Indiana
(State or other jurisdiction of
incorporation) |
1-6651
(Commission File Number)
|
35-1160484
(IRS Employer Identification No.)
|
130 East Randolph Street
Suite 1000
Chicago, IL
(Address of principal executive
offices) |
60601
(Zip Code)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
☐
|
Emerging growth company (Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.b-2 of this chapter).
|
☐
|
If an emerging growth company, indicate by check mark of the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
Item 2.02. |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
Item 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS.
|
99.1
|
Exhibit Number
|
Exhibit Description
|
99.1
|
HILL-ROM HOLDINGS, INC.
(Registrant)
|
||||
DATE: April 27, 2018
|
By:
|
/s/ Steven J. Strobel
|
||
Name:
|
Steven J. Strobel
|
|||
Title:
|
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
|
Contact:
|
Mary Kay Ladone, Vice President, Investor Relations
|
Phone:
|
312-819-9387
|
Email:
|
MaryKay.Ladone@hill-rom.com
|
Media
|
|
Contact:
|
Howard Karesh, Vice President, Corporate Communications
|
Phone:
|
312-819-7268
|
Email:
|
Howard.Karesh@hill-rom.com
|
• |
Patient Support Systems: Patient Support Systems revenue of $355 million declined 2 percent on a reported basis and declined 5 percent on a constant currency basis. Core revenue declined 1 percent on a constant currency basis.
|
• |
Front Line Care: Front Line Care revenue of $238 million increased 13 percent on a reported basis and increased 11 percent on a constant currency basis. Core revenue increased 6 percent on a constant currency basis.
|
• |
Surgical Solutions: Surgical Solutions revenue of $118 million advanced 12 percent on a reported basis and rose 6 percent on a constant currency basis.
|
· |
Expanding indications with enhancements to the Spot™ Vision Screener, enabling the device to quickly and effectively screen for vision issues in adult patients with pupil sizes as small as 3 mm – a first-of-its-kind application in the vision-screening device sector. The portable, handheld device enables clinicians to quickly detect vision issues in patients from as young as six months of age through adulthood. Hill-Rom’s “Vision for All” campaign is focused on expanding access and preventing loss of sight for both pediatric and adult populations.
|
· |
Enhancing workflow efficiency and security features for the Welch Allyn Connex® vital signs monitoring portfolio with the integration of Imprivata® secure access technology. The new applications enable stronger protection of patient data collected or stored on Connex devices used in EMR-connected workflows, and provide clinicians a faster, easier way to access or update patient data.
|
· |
Presenting new data from a robust multicenter study demonstrating that Hill-Rom’s MetaNeb® System reduces the incidence of post-operative pulmonary complications in high-risk patients, time spent on a ventilator, length of stay and total cost of care. The MetaNeb System, part of Hill-Rom’s respiratory care product portfolio, combines lung expansion, secretion clearance and aerosol delivery into a single, efficient therapy. Researchers from the Carolinas Health Care System, the University of Pennsylvania, Lahey Hospital and Medical Center, and Johns Hopkins University compiled data from 419 patients enrolled in the study.
|
· |
Showcasing Hill-Rom’s surgical leadership and safety innovations with the introduction of the new Bard Parker® Plus Blade with Loader, designed to enhance safety and reduce sharps injuries in the operating room (OR), as well as the latest safety and ease-of-use upgrade to its Allen® Advance Table, a specialty OR table for complex surgical procedures.
|
· |
Optimizing the product portfolio by entering an agreement to divest assets related to the company’s third-party rental business to Universal Hospital Services, Inc. (UHS) during the fiscal third quarter. The pending transaction, which includes the transfer of certain moveable, third-party medical equipment that can be rented to customers, allows Hill-Rom to redirect resources and strategic investments towards innovation, enhanced commercial capabilities and future growth opportunities.
