Hill-Rom Holdings (NYSE: HRC) leaders have announced financial results for its fiscal second quarter ended March 31 and maintained its 2014 earnings outlook.
The company’s quarterly revenue was $415 million, a 2 percent decrease compared to last year on a reported basis and a 3 percent decrease on a constant currency basis. Domestic revenue was $263 million, down 4 percent, while revenue outside the United States decreased 1 percent to $152 million on a constant currency basis.
Adjusted earnings per diluted share of $0.57 increased 2 percent from $0.56 in the prior year. Reported loss per diluted share of $0.06 compares to $0.37 earnings per diluted share in the prior year.
John Greisch, Hill-Rom president and chief executive officer reported, “We are pleased to deliver adjusted earnings per share ahead of expectations despite continued revenue pressure across our portfolio. We increased operating margins compared to last year and sequentially from the first quarter. We will maintain our disciplined focus on operational improvements, margin expansion and sustainable cash flow while we pursue portfolio diversification opportunities in order to enhance shareholder value.”
Second quarter highlights:
• North America revenue declined 6 percent to $224 million. Capital revenue decreased 6 percent, while rental revenue declined 7 percent.
• International segment revenue increased slightly to $125 million compared with the prior year (down 2 percent on a constant currency basis) on strength in Latin America and Asia Pacific, offset by lower revenue in the Middle East and Europe. Capital revenue declined slightly while rental revenue increased 5 percent.
• Surgical/Respiratory Care revenue increased 7 percent to $66 million, due to continued strong results in Hill-Rom’s surgical businesses.
• Year-to-date operating cash flow was $78 million compared to $113 million in the prior year.
• In a continuing effort to rationalize Hill-Rom’s portfolio and improve margins, the company discontinued the remaining portion of its home care bed rental business in North America. This resulted in an incremental restructuring charge of $12 million, of which $8 million is non-cash, and is in addition to the restructuring programs announced last quarter.
Hill-Rom officials now expect a full year 2014 revenue decline of approximately 4-5 percent (constant currency), which includes an approximate 1 percent reduction due to exiting the home care rental bed frame business.
This compares to prior guidance of a 2-4 percent decline. Third quarter revenue is expected to decline 4-6 percent compared to the prior year.
A more complete review of Hill-Rom’s results can be found on the company’s quarterly report on Form 10-Q.