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Hill-Rom (HRC)

Participants
Mary Kay Ladone Vice President-Investor Relations
John Greisch President and Chief Executive Officer
Steve Strobel Chief Financial Officer
Bob Hopkins Bank of America
David Lewis Morgan Stanley
Rick Wise Stifel
Larry Keusch Raymond James
Isaac Ro Goldman Sachs
Matthew Mishan KeyBanc
Call transcript
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Operator

Good morning, and welcome to Hill-Rom’s Fiscal Second Quarter Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. At the end of management’s prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded by Hill-Rom and is copyrighted material. It cannot be recorded, rebroadcast or transmitted without Hill-Rom’s written consent.

objections, at any time. have you please this disconnect If call to Ms. I like the over would now turn to Mary Kay Ladone, Vice President, Investor Relations at Hill-Rom. Ms. begin. may you Ladone,

Mary Kay Ladone

Thanks, earnings Thanks fiscal everyone. and us good our for for second call. conference joining XXXX quarter morning,

Joining Executive of me Financial Hill-Rom; Chief Chief Officer Strobel, today Greisch, Steve and John Officer. are President and

Relations started, supplemental to release Investor mention get morning, we of presentation, this on issued can page have in accessed addition we at Events Before a website that, I’d like posted which be press hill-rom.com to Presentations. and our the the under

So to prepared subject that are with by are that certain introduction, refer differ this described. differ results you our and factors let results those materially. risk details statements and release to me risks, presentation actual actual begin reminding to press this forward-looking remarks our uncertainties, filings that from statements Please for SEC more to factors assumptions in contained concerning other morning and materially cause could cause today’s could that

addition, be and used. financial are this Reconciliations measures release morning. on will included issued GAAP financial measures non-GAAP non-GAAP between today’s In our in earnings call,

the I’d Now to John. turn over like call to

John Greisch

Good us for thank everyone, today. Thanks, you Kay. Mary morning, joining

to few operational quarter financial we our announcement today. discuss exciting Before second we minutes about leadership results, take I the and talk want a to made earlier

Prior with in as of a devices, been VP leader And in John XX-year growing John announced plans exceptional his a record from of of President become as Group roles focus. years most career recently our operations right Dickinson. leader President XXXX. and Hill-Rom. Segment retire of will President a the is engaged device reins. global announced search Vice Since looks has for John in of experience Groetelaars he importantly, meeting identify to a forward all our appreciation that first CEO you during results. knowledge, and you customer medical that, at John I’m our my Group January, XX, that, our all XX May to time successfully Board an in and President CR businesses. future. Perhaps we’ve Interventional Becton take As veteran industry has I than medical brings And Bard know, Effective at served process Hill-Rom. that more to culture that the variety industry a Executive delighted the robust in serving the to turn today. track to of let’s leading and and there, most he strong to experience With including XXXX to unique from and with

range this $X.XX share saw delivered Hill-Rom in $X.XX our per solid pleased full issued quarter be year raising diluted our to earnings adjusted and you earnings the As per $X.XX low morning, we’re of end release another to share. to by

with contributions portfolio initiatives once again and products momentum drivers our X% diversification of guidance. which international of increased key Ongoing guidance. quarter Core our a and of core resulted margin growth, strategic Second flexibility earnings Strong key reinvest helps range our line benefits performance revenue from new Benefits were to quarter in solid combined sustained afforded basis exceeded delivering and momentum decline share revenue our and International adjusted in in efficiency while growth. growth initiatives a offset of expansion in to our diluted execution tax we diversification revenue from earnings lower guidance consecutive comparison. with Systems a X% where earnings points. Support our XX%, operational operational operating and double-digit per upside XXth to core challenging revenue in business, of $X.XX rate resulted increased our our growth. XXX very face us initiatives, In Patient

continue trend straight quarters core higher-margin our performance, positive company. to and on with expect throughout Our and X%. and long in growth five Innovation at team With for are we progress all this leadership of our growth businesses encouraged this have strong over of XXXX three One focus a contributing international strategy plan. disciplined approach, our remains resulted to Hill-Rom key least opportunities range

As you revenue new revenue million $XXX of million we’re our for to products year. revenues contributed half in more XXXX. in full may With new $XXX well than on $XXX the recall, approximately at way approximately product first XXXX, million the in achieving of

and some recent Let achievements. me a moment to take optimization innovation commercial, on comment portfolio

