Financial Data and Key Metrics Changes - Revenue for the second quarter was $716 million, down 9% year-over-year primarily due to reduced volume from a lower starting backlog [19] - Adjusted EBITDA decreased 19% to $99 million, with a margin of 13.8%, down 180 basis points compared to the prior year [20] - GAAP net loss was $41 million, compared to income of $6 million in the prior year, largely due to a non-cash loss on the majority sale of Milacron [20] - Adjusted earnings per share were $0.60, a decrease of 21% year-over-year but exceeded expectations due to favorable interest expense [20] Business Line Data and Key Metrics Changes - Advanced Process Solutions (APS) segment saw year-over-year improvement in capital orders for Food, Health, and Nutrition (FHN) products, but larger investments were paused due to tariff uncertainties [12][19] - Molding Technology Solutions (MTS) revenue was $222 million, a decrease of 2% year-over-year, with stable orders for hot runner and mold-based components [23] - Backlog for MTS was $55 million, excluding the Milacron business, indicating a stable order environment despite macro challenges [24] Market Data and Key Metrics Changes - The ongoing global macroeconomic uncertainty, driven by tariffs, has led to a decline in business and consumer confidence, resulting in delays in customer investment plans [10] - The company noted a strong project pipeline but faced slow conversion to orders due to the unpredictable environment [9][10] - Tariffs have significantly impacted customer sentiment, particularly in China, leading to a pause in orders for the hot runner business [14] Company Strategy and Development Direction - The company is focusing on its core strengths in highly engineered, value-added processing technologies and systems, targeting less cyclical global end markets [6] - A strategic shift towards leveraging expertise in systems design and process technology is emphasized to drive long-term growth [7] - The company is actively managing its supply chain to mitigate tariff impacts, including dual sourcing and adjusting contract terms [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the project pipeline but acknowledged that elevated uncertainty is expected to persist in the near term [10][18] - The updated outlook anticipates total revenue of approximately $2.56 billion to $2.62 billion, significantly down from previous guidance due to lower orders [27] - Management remains confident in the long-term demand drivers for their end markets despite current challenges [30] Other Important Information - The company has entered into a definitive agreement to sell the TerraSource global business for $245 million, with expected net proceeds of approximately $100 million to be used for debt reduction [26] - The company has included approximately $15 million in direct tariff costs in its updated outlook for the remainder of the year [17] Q&A Session Summary Question: Can you describe the order cadence you saw in the business as the quarter unfolded? - Orders were stable through February but faced delays due to tariff considerations, particularly in Food, Health, and Nutrition [34][35] Question: Can you talk about synergies related to the FHN businesses? - The company is on track to achieve synergies ahead of schedule, with significant integration initiatives already completed [40][41] Question: Which lever to offset tariffs is expected to have the most immediate impact? - Dual sourcing is expected to have the largest near-term impact, with targeted pricing actions also being implemented [47] Question: Can you provide an update on the TerraSource divestiture? - The TerraSource divestiture is expected to close by the end of Q3 or early Q4, with proceeds aimed at debt reduction [51][52] Question: What is the outlook for the macro environment? - The company anticipates a mild recession, with orders expected to decline from 2024 levels [78]

Second Quarter FY 2025 Earnings Call Presentation April 30, 2025 Disclosure Regarding Forward-Looking Statements Throughout this earnings presentation, we make a number of "forward-looking statements," including statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and that are intended to be covered by the safe harbor provided under these secti ...

While Hillenbrand has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Over the last four quarters, the company has surpassed consensus EPS estimates four times. Hillenbrand, which belongs to the Zacks Industrial Services industry, posted revenues of $715.9 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.60%. This compares to year-ago revenues of $785.3 million. The company has topped consensus reven ...

