Hill-Rom (HRC)

Mary Ladone Senior Vice President, Corporate Development, Strategy, and Investor Relations
John Groetelaars President and Chief Executive Officer
Barbara Bodem Senior Vice President and Chief Financial Officer
Bob Hopkins Bank of America
John Hsu Raymond James
Matt Taylor UBS
David Lewis Morgan Stanley
Matthew Mishan KeyBanc
Rick Wise Stifel
Kristen Stewart Barclays
Call transcript
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Good morning and welcome to Hill-Rom's Fiscal Second Quarter 2019 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 over turn I'd to call to now like the Ms. Ladone, Development, Relations. Strategy, Kay and Mary Senior Investor Vice President, Corporate Ms. Ladone you may begin.

Mary Ladone

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

are today and President and Groetelaars, of Chief Financial Bodem Chief John Officer. Officer Hill-Rom; me Joining Executive Barbara

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

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

John. which new know our With apples-to-apples and recognition quarter, current for year allow As let retrospective me comparisons prior introduction focus you fiscal this the an of under a on call that financial this our standard morning basis. results standard XXX accounting comparability to new for modified XXXX the on basis The our periods, commentary over as the well guidance. as first will on adopted to we be financial ASC will beginning turn with our revenue now

John Groetelaars

everyone Thanks and for today. Mary thanks Kay. Good joining morning us

six strong in first of pleased months fiscal our very XXXX. with performance are We the

leadership and health on QX, outcomes, shareholders. and that priorities were results execute expectations enhance for expanding caregivers, strategy transforming value to we category geographical portfolio care our in solutions, and patients, to continue differentiated presence emerging four a to QX drive in our advancing our and addition financial markets, In above

diverse bottom-line. portfolio, another our both product delivered that results across leading accelerated -- exceeded we topline core new to positive guidance quarter momentum growth and our driven QX, by diversified financial of to on Turning revenue the

in continued revenue progress towards core For core This growth represents driving of business mid-single-digit for second durable company. row, quarter profile. increased the quarter also revenue consecutive the growth a our establishing more diversified fourth and a X%, reflecting

on focus versus XX we This $X.XX delivered points operational year. execution of XXth expansion margin Our the increase per earnings basis prior XX% of consecutive earnings led share, to growth. adjusted an represents and of diluted double-digit quarter our of

short-term key reinvest achievement flexibility initiatives Importantly, for this our and financial objectives. in performance of both strong and provides our growth foundation to long-term a solid sets

to our executing focus Hill-Rom priorities. of advancing Our leadership team continues connected on four strategy category our and by our vision on care

revenue. Vision new and Signs total, XXXX. of exceeds for of XXX products the several continues innovative this driver Integrated of The eight shifting differentiated product the the Table average to Supporting new Care from track is half Airway are represent Vital solutions The Motion, into new the including achieving XX% our $XXX products of approximately and our fiscal significant first of the higher demonstrating first Monarch products contributing performance Clearance products weighted or of categories topline that our of our revenue priority range. important mid-single-digit revenue advancing these XX% In improving portfolio. Monitor, are contribution our System, XX% Connex be new Centrella, that $XXX revenues Spot This driving basis innovation. X% of rate total Diversification driver mix from million an growth expectations product at our points and and year, this has with been growth growth market goal of growth Again in the is and revenue progress greater categories. on approximately new now revenue XXXX from is growth toward a million. growing quarter, in

can a advancing care challenges falls penalties. and at clinical connected through the our valuable such and focused million by insights Monitoring devices cause With our more Smart+ point-of-care be differentiated faced communications one patient that footprint in as of deterioration reimbursement, offering complications, our customers has of than Nurse our connected Vital addressing Signs Call vision Centrella readmissions, mobile growing Hill-Rom bed, significant and data and on or costly platforms. is lower Our providing real-time that devices, may

continue will and patient getting anticipating to needs. data to and We connectivity proactively information caregivers innovation invest in

emerging to turn me markets. priority, Let second our expanding penetrating and internationally is which

our a stages turnaround of While by in we're year. this the in America Asia-Pac so encouraged growth far are we mid-single-digit still early Latin and