|
Hill-Rom Holdings, Inc. and Subsidiaries
|
|
Condensed Consolidated Statements of Income
|
|
(Dollars in millions, except per share data, unaudited)
|
Quarter Ended
March 31 |
Year to Date Ended
March 31 |
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net revenue
|
||||||||||||||||
Product sales and service
|
$
|
610.7
|
$
|
579.6
|
$
|
1,185.9
|
$
|
1,121.5
|
||||||||
Rental revenue
|
99.8
|
99.3
|
194.3
|
194.8
|
||||||||||||
Total revenue
|
710.5
|
678.9
|
1,380.2
|
1,316.3
|
||||||||||||
Cost of revenue
|
||||||||||||||||
Cost of goods sold
|
313.7
|
305.7
|
617.8
|
594.1
|
||||||||||||
Rental expenses
|
46.4
|
48.8
|
92.4
|
95.2
|
||||||||||||
Total cost of revenue
|
360.1
|
354.5
|
710.2
|
689.3
|
||||||||||||
Gross profit
|
||||||||||||||||
Product sales and service
|
297.0
|
273.9
|
568.1
|
527.4
|
||||||||||||
Rental
|
53.4
|
50.5
|
101.9
|
99.6
|
||||||||||||
Total gross profit
|
350.4
|
324.4
|
670.0
|
627.0
|
||||||||||||
As a percentage of sales
|
49.3
|
%
|
47.8
|
%
|
48.5
|
%
|
47.6
|
%
|
||||||||
Research and development expenses
|
34.7
|
35.3
|
67.0
|
67.3
|
||||||||||||
Selling and administrative expenses
|
232.7
|
222.4
|
454.4
|
431.2
|
||||||||||||
Special charges
|
36.9
|
3.1
|
50.4
|
8.9
|
||||||||||||
Operating profit
|
46.1
|
63.6
|
98.2
|
119.6
|
||||||||||||
Other income (expense), net
|
(24.6
|
)
|
(22.3
|
)
|
(45.9
|
)
|
(43.0
|
)
|
||||||||
Income tax expense
|
(7.0
|
)
|
7.3
|
(64.5
|
)
|
19.1
|
||||||||||
Net income
|
28.5
|
34.0
|
116.8
|
57.5
|
||||||||||||
Less: Net loss attributable to noncontrolling interests
|
—
|
(0.4
|
)
|
—
|
(0.7
|
)
|
||||||||||
Net income attributable to common shareholders
|
$
|
28.5
|
$
|
34.4
|
$
|
116.8
|
$
|
58.2
|
||||||||
Diluted earnings per share
|
$
|
0.42
|
$
|
0.51
|
$
|
1.73
|
$
|
0.87
|
||||||||
Average common shares outstanding - diluted (thousands)
|
67,597
|
67,132
|
67,508
|
67,057
|
||||||||||||
Dividends per common share
|
$
|
0.20
|
$
|
0.18
|
$
|
0.38
|
$
|
0.35
|
U.S.
|
OUS
|
|||||||||||||||||||||||||||
Quarter Ended
March 31 |
Change As
|
Constant
|
Change As
|
Change As
|
Constant
|
|||||||||||||||||||||||
2018
|
2017
|
Reported
|
Currency
|
Reported
|
Reported
|
Currency
|
||||||||||||||||||||||
Product sales and service
|
$
|
610.7
|
$
|
579.6
|
5.4
|
%
|
2.2
|
%
|
1.1
|
%
|
13.0
|
%
|
4.1
|
%
|
||||||||||||||
Rental revenue
|
99.8
|
99.3
|
0.5
|
%
|
(0.8
|
)%
|
0.1
|
%
|
3.6
|
%
|
(8.0
|
)%
|
||||||||||||||||
Total revenue
|
$
|
710.5
|
$
|
678.9
|
4.7
|
%
|
1.8
|
%
|
1.0
|
%
|
12.5
|
%
|
3.5
|
%
|
||||||||||||||
Patient Support Systems
|
$
|
355.0
|
$
|
362.9
|
(2.2
|
)%
|
(4.5
|
)%
|
(5.5
|
)%
|
6.5
|
%
|
(2.0
|
)%
|
||||||||||||||
Front Line Care
|
237.9
|
211.0
|
12.7
|
%
|
10.7
|
%
|
10.9
|
%
|
17.0
|
%
|
10.1
|
%
|
||||||||||||||||
Surgical Solutions
|
117.6
|
105.0
|
12.0
|
%
|
5.6
|
%
|
5.4
|
%
|
18.4
|
%
|
5.8
|
%
|
||||||||||||||||
Total revenue
|
$
|
710.5
|
$
|
678.9
|
4.7
|
%
|
1.8
|
%
|
1.0
|
%
|
12.5
|
%
|
3.5
|
%
|
||||||||||||||
OUS - Outside of the U.S.