First, year, across clinical Within did we of Systems, portfolio. business, equipment prospects business second core enhance Centrella orders customers. majority our commercial capabilities OEM our processes. We PSS and been workflow business, rental we of and vast to company. evaluations customers attractive growth process while which from flat. Surfaces we as complete have winding surfaces in medical Not our and a recently large in growth lower net clinical the grew an only with as towards third-party this our down solutions mid-teens non-strategic have actions assets. growth several allow we’re redirect systems, so hospital consists the revenue has investment third-party us optimize of difficult and to pending significant rental revenue along many core Support business, quarter XX% our resources in comparison to approval portion innovation, both with product advanced Frames has continue of core margin capital will the their movable last demand and in And large the the divest This Patient announced revenue to year agreement rented our far other –

performance on is products the XX% accelerated Care, at Just revenue growth. backlog Centrella Welch to in for with chair to Front accounting growth clinicians early overall our at continues revenue increased aimed ability five our and as safety, exceeding caregiver features, and strong of Centrella’s on feedback new capitalize and more confident positive differentiated Within expectations. from our to months revenue Med satisfaction U.S. accelerate efficiency. we’re patient than With second Allyn be Surg the quarter, we Centrella our into transforming launch, in Line contributing

double-digit way business with Our leading higher margin growth. respiratory care the is

care of airway clearance offering the RetinaVue helps simple making And patients but with campaign, enabling quickly to care needs promote application the decreases clearance of multicenter and therapy. pupil conditions, at stay, complications delivery post-operative demonstrating vision our diabolic in a young efficient as new screen lowers single well vision home. the by study System, in Welch months of we a in cystic as System a chronic used ventilator, small retinopathy detections – both now all to into age on adult product lung our screening in as patients pulmonary this we cost issues With for vision six Spot the and high-risk well investments strategic of as sector. and in are and device incidence address not kind This first from Our screening time presented also as sizes device patients. as adults. patients primary the Earlier a length children includes Vision setting. fibrosis to year, our data vision of network, the as X this both of the which respiratory enhancements we continue early and for setting acute secretion that Allyn announced with with reduces expansion, a MetaNeb Screener, the and best It in products as Recently diabetic robust MetaNeb patients’ affordable for other issues we in care. effectively millimeters, device its combines aerosol spent only total

more screened device have has We expanded the XXX,XXX in successfully of since vision sales specialty our now launch than and force, patients XXXX. it the

country. Our the the IV-ends Independent implementations investments United large success within States, Association but major in physician having already Physician expand practice have in of we are focus groups to planned three team our on the and commercial we largest the as

XX With the the Americans more with incidence be most to and our of amounting exciting opportunities. than growth RetinaVue continues today, one diabetes long-term of disease million

surgical business our outperform continues to Finally, expectations. our

the enhancing in Bard Blade well Parker upgrade enhance designed strong Vinci penetration operating surgical instruments portfolios Xi table to and for mobile XXXX reduce Integrated with in a robots. focus the be well latest and sustainable Loader positioning Plus in as enhancements. our includes with procedures. focusing U.S. increase placements key new safety like We Table operating attachment our the the to of driven the we surgical in future equipment efficiency about continues by Motion. injuries surgical lights safety to TruSystem new to are opportunities room, is products the ease-of-use This Japan. patient sharp Overall, business select with and introduction very safety, and complex These are acceleration to including driving Surgical are very Integrated we iLED placements are growth rate da Allen markets, great room robust Advance growth as Surgical and our used markets Table X our and our strategic and new also the our are tables of in partnerships. surgical and the International by high as Motion surgical Table on international drive as optimistic

the medical We partner companies improve are world. with breadth to and of offerings opportunity OR we’ll other our investing in the technology around robotics the and hybrid

growth strategic results and core half our reflects summarize, with stable in objectives. on enhanced and performance our team’s execution was meeting financial solid This I’m XXXX, pleased and first very XX%. progress diversified to the than generate X% investing shareholders. range to than for more building expected operational of long better success innovation strong business, advanced earnings more So in patients, and revenue and caregivers our for our improving adjusted a value Up

the our Now turn financial for second let Steve? and review for results Steve me outlook XXXX. quarter of call a over

Steve Strobel

and Thanks, everyone. morning, John, good

$X intangible other amortization, per tax These and reported items $X.XX $X.XX the As prior optimization our guidance related business in reflect in charges. to of increased exceeding the legislation, compared GAAP results to release, share XX% diluted recent of per earnings press in the year. of to $X.XX mentioned share. per share reform earnings range second diluted after-tax Adjusted $X.XX quarter we special special

financial revenue walk advanced let with revenue On briefly increased while $XXX of revenue, constant P&L basis million a second our international turning outlook. for X%. Now grew currency Domestic to X%, the me Starting quarter, increased through revenue fiscal X%. X%. the before revenue XXXX