Hill-Rom's we China addition of are which only and X% a in as growth future represents days Accelerating significant today. our for support total market leadership represents markets growth early to stabilizing plans opportunity Hill-Rom. In investment growth the is plans completed place, a near-term revenue With emerging operations priority new now have meaningful in reinvigorating acceleration. are of our go-to-market in in we our well and as commercial

half We well-positioned year the investments we targeted of compete and to will win. second to and leadership turn at are fiscal begin where building this in on our category

some and While and benefits contributor of in half we beyond. second to do XXXX significant be fiscal not to this to begin XXXX expect we see the performance, traction expect a realizing

and portfolio third transforming portfolio Our through M&A priority initiatives. optimization the is

growth. over acquisition mobile text Voalte attractive builds discussed, divest connects with core Smart+ Workflow Voalte important currently and and with transaction substantial on leadership market. to As Solutions creating very caregivers acquisition this the platform existing real-time base which capital digital communications global a of a business the care communications, is Clinical XXX,XXX our flexibility with credit adhering announce diversification record facility noncore financial part closed energy are strengthened strategic our a funded secure Combining focus in and of future execute to continue assess communication to track and us to returns. strategically enabled continuum voice, we've our double-digit an of and This in offering our deals company. We strategic supporting pleased wind through M&A connected dry mobile we to scale on we pioneer powder actively and and how digital margin fast-growing consistent with and in This growth lower bed down of our our leaving rigorous lower customer leader we growth an communications are this drive sheet comprehensive $X installed and a deliver to earlier communications. continues approach durable and our accelerates generating and excellent care to portfolio which evolving to has to month. revenue Voalte durable strategy and smartphone. targets an capabilities from solutions resources the we Voalte not recently Voalte's platform a billion-plus health generate Hill-Rom's our strengthens alarm, attractive be consistent deploy previously businesses continue revenue and and to of balance example funnel. disciplined as to to our is plan growing and additional to insights. plenty criteria more

our business accelerating strong execution growth, driving previously reducing and cost final improving financial structure. our discussed Our We've is program on optimization performance. and focused operational complexity, priority

XXXX. allowed to initiatives We which have more emerging and on have into progress reinvest executing numerous made us significant in and market digital are fiscal opportunities

not over strategic we our next the to with in reminder, we plan. priorities. two $XX expect and four execution, are our savings of In performance, making maintaining tremendous strong million pretax a included focus which progress drive financial are years As long-range summary operational on

our our updated to achieve are care. over in Barb. innovative confident of to me vision deliver the With and portfolio, commitments, let consistent ability with our solutions that, We turn our connected business advancing strengthen call healthcare

Barbara Bodem

Thanks, morning, John and good everyone.

integration we to GAAP growth. share. basis under standard revenue of These results special earnings of charges. ASC future adjusted On items, quarter, intangible $X.XX revenue diluted These and costs special investments amortization, strategic other guidance drive include items XXX to business second related excluding fiscal results $X.XX reported an diluted our $X.XX new expansion the exceeded core share per XX% acquisition per For optimization, to accelerated share. advanced after-tax accounting the per reflect and diluted special margin of continued $X.XX growth, and range earnings and

results focus for supplemental basis schedules XXX. along. quarter this adjusted posted year ASC the to the to to our prior mentioned, will period a As second morning Mary use our comparable Please Kay follow commentary on on website

a core through briefly in the P&L, quarter, OEM constant quarter, basis revenue basis X% we Support turning Core me Surgical reported quarter, financial Surgical the with let impact of revenue, increased foreign the currency, of business. Care and X%. driven approximately consecutive walk Front growth revenue a and our Starting XX% on exceeding and Domestic solid fiscal on double-digit before second a the basis. adjusts revenue X% for currency in Now, exit growth X% million on the outlook. of guidance the revenue may our to second in non-strategic for Line International grew Systems. growth by Solutions including second Core for increased assets Solutions, and Patient divestitures $XXX

comparison the capital East in period to from year prior the Canada, the challenging projects declined expected, -- given revenue international X%. large and As for Middle some core

first revenue quarter core line in Excluding year, with last large orders performance. X% increased the international

advanced Moving of core on X% Starting the only. on constant $XXX Patient revenue business increased a will to million Support revenue growth segments, address Systems, revenue basis I with currency and X%.

Latin offset U.S. double-digit growth Med-Surg difficult X% growth across quarter, U.S. key For Patient systems, Europe including Solutions, categories more as safe solid Clinical by we comparison Canada in the the and the bed in core and and Middle equipment. revenue East. consecutive than patient strong our fourth Systems, the Workflow in Support generated was the Outside handling declined America product