Divestiture and Financial Impact - Hillenbrand completed the divestiture of its majority interest in the Milacron injection molding and extrusion business for total consideration of $286.0 million, consisting of $98.0 million in cash and $188.0 million in debt assumed by Bain Capital[95]. - The company recorded a pre-tax loss of $54.6 million from the Milacron divestiture during the three and six months ended March 31, 2025[98]. - Hillenbrand incurred $4.1 million in transaction costs associated with the Milacron divestiture during the reporting period[98]. - Loss on divestiture amounted to $54.6 million due to the divestiture of Milacron[122]. - Order backlog decreased by $175.1 million (76%) from $229.8 million at March 31, 2024, to $54.7 million at March 31, 2025, mainly due to the Milacron divestiture[138]. - Consolidated net loss increased by $47.2 million (549%) for the three months ended March 31, 2025, primarily due to a loss on the divestiture of Milacron[157]. Financial Performance Metrics - The company utilizes adjusted EBITDA as a key non-GAAP financial measure to monitor business performance, which excludes certain expenses related to acquisitions and restructuring[103]. - Net revenue for the three months ended March 31, 2025, decreased by $69.4 million (9%) compared to the same period in 2024[110]. - Gross profit for the same period decreased by $14.3 million (6%), with a gross profit margin improvement of 110 basis points to 33.0%[111]. - Advanced Process Solutions net revenue decreased by $65.2 million (12%), primarily due to a decrease in volume[125]. - Adjusted EBITDA from continuing operations decreased by $23.8 million (19%) for the three months ended March 31, 2025, primarily driven by lower volume and cost inflation[158]. - Consolidated adjusted EBITDA from continuing operations decreased by $40.9 million (17%) for the six months ended March 31, 2025, compared to the same period in 2024, primarily due to lower volume and cost inflation[160]. Expenses and Cost Management - Selling, general and administrative expenses decreased by $1.6 million (1%), with these expenses as a percentage of net revenue increasing by 200 basis points to 25.1%[112]. - Selling, general and administrative expenses for the six months ended March 31, 2025, increased by $11.6 million (3%) compared to the same period in 2024[120]. - Selling, general and administrative expenses decreased by $10.9 million (20%) for the three months ended March 31, 2025, primarily due to a decrease in restructuring costs[140]. - Corporate expenses increased by $2.0 million (11%) for the three months ended March 31, 2025, primarily due to higher business acquisition costs[151]. - Amortization expense decreased by $1.5 million (17%) for the three months ended March 31, 2025, primarily due to the impact of the Milacron divestiture[142]. Revenue and Backlog - Backlog represents expected net revenue from awarded contracts, with fulfillment timelines ranging from days for aftermarket parts to 18-24 months for larger systems[104]. - The company expects future net revenue to be influenced by order backlog, although fluctuations may occur due to order timing and customer delivery dates[105]. - Order backlog decreased by $282.2 million (15%) from $1,877.1 million at March 31, 2024, to $1,594.9 million at March 31, 2025[126]. Tax and Interest - The effective tax rate was 12.9% in 2025 compared to 32.8% in 2024, primarily driven by a decrease in unrecognized tax benefits[115]. - Interest expense, net decreased by $7.6 million (25%) due to the impact of cross-currency swaps[114]. Cash Flow and Liquidity - Cash flows from operating activities from continuing operations used $10.0 million during the six months ended March 31, 2025, compared to $20.8 million used in the same period in 2024, reflecting a $10.8 million decrease[173]. - Net cash flows from investing activities increased by $118.7 million during the six months ended March 31, 2025, primarily due to proceeds from the divestiture of Milacron[175]. - Cash provided by financing activities from continuing operations increased by $142.2 million during the six months ended March 31, 2025, largely due to net borrowing activity[176]. - The company returned $31.7 million to shareholders in the form of quarterly dividends during the six months ended March 31, 2025, with an increase in the quarterly dividend to $0.2250 per common share from $0.2225 per common share in 2024[177]. - The company believes its current liquidity position is sufficient to meet all financial commitments in the current business environment[171]. Current Assets and Liabilities - Current assets as of March 31, 2025, totaled $881.9 million, while current liabilities were $1,275.2 million[181]. - The company had a net revenue of $178.0 million for the six months ended March 31, 2025, with a gross profit of $60.1 million[181].

