UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 2013
Commission File No. 001-33794
HILLENBRAND, INC.
(Exact name of registrant as specified in its charter)
Indiana |
|
26-1342272 |
|
|
|
One Batesville Boulevard |
|
|
Batesville, IN |
|
47006 |
(Address of principal executive offices) |
|
(Zip Code) |
(812) 934-7500
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer x |
|
Accelerated filer o |
|
Non-accelerated filer o |
|
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
The registrant had 63,049,281 shares of common stock, no par value per share, outstanding as of January 28, 2014.
HILLENBRAND, INC.
PART I FINANCIAL INFORMATION
Hillenbrand, Inc.
Consolidated Statements of Income (Unaudited)
(in millions, except per share data)
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
|
|
|
|
|
| ||
Net revenue |
|
$ |
384.9 |
|
$ |
305.2 |
|
Cost of goods sold |
|
253.9 |
|
194.7 |
| ||
Gross profit |
|
131.0 |
|
110.5 |
| ||
Operating expenses |
|
94.0 |
|
86.4 |
| ||
Operating profit |
|
37.0 |
|
24.1 |
| ||
Interest expense |
|
6.3 |
|
4.5 |
| ||
Other income (expense), net |
|
(0.1 |
) |
0.9 |
| ||
Income before income taxes |
|
30.6 |
|
20.5 |
| ||
Income tax expense |
|
9.0 |
|
5.9 |
| ||
Consolidated net income |
|
21.6 |
|
14.6 |
| ||
Less: Net income attributable to noncontrolling interests |
|
1.3 |
|
0.3 |
| ||
Net income(1) |
|
$ |
20.3 |
|
$ |
14.3 |
|
|
|
|
|
|
| ||
Net income(1) per share of common stock: |
|
|
|
|
| ||
Basic earnings per share |
|
$ |
0.32 |
|
$ |
0.23 |
|
Diluted earnings per share |
|
$ |
0.32 |
|
$ |
0.23 |
|
Weighted-average shares outstanding basic |
|
63.1 |
|
62.4 |
| ||
Weighted-average shares outstanding diluted |
|
63.7 |
|
62.6 |
| ||
|
|
|
|
|
| ||
Cash dividends per share |
|
$ |
0.1975 |
|
$ |
0.1950 |
|
(1) Net income attributable to Hillenbrand
See Condensed Notes to Consolidated Financial Statements
Hillenbrand, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
(in millions)
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
|
|
|
|
|
| ||
Consolidated net income |
|
$ |
21.6 |
|
$ |
14.6 |
|
Other comprehensive income (loss), net of tax |
|
|
|
|
| ||
Currency translation |
|
8.7 |
|
10.2 |
| ||
Pension and postretirement (net of tax of $1.0 and $0.7) |
|
2.2 |
|
1.1 |
| ||
Change in net unrealized gain (loss) on derivative instruments (net of tax of $0.2 and $0.0) |
|
0.5 |
|
0.2 |
| ||
Change in net unrealized gain (loss) on available-for-sale securities (net of tax of $0.0 and $0.1) |
|
|
|
(0.2 |
) | ||
Total other comprehensive income, net of tax |
|
11.4 |
|
11.3 |
| ||
Consolidated comprehensive income |
|
33.0 |
|
25.9 |
| ||
Less: Comprehensive income attributable to noncontrolling interests |
|
1.2 |
|
0.3 |
| ||
Comprehensive income (2) |
|
$ |
31.8 |
|
$ |
25.6 |
|
(2) Comprehensive income attributable to Hillenbrand
See Condensed Notes to Consolidated Financial Statements
Hillenbrand, Inc.
Consolidated Balance Sheets (Unaudited)
(in millions)
|
|
December 31, |
|
September 30, |
| ||
|
|
2013 |
|
2013 |
| ||
ASSETS |
|
|
|
|
| ||
Current Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
62.3 |
|
$ |
42.7 |
|
Trade receivables, net |
|
189.6 |
|
213.4 |
| ||
Unbilled receivables from long-term manufacturing contracts |
|
131.0 |
|
142.1 |
| ||
Inventories |
|
178.6 |
|
177.5 |
| ||
Deferred income taxes |
|
23.4 |
|
22.3 |
| ||
Prepaid expenses |
|
28.9 |
|
20.4 |
| ||
Other current assets |
|
16.7 |
|
21.0 |
| ||
Total current assets |
|
630.5 |
|
639.4 |
| ||
Property, plant, and equipment, net |
|
171.9 |
|
171.9 |
| ||
Intangible assets, net |
|
556.1 |
|
558.6 |
| ||
Goodwill |
|
599.4 |
|
585.8 |
| ||
Other assets |
|
46.0 |
|
47.5 |
| ||
Total Assets |
|
$ |
2,003.9 |
|
$ |
2,003.2 |
|
|
|
|
|
|
| ||
LIABILITIES |
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Trade accounts payable |
|
$ |
169.6 |
|
$ |
183.2 |
|
Liabilities from long-term manufacturing contracts and advances |
|
97.1 |
|
80.9 |
| ||
Current portion of long-term debt |
|
11.2 |
|
10.0 |
| ||
Accrued compensation |
|
43.3 |
|
59.6 |
| ||
Deferred income taxes |
|
11.0 |
|
12.1 |
| ||
Other current liabilities |
|
117.6 |
|
119.7 |
| ||
Total current liabilities |
|
449.8 |
|
465.5 |
| ||
Long-term debt |
|
640.5 |
|
654.3 |
| ||
Accrued pension and postretirement healthcare |
|
193.0 |
|
190.3 |
| ||
Deferred income taxes |
|
74.0 |
|
75.4 |
| ||
Other long-term liabilities |
|
39.8 |
|
41.4 |
| ||
Total Liabilities |
|
1,397.1 |
|
1,426.9 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
SHAREHOLDERS EQUITY |
|
|
|
|
| ||
Common stock, no par value (63.1 and 63.1 shares issued, 63.0 and 62.9 shares outstanding) |
|
|
|
|
| ||
Additional paid-in capital |
|
328.1 |
|
321.7 |
| ||
Retained earnings |
|
259.8 |
|
252.2 |
| ||
Treasury stock (0.1 and 0.2 shares) |
|
(1.6 |
) |
(4.2 |
) | ||
Accumulated other comprehensive gain (loss) |
|
10.0 |
|
(1.4 |
) | ||
Hillenbrand Shareholders Equity |
|
596.3 |
|
568.3 |
| ||
Noncontrolling interests |
|
10.5 |
|
8.0 |
| ||
Total Shareholders Equity |
|
606.8 |
|
576.3 |
| ||
|
|
|
|
|
| ||
Total Liabilities and Equity |
|
$ |
2,003.9 |
|
$ |
2,003.2 |
|
See Condensed Notes to Consolidated Financial Statements
Hillenbrand, Inc.