X% Line on moving Care, Front million. to increased $XXX to revenue Now,

portfolio international the and the including Europe, drivers. Asia-Pacific East. X% solid the grew Domestic mobile Monarch products Connex be performance revenue continued Monitor, Vision revenue across Spot and to increased, while our the Care growth X% key vest with Middle New

to as as revenue X%, Lastly, declined challenge consumables, revenue million X%, related of the last of rebound a year's resulting timing Surgical $XXX of from Solutions surgical the comparison while post-hurricane in well core increased growth and in double-digit single equipment. patient placements to a primarily East. positioning low the Middle projects high Revenue Table room capital Motion in to and is growth U.S. record large attributable of operating Integrated revenue

last year. Adjusted expansion improved by sequentially inflation. strong from improved the margin XXX Now of of more from Growth margin reflect P&L. to offset raw rest XX.X% the material positive compared benefits impact performance efforts, margin which when contribution manufacturing points basis the product mix, well and of as procurement points XX basis productivity turning gross tariffs continues to and and to the than collectively as

half points. commitment management ongoing cost our $XX efforts disciplined growth. to gross programs to margin basis future X% future first the of the R&D $XXX increased strategic are and year year, offset innovation to we million Adjusted expanded than XX million spending in declined reflecting as prior our investments drive business of versus making of For fiscal and optimization adjusted key the SG&A X% drive growth. more investments

quarter Our margin XX.X%, adjusted an in points XX second prior operating the basis was improvement year. the to compared reflecting of

points the per basis last adjusted adjusted year. For compensation the operating margin XX.X%. year, compared share a of rate a XXX first $X.XX to $X.XX improved was diluted Stock-based last half per of year. was benefit diluted our share fiscal of versus tax benefit The

of the Excluding tax XX.X%. compensation, rate impact our stock-based was

line, increased second quarter bottom per fiscal adjusted earnings diluted So XX%. of the for $X.XX share

expenditures contributed Capital lower million cash to was project advancing XX%. than cash management million $XXX prior last on six and timing result period year-to-date income to due year of Higher a net basis million for Cash as XXXX operations XX% free a working performance. the totaled flow the months to strong Now, flow. of flow capital from year. $XXX a first and is higher million this $XX than turning of $XX strong

debt-to-EBITDA shareholders the to of $XXX repurchases times the In terms and through XXXX approximately our March leverage, and ratio was and have financial share we dividends balance of during end the returned sheet X.X at year. fiscal million

providing Voalte the conclude Let the acquisition. of call portion fiscal XXXX, impact includes the me now update to for by an this of which our guidance

included under should ASC the our As results which reminder, modified are to XXXX the in financial on XXX, website. our compared XXXX supplemental schedules guidance a be financial

growth we Voalte. full year, to the revenue reported the X% Core X% of expected contribution revenue of to and is to a constant including For of currency X% to now expect growth increase growth X% X% X%.

non-core increase year at with There is revenue. full original Excluding to Voalte, the to end approximately revenue to of is high X% change our guidance no expectations range. expected regards core

As totaled XXXX. and million $XX we expected decline $XXX approximately to revenue is have mentioned, to million non-core XXXX in in

the well by X% core first core is As in and the excluding current the calculated contribution in By Patient is half to a Systems range, revenue a Voalte. business the basis, incorporated our expect grow guidance the to performance non-core reminder, components this in both reported guidance, X% on as segment we reflecting now periods. prior headwind while strong growth Support as of year

with Front margin to incremental Solutions more to mix growth Surgical expect basis We X%. and spending to addition reinvestments gross improvements expand growth initiatives. sales. approximately increase expect to offset reflecting Care reflecting be tariffs inflation. From and in and XX productivity adjusted XX% profitability than key digits, points, standpoint, a to core Line XX.X% mid-single of costs associated sales, approximately R&D in that we of XX raw X% Adjusted material and the SG&A approximately of of Voalte representing

margin of operating XX a basis we points. XXX to expect As now expansion result, adjusted

guidance count $X.XX rate of our approximately to XX% share the free we project of per XX.X previous of performance flow million, continue per share cash million our $X.XX in expenditures the $XXX and and and of tax $XX acquisition. of flow $X.XX of approximately and related to $XX expect capital shares. now $X.XX to Voalte continue cash of a This modest approximately to the adjusted We reflecting earnings interest including guidance of a $XXX to perspective, share at expect strong high-end a From solution million first-half approximately operating million. flow we cash of and other million results diluted expense both

from on Voalte, or revenue constant core Including fiscal increase X% revenue basis. X%. contribution expect approximately the to to approximately expect third For the X% increase approximately we we quarter, currency growth X% to a

for per diluted I'll John. providing now of adjusted are Thanks. share. the call guidance to earnings We over $X.XX $X.XX And turn to back

John Groetelaars

we're half pleased first momentum summarize, To look very our to in and beyond. Barb. that performance and with XXXX building forward Thanks, on

which and range in has core growth, XXXX quarters. first to half for in X% the consecutive mid-single are the We encouraged the four revenue with of digit now increased last

growth for quarters. delivered We also EPS double-digit have adjusted XX consecutive

momentum continues product to build. New

We increasing spending are solutions with drive and to R&D differentiated actively category our innovation. leadership

to our and on increase expand international China. We emerging are investments in like footprint presence turning markets our

me the on Q&A. We vision are that, for build very advancing to care the connected let open acquisitions Voalte. With of recent of our excited up with call