Europe increased the our positive and in expectations. our in and of was with the growth and double-digit line Latin business Core strength in trends X% America. Continued revenue East, result in Canada Middle International

a QX Mortara foreign and adjusts date As assets plan revenue impact non-strategic currency the to divestitures, the anniversary core growth acquisition. we of prior the to exit reminder, for of

discussed moving mind was business services Patient revenue keep I bed offset a Before by address as while accelerated core Support clinical revenue declined Starting X%. that only. of declined constant currency X%, solutions, growth segment $XXX on, core handling down on with each basis I revenue in in will Domestic revenue as growth was and in workflow decline million systems. patient X%, Systems,

for As was growth challenging Surfaces East. With our we double the strength our and with of had and and number and complete business last similar and core second clinical backlog particularly by approvals. growth orders patient last half the Canada, anticipated Outside from and Adjusting very obtain we X% year, Surg as their a Middle customers flat orders Med two momentum Systems large core QX, revenue America, mid-teens in revenue of comparison driven major are year, in service U.S., the particularly Latin PSS core evaluations was systems, year. John large customers bed encouraged U.S. mentioned, the in to the in Patient digits. of Frames business, pending handling, up Support bed our capital building by in increased system growing

thermometry, and brand penetration continue adjusts another tools, the XX% business. X% to to which double-digit focus by contribution Mortara core strong driven increased portfolio, of products, assessment Now increasing growth Welch infrastructure. physical X%. revenue respiratory quarter and accelerated as with in moving again care International $XXX growth Core Care, acquisition and our prior with leveraging to pressure from on for growth presence, to performance solid of in of Core X%. Line to Europe geographic new our we million. anniversary revenue was Front U.S. Hill-Rom’s date, Allyn was revenue strong particularly revenue and was blood

balanced other our and mobile Integrated Motion to was strong Lastly, like the Solutions in Growth X, the and U.S. grew East in product also solid and the revenue XXXX and million. Middle revenue performance in products Surgical table TruSystem increased X% Table $XXX double digits, and Europe. iLED new momentum. innovative totaled momentum the operating with contributed

line from points and Now of versus initiatives points, as to our mix, Adjusted of turning $XX million benefits investments, positive other primarily long-term our P&L. objectives. basis R&D capabilities. well Mortara. portfolio the which our declined our X%, XX.X% of rest partially supporting of to by of was a percentage from of commercial R&D gross sourcing includes offset new impact X%, in products last efficiencies. million and revenue as as the improved initiatives SG&A manufacturing reflecting with the related cost X.X% global margin new contribution optimization XXX while year, Disciplined XXX and management sequentially selling $XXX increased and Adjusted and enhance marketing cost products, basis incremental to spending

Our the points adjusted benefited The operating U.S. compared of year. second XX.X%, from adjusted and prior of the compensation. margin rate impact stock-based basis tax an of tax in was quarter to XXX improvement XX.X% reform

share. adjusted per share year-to-date On second bottom line, again, advancing per XX%. up earnings quarter of $X.XX earnings to XX% strong, diluted are adjusted basis, diluted a were So, $X.XX

of XXXX. earnings the benefit the reform, increased half tax adjusted XX% for Excluding of first

flow, a basis with from year. has initiatives line cash Turning of manufacturing year-to-date support launches. impacted our new levels and cash million flow $XXX been higher was on consolidation cash inventory to Growth product to flow in in last operations by

the end by Capital levels decline XXXX than of the year. Expenditures million, inventory prior in We $X million the were $XX of half first period. to year expect the higher

a As free $XX flow million XXXX. is cash slightly year-to-date of below result,

financial the of EBITDA of and year sheet balance to our leverage, and was levels March, debt at the have reduced terms ratio debt by In million $XX X.X. we this end

year the third of our conclude full XXXX and fiscal quarter outlook. me let providing Now by portion this call

currency revenue the year, we of full Core expect X% to continue non-strategic to assets of and the to date reported divestitures, growth X%. excludes increase currency we anniversary approximately expected constant and of acquisition. foreign to revenue Mortara to growth plan is X%, X% For the which prior exit to X%,

to revenue the and in of to million revenue digits continuation contribute now $XX digits, in Systems divestitures approximately third-party collectively we XXXX. revenue the low-single revenue half and decline in segment, recall, divestiture reflecting the divestiture. reflecting Patient the spending business Support third revenue capital non-strategic is may of is second XXXX you with in PSS consistent prior rental expected impact a expected in the to low-single increase guidance. $XXX expect rental third-party with totaled As non-strategic environment, momentum, in Core million, quarter, business By approximately of our stable the now

growth digits now low- digit solutions. than first to in This Care, high-single and strong of XX performance. with From and a Line points our digits, core For adjusted reported expand be Front expect we growth standpoint, guidance is is expected reflecting to XX%. we mid-single to gross margin the low- exceed expect to surgical half mid-single growth original higher profitability basis for

of of approximately further spending initiatives. adjusted R&D expect sales behind our reflecting investments of X% sales XX% of growth We and SG&A

benefit interest last reflected approximately that legislation was updated expansion of the diluted in U.S. from expenses We rate $X.XX quarter. basis Recall and including of continue Other $XX reform adjusted per to our expect of share margin million tax guidance a operating approximately XX%. points. of XXX tax

of shares. Lastly, we a billion share approximately count expect XX

$X.XX diluted summarize, to earnings this translates into So of to guidance adjusted per share. $X.XX