Consolidated Statements of Cash Flow (Unaudited)
(in millions)
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Operating Activities |
|
|
|
|
| ||
Consolidated net income |
|
$ |
21.6 |
|
$ |
14.6 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
|
14.3 |
|
15.0 |
| ||
Deferred income taxes |
|
(5.4 |
) |
4.7 |
| ||
Share-based compensation |
|
1.7 |
|
4.5 |
| ||
Trade accounts receivable and receivables on long-term manufacturing contracts |
|
38.3 |
|
4.3 |
| ||
Inventories |
|
0.4 |
|
8.4 |
| ||
Other current assets |
|
(2.1 |
) |
(8.3 |
) | ||
Trade accounts payable |
|
(16.6 |
) |
0.2 |
| ||
Accrued expenses and other current liabilities |
|
(5.6 |
) |
(25.3 |
) | ||
Income taxes payable |
|
(2.6 |
) |
(1.2 |
) | ||
Defined benefit plan funding |
|
(4.2 |
) |
(1.2 |
) | ||
Defined benefit plan expense |
|
3.6 |
|
3.8 |
| ||
Other, net |
|
2.5 |
|
0.2 |
| ||
Net cash provided by operating activities |
|
45.9 |
|
19.7 |
| ||
|
|
|
|
|
| ||
Investing Activities |
|
|
|
|
| ||
Capital expenditures |
|
(5.6 |
) |
(5.6 |
) | ||
Proceeds from sales of property, plant, and equipment |
|
|
|
1.2 |
| ||
Proceeds from sales of investments |
|
|
|
1.4 |
| ||
Acquisition of business, net of cash acquired |
|
|
|
(415.6 |
) | ||
Other, net |
|
(0.6 |
) |
|
| ||
Net cash used in investing activities |
|
(6.2 |
) |
(418.6 |
) | ||
|
|
|
|
|
| ||
Financing Activities |
|
|
|
|
| ||
Proceeds from term loan |
|
|
|
200.0 |
| ||
Repayments on term loan |
|
(2.5 |
) |
(2.5 |
) | ||
Proceeds from revolving credit facilities, net of financing costs |
|
94.2 |
|
535.3 |
| ||
Repayments on revolving credit facilities |
|
(105.9 |
) |
(238.0 |
) | ||
Payment of dividends on common stock |
|
(12.4 |
) |
(12.1 |
) | ||
Net proceeds (payments) on stock plans |
|
7.6 |
|
(2.7 |
) | ||
Other, net |
|
(0.3 |
) |
|
| ||
Net cash (used in) provided by financing activities |
|
(19.3 |
) |
480.0 |
| ||
|
|
|
|
|
| ||
Effect of exchange rates on cash and cash equivalents |
|
(0.8 |
) |
0.8 |
| ||
|
|
|
|
|
| ||
Net cash flows |
|
|
|
|
| ||
|
|
19.6 |
|
81.9 |
| ||
Cash and cash equivalents: |
|
|
|
|
| ||
At beginning of period |
|
42.7 |
|
20.2 |
| ||
At end of period |
|
$ |
62.3 |
|
$ |
102.1 |
|
See Condensed Notes to Consolidated Financial Statements
Hillenbrand, Inc.
Condensed Notes to Consolidated Financial Statements (Unaudited)
(in millions, except share and per share data)
1. Background and Basis of Presentation
Hillenbrand, Inc. (Hillenbrand) is a global diversified industrial company that makes and sells premium business-to-business products and services for a wide variety of industries. We pursue profitable growth and meaningful dividends for our shareholders by leveraging our leading brands, robust cash generation capabilities, and strong core competencies. Hillenbrand has two segments: the Process Equipment Group and Batesville®. The Process Equipment Group has multiple market-leading brands of process and material handling equipment and systems serving a wide variety of industries across the globe. Batesville is a recognized leader in the North American death care industry. Hillenbrand was incorporated on November 1, 2007, in the state of Indiana and began trading on the New York Stock Exchange under the symbol HI on April 1, 2008. Hillenbrand, the Company, we, us, our, and similar words refer to Hillenbrand and its subsidiaries.
The accompanying unaudited consolidated financial statements include the accounts of Hillenbrand and its subsidiaries, including Coperion Capital GmbH (Coperion), which was acquired on December 1, 2012. The acquisition of Coperion included a few small subsidiaries where Coperions ownership percentage was less than 100%. These unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial statements and therefore do not include all information required in accordance with accounting principles generally accepted in the United States (GAAP). The unaudited consolidated financial statements have been prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and notes thereto included in our latest Annual Report on Form 10-K for the fiscal year ended September 30, 2013, as filed with the SEC. Certain prior period balances have been reclassified to conform to the current presentation. In the opinion of management, these financial statements reflect all adjustments necessary to present a fair statement of the Companys consolidated financial position and the consolidated results of operations and cash flow as of the dates and for the periods presented.
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates. Examples of such estimates include, but are not limited to, revenue recognition under the percentage-of-completion method, the establishment of reserves related to customer rebates, doubtful accounts, warranties, early-pay discounts, inventories, income taxes, litigation, self-insurance, and progress toward achievement of performance criteria under the incentive compensation programs.
Correction of Errors
During the first quarter of fiscal 2014, we recorded an adjustment to operating expenses to correct errors related to the accounting for sales commissions at Coperion in fiscal 2013. The adjustment reduced operating expenses in the first quarter of fiscal 2014 by $2.0, which should have been recorded in fiscal 2013. In connection with this same issue, we identified a classification error of $8.5 between operating expenses and cost of goods sold in fiscal 2013. We have revised our consolidated statement of income for the three months ended December 31, 2012, to increase cost of goods sold and decrease operating expenses by $0.1. We will revise the March 31, 2013; June 30, 2013; and September 30, 2013; consolidated statements of income to reflect the revisions the next time such financial information is included in future filings for comparable purposes. These revisions will decrease operating expenses and increase cost of goods sold by $2.6 in the second quarter of 2013, $2.3 in the third quarter of 2013, and $8.5 for fiscal year 2013. We believe the impact of these income statement classification errors and the $2.0 adjustment to correct prior period errors was immaterial to our consolidated financial statements for the current and prior periods.
2. Summary of Significant Accounting Policies
The significant accounting policies used in preparing these financial statements are consistent with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013.
Recently Adopted and Issued Accounting Standards
In February 2013, the FASB issued an accounting standards update titled Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This standard is intended to improve the reporting of reclassifications out of accumulated other comprehensive income of various components. An entity is required to present significant amounts reclassified from each component of accumulated other comprehensive income and the income statement affected by the reclassification. The new disclosure requirements became effective and were adopted for our fiscal year beginning October 1, 2013. The adoption of this disclosure-only guidance did not have an impact on our financial statements.
