Hillrom's Fiscal First Quarter Financial Results Exceed Guidance

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

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

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

Fiscal First Quarter 2021 Financial Results

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

By Reporting Segment:

    --  Patient Support Systems revenue of $377 million increased 10 percent on
        a reported basis, or 8 percent on a constant currency basis, reflecting
        strong international expansion of med-surg and ICU bed systems, growth
        in U.S. bed system rentals to support customers in the treatment of
        COVID-19, and continued recovery in the company's care communications
        platforms.
    --  Front Line Care generated revenue of $270 million, an increase of 6
        percent on a reported basis and 5 percent on a constant currency basis,
        driven by strong demand for Welch Allyn patient monitoring and blood
        pressure equipment, and thermometry. Other products, including physical
        assessment and vision care products, continued to show sequential gains
        as physician office visits return to pre-COVID levels.
    --  Surgical Solutions generated revenue of $94 million, an increase of 9
        percent on a reported basis, or 4 percent on a constant currency basis.
        Strong international growth was partially offset by continued project
        delays in the U.S. due to the pandemic.

Recent Highlights

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

    --  Achieving new product revenue of more than $150 million, an increase of
        more than 20 percent, during the fiscal first quarter through several
        innovative products. Hillrom expects to launch at least ten products
        during fiscal 2021, further enhancing its category leadership and
        creating value across care settings.
    --  Establishing a national partnership with a large retail pharmacy
        provider to enhance patient access to annual diabetic retinal
        examinations and help reduce vision loss and blindness resulting from
        undiagnosed diabetic retinopathy. Diabetic retinopathy is the leading
        cause of vision loss and blindness among adults between 20 and 74 years
        of age,(1) but with early detection, 95% of diabetes-related vision loss
        can be prevented.(2) Most commercial healthcare plans provide coverage
        for diabetic retinal exams in primary care settings, and as of January
        1, 2021, Medicare will cover the RetinaVue® Care Delivery Model.(3)
    --  Acquiring contact-free continuous monitoring technology from EarlySense,
        as Hillrom continues to build a differentiated suite of connected
        sensing and digital communication solutions to improve patient safety
        and ensure timely, effective clinical intervention. Hillrom defined a
        new standard of care with the integration of contact-free continuous
        monitoring and analytics technology into the Centrella® Smart+ med-surg
        bed and ecosystem of connected devices. Early identification of clinical
        deterioration has led to improved survival, decreased costs, and
        decreased need for higher acuity settings.(4)
    --  Announcing the intent to acquire Bardy Diagnostics, Inc. (BardyDx), an
        innovator in digital health and a leading provider of ambulatory cardiac
        monitoring technologies. BardyDx provides a differentiated, wearable
        bio-sensing technology, the Carnation Ambulatory Monitor (or CAM(TM)
        patch), that is engineered for patient-comfort, superior P-wave clarity,
        exceptional diagnostic yield and superior clinical accuracy.
    --  Partnering with Augmedics, creator of the groundbreaking xvision Spine
        System (XVS), the first augmented reality navigation system to be used
        in surgery. Hillrom Surgical Solutions has integrated this technology
        with the Videomed system to enable peak procedure performance and
        connectivity in spinal procedures. The co-marketing agreement adds to
        Hillrom's portfolio of strategic alliances with companies like Intuitive
        Surgical, Siemens Healthineers, Philips and NuVasive.
    --  Promoting excellence in the workplace and a commitment to diversity,
        inclusion and belonging initiatives as the recipient of multiple awards
        and recognitions, including new Great Place To Work® certification in
        Australia. In addition, Hillrom was recently recognized by Newsweek for
        its commitment to environmental sustainability as one of America's Most
        Responsible Companies for the second consecutive year.
    --  Generating operating cash flow for the quarter of $100 million, reducing
        debt by $13 million, and delivering significant value to shareholders
        through dividends and share repurchases. During the quarter, Hillrom
        returned $70 million to shareholders through dividends and share
        repurchases.

2021 Financial Outlook

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

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

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

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

Discussion of Adjusted Financial Measures

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

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

The company also routinely provides earnings per diluted share guidance on an adjusted basis. This excludes the impact of intangible asset amortization associated with prior business acquisitions, which we expect to be $1.18 - $1.23 per diluted share for the fiscal year 2021. Management also does not include adjusted items such as strategic developments, acquisition and integration costs, special charges, and other special items or unusual items in our guidance because such items are evaluated on an ongoing basis, can be highly variable and cannot be reasonably predicted. As such, prospective quantification of these items is not feasible, and a full reconciliation of non-GAAP earnings per diluted share guidance to GAAP earnings per diluted share has not been provided. However, as a result of acquisitions, our ongoing portfolio and business optimization initiatives, and any change to the transitional impacts from U.S. tax reform legislation, we do expect adjusted items we have not predicted to potentially be significant to our GAAP measures including gross margin, operating margin, income tax expense and earnings per diluted share.