$XXX $XXX the raising million. of cash previous approximately low-end per are to of with this range full We diluted free perspective $XXX expenditures with project of by we flow around to $X.XX. of million year. operating flow our the capital $X.XX From project continue guidance million a cash flow share cash $X.XX We for

X% basis, share. of For constant And the revenue will guidance now, to X%. a of growth $X.XX adjusted increase X% approximately currency per back $X.XX over X% we to expect turn for expect to I the we On earnings our reported provided growth call diluted John. third quarter, approximately to and of revenue only core and

John Greisch

Steve. Thanks,

the me comments priorities. up the Let team few with execute on very for our first key our financial our to prepared wrap our a continues strategic half pleased First, we’re of year, with perspectives as successfully performance

products half momentum to allowed and growth, expansion first growth building of us on revenue expectations. earnings number new above deliver adjusted have a opportunities Solid core with margin execution our

moment you earnings eight my objectives, transformation, long-term your through the extremely delivering while to thank As proud like the significant for top-tier our have is support. returns. lead years a last for this consistently I I’d that take our strategic financial on Hill-Rom and call, last and achieving I’m a shareholder

shareholders. leadership a We as to that strong helping get hospital have are enhanced and passionate people inside team both outside care, fortunate for is the value well creating about better as

work XXXX, sustained succeed confidence around call I success. thank next wrap With their great exciting half of growth. the well team during I the potential strength have for first employees watching the We of to our know have that, into is would Hill-Rom and to up to for John our momentum of business the let’s our we excited I Hill-Rom as the leading like hard position phase forward dedication in long-term the I Q&A. about and and world future. utmost look and open for the

Operator

Thank you.

[Operator now Instructions] Bob Bank comes Our question-and begin Hopkins will We of answer-session. first question the America. of from

Your question, please.

Bob Hopkins

good and the congratulations And, success. morning. on all John, Thanks again,

John Greisch

Thanks, Bob.

Bob Hopkins

I the out John the of on be just to actually in start terms wanted announcement asking bringing absolutely. Yes, about today of company. CEO to big

guy comments Hill-Rom was the a right talk John, specifically about running for some this little you bit and on about think the is maybe remarks, the specifics a time. process, at was if just some you more more I for prepared John why could little this I the this but, right and job choice made in why

John Greisch

experience, Bard, a and inside got from, Scientific people a really terms managing in successful a you and of choices businesses Tim its Yes, guidance. John device that very a I landscape both I’ll of great of companies, to performance, of in huge was looked Wylan’s under BD company, know multibillion it’s selected and obviously as was one, number number his global And of with choose for experience dollar One, and he’s The at most there had Guidan had recently great the successful that reasons. out John scanned long-term be mentioned at thorough our highly John company Boston hand We the comments. outside as Bob, Lilly. company, and prepared well, we process happy part to, a Bard any we background, Bob. a the in

outstanding I think also, culturally he’s fit. an

spoken in lot and here, a his spent have I of I in is Our that growth that’s and Board been I him. financial culture him I we’ve I that to we is like comparable he got, mean, multibillion our makes I as our appreciation we the time Bard, models of of what management, performance and take mentioned, I P&L the done, with an him. think, appreciation fit. and experience think ways to the to many which And global And have the one dollar tired role of come very he’s here. pattern think anybody as after the reins outstanding spoke that prepared as

Bob Hopkins

know just I want growth. core Obviously, question for thanks my big for you’re again, of guidance. there’s I know acceleration accelerate growth ask you’re the on this the that. half revenue to as – I really first back picture things And a in of I to you’ve year. kind half to year Terrific, your follow-up, in some see the need here on your hit the the can true hit though revenue to here start I getting we guidance, company. profile think that day hope guidance And

So keep your your in like for digit specific one target will the on back maybe, digits, you Med then maybe year especially revenue confidence for half within division? double the the comment and Surg PSS, the growing that you you. And exceed low-single of targets. about your achievability the growth, Thank if whole John, U.S., in talk

John Greisch

Sure, Bob.