[Operator Instructions] first comes of of question Your line Bank Bob of Hopkins from America.

open. line is Your

Bob Hopkins

and Thanks morning. good

guidance. just First question I want the to was ask on

the growth. your the with from QX, then growth a that fiscal number you're way You coming has guys same the giving down fiscal very that basis strong quarter I believe for had But like all X% you to above guidance. guidance on X% down X% growth

explain, the So and I'm versus QX fiscal QX if could QX. in much just Thank wondering you fiscal growth so fiscal in you. frankly is why slower

Barbara Bodem

Good I'll to happy that. Bob. take morning, be

to QX, to is revenue guidance So recap, have we're our that when X% of at we'll core X%. looking

as the half challenging ramp in second Front the as Vest, year. specifically Patients of Care the of as latter Monarch of Centrella Support you of But for year. to the X% Excluding slow is for Voalte, we revenue QX X% be year. well more you it okay? up want and strong core will saw performance comps the where we've talked of the in have in quarter. very we Line our year saw second in part previously, X% does as It half thinking the the So in Last U.S. really the about third be the remember Systems

to lower part we more are so see we're the expecting year. Does in difficult the help? And comps. going growth of second that And U.S.

Bob Hopkins

the little you're to you're I'm between it X% what as QX It versus the deteriorating X% in so for a the quarter there and that to is just curious. all what X% that the -- growing difference Is you're QX comps guiding seeing anything comps? separate trends from does. that is -- the in -- that business you is bit see Or today? X%

John Groetelaars

Bob. No,

I think -- John. it's

Monarch effectively we was demand the last released Vest, the launched in and of to When launch last was year year. to pent-up the is from QX One had that place things anniversary. on going QX took we reflect Monarch that

have. the large specific Barb the know comps quarter that's launch last Centrella we comp, then it the QX, Front are the comps -- was PSS QX. on in Line for specifically when year one of we Centrella but And So mentioned QX, a in to not Care

neutral in our of factoring in are see we're we So half the that in second growth tough things performance Line would combination Front into Care in comps the to to guidance. QX to PSS Offsetting that it, QX, expect of and this better the year. be a International would accretive that

half overcome. you in As a headwind the to bit was us of probably of first international for year the saw

question terms guiding various of we full would factoring in in the all, confidence and confidence puts guidance, We're in the in our our of Voalte and have and takes in in the here. the level complete we're I underlying guidance QX. the confidence QX underlying you this business say all in So and business comps and level providing ex international of full is for

Barbara Bodem

I we X% is Voalte, core And to we is full-year, excluding are sorry the thing X% last where the would to there guiding at add -- high-end which for started on year. the growth. X% the X% to

And for is good we So what line We're for the half year the of our in in full were confidence the year high. John in is performance looking second as shape. the year. said, with

Bob Hopkins

Okay. Great. Thank you very much.


comes from the line of of question Your Raymond Hsu James. next John

Your line is open.

John Hsu

Good morning.

core curious, did core that in growth of presumably, obviously, assets rather was you again, updated or divestitures you include First first this as why curious the excluding including growth for question guidance helpful idea exclude -- that gave as the color Voalte on you kind why just numbers? is, just and And Voalte. clearly, excluding thought you those did I'm mentioned far just But are FX. you it's Voalte. question. non-strategic process as But of the -- philosophically I you curious

Barbara Bodem

the simple Thanks Voalte question. give for line We is about things growth this possible keep dilutive which for standpoint, core, deliver additional it's small encouragement it would We not rather metrics basis than for on simpler a set contribution, year. and however for that We But go top much lot contribution, the year. new core, of the core, mean, small want talked non-core keep like was to non-core. non-core, estimating a it this to felt some like the modestly we've organic, how more by as a would introduce thought points, a I you to to as we're XX in, it. than from with pretty be given top that. of line it'll -- organic

So we core try a keep the that the said, we by small we differences, like thought And as revenue -- possible. Voalte is was compromise. good that simple you to as insight contribution growth the message into the enough giving

Mary Ladone

And Voalte acquisition it's divested defined Non-core as Mary we wound as John, down us, and didn't with feel a on obviously Kay. that also non-core so things a fit that definition. non-strategic we is strategic for into

John Hsu

following Okay. bottom can and small, that, Voalte, bridge That's help just you help XQ could year? us know revenue it's just on up for well fair. both the for I as I us top both line the as guess EPS? bridge and fiscal on guidance but just And -- Just you

