Hill-Rom Holdings, Inc. (NYSE:HRC) Q4 2019 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 08:00 am ET


Hill-Rom Holdings, Inc. (NYSE:HRC) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Hill-Rom's Fiscal Fourth 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. If you have any objections, please disconnect at this time.

Now I'd like to turn the call over to Ms. Mary Kay Ladone, Senior Vice President, Corporate Development, Strategy and Investor Relations. Ms. Ladone, you may begin.

Mary Kay Ladone

Thanks, and good morning. Thanks for joining us for our fiscal fourth quarter 2019 earnings conference call. Joining me today are John Groetelaars, President and Chief Executive Officer of Hill-Rom; and Barbara Bodem, Chief Financial Officer.

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

In addition, on today's call, non-GAAP financial measures will be used. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release issued this morning. As you know, beginning with our fiscal first quarter, we adopted the new revenue recognition accounting standard ASC 606, on a modified retrospective basis. The focus of our commentary this morning will be on our financial results under this new standard for the current and prior year periods, which will allow for comparability on an apples-to-apples basis as well as comparisons to our 2019 financial guidance.

This morning we have a lot of ground to cover. We'll be discussing our fourth quarter and full year 2019 financial results and our 2020 guidance. We will then switch gears and highlight our new three year financial outlook through fiscal 2022, before opening up the call for Q&A. We've included additional details in a comprehensive presentation that can be accessed on the Investor Relations page of our website at hill-rom.com under Events and Presentations.

So with that introduction, let me now turn the call over to John.

John P. Groetelaars

Thanks, Mary Kay. Good morning, everybody. Let me start by saying 2019 was a very successful year for Hill-Rom. We concluded our fiscal year with strong broad-based momentum across the portfolio, in both the US and International. In Q4, we achieved 8% core revenue growth and 11% adjusted EPS growth, excluding stock-based comp in both periods. Once again, these financial results exceeded expectations.

For fiscal 2019, adjusted earnings of $5.08 per diluted share reflects the sixth consecutive quarter of core revenue growth in mid-single digits or higher. New product revenue was more than $450 million and adjusted operating margin was 17.8%. Margin expansion was driven by multiple factors: These include, favorable mix from new products,