|
|
|
Indiana
|
|
26-1342272
|
|
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
|
|
One Batesville Boulevard
|
|
|
|
|
Batesville
|
IN
|
|
47006
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
|
Common Stock, without par value
|
|
HI
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
Emerging growth company
|
☐
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Net revenue
|
$
|
566.9
|
|
|
$
|
410.3
|
|
|
Cost of goods sold
|
395.1
|
|
|
263.3
|
|
||
|
Gross profit
|
171.8
|
|
|
147.0
|
|
||
|
Operating expenses
|
157.4
|
|
|
90.7
|
|
||
|
Amortization expense
|
14.8
|
|
|
7.8
|
|
||
|
Interest expense
|
14.7
|
|
|
5.5
|
|
||
|
Other income, net
|
1.9
|
|
|
0.5
|
|
||
|
(Loss) income before income taxes
|
(13.2
|
)
|
|
43.5
|
|
||
|
Income tax (benefit) expense
|
(12.4
|
)
|
|
14.5
|
|
||
|
Consolidated net (loss) income
|
(0.8
|
)
|
|
29.0
|
|
||
|
Less: Net income attributable to noncontrolling interests
|
2.3
|
|
|
0.7
|
|
||
|
Net (loss) income attributable to Hillenbrand
|
$
|
(3.1
|
)
|
|
$
|
28.3
|
|
|
|
|
|
|
||||
|
Net (loss) income attributable to Hillenbrand — per share of common stock:
|
|
|
|
||||
|
Basic (loss) earnings per share
|
$
|
(0.05
|
)
|
|
$
|
0.45
|
|
|
Diluted (loss) earnings per share
|
$
|
(0.05
|
)
|
|
$
|
0.45
|
|
|
Weighted average shares outstanding (basic)
|
68.4
|
|
|
62.9
|
|
||
|
Weighted average shares outstanding (diluted)
|
68.4
|
|
|
63.5
|
|
||
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Consolidated net (loss) income
|
$
|
(0.8
|
)
|
|
$
|
29.0
|
|
|
Changes in other comprehensive income (loss), net of tax
|
|
|
|
||||
|
Currency translation adjustment
|
17.3
|
|
|
(4.9
|
)
|
||
|
Pension and postretirement (net of tax of $0.5 and $0.1)
|
1.1
|
|
|
0.2
|
|
||
|
Change in net unrealized gain (loss) on derivative instruments (net of tax of $0.2 and $1.7)
|
1.4
|
|
|
(5.2
|
)
|
||
|
Total changes in other comprehensive income (loss), net of tax
|
19.8
|
|
|
(9.9
|
)
|
||
|
Consolidated comprehensive income
|
19.0
|
|
|
19.1
|
|
||
|
Less: Comprehensive income attributable to noncontrolling interests
|
2.2
|
|
|
0.9
|
|
||
|
Comprehensive income attributable to Hillenbrand
|
$
|
16.8
|
|
|
$
|
18.2
|
|
|
|
December 31, 2019 (unaudited)
|
|
September 30,
2019 |
||||
|
ASSETS
|
|
|
|
|
|
||
|
Current Assets
|
|
|
|
|
|
||
|
Cash and cash equivalents
|
$
|
142.4
|
|
|
$
|
399.0
|
|
|
Trade receivables, net
|
344.3
|
|
|
217.4
|
|
||
|
Receivables from long-term manufacturing contracts
|
205.9
|
|
|
181.1
|
|
||
|
Inventories, net
|
442.1
|
|
|
176.6
|
|
||
|
Prepaid expenses and other current assets
|
87.4
|
|
|
49.1
|
|
||
|
Total current assets
|
1,222.1
|
|
|
1,023.2
|
|
||
|
Property, plant, and equipment, net
|
398.1
|
|
|
140.3
|
|
||
|
Operating lease right-of-use assets
|
172.5
|
|
|
—
|
|
||
|
Intangible assets, net
|
1,317.7
|
|
|
454.9
|
|
||
|
Goodwill
|
1,256.9
|
|
|
578.0
|
|
||
|
Other long-term assets
|
53.4
|
|
|
32.2
|
|
||
|
Total Assets
|
$
|
4,420.7
|
|
|
$
|
2,228.6
|
|
|
|
|
|
|
||||
|
LIABILITIES
|
|
|
|
|
|
||
|
Current Liabilities
|
|
|
|
|
|
||
|
Trade accounts payable
|
$
|
349.0
|
|
|
$
|
236.2
|
|
|
Liabilities from long-term manufacturing contracts and advances
|
183.1
|
|
|
158.2
|
|
||
|
Current portion of long-term debt
|
42.1
|
|
|
—
|
|
||
|
Accrued compensation
|
86.2
|
|
|
73.2
|
|
||
|
Other current liabilities
|
219.4
|
|
|
121.7
|
|
||
|
Total current liabilities
|
879.8
|
|
|
589.3
|
|
||
|
Long-term debt
|
1,822.6
|
|
|
619.5
|
|
||
|
Accrued pension and postretirement healthcare
|
162.0
|
|
|
131.3
|
|
||
|
Operating lease liabilities
|
137.1
|
|
|
—
|
|
||
|
Deferred income taxes
|
215.4
|
|
|
73.6
|
|
||
|
Other long-term liabilities
|
60.0
|
|
|
45.1
|
|
||
|
Total Liabilities
|
3,276.9
|
|
|
1,458.8
|
|
||
|
|
|
|
|
||||
|
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
|
Common stock, no par value (75.8 and 63.9 shares issued, 74.7 and 62.7 shares outstanding)
|
—
|
|
|
—
|
|
||
|
Additional paid-in capital
|
712.9
|
|
|
345.3
|
|
||
|
Retained earnings
|
586.5
|
|
|
599.5
|
|
||
|
Treasury stock (1.1 and 1.2 shares)
|
(45.6
|
)
|
|
(50.1
|
)
|
||
|
Accumulated other comprehensive loss
|
(126.7
|
)
|
|
(140.6
|
)
|
||
|
Hillenbrand Shareholders’ Equity
|
1,127.1
|
|
|
754.1
|
|
||
|
Noncontrolling interests
|
16.7
|
|
|
15.7
|
|
||
|
Total Shareholders’ Equity
|
1,143.8
|
|
|
769.8
|
|
||
|
|
|
|
|
||||
|
Total Liabilities and Shareholders’ Equity
|
$
|
4,420.7
|
|
|
$
|
2,228.6
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Operating Activities
|
|
|
|
|
|
||
|
Consolidated net (loss) income
|
$
|
(0.8
|
)
|
|
$
|
29.0
|
|
|
Adjustments to reconcile net (loss) income to cash provided by operating activities:
|
|
|
|
|
|
||
|
Depreciation and amortization
|
25.9
|
|
|
14.1
|
|
||
|
Deferred income taxes
|
(29.0
|
)
|
|
5.3
|
|
||
|
Amortization of deferred financing costs
|
0.5
|
|
|
0.1
|
|
||
|
Share-based compensation
|
2.3
|
|
|
1.9
|
|
||
|
Settlement of Milacron share-based equity awards
|
5.9
|
|
|
—
|
|
||
|
Trade accounts receivable and receivables from long-term manufacturing contracts
|
(9.4
|
)
|
|
15.7
|
|
||
|
Inventories
|
26.3
|
|
|
(8.9
|
)
|
||
|
Prepaid expenses and other current assets
|
14.5
|
|
|
1.9
|
|
||
|
Trade accounts payable
|
(1.8
|
)
|
|
(0.6
|
)
|
||
|
Liabilities from long-term manufacturing contracts and advances,
|
|
|
|
||||
|
accrued compensation, and other current liabilities
|
(21.3
|
)
|
|
(9.7
|
)
|
||
|
Income taxes payable
|
6.5
|
|
|
(12.1
|
)
|
||
|
Defined benefit plan and postretirement funding
|
(2.7
|
)
|
|
(2.3
|
)
|
||
|
Defined benefit plan and postretirement expense
|
1.5
|
|
|
0.8
|
|
||
|
Other, net
|
(0.6
|
)
|
|
0.3
|
|
||
|
Net cash provided by operating activities
|
17.8
|
|
|
35.5
|
|
||
|
|
|
|
|
||||
|
Investing Activities
|
|
|
|
|
|
||
|
Capital expenditures
|
(6.3
|
)
|
|
(3.6
|
)
|
||
|
Proceeds from sales of property, plant, and equipment
|
13.3
|
|
|
—
|
|
||
|
Acquisition of businesses, net of cash acquired
|
(1,503.1
|
)
|
|
(26.2
|
)
|
||
|
Net cash used in investing activities
|
(1,496.1
|
)
|
|
(29.8
|
)
|
||
|
|
|
|
|
||||
|
Financing Activities
|
|
|
|
|
|
||
|
Proceeds from issuance of long-term debt
|
725.0
|
|
|
—
|
|
||
|
Repayments on long-term debt
|
(9.1
|
)
|
|
—
|
|
||
|
Proceeds from revolving credit facilities
|
747.5
|
|
|
160.2
|
|
||
|
Repayments on revolving credit facilities
|
(222.5
|
)
|
|
(139.6
|
)
|
||
|
Payment of deferred financing costs
|
(5.4
|
)
|
|
—
|
|
||
|
Payments of dividends on common stock
|
(15.8
|
)
|
|
(13.1
|
)
|
||
|
Proceeds from stock option exercises
|
0.2
|
|
|
0.3
|
|
||
|
Payments for employee taxes on net settlement equity awards
|
(1.8
|
)
|
|
(4.1
|
)
|
||
|
Other, net
|
3.3
|
|
|
(0.9
|
)
|
||
|
Net cash provided by financing activities
|
1,221.4
|
|
|
2.8
|
|
||
|
|
|
|
|
||||
|
Effect of exchange rates on cash and cash equivalents
|
0.4
|
|
|
0.3
|
|
||
|
|
|
|
|
||||
|
Net cash flows
|
(256.5
|
)
|
|
8.8
|
|
||
|
|
|
|
|
||||
|
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
||
|
At beginning of period
|
399.4
|
|
|
56.5
|
|
||
|
At end of period
|
$
|
142.9
|
|
|
$
|
65.3
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
Cash and cash equivalents
|
$
|
142.4
|
|
|
$
|
64.8
|
|
|
Short-term restricted cash included in other current assets
|
0.5
|
|
|
0.5
|
|
||
|
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows
|
$
|
142.9
|
|
|
$
|
65.3
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||||||||||||||||
|
|
Shareholders of Hillenbrand, Inc.
