
|
Exhibit Description
|
|
99.1
|
Press release, dated April 29, 2016, issued by the Corporation.
|
Contact:
|
Mike Macek, Vice President, Treasurer and Investor Relations
|
Phone:
|
812-934-7809
|
Email:
|
Mike.Macek@hill-rom.com
|
Media
|
Contact:
|
Howard Karesh, Vice President, Corporate Communications
|
Phone:
|
312-819-7268
|
Email:
|
Howard.Karesh@hill-rom.com
|
|
·
|
Reported revenue increased 33 percent from prior year to $633 million
|
|
·
|
Adjusted operating margin of 13.9 percent increased 230 basis points compared to the prior year
|
|
·
|
Adjusted diluted earnings per share of $0.71 increased 11 percent compared to $0.64 in the prior year
|
|
·
|
Reported diluted earnings per share of $0.33 decreased 27 percent compared to $0.45 in the prior year
|
|
·
|
Year-to-date operating cash flow increased to $88 million
|
|
·
|
Fiscal year 2016 adjusted earnings per share outlook now expected to be $3.26 to $3.30; Full-year reported revenue is now expected to be between $2.64 and $2.67 billion
|
|
·
|
low-to-mid single digit pro forma constant currency growth, and
|
|
·
|
negative currency impact of approximately 2 to 3 percent at current rates
|
|
·
|
low-single-digit pro forma constant currency growth, and
|
|
·
|
negative currency impact of approximately 1 percent at current rates
|
Quarter Ended March 31
|
Year To Date Ended March 31
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net revenue
|
||||||||||||||||
Product sales and service
|
$ | 529.3 | $ | 375.7 | $ | 1,094.4 | $ | 749.1 | ||||||||
Rental revenue
|
103.3 | 99.1 | 199.4 | 190.7 | ||||||||||||
Total revenue
|
632.6 | 474.8 | 1,293.8 | 939.8 | ||||||||||||
Cost of revenue
|
||||||||||||||||
Cost of goods sold
|
279.3 | 213.9 | 602.4 | 434.4 | ||||||||||||
Rental expenses
|
49.1 | 46.7 | 96.5 | 91.3 | ||||||||||||
Total cost of revenue
|
328.4 | 260.6 | 698.9 | 525.7 | ||||||||||||
Gross profit
|
||||||||||||||||
Product sales and service
|
250.0 | 161.8 | 492.0 | 314.7 | ||||||||||||
Rental
|
54.2 | 52.4 | 102.9 | 99.4 | ||||||||||||
Total gross profit
|
304.2 | 214.2 | 594.9 | 414.1 | ||||||||||||
As a percentage of sales
|
48.1 | % | 45.1 | % | 46.0 | % | 44.1 | % | ||||||||
Research and development expenses
|
34.3 | 22.2 | 67.9 | 44.0 | ||||||||||||
Selling and administrative expenses
|
209.4 | 149.9 | 430.6 | 305.0 | ||||||||||||
Special charges
|
10.7 | 3.8 | 17.8 | 7.5 | ||||||||||||
Operating profit
|
49.8 | 38.3 | 78.6 | 57.6 | ||||||||||||
Other income/(expense), net
|
(21.7 | ) | (1.7 | ) | (44.7 | ) | (4.0 | ) | ||||||||
Income tax expense
|
6.0 | 10.5 | 7.5 | 15.4 | ||||||||||||
Net income
|
22.1 | 26.1 | 26.4 | 38.2 | ||||||||||||
Less: Net loss attributable to noncontrolling interests
|
(0.2 | ) | - | (0.7 | ) | - | ||||||||||
Net income attributable to common shareholders
|
$ | 22.3 | $ | 26.1 | $ | 27.1 | $ | 38.2 | ||||||||
Diluted earnings per share:
|