a So of that. on perspectives couple

quarterly building first only enabled you revenue when not familiar not revenue deliver on with positive moves building delivered If PSS business, line us all half us more at overcome continues of that years guidance the a we’ve what year, lumpiness deliver we’ve but in by the with diversification with FLC, only diversification you overall, in that in the to look have our hit with the that to time looking the we’re at portfolio, done and the we’ve are basis – those double-digit line very overall importantly for. earnings over surgical guidance with, our were made here performance a revenue growth that the

forward, much of year, half. by look Centrella, we – our year, with PSS strong half this with performance, the rightly particularly in we we in second in delivering As out, a our you line revenue expectation turnaround the driven point as as accelerated came very the into second confidence a is is expect which

of pleased the with year with very the Centrella. We’re half first

large contribute QX. Steve grow is double year. excluding And couple second a the of Centrella here Surg here year mentioned, As of orders even half Med in going more the last digits did in to

in most lead the But of International delivering I regions, performance. saying revenue part continues terms revenue second here PSS you’ve now continues think rest of of stronger to likelihood half to and ago. seen In to the as not half perform addition half us, accelerating straight the contributions of comment our The surgical to of much with came for second the growth, several on six be and as new the very we be portfolio in the obviously the growth, over last that second into growth, consistently the probably of – outstanding five accelerated to as year, FLC. will to X-plus-percent year, and on for the months Centrella our with think, I continue performing revenue rather delivers what’s I’d turnaround tends expectations I’ve contribute from that performance, a unusual stronger our a it that not been PSS positive and having first overall quarters underappreciated which across is product half. line quarters, our

gross had as well. the that you with revenue looking we’re half but here we said investors operating margin in and the the performance of delivering the growth pleased that think year, of cost first that, I really the as that we’re extremely we’ve as expect, And not margin for. the are do on we only

Bob Hopkins

Great. that, best and of for Well, you thank luck.

John Greisch

Okay. Bob. Thanks a lot,

Operator

with Morgan Please the Lewis state question. is online David question. your with Stanley

David Lewis

Good team John again a value quarter, with is the I’ll created, that the maintaining legacy argue the coincidence. just as John, obviously and said G morning. And and you try we pretend retirement, I congrats on last can’t the to

John Greisch

X.X, JG David.

David Lewis

That’s right.

So follow-up just of and couple implications me. a debt in a European think that on But competitors of slowdown. the reimbursement and the questions questions the then maybe year? the this hold, of quarter quick sounds Japan, started the an time of Japanese that I an European talked of some demand for in it issue terms intuitive, it’s for is be U.S., Was flat the thought Steve. had said ex-U.S. Steve that that Centrella. just On back related about exactly at have expanded we build And down have the just I see in where that And PSS, It wrong. year. would one Table on of issue pipeline all your Motion post would a half of kind in for quick you two already because you be to

John Greisch

a mix. I’ll address Steve let Yes, the of and those I’ll PSS take couple

including a heck year of having across board in PSS. we’re So the Europe a

the our diversified the we’re in think PSS strong a it I is that a power and Europe. talked within about. of of year team But of portfolio also we’ve execution lot having

now in it’s is on opportunity our and that’s ahead and just us. strong Motion, anywhere mix weakness in as Japan Steve, technology reimbursed U.S. market with so the Japan any Integrated of want we’ve of our of take demand Japan and highly you a lot in our for in going potential in and beginning else International? a capitalize we’re there as forward, seeing not to world, you Europe businesses. as the in that we’re all Table established to still relationships us know got So versus

Steve Strobel

International I PSS. the second actually was we grew – quarter were think PSS good. in We PSS – internationally

Mary Kay Ladone

core basis, difficult on add, have the Mary a comp were created X% but we down reported Yes, international David, X% just I’d basis. it’s revenue we on divestiture Kay. that up was a in reported bulk a because of

David Lewis

helpful, your And I Okay. then, That’s but gross talked you, up, just margin operating margins not. this, about Steve, Kay. thank Mary you think is

some every is You just talked about Thanks of us much. going? Can sense give investment a reinvestment. you slight where so

Steve Strobel

Sure.

against I areas we’ve of well business, think care Centrella in and and obviously particularly business, going our product as against the innovation the care margin, as now, the innovation got PSS. in our that new vision higher growth higher to spending respiratory right we’re it’s in the business be

we’re want the are business So put grow, money. that margin areas higher where higher we want elements growth, our the of that to to we – our

John Greisch

in The the only seeing States enjoy and capitalize the thing areas to team to the our that international of David, accounts the surgical on addition United in of both now. here growth business addition we I’d in leverage channel to Steve add behind to particularly the accelerate in those that where adding vision you’re or enterprise portfolio investors as mentioned, and

quarter got earnings raised at performance. here still as So stronger margin growth half the double-digit gross reinvesting our we’re outlook. that full first the And we’ve we Steve year. we in been in opportunities strong and we’ve of basis first behind And with the margin as fortunate the XXX year year full point did operating delivering for mentioned, the

David Lewis

Okay, so clear. Thanks much. very

John Greisch

Thanks, Dave.