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Treasury Stock
|
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total
|
||||||||||||||||
|
|
Shares
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||
|
Balance at September 30, 2019
|
63.9
|
|
|
$
|
345.3
|
|
|
$
|
599.5
|
|
|
1.2
|
|
|
$
|
(50.1
|
)
|
|
$
|
(140.6
|
)
|
|
$
|
15.7
|
|
|
$
|
769.8
|
|
|
Total other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.9
|
|
|
(0.1
|
)
|
|
19.8
|
|
||||||
|
Net (loss) income
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
(0.8
|
)
|
||||||
|
Issuance/retirement of stock for stock awards/options
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
||||||
|
Share-based compensation
|
—
|
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
||||||
|
Dividends ($0.2125 per share)
|
—
|
|
|
0.1
|
|
|
(15.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(17.0
|
)
|
||||||
|
Common stock issued to acquire Milacron (see Note 4)
|
11.9
|
|
|
371.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
371.3
|
|
||||||
|
Reclassification of certain income tax effects (1)
|
—
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
||||||
|
Balance at December 31, 2019
|
75.8
|
|
|
$
|
712.9
|
|
|
$
|
586.5
|
|
|
1.1
|
|
|
$
|
(45.6
|
)
|
|
$
|
(126.7
|
)
|
|
$
|
16.7
|
|
|
$
|
1,143.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||||||||
|
|
Shareholders of Hillenbrand, Inc.
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Treasury Stock
|
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total
|
||||||||||||||||
|
|
Shares
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||
|
Balance at September 30, 2018
|
63.9
|
|
|
$
|
351.4
|
|
|
$
|
531.0
|
|
|
1.6
|
|
|
$
|
(67.1
|
)
|
|
$
|
(84.2
|
)
|
|
$
|
13.0
|
|
|
$
|
744.1
|
|
|
Total other comprehensive (loss) income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|
0.2
|
|
|
(9.9
|
)
|
||||||
|
Net income
|
—
|
|
|
—
|
|
|
28.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
29.0
|
|
||||||
|
Issuance/retirement of stock for stock awards/options
|
—
|
|
|
(11.7
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
(3.8
|
)
|
||||||
|
Share-based compensation
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
||||||
|
Dividends ($0.2100 per share)
|
—
|
|
|
0.1
|
|
|
(13.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(14.1
|
)
|
||||||
|
Other
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||||
|
Balance at December 31, 2018
|
63.9
|
|
|
$
|
341.7
|
|
|
$
|
546.3
|
|
|
1.4
|
|
|
$
|
(59.2
|
)
|
|
$
|
(94.3
|
)
|
|
$
|
12.9
|
|
|
$
|
747.4
|
|
|
|
|
(1)
|
Income tax effects of the Tax Act (as defined in Note 2) were reclassified from accumulated other comprehensive loss to retained earnings due to the adoption of ASU 2018-02. See Note 2 for more information.
|
|
1.
|
Background and Basis of Presentation
|
|
2.
|
Summary of Significant Accounting Policies
|
|
3.
|
Revenue Recognition
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||
|
|
Process Equipment Group
|
|
Milacron
|
|
Batesville
|
|
Total
|
||||||||
|
Revenue by End Market
|
|
|
|
|
|
|
|
||||||||
|
Plastics
|
$
|
202.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202.0
|
|
|
Automotive
|
—
|
|
|
25.0
|
|
|
—
|
|
|
25.0
|
|
||||
|
Chemicals
|
24.4
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
||||
|
Consumer goods
|
—
|
|
|
18.4
|
|
|
—
|
|
|
18.4
|
|
||||
|
Food and pharmaceuticals
|
18.0
|
|
|
—
|
|
|
—
|
|
|
18.0
|
|
||||
|
Custom molders
|
—
|
|
|
16.8
|
|
|
—
|
|
|
16.8
|
|
||||
|
Construction
|
—
|
|
|
16.8
|
|
|
—
|
|
|
16.8
|
|
||||
|
Packaging
|
—
|
|
|
13.8
|
|
|
—
|
|
|
13.8
|
|
||||
|
Minerals and mining
|
13.3
|
|
|
—
|
|
|
—
|
|
|
13.3
|
|
||||
|
Electronics
|
—
|
|
|
8.3
|
|
|
—
|
|
|
8.3
|
|
||||
|
Death care
|
—
|
|
|
—
|
|
|
127.0
|
|
|
127.0
|
|
||||
|
Other industrial
|
48.9
|
|
|
34.2
|
|
|
—
|
|
|
83.1
|
|
||||
|
Total
|
$
|
306.6
|
|
|
$
|
133.3
|
|
|
$
|
127.0
|
|
|
$
|
566.9
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
|
|
Process Equipment Group
|
|
Batesville
|
|
Total
|
||||||
|
Revenue by End Market
|
|
|
|
|
|
||||||
|
Plastics
|
$
|
160.9
|
|
|
$
|
—
|
|
|
$
|
160.9
|
|
|
Chemicals
|
29.6
|
|
|
—
|
|
|
29.6
|
|
|||
|
Minerals and mining
|
28.0
|
|
|
—
|
|
|
28.0
|
|
|||
|
Food and pharmaceuticals
|
16.5
|
|
|
—
|
|
|
16.5
|
|
|||
|
Death care
|
—
|
|
|
128.1
|
|
|
128.1
|
|
|||
|
Other industrial
|
47.2
|
|
|
—
|
|
|
47.2
|
|
|||
|
Total
|
$
|
282.2
|
|
|
$
|
128.1
|
|
|
$
|
410.3
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||
|
|
Process Equipment Group
|
|
Milacron
|
|
Batesville
|
|
Total
|
||||||||
|
Products and Services
|
|
|
|
|
|
|
|
||||||||
|
Equipment
|
$
|
206.0
|
|
|
$
|
82.2
|
|
|
$
|
—
|
|
|
$
|
288.2
|
|
|
Parts and services
|
100.6
|
|
|
32.2
|
|
|
—
|
|
|
132.8
|
|
||||
|
Death care
|
—
|
|
|
—
|
|
|
127.0
|
|
|
127.0
|
|
||||
|
Other
|
—
|
|
|
18.9
|
|
|
—
|
|
|
18.9
|
|
||||
|
Total
|
$
|
306.6
|
|
|
$
|
133.3
|
|
|
$
|
127.0
|
|
|
$
|
566.9
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
|
|
Process Equipment Group
|
|
Batesville
|
|
Total
|
||||||
|
Products and Services
|
|
|
|
|
|
||||||
|
Equipment
|
$
|
183.4
|
|
|
$
|
—
|
|
|
$
|
183.4
|
|
|
Parts and services
|
98.8
|
|
|
—
|
|
|
98.8
|
|
|||
|
Death care
|
—
|
|
|
128.1
|
|
|
128.1
|
|
|||
|
Total
|
$
|
282.2
|
|
|
$
|
128.1
|
|
|
$
|
410.3
|
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||
|
|
Process Equipment Group
|
|
Milacron
|
|
Batesville
|
|
Total
|
||||||||
|
Timing of Transfer
|
|
|
|
|
|
|
|
||||||||
|
Point in time
|
$
|
147.3
|
|
|
$
|
133.3
|
|
|
$
|
127.0
|
|
|
$
|
407.6
|
|
|
Over time
|
159.3
|
|
|
—
|
|
|
—
|
|
|
159.3
|
|
||||
|
Total
|
$
|
306.6
|
|
|
$
|
133.3
|
|
|
$
|
127.0
|
|
|
$
|
566.9
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
|
|
Process Equipment Group
|
|
Batesville
|
|
Total
|
||||||
|
Timing of Transfer
|
|
|
|
|
|
||||||
|
Point in time
|
$
|
163.7
|
|
|
$
|
128.1
|
|
|
$
|
291.8
|
|
|
Over time
|
118.5
|
|
|
—
|
|
|
118.5
|
|
|||
|
Total
|
$
|
282.2
|
|
|
$
|
128.1
|
|
|
$
|
410.3
|
|
|
4.
