Hillenbrand(HI) - 2025 Q4 - Annual Results

Financial Performance - Q4 net revenue was $652 million, a decrease of 22% year-over-year; pro forma net revenue decreased 5%[7] - FY 2025 net revenue totaled $2.67 billion, down 16% compared to the prior year; pro forma net revenue decreased 9%[20] - Q4 GAAP EPS increased to $1.07 from $0.17 in the prior year; adjusted EPS decreased 18% to $0.83[7] - FY 2025 GAAP EPS was $0.61, up from a loss of $(3.03) in the prior year; adjusted EPS decreased 25% to $2.49[20] - Adjusted EBITDA for FY 2025 was $388 million, a decrease of 24% year-over-year; pro forma adjusted EBITDA decreased 19%[24] - The company experienced a gross profit of $226.8 million, down 21.4% from $288.4 million year-over-year[39] - Consolidated net income for the year ended September 30, 2025, was $52.1 million, a significant recovery from a net loss of $202.0 million in the previous year[45] Cash Flow and Debt - Cash flows from operating activities in FY 2025 were $56 million, a decrease of $135 million year-over-year[25] - Hillenbrand's cash flows from operating activities from continuing operations were $56.2 million for the year ended September 30, 2025, a significant decrease from $191.3 million in 2024[40] - Cash, cash equivalents, and restricted cash decreased to $191.4 million at the end of the period from $227.9 million at the beginning of the period[40] - As of September 30, 2025, net debt was $1.36 billion, with a net debt to pro forma adjusted EBITDA ratio of 3.7x[26] - Total debt as of September 30, 2025, was $1,524.8 million, with a net debt of $1,360.0 million after accounting for cash and cash equivalents of $164.8 million[47] - The ratio of net debt to adjusted EBITDA for the trailing twelve months ended September 30, 2025, was 3.7[47] Backlog and Future Revenue - The company has a backlog of $1.52 billion, which decreased 10% year-over-year[16] - The total backlog represents expected net revenue from awarded contracts, with the majority expected to be fulfilled within the next twelve months[35] - The company anticipates that future net revenue will be influenced by order backlog due to lead times in fulfilling engineered-to-order equipment[37] - The backlog for Advanced Process Solutions as of September 30, 2025, was $1,522.4 million, down from $1,681.4 million in the previous year[47] - The company anticipates future sales and earnings growth, contingent on successful execution of its strategic initiatives, including the proposed merger with Lone Star[48] Impairment and Charges - The company recorded impairment charges of $83.5 million in the three months ended September 30, 2025, compared to no impairment charges in the same period of 2024[41] Market and Operational Risks - Risks associated with the Merger include potential delays in regulatory approvals and the possibility of incurring significant transaction costs[50] - The company faces competition in its industries, which may impact pricing and market share[50] - Hillenbrand's financial performance may be affected by global market conditions, including volatility in interest and exchange rates[50] - There are uncertainties related to environmental regulations and the physical risks of climate change that could impact operations[50] - Labor shortages and increasing competition for skilled workers are challenges that Hillenbrand is currently facing[50] - The company is subject to risks from foreign currency fluctuations and potential labor disruptions[50] - Hillenbrand's effective tax rate may be influenced by changes in tax laws and the mix of earnings[50] Strategic Initiatives and Acquisitions - Hillenbrand is set to be acquired by Lone Star Funds for an enterprise value of approximately $3.8 billion, with shareholders receiving $32.00 per share[5] - The company has made acquisitions, such as the Schenck Process Food and Performance Materials business, which may influence its financial condition and operational results[50] Operational Overview - Hillenbrand operates in over 100 countries, providing mission-critical processing equipment and solutions across durable plastics, food, and recycling markets[52] - The company is focused on pursuing excellence, collaboration, and innovation to shape solutions for its stakeholders[52] Segment Performance - Advanced Process Solutions adjusted EBITDA for Q3 2025 was $103.8 million, down from $117.1 million in Q3 2024, representing a decrease of 11.3%[43] - Molding Technology Solutions adjusted EBITDA for Q3 2025 was $21.1 million, a decline of 49.8% compared to $42.0 million in Q3 2024[45] - Advanced Process Solutions net revenue for Q3 2025 was $557.3 million, down from $591.1 million in Q3 2024, reflecting a decrease of 5.7%[46] - Molding Technology Solutions net revenue for Q3 2025 was $94.8 million, a decrease of 61.6% from $246.5 million in Q3 2024[46] - Consolidated pro forma net revenue for the year ended September 30, 2025, was $2,428.3 million, down from $2,656.7 million in 2024, indicating a decline of 8.6%[46]