|
U.S.
|
OUS
|
|||||||||||||||||||||||||||
Year to Date Ended
March 31 |
Change As
|
Constant
|
Change As
|
Change As
|
Constant
|
|||||||||||||||||||||||
2018
|
2017
|
Reported
|
Currency
|
Reported
|
Reported
|
Currency
|
||||||||||||||||||||||
Product sales and service
|
$
|
1,185.9
|
$
|
1,121.5
|
5.7
|
%
|
3.0
|
%
|
1.7
|
%
|
13.4
|
%
|
5.5
|
%
|
||||||||||||||
Rental revenue
|
194.3
|
194.8
|
(0.3
|
)%
|
(1.3
|
)%
|
(0.8
|
)%
|
4.1
|
%
|
(5.5
|
)%
|
||||||||||||||||
Total revenue
|
$
|
1,380.2
|
$
|
1,316.3
|
4.9
|
%
|
2.4
|
%
|
1.2
|
%
|
12.9
|
%
|
4.9
|
%
|
||||||||||||||
Patient Support Systems
|
$
|
689.4
|
$
|
698.1
|
(1.2
|
)%
|
(3.3
|
)%
|
(3.8
|
)%
|
5.6
|
%
|
(2.0
|
)%
|
||||||||||||||
Front Line Care
|
462.5
|
412.8
|
12.0
|
%
|
10.2
|
%
|
9.0
|
%
|
19.6
|
%
|
13.3
|
%
|
||||||||||||||||
Surgical Solutions
|
228.3
|
205.4
|
11.1
|
%
|
5.7
|
%
|
3.6
|
%
|
18.5
|
%
|
7.7
|
%
|
||||||||||||||||
Total revenue
|
$
|
1,380.2
|
$
|
1,316.3
|
4.9
|
%
|
2.4
|
%
|
1.2
|
%
|
12.9
|
%
|
4.9
|
%
|
||||||||||||||
OUS - Outside of the U.S.
|
||||||||||||||||||||||||||||
Quarter Ended March 31, 2018
|
Quarter Ended March 31, 2017
|
|||||||||||||||||||||||||||||||||||||||
Gross
Margin |
Operating
Margin |
Income
Before Income Taxes |
Income
Tax Expense |
Diluted
EPS |
Gross
Margin |
Operating
Margin1 |
Income
Before Income Taxes |
Income
Tax Expense |
Diluted
EPS |
|||||||||||||||||||||||||||||||
GAAP Basis
|
49.3
|
%
|
6.5
|
%
|
$
|
21.5
|
$
|
(7.0
|
)
|
$
|
0.42
|
47.8
|
%
|
9.4
|
%
|
$
|
41.3
|
$
|
7.3
|
$
|
0.51
|
|||||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||||||||||
Acquisition and integration costs
|
—
|
%
|
0.4
|
%
|
2.6
|
0.7
|
0.03
|
0.1
|
%
|
1.1
|
%
|
7.2
|
3.4
|
0.06
|
||||||||||||||||||||||||||
Acquisition-related intangible asset
amortization |
—
|
%
|
3.8
|
%
|
27.0
|
6.9
|
0.30
|
—
|
%
|
3.9
|
%
|
26.6
|
9.0
|
0.26
|
||||||||||||||||||||||||||
Field corrective actions
|
—
|
%
|
—
|
%
|
—
|
—
|
—
|
0.1
|
%
|
0.1
|
%
|
0.5
|
(0.1
|
)
|
0.01
|
|||||||||||||||||||||||||
Litigation expenses
|
—
|
%
|
0.3
|
%
|
1.8
|
0.4
|
0.02
|
—
|
%
|
0.1
|
%
|
0.9
|
0.3
|
0.01
|
||||||||||||||||||||||||||
Special charges
|
—
|
%
|
5.2
|
%
|
36.9
|
9.7
|
0.40
|
—
|
%
|
0.5
|
%
|
3.1
|
0.9
|
0.03
|
||||||||||||||||||||||||||
Tax method and law changes and related
costs |
—
|
%
|
—
|
%
|
0.8
|
8.7
|
(0.12
|
)
|
—
|
%
|
—
|
%
|
—
|
—
|
—
|
|||||||||||||||||||||||||
Adjusted Basis
|
49.3
|
%
|
16.2
|
%
|
$
|
90.6
|
$
|
19.4
|
$
|
1.05
|
48.0
|
%
|
15.0
|
%
|
$
|
79.6
|
$
|
20.8
|
$
|
0.88
|
Year to Date Ended
March 31, 2018 |
Year to Date Ended
March 31, 2017 |
|||||||||||||||||||||||||||||||||||||||
Gross