The company also presents certain results on a constant currency basis, which compares results between periods as if foreign currency exchange rates had remained consistent period-over-period. Management monitors sales performance on an adjusted basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars. Management calculates constant currency by applying the foreign currency exchange rate for the prior period to the local currency results for the current period. Management believes that evaluating growth in net revenue on a constant currency basis provides an additional and meaningful assessment to both management and investors.

Conference Call Webcast and Dial-in Information

The company will host a conference call and webcast today beginning at 7:30 a.m. (CT) / 8:30 a.m. (ET).

Conference Call Audio Only Dial-in Information: To participate in the conference call dial (844) 654-5620 (domestic) or (647) 253-8654 (international). Please dial into the call at least 10 minutes prior to the start to allow time to connect. The confirmation code is 1588314.

Webcast: A simultaneous webcast of the call will be accessible via the company's website at www.hillrom.com. A supplementary presentation will be posted to the Hillrom website prior to the webcast.

A recording of the webcast/call audio will be available for telephone replay for a period of 7 days following the earnings call. To access the replay, dial (800) 585-8367 (domestic) or (416) 621-4642 (international). For the replay, callers will need to use confirmation code 1588314. If you are unable to listen to the live webcast or the telephone replay, the webcast will be archived at www.hillrom.com.

About Hillrom

Hillrom is a global medical technology leader whose 10,000 employees have a single purpose: enhancing outcomes for patients and their caregivers by Advancing Connected Care(TM). Around the world, our innovations touch over 7 million patients each day. They help enable earlier diagnosis and treatment, optimize surgical effici0ency and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. We make these outcomes possible through digital and connected care solutions and collaboration tools, including smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care. Learn more at hillrom.com.

Disclosure Regarding Forward-Looking Statements

Certain statements in this release relating to Hillrom's future plans, objectives, beliefs, expectations, representations and projections, including but not limited to those made with respect to the BardyDx transaction, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. It is important to note that forward-looking statements involve significant risks and uncertainties and are not guarantees of future performance, and Hillrom's actual results could differ materially from those set forth in any forward-looking statements. For a more in-depth discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading "Risk Factors" in Hillrom's previously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Hillrom assumes no obligation to update or revise any forward-looking statements, unless required by law.

(1) CDC Vision Health Initiative (VHI), Common Eye Disorders. www.cdc.gov/visionhealth/basics/ced/index.html.
(2) National Eye Institute. Diabetic Retinopathy. https://www.nei.nih.gov/sites/default/files/2019-06/diabetes-prevent-vision-loss.pdf. Accessed Sep-2, 2020.
(3) Medicare Program; CY 2021 Payment Policies under the Physician Fee Schedule Proposed Rule [CMS-1734-P], 08/17/2020.
(4) Vincent JL, Einav S, Pearse R, et al. Improving detection of patient deterioration in the general hospital ward environment. Eur J Anaesthesiol. 2018;35(5):325-333.



     
              Hill-Rom Holdings, Inc. and Subsidiaries



     
              Condensed Consolidated Statements of Income (Unaudited)



     
              (In millions, except per share data)




                                                                           Three Months Ended
                                                                     December 31



                                                        2020                                  2019




     
              Net Revenue


      Product sales and service                                $
            
              652.5                  $
      614.3



     Rental revenue                                    88.6                                          70.7




     Total net revenue                                741.1                                         685.0




                 Cost of Net Revenue



     Cost of goods sold                               324.2                                         306.3



     Rental expenses                                   37.7                                          37.0



      Total cost of net revenue
       (excludes acquisition-related
       intangible asset amortization)                  361.9                                         343.3




      Research and development
       expenses                                         34.8                                          31.5


      Selling and administrative
       expenses                                        209.0                                         196.8


      Acquisition-related intangible
       asset amortization                               25.9                                          26.7



     Special charges                                   27.1                                           7.8



                 Operating Profit                       82.4                                          78.9






     Interest expense                                (17.8)                                       (19.4)


      Loss on extinguishment of debt                                                               (15.6)


      Investment income (expense) and
       other, net                                        7.0                                         (1.3)





                 Income Before Income Taxes             71.6                                          42.6





     Income tax expense                                12.8                                           2.8






     
              Net Income                                     $
            
              58.8                   $
      39.8





                 Net Income per Basic Common
                  Share                                         $
            
