Hill-Rom revenue up, but forecast not bright-WEB ONLY

Batesville hospital equipment manufacturer Hill-Rom Holdings Inc. saw revenue increase to $351.6 million in its first fiscal quarter, 3 percent better than the same period last year. Profit from continuing operations was up 15 percent, to $14.2 million.

But the company doesn’t expect its good fortune to continue.

Its hospital customers began slashing their capital spending during the quarter, CEO Peter Soderburg said in a statement. The company didn’t feel much of an immediate impact because of its diverse product mix; in addition to selling equipment, it also has a rental business and international operation.

Still, “as we look forward, we believe U.S. hospitals will continue to reduce or postpone capital purchases as they respond to the effects of the economy on their operations,” Soderburg said, explaining the company’s decision to lower its expectations for the rest of 2009.

Hill-Rom expects revenue for the year to be $1.375 billion to $1.470 billion, less than the $1.5 billion it recorded during fiscal 2008.

The company also expects to incur special charges during the second and third quarters tied to a cost-saving plan announced last month. Hill-Rom is consolidating some manufacturing and back-office operations, reducing discretionary spending and reducing its staff by about 300 positions – in addition to the 160 it cut in August.

The reorganization is expected to save the company as much as $14 million a year, and it expects to record a charge of $7 million to $10 million for severance and other costs tied to the job cuts. Other charges also are possible, Hill-Rom said.

Hill-Rom was part of Batesville-based Hillenbrand Industries Inc. until April 1, when Hillenbrand spun off its casket-making business. That kept the Hillenbrand name.