Hill-Rom reports strong fiscal third quarter 2018 financial results

Hill-Rom Holdings, Inc. has announced financial results for its fiscal third quarter ended June 30, 2018, and reaffirmed its fiscal 2018 full-year outlook. For the fiscal third quarter, Hill-Rom reported earnings of USD 0.67 per diluted share compared to USD 0.09 per diluted share in the prior-year period. On an adjusted basis, excluding special items, earnings of USD 1.15 per diluted share rose 26 percent from USD 0.91 per diluted share in the prior-year period, exceeding the company›s previously-issued guidance of USD 1.12 to USD 1.14 per diluted share. Adjustments to reported earnings are detailed in the reconciliation schedules provided.

In the fiscal third quarter, Hill-Rom’s worldwide revenue of USD 709 million increased 3 percent compared to the fiscal third quarter of last year, or 1 percent on a constant currency basis. Domestic revenue of USD 494 million advanced 5 percent, while revenue outside the United States of America of USD 215 million declined 2 percent, or 7 percent on a constant currency basis. Hill-Rom›s core revenue accelerated by 4 percent on a constant currency basis, as the company capitalized on several new product introductions from across the portfolio. Core revenue excludes foreign currency, divestitures, and non-strategic assets the company plans to exit. Gross margin of 49.1 percent expanded 110 basis points compared to the prior year, and operating margin improved 520 basis points to 11.1 percent. On an adjusted basis, gross margin expanded by 80 basis points to 49.1 percent and operating margin improved by 120 basis points to 17.3 percent. Adjustments to gross margin and operating margin are detailed in the reconciliation schedules provided. Year-to-date, operating cash flow of USD 250 million increased 4 percent versus the prior-year period, and the company returned USD 46 million to shareholders in the form of dividends and share repurchases.

For the fiscal fourth quarter 2018, Hill-Rom expects revenue to increase approximately 2 percent on both a reported and constant currency basis, and core revenue to increase 3 to 4 percent. Hill-Rom expects adjusted earnings, excluding special items, of USD 1.50 to USD 1.53 per diluted share. For full-year 2018, Hill-Rom continues to expect revenue to increase 3 to 4 percent on a reported basis and 2 to 3 percent on a constant currency basis. The company continues to expect core revenue to increase approximately 3 percent. Core revenue excludes foreign currency, divestitures, non-strategic assets the company plans to exit, and Mortara revenue prior to the anniversary date of the acquisition. Hill-Rom now expects adjusted earnings, excluding special items, of USD 4.62 to USD 4.65 per diluted share, compared to its prior guidance of USD 4.60 to USD 4.65 per diluted share, and approximately USD 350 million in operating cash flow.