Margin |
Operating
Margin |
Income
Before Income Taxes |
Income
Tax Expense |
Diluted
EPS |
Gross
Margin |
Operating
Margin1 |
Income
Before Income Taxes |
Income
Tax Expense |
Diluted
EPS |
|||||||||||||||||||||||||||||||
GAAP Basis
|
48.5
|
%
|
7.1
|
%
|
$
|
52.3
|
$
|
(64.5
|
)
|
$
|
1.73
|
47.6
|
%
|
9.1
|
%
|
$
|
76.6
|
$
|
19.1
|
$
|
0.87
|
|||||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||||||||||
Acquisition and integration costs
|
—
|
%
|
0.4
|
%
|
5.0
|
1.3
|
0.05
|
0.1
|
%
|
1.0
|
%
|
13.2
|
5.6
|
0.11
|
||||||||||||||||||||||||||
Acquisition-related intangible asset
amortization |
—
|
%
|
3.9
|
%
|
53.7
|
13.5
|
0.60
|
—
|
%
|
4.0
|
%
|
52.1
|
17.3
|
0.52
|
||||||||||||||||||||||||||
Field corrective actions
|
—
|
%
|
—
|
%
|
—
|
—
|
—
|
—
|
%
|
—
|
%
|
0.5
|
(0.1
|
)
|
0.01
|
|||||||||||||||||||||||||
Litigation expenses
|
—
|
%
|
0.4
|
%
|
5.8
|
1.5
|
0.06
|
—
|
%
|
0.1
|
%
|
0.9
|
0.3
|
0.01
|
||||||||||||||||||||||||||
Special charges
|
—
|
%
|
3.7
|
%
|
50.4
|
13.2
|
0.55
|
—
|
%
|
0.7
|
%
|
8.9
|
2.8
|
0.09
|
||||||||||||||||||||||||||
Tax method and law changes and related
costs |
—
|
%
|
—
|
%
|
0.8
|
69.0
|
(1.01
|
)
|
—
|
%
|
—
|
%
|
—
|
(2.2
|
)
|
0.03
|
||||||||||||||||||||||||
Gain on disposition
|
—
|
%
|
—
|
%
|
(1.0
|
)
|
—
|
(0.01
|
)
|
—
|
%
|
—
|
%
|
(1.0
|
)
|
(0.4
|
)
|
(0.01
|
)
|
|||||||||||||||||||||
Adjusted Basis
|
48.5
|
%
|
15.5
|
%
|
$
|
167.0
|
$
|
34.0
|
$
|
1.97
|
47.7
|
%
|
14.8
|
%
|
$
|
151.2
|
$
|
42.4
|
$
|
1.63
|
March 31,
2018 |
September 30,
2017 |
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
239.0
|
$
|
231.8
|
||||
Trade accounts receivable, net of allowances
|
537.9
|
579.3
|
||||||
Inventories, net
|
315.1
|
284.5
|
||||||
Other current assets
|
109.0
|
70.6
|
||||||
Total current assets
|
1,201.0
|
1,166.2
|
||||||
Property, plant and equipment, net
|
341.8
|
355.4
|
||||||
Intangible assets
|
||||||||
Goodwill
|
1,754.2
|
1,759.6
|
||||||
Other intangible assets and software, net
|
1,088.1
|
1,144.0
|
||||||
Other assets
|
119.6
|
103.5
|
||||||
Total Assets
|
$
|
4,504.7
|
$
|
4,528.7
|
||||
Liabilities
|
||||||||
Current Liabilities
|
||||||||
Trade accounts payable
|
$
|
159.6
|
$
|
167.9
|
||||
Short-term borrowings
|
221.3
|
188.9
|
||||||
Other current liabilities
|
269.6
|
301.9
|
||||||
Total current liabilities
|
650.5
|
658.7
|
||||||
Long-term debt
|
2,025.6
|
2,120.4
|
||||||
Other long-term liabilities
|
318.2
|
384.0
|
||||||
Total Liabilities
|
2,994.3
|
3,163.1
|
||||||
Total Shareholders' Equity Attributable to Common Shareholders
|
1,510.4
|
1,358.2
|
||||||
Noncontrolling interests
|
—
|
7.4
|
||||||
Total Shareholders' Equity
