Quarterly report pursuant to Section 13 or 15(d)

Background and Basis of Presentation

Background and Basis of Presentation
3 Months Ended
Dec. 31, 2013
Background and Basis of Presentation  
Background and Basis of Presentation

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 Coperion’s 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 Company’s 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.