• Revenue: $838 million, an increase of 10% overall compared to the prior year.
• Organic Revenue: Decreased 1% year over year.
• Adjusted EBITDA: $144 million, decreased 2% or 13% organically.
• GAAP Net Income: $12 million, down from $17 million in the prior year.
• Adjusted Net Income: $71 million, resulting in earnings per share of $1.01.
• Adjusted Effective Tax Rate: 27.4% for the quarter.
• Cash Flow from Operations: $167 million, an increase of $93 million over the prior year.
• Capital Expenditures: $13 million in the quarter.
• APS Revenue: $591 million, increased 15% compared to the prior year.
• APS Organic Revenue: Decreased 2% year over year.
• APS Adjusted EBITDA Margin: 19.8%, down 300 basis points from the prior year.
• MTS Revenue: $247 million, essentially flat to the prior year.
• MTS Adjusted EBITDA: $42 million, decreased 8%.
• MTS Adjusted EBITDA Margin: 17%, decreased 150 basis points from the prior year.
• Full Year Revenue: $3.18 billion, increased 30% over the prior year.
• Full Year Adjusted EBITDA: $512 million, increased 6% but down 12% organically.
• Full Year GAAP Net Loss: $230 million, down from net income of $107 million in the prior year.
• Full Year Adjusted Net Income: $234 million, resulting in adjusted earnings per share of $3.32.
• Full Year Operating Cash Flow: $191 million, down $16 million compared to the prior year.
• Net Debt: $1.69 billion at the end of the fourth quarter.
• Net Debt to Adjusted EBITDA Ratio: 3.3 times.

• Warning! GuruFocus has detected 8 Warning Signs with HI.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hillenbrand Inc (NYSE:HI) successfully executed its integration program, achieving significant cost savings and operational efficiencies.
• The company reported a 10% increase in revenue for the fourth quarter, driven by favorable pricing and strengthened aftermarket parts and services.
• Hillenbrand Inc (NYSE:HI) generated $167 million in cash flow from operations, a significant increase over the prior year.
• The company has made progress in its sustainability efforts, publishing its first Task Force on Climate-related Financial Disclosures (TCFD) report.
• Hillenbrand Inc (NYSE:HI) has a healthy order pipeline across key markets and regions, indicating potential for future growth.

Negative Points

• The company faces a lower backlog entering 2025, which is expected to be a headwind for the year.
• Hillenbrand Inc (NYSE:HI) reported a decrease in GAAP net income due to increased business integration costs and higher tax expenses.
• The adjusted EBITDA margin for the APS segment decreased by 300 basis points compared to the prior year.
• The company anticipates a decline in total revenues for fiscal 2025, primarily driven by a decrease in the APS segment.
• Hillenbrand Inc (NYSE:HI) expects leverage to slightly increase in the fiscal first quarter due to typical seasonality and lower starting backlog.

Q & A Highlights

Q: Can you provide more details on order trends for fiscal '25 and when you expect backlogs to stabilize and grow? A: Robert VanHimbergen, CFO, explained that capital budgets were locked down for the rest of the calendar year due to macroeconomic uncertainties, including interest rates. They expect orders to start trickling in during the fiscal second quarter as capital budgets unlock, with acceleration in the second half of the year.

Q: What is the current state of hot runner demand across industries and geographies? A: Kimberly Ryan, CEO, noted stability and slight growth in the hot runner market, particularly in India and China. They are expanding into new markets through product innovation, targeting opportunities in medical and automotive sectors, which are expected to grow in the coming months.

Q: Are you surprised by the pullback in spending in food and pharma sectors, and do you expect a period of outsized growth when the cycle turns? A: Kimberly Ryan stated that consumer demand and discretionary income are key drivers for these markets. While there is stability in the food sector, the company is focusing on integration and cost efficiencies to be well-positioned for growth when market conditions stabilize.

Q: What factors influenced the deleverage in APS, and how is it reflected in the fiscal '25 guidance? A: Robert VanHimbergen explained that lower volumes, timing of incentive compensation, and a mix of lower-margin projects impacted Q4. For fiscal '25, they expect flat order volume with modest improvements in aftermarket revenue and pricing, focusing on cost containment and integration.

Q: How much of the $30 million synergies have been realized, and what is expected for fiscal '25? A: Robert VanHimbergen reported that they achieved nearly double the expected synergies for the year, with continued acceleration anticipated in 2025 and 2026. Kimberly Ryan added that cost synergies are reflected in margin improvements and integration efforts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.