|
1,510.4
|
1,365.6
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
4,504.7
|
$
|
4,528.7
|
Year to Date Ended March 31
|
||||||||
2018
|
2017
|
|||||||
Operating Activities
|
||||||||
Net income
|
$
|
116.8
|
$
|
57.5
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
39.2
|
40.6
|
||||||
Amortization
|
9.6
|
10.0
|
||||||
Acquisition-related intangible asset amortization
|
53.7
|
52.1
|
||||||
Provision for deferred income taxes
|
(89.2
|
)
|
(14.6
|
)
|
||||
(Gain) Loss on disposal of property, equipment leased to others, intangible assets, and
impairments |
(0.6
|
)
|
(3.0
|
)
|
||||
(Gain) loss on disposition of businesses
|
22.4
|
(1.0
|
)
|
|||||
Stock compensation
|
15.8
|
12.2
|
||||||
Change in working capital excluding cash, current debt, acquisitions and dispositions:
|
||||||||
Trade accounts receivable
|
45.7
|
25.4
|
||||||
Inventories
|
(29.0
|
)
|
2.9
|
|||||
Other current assets
|
(37.9
|
)
|
2.8
|
|||||
Trade accounts payable
|
(8.7
|
)
|
(5.7
|
)
|
||||
Accrued expenses and other liabilities
|
(35.8
|
)
|
(55.0
|
)
|
||||
Other, net
|
23.6
|
2.2
|
||||||
Net cash provided by operating activities
|
125.6
|
126.4
|
||||||
Investing Activities
|
||||||||
Capital expenditures and purchases of intangible assets
|
$
|
(51.4
|
)
|
$
|
(47.3
|
)
|
||
Proceeds on sale of property and equipment leased to others
|
3.7
|
10.6
|
||||||
Payment for acquisition of businesses, net of cash acquired
|
—
|
(314.3
|
)
|
|||||
Proceeds on sale of businesses
|
1.0
|
4.5
|
||||||
Other
|
(1.0
|
)
|
(0.4
|
)
|
||||
Net cash used in investing activities
|
(47.7
|
)
|
(346.9
|
)
|
||||
Financing Activities
|
||||||||
Proceeds from borrowings on long-term debt
|
$
|
1.0
|
$
|
300.0
|
||||
Payment of long-term debt
|
(54.9
|
)
|
(36.6
|
)
|
||||
Borrowings on Revolving Credit Facility
|
75.0
|
53.0
|
||||||
Payments on Revolving Credit Facility
|
(95.0
|
)
|
(60.8
|
)
|
||||
Borrowings on Securitization Program
|
51.4
|
—
|
||||||
Payments on Securitization Program
|
(37.3
|
)
|
—
|
|||||
Debt issuance costs
|
—
|
(4.3
|
)
|
|||||
Payment of cash dividends
|
(25.1
|
)
|
(22.9
|
)
|
||||
Proceeds from exercise of stock options
|
10.5
|
14.6
|
||||||
Proceeds from stock issuance
|
3.0
|
2.3
|
||||||
Treasury stock acquired
|
(4.4
|
)
|
(33.6
|
)
|
||||
Net cash provided by (used in) financing activities
|
(75.8
|
)
|
211.7
|
|||||
Effect of exchange rate changes on cash
|
5.1
|
(4.7
|
)
|
|||||
Net Cash Flows
|
7.2
|
(13.5
|
)
|
|||||
Cash and Cash Equivalents
|
||||||||
At beginning of period
|
231.8
|
232.2
|
||||||
At end of period
|
$
|
239.0
|
$
|
218.7
|
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