Barbara Bodem

less saying half in dilution, we of than half of second a second of about of Voalte to year, $X.XX think So what that for XX terms basis the points is year dilution. growth. of it's be contribute From going the EPS revenue core the would we're

Mary Ladone

And evenly John. QX -- QX split QX or that's and

John Hsu

tracking which for the looks then tracking to new original Great. very done one long-range have obviously Obviously Okay. ahead million Excellent. products well the and $XXX like is plus -- plan. last it of And me.

halfway I through just year. we're the So know of -- kind

to with XX% growth there So just legs of some still broad-based driving pretty products ahead, this clearly the and eight it. looking it's is

So are maybe I momentum just to guess fiscal presumably progression? where we continue. at that that in XXXX, to would I guess expect And looking you --

be could very that helpful? color provide that around any would So you

John Groetelaars

question. thanks it's a great John Yes,

powder four sauce updated that the high the is or us and It's fundamental confidence cores of rest to you the our mid-single-digit the guidance I if this raise It growth providing. that's dry in to the we're will enabled for think growth. guidance to a been significant year. secret that's been we're drive the guidance confidence our us allows It's providing driver. of

it's big So contributor. a

just contributing. We that have new going launching some are that start are to products

towards year also EarlySense, to year, second namely get acquisition WATCHCARE, as we end in the will As this the the the that Voalte later -- add well. of

in the So the we keep feel to performance expect in performance our basis mid-single-digit continue for of it the us to we range year, great and drive new the products. very XXX of us half about contributed good of first It points and in that range. probably


from Taylor question Your comes UBS. of the Matt line of next

Your open. line is

Matt Taylor

question. thank for taking the you Hi,

how So think then the us perspective some if of be first on And thing will helpful business color your margins purview? too. grow could I wanted you any you ask under the was, that Voalte give about more would

John Groetelaars

its Matt, I'll discussion. turn John the margin Yes. to for take And Barb that it then question. over

now their all of response Hill-Rom first the was two the together are acquisition this -- in So delighted acquisition the see one. the the the and -- favorite the They we're our the phenomenal. together this coming of combination that Customers the customer a coming is and to companies customers has really the pulled equally and to employees been it's and in together; Voalte -- said positive of significant organizations response of the awesome. integrating announcement

ability was the capability and clinical a Call reliability teaching all really customers Hill-Rom and well platform in be mobile environment, together. to when install as our a that base building large the great our really some communications process systems more and with to to scale as that are IDNs. connectivity service leading the table The hospitals Nurse that provide giving then has nice -- So device And ongoing together good the required bringing significantly nice We a extremely resources platform the and Voalte these about feedback tools out. growth. able record is large feel establish brings sustained and support of is a mobile clinical integrate combination about had of to track really with a us into secure and

of this plus So really -- really two two the a equals of type five two is scenario. combination

we're So customer feedback. as pleased as with the Barb talk well margins. And I'll that about let very the

Barbara Bodem

look in think to acquisitions revenue, think we've deferred through think as want everybody should line, year treatment ramp-up see things line and M&A, revenue our margins. as what XXXX deferred portfolio. let as a we've purchase in about that's a this the And So But about them the the to you well when first growth should of double in fit, that year is be the way of are Voalte slower for margins, we exactly you latter strategic are that both make to revenue be fiscal system. to but we being work only and Hill-Rom talked of accounting fits as the not the as in the said about top part The want going you of should its there. we digits. you accretive half terms accounting the accretive double top to part Voalte of thinking line growth in for on revenue of would And digits. to purchase about about revenue going But to I aware something

Matt Taylor

some on prepared remarks did emerging made in want Okay. of markets. the you that on comments follow-up And the to I then

benefit you you your you that And about; a are market keeping could some emerging benefits how investments? those XXXX. in you see factors So growth or will that what making like through think getting the could year A, could investment from guess, later the business it gating sounds earlier? grow an talk this once and investments are making I you're be

John Groetelaars

We towards two second year of double-digit to growth as regions the to bit, emerging step this America little so performance this Yes. markets in has the begin we Good been growth. single-digit year markets the our a mid that Latin of in Asia-Pac -- end half question. has far of to The just emerging get do year. back and been get expect those

type We on sustain that making the driver add the a investments a intend talking China growth The about in to on in you that forward. XX to of the early in as half be year months, growth would basis, we year, and of begin that and certainly investments If digits the is. sustained this turning XX make double we're timing of -- and double-digit to region second of level on of as to second perform now months China. expect this region half certainly Asia-Pac expect profile going the by that at in

Matt Taylor

you Thank Great. very much.

Mary Ladone

Next question, Jack?


with Morgan Lewis is the David of next question. Stanley online

Your line is open.