In July 2013, the FASB issued an accounting standard update titled Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new standard requires the netting of unrecognized tax benefits (UTBs) against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. Under the new standard, UTBs will be netted against all available samejurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs. The standard will be effective for our fiscal year beginning October 1, 2014. We do not expect the adoption of this standard to have a significant impact on our financial statements.
3. Business Acquisitions
We completed the acquisition of Coperion on December 1, 2012, in a transaction valued at $545.0. The aggregate purchase consideration consisted of $269.1 of cash, net of cash acquired, and the assumption of $146.0 of debt and $129.9 of pension liabilities. We utilized $426.3 of borrowings under our revolving credit facility and cash on hand to finance the acquisition, including the repayment of $146.0 of debt outstanding under Coperions prior financing arrangements.
This acquisition was the largest in the Companys history and represented an important step in the execution of our strategic plans to further diversify Hillenbrand and accelerate the growth of the Process Equipment Group. The integration of Coperion with the Process Equipment Group will continue to be a key initiative for the near term. Combining our product offerings to provide a more complete system solution is our highest priority from an integration perspective. In addition, we believe leveraging Coperions global infrastructure will enable the existing businesses within the Process Equipment Group to enter new global markets more quickly. We also expect the Process Equipment Groups existing strong U.S. sales network will enhance Coperions expansion in North America. Finally, the application of the Companys Lean tools and other core competencies to Coperions operations is expected to contribute to improved margins and increased customer satisfaction.
The following table summarizes fair values of the assets acquired and liabilities assumed for the Coperion acquisition:
|
|
December 1, |
| |
Cash and cash equivalents |
|
$ |
32.8 |
|
Inventory |
|
112.4 |
| |
Current assets, excluding cash and cash equivalents and inventory |
|
175.2 |
| |
Property, plant, and equipment |
|
54.4 |
| |
Identifiable intangible assets |
|
291.8 |
| |
Goodwill |
|
275.1 |
| |
Other assets |
|
2.1 |
| |
Total assets acquired |
|
943.8 |
| |
|
|
|
| |
Current liabilities |
|
282.5 |
| |
Accrued pension obligations |
|
129.9 |
| |
Deferred income taxes |
|
68.6 |
| |
Other long-term liabilities |
|
6.7 |
| |
Total liabilities assumed |
|
487.7 |
| |
|
|
|
| |
Noncontrolling interests |
|
8.2 |
| |
|
|
|
| |
Aggregate purchase price |
|
$ |
447.9 |
|
Final purchase accounting adjustments were made during the first quarter of fiscal 2014 that increased goodwill ($7.3) and the accrued pension obligations ($4.3) based on finalization of the actuarial analysis for Coperions defined benefit plans. In addition, adjustments were made to current liabilities ($1.3) and the noncontrolling interests ($1.7) based on final valuation adjustments. The remaining change in consolidated goodwill during the first quarter of fiscal 2014 was related to change in foreign currency.
Set forth below is unaudited pro forma information for the first quarter of fiscal 2013. It excludes acquisition costs ($8.2) and backlog amortization and inventory step-up costs ($6.8). The unaudited pro forma information is presented for informational purposes only and does not necessarily reflect the results of operations that would actually have been achieved.
|
|
Three Months |
| |
|
|
2012 |
| |
Pro forma net revenue |
|
$ |
420.4 |
|
Pro forma net income(1) |
|
28.3 |
| |
Pro forma basic and diluted earnings per share |
|
$ |
0.46 |
|
(1)Pro forma net income attributable to Hillenbrand
We incurred $8.2 of net business acquisition costs associated with acquisitions during the first quarter of fiscal 2013. These costs consisted of $9.0 of operating expenses, partially offset by $0.8 of other income (see Note 12).
4. Supplemental Balance Sheet Information
|
|
December 31, |
|
September 30, |
| ||
|
|
2013 |
|
2013 |
| ||
|
|
|
|
|
| ||
Trade accounts receivable reserves |
|
$ |
18.7 |
|
$ |
19.3 |
|
|
|
|
|
|
| ||
Accumulated depreciation on property, plant, and equipment |
|
$ |
272.0 |
|
$ |
268.0 |
|
|
|
|
|
|
| ||
Accumulated amortization on intangible assets |
|
$ |
110.4 |
|
$ |
99.6 |
|
|
|
|
|
|
| ||
Inventories: |
|
|
|
|
| ||
Raw materials and components |
|
$ |
54.8 |
|
$ |
58.3 |
|
Work in process |
|
78.6 |
|
74.8 |
| ||
Finished goods |
|
45.2 |
|
44.4 |
| ||
Total inventories |
|
$ |
178.6 |
|
$ |
177.5 |
|
5. Financing Agreements
|
|
December 31, |
|
September 30, |
| ||
|
|
2013 |
|
2013 |
| ||
$700 revolving credit facility (excludes outstanding letters of credit) |
|
$ |
315.4 |
|
$ |
325.5 |
|
$200 term loan |
|
187.5 |
|
190.0 |
| ||
$150 senior unsecured notes, due July 15, 2020, net of discount |
|
148.8 |
|
148.8 |
| ||
Total debt |
|
651.7 |
|
664.3 |
| ||
Less: current portion |
|
11.2 |
|
10.0 |
| ||
Total long-term debt |
|
$ |
640.5 |
|
$ |
654.3 |
|
With respect to the $700 revolving credit facility (the Facility), as of December 31, 2013, we had $23.0 in outstanding letters of credit issued and $361.6 of remaining borrowing capacity available. The weighted-average interest rate on borrowings under the Facility was 1.35% in the first quarter of fiscal 2014 and 2013.
The weighted average interest rates on the term loan were 1.68% and 1.81% for the first quarter of fiscal 2014 and 2013.
In the normal course of business, the Process Equipment Group provides certain customers with bank guarantees and other credit arrangements in support of performance, warranty, advance payment, and other contract obligations. This form of trade finance is customary in the industry and, as a result, we are required to maintain adequate capacity to provide the guarantees. As of December 31, 2013, we had credit arrangements totaling $301.0 under which $210.9 was utilized for this purpose. These arrangements include a 150.0 Syndicated Letter of Guarantee Facility (LG Facility) under which unsecured letters of credit, bank guarantees, or other surety bonds may be issued. There were no borrowings under these credit arrangements.
The availability of borrowings under the Facility and the LG Facility is subject to our ability to meet certain conditions including compliance with covenants, absence of default, and continued accuracy of certain representations and warranties. As of December 31, 2013, we were in compliance with all covenants.
We had restricted cash of $0.5 and $1.6 at December 31, 2013 and 2012.
