SPY380.36-1.97 -0.52%
DIA309.45-4.53 -1.44%
IXIC13,192.35+72.96 0.56%

Press Release: Hillrom's Fiscal First Quarter Financial Results Exceed Guidance

· 02/05/2021 06:59
-- Achieving new product revenue of more than $150 million, an increase of more than 20 percent, during the fiscal first quarter through several innovative products. Hillrom expects to launch at least ten products during fiscal 2021, further enhancing its category leadership and creating value across care settings. -- Establishing a national partnership with a large retail pharmacy provider to enhance patient access to annual diabetic retinal examinations and help reduce vision loss and blindness resulting from undiagnosed diabetic retinopathy. Diabetic retinopathy is the leading cause of vision loss and blindness among adults between 20 and 74 years of age,1 but with early detection, 95% of diabetes-related vision loss can be prevented.2 Most commercial healthcare plans provide coverage for diabetic retinal exams in primary care settings, and as of January 1, 2021, Medicare will cover the RetinaVue(R) Care Delivery Model.3 -- Acquiring contact-free continuous monitoring technology from EarlySense, as Hillrom continues to build a differentiated suite of connected sensing and digital communication solutions to improve patient safety and ensure timely, effective clinical intervention. Hillrom defined a new standard of care with the integration of contact-free continuous monitoring and analytics technology into the Centrella(R) Smart+ med-surg bed and ecosystem of connected devices. Early identification of clinical deterioration has led to improved survival, decreased costs, and decreased need for higher acuity settings.4 -- Announcing the intent to acquire Bardy Diagnostics, Inc. (BardyDx), an innovator in digital health and a leading provider of ambulatory cardiac monitoring technologies. BardyDx provides a differentiated, wearable bio-sensing technology, the Carnation Ambulatory Monitor (or CAM(TM) patch), that is engineered for patient-comfort, superior P-wave clarity, exceptional diagnostic yield and superior clinical accuracy. -- Partnering with Augmedics, creator of the groundbreaking xvision Spine System (XVS), the first augmented reality navigation system to be used in surgery. Hillrom Surgical Solutions has integrated this technology with the Videomed system to enable peak procedure performance and connectivity in spinal procedures. The co-marketing agreement adds to Hillrom's portfolio of strategic alliances with companies like Intuitive Surgical, Siemens Healthineers, Philips and NuVasive. -- Promoting excellence in the workplace and a commitment to diversity, inclusion and belonging initiatives as the recipient of multiple awards and recognitions, including new Great Place To Work(R) certification in Australia. In addition, Hillrom was recently recognized by Newsweek for its commitment to environmental sustainability as one of America's Most Responsible Companies for the second consecutive year. -- Generating operating cash flow for the quarter of $100 million, reducing debt by $13 million, and delivering significant value to shareholders through dividends and share repurchases. During the quarter, Hillrom returned $70 million to shareholders through dividends and share repurchases.-- Patient Support Systems revenue of $377 million increased 10 percent on a reported basis, or 8 percent on a constant currency basis, reflecting strong international expansion of med-surg and ICU bed systems, growth in U.S. bed system rentals to support customers in the treatment of COVID-19, and continued recovery in the company's care communications platforms. -- Front Line Care generated revenue of $270 million, an increase of 6 percent on a reported basis and 5 percent on a constant currency basis, driven by strong demand for Welch Allyn patient monitoring and blood pressure equipment, and thermometry. Other products, including physical assessment and vision care products, continued to show sequential gains as physician office visits return to pre-COVID levels. -- Surgical Solutions generated revenue of $94 million, an increase of 9 percent on a reported basis, or 4 percent on a constant currency basis. Strong international growth was partially offset by continued project delays in the U.S. due to the pandemic.

Hillrom's Fiscal First Quarter Financial Results Exceed Guidance

Accelerated Recovery and Expanded Demand for Critical Care Products Contribute to Strong Performance

Company Raises Fiscal 2021 Guidance

PR Newswire

CHICAGO, Feb. 5, 2021

CHICAGO, Feb. 5, 2021 /PRNewswire/ -- Hillrom (NYSE: HRC) today announced financial results for its fiscal first quarter ended December 31, 2020, and raised its fiscal 2021 guidance.