Financial Performance - Revenue for the fiscal second quarter was $716 million, a decrease of 9% year-over-year primarily due to lower volume in the Advanced Process Solutions (APS) segment[4]. - GAAP net loss was $41 million, or $(0.58) per share, compared to income of $0.09 per share in the prior year, primarily due to a loss on the sale of the Milacron business[6]. - Adjusted EPS was $0.60, a decrease of 21% compared to the prior year, driven by lower APS volume[4]. - Adjusted EBITDA for the quarter was $99 million, down 19% year-over-year, primarily due to lower volume and cost inflation[7]. - Fiscal 2025 revenue guidance is updated to $2.555 billion to $2.620 billion, reflecting a year-over-year decline of 20% to 18%[19]. - Net revenue for the three months ended March 31, 2025, was $715.9 million, a decrease of 8.8% compared to $785.3 million for the same period in 2024[32]. - Gross profit for the six months ended March 31, 2025, was $471.4 million, down from $501.7 million in the prior year, reflecting a decrease of 6.0%[32]. - The company reported a consolidated net loss of $38.6 million for the three months ended March 31, 2025, compared to a net income of $8.6 million in the same period last year[32]. - Adjusted net income from continuing operations attributable to Hillenbrand for the six months ended March 31, 2025, was $81.8 million, down from $102.6 million in 2024, reflecting a decrease of approximately 20.3%[35]. - The company's adjusted diluted EPS from continuing operations was $0.60 for the three months ended March 31, 2025, compared to $0.76 in 2024, indicating a decline of 21.1%[36]. Backlog and Future Outlook - Backlog decreased 15% year-over-year to $1.59 billion, primarily due to lower order intake, but increased 1% sequentially[10]. - The backlog includes expected net revenue from large systems and equipment, as well as aftermarket parts, with fulfillment timelines ranging from days to approximately 18 to 24 months[29]. - The company expects that future net revenue will be influenced by order backlog, which does not include projects and parts orders booked and shipped within the same quarter[30]. - Hillenbrand's consolidated organic backlog as of March 31, 2025, was $1,653.1 million, down from $1,926.7 million in 2024, a decrease of approximately 14.1%[37]. - The company updated its fiscal 2025 outlook, expecting full-year EPS to be in the range of $2.10 to $2.45[4]. Cash Flow and Debt - Operating cash flow for the fiscal year is projected to be approximately $120 million[19]. - Cash flows used in operating activities from continuing operations were $(10.0) million for the six months ended March 31, 2025[33]. - The total debt of Hillenbrand as of March 31, 2025, was $1,916.7 million, with a net debt of $1,458.3 million, resulting in a net debt to pro forma adjusted EBITDA ratio of 3.4[37]. - The sale of the majority stake in Milacron generated net proceeds of approximately $265 million, which were used for debt pay down[4]. - The company expects to receive after-tax cash proceeds of approximately $100 million from the sale of TerraSource Global, which will also be used for debt pay down[16]. Losses and Costs - The company incurred a loss on divestiture of $54.6 million during the three months ended March 31, 2025[32]. - Business acquisition, divestiture, and integration costs for the three months ended March 31, 2025, amounted to $25.1 million, significantly higher than $9.1 million in the same period of 2024[36]. - The company incurred a loss on divestiture of $54.6 million for the three months ended March 31, 2025, which was not present in the same period of 2024[36]. Tax and Shareholder Information - The effective tax rate for the three months ended March 31, 2025, was 12.9%, a decrease from 32.8% in 2024, indicating a substantial change in tax liabilities[37]. - Cash dividends per share increased slightly to $0.2250 for the three months ended March 31, 2025, compared to $0.2225 in the same period last year[32]. - The weighted average shares outstanding (basic) for the six months ended March 31, 2025, was 70.7 million, consistent with the prior year[32]. Market Conditions and Strategic Initiatives - Hillenbrand anticipates potential impacts from global market conditions and competition, which may affect future performance and strategic initiatives[38]. - Hillenbrand is a global industrial company providing mission-critical processing equipment and solutions across various end markets, including durable plastics, food, and recycling[42]. - The company emphasizes its commitment to excellence, collaboration, and innovation to shape solutions that serve its stakeholders[42]. - Investors are advised to consider risks and uncertainties when evaluating forward-looking statements, as actual results may differ significantly[40]. - Hillenbrand's forward-looking information is only valid as of the date it is made, with no obligation to update or revise it[40].

Core Viewpoint - Hillenbrand, Inc. reported a decline in financial performance for the fiscal second quarter of 2025, primarily due to lower capital equipment volume and increased macroeconomic uncertainty, leading to an adjusted outlook for the remainder of the fiscal year [2][3][7]. Financial Performance Summary - Net revenue for the second quarter was $715.9 million, a decrease of 9% from $785.3 million in the prior year, mainly due to lower capital equipment volume [3][7]. - GAAP net loss attributable to Hillenbrand was $40.9 million, or $(0.58) per share, compared to a profit of $6.1 million, or $0.09 per share, in the prior year [4][7]. - Adjusted EBITDA was $98.8 million, down 19% from $122.6 million year-over-year, primarily due to lower volume and cost inflation [5][7]. - Adjusted diluted EPS was $0.60, a decrease of 21% compared to $0.76 in the prior year [5][7]. Segment Performance - Advanced Process Solutions (APS) segment net revenue was $494 million, down 12% from $559.2 million, primarily due to lower capital equipment volume [6][8]. - Molding Technology Solutions (MTS) segment net revenue was $221.9 million, a decrease of 2% from $226.1 million, driven by unfavorable foreign currency exchange rates [10][11]. Backlog and Future Outlook - Total backlog decreased by 15% year-over-year to $1.59 billion, primarily due to lower order intake, although it increased by 1% sequentially [9][12]. - The company updated its fiscal 2025 guidance, expecting total revenue between $2.555 billion and $2.620 billion, reflecting a year-over-year decline of 20% to 18% [17][18]. Cash Flow and Capital Allocation - Cash flow from operating activities was $1.3 million, a decrease of 59% from $3.2 million in the prior year [3][13]. - As of March 31, 2025, net debt was $1.46 billion, with a net debt to pro forma adjusted EBITDA ratio of 3.4x [14][38]. Recent Transactions - The company completed the sale of a majority stake in the Milacron injection molding and extrusion business on March 31, 2025, generating net proceeds of approximately $265 million, which were used for debt reduction [7][16]. - Hillenbrand entered into an agreement to sell the TerraSource business to Astec Industries for $245 million, expected to close in late fiscal third quarter or early fiscal fourth quarter 2025 [15].