6. Retirement Benefits
Defined Benefit Plans
|
|
U.S. Pension Benefits |
|
Non-U.S. Pension Benefits |
| ||||||||
|
|
Three Months Ended December 31, |
|
Three Months Ended December 31, |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
Service costs |
|
$ |
1.0 |
|
$ |
1.2 |
|
$ |
0.4 |
|
$ |
0.4 |
|
Interest costs |
|
3.7 |
|
2.9 |
|
1.1 |
|
0.6 |
| ||||
Expected return on plan assets |
|
(3.5 |
) |
(3.0 |
) |
(0.3 |
) |
(0.4 |
) | ||||
Amortization of unrecognized prior service costs, net |
|
0.2 |
|
0.2 |
|
|
|
|
| ||||
Amortization of net loss |
|
0.9 |
|
1.8 |
|
|
|
|
| ||||
Net pension costs |
|
$ |
2.3 |
|
$ |
3.1 |
|
$ |
1.2 |
|
$ |
0.6 |
|
Postretirement Healthcare Plans Net postretirement healthcare costs were $0.1 and $0.1 for the first quarter of fiscal 2014 and 2013.
Defined Contribution Plans Expenses related to our defined contribution plans were $2.1 and $2.0 for the first quarter of fiscal 2014 and 2013.
7. Income Taxes
The effective tax rates for the first quarter of fiscal 2014 and 2013 were 29.4% and 28.8%. The year-over-year change in the effective tax rate was largely due to a prior year discrete tax benefit related to changes in California tax law, offset by higher business acquisition and integration costs related to Coperion in fiscal 2013.
8. Earnings Per Share
The dilutive effects of performance-based stock awards were included in the computation of diluted earnings per share at the level the related performance criteria were met through the respective balance sheet date. At December 31, 2013 and 2012, potential dilutive effects, representing approximately 1,800,000 and 2,000,000 shares were excluded from the computation of diluted earnings per share as the related performance criteria were not yet met, although we expect to meet various levels of criteria in the future.
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Net income (1) |
|
$ |
20.3 |
|
$ |
14.3 |
|
Weighted-average shares outstanding basic (in millions) |
|
63.1 |
|
62.4 |
| ||
Effect of dilutive stock options and other unvested equity awards (in millions) |
|
0.6 |
|
0.2 |
| ||
Weighted-average shares outstanding diluted (in millions) |
|
63.7 |
|
62.6 |
| ||
|
|
|
|
|
| ||
Earnings per share basic |
|
$ |
0.32 |
|
$ |
0.23 |
|
Earnings per share diluted |
|
$ |
0.32 |
|
$ |
0.23 |
|
|
|
|
|
|
| ||
Shares with anti-dilutive effect excluded from the computation of diluted earnings per share (in millions) |
|
0.6 |
|
2.4 |
|
(1) Net income attributable to Hillenbrand
9. Shareholders Equity
During the first quarter of fiscal 2014, we paid $12.4 of cash dividends and acquired the remaining shares of one of the less than wholly-owned subsidiaries for $1.4.
10. Other Comprehensive Income (Loss)
Changes in Accumulated Other Comprehensive Income
|
|
Pension and |
|
Currency |
|
Net |
|
Net |
|
Total |
|
Noncontrolling |
|
Total |
| |||||||
Balance at September 30, 2012 |
|
$ |
(58.5 |
) |
$ |
16.2 |
|
$ |
(0.3 |
) |
$ |
0.2 |
|
$ |
(42.4 |
) |
|
|
|
| ||
Other comprehensive income before reclassifications |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Before tax amount |
|
|
|
10.2 |
|
0.2 |
|
(0.3 |
) |
10.1 |
|
$ |
|
|
$ |
10.1 |
| |||||
Tax benefit |
|
|
|
|
|
|
|
0.1 |
|
0.1 |
|
|
|
0.1 |
| |||||||
After tax amount |
|
|
|
10.2 |
|
0.2 |
|
(0.2 |
) |
10.2 |
|
|
|
10.2 |
| |||||||
Amounts reclassified from accumulated other comprehensive income(1) |
|
1.1 |
|
|
|
|
|
|
|
1.1 |
|
|
|
1.1 |
| |||||||
Net current period other comprehensive income (loss) |
|
1.1 |
|
10.2 |
|
0.2 |
|
(0.2 |
) |
11.3 |
|
$ |
|
|
$ |
11.3 |
| |||||
Balance at December 31, 2012 |
|
$ |
(57.4 |
) |
$ |
26.4 |
|
$ |
(0.1 |
) |
$ |
|
|
$ |
(31.1 |
) |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance at September 30, 2013 |
|
$ |
(33.0 |
) |
$ |
31.4 |
|
$ |
0.2 |
|
$ |
|
|
$ |
(1.4 |
) |
|
|
|
| ||
Other comprehensive income before reclassifications |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Before tax amount |
|
2.1 |
|
8.7 |
|
0.6 |
|
|
|
11.4 |
|
$ |
(0.1 |
) |
$ |
11.3 |
| |||||
Tax expense |
|
(0.6 |
) |
|
|
(0.2 |
) |
|
|
(0.8 |
) |
|
|
(0.8 |
) | |||||||
After tax amount |
|
1.5 |
|
8.7 |
|
0.4 |
|
|
|
10.6 |
|
|
|
10.5 |
| |||||||
Amounts reclassified from accumulated other comprehensive income(1) |
|
0.7 |
|
|
|
0.1 |
|
|
|
0.8 |
|
|
|
0.8 |
| |||||||
Net current period other comprehensive income (loss) |
|
2.2 |
|
8.7 |
|
0.5 |
|
|
|
11.4 |
|
$ |
(0.1 |
) |
$ |
11.3 |
| |||||
Balance at December 31, 2013 |
|
$ |
(30.8 |
) |
$ |
40.1 |
|
$ |
0.7 |
|
$ |
|
|
$ |
10.0 |
|
|
|
|
|
(1) Amounts are net of tax.
Reclassifications out of Accumulated Other Comprehensive Income
|
|
Three Months Ended December 31, 2013 |
| ||||||||||
|
|
Amortization of Pension and |
|
Realized (Gain)/Loss |
|
|
| ||||||
|
|
Net Loss |
|
Prior Service Costs |
|
on Derivative |
|
Total |
| ||||
Affected Line in the Consolidated Statement of Operations: |
|
|
|
|
|
|
|
|
| ||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
0.1 |
|
$ |
0.1 |
|
Cost of goods sold |
|
0.6 |
|
0.1 |
|
(0.1 |
) |
0.6 |
| ||||
Operating expenses |
|
0.3 |
|
0.1 |
|
|
|
0.4 |
| ||||
Other income (expense), net |
|
|
|
|
|
0.1 |
|
0.1 |
| ||||
Total before tax |
|
$ |
0.9 |
|
$ |
0.2 |
|
$ |
0.1 |
|
1.2 |
| |
Tax expense |
|
|
|
|
|
|
|
(0.4 |
) | ||||
Total reclassifications for the period, net of tax |
|
|
|
|
|
|
|
$ |
0.8 |
|
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 6).