$ | 0.33 | $ | 0.45 | $ | 0.41 | $ | 0.66 | ||||||||
Average common shares outstanding - diluted (thousands)
|
66,382 | 57,610 | 66,364 | 57,894 | ||||||||||||
Dividends per common share
|
$ | 0.1700 | $ | 0.1600 | $ | 0.3300 | $ | 0.3125 |
US
|
OUS
|
|||||||||||||||||||||||||||
Quarter Ended March 31
|
As
|
Constant
|
As
|
As
|
Constant
|
|||||||||||||||||||||||
2016
|
2015
|
Reported
|
Currency
|
Reported
|
Reported
|
Currency
|
||||||||||||||||||||||
Product Sales and Service
|
$ | 529.3 | $ | 375.7 | 40.9 | % | 42.5 | % | 64.3 | % | 10.8 | % | 14.4 | % | ||||||||||||||
Rental
|
103.3 | 99.1 | 4.2 | % | 4.6 | % | 6.4 | % | (9.6 | %) | (6.7 | %) | ||||||||||||||||
Total
|
$ | 632.6 | $ | 474.8 | 33.2 | % | 34.6 | % | 47.6 | % | 9.3 | % | 12.8 | % | ||||||||||||||
North America
|
$ | 269.8 | $ | 246.9 | 9.3 | % | 9.6 | % | 11.3 | % | (23.0 | %) | (16.9 | %) | ||||||||||||||
Front Line Care
|
185.3 | 22.4 | N/M | N/M | N/M | N/M | N/M | |||||||||||||||||||||
Surgical Solutions
|
95.1 | 99.4 | (4.3 | %) | (3.4 | %) | 7.7 | % | (13.9 | %) | (12.3 | %) | ||||||||||||||||
International
|
82.4 | 106.1 | (22.3 | %) | (20.6 | %) | - | (22.3 | %) | (20.6 | %) | |||||||||||||||||
Total
|
$ | 632.6 | $ | 474.8 | 33.2 | % | 34.6 | % | 47.6 | % | 9.3 | % | 12.8 | % |
US
|
OUS
|
|||||||||||||||||||||||||||
Year To Date Ended March 31
|
As
|
Constant
|
As
|
As
|
Constant
|
|||||||||||||||||||||||
2016 | 2015 |
Reported
|
Currency
|
Reported
|
Reported
|
Currency
|
||||||||||||||||||||||
Product Sales and Service
|
$ | 1,094.4 | $ | 749.1 | 46.1 | % | 49.8 | % | 68.9 | % | 17.4 | % | 25.8 | % | ||||||||||||||
Rental
|
199.4 | 190.7 | 4.6 | % | 5.5 | % | 7.6 | % | (13.9 | %) | (7.3 | %) | ||||||||||||||||
Total
|
$ | 1,293.8 | $ | 939.8 | 37.7 | % | 40.8 | % | 51.7 | % | 15.0 | % | 23.3 | % | ||||||||||||||
North America
|
$ | 518.7 | $ | 472.1 | 9.9 | % | 10.3 | % | 10.9 | % | (12.1 | %) | (1.9 | %) | ||||||||||||||
Front Line Care
|
405.5 | 44.5 | N/M | N/M | N/M | N/M | N/M | |||||||||||||||||||||
Surgical Solutions
|
194.4 | 204.4 | (4.9 | %) | (1.5 | %) | 6.3 | % | (13.5 | %) | (7.5 | %) | ||||||||||||||||
International
|
175.2 | 218.8 | (19.9 | %) | (14.6 | %) | - | (19.9 | %) | (14.6 | %) | |||||||||||||||||
Total
|
$ | 1,293.8 | $ | 939.8 | 37.7 | % | 40.8 | % | 51.7 | % | 15.0 | % | 23.3 | % |
Quarter Ended March 31, 2016
|
Quarter Ended March 31, 2015
|
|||||||||||||||||||||||||||||||
Operating
Margin
|
Income
Before
Income
Taxes
|
Income
Tax
Expense
|
Diluted
EPS
|
Operating
Margin1
|
Income
Before
Income
Taxes
|
Income
Tax
Expense
|
Diluted
EPS1
|
|||||||||||||||||||||||||
GAAP Basis
|
7.9 | % | $ | 28.1 | $ | 6.0 | $ | 0.33 | 8.1 | % | $ | 36.6 | $ | 10.5 | $ | 0.45 | ||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||
Acquisition and integration costs
|
0.7 | % | 4.4 | 1.4 | 0.05 | 0.8 | % | 3.8 | 1.2 | 0.05 | ||||||||||||||||||||||
Acquisition-related intangible asset amortization