|
Business Acquisitions
|
|
Cash consideration paid to Milacron stockholders
|
$
|
835.9
|
|
|
Repayment of Milacron debt, including accrued interest
|
772.9
|
|
|
|
Cash consideration paid to settle outstanding share-based equity awards
|
34.2
|
|
|
|
Total cash consideration
|
1,643.0
|
|
|
|
Fair value of Hillenbrand common stock issued to Milacron stockholders (1)
|
356.9
|
|
|
|
Stock consideration issued to settle outstanding share-based equity awards (1)
|
14.4
|
|
|
|
Total consideration transferred
|
2,014.3
|
|
|
|
Portion of cash settlement of outstanding share-based equity awards recognized as expense (2)
|
(14.1
|
)
|
|
|
Portion of stock settlement of outstanding share-based equity awards recognized as expense (2)
|
(5.9
|
)
|
|
|
Total purchase price consideration
|
$
|
1,994.3
|
|
|
|
|
(1)
|
The fair value of the 11.4 million shares of Hillenbrand’s common stock issued as of the acquisition date was determined based on a per share price of $31.26, which was the closing price of the Hillenbrand’s common stock on November 20, 2019, the last trading day before the acquisition closed on November 21, 2019. This includes a nominal amount of cash paid in lieu of fractional shares. Additionally, 0.5 million shares of Hillenbrand’s common stock were issued to settle certain of Milacron’s outstanding share-based equity awards, as previously discussed.
|
|
(2)
|
In total, $20.0 was immediately recognized as expense within operating expenses on the Consolidated Statements of Operations during the three months ended December 31, 2019, which represents the portion of the fair value of outstanding share-based equity awards that was not associated with pre-acquisition service of Milacron employees, as previously discussed.
|
|
|
November 21, 2019
|
||
|
Assets acquired:
|
|
||
|
Cash and cash equivalents
|
$
|
125.8
|
|
|
Trade receivables
|
135.5
|
|
|
|
Inventories
|
288.7
|
|
|
|
Prepaid expense and other current assets
|
64.3
|
|
|
|
Property, plant, and equipment
|
262.9
|
|
|
|
Operating lease right-of-use assets
|
41.3
|
|
|
|
Identifiable intangible assets
|
865.0
|
|
|
|
Goodwill
|
666.5
|
|
|
|
Other long-term assets
|
22.6
|
|
|
|
Total assets acquired
|
2,472.6
|
|
|
|
|
|
||
|
Liabilities assumed:
|
|
||
|
Trade accounts payable
|
110.2
|
|
|
|
Liabilities from long-term manufacturing contracts and advances
|
32.7
|
|
|
|
Accrued compensation
|
23.2
|
|
|
|
Other current liabilities
|
72.2
|
|
|
|
Accrued pension and postretirement healthcare
|
29.4
|
|
|
|
Deferred income taxes
|
166.3
|
|
|
|
Operating lease liabilities - long-term
|
31.2
|
|
|
|
Other long-term liabilities
|
13.1
|
|
|
|
Total liabilities assumed
|
478.3
|
|
|
|
|
|
||
|
Total purchase price consideration
|
$
|
1,994.3
|
|
|
|
|
Gross Carrying Amount
|
|
Weighted-Average Useful Life
|
||
|
Customer relationships
|
|
$
|
555.0
|
|
|
19 years
|
|
Trade names
|
|
205.0
|
|
|
Indefinite
|
|
|
Technology, including patents
|
|
95.0
|
|
|
10 years
|
|
|
Backlog
|
|
10.0
|
|
|
3 months
|
|
|
Total
|
|
$
|
865.0
|
|
|
|
|
|
Three Months Ended December 31, 2019
|
||
|
Net revenue
|
$
|
133.3
|
|
|
Income before income taxes
|
0.7
|
|
|
|
•
|
an increase to depreciation and amortization expense that would have been recognized due to acquired tangible and intangible assets;
|
|
•
|
an adjustment to interest expense to reflect the additional borrowings of Hillenbrand and the repayment of Milacron’s historical debt in conjunction with the acquisition;
|
|
•
|
an adjustment to remove business acquisition and integration costs, inventory step-up costs, and backlog amortization during the three months ended December 31, 2019, as these costs are non-recurring in nature and will not have a continuing effect on Hillenbrand’s results; and
|
|
•
|
the related income tax effects of the adjustments noted above.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
Net revenue
|
$
|
682.6
|
|
|
$
|
699.9
|
|
|
Net income attributable to Hillenbrand
|
20.6
|
|
|
30.9
|
|
||
|
|
|
|
|
||||
|
Net income attributable to Hillenbrand — per share of common stock:
|
|
|
|
||||
|
Basic earnings per share
|
$
|
0.27
|
|
|
$
|
0.41
|
|
|
Diluted earnings per share
|
0.27
|
|
|
0.41
|
|
||
|
5.
|
Supplemental Consolidated Balance Sheet Information
|
|
|
December 31,
2019 |
|
September 30,
2019 |
||||
|
Trade accounts receivable reserves
|
$
|
26.2
|
|
|
$
|
22.8
|
|
|
|
|
|
|
||||
|
Accumulated depreciation on property, plant, and equipment
|
$
|
316.1
|
|
|
$
|
309.0
|
|
|
|
|
|
|
||||
|
Inventories:
|
|
|
|
|
|
||
|
Raw materials and components
|
$
|
144.9
|
|
|
$
|
72.3
|
|
|
Work in process
|
85.3
|
|
|
44.0
|
|
||
|
Finished goods
|
211.9
|
|
|
60.3
|
|
||
|
Total inventories
|
$
|
442.1
|
|
|
$
|
176.6
|
|
|
6.
|
Leases
|
|
|
December 31, 2019
|
||
|
Operating lease right-of-use assets
|
$
|
172.5
|
|
|
|
|
||
|
Other current liabilities
|
$
|
32.9
|
|
|
Operating lease liabilities
|
137.1
|
|
|
|
Total operating lease liabilities
|
$
|
170.0
|
|
|
|
|
||
|
Weighted-average remaining lease term (in years)
|
7.9
|
|
|
|
|
|
||
|
Weighted-average discount rate
|
2.2
|
%
|
|
|
2020 (excluding the three months ended December 31, 2019)
|
$
|
27.4
|
|
|
2021
|
32.8
|
|
|
|
2022
|
28.0
|
|
|
|
2023
|
22.8
|
|
|
|
2024
|
15.4
|
|
|
|
Thereafter
|
57.8
|
|
|
|
Total lease payments
|
184.2
|
|
|
|
Less: imputed interest
|
(14.2
|
)
|
|
|
Total present value of lease payments
|
$
|
170.0
|
|
|
|
Three Months Ended December 31, 2019
|
||
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
8.0
|
|
|
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities
|
13.3
|
|
|
|
7.
|
Intangible Assets and Goodwill
|
|
|
|||||||||||||||
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||||||||
|
|
Cost
|
|
Accumulated
Amortization
|
|
Cost
|
|
Accumulated
Amortization
|
||||||||
|
Finite-lived assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Trade names
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
Customer relationships
|
1,026.3
|
|
|
(179.4
|
)
|
|
464.2
|
|
|
(169.2
|
)
|
||||
|
Technology, including patents
|
173.0
|
|
|
(52.2
|
)
|
|
76.8
|
|
|
(49.4
|
)
|
||||
|
Software
|
65.4
|
|
|
(53.1
|
)
|
|
58.7
|
|
|
(51.7
|
)
|
||||
|
Backlog
|
10.0
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
||||
|
Other
|
0.1
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
||||
|
|
1,275.0
|
|
|
(289.2
|
)
|
|
600.1
|
|
|
(270.7
|
)
|
||||
|
Indefinite-lived assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Trade names
|
331.9
|
|
|
—
|
|
|
125.5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Total
|
$
|
1,606.9
|
|
|
$
|
(289.2
|
)
|
|
$
|
725.6
|
|
|
$
|
(270.7
|
)
|
|
|
Process
Equipment
Group
|
|
Milacron
|
|
Batesville
|
|
Total
|
||||||||
|
Balance as of September 30, 2019
|
$
|
569.7
|
|
|
$
|
—
|
|
|
$
|
8.3
|
|
|
$
|
578.0
|
|
|
Acquisition (see Note 4)
|
1.7
|
|
|
666.5
|
|
|
—
|
|
|
668.2
|
|
||||
|
Foreign currency adjustments
|
8.4
|
|
|
2.3
|
|
|
—
|
|
|
10.7
|
|
||||
|
Balance as of December 31, 2019
|
$
|
579.8
|
|
|
$
|
668.8
|
|
|
$
|
8.3
|
|
|
$
|
1,256.9
|
|
|
8.
|
Financing Agreements
|
|
|
December 31,
2019 |
|
September 30,
2019 |
||||
|
$900.0 revolving credit facility (excluding outstanding letters of credit)
|
$
|
525.0
|
|
|
$
|
—
|
|
|
$500.0 term loan facility (1)
|
492.2
|
|
|
—
|
|
||
|
$375.0 senior unsecured notes, net of discount (2)
|
370.2
|
|
|
370.1
|
|
||
|
$225.0 term loan facility (3)
|
221.7
|
|
|
—
|
|
||
|
$150.0 senior unsecured notes, net of discount (4)
|
149.8
|
|
|
149.7
|
|
||
|
$100.0 Series A Notes (5)
|
99.7
|
|
|
99.7
|
|
||
|
Other
|
6.1
|
|
|
—
|
|
||
|
Total debt
|
1,864.7
|
|
|
619.5
|
|
||
|
Less: current portion
|
42.1
|
|
|
—
|
|
||
|
Total long-term debt
|
$
|
1,822.6
|
|
|
$
|
619.5
|
|
|
|
|
(1)
|
Includes debt issuance costs of $1.5 at December 31, 2019.