Operator

Wise on the with Stifel question. question. Please state the We Rick have your line with

Rick Wise

and thanks morning, excellent Good John morning, – Good quarter. everybody.

John Greisch

Rick. morning, Good

Rick Wise

As you good exit, another thanks quarter. for

of you investments discuss what want couple some time new really of questions, you implications on I us would the cash or capital had margin? a heard you you Let A scope so plant operating on a the first for inventory And understand consolidation supporting to the can consolidation initiatives, facilities. and what’s and commentary Is plainly help me talk I’ve Maybe consolidation questions Steve excess hadn’t that for initiative? had inventory flow lot it’s comments big some you there. initiatives. – your if how we think that cash free me off long-term I flow knew how it? of made, start this about – plant in this

Steve Strobel

our is This plant ongoing Rick. Thanks, it. program. got Yes, consolidation

We’re business. consolidating our of services some

couple consolidating We’re plants. of plants – surgical our a

second hits So the that us the preparation inventory here in for quarter.

build Centrella guess I in of for quarter second I the so the launch. other And as inventory our the preparation mentioned elements is here that in

we those consolidation, And our a probably years the I combined out time. of the build, prepared inventory the in would flow these all as consolidations ago, the plant good as we’re things that here well couple in – talked cash So of combined that. inventory have comments effort. first Centrella plant in digits. the double program. inventory build of we that as for preparation, launch. about end long not It’s across for expect I the plant the our the million $XX stages we inventory toward said plus range When have preparation a laid And been half that And of the preparation at are decrease plan will final over optimization several free

John Greisch

Rick. closed closed the closed manufacturing as and in and about two with We or We’ve couple over process consolidation this years. surface Steve in five years our we are facilities. Yes, closing conjunction seven of last approximately the three year, mentioned,

That’s the we contributing smaller last think I consolidation some it see. surgical as accelerate to are as XX here and So XXXX seeing correctly. that after as points being year lend the our in closed that us ones the you last I and basis as we’re that we that was openly about going plants the remember a And the margin margin of year, pretty are performance margin talked to, over cost I nicely we’ve the said, if well opportunities. opportunity around think about turning

Rick Wise

that what impact flu to not material, the Great, another good contributed second flu, an had to or whether the can you just of wondered quarter results? question, on extent quantify so much

John Greisch

impact, Not a Rick. material

Rick Wise

the good. then from Obviously, is Okay, innovation Hill-Rom John, to last And key me. just story.

you’ve the potentially next serious or And of several excited You in you I’ll the know, do look think being the are what been the years you certain incremental about next how couple over of months hidden pipeline. six the we driver? call it, – said growth terms as increased it, think There most we and years investing R&D about – spending. excited is most you’ve products for are – what I one,

You’ve whether some well? to a lot. got us there know. you could investing than It’s be more lot be thoughts I’d we curious, give as a there

John Greisch

Yes, couple comments. of

As And portfolio Rick, over behind largely the us bed behind heavily pretty you we five years. last PSS invested that’s know, our now.

openly over ORs is pipeline. really we’ve a some look made talked a and we of for was area hit around some here And we’ve us. in an our think, OR Motion Obviously, recently growth about surgical for big of that’s the year us with I non-hidden hybrid couple announcements players. leading Integrated here Table the As shown hybrid fairly past partnerships forward, the

the over channel obviously, commitment the isn’t the XXXX, think, see increase going that throw $XXX put already million million product see more obviously, products to coming one-third about we to don’t that the of we’ve new halfway already in should a anything why those The you’ll some doing about XXXX a portfolios, much I prepared Welch think haven’t going only go not my public we’re innovation $XXX as I’d new and to and in Front out contribution. over several forward. here some in with expectations we’re Mortara, to care we think comments more ourselves about of product our but I And out of that Allyn, continue disadvantage behind in openly commented years. portfolio we’re Line And on the spoken the there of to But million at. we’re was not those. of surgical in we have I money, looking capitalize when pipeline in enhancing much in the by launched, rather with Care domain, very respiratory talk some same what terms of as want previously. we’ve year this that had competitive forward we over going at investors fiscal is XXXX our $XXX the things I from last contributions been point revenue, reasons

haven’t connects and bed obviously And of to marketing FLC some we talked period in data that of thing to capabilities degree, do meaningful them or the that some probably but you our have enhance a about, the how with So of continuing portfolio provide capabilities between of portfolio, our and and communications our some about for way objectives and our connectivity talk but during key to those have – two integrate us. other those the surgical, we we our not in data most concise particularly patient LRP efficient us elements our heard customers capabilities. more portfolio use of

see years us You’ll in the put next a as money lot well. here of that several behind

Rick Wise

best luck, much, so Thanks of John.