              0.88                   $
      0.60





                 Net Income per Diluted Common
                  Share                                         $
            
              0.88                   $
      0.59





                 Average Basic Common Shares
                  Outstanding (in thousands)          66,497                                        66,792





                 Average Diluted Common Shares
                  Outstanding (in thousands)          66,925                                        67,329



     
                Hill-Rom Holdings, Inc. and Subsidiaries


     
                Revenue Constant Currency (Unaudited)


     
                (In millions)




                                                                                                                                                                U.S.                            OUS



                                                                       Three Months Ended                 Change As                Constant           Change As                  Change As           Constant
                                                               December 31                           Reported                Currency            Reported                   Reported            Currency



                                                     2020                                 2019






     Net Revenue:


      Product sales and service                             $
         
                652.5                               $
     614.3                                       6.2                      4.4                     (2.8)         25.7            19.9
                                                                                                                                                                   %
                                                                                                                                                                                           %                        %            %              %



     Rental revenue                                 88.6                                       70.7                                        25.3                       24.3                                    28.1          6.5          (1.1)
                                                                                                                                             %                                                                %
                                                                                                                                                                       %                                                  %             %




     Total net revenue                                     $
         
                741.1                               $
     685.0                                       8.2                      6.5                       1.2          24.8            18.9
                                                                                                                                                                   %                                                %
                                                                                                                                                                                           %                                     %              %






     Net Revenue:


      Patient Support Systems                               $
         
                377.4                               $
     344.2                                       9.6                      8.0                       0.9          39.8            32.7
                                                                                                                                                                   %                                                %
                                                                                                                                                                                           %                                     %              %



     Front Line Care                               269.9                                      254.6                                         6.0                        5.0                                     3.6         11.6            8.2
                                                                                                                                             %                                                                %
                                                                                                                                                                       %                                                  %             %



     Surgical Solutions                             93.8                                       86.2                                         8.8                        4.4                                   (7.8)        21.4           13.6
                                                                                                                                             %
                                                                                                                                                                       %                                      %           %             %




     Total net revenue                                     $
         
                741.1                               $
     685.0                                       8.2                      6.5                       1.2          24.8            18.9
                                                                                                                                                                   %                                                %
                                                                                                                                                                                           %                                     %              %






     OUS - Outside of the United States



     
                Hill-Rom Holdings, Inc. and Subsidiaries


     
                Reconciliation: Earnings Per Share (Unaudited)


     
                (In millions, except per share data)




                                                                                           
       
            Three Months Ended December 31, 2020                                                      
          Three Months Ended December 31, 2019

                                                                                                                                                                                                                    ---

                                                                               Operating                  Income                                    Income Tax Diluted EPS         Operating                          Income                         Income Tax          Diluted EPS
                                                                           Margin                    Before                                     Expense                        Margin                            Before                          Expense
                                                                                                   Income                                                                                                      Income
                                                                                                   Taxes                                                                                                       Taxes

                                                                                                                                                                                                                                                                                 ---

                                                                                   11.1

                                                                                                                                                                                                                                                                                         %


     
                GAAP Basis                                                          %                                             $
           
               71.6              $
      
                12.8                                             $
        
                0.88                    11.5               $
         42.6                   $
      2.8 $
     0.59



     Adjustments:



     Acquisition and integration costs and related fair value adjustments             - %                              (0.1)                                                                                                                                 (1.0)

                                                                                                                                                                                                                                                                  %                  (6.6)          0.3                 (0.10)



     Acquisition-related intangible asset amortization                              3.5

                                                                                                                                                                                                                                                                  %
                                                                                       %                                 25.9                                           6.3                           0.29                                                         4.0                    26.7          6.4                    0.30



     Regulatory compliance costs                                                    0.5

                                                                                                                                                                                                                                                                  %
                                                                                       %                                  4.1                                           1.0                           0.05                                                         0.6                     3.9          0.6                    0.05



     Special charges                                                                3.7

                                                                                                                                                                                                                                                                  %
                                                                                       %                                 27.1                                           6.2                           0.31                                                         1.1                     7.8          1.2                    0.10



     Debt refinancing costs                                                           - %                                                                                                                                                                             %                       16.1            3.7                  0.18



     Loss on business combinations                                                    - %                                                                                                                                                                             %                        0.5            0.1                  0.01



     COVID-19 related costs and benefits, net                                         - %                              (0.1)                                                                                                                                          %



                                                                                   18.8

                                                                                                                                                                                                                                                                                         %


     
                Adjusted Basis                                                      %                                            $
           
               128.5              $
      
                26.3                                             $
        
                1.53                    16.2               $
         91.0                  $
      15.1 $
     1.13