For the fiscal first quarter, Hillrom reported GAAP earnings of $0.88 per diluted share compared to $0.59 per diluted share in the prior-year period. On an adjusted basis, excluding special items, earnings of $1.53 per diluted share rose 35 percent from $1.13 per diluted share in the prior-year period, and exceeded the company's guidance range of $1.05 to $1.10 per diluted share. First quarter financial results reflect strong revenue growth, margin expansion, disciplined cost management and strategic investments to drive future growth. Adjustments to reported earnings are detailed in the reconciliation schedules provided.

"Hillrom's strong start to fiscal 2021 underscores our significant transformation and the diversity of our product portfolio," said John Groetelaars, Hillrom president and CEO. "We continue to support our global customers, deliver critical care products and solutions in response to the ongoing pandemic, and remain committed to our vision of Advancing Connected Care(TM)."

Fiscal First Quarter 2021 Financial Results

For the fiscal first quarter, worldwide revenue of $741 million increased 8 percent on a reported basis, or 6.5 percent on a constant currency basis. All three business segments generated better-than-expected performance driven by accelerated recovery and expanded demand for critical care products, including one-time COVID revenue of approximately $40 million and earnings of $0.20 per diluted share.

By Reporting Segment:

Recent Highlights

Hillrom recently achieved numerous key milestones aimed at realizing the company's vision of Advancing Connected Care, transforming the portfolio through innovation and acquisitions, and delivering sustainable value to shareholders. Highlights include:

2021 Financial Outlook

"With improved performance, building momentum and accelerated recovery across the Hillrom portfolio, we are raising our full-year revenue and earnings guidance. Our revised forecast includes continued recovery in our underlying business and COVID-related revenue," continued Mr. Groetelaars. "We remain committed to driving sustainable and profitable growth aligned with our long-term aspirations, achieving our strategic objectives, and unlocking significant value for patients, caregivers and shareholders as we deliver on our mission."

For the full year, Hillrom now expects revenue to increase 0 percent to 2 percent on a reported basis. In addition, the company now expects adjusted earnings, excluding special items, of $5.70 to $5.90 per diluted share and operating cash flow of $400 to $430 million. This compares to the company's previous guidance range of adjusted earnings of $5.25 to $5.45 per diluted share and operating cash flow of $370 to $400 million.

For the fiscal second quarter 2021, Hillrom expects revenue to increase 0 percent to 2 percent on a reported basis, and adjusted earnings, excluding special items, of $1.40 to $1.45 per diluted share.

The ongoing scope and evolution of the pandemic remains uncertain and could present pandemic-related risks or opportunities that may require updates to the fiscal 2021 guidance ranges provided today.

Discussion of Adjusted Financial Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP), Hillrom routinely provides gross margin, operating margin, income before taxes, income tax expense, and earnings per diluted share results on an adjusted basis because the company's management believes these measures contribute to an understanding of our financial performance, provide additional analytical tools to understand our results from core operations, and reveal underlying operating trends. These measures exclude strategic developments, acquisition and integration costs and related fair value adjustments, gains and losses associated with disposals of businesses or significant product lines, regulatory costs related to updating existing product registrations to comply with the European Medical Device Regulations, special charges, the transitional impacts of U.S. tax reform legislation, changes in tax accounting methods, other tax law changes and expenses associated with these tax items, the impacts of significant litigation matters, certain impacts of the COVID-19 pandemic, and other unusual events. The company also excludes expenses associated with the amortization of purchased intangible assets. These adjustments are made to allow investors to evaluate and understand operating trends excluding their impact on operating income and earnings per diluted share.

Management uses these measures internally for planning, forecasting and evaluating the performance of the business. Investors should consider these non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Reconciliations of GAAP measures to adjusted measures appear in the financial tables of this release.

(MORE TO FOLLOW) Dow Jones Newswires

February 05, 2021 06:59 ET (11:59 GMT)