David Lewis

morning. Good

couple I U.S. a PSS mid-teens basis improved questions little type quarter. for off, better may actually a on than think core been thought I growth, Just I'd start John, me. have momentum bit last I may a it and think be

Centrella patient your So CWS handling.

the orders sustainability And could about the capital -- I how the just look? strong just All? So if you is there in overarching concerns some want on to in light that environment, light there for of performance of in frankly U.S. the Medicare talk

John Groetelaars

question, Yes. Good David.

really in our the terms to the gives changes again no Hill-Rom and sustaining us growth In order our be past, be confidence the the indicated PSS there. the capital volume of look, PSS, confidence backlog way as guidance like We to healthy. our as for continues as level well stable, overall. stable And and the both to to see raise of capital environment level we we've for environment in positive continues

really quarters been in the a safe PSS, row, feeling handling that row driven health maybe Centrella our of three quarters driver and Med-Surg businesses been for good business. and been a we're it's unit. It's business in four four It's been patient have about been certainly that environment, in not business, our clinical or just communications of for that's in a balanced a that CWS that quarters performance And it's it's row. business. So

better you gets So Voalte think add when it. it we only into

a All, Medicare and its innovative our all amount tremendous do speculative. I care Hill-Rom In early value our cycle any in comment for to there kind much drive and clinical is I of the solutions our guess we our And for be of be I portfolio, given than have think say past. the diversification health would our I patients terms too volatility do mitigate change way think fluctuations to and products, of the portfolio and portfolio to in of positioned political and resilient more customers environment. in the is in

we're shareholders. our on mid-single-digit driving value and driving near-term So focused business growth our and for running

David Lewis

Okay. Thanks, just more together. me I'll for ask John. And them two

this so sense go-forward International significant on should with is watch. should and the first lot we of under year? should thinking type versus about we two, of be the in I in PSS, transient half I'm in you Thanks framework it's And tuck-in one. this in capital Number issues million to much. things us the The the Front bit sort Surgical be of -- strength out why back number a just sorry capital basis? sort million your shareholders relatively think playing what on little or see of the $XXX Line thinking what million just or a the Voalte. into then the $XXX extent a a deployment standard of To nature. of Give Is first mean $XXX is weakness quarter internationally. of

John Groetelaars

take that I'll Yes, last sure. first. question

of more a size, be the accretive all can it all margins, boxes the good -- When expect the international to happy plus and M&A find boxes. that more deal that fit or of basis. it very we'll check one future. the I should that growth is when see category, Voalte to all like those what comes nice acquisitions a deal minus and to High on checks synergistic to of in do tuck-in kind the think frequent you strategic think growth. that deals we I representative to comes If

expect had entered was I'm this to sure happened. that's on had a comp did last really international. a we we commented for for a And strong what in Europe And we tough really going quarter, a to international We provide we it Canada year year. quarter that and challenging strong fact last be us. As pretty call. in the knew

a more as had East X% capital. place a is orders as our international purchases of of know, look grower International for the we if the over -- the well of region and project the for business last project-based Middle is And was we been with first of and a large longer it's consistent X% our year you orders international those to remove Canada, first the which exposed ebbs If in half entirely consistent projects the you as term, in – and flows performance at over of year half of couple capital years. -- ex the us. growth, couple But where

a our better of year result international. a first half in expect half second for we the As weak

So our that’s in neutral to to of story year. half growth either again to become second going accretive the this

Barbara Bodem

to out David, that I like at X%. Line in that thing for the to the grow did Care is Front I'd would point International only add quarter revenue

PSS like and back that if to we saw rate those to the perform that International of have prior in Surgical comps Care Line X% not or that So you in somewhere Front go in in comps X% range. did underlying difficult growth continued range. year strange


Mishan Matthew your question. is KeyBanc next of

line Your open. is

Matthew Mishan

of really it for breadth questions. up you like, like Great. I talk for Support little But of was across U.S. a at the kind taking -- stronger business, thought Can expectations? bit on across lower. of about, what's seems U.S. it balanced everything everything. X% going else guidance maybe is below X% at looked like outside the PSS, Patient geography to I with beginning just of on I really Thanks when year, and segment And your the the following

John Groetelaars


it Let PSS having It's going exceed we to X% year. fall add also the to going we're be what We're clearly expect not and me is year then, we range. that the X%. The to they're so we now address That's was that communicating. original a to guidance a International for to more X% on have provided. below out can Barb, full growth -- calling and great it. like

So the PSS feeding International -- we behind range our provided.

at the Surgery Those by be line those -- lower where the range the Albeit, International driven may here and the of -- The other lower had range, they the two end of businesses on business as FLC our largely performance. with we performance we is many sit are, provided. today. but end that's the of in