                                                                                             
       
              Year Ended December 31, 2020                                                            
            Year Ended December 31, 2019

                                                                                                                                                                     ---

                                                                               Operating                  Income                                    Income Tax Diluted EPS         Operating                          Income                         Income Tax          Diluted EPS
                                                                           Margin                    Before                                     Expense                        Margin                            Before                          Expense
                                                                                                   Income                                                                                                      Income
                                                                                                   Taxes                                                                                                       Taxes

                                                                                                                                                                                                                                                                                 ---

                                                                                   11.1

                                                                                                                                                                                                                                                                                         %


     
                GAAP Basis                                                          %                                             $
           
               71.6              $
      
                12.8                                             $
        
                0.88                    11.5               $
         42.6                   $
      2.8 $
     0.59



     Adjustments:



     Acquisition and integration costs and related fair value adjustments             - %                              (0.1)                                                                                                                                 (1.0)

                                                                                                                                                                                                                                                                  %                  (6.6)          0.3                 (0.10)



     Acquisition-related intangible asset amortization                              3.5

                                                                                                                                                                                                                                                                  %
                                                                                       %                                 25.9                                           6.3                           0.29                                                         4.0                    26.7          6.4                    0.30



     Regulatory compliance costs                                                    0.5

                                                                                                                                                                                                                                                                  %
                                                                                       %                                  4.1                                           1.0                           0.05                                                         0.6                     3.9          0.6                    0.05



     Special charges                                                                3.7

                                                                                                                                                                                                                                                                  %
                                                                                       %                                 27.1                                           6.2                           0.31                                                         1.1                     7.8          1.2                    0.10



     Debt refinancing costs                                                           - %                                                                                                                                                                             %                       16.1            3.7                  0.18



     Loss on business combinations                                                    - %                                                                                                                                                                             %                        0.5            0.1                  0.01



     COVID-19 related costs and benefits, net                                         - %                              (0.1)                                                                                                                                          %



                                                                                   18.8

                                                                                                                                                                                                                                                                                         %


     
                Adjusted Basis                                                      %                                            $
           
               128.5              $
      
                26.3                                             $
        
                1.53                    16.2               $
         91.0                  $
      15.1 $
     1.13



     
                Hill-Rom Holdings, Inc. and Subsidiaries


     
                Condensed Consolidated Balance Sheets (Unaudited)


     
                (In millions, except share amounts)




                                                                     December 31,                  September 30,
                                                                             2020                            2020

                                                                                                             ---


     
                ASSETS



     Current Assets


      Cash and cash equivalents                                                     $
       
       294.6                           $
       296.5


      Trade accounts receivable, net
       of allowances of $27.7 and
       $25.9 as of December 31, 2020
       and September 30, 2020                                               598.0                                    594.9


      Inventories, net of reserves                                          335.9                                    352.0



     Other current assets                                                  111.5                                    121.5




     Total current assets                                                1,340.0                                  1,364.9



      Property, plant and equipment                                         878.1                                    858.2


      Less accumulated depreciation                                       (569.6)                                 (552.1)



      Property, plant and equipment,
       net                                                                  308.5                                    306.1



     Goodwill                                                            1,847.9                                  1,835.5


      Other intangible assets and
       software, net                                                        958.6                                    976.7


      Deferred income taxes                                                  34.7                                     32.9



     Other assets                                                          153.8                                    155.0



                   Total Assets                                                   $
       
       4,643.5                         $
       4,671.1




     
                LIABILITIES



     Current Liabilities


      Trade accounts payable                                                        $
       
       202.9                           $
       236.5


      Short-term borrowings                                                 222.3                                    222.3



     Accrued compensation                                                   97.6                                    144.9


      Accrued product warranties                                             30.0                                     30.8



     Accrued rebates                                                        54.4                                     44.8



     Deferred revenue                                                      112.3                                    110.1


      Other current liabilities                                             180.7                                    162.8



      Total current liabilities                                             900.2                                    952.2






     Long-term debt                                                      1,643.8                                  1,655.7


      Accrued pension and
       postretirement benefits                                               94.7                                     89.3


      Deferred income taxes                                                 108.7                                    113.0


      Other long-term liabilities                                           133.0                                    134.8



                   Total Liabilities                                      2,880.4                                  2,945.0




     
                SHAREHOLDERS' EQUITY



     Capital Stock:


      Preferred stock -without par value: Authorized
       -1,000,000; none issued or outstanding


      Common stock -without par
       value: Authorized -
       199,000,000                                                            4.4                                      4.4