11. Share-Based Compensation
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
|
|
|
|
|
| ||
Share-based compensation cost |
|
$ |
1.7 |
|
$ |
4.5 |
|
Less impact of income tax |
|
0.6 |
|
1.6 |
| ||
Share-based compensation cost, net of tax |
|
$ |
1.1 |
|
$ |
2.9 |
|
During the first quarter of fiscal 2014, we made the following grants:
|
|
Number of |
|
Stock options |
|
449,706 |
|
Time-based stock awards |
|
22,891 |
|
Performance-based stock awards (maximum that can be earned) |
|
575,782 |
|
Stock options granted had a weighted-average exercise price of $28.16 and a weighted-average grant date fair value of $6.95. Our time-based stock awards and performance-based stock awards had a weighted-average grant date fair value of $28.39 and $28.49. Included in the performance-based stock awards granted in the first quarter of fiscal 2014 are 185,278 units whose payout level is based upon the Companys total shareholder return as it relates to the performance of companies in its compensation peer group over a three-year measurement period. These units will be expensed on a straight-line basis over the measurement period.
12. Other Income (Expense), Net
|
|
Three Months Ended |
| ||||
|
|
December 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Equity in net income (loss) of affiliates |
|
$ |
(0.2 |
) |
$ |
(0.2 |
) |
Foreign currency exchange gain (loss) |
|
(0.3 |
) |
0.8 |
| ||
Business acquisition and integration costs, net |
|
|
|
0.8 |
| ||
Other, net |
|
0.4 |
|
(0.5 |
) | ||
Other income and expense, net |
|
$ |
(0.1 |
) |
$ |
0.9 |
|
The acquisition of Coperion was transacted in euros. Business acquisition and integration costs, net within other income and expense represent the foreign exchange gain recognized on euro-denominated cash required to fund the acquisition, offset by the costs of derivative contracts that hedged currency exposure on the funds required to close the transaction.
13. Commitments and Contingencies
Litigation
General Like most companies, we are involved on an ongoing basis in claims, lawsuits, and government proceedings relating to our operations, including environmental, patent infringement, business practices, commercial transactions, product and general liability, workers compensation, auto liability, employment, and other matters. The ultimate outcome of these matters cannot be predicted with certainty. An estimated loss from these contingencies is recognized when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated; however, it is difficult to measure the actual loss that might be incurred related to litigation. If a loss is not considered probable and/or cannot be reasonably estimated, we are required to make a disclosure if there is at least a reasonable possibility that a significant loss may have been incurred. Legal fees associated with claims and lawsuits are generally expensed as incurred.
Claims other than employment and related matters have deductibles and self-insured retentions ranging from $0.5 to $1.0 per occurrence or per claim, depending upon the type of coverage and policy period. Outside insurance companies and third-party claims administrators assist in establishing individual claim reserves, and an independent outside actuary provides estimates of ultimate projected losses, including incurred but not reported claims, which are used to establish reserves for losses. Claim reserves for employment-related matters are established based upon advice from internal and external counsel and historical settlement information for claims and related fees when such amounts are considered probable of payment.
The recorded amounts represent our best estimate of the costs we will incur in relation to such exposures, but it is possible that actual costs will differ from those estimates.
Matthews Litigation In August 2010, the York Group, Inc., Milso Industries Corporation, and Matthews International Corporation (collectively Matthews) filed a lawsuit against Scott Pontone and Batesville Casket Company, Inc. in the U.S. District Court, Western District of Pennsylvania, which was subsequently amended by Matthews in February 2011 to include two additional defendants, Harry Pontone and Pontone Casket Company, LLC (the Matthews Litigation). The Matthews Litigation arises, in part, as a result of a Marketing Consulting Agreement entered into between Batesville and Pontone Casket Company effective June 24, 2010, and Batesvilles hiring of two former employees of certain Matthews entities in June 2010. Scott Pontone provides consulting services to Batesville pursuant to the Marketing Consulting Agreement entered into between Batesville and Pontone Casket Company. Matthews alleges that Scott Pontone and Harry Pontone breached contractual and business obligations with Matthews and that Batesville induced certain of those breaches as part of its sales initiatives in the New York metropolitan area.
Matthews claims that it has lost revenue and will lose future revenue in the New York metropolitan area, although the amount of those alleged damages is unspecified. Matthews seeks to: (i) recover compensatory damages, punitive damages, attorneys fees and costs; and (ii) enjoin certain activities by Harry Pontone, Scott Pontone, Pontone Casket Company, and Batesville and its employees in the New York metropolitan area. Although Matthews originally moved for a preliminary injunction, that request was withdrawn. Discovery has closed. Batesville has moved for summary judgment on Matthews claims. No trial date has been set.
The Company believes Batesville acted lawfully and intends to defend this matter vigorously. The Company does not believe, based on currently available information, that the outcome of this lawsuit will have a material adverse effect on the Companys financial condition or liquidity. If Matthews prevails at trial, however, the outcome could be materially adverse to the Companys operating results or cash flows for the particular period, depending, in part, upon the operating results or cash flows for such period.
Horstmann Litigation On March 18, 2013, a joint and several judgment was entered by the Higher Regional Court (OLG) Hamm, Germany, in favor of plaintiff, Jürgen Horstmann, and against defendants, Atlas-Vermögensverwaltungs GmbH, ThyssenKrupp Technologies Beteiligungen (ThyssenKrupp), and Hillenbrand subsidiary, Coperion, in the amount of 10.3, plus interest, for a total estimated judgment of 18.5 to 19.6 (the Horstmann Litigation). In the Horstmann Litigation, the plaintiff alleged numerous claims relating to its purchase from ThyssenKrupp of a former ThyssenKrupp business in 1996. This judgment reversed a ruling on September 1, 2010, by the Court of First Instance that previously dismissed these claims.
Pursuant to a Framework Agreement entered into in 2000 between ThyssenKrupp and Admini Zweiundsiebzig (Admini) (predecessor to Coperion), ThyssenKrupp agreed to indemnify Coperion for all liability associated with the Horstmann Litigation. Additionally, pursuant to the Share Purchase Agreement by which the Company acquired Coperion, the sellers are required to indemnify Hillenbrand in the event ThyssenKrupp does not fulfill its indemnification obligations, subject to the terms and conditions of such Share Purchase Agreement.
On August 22, 2013, the defendants in the Horstmann Litigation filed an appeal with the German Federal Court of Justice of the judgment that was entered on March 18, 2013. Even if the appeal is unsuccessful and the judgment stands, Hillenbrand believes it will be fully indemnified with respect to the Horstmann Litigation and does not believe that the outcome of this lawsuit will have a material adverse effect on the Companys financial condition or liquidity. Hillenbrands balance sheet at December 31, 2013 and September 30, 2013, included a long-term liability of $8.9 and $8.7 and a corresponding indemnification receivable, recorded in other assets, for $8.9 and $8.7.