Matthew Mishan

time? in be customers? five next four -- over your talking I going going at worried just you there in on Patient I'm comps about the then a the -- Should we U.S. about this tough And year sustainability are or quarters. outsized curious mean, Support. Are mentioned lot. getting tough the Support, Should guys guys comps Patient Okay. next You into U.S. Support U.S. about Patient from orders you're of

John Groetelaars

a volume it's We diverse, we through. PSS little and answer backlog about good growth it's is a business a in business. our To no. really drivers than I coming elaborate our double-digit more mean, of big order diverse It's lot there. short and feel good about that, feel got The

business. feel with really about stand good we PSS we our So where

we of we fourth year get back and a this the have quarter, tough into we As know comp. end

that factoring we're in. So

aggressive. things maybe guidance very guidance that be all being or today. in confident we're factored versus meet With that, philosophy the but we Now we on end about conservative up way our beat, these providing of feel rather being we and

Matthew Mishan

Thank John. Okay. you,

Barbara Bodem

Jack, for we have more time two questions.


Rick your with question. Wise Stifel is online next of

Your line open. is

Rick Wise

Good morning, John.

with start your some me market earlier emerging Let of comments. off

help maybe in worked you in a and us I team that you new past. hired them detail, are. with more know, understand little you where great the Just a

again, of say -- in return it you you. on you You're internal, with more you'll us what's something color. what Is when you're on said means What that distribution? little happening invigorating, turn Just what Help days and Thank then you're to frame commercial, investments. investments? planning you're your understand, in now? doing the the going you're a early

John Groetelaars

be are plan our just of that were In investment an Yes. on Yes, was really we quarter. speak the putting which the as investigating in together, Thanks, third primary we let's that turning case we China and specific. Rick. area

incremental in of amount we'd of we doing were sustained have research growth. leadership have for extensive and see take street, capability, can to an real providing investment that we'll opportunities So in feet China capability, so up beefed a presence opportunities commercial the government advantage after on reimbursement and the marketing affairs and understanding where our

the same and out growth we that is We're finish investments in and in very research. growth doing fundamentals now that other that feel regions China. taking those so investment incremental charging So good six case out was place year, for in that approach, Rick, before and getting on we're double-digit and turning the leadership, of now markets months while prospects as about in positioned of about of investments place the the China. other emerging We're the outside with on to turn

Rick Wise

platform, more you about your guessing, on communication you bag the full not. tools to it bit Is to Just the bag? Or connected is internally? full And little a full market? But can penetrate spend digital Do it strategy get frame in to M&A back focused you're Okay. Thank turning more clearly gaps really there. care? you're to on -- that $X going comments much. evolving your the time centric so have your fill your Voalte. more you with to thoughts I'm billion going

John Groetelaars

Rick. Thanks, Sure.

So That mobile some Call on global fixed peripheral that well sized includes the or communications well software as a we've integration elements. category, Nurse billion-plus the systems, market. communications care systems wire as category, $X as clinical of and to as be

participate we that of today approximately in market. XX% So

XX% its acquisition. Voalte It's terms With in a TAM it's probably -- the penetrated. of

$X opportunity In at today. terms its billion-plus global of

that highest segments. growing and our -- So of market is market segment one

we've think, growth X% it X% to to a I category. sized be

a a So the the in the growth category future communications we in like category, standalone on tool. we there's lot of think

digital -- digital a the that R&D on. the into lot where As of we realm future. you is have connectivity and and our going This taking our in efforts to add

connects we're expect said a could working the Smart+ first the it, smartphone remarks, in on elements talked digital the that We of Things all way of our think to it busy and But in the simple in kind prepared we've as offering my they'll launching what service fiscal And of XXXX. of very the Internet be in are. effectively, connects to it it I -- between. as bed -- and past,

traditional what platform. So platform or it be then algorithms a Nurse inputs to and into other rate, and we kind conditions this AI Smart+ mobile a addressed respiratory bed of detect communicate events, with Call rate and need future, in incontinence to heart can translations the signs vital

there, So that's half the is offering solution XXXX. will and again aiming piece the of towards first software vision the More our to something fiscal product we're of digital it. be of a digital first come

Mary Ladone

question. for we time Jack, one have last


Barclays of with Stewart is Kristen your online final question.

open. Your line is

Kristen Stewart

me squeezing so much here. last the Hi. for on in Thanks question

I asked of bit Voalte. around sentiment a been questions little to of want kind a now So lot echo and the of just have, guess, I already the with core on confusion