      Issued: 88,457,634 shares as of December 31,
       2020 and September 30, 2020; Outstanding:
       66,354,008 as of December 31, 2020 and
       66,640,832 as of September 30, 2020


      Additional paid-in capital                                            668.5                                    667.0



     Retained earnings                                                   2,174.1                                  2,132.2


      Accumulated other comprehensive
       income (loss)                                                      (143.3)                                 (180.2)


      Treasury stock, common shares
       at cost: 22,103,626 as of
       December 31, 2020 and
       21,816,802 as of September 30,
       2020                                                               (940.6)                                 (897.3)


                   Total Shareholders' Equity                             1,763.1                                  1,726.1



                   Total Liabilities and
                    Shareholders' Equity                                          $
       
       4,643.5                         $
       4,671.1



     
                Hill-Rom Holdings, Inc. and Subsidiaries


     
                Condensed Consolidated Statements of Cash Flows (Unaudited)


     
                (In millions)




                                                                            Year Ended December 31



                                                       2020                                        2019



                   Operating Activities



     Net income                                               $
              
                58.8                      $
      39.8


      Adjustments to reconcile net income
       to net cash, cash equivalents and
       restricted cash provided by
       operating activities:


      Depreciation and amortization of
       property, plant, equipment and
       software                                        18.4                                                 16.6


      Acquisition-related intangible
       asset amortization                              25.9                                                 26.7


      Amortization of debt discounts and
       issuance costs                                   1.1                                                  1.0


      Loss on extinguishment of debt                                                                       15.6


      Benefit for deferred income taxes               (3.3)                                               (3.9)


      Loss on disposal of property,
       equipment, intangible assets and
       impairments                                      0.1                                                  1.1



     Stock compensation                               11.0                                                  8.3


      Other operating activities                        4.5                                                (5.1)


      Change in working capital excluding
       cash, current debt, acquisitions
       and dispositions:


      Trade accounts receivable                         6.2                                                 74.8



     Inventories                                      15.4                                                (9.8)



     Other current assets                              9.7                                               (15.8)



     Trade accounts payable                         (35.7)                                               (9.0)


      Accrued expenses and other
       liabilities                                   (16.1)                                              (60.2)


      Other assets and liabilities                      4.2                                                (3.1)



      Net cash, cash equivalents and
       restricted cash provided by
       operating activities                           100.2                                                 77.0



                   Investing Activities


      Purchases of property, plant,
       equipment and software                        (29.3)                                              (24.3)


      Proceeds on sale of property and
       equipment                                        0.3                                                  0.5


      Net cash, cash equivalents and
       restricted cash used in investing
       activities                                    (29.0)                                              (23.8)



                   Financing Activities


      Payments of long-term debt                     (12.5)                                              (12.6)


      Borrowings on Revolving Credit
       Facility                                                                                            50.0


      Payments on Revolving Credit
       Facility                                                                                          (55.0)


      Payments on Securitization Facility                                                                 (7.5)


      Borrowings on Note Securitization
       Facility                                                                                            11.4


      Payments on Note Securitization
       Facility                                                                                          (12.6)


      Redemption and prepayment premium
       on 5.75% Notes                                                                                   (437.2)



     Cash dividends                                 (14.6)                                              (14.1)


      Proceeds on exercise of stock
       options                                          0.5                                                  3.7


      Stock repurchases for stock award
       withholding obligations                        (8.3)                                              (15.1)


      Stock repurchases in the open
       market                                        (47.4)


      Other financing activities                        2.3                                                  1.7



      Net cash, cash equivalents and
       restricted cash used in financing
       activities                                    (80.0)                                             (487.3)



      Effect of exchange rate changes on
       cash, cash equivalents and
       restricted cash                                  6.9                                                  4.7



                   Net Cash Flows                     (1.9)                                             (429.4)


                   Cash, Cash Equivalents and
                    Restricted Cash:



     At beginning of period                          296.5                                                633.8




     At end of period                                        $
              
                294.6                     $
      204.4



       
            CONTACT INFORMATION





       
            
                  Investor Relations

    ---

                 Contact:                
              Mary Kay Ladone, Senior Vice                                     Contact: 
              Lorna Williams, Executive Director,
                                         President, Corporate Development,                                                    Investor Relations and Strategy
                                         Strategy and Investor Relations


        Phone:                           
              312-819-9387                                            
     Phone:          
              312-233-7799


        Email:                           
              
                marykay.ladone@hillrom.com                 
     Email:                                                 lorna.williams@hillrom.com






       
            
                  Media

    ---

        Contact:                                    Howard Karesh, Vice President, Corporate Communications


        Phone:                           
              312-819-7268


        Email:                           
              
                howard.karesh@hillrom.com

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