John Greisch

It’s Rick. thanks. all right, Likewise,

Operator

question. on is with line Please state your James Raymond a the of question. Keusch Larry

Larry Keusch

John, your one, luck every morning, in and Good best of retirement. again,

John Greisch

Larry. Thanks,

Larry Keusch

of just So here. couple questions

your above is that Centrella, So believe that actually comments, around the expectations. John, you on said I backlog

a base. in that some spend cycle play I optimism just resonating what’s the could into customer the on well. come really with an there on as that the talked product past maybe about be could you upgrade So moment And think

maybe as thoughts well there some So that? on share

John Greisch

replacement as the reduce Centrella surface I’ve Yes, resonated our the with overnight. future universal days well that there your around happen replacement And the question investments. us communications don’t accelerated brought a personally and that with with were I’ve XXXX around caregivers, on back team pressure of the in with the acceleration day of competitors. There’s We is, really hay other seen the Centrella. our which capital the early alters of on our bed I from enthusiasm, beds out think ICU portfolio saw XXXX lot still from caregivers. product around seen Board. as with saw previously The about think program one we both for investment has evaluations investments And have issues we’ve the and with is out introductions patient Progressa, clinical back a customers new hope of that to enhanced deterioration across product I obviously Larry of helped commented safety, on we invested there. talked second on of it’s skin the product,

lot backlog part going in competitive of I accounts and half acceleration both and the accounts, the good the that correlated those a with business we’re improved seen expectations. and PSS we’ve So customers in And think second of success, Hill-Rom with our bed is through I is think with directly against it. our our expectations

been in we going the forward the incredibly customer I’ll here only Centrella think won’t has quoting but to sitting and stick second also. second we’re really that year quarter, activity, today, positive how half contributions response the this of last know think I make, out. as very half the probably acceleration year, is to of we play I excited but So with move comments said is those going And until I the the about that not

Larry Keusch

Okay, spoken terrific. and the of on just then the obviously Maybe And two business strength you’ve specifically touch others, Asia. Europe. about around overseas just

next for And there tax so, self-inflected I you tax are you But broad had which are company, issues and rate? of year change Asia? stand of year in Thank certainly maybe some an this update lastly, do reform again, strokes just that thinking for given with your you. outlined. dynamics about I about know again that year, was just, where last You how about of U.S. kind sort on fiscal then year’s think a some and sort we have brush in tax you obviously Steve, rate

John Greisch

Yes.

performance that second. of growth against a Middle X-plus-percent that Steve about great comp feel is things I this quarter know, tough quarter, and Asia internationally And first of of out had seen out of of address not we the out in core coming a our region in here. East a I’ll to construction going growth bit number you because But There tend I that a international the can where all this International, where contributor X% comp. business, was new tackle fair to fifth against taxes. going as is very volatility couple in difficult years a as come we see of real growth International. for revenue on we’ve me let of So particular there. mentioned, the overall which,

we of worried PSS, tough we half had in our I about we comp internationally. revenue second a a lot also think expectations, comp the which a had investors tough about, U.S. were because talked

will So Europe, that. to refine Middle in Latin again strength in Canada, America the and the East

there. Asia self-inflicted in some have us. wounds we process a And work said, rightly bit is still of a for you

of we’ve got I the think on the to a significant we Groetelaars, some brings businesses, place, starting new in of similar is choked last who year integration leader John and Asia-Pac have. of team. experience a than as larger as on more couple businesses he and in we rebuilding in process much And much is well complex of Asia businesses early managing the spots his

we out come still very International in here as Carlos feels Asia to leader to down whole think, XXXX, we’re where I performance a about. That’s we which slightly a the into our as of think going tailwind, year. XXXX, have full team good the flat for I Alonso, go and very, So

it’s some I expectations. area So into we one the came knew been against would our year say, with performing that this Asia. the we’ve We weakness under in year

to XXXX. that it into get a And a performance. we turned it have. as But we able I we little to think around with have hoping been stronger tailwind pretty fiscal We’re look remains quicker good compensate than fortunately,

Steve Strobel

the actually a get and little had you And what that, approximately over for we’re play our XX% actually but rate to LRP tax that the on – think of tax the you in that, last XXXX slightly. just tax bit. clawbacks some out a to rate time, want I would I U.S. talk the is remind up period. into we when obviously, talked our the come Larry, I’ll was that tax that in question. year, years LRP, XXXX But than rate, in be year. years This mentioned the about LRP reform drive comp down benefit were into lower benefiting guidance I from guess, we the you there out expect yet, recall tax for don’t this bit this your rate stock to which I little

said, rate our XX% tax LRP period, as the that I over So in that range. is –

Larry Keusch

very you John, good And much. thank Okay, care. again, luck. Take

John Greisch

Larry, same you. to Thanks,

Mary Kay Ladone

more have questions. for two time we Carol,

Operator

on Isaac is the state of your question. question. you. Sachs Thank Goldman with the Ro Please line

