Exhibit 99.1
HILLENBRAND, INC. REPORTS SECOND QUARTER
REVENUE OF $191.4 MILLION, UP 5.6% OVER PRIOR YEAR, AND
CONFIRMS 2008 EARNINGS GUIDANCE
BATESVILLE, Ind. May 13, 2008, Hillenbrand, Inc. (NYSE:HI) /PR Newswire-First Call/)
Hillenbrand, Inc. reported second-quarter revenue of
$191.4 million versus $181.2 million for the prior
years second quarter, up 5.6 percent. The increased revenue was favorably impacted by a more
typical pneumonia and influenza season than we have experienced during the last several years and
the ability of our sales and distribution organizations to capitalize on those conditions. Gross
profit increased $3.2 million due to the increased sales with some unfavorable impact from higher
health care expenses, direct fuel costs and fuel surcharges imposed by many of our suppliers.
Second-quarter operating profit of $40.9 million includes the effects of one-time separation costs
of $12.9 million and incremental corporate costs of $2.6 million. Excluding these costs, the
operating results from our core casket and cremation business showed a solid growth rate in excess
of our revenue growth rate. We currently expect our annual public company costs to be $17 million
to $19 million in fiscal 2009.
An additional separation-related impact on our financial performance is the increase in our tax
rate from 36.2 percent to 43.0 percent because certain non-recurring separation costs are not
deductible. We do not expect this tax rate to continue at the current level.
As a result of the factors noted above, our GAAP net income for the quarter was $23.3 million or
$0.37 fully diluted earnings per share, down from $33.3 million or $0.53 fully diluted earnings per
share reported in the second quarter of the prior year. Excluding anti-trust litigation and
separation costs, net income of $34.5 million was essentially unchanged in the quarter as improved
operating results offset the incremental corporate costs discussed above. Cash flow from operations
for the quarter was $26.8 million.
Overall, the operating results of our core business reflect better performance than the prior year
in key areas of the company despite increased costs for health care, fuel and commodities, said
Kenneth A. Camp, president and CEO of Hillenbrand, Inc. Although we expect to face increased fuel
and commodity cost pressures in the second half of the year, we are reaffirming our previous
guidance for the 2008 fiscal year.
Our leadership team is invigorated by the reception we have received as a new publicly traded
company and we are excited about continuing to explore growth opportunities to build long-term
value for our shareholders, Camp concluded.
1
OUTLOOK FOR 2008
The company reaffirms the following guidance for fiscal 2008:
$ and shares in millions, except per share amounts
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FY ending September 30 |
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2008 Range |
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2007 |
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Low |
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High |
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Net revenues |
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$ |
667 |
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$ |
668 |
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$ |
686 |
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Income before taxes |
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$ |
157 |
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$ |
131 |
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$ |
149 |
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Tax rate |
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36.6 |
% |
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38.7 |
% |
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38.1 |
% |
Net income |
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$ |
100 |
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$ |
80 |
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$ |
93 |
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Diluted shares outstanding |
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63 |
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63 |
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63 |
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Diluted net income per share |
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$ |
1.59 |
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$ |
1.27 |
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$ |
1.47 |
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Excluding non-recurring charges (Anti-trust and separation expenses*) |
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Net income |
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$ |
103 |
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$ |
113 |
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Diluted net income per share |
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$ |
1.64 |
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$ |
1.79 |
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* See table on non-GAAP disclosures and reconciliations
Additional assumptions and discussion will be provided during the companys conference call to be
held later today.
2
Conference Call and Webcast
The company will sponsor a conference call and webcast for the investing public at 5 p.m. EDT
Tuesday, May 13, 2008. During the event, management will discuss the results for the fiscal second
quarter ended March 31, 2008, along with expectations for the remainder of fiscal 2008. The webcast
is available at http://www.hillenbrandinc.com and will be archived on the companys Web site
through May 12, 2009, for those unable to listen to the live webcast.
Participants may listen to the conference call by dialing 1-877-397-0300 (1-719-325-4851 for
international callers). A replay of the call will be available through May 27, 2008, at
1-888-203-1112 (1-719-457-0820 for international callers). Please use the confirmation code
9845397.