|
|
(2)
|
Includes debt issuance costs of $4.2 and $4.3 at December 31, 2019 and September 30, 2019, respectively.
|
|
(3)
|
Includes debt issuance costs of $0.5 at December 31, 2019.
|
|
(4)
|
Includes debt issuance costs of $0.1 and $0.2 at December 31, 2019 and September 30, 2019, respectively.
|
|
(5)
|
Includes debt issuance costs of $0.3 and $0.3 at December 31, 2019 and September 30, 2019, respectively.
|
|
9.
|
Retirement Benefits
|
|
|
U.S. Pension Benefits
|
|
Non-U.S. Pension Benefits
|
||||||||||||
|
|
Three Months Ended December 31,
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Service costs
|
$
|
0.4
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
0.3
|
|
|
Interest costs
|
2.0
|
|
|
2.6
|
|
|
0.2
|
|
|
0.3
|
|
||||
|
Expected return on plan assets
|
(3.2
|
)
|
|
(3.3
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
|
Amortization of net loss
|
1.2
|
|
|
0.2
|
|
|
0.4
|
|
|
0.2
|
|
||||
|
Net periodic pension cost
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
|
10.
|
Income Taxes
|
|
11.
|
Earnings per share
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Net (loss) income attributable to Hillenbrand
|
$
|
(3.1
|
)
|
|
$
|
28.3
|
|
|
Weighted average shares outstanding (basic - in millions) (1)
|
68.4
|
|
|
62.9
|
|
||
|
Effect of dilutive stock options and other unvested equity awards (in millions) (2)
|
—
|
|
|
0.6
|
|
||
|
Weighted average shares outstanding (diluted - in millions)
|
68.4
|
|
|
63.5
|
|
||
|
|
|
|
|
||||
|
Basic (loss) earnings per share
|
$
|
(0.05
|
)
|
|
$
|
0.45
|
|
|
Diluted (loss) earnings per share
|
$
|
(0.05
|
)
|
|
$
|
0.45
|
|
|
|
|
|
|
||||
|
Shares with anti-dilutive effect excluded from the computation of diluted earnings per share (in millions)
|
2.4
|
|
|
0.7
|
|
||
|
|
|
(1)
|
The increase in weighted average shares outstanding during the current quarter was due to 11.9 million of additional shares issued on November 21, 2019 in connection with the acquisition of Milacron. See Note 4 for further information.
|
|
(2)
|
As a result of the net loss attributable to Hillenbrand during the three months ended December 31, 2019, the effect of stock options and other unvested equity awards would be antidilutive. In accordance with GAAP, they have been excluded from the diluted EPS calculation.
|
|
12.
|
Accumulated Other Comprehensive Loss
|
|
|
Pension and
Postretirement
|
|
Currency
Translation
|
|
Net
Unrealized
Gain (Loss)
on Derivative
Instruments
|
|
Total
Attributable
to
Hillenbrand,
Inc.
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||
|
Balance at September 30, 2019
|
$
|
(62.3
|
)
|
|
$
|
(64.7
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
(140.6
|
)
|
|
|
|
|
|
|
||
|
Other comprehensive income (loss) before reclassifications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Before tax amount
|
—
|
|
|
17.4
|
|
|
1.3
|
|
|
18.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
18.6
|
|
||||
|
Tax expense
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||
|
After tax amount
|
—
|
|
|
17.4
|
|
|
1.0
|
|
|
18.4
|
|
|
(0.1
|
)
|
|
18.3
|
|
||||||
|
Amounts reclassified from accumulated other comprehensive loss(1)
|
1.1
|
|
|
—
|
|
|
0.4
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||
|
Net current period other comprehensive income (loss)
|
1.1
|
|
|
17.4
|
|
|
1.4
|
|
|
19.9
|
|
|
(0.1
|
)
|
|
$
|
19.8
|
|
|||||
|
Reclassification of certain income tax effects (2)
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
|
|
|
||||||||
|
Balance at December 31, 2019
|
$
|
(67.2
|
)
|
|
$
|
(47.3
|
)
|
|
$
|
(12.2
|
)
|
|
$
|
(126.7
|
)
|
|
|
|
|
|
|
||
|
|
|
(1)
|
Amounts are net of tax.
|
|
(2)
|
Income tax effects of the Tax Act were reclassified from accumulated other comprehensive loss to retained earnings due to the adoption of ASU 2018-02. See Note 2 for more information.
|
|
|
Pension and
Postretirement
|
|
Currency
Translation
|
|
Net
Unrealized
Gain (Loss)
on Derivative
Instruments
|
|
Total
Attributable
to
Hillenbrand,
Inc.
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||
|
Balance at September 30, 2018
|
$
|
(41.0
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
0.9
|
|
|
$
|
(84.2
|
)
|
|
|
|
|
|
|
||
|
Other comprehensive income before reclassifications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Before tax amount
|
—
|
|
|
(5.1
|
)
|
|
(6.8
|
)
|
|
(11.9
|
)
|
|
$
|
0.2
|
|
|
$
|
(11.7
|
)
|
||||
|
Tax benefit
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||||
|
After tax amount
|
—
|
|
|
(5.1
|
)
|
|
(5.2
|
)
|
|
(10.3
|
)
|
|
0.2
|
|
|
(10.1
|
)
|
||||||
|
Amounts reclassified from accumulated other comprehensive loss(1)
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
|
Net current period other comprehensive income (loss)
|
0.2
|
|
|
(5.1
|
)
|
|
(5.2
|
)
|
|
(10.1
|
)
|
|
$
|
0.2
|
|
|
$
|
(9.9
|
)
|
||||
|
Balance at December 31, 2018
|
$
|
(40.8
|
)
|
|
$
|
(49.2
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
(94.3
|
)
|
|
|
|
|
|
|
||
|
|
|
(1)
|
Amounts are net of tax.
|
|
|
Three Months Ended December 31, 2019
|
||||||||||||||
|
|
Amortization of Pension and
Postretirement (1) |
|
(Gain)/Loss on
|
|
|
||||||||||
|
|
Net Loss
Recognized |
|
Prior Service Costs
Recognized |
|
Derivative
Instruments |
|
Total
|
||||||||
|
Affected Line in the Consolidated Statement of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
|
Other income, net
|
1.6
|
|
|
—
|
|
|
0.5
|
|
|
2.1
|
|
||||
|
Total before tax
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
2.0
|
|
|
Tax expense
|
|
|
|
|
|
|
(0.5
|
)
|
|||||||
|
Total reclassifications for the period, net of tax
|
|
|
|
|
|
|
$
|
1.5
|
|
||||||
|
|
|
(1)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 9).
|
|
|
Three Months Ended December 31, 2018
|
||||||||||||||
|
|
Amortization of Pension and
Postretirement (1)
|
|
(Gain)/Loss on
|
|
|
||||||||||
|
|
Net Loss
Recognized
|
|
Prior Service Costs
Recognized
|
|
Derivative
Instruments
|
|
Total
|
||||||||
|
Affected Line in the Consolidated Statement of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
Cost of goods sold
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
|
Other income, net
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
|
Total before tax
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
Tax expense
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
||||
|
Total reclassifications for the period, net of tax
|
|
|
|
|
|
|
|
|
|
$
|
0.2
|
|
|||
|
|
|
(1)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 9).
|
|
13.
|
Share-Based Compensation
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Share-based compensation costs
|
$
|
2.3
|
|
|
$
|
1.9
|
|
|
Less impact of income tax benefit
|
0.5
|
|
|
0.4
|
|
||
|
Share-based compensation costs, net of tax
|
$
|
1.8
|
|
|
$
|
1.5
|
|
|
|
Number of
Units
|
|
|
Stock options
|
454,929
|
|
|
Time-based stock awards
|
250,741
|
|
|
Performance-based stock awards (maximum that can be earned)
|
247,112
|
|
|
14.
|
Other Income, Net
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Interest income
|
$
|
1.3
|
|
|
$
|
0.2
|
|
|
Foreign currency exchange gain, net
|
0.1
|
|
|
0.4
|
|
||
|
Other, net
|
0.5
|
|
|
(0.1
|
)
|
||
|
Other income, net
|
$
|
1.9
|
|
|
$
|
0.5
|
|
|
15.
|
Commitments and Contingencies
|
|
16.
|
Fair Value Measurements
|
|
Level 1:
|
Inputs are quoted prices in active markets for identical assets or liabilities.
|
|
Level 2:
|
Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
|
|
Level 3:
|
Inputs are unobservable for the asset or liability.