14. Fair Value Measurements
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Companys assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels:
Level 1: |
Inputs are quoted prices in active markets for identical assets or liabilities. |
Level 2: |
Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. |
Level 3: |
Inputs are unobservable for the asset or liability. |
|
|
Carrying |
|
|
|
|
|
|
| ||||
|
|
Value at |
|
Fair Value at December 31, 2013 |
| ||||||||
|
|
December 31, |
|
Using Inputs Considered as: |
| ||||||||
|
|
2013 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
Assets: |
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
$ |
62.3 |
|
$ |
62.3 |
|
$ |
|
|
$ |
|
|
Equity investments |
|
1.0 |
|
|
|
|
|
6.2 |
| ||||
Investments in rabbi trust |
|
6.0 |
|
6.0 |
|
|
|
|
| ||||
Derivative instruments |
|
1.8 |
|
|
|
1.8 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Liabilities: |
|
|
|
|
|
|
|
|
| ||||
$150 senior unsecured notes |
|
148.8 |
|
159.1 |
|
|
|
|
| ||||
Revolving credit facility |
|
315.4 |
|
|
|
315.4 |
|
|
| ||||
Term loan |
|
187.5 |
|
|
|
187.5 |
|
|
| ||||
Derivative instruments |
|
0.6 |
|
|
|
0.6 |
|
|
| ||||
The equity investments include $1.0 of warrants to purchase the common stock of a privately held company that was acquired by a third-party on January 2, 2014. The warrants were exercised as described in Note 17, and had a fair value of $6.2 at December 31, 2013.
The fair values of the revolving credit facility and term loan approximated book value at December 31, 2013. The fair values of the revolving credit facility and term loan are estimated based on internally developed models, using current market interest rate data for similar issues as there is no active market for our revolving credit facility and term loan.
The fair values of the Companys derivative instruments are based upon pricing models using inputs derived from third-party pricing services or observable market data such as currency spot and forward rates. These values are periodically validated by comparing to third-party broker quotes. The aggregate notional value of these derivatives was $165.1 at December 31, 2013.
15. Segment and Geographical Information
|
|
Three Months Ended |
| ||||
|
|
2013 |
|
2012 |
| ||
Net revenue |
|
|
|
|
| ||
Process Equipment Group |
|
$ |
242.2 |
|
$ |
153.7 |
|
Batesville |
|
142.7 |
|
151.5 |
| ||
Total |
|
$ |
384.9 |
|
$ |
305.2 |
|
|
|
|
|
|
| ||
Adjusted EBITDA |
|
|
|
|
| ||
Process Equipment Group |
|
$ |
26.7 |
|
$ |
20.9 |
|
Batesville |
|
34.5 |
|
38.5 |
| ||
Corporate |
|
(8.0 |
) |
(8.0 |
) | ||
|
|
|
|
|
| ||
Net revenue (1) |
|
|
|
|
| ||
United States |
|
$ |
202.4 |
|
$ |
205.5 |
|
International |
|
182.5 |
|
99.7 |
| ||
Total |
|
$ |
384.9 |
|
$ |
305.2 |
|
(1) We attribute revenue to a geography based upon the location of the business unit that consummates the external sale.
|
|
December 31, |
|
September 30, |
| ||
Total assets |
|
|
|
|
|
|
|
Process Equipment Group |
|
$ |
1,714.8 |
|
$ |
1,708.6 |
|
Batesville |
|
236.3 |
|
238.3 |
| ||
Corporate |
|
52.8 |
|
56.3 |
| ||
Total |
|
$ |
2,003.9 |
|
$ |
2,003.2 |
|
|
|
|
|
|
| ||
Tangible long-lived assets |
|
|
|
|
| ||
United States |
|
$ |
101.2 |
|
$ |
101.9 |
|
International |
|
70.7 |
|
70.0 |
| ||
Total |
|
$ |
171.9 |
|
$ |
171.9 |
|
The following schedule reconciles segment adjusted EBITDA to consolidated net income.
|
|
Three Months Ended |
| ||||
|
|
2013 |
|
2012 |
| ||
Adjusted EBITDA: |
|
|
|
|
| ||
Process Equipment Group |
|
$ |
26.7 |
|
$ |
20.9 |
|
Batesville |
|
34.5 |
|
38.5 |
| ||
Corporate |
|
(8.0 |
) |
(8.0 |
) | ||
Less: |
|
|
|
|
| ||
Interest income |
|
(0.2 |
) |
(0.1 |
) | ||
Interest expense |
|
6.3 |
|
4.5 |
| ||
Income tax expense |
|
9.0 |
|
5.9 |
| ||
Depreciation and amortization |
|
14.3 |
|
15.0 |
| ||
Business acquisition and integration |
|
1.9 |
|
8.2 |
| ||
Inventory step-up |
|
|
|
2.6 |
| ||
Restructuring |
|
0.3 |
|
0.6 |
| ||
Antitrust litigation |
|
|
|
0.1 |
| ||
Consolidated net income |
|
$ |
21.6 |
|
$ |
14.6 |
|
16. Condensed Consolidating Information
On January 9, 2013, the Companys subsidiary, Coperion Corporation, a Delaware corporation, was joined as a party to the Guaranty dated July 27, 2012 (Guaranty), by certain subsidiaries of the Company (including Coperion Corporation, the Guarantors), which was entered into in connection with the Companys revolving credit facility. In accordance with the terms of the revolving credit facility, Coperion Corporation was required to join the Guaranty as a material domestic subsidiary of the Company following the acquisition of Coperion Capital GmbH.
On January 10, 2013, the Company, the Guarantors, and U.S. Bank National Association (Trustee) entered into a supplemental indenture pursuant to which the Guarantors agreed to guarantee the obligations of the Company under its 5.50% Notes due 2020 issued pursuant to an Indenture entered into on July 9, 2010, between the Company and the Trustee. As such, certain 100% owned subsidiaries of Hillenbrand fully and unconditionally, jointly and severally, agreed to guarantee all of the indebtedness relating to our obligations under our 5.50% Notes due 2020. The following are the condensed consolidating financial statements, including the guarantors, which present the statements of income, balance sheets, and cash flows of (i) the parent holding company, (ii) the guarantor subsidiaries, (iii) the non-guarantor subsidiaries, and (iv) eliminations necessary to present the information for Hillenbrand on a consolidated basis.