Company Overview - Hillenbrand, Inc. (NYSE: HI) is a global industrial company providing highly-engineered, mission-critical processing equipment and solutions to customers in over 100 countries [4] - The company's portfolio includes leading industrial brands serving large end markets such as durable plastics, food, and recycling [4] - Hillenbrand is guided by its purpose to "Shape What Matters For Tomorrow," focusing on excellence, collaboration, and innovation [4] Upcoming Events - Hillenbrand will hold a conference call and webcast on April 30, 2025, at 8:00 a.m. ET to discuss the results for the second quarter of fiscal year 2025, which ended on March 31, 2025 [1] - A press release reporting the financial results will be issued after the market closes on April 29, 2025 [3] - The live webcast will be available on the company's investor relations website and archived until May 30, 2025 [1]

Core Viewpoint - Hillenbrand, Inc. has completed the sale of its majority interest in the Milacron injection molding and extrusion business to Bain Capital for $287 million, aligning with its strategy to enhance margins by focusing on higher growth opportunities [1][4]. Group 1: Sale Details - The Milacron business was acquired by Hillenbrand in 2019 and contributed $526 million in revenues and $64 million in adjusted EBITDA in fiscal 2024 [2][3]. - Following the sale, Bain Capital owns approximately 51% of Milacron and has full operational control, while Hillenbrand retains a 49% stake [4]. Group 2: Financial Implications - Hillenbrand plans to use the net proceeds of approximately $250 million from the sale to repay its debt [4]. - The fiscal 2025 revenue outlook for Hillenbrand's remaining businesses has been updated to a range of $2.625 - $2.790 billion, down from the previous estimate of $2.925 - $3.090 billion [5]. - Total adjusted EBITDA is expected to be between $411 million and $447 million, with adjusted earnings per share anticipated in the range of $2.45 - $2.80 [6]. Group 3: Stock Performance - Hillenbrand's stock has experienced a significant decline, losing 50.5% over the past year, compared to an 11.4% decline in the industry [7].

Core Viewpoint - Hillenbrand, Inc. has completed the sale of its majority interest in the Milacron injection molding and extrusion business to Bain Capital for $287 million, retaining a 49% ownership stake [1][2][3] Group 1: Transaction Details - Bain Capital now holds approximately 51% of Milacron and has full operational control, while Hillenbrand retains a 49% stake [2] - The transaction is expected to yield after-tax net proceeds of approximately $250 million for Hillenbrand, which will be used to pay down debt [4] Group 2: Strategic Implications - This sale reflects Hillenbrand's ongoing transformation into a pure-play industrial company, allowing it to focus on core process and automation equipment for food, pharmaceutical, and polymer markets [3] - The partnership with Bain Capital is anticipated to enhance Milacron's growth potential and operational success, leveraging Bain's resources and focus [4] Group 3: Historical Context - Hillenbrand acquired Milacron Holdings Corp. in 2019, which included Milacron's injection molding and extrusion business, along with Mold-Masters, DME, and Cimcool [3] - Hillenbrand previously sold the Cimcool business in 2020 and continues to own Mold-Masters and DME [3]

Core Viewpoint - Investors in Hillenbrand (HI) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Apr 17, 2025 $17.50 Put option [1] Group 1: Implied Volatility - Implied volatility indicates the market's expectations for future stock movement, with high levels suggesting potential significant price changes or upcoming events that could lead to a rally or sell-off [2] - The current high implied volatility for Hillenbrand may signal a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4] Group 2: Analyst Sentiment - Hillenbrand currently holds a Zacks Rank of 4 (Sell) within the Industrial Services industry, which is in the bottom 23% of the Zacks Industry Rank [3] - Over the past 60 days, two analysts have raised their earnings estimates for the current quarter, while one has lowered theirs, resulting in a decrease in the Zacks Consensus Estimate from 62 cents per share to 54 cents [3]