|
3.8 | % | 23.8 | 8.2 | 0.24 | 1.6 | % | 7.6 | 2.2 | 0.10 | ||||||||||||||||||||||
FDA remediation expenses
|
- | - | - | - | 0.3 | % | 1.2 | 0.4 | 0.01 | |||||||||||||||||||||||
Field corrective actions
|
-0.2 | % | (1.0 | ) | (0.3 | ) | (0.01 | ) | 0.3 | % | 1.2 | 0.2 | 0.02 | |||||||||||||||||||
Litigation settlements and expenses
|
- | - | - | - | -0.2 | % | (0.9 | ) | (0.3 | ) | (0.01 | ) | ||||||||||||||||||||
Special charges
|
1.7 | % | 10.7 | 3.8 | 0.10 | 0.8 | % | 3.8 | 0.1 | 0.06 | ||||||||||||||||||||||
Foreign valuation allowance and acquisition dividends
|
- | - | - | - | - | - | 1.9 | (0.03 | ) | |||||||||||||||||||||||
Adjusted Basis
|
13.9 | % | $ | 66.0 | $ | 19.1 | $ | 0.71 | 11.6 | % | $ | 53.3 | $ | 16.2 | $ | 0.64 |
Year to Date Ended March 31, 2016
|
Year To Dated Ended March 31, 2015
|
|||||||||||||||||||||||||||||||
Operating
Margin
|
Income
Before
Income
Taxes
|
Income
Tax
Expense
|
Diluted
EPS1
|
Operating
Margin
|
Income
Before
Income
Taxes
|
Income
Tax
Expense
|
Diluted
EPS1
|
|||||||||||||||||||||||||
GAAP Basis
|
6.1 | % | $ | 33.9 | $ | 7.5 | $ | 0.41 | 6.1 | % | $ | 53.6 | $ | 15.4 | $ | 0.66 | ||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||
Acquisition and integration costs
|
2.3 | % | 30.2 | 9.0 | 0.32 | 1.4 | % | 12.7 | 4.0 | 0.15 | ||||||||||||||||||||||
Acquisition-related intangible asset amortization
|
3.7 | % | 48.0 | 16.5 | 0.47 | 1.7 | % | 15.7 | 4.4 | 0.20 | ||||||||||||||||||||||
FDA remediation expenses
|
- | - | - | - | 0.2 | % | 1.7 | 0.6 | 0.02 | |||||||||||||||||||||||
Field corrective actions
|
- | 0.1 | (0.1 | ) | - | 0.2 | % | 2.3 | 0.7 | 0.03 | ||||||||||||||||||||||
Litigation settlements and expenses
|
- | - | - | - | -0.1 | % | (0.9 | ) | (0.3 | ) | (0.01 | ) | ||||||||||||||||||||
Special charges
|
1.4 | % | 17.8 | 5.8 | 0.18 | 0.8 | % | 7.5 | 0.3 | 0.12 | ||||||||||||||||||||||
Foreign valuation allowance and acquisition dividends
|
- | - | - | - | - | - | 1.9 | (0.03 | ) | |||||||||||||||||||||||
Adjusted Basis
|
13.5 | % | $ | 130.0 | $ | 38.7 | $ | 1.39 | 10.3 | % | $ | 92.6 | $ | 27.0 | $ | 1.13 |
March 31, 2016
|
September 30, 2015
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 157.6 | $ | 192.8 | ||||
Trade accounts receivable, net of allowances
|
467.4 | 494.7 | ||||||
Inventories, net
|
256.5 | 267.4 | ||||||
Other current assets
|
102.3 | 186.1 | ||||||
Total current assets
|
983.8 | 1,141.0 | ||||||
Property, plant and equipment, net
|
372.6 | 378.4 | ||||||
Intangible assets:
|
||||||||
Goodwill
|
1,613.8 | 1,610.5 | ||||||
Software and other, net
|
1,200.3 | 1,247.7 | ||||||
Other assets
|
72.1 | 80.0 | ||||||
Total Assets
|
$ | 4,242.6 | $ | 4,457.6 | ||||
Liabilities
|
||||||||
Current Liabilities
|
||||||||
Trade accounts payable
|
$ | 118.9 | $ | 136.3 | ||||
Short-term borrowings
|
90.6 | 58.0 | ||||||
Other current liabilities
|
282.1 | 384.5 | ||||||
