Hillenbrand(US:HI)2025-04-29 20:46Divestiture 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].