|
|
|
Carrying Value at December 31, 2019
|
|
Fair Value at December 31, 2019
Using Inputs Considered as: |
||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
142.4
|
|
|
$
|
142.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Investments in rabbi trust
|
5.0
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
||||
|
Derivative instruments
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revolver
|
525.0
|
|
|
—
|
|
|
525.0
|
|
|
—
|
|
||||
|
$500.0 term loan facility
|
493.7
|
|
|
—
|
|
|
493.7
|
|
|
—
|
|
||||
|
$375.0 senior unsecured notes
|
374.4
|
|
|
393.1
|
|
|
—
|
|
|
—
|
|
||||
|
$225.0 term loan facility
|
222.2
|
|
|
—
|
|
|
222.2
|
|
|
—
|
|
||||
|
$150.0 senior unsecured notes
|
149.9
|
|
|
152.3
|
|
|
—
|
|
|
—
|
|
||||
|
$100.0 Series A Notes
|
100.0
|
|
|
—
|
|
|
104.9
|
|
|
—
|
|
||||
|
Derivative instruments
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
|
|
Carrying Value at September 30, 2019
|
|
Fair Value at September 30, 2019
Using Inputs Considered as: |
||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
399.0
|
|
|
$
|
399.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Investments in rabbi trust
|
4.2
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
||||
|
Derivative instruments
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
$375.0 senior unsecured notes
|
374.4
|
|
|
380.6
|
|
|
—
|
|
|
—
|
|
||||
|
$150.0 senior unsecured notes
|
149.9
|
|
|
152.8
|
|
|
—
|
|
|
—
|
|
||||
|
Series A Notes
|
100.0
|
|
|
—
|
|
|
108.5
|
|
|
—
|
|
||||
|
Derivative instruments
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
|
•
|
Cash and cash equivalents and investments in rabbi trust are classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The types of financial instruments the Company classifies within Level 1 include most bank deposits, money market securities, and publicly traded mutual funds. The Company does not adjust the quoted market price for such financial instruments.
|
|
•
|
The Company estimates the fair value of foreign currency derivatives using industry accepted models. The significant Level 2 inputs used in the valuation of derivatives include spot rates, forward rates, and volatility. These inputs were obtained from pricing services, broker quotes, and other sources.
|
|
•
|
The fair value of the amounts outstanding under the Revolver and Term Loan Facilities approximate carrying value.
|
|
•
|
The fair values of the Series A Notes were estimated based on internally-developed models, using current market interest rate data for similar issues, as there is no active market for the Series A Notes.
|
|
•
|
The fair values of the $375.0 and $150.0 senior unsecured notes were based on quoted prices in active markets
|
|
17.
|
Segment and Geographical Information
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Net revenue
|
|
|
|
|
|
||
|
Process Equipment Group
|
$
|
306.6
|
|
|
$
|
282.2
|
|
|
Milacron
|
133.3
|
|
|
—
|
|
||
|
Batesville
|
127.0
|
|
|
128.1
|
|
||
|
Total
|
$
|
566.9
|
|
|
$
|
410.3
|
|
|
|
|
|
|
||||
|
Adjusted EBITDA (1)
|
|
|
|
|
|
||
|
Process Equipment Group
|
$
|
51.5
|
|
|
$
|
46.2
|
|
|
Milacron
|
26.3
|
|
|
—
|
|
||
|
Batesville
|
23.0
|
|
|
26.7
|
|
||
|
Corporate
|
(8.9
|
)
|
|
(8.8
|
)
|
||
|
|
|
|
|
||||
|
Net revenue (2)
|
|
|
|
|
|
||
|
United States
|
$
|
272.9
|
|
|
$
|
214.8
|
|
|
Germany
|
155.4
|
|
|
111.3
|
|
||
|
All other foreign business units
|
138.6
|
|
|
84.2
|
|
||
|
Total
|
$
|
566.9
|
|
|
$
|
410.3
|
|
|
|
|
(1)
|
Adjusted EBITDA is a non-GAAP measure used by management to measure segment performance and make operating decisions. See the Operating Performance Measures section of Management’s Discussion and Analysis for further information on adjusted EBITDA, which is reconciled to consolidated net (loss) income below.
|
|
(2)
|
The Company attributes net revenue to a geography based upon the location of the business that consummates the external sale.
|
|
|
December 31,
2019 |
|
September 30,
2019 |
||||
|
Total assets assigned
|
|
|
|
|
|
||
|
Process Equipment Group
|
$
|
1,791.7
|
|
|
$
|
1,729.1
|
|
|
Milacron
|
2,347.7
|
|
|
—
|
|
||
|
Batesville
|
227.7
|
|
|
186.1
|
|
||
|
Corporate
|
53.6
|
|
|
313.4
|
|
||
|
Total
|
$
|
4,420.7
|
|
|
$
|
2,228.6
|
|
|
|
|
|
|
||||
|
Tangible long-lived assets, net(1)
|
|
|
|
|
|
||
|
United States
|
$
|
238.5
|
|
|
$
|
75.8
|
|
|
Germany
|
106.9
|
|
|
40.2
|
|
||
|
China
|
63.4
|
|
|
4.4
|
|
||
|
All other foreign business units
|
161.8
|
|
|
19.9
|
|
||
|
Total
|
$
|
570.6
|
|
|
$
|
140.3
|
|
|
|
|
(1)
|
Tangible long-lived assets, net includes operating lease right-of-use assets as of December 31, 2019 due to the adoption of ASU 2016-02 in the current year.
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
Adjusted EBITDA:
|
|
|
|
||||
|
Process Equipment Group
|
$
|
51.5
|
|
|
$
|
46.2
|
|
|
Milacron
|
26.3
|
|
|
—
|
|
||
|
Batesville
|
23.0
|
|
|
26.7
|
|
||
|
Corporate
|
(8.9
|
)
|
|
(8.8
|
)
|
||
|
Less:
|
|
|
|
|
|
||
|
Interest income
|
(1.3
|
)
|
|
(0.2
|
)
|
||
|
Interest expense
|
14.7
|
|
|
5.5
|
|
||
|
Income tax (benefit) expense
|
(12.4
|
)
|
|
14.5
|
|
||
|
Depreciation and amortization
|
25.9
|
|
|
14.1
|
|
||
|
Business acquisition, development, and integration costs
|
53.8
|
|
|
0.6
|
|
||
|
Restructuring and restructuring related charges
|
2.4
|
|
|
0.5
|
|
||
|
Inventory step-up
|
9.6
|
|
|
0.1
|
|
||
|
Consolidated net (loss) income
|
$
|
(0.8
|
)
|
|
$
|
29.0
|
|
|
18.
|
Condensed Consolidating Information
|
|
|
Three Months Ended December 31, 2019
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||||||||||||
|
Net revenue
|
$
|
—
|
|
|
$
|
205.5
|
|
|
$
|
417.0
|
|
|
$
|
(55.6
|
)
|
|
$
|
566.9
|
|
|
$
|
—
|
|
|
$
|
216.1
|
|
|
$
|
247.8
|
|
|
$
|
(53.6
|
)
|
|
$
|
410.3
|
|
|
Cost of goods sold
|
—
|
|
|
117.7
|
|
|
306.3
|
|
|
(28.9
|
)
|
|
395.1
|
|
|
—
|
|
|
115.8
|
|
|
174.4
|
|
|
(26.9
|
)
|
|
263.3
|
|
||||||||||
|
Gross profit
|
—
|
|
|
87.8
|
|
|
110.7
|
|
|
(26.7
|
)
|
|
171.8
|
|
|
—
|
|
|
100.3
|
|
|
73.4
|
|
|
(26.7
|
)
|
|
147.0
|
|
||||||||||
|
Operating expenses
|
48.6
|
|
|
58.5
|
|
|
77.0
|
|
|
(26.7
|
)
|
|
157.4
|
|
|
10.2
|
|
|
61.4
|
|
|
45.8
|
|
|
(26.7
|
)
|
|
90.7
|
|
||||||||||
|
Amortization expense
|
—
|
|
|
3.3
|
|
|
11.5
|
|
|
—
|
|
|
14.8
|
|
|
—
|
|
|
3.3
|
|
|
4.5
|
|
|
—
|
|
|
7.8
|
|
||||||||||
|
Interest expense
|
5.2
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
14.7
|
|
|
4.5
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
5.5
|
|
||||||||||
|
Other income (expense), net
|
0.9
|
|
|
(0.9
|
)
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.5
|
|
||||||||||
|
Equity in net income of subsidiaries
|
25.6
|
|
|
1.8
|
|
|
—
|
|
|
(27.4
|
)
|
|
—
|
|
|
42.0
|
|
|
2.2
|