And in growth, expect to kind just expectations with said the included fair, contribute So of you kind things that forecast would ahead that but frame ground Maybe of expecting. this you I now? to base some you about was just I comments So basically it? as second it of next Is that's a help better us year, of what of revenue were in business you points guess, if frame it acquiring revenue made kind maybe thinking year? guess. million you for or like could had the around basis $X half the is growth help think, the just already about where guys so us I when just XX are

Barbara Bodem

Barb. it's Kristen, Hi

purchase the a for has overall fact about in year, But and So of you're the -- neighborhood. taken the then sort quarter probably right to the we've do discounting backing in need we're part impact we accounting going we're to probably each the got about revenue want the estimating of second into I that of revenues you think the about, be numbers third that. that's to

treatment purchase and or cycle, top we quarter $X million new little accounting. get going of $X as line a because each revenues through normal to of bit are sale is so, we a until for the suppress orders and just XX% in. growth And the into of the of discount sort million it's a coming get time after So

the you perspective. think about line So Voalte top from a should that's how

about the it. back to I want and go back just core Going excluding Voalte to talk

had more been the has as U.S. the So of as year the business the comps the very difficult had beginning set we've predominantly first to of And strong that's X%. we year talked X% about. a International half guidance driven by we've of

performance a to good comps, you're about U.S. full and half you just the good the at comps, our really easier we're in International coming the business. Centrella the John first in beginning the back you talked second growth feel that see as and half core high slightly business the is half about for delivering year, on end year second feel as we're the of saw to to about out two the fiscal between on year end mid aspire ability year, this there. really of of that our especially guidance. And to in of going that going year it more through. the we're does lower we work really higher strong demonstrate and start single-digit core the But we the to delta the we And the year, of As growth to growth core the year, difficult mix Monarch end through versus to going in you'll the have the extraordinarily of think the the rate fact of coming QX goes the towards mean more growth see But get XXXX. that International that about.

XXXX. that's how you fiscal growth I'd year sort core in growth the of ask about the mix drivers think to So the of throughout

Kristen Stewart

Yes. Okay.

full because Just the clarify of XX had you to $X the basis calculating I said half based that I second second that a was was to think that off million points number, half.

that you're So be of $X the basis, on run it as that going was the to reported. quarterly saying it's rate the revenue But recognition different? million because previously a was

Barbara Bodem

all earlier. the that's for sure Yes. XX I XX of wasn't points year My make talk thank the about full apologies, really to to come want second if year. I much basis in on its Kristen, clear When rate, growth half clear. through basis very points, we going the clarification. that you we're

Kristen Stewart

sense. makes That Okay.

Barbara Bodem

right. You're absolutely

how and get each So $X million to you quarter. that's in million back $X

number and it. Just your take double

Kristen Stewart


Okay makes that that. perfect And for Thank just to… you then clarifying sense.

Barbara Bodem

take Yes. stress. Don’t

Kristen Stewart


for the on -- further John to Surgical comments -- this and and the I it guess, clarify, also me. much Line those also the just lower that Front -- it's Solutions, with too Care on, I -- is think Just multi-tasking just morning what

end me of you're saying that expecting that that or lower is the you're part all half Because like first in the mostly kind X% half. the International to sounds the that should second so performance? of to attributable And basically business now it there accelerate

sure just I'm why of to I just So want it's understand sort now that. make fully confused lower I and

John Groetelaars

below Yes. primarily lower what where And first International the Kristen, first half for That's it's Line year it be correct. end the to to attributed And our the to to a we Surgery. driven basis Obviously, -- that's of performance. full Front of for primarily the half our be Care. performance. expected where year by on expect we

Barbara Bodem

And also very very QX. strong in comps. Remember comps Line U.S. Care in strong for Front

John Groetelaars


Barbara Bodem

these focus [ph]. on can You

Kristen Stewart

area seeing you've you're within the it of terms longer-term opportunity seeing change at at But on Hill-Rom International? and touched a know, And tough current of of real expand I for we that coming the little had has your you into to in which was been trends bit bringing in out strong experience growth continue this your International, Hill-Rom beliefs seemingly the all to that Okay. kind from really Bard as mind prior questions. in see. does of a more that looking one International

John Groetelaars

coming level. we at be as market consistent We year period on been time think It's portfolio, of to about proof X% when full high higher confidence it longer way, there grower. and look my move that of year. out that look we the -- that the can change in doesn't can speak. over half believe we International of a I those that context in And slightly turning drive And emerging you underlying with that we're been will our International. and get That's pretty in have have the quarter-to-quarter. definitely believe to it's It at growth pudding try belief and can in terms confidence why an the Yes. you think and a future higher investment. we to the what current for -- we we in quarters of you And


Thank and conference Hill-Rom with Ladies you gentlemen joining. for call Inc. Holding concludes this today's