Non-GAAP Financial Disclosures and Reconciliations for Second Quarter
While Hillenbrand, Inc. reports financial results in accordance with U.S. GAAP, this press release
includes non-GAAP measures. These non-GAAP measures are not in accordance with, nor are they a
substitute for, GAAP measures. Hillenbrand, Inc. uses the non-GAAP measures to evaluate and manage
its operations and provides the information to assist investors in performing financial analysis
that is consistent with financial models developed by research analysts. Investors should consider
non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial
performance prepared in accordance with GAAP.
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Second Quarter 2007 |
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Second Quarter 2008 |
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Guidance Mid-Point for 2008 |
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Income |
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Net |
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Income |
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Net |
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Income |
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Net |
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(Dollars in millions) |
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Pre-tax |
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Taxes |
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income |
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Pre-tax |
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Taxes |
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income |
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Pre-tax |
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Taxes |
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income |
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GAAP income |
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$ |
52.2 |
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$ |
18.9 |
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$ |
33.3 |
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$ |
40.8 |
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$ |
17.5 |
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$ |
23.3 |
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$ |
140.0 |
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$ |
53.8 |
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$ |
86.2 |
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Antitrust litigation |
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2.0 |
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0.7 |
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1.3 |
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0.9 |
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0.3 |
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0.6 |
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12.0 |
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4.4 |
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7.6 |
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Separation costs |
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0.0 |
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0.0 |
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0.0 |
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12.9 |
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2.3 |
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10.6 |
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17.0 |
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2.9 |
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14.1 |
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Adjusted income |
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$ |
54.2 |
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$ |
19.6 |
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$ |
34.6 |
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$ |
54.6 |
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$ |
20.1 |
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$ |
34.5 |
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$ |
169.0 |
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$ |
61.1 |
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$ |
107.9 |
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3
Hillenbrand, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Amounts in millions, except per share data)
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Three Months Ended |
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Six Months Ended |
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March 31 |
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March 31 |
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2008 |
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2007 |
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2008 |
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2007 |
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Net revenues |
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$ |
191.4 |
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$ |
181.2 |
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$ |
354.3 |
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$ |
343.4 |
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Cost of goods sold |
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108.2 |
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101.2 |
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204.2 |
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194.6 |
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Gross profit |
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83.2 |
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80.0 |
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150.1 |
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148.8 |
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Operating expenses (including separation costs of
$12.9 and $14.1 in the three- and six-month
periods ending March 31, 2008, respectively) |
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42.3 |
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28.2 |
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70.8 |
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54.9 |
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Operating profit |
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40.9 |
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51.8 |
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79.3 |
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93.9 |
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Interest expense |
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Investment income and other |
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(0.1 |
) |
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0.4 |
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(0.5 |
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Income before income taxes |
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40.8 |
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52.2 |
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78.8 |
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93.9 |
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Income tax expense |
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17.5 |
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18.9 |
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31.5 |
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34.5 |
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Net income |
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$ |
23.3 |
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$ |
33.3 |
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$ |
47.3 |
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$ |
59.4 |
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Income per common share -
basic and diluted |
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$ |
0.37 |
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$ |
0.53 |
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$ |
0.76 |
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$ |
0.95 |
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Average common shares outstanding -
basic and diluted |
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62.5 |
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62.5 |
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62.5 |
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62.5 |
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See Notes to Consolidated Financial Statements
4
Hillenbrand, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in millions)
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March 31 |
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September 30 |
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2008 |
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2007 |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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$ |
125.9 |
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$ |
11.9 |
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Receivable from Hill-Rom Holdings, Inc. |
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15.4 |
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Short-term investments |
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55.3 |
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Trade receivables, net |