Condensed Consolidating Statements of Income
|
|
Three months ended December 31, 2013 |
|
Three months ended December 31, 2012 |
| ||||||||||||||||||||||||||
|
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
| ||||||||||
Net revenue |
|
$ |
|
|
$ |
200.3 |
|
$ |
225.0 |
|
$ |
(40.4 |
) |
$ |
384.9 |
|
$ |
|
|
$ |
198.7 |
|
$ |
148.2 |
|
$ |
(41.7 |
) |
$ |
305.2 |
|
Cost of goods sold |
|
|
|
102.5 |
|
166.6 |
|
(15.2 |
) |
253.9 |
|
|
|
98.5 |
|
110.9 |
|
(14.7 |
) |
194.7 |
| ||||||||||
Gross profit |
|
|
|
97.8 |
|
58.4 |
|
(25.2 |
) |
131.0 |
|
|
|
100.2 |
|
37.3 |
|
(27.0 |
) |
110.5 |
| ||||||||||
Operating expenses |
|
9.0 |
|
61.9 |
|
48.3 |
|
(25.2 |
) |
94.0 |
|
18.1 |
|
60.8 |
|
34.5 |
|
(27.0 |
) |
86.4 |
| ||||||||||
Operating profit |
|
(9.0 |
) |
35.9 |
|
10.1 |
|
|
|
37.0 |
|
(18.1 |
) |
39.4 |
|
2.8 |
|
|
|
24.1 |
| ||||||||||
Interest expense |
|
4.9 |
|
0.1 |
|
1.3 |
|
|
|
6.3 |
|
4.1 |
|
|
|
0.4 |
|
|
|
4.5 |
| ||||||||||
Other income (expense), net |
|
(0.1 |
) |
(0.7 |
) |
0.7 |
|
|
|
(0.1 |
) |
1.5 |
|
(0.9 |
) |
0.3 |
|
|
|
0.9 |
| ||||||||||
Equity in net income (loss) of subsidiaries |
|
28.6 |
|
1.9 |
|
|
|
(30.5 |
) |
|
|
25.1 |
|
1.5 |
|
|
|
(26.6 |
) |
|
| ||||||||||
Income (loss) before income taxes |
|
14.6 |
|
37.0 |
|
9.5 |
|
(30.5 |
) |
30.6 |
|
4.4 |
|
40.0 |
|
2.7 |
|
(26.6 |
) |
20.5 |
| ||||||||||
Income tax expense (benefit) |
|
(5.7 |
) |
13.2 |
|
1.5 |
|
|
|
9.0 |
|
(9.9 |
) |
14.4 |
|
1.4 |
|
|
|
5.9 |
| ||||||||||
Consolidated net income |
|
20.3 |
|
23.8 |
|
8.0 |
|
(30.5 |
) |
21.6 |
|
14.3 |
|
25.6 |
|
1.3 |
|
(26.6 |
) |
14.6 |
| ||||||||||
Less: Net income attributable to noncontrolling interests |
|
|
|
|
|
1.3 |
|
|
|
1.3 |
|
|
|
|
|
0.3 |
|
|
|
0.3 |
| ||||||||||
Net income (loss)(1) |
|
$ |
20.3 |
|
$ |
23.8 |
|
$ |
6.7 |
|
$ |
(30.5 |
) |
$ |
20.3 |
|
$ |
14.3 |
|
$ |
25.6 |
|
$ |
1.0 |
|
$ |
(26.6 |
) |
$ |
14.3 |
|
Consolidated comprehensive income (loss) |
|
$ |
31.8 |
|
$ |
24.5 |
|
$ |
18.7 |
|
$ |
(42.0 |
) |
$ |
33.0 |
|
$ |
25.6 |
|
$ |
25.6 |
|
$ |
15.2 |
|
$ |
(40.5 |
) |
$ |
25.9 |
|
Less: Comprehensive income attributable to noncontrolling interests |
|
|
|
|
|
1.2 |
|
|
|
1.2 |
|
|
|
|
|
0.3 |
|
|
|
0.3 |
| ||||||||||
Comprehensive income (loss)(2) |
|
$ |
31.8 |
|
$ |
24.5 |
|
$ |
17.5 |
|
$ |
(42.0 |
) |
$ |
31.8 |
|
$ |
25.6 |
|
$ |
25.6 |
|
$ |
14.9 |
|
$ |
(40.5 |
) |
$ |
25.6 |
|
(1) Net income attributable to Hillenbrand
(2) Comprehensive income attributable to Hillenbrand
Condensed Consolidating Balance Sheets
|
|
As of December 31, 2013 |
|
As of September 30, 2013 |
| ||||||||||||||||||||||||||
|
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
| ||||||||||
Cash and equivalents |
|
$ |
1.2 |
|
$ |
9.0 |
|
$ |
52.1 |
|
$ |
|
|
$ |
62.3 |
|
$ |
0.6 |
|
$ |
8.7 |
|
$ |
33.4 |
|
$ |
|
|
$ |
42.7 |
|
Trade receivables, net |
|
|
|
92.7 |
|
96.9 |
|
|
|
189.6 |
|
|
|
97.0 |
|
116.4 |
|
|
|
213.4 |
| ||||||||||
Unbilled receivables from long-term manufacturing contracts |
|
|
|
9.6 |
|
121.4 |
|
|
|
131.0 |
|
|
|
15.2 |
|
126.9 |
|
|
|
142.1 |
| ||||||||||
Inventories |
|
|
|
75.6 |
|
105.9 |
|
(2.9 |
) |
178.6 |
|
|
|
72.4 |
|
107.8 |
|
(2.7 |
) |
177.5 |
| ||||||||||
Deferred income taxes |
|
9.1 |
|
11.4 |
|
2.9 |
|
|
|
23.4 |
|
9.1 |
|
8.3 |
|
4.9 |
|
|
|
22.3 |
| ||||||||||
Prepaid expense |
|
1.5 |
|
4.6 |
|
22.8 |
|
|
|
28.9 |
|
1.0 |
|
4.4 |
|
15.0 |
|
|
|
20.4 |
| ||||||||||
Intercompany receivables |
|
238.3 |
|
1,019.9 |
|
71.7 |
|
(1,329.9 |
) |
|
|
222.5 |
|
1,011.3 |
|
33.3 |
|
(1,267.1 |
) |
|
| ||||||||||
Other current assets |
|
0.5 |
|
2.7 |
|
14.3 |
|
(0.8 |
) |
16.7 |
|
0.4 |
|
4.3 |
|
17.0 |
|
(0.7 |
) |
21.0 |
| ||||||||||
Total current assets |
|
250.6 |
|
1,225.5 |
|
488.0 |
|
(1,333.6 |
) |
630.5 |
|
233.6 |
|
1,221.6 |
|
454.7 |
|
(1,270.5 |
) |
639.4 |
| ||||||||||
Property, plant and equipment, net |
|
7.4 |
|
67.8 |
|
96.7 |
|
|
|
171.9 |
|
7.4 |
|
69.0 |
|
95.5 |
|
|
|
171.9 |
| ||||||||||
Intangible assets, net |
|
2.6 |
|
191.6 |
|
361.9 |
|
|
|
556.1 |
|
2.7 |
|
194.3 |
|
361.6 |
|
|
|
558.6 |
| ||||||||||
Goodwill |
|
|
|
209.1 |
|
390.3 |
|
|
|
599.4 |
|
|
|
209.3 |