|
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
||||||||||
|
(Loss) income before income taxes
|
(27.3
|
)
|
|
26.9
|
|
|
14.6
|
|
|
(27.4
|
)
|
|
(13.2
|
)
|
|
27.0
|
|
|
37.8
|
|
|
22.9
|
|
|
(44.2
|
)
|
|
43.5
|
|
||||||||||
|
Income tax (benefit) expense
|
(24.2
|
)
|
|
6.2
|
|
|
5.6
|
|
|
—
|
|
|
(12.4
|
)
|
|
(1.3
|
)
|
|
9.9
|
|
|
5.9
|
|
|
—
|
|
|
14.5
|
|
||||||||||
|
Consolidated net (loss) income
|
(3.1
|
)
|
|
20.7
|
|
|
9.0
|
|
|
(27.4
|
)
|
|
(0.8
|
)
|
|
28.3
|
|
|
27.9
|
|
|
17.0
|
|
|
(44.2
|
)
|
|
29.0
|
|
||||||||||
|
Less: Net income attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
noncontrolling interests
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||||||||
|
Net (loss) income attributable to Hillenbrand
|
$
|
(3.1
|
)
|
|
$
|
20.7
|
|
|
$
|
6.7
|
|
|
$
|
(27.4
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
28.3
|
|
|
$
|
27.9
|
|
|
$
|
16.3
|
|
|
$
|
(44.2
|
)
|
|
$
|
28.3
|
|
|
Consolidated comprehensive income
|
$
|
16.8
|
|
|
$
|
18.9
|
|
|
$
|
25.9
|
|
|
$
|
(42.6
|
)
|
|
$
|
19.0
|
|
|
$
|
18.2
|
|
|
$
|
27.8
|
|
|
$
|
11.8
|
|
|
$
|
(38.7
|
)
|
|
$
|
19.1
|
|
|
Less: Comprehensive income attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
to noncontrolling interests
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||||||||
|
Comprehensive income attributable to Hillenbrand
|
$
|
16.8
|
|
|
$
|
18.9
|
|
|
$
|
23.7
|
|
|
$
|
(42.6
|
)
|
|
$
|
16.8
|
|
|
$
|
18.2
|
|
|
$
|
27.8
|
|
|
$
|
10.9
|
|
|
$
|
(38.7
|
)
|
|
$
|
18.2
|
|
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||||||||||||||||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||||||||||||
|
Cash and cash equivalents
|
$
|
1.3
|
|
|
$
|
1.7
|
|
|
$
|
139.4
|
|
|
$
|
—
|
|
|
$
|
142.4
|
|
|
$
|
283.1
|
|
|
$
|
9.6
|
|
|
$
|
106.3
|
|
|
$
|
—
|
|
|
$
|
399.0
|
|
|
Trade receivables, net
|
—
|
|
|
100.7
|
|
|
243.6
|
|
|
—
|
|
|
344.3
|
|
|
—
|
|
|
113.6
|
|
|
103.8
|
|
|
—
|
|
|
217.4
|
|
||||||||||
|
Receivables from long-term manufacturing contracts
|
—
|
|
|
11.7
|
|
|
194.2
|
|
|
—
|
|
|
205.9
|
|
|
—
|
|
|
9.8
|
|
|
171.3
|
|
|
—
|
|
|
181.1
|
|
||||||||||
|
Inventories
|
—
|
|
|
79.0
|
|
|
365.9
|
|
|
(2.8
|
)
|
|
442.1
|
|
|
—
|
|
|
78.2
|
|
|
101.2
|
|
|
(2.8
|
)
|
|
176.6
|
|
||||||||||
|
Intercompany receivables
|
70.5
|
|
|
1,225.4
|
|
|
—
|
|
|
(1,295.9
|
)
|
|
—
|
|
|
—
|
|
|
1,179.7
|
|
|
—
|
|
|
(1,179.7
|
)
|
|
—
|
|
||||||||||
|
Prepaid expenses and other current assets
|
6.3
|
|
|
8.0
|
|
|
72.5
|
|
|
0.6
|
|
|
87.4
|
|
|
2.5
|
|
|
6.1
|
|
|
40.1
|
|
|
0.4
|
|
|
49.1
|
|
||||||||||
|
Total current assets
|
78.1
|
|
|
1,426.5
|
|
|
1,015.6
|
|
|
(1,298.1
|
)
|
|
1,222.1
|
|
|
285.6
|
|
|
1,397.0
|
|
|
522.7
|
|
|
(1,182.1
|
)
|
|
1,023.2
|
|
||||||||||
|
Property, plant and equipment, net
|
3.4
|
|
|
60.9
|
|
|
333.8
|
|
|
—
|
|
|
398.1
|
|
|
3.8
|
|
|
61.2
|
|
|
75.3
|
|
|
—
|
|
|
140.3
|
|
||||||||||
|
Operating lease right-of-use assets
|
0.8
|
|
|
13.4
|
|
|
158.3
|
|
|
—
|
|
|
172.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Intangible assets, net
|
2.4
|
|
|
177.8
|
|
|
1,137.5
|
|
|
—
|
|
|
1,317.7
|
|
|
2.4
|
|
|
181.4
|
|
|
271.1
|
|
|
—
|
|
|
454.9
|
|
||||||||||
|
Goodwill
|
—
|
|
|
225.0
|
|
|
1,031.9
|
|
|
—
|
|
|
1,256.9
|
|
|
—
|
|
|
225.0
|
|
|
353.0
|
|
|
—
|
|
|
578.0
|
|
||||||||||
|
Investment in consolidated subsidiaries
|
2,913.7
|
|
|
655.1
|
|
|
—
|
|
|
(3,568.8
|
)
|
|
—
|
|
|
2,266.4
|
|
|
655.2
|
|
|
—
|
|
|
(2,921.6
|
)
|
|
—
|
|
||||||||||
|
Other long-term assets
|
48.3
|
|
|
24.6
|
|
|
37.0
|
|
|
(56.5
|
)
|
|
53.4
|
|
|
33.8
|
|
|
20.5
|
|
|
3.1
|
|
|
(25.2
|
)
|
|
32.2
|
|
||||||||||
|
Total Assets
|
$
|
3,046.7
|
|
|
$
|
2,583.3
|
|
|
$
|
3,714.1
|
|
|
$
|
(4,923.4
|
)
|
|
$
|
4,420.7
|
|
|
$
|
2,592.0
|
|
|
$
|
2,540.3
|
|
|
$
|
1,225.2
|
|
|
$
|
(4,128.9
|
)
|
|
$
|
2,228.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Trade accounts payable
|
$
|
5.0
|
|
|
$
|
67.0
|
|
|
$
|
277.0
|
|
|
$
|
—
|
|
|
$
|
349.0
|
|
|
$
|
2.6
|
|
|
$
|
59.0
|
|
|
$
|
174.6
|
|
|
$
|
—
|
|
|
$
|
236.2
|
|
|
Liabilities from long-term manufacturing contracts and advances
|
—
|
|
|
17.3
|
|
|
165.8
|
|
|
—
|
|
|
183.1
|
|
|
—
|
|
|
13.5
|
|
|
144.7
|
|
|
—
|
|
|
158.2
|
|
||||||||||
|
Current portion of long-term debt
|
36.2
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
|
42.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Accrued compensation
|
2.6
|
|
|
15.1
|
|
|
68.5
|
|
|
—
|
|
|
86.2
|
|
|
6.9
|
|
|
20.8
|
|
|
45.5
|
|
|
—
|
|
|
73.2
|
|
||||||||||
|
Intercompany payables
|
—
|
|
|
—
|
|
|
1,298.7
|
|
|
(1,298.7
|
)
|
|
—
|
|
|
1,167.0
|
|
|
10.2
|
|
|
5.3
|
|
|
(1,182.5
|
)
|
|
—
|
|
||||||||||
|
Other current liabilities
|
29.8
|
|
|
58.1
|
|
|
148.4
|
|
|
(16.9
|
)
|
|
219.4
|
|
|
19.2
|
|
|
45.0
|
|
|
67.1
|
|
|
(9.6
|
)
|
|
121.7
|
|
||||||||||
|
Total current liabilities
|
73.6
|
|
|
157.5
|
|
|
1,964.3
|
|
|
(1,315.6
|
)
|
|
879.8
|
|
|
1,195.7
|
|
|
148.5
|
|
|
437.2
|
|
|
(1,192.1
|
)
|
|
589.3
|
|
||||||||||
|
Long-term debt
|
1,822.4
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
1,822.6
|
|
|
619.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
619.5
|
|
||||||||||
|
Accrued pension and postretirement healthcare
|
1.0
|
|
|
31.1
|
|
|
129.9
|
|
|
—
|
|
|
162.0
|
|
|
0.8
|
|
|
32.1
|
|
|
98.4
|
|
|
—
|
|
|
131.3
|
|
||||||||||
|
Operating lease liabilities
|
0.4
|
|
|
10.5
|
|
|
126.2
|
|
|
—
|
|
|
137.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Deferred income taxes
|
—
|
|
|
20.4
|
|
|
234.0
|
|
|
(39.0
|
)
|
|
215.4
|
|
|
—
|
|
|
24.0
|
|
|
64.8
|
|
|
(15.2
|
)
|
|
73.6
|
|
||||||||||
|
Other long-term liabilities
|
22.2
|
|
|
16.6
|
|
|
21.2
|
|
|
—
|
|
|
60.0
|
|
|
21.9
|
|
|
12.5
|
|
|
10.7
|
|
|
—
|
|
|
45.1
|
|
||||||||||
|
Total Liabilities
|
1,919.6
|
|
|
236.1
|
|
|
2,475.8
|
|
|
(1,354.6
|
)
|
|
3,276.9
|
|
|
1,837.9
|
|
|
217.1
|
|
|
611.1
|
|
|
(1,207.3
|
)
|
|
1,458.8
|
|
||||||||||
|
Hillenbrand Shareholders’ Equity
|
1,127.1
|
|
|
2,347.2
|
|
|
1,221.6
|
|
|
(3,568.8
|
)
|
|
1,127.1
|
|
|
754.1
|
|
|
2,323.2
|
|
|
598.4
|
|
|
(2,921.6
|
)
|
|
754.1
|
|
||||||||||
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
16.7
|
|
|
—
|
|
|
16.7
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
15.7
|
|
||||||||||
|
Total Shareholders’ Equity
|
1,127.1
|
|
|
2,347.2
|
|
|
1,238.3
|
|
|
(3,568.8
|
)
|
|
1,143.8
|
|
|
754.1
|
|
|
2,323.2
|
|
|
614.1
|
|
|
(2,921.6
|
)
|
|
769.8
|
|
||||||||||
|
Total Liabilities and Shareholders’ Equity
|
$
|
3,046.7
|
|
|
$
|
2,583.3
|
|
|
$
|
3,714.1
|
|
|
$
|
(4,923.4
|
)
|
|
$
|
4,420.7
|
|
|
$
|
2,592.0
|
|
|
$
|
2,540.3
|
|
|
$
|
1,225.2
|
|
|
$
|
(4,128.9
|
)
|
|
$
|
2,228.6
|
|
|
|
Three Months Ended December 31, 2019