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101.8 |
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90.9 |
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Inventories |
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49.7 |
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47.5 |
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Deferred income taxes |
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18.8 |
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16.0 |
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Prepaid income taxes |
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14.9 |
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0.3 |
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Other current assets |
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6.9 |
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3.6 |
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Total current assets |
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388.7 |
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170.2 |
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Property, net |
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93.7 |
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88.9 |
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Intangible assets, net |
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21.3 |
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23.0 |
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Investments |
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152.5 |
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Prepaid pension costs |
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1.7 |
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1.6 |
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Deferred income taxes |
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10.8 |
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16.2 |
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Due from Hill-Rom Holdings, Inc. |
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9.1 |
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Other |
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21.0 |
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16.7 |
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Total Assets |
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$ |
698.8 |
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$ |
316.6 |
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LIABILITIES |
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Current Liabilities |
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Revolving credit facility |
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$ |
250.0 |
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$ |
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Trade accounts payable |
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19.8 |
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18.3 |
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Accrued compensation |
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23.1 |
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20.6 |
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Accrued customer rebates |
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18.8 |
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20.3 |
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Other current liabilities |
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20.5 |
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16.6 |
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Due to Hill-Rom Holdings, Inc. |
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20.2 |
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Total current liabilities |
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352.4 |
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75.8 |
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Deferred compensation, long-term portion |
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7.3 |
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8.6 |
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Accrued pension and postretirement healthcare,
long-term portion |
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38.9 |
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28.1 |
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Other long-term liabilities |
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31.2 |
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23.2 |
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Total Liabilities |
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429.8 |
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135.7 |
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Commitments and Contingencies |
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SHAREHOLDERS EQUITY |
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Parent company equity |
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193.5 |
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Common stock, no par value |
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Additional paid-in-capital |
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283.3 |
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Retained earnings |
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Accumulated other comprehensive loss |
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(14.3 |
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(12.6 |
) |
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Total Shareholders Equity |
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269.0 |
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180.9 |
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Total Liabilities and Shareholders Equity |
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$ |
698.8 |
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$ |
316.6 |
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5
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Throughout this announcement and the related conference call, we make a number of forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. As the
words imply, forward-looking statements are statements about the future, as contrasted with
historical information. Our forward-looking statements are based on assumptions that we believe
are reasonable, but by their very nature they are subject to a wide range of risks.
Words that could indicate were making forward-looking statements include the following:
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intend
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believe
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plan
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expect
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may
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goal |
become
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pursue
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estimate
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will
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forecast
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continue |
This isnt an exhaustive list, but is simply intended to give you an idea of how we try to
identify forward-looking statements. The absence of any of these words, however, does not mean
that the statement is not forward-looking.
Heres the key point: Forward-looking statements are not guarantees of future performance, and our
actual results could differ materially from those set forth in any forward-looking statements. Any
number of factors many of which are beyond our control could cause our performance to differ
significantly from those described in the forward-looking statements, and include, but are not
limited to: the antitrust and other litigation in which the Company is currently or may potentially
become a defendant; the Companys dependence on its relationships with several large national
providers; continued fluctuations in mortality rates and increased cremations; failure of the
Companys announced strategic initiatives to achieve expected growth, efficiencies, or cost
reductions; disruptions in the Companys business or other adverse consequences resulting from the
spin-off of the Company from Hillenbrand Industries, Inc.; competition from nontraditional sources
in the funeral service business; increased costs or unavailability of raw materials; the ability to
retain executive officers and other key personnel; and certain tax-related matters. Additional
information concerning these and other factors are contained in our filings with the Securities and
Exchange Commission. We assume no obligation to update or revise any forward-looking statements.
ABOUT HILLENBRAND, INC.
Hillenbrand, Inc. is the holding company for Batesville Casket Company, a leader in the North
American death care industry through the manufacture, distribution and sale of funeral service
products to licensed funeral establishments. Batesville sells primarily burial caskets, but also
provides cremation caskets, containers and urns, and selection room display fixturing for funeral
establishments.
Batesvilles mission is to provide funeral directors with the highest quality products and
services; in a phrase, helping families honor the lives of those they love. ®
www.hillenbrandinc.com
CONTACT INFORMATION
Investor Relations, Hillenbrand, Inc.
Contact: Mark R. Lanning, Vice President, Investor Relations, and Treasurer
Phone: 812-934-7256
Email: mrlanning@hillenbrand.com
6