|
376.5 |
|
|
|
585.8 |
| ||||||||||
Investment in consolidated subsidiaries |
|
1,987.2 |
|
644.0 |
|
|
|
(2,631.2 |
) |
|
|
1,938.9 |
|
644.0 |
|
|
|
(2,582.9 |
) |
|
| ||||||||||
Other assets |
|
13.1 |
|
19.4 |
|
13.5 |
|
|
|
46.0 |
|
13.9 |
|
19.0 |
|
15.5 |
|
(0.9 |
) |
47.5 |
| ||||||||||
Total Assets |
|
$ |
2,260.9 |
|
$ |
2,357.4 |
|
$ |
1,350.4 |
|
$ |
(3,964.8 |
) |
$ |
2,003.9 |
|
$ |
2,196.5 |
|
$ |
2,357.2 |
|
$ |
1,303.8 |
|
$ |
(3,854.3 |
) |
$ |
2,003.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Trade accounts payable |
|
$ |
0.3 |
|
$ |
21.0 |
|
$ |
148.3 |
|
$ |
|
|
$ |
169.6 |
|
$ |
0.6 |
|
$ |
25.8 |
|
$ |
156.8 |
|
$ |
|
|
$ |
183.2 |
|
Liabilities from long-term manufacturing contracts and advances |
|
|
|
13.8 |
|
83.3 |
|
|
|
97.1 |
|
|
|
12.3 |
|
68.6 |
|
|
|
80.9 |
| ||||||||||
Current portion of long-term debt |
|
11.2 |
|
|
|
|
|
|
|
11.2 |
|
10.0 |
|
|
|
|
|
|
|
10.0 |
| ||||||||||
Accrued compensation |
|
1.0 |
|
14.7 |
|
28.4 |
|
(0.8 |
) |
43.3 |
|
3.6 |
|
22.3 |
|
33.7 |
|
|
|
59.6 |
| ||||||||||
Deferred income taxes |
|
|
|
|
|
11.0 |
|
|
|
11.0 |
|
|
|
|
|
12.1 |
|
|
|
12.1 |
| ||||||||||
Intercompany payables |
|
1,091.0 |
|
233.1 |
|
8.7 |
|
(1,332.8 |
) |
|
|
1,048.1 |
|
221.7 |
|
|
|
(1,269.8 |
) |
|
| ||||||||||
Other current liabilities |
|
5.0 |
|
62.6 |
|
50.0 |
|
|
|
117.6 |
|
3.6 |
|
69.3 |
|
47.5 |
|
(0.7 |
) |
119.7 |
| ||||||||||
Total current liabilities |
|
1,108.5 |
|
345.2 |
|
329.7 |
|
(1,333.6 |
) |
449.8 |
|
1,065.9 |
|
351.4 |
|
318.7 |
|
(1,270.5 |
) |
465.5 |
| ||||||||||
Long-term debt |
|
555.1 |
|
|
|
85.4 |
|
|
|
640.5 |
|
562.3 |
|
|
|
92.0 |
|
|
|
654.3 |
| ||||||||||
Accrued pension and postretirement healthcare |
|
1.0 |
|
84.9 |
|
107.1 |
|
|
|
193.0 |
|
|
|
86.1 |
|
104.2 |
|
|
|
190.3 |
| ||||||||||
Deferred income taxes |
|
|
|
21.8 |
|
52.2 |
|
|
|
74.0 |
|
|
|
46.2 |
|
30.1 |
|
(0.9 |
) |
75.4 |
| ||||||||||
Other long-term liabilities |
|
|
|
23.6 |
|
16.2 |
|
|
|
39.8 |
|
|
|
24.4 |
|
17.0 |
|
|
|
41.4 |
| ||||||||||
Total Liabilities |
|
1,664.6 |
|
475.5 |
|
590.6 |
|
(1,333.6 |
) |
1,397.1 |
|
1,628.2 |
|
508.1 |
|
562.0 |
|
(1,271.4 |
) |
1,426.9 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Hillenbrand Shareholders Equity |
|
596.3 |
|
1,881.9 |
|
749.3 |
|
(2,631.2 |
) |
596.3 |
|
568.3 |
|
1,849.1 |
|
733.8 |
|
(2,582.9 |
) |
568.3 |
| ||||||||||
Noncontrolling interests |
|
|
|
|
|
10.5 |
|
|
|
10.5 |
|
|
|
|
|
8.0 |
|
|
|
8.0 |
| ||||||||||
Total Equity |
|
596.3 |
|
1,881.9 |
|
759.8 |
|
(2,631.2 |
) |
606.8 |
|
568.3 |
|
1,849.1 |
|
741.8 |
|
(2,582.9 |
) |
576.3 |
| ||||||||||
Total Liabilities and Equity |
|
$ |
2,260.9 |
|
$ |
2,357.4 |
|
$ |
1,350.4 |
|
$ |
(3,964.8 |
) |
$ |
2,003.9 |
|
$ |
2,196.5 |
|
$ |
2,357.2 |
|
$ |
1,303.8 |
|
$ |
(3,854.3 |
) |
$ |
2,003.2 |
|
Condensed Consolidating Statements of Cash Flows
|
|
Three months ended December 31, 2013 |
|
Three months ended December 31, 2012 |
| ||||||||||||||||||||||||||
|
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
|
Parent |
|
Guarantors |
|
Non- |
|
Eliminations |
|
Consolidated |
| ||||||||||
Net cash provided by (used in) operating activities |
|
$ |
11.8 |
|
$ |
2.2 |
|
$ |
31.9 |
|
$ |
|
|
$ |
45.9 |
|
$ |
(12.1 |
) |
$ |
26.9 |
|
$ |
4.9 |
|
$ |
|
|
$ |
19.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Capital expenditures |
|
(0.3 |
) |
(1.9 |
) |
(3.4 |
) |
|
|
(5.6 |
) |
(0.9 |
) |
(2.7 |
) |
(2.0 |
) |
|
|
(5.6 |
) | ||||||||||
Proceeds from property, plant, and equipment |
|
|
|
|
|
|
|
|
|
|
|
1.1 |
|
0.1 |
|
|
|
|
|
1.2 |
| ||||||||||
Proceeds from sales of investments |
|
|
|
|
|
|
|
|
|
|
|
1.4 |
|
|
|
|
|
|
|
1.4 |
| ||||||||||
Acquisition of business, net of cash acquired |
|
|
|
|
|
|
|
|
|
|
|
(404.2 |
) |
(0.5 |
) |
(10.9 |
) |
|
|
(415.6 |
) | ||||||||||
Other, net |
|
(0.6 |
) |
|
|
|
|
|
|
(0.6 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net cash used in investing activities |
|
(0.9 |
) |
(1.9 |
) |
(3.4 |
) |
|
|
(6.2 |
) |
(402.6 |
) |
(3.1 |
) |
(12.9 |
) |
|
|
(418.6 |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Financing activities: |
|
|
|
|
|
|
|
|