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
|
Parent
|
|
Guarantors
|
|
Non-
Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||||||||||||
|
Net cash provided by (used in)
operating activities
|
$
|
3.6
|
|
|
$
|
(5.6
|
)
|
|
$
|
19.8
|
|
|
$
|
—
|
|
|
$
|
17.8
|
|
|
$
|
(17.5
|
)
|
|
$
|
0.1
|
|
|
$
|
52.9
|
|
|
$
|
—
|
|
|
$
|
35.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Capital expenditures
|
(0.2
|
)
|
|
(2.3
|
)
|
|
(3.8
|
)
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|
(1.7
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(3.6
|
)
|
||||||||||
|
Proceeds from sales of property, plant, and
equipment
|
—
|
|
|
—
|
|
|
13.3
|
|
|
—
|
|
|
13.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Acquisition of business, net of cash
acquired
|
(1,503.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,503.1
|
)
|
|
—
|
|
|
—
|
|
|
(26.2
|
)
|
|
—
|
|
|
(26.2
|
)
|
||||||||||
|
Net cash (used in) provided by investing
activities
|
(1,503.3
|
)
|
|
(2.3
|
)
|
|
9.5
|
|
|
—
|
|
|
(1,496.1
|
)
|
|
—
|
|
|
(1.7
|
)
|
|
(28.1
|
)
|
|
—
|
|
|
(29.8
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Proceeds from issuance of long-term debt
|
725.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
725.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Repayments on term loan
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Proceeds from revolving credit facilities,
net of financing costs
|
747.3
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
747.5
|
|
|
106.0
|
|
|
—
|
|
|
54.2
|
|
|
—
|
|
|
160.2
|
|
||||||||||
|
Repayments on revolving credit facilities
|
(222.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(222.5
|
)
|
|
(72.3
|
)
|
|
—
|
|
|
(67.3
|
)
|
|
—
|
|
|
(139.6
|
)
|
||||||||||
|
Payment of deferred financing costs
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Payment of dividends on common stock
|
(15.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.8
|
)
|
|
(13.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.1
|
)
|
||||||||||
|
Proceeds from stock option exercises and
other
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||||||
|
Payments for employee taxes on net
settlement equity awards
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||||||||
|
Other, net
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
||||||||||
|
Net cash provided by (used in)
financing activities
|
1,217.9
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
1,221.4
|
|
|
16.8
|
|
|
—
|
|
|
(14.0
|
)
|
|
—
|
|
|
2.8
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Effect of exchange rates on cash and
cash equivalents
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Net cash flow
|
(281.8
|
)
|
|
(7.9
|
)
|
|
33.2
|
|
|
—
|
|
|
(256.5
|
)
|
|
(0.7
|
)
|
|
(1.6
|
)
|
|
11.1
|
|
|
—
|
|
|
8.8
|
|
||||||||||
|
Cash, cash equivalents and restricted cash at
beginning of period
|
283.1
|
|
|
9.6
|
|
|
106.7
|
|
|
—
|
|
|
399.4
|
|
|
1.1
|
|
|
5.8
|
|
|
49.6
|
|
|
—
|
|
|
56.5
|
|
||||||||||
|
Cash, cash equivalents and restricted cash at
end of period
|
$
|
1.3
|
|
|
$
|
1.7
|
|
|
$
|
139.9
|
|
|
$
|
—
|
|
|
$
|
142.9
|
|
|
$
|
0.4
|
|
|
$
|
4.2
|
|
|
$
|
60.7
|
|
|
$
|
—
|
|
|
$
|
65.3
|
|
|
19.
|
Restructuring
|
|
|
Three Months Ended December 31, 2019
|
|
Three Months Ended December 31, 2018
|
||||||||||||||||||||
|
|
Cost of goods sold
|
|
Operating expenses
|
|
Total
|
|
Cost of goods sold
|
|
Operating expenses
|
|
Total
|
||||||||||||
|
Process Equipment Group
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
$
|
1.6
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
Milacron
|
—
|
|
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Batesville
|
0.1
|
|
|
0.3
|
|
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||||
|
Corporate
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Total
|
$
|
0.8
|
|
|
$
|
2.3
|
|
|
$
|
3.1
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
intend
|
|
believe
|
|
plan
|
|
expect
|
|
may
|
|
goal
|
|
would
|
|
become
|
|
pursue
|
|
estimate
|
|
will
|
|
forecast
|
|
continue
|
|
could
|
|
target
|
|
encourage
|
|
promise
|
|
improve
|
|
progress
|
|
potential
|
|
should
|
|
|
Three Months Ended December 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
Amount
|
|
% of Net
Revenue
|
|
Amount
|
|
% of Net
Revenue
|
||||||
|
Net revenue
|
$
|
566.9
|
|
|
100.0
|
|
|
$
|
410.3
|
|
|
100.0
|
|
|
Gross profit
|
171.8
|
|
|
30.3
|
|
|
147.0
|
|
|
35.8
|
|
||
|
Operating expenses
|
157.4
|
|
|
27.8
|
|
|
90.7
|
|
|
22.1
|
|
||
|
Amortization expense
|
14.8
|
|
|
2.6
|
|
|
7.8
|
|
|
1.9
|
|
||
|
Interest expense
|
14.7
|
|
|
2.6
|
|
|
5.5
|
|
|
1.3
|
|
||
|
Other income, net
|
1.9
|
|
|
(0.3
|
)
|
|
0.5
|
|
|
(0.1
|
)
|
||
|
Income tax (benefit) expense
|
(12.4
|
)
|
|
(2.2
|
)
|
|
14.5
|
|
|
3.5
|
|
||
|
Net (loss) income attributable to Hillenbrand
|
(3.1
|
)
|
|
(0.5
|
)
|
|
28.3
|
|
|
6.9
|
|
||
|
•
|
The Process Equipment Group’s net revenue increased $24.4 (9%), primarily due to higher volume (7%) and favorable pricing. Foreign currency impact decreased net revenue by 2%.
|
|
•
|
Batesville’s net revenue decreased $1.1 (1%), primarily due to a decrease in average selling price (2%), partially offset by an increase in volume (1%). Higher volume was driven by an increase in burial sales despite what we estimate to be a decrease in North American burials driven by an increased rate at which families opted for cremation.
|
|
•
|
The Process Equipment Group’s gross profit was flat compared to the prior year, primarily due to unfavorable mix due to an increased proportion of lower margin, large systems sales in plastics, a decline in demand for screening and separating equipment (including equipment that processes proppants for hydraulic fracturing), and cost inflation, offset by pricing and productivity improvements and an increase in volume. Foreign currency impact decreased gross profit by 1%. Gross profit margin decreased 290 basis points to 33.6% in 2020, primarily due to an increased proportion of lower margin, large systems sales in plastics, and cost inflation, partially offset by pricing and productivity improvements.
|
|
•
|
Milacron’s gross profit was $29.3 and gross profit margin was 22.0% for the period since the acquisition date. Milacron’s gross profit included inventory step-up charges of $9.6. Excluding these charges, adjusted gross profit margin was 29.1%.
|
|
•
|
Batesville’s gross profit decreased $4.5 (10%) and gross profit margin decreased 330 basis points to 31.0%. The decrease in gross profit and gross profit margin was primarily due to inflation in wages and benefits, including higher healthcare costs, and unfavorable mix, partially offset by productivity initiatives and the higher burial volume.
