-- First quarter revenue of $381 million grew 2 percent versus prior year
-- GAAP and adjusted diluted earnings per share for the first quarter were $0.53 compared to $0.55 in the prior year
-- Second quarter financial guidance: Constant currency revenue is expected to be flat compared to the prior year with earnings of $0.53 to $0.55 per diluted share, excluding special items
-- Full year 2012 financial guidance: Constant currency revenue is expected to grow 3 to 4 percent and earnings are expected to be $2.45 to $2.50 per diluted share, excluding special items
Hill-Rom Holdings, Inc. (NYSE: HRC) announced final financial results for its fiscal first quarter ended December 31, 2011 and reiterated its outlook for 2012. Earnings per diluted share decreased 4 percent during the period to $0.53 from $0.55. Prior period earnings included a non-recurring benefit of $0.03 per share due to the reinstatement of the Research and Development Tax Credit for a previous period. Net income decreased to $33 million from $35 million over the same period.
Hill-Rom's quarterly revenue of $381 million increased 2 percent compared to last year. Domestic revenue increased 7 percent to $272 million, while revenue outside the United States decreased 9 percent to $109 million in the same period. Foreign exchange rates did not materially impact revenue comparisons.
"First quarter results were in line with our previously announced preliminary figures," stated John J. Greisch, President & CEO. "Strong performance in our North America Acute Care business, where revenue increased 7 percent, was partially offset by declines in our Post Acute Care and International businesses. Despite a challenging environment, we are confident in our ability to deliver our earnings outlook for the year through disciplined management of our cost structure as we demonstrated in the first quarter."
Financial and Operational Highlights
-- First quarter revenue highlights include:
-- North America Acute Care. North America Acute Care revenue grew 7
percent to approximately $234 million. Capital sales increased 11
percent primarily due to higher sales of patient support systems,
which grew 13 percent. Rental revenue declined 2 percent versus the
-- International. International segment revenue, which excludes
Canada, declined 7 percent to approximately $97 million, due
primarily to declines in Latin America and European regions.
-- North America Post-Acute Care. North America Post-Acute Care
revenue declined 3 percent to approximately $51 million. Capital
sales increased 5 percent and rental revenue decreased 5 percent
versus the prior year. Extended care revenue growth was more than
offset by a decline in our home care business versus the prior year.
-- First quarter operating cash flow was $62 million, compared to $24
million in the prior year.
-- The Company commercialized its new powered stretcher products which
received Food and Drug Administration (FDA) 510k clearance last quarter.
-- During the quarter, the Company announced an agreement to acquire Volker
group for approximately $85 million. The acquisition is expected to
close within the first calendar quarter of 2012.
Please see the attached schedules for additional information, including condensed financial information, summary balance sheet, cash flow statement and segment sales summaries.
For a more complete review of Hill-Rom's results, please refer to our Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, which will be filed later this week.
Financial Guidance Summary
For the second quarter of fiscal 2012, Hill-Rom expects constant currency revenue to be flat compared to the prior year and expects adjusted earnings of $0.53 to $0.55 per diluted share.
Hill-Rom expects full-year constant currency revenue growth of between 3 and 4 percent and adjusted earnings of $2.45 to $2.50 per diluted share. If currency rates remain stable near recent levels, the Company expects revenue growth to be approximately 1 percentage point lower on a reported basis for both the second quarter and full year. Cash flow from operations for the full year is expected to be approximately $290 to $300 million.
Hill-Rom Holdings, Inc. routinely provides earnings per share results and guidance on an adjusted basis because the Company's management believes that the presentation provides useful information to investors. These measures exclude strategic developments, special charges and the impact of significant litigation or other unusual events. Such items may be highly variable, difficult to predict and of a size that sometimes have substantial impact on the Company's reported operations for a period. Often, prospective quantification of such items is not feasible. Management uses these measures internally for planning, forecasting and evaluating the performance of the business. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.