Isaac Ro

you. thank Good morning,

back to of John appointment getting Just Groetelaars. the

you. of sort or If and John most looked is to trades and Board key should experience i.e. we you things, could, maybe, other think mind three that for some candidate, brings if now takes the that the over. complete extent the maybe of us And that four for he in frame a important you keep criteria. in those search the you Thank matches criteria

John Greisch

record previous but was Yes, a here, Bard in as I as may list. certainly experiences performer the performance was company repeat said the his that well top a of what Isaac, of a at high I like

global experience diverse think are we I looking also critical a for. capability

And and a fit, has to strong John have got has his fit leading. internationally. got mentioned to As ground culture performance, running important. been with going. confidence, has cool we his experience, we run the businesses. and that’s the companies, years. evolution going has has driven businesses a and at built morning, His something heard in to leverage growth dollar high he the of eight with years. European run not I in multibillion of this a the continues other be of Bard seen incredibly businesses. us over several perfectly come in businesses hit to And come culture going lot run spent growth think you’ve He we the evolution seen positions here. keep in that global that performance lot expertise growth he’s our as Asia-Pac really gives last It’s you’ve that our that he’s again, John that our but many last about, him global and directly have here time the to and what talk his well the what correlated have cultural we the we having experiences fits with over I here and He momentum the John here in is

Isaac Ro

year. follow-up just then the on a And thanks. of guidance the for the rest Understood,

though year revenue goes implies I of the reconcile you. side. decline I guidance Just directionally sure if up. SG&A. the in back of And like a bit make to expense had even terms the of numbers, it on look at Thank the on just a outlook in seems the percent I that to dollar want trying right SG&A, half full

Steve Strobel

directionally I correct. that’s think Yes,

to more, spend be was said, XX.X%, investing now but I we’re previous going more, a to to little up directionally going around so as bit guidance We’re gone correct. a the XX%, little bit

Isaac Ro

Okay, thank you.

John Greisch

Isaac. Thanks,

Operator

your KeyBanc from question. Mishan the is Please question. Matthew line the state on with

Matthew Mishan

And the in job on of congratulations, Hill-Rom, best you. luck future done thank industries. the in Great, and you’ve John,

John Greisch

Thanks, Matt.

Matthew Mishan

more Line mean, than material you’re a has down really or How Care, little and these building up out quarter. year more over have I area Front expected vision sustainable a bit been becoming are it and was nice would two. with I On international trends That last especially the channel?

John Greisch

we Yes, recall We’ve won of in the on larger had large very that our may you very – comp is we the think we a quarter, first back customers. it our relationship sustainable. a there tough with order with of one

core I think in X%. the for full expectation And growth our QX the Here for was year LRP is our mid-single and growth. period strong digit

for as been along year. very of So the into of hits to new Mortara with have product those move here the half as expectations contributions stride strong second strong. The the continue contribute, international been very that has we I and performance think its both

think I us, sustainability all that feel we about. this good positions

Matthew Mishan

you last talked long the tax the then of impact plan range outlook And Okay. reform about your on quarter. on

of impacted wondering, and your some has Just an their on – an update capital expenditures? you outlook how do have tax reform customers on

John Greisch

Yes.

for-profits I haven’t expectations, you know spending think we chains. all for-profits the are CapEx anybody raising the their A really start aggressively. seen so far more commented few as have and certainly that it of affects they only

tailwind about capital dealing really been some comments But portfolio going So more which last particularly three our the we forward, of components. around have another timeframe, increased intensive which, we’ve again, with. is us seen is behind over looking the CapEx months, forward certainly

any think, is my seen earlier. Centrella, is certainly increases going benefit us line specifically, haven’t with I things like forward it’s will but in that huge particularly commentary expectation around We

Matthew Mishan

much. All right, thank you very

Operator

over turn There to further this remarks. to I for would time. closing back at like a few no are questions the Greisch call John

John Greisch

of we’ve bumps enjoyable thank enjoyed a even all you we’re way, the to about great I with ways. business the again, a on along out with speed support. I is momentum building confident know fantastic. different the just to crossing feel world. and in but I’ve And you up way know to I across in a a eight company excited look years, highly and forward I’ve support John I few community of the has for great along paths across getting momentum in lot is your been and and future experiences incredibly the a investment to the you been coming got. our more sitting position that the And our in all that dealt interactions, to few want It’s wrap up, enjoyed guys,

of the So luck, years. to thanks wish want the over again, all best I’d of support you also the and for

Operator

today’s you conference and Holdings Ladies concludes Hill-Rom Thank gentlemen, Incorporated. with for this participating.