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
Business acquisition, development, and integration costs
|
$
|
53.8
|
|
|
$
|
0.6
|
|
|
Restructuring and restructuring related charges
|
1.7
|
|
|
0.2
|
|
||
|
•
|
certain tax items related to the acquisition of Milacron, including the revaluation of deferred tax balances in connection with enacted statutory tax rate reductions in certain foreign jurisdictions ($7.4 in fiscal 2020);
|
|
•
|
an adjustment to our transition tax liability pursuant to the Tax Act ($0.5 in fiscal 2019);
|
|
•
|
an adjustment to our deferred tax liability as a result of revising our permanent reinvestment assertion on earnings of foreign subsidiaries driven by the Tax Act ($1.3 in fiscal 2019); and
|
|
•
|
the tax effect of the adjustments previously discussed within this section.
|
|
|
Three Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
||||||||
|
|
Amount
|
|
% of Net
Revenue
|
|
Amount
|
|
% of Net
Revenue
|
||||
|
Net revenue
|
$
|
306.6
|
|
|
100.0
|
|
$
|
282.2
|
|
|
100.0
|
|
Gross profit
|
103.1
|
|
|
33.6
|
|
103.1
|
|
|
36.5
|
||
|
Operating expenses
|
57.0
|
|
|
18.6
|
|
61.6
|
|
|
21.8
|
||
|
Amortization expense
|
7.3
|
|
|
2.4
|
|
7.8
|
|
|
2.8
|
||
|
|
Three Months Ended December 31,
|
||||
|
|
2019
|
||||
|
|
Amount
|
|
% of Net
Revenue
|
||
|
Net revenue
|
$
|
133.3
|
|
|
100.0
|
|
Gross profit
|
29.3
|
|
|
22.0
|
|
|
Operating expenses
|
21.9
|
|
|
16.4
|
|
|
Amortization expense
|
7.5
|
|
|
5.6
|
|
|
|
Three Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
||||||||
|
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
||||
|
Net revenue
|
$
|
127.0
|
|
|
100.0
|
|
$
|
128.1
|
|
|
100.0
|
|
Gross profit
|
39.4
|
|
|
31.0
|
|
43.9
|
|
|
34.3
|
||
|
Operating expenses
|
18.5
|
|
|
14.6
|
|
19.6
|
|
|
15.3
|
||
|
|
Three Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
||||||||
|
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
||||
|
Core operating expenses
|
$
|
10.2
|
|
|
1.8
|
|
$
|
9.2
|
|
|
2.2
|
|
Business acquisition, development, and integration costs
|
49.8
|
|
|
8.8
|
|
0.3
|
|
|
0.1
|
||
|
Operating expenses
|
$
|
60.0
|
|
|
10.6
|
|
$
|
9.5
|
|
|
2.3
|
|
|
Three Months Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
Consolidated net (loss) income
|
$
|
(0.8
|
)
|
|
$
|
29.0
|
|
|
Interest income
|
(1.3
|
)
|
|
(0.2
|
)
|
||
|
Interest expense
|
14.7
|
|
|
5.5
|
|
||
|
Income tax (benefit) expense
|
(12.4
|
)
|
|
14.5
|
|
||
|
Depreciation and amortization
|
25.9
|
|
|
14.1
|
|
||
|
EBITDA
|
$
|
26.1
|
|
|
$
|
62.9
|
|
|
Business acquisition, development, and integration costs (1)
|
53.8
|
|
|
0.6
|
|
||
|
Restructuring and restructuring related charges (2)
|
2.4
|
|
|
0.5
|
|
||
|
Inventory step-up (3)
|
9.6
|
|
|
0.1
|
|
||
|
Adjusted EBITDA
|
$
|
91.9
|
|
|
$
|
64.1
|
|
|
|
|
(1)
|
Business acquisition, development, and integration costs during the three months ended December 31, 2019 primarily included expenses for the settlement of outstanding Milacron share-based equity awards, professional fees, and severance and employee-related costs in connection with the acquisition and integration of Milacron. Business acquisition, development, and integration costs during the three months ended December 31, 2018 primarily included professional fees.
|
|
(2)
|
Restructuring and restructuring-related charges primarily included severance costs, unrelated to the acquisition and integration of Milacron, during the three months ended December 31, 2019 and 2018.
|
|
(3)
|
Represents the non-cash charges related to the fair value adjustment of inventories acquired in connection with the acquisitions of Milacron and BM&M during the three months ended December 31, 2019 and 2018, respectively.
|
|
•
|
$374.4 (net of discount) was raised in connection with issuing publicly traded notes in September 2019;
|
|
•
|
$650.0 of additional borrowings under the Revolver. Hillenbrand made repayments subsequent to the closing of the acquisition to reduce the outstanding balance of the Revolver, which was $525.0 as of December 31, 2019; and
|
|
•
|
Two term loan commitments totaling $725.0 in principal.
|
|
|
Three Months Ended December 31,
|
||||||
|
(in millions)
|
2019
|
|
2018
|
||||
|
Cash flows provided by (used in)
|
|
|
|
|
|
||
|
Operating activities
|
$
|
17.8
|
|
|
$
|
35.5
|
|
|
Investing activities
|
(1,496.1
|
)
|
|
(29.8
|
)
|
||
|
Financing activities
|
1,221.4
|
|
|
2.8
|
|
||
|
Effect of exchange rates on cash and cash equivalents
|
0.4
|
|
|
0.3
|
|
||
|
Net cash flows
|
$
|
(256.5
|
)
|
|
$
|
8.8
|
|
|
|
|
Payment Obligations by Fiscal Year
|
||||||||||||||||||
|
As of December 31, 2019
|
|
Total
|
|
Remainder of 2020
|
|
2021 - 2022
|
|
2023 - 2024
|
|
Thereafter
|
||||||||||
|
$500.0 term loan
|
|
$
|
493.7
|
|
|
$
|
18.7
|
|
|
$
|
62.5
|
|
|
$
|
87.5
|
|
|
$
|
325.0
|
|
|
$225.0 term loan
|
|
222.2
|
|
|
8.5
|
|
|
28.1
|
|
|
185.6
|
|
|
—
|
|
|||||
|
Revolver(1)
|
|
525.0
|
|
|
—
|
|
|
—
|
|
|
525.0
|
|
|
—
|
|
|||||
|
Interest on financing agreements (2)
|
|
309.0
|
|
|
51.3
|
|
|
120.5
|
|
|
101.3
|
|
|
35.9
|
|
|||||
|
Operating lease payments
|
|
184.2
|
|
|
27.4
|
|
|
60.8
|
|
|
38.2
|
|
|
57.8
|
|
|||||
|
|
|
(1)
|
The Revolver expires in August 2024. Although we may make earlier principal payments, we have reflected the principal balance due at expiration.
|
|
(2)
|
Cash obligations for interest requirements relate to our fixed-rate debt obligations at the contractual rates and our variable-rate debt obligations at the current rates as of December 31, 2019.
|
|
•
|
the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies as a result of the devotion of management’s attention to the merger or integration;
|
|
•
|
managing a larger combined business;
|
|
•
|
maintaining employee morale and retaining key management and other employees;
|
|
•
|
retaining existing business and operational relationships, including customers, suppliers and employees and other counterparties, as may be impacted by contracts containing consent and/or other provisions that may be triggered by the merger, and attracting new business and operational relationships;
|
|
•
|
the possibility of faulty assumptions underlying expectations regarding the integration process;
|
|
•
|
consolidating corporate and administrative infrastructures and eliminating duplicative operations;
|
|
•
|
coordinating geographically separate organizations; and
|
|
•
|
unanticipated issues in integrating information technology, communications and other systems.
|
|
•
|
We may be more vulnerable to general adverse economic and industry conditions, because we have lower borrowing capacity.
|
|
•
|
We may be required to dedicate a larger portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow for other purposes, including business development efforts and acquisitions.
|
|
•
|
We will continue to be exposed to the risk of increased interest rates, because a portion of our borrowings is at variable rates of interest.
|
|
•
|
We may be more limited in our flexibility in planning for, or reacting to, changes in our businesses and the industries in which they operate, thereby placing us at a competitive disadvantage compared to competitors that have less indebtedness.
|
|
•
|
We may be more vulnerable to credit rating downgrades which could have an impact on our ability to secure future financing at attractive interest rates.
|
|
|
|
|
HILLENBRAND, INC.
|
|
|
|
|
|
|
Date: February 5, 2020
|
BY:
|
/s/ Kristina A. Cerniglia
|
|
|
|
Kristina A. Cerniglia
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
Date: February 5, 2020
|
|
/s/ Andrew S. Kitzmiller
|
|
|
|
Andrew S. Kitzmiller
|
|
|
|
Vice President, Controller, and Chief Accounting Officer
|
|
Target Performance Based Unit Award
(100% achievement of Shareholder Value Expected)
|
______ Units
|
|
Measurement Period (three fiscal years)
|
October 1, 20__ through September 30, 20__
|
|
Shareholder Value Expected (at the end of the Measurement Period)
|
$____M*
|
|
Target Performance Based Unit Award
|
______ Units
|
|
Measurement Period (three fiscal years)
|
October 1, 20__ through September 30, 20__
|
|
Ranking of Company TSR against Index members, expressed as a percentage
|
Multiplier
|
|
Equal to or less than 24.99% of Index
|
zero (no Units earned)
|
|
Equal to 25% of Index
|
0.25
|
|
Equal to 25.01% up to 49.99% of Index
|
determined via linear interpolation, from 0.2501 through 0.9999
|
|
Equal to 50% of Index
|
1.0 (target number of Units earned)
|
|
Equal to 50.01% up to 74.99% of Index
|
determined via linear interpolation, from 1.01 through 1.7499
|
|
Equal to or greater than 75% of Index
|
1.75 (maximum Units earned)
|
|
10.
|
Tax and Social Insurance Contributions Withholding.
|
|
Name of Grantee: ______________________
|
No. of Shares: ______________________
|
|
Grant Date: December ___, 20__
|
Price per Share: $______________________
|
|
/s/ Joe A. Raver
|
|
|
Joe A. Raver
|
|
|
President and Chief Executive Officer
|
|
|
|
|
/s/ Kristina A. Cerniglia
|
|
|
Kristina A. Cerniglia
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
/s/ Joe A. Raver
|
|
|
Joe A. Raver
|
|
|
President and Chief Executive Officer
|
|
|
February 5, 2020
|
|
|
|
|
/s/ Kristina A. Cerniglia
|
|
|
Kristina A. Cerniglia
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
February 5, 2020
|
|
|
|