Total current liabilities
|
491.6 | 578.8 | ||||||
Long-term debt
|
2,087.3 | 2,175.2 | ||||||
Other long-term liabilities
|
486.2 | 546.7 | ||||||
Total Liabilities
|
3,065.1 | 3,300.7 | ||||||
Total Shareholders' Equity Attributable to Common Shareholders
|
1,168.2 | 1,146.9 | ||||||
Noncontrolling interests
|
9.3 | 10.0 | ||||||
Total Shareholders' Equity
|
1,177.5 | 1,156.9 | ||||||
Total Liabilities and Shareholders' Equity
|
$ | 4,242.6 | $ | 4,457.6 |
Year to Date Ended March 31
|
||||||||
2016
|
2015
|
|||||||
Operating Activities
|
||||||||
Net income
|
$ | 26.4 | $ | 38.2 | ||||
Adjustments to reconcile net income to net cash provided by
|
||||||||
operating activities:
|
||||||||
Depreciation
|
46.9 | 34.9 | ||||||
Amortization
|
8.5 | 5.5 | ||||||
Acquisition-related intangible asset amortization
|
48.0 | 15.7 | ||||||
Provision for deferred income taxes
|
14.9 | (6.2 | ) | |||||
(Gain) loss on disposal of property, equipment leased to others,
|
||||||||
intangible assets and impairments
|
1.5 | (0.2 | ) | |||||
Stock compensation
|
12.1 | 9.9 | ||||||
Excess tax benefits from employee stock plans
|
(1.1 | ) | (1.4 | ) | ||||
Change in working capital excluding cash, current investments,
|
||||||||
current debt and acquisitions and dispositions:
|
||||||||
Trade accounts receivable
|
28.9 | 22.6 | ||||||
Inventories
|
12.0 | (3.9 | ) | |||||
Other current assets
|
6.8 | (2.8 | ) | |||||
Trade accounts payable
|
(15.0 | ) | (16.6 | ) | ||||
Accrued expenses and other liabilities
|
(102.9 | ) | (9.4 | ) | ||||
Other, net
|
0.5 | 0.8 | ||||||
Net cash provided by operating activities
|
87.5 | 87.1 | ||||||
Investing Activities
|
||||||||
Capital expenditures and purchases of intangibles
|
(46.4 | ) | (80.3 | ) | ||||
Proceeds on sales of property and equipment leased to others
|
0.4 | 0.9 | ||||||
Payment for acquisition of businesses, net of cash acquired
|
- | (2.7 | ) | |||||
Other
|
2.4 | (4.8 | ) | |||||
Net cash used in investing activities
|
(43.6 | ) | (86.9 | ) | ||||
Financing Activities
|
||||||||
Net change in short-term debt
|
- | (0.7 | ) | |||||
Borrowings on revolving credit facility
|
20.0 | 95.0 | ||||||
Payment of long-term debt
|
(79.1 | ) | (7.6 | ) | ||||
Purchase of noncontrolling interest of former joint venture
|
(0.4 | ) | (1.3 | ) | ||||
Payment of cash dividends
|
(21.5 | ) | (17.7 | ) | ||||
Proceeds on exercise of stock options
|
2.2 | 9.1 | ||||||
Proceeds from stock issuance
|
1.6 | 1.3 | ||||||
Excess tax benefits from employee stock plans
|
1.1 | 1.4 | ||||||
Treasury stock acquired
|
(3.2 | ) | (57.1 | ) | ||||
Net cash provided by (used in) financing activities
|
(79.3 | ) | 22.4 | |||||
Effect of exchange rate changes on cash
|
0.2 | (7.4 | ) | |||||
Net Cash Flows
|
(35.2 | ) | 15.2 | |||||
Cash and Cash Equivalents:
|
||||||||
At beginning of period
|
192.8 | 99.3 | ||||||
At end of period
|
$ | 157.6 | $ | 114.5 |