Hillenbrand Reports 9% Revenue Decline and 54% Drop in Net Income for December 2024

Hillenbrand, Inc. reported a decline in financial performance for the three months ended December 31, 2024, with net revenue of $706.9 million, down 9% from $773.3 million in the same period of the previous year. The company's gross profit also decreased to $235.0 million, a 6% drop from $251.0 million, although the gross profit margin improved to 33.2%. Operating expenses rose by 8% to $171.1 million, primarily due to increased costs associated with business acquisitions and inflation. The company recorded a consolidated net income of $8.9 million, a significant decrease of 54% compared to $19.2 million in the prior year.

The decline in revenue was largely attributed to a 10% decrease in the Advanced Process Solutions segment, driven by lower sales volumes despite favorable pricing. The Molding Technology Solutions segment also experienced a 5% revenue decline, primarily due to reduced sales of injection molding and hot runner equipment. The company noted that foreign currency fluctuations negatively impacted revenue by 1%. Additionally, the order backlog for Advanced Process Solutions decreased by 17%, indicating a potential slowdown in future sales.

Strategically, Hillenbrand completed the divestiture of its Batesville segment in February 2023, which has since been classified as a discontinued operation. This divestiture has allowed the company to focus on its two remaining segments: Advanced Process Solutions and Molding Technology Solutions. The company is also in the process of selling a 51% stake in its Milacron injection molding and extrusion business to Bain Capital, expected to close in mid-2025 for approximately $287 million.

Operationally, Hillenbrand's total assets decreased to $5.06 billion from $5.24 billion at the end of the previous fiscal year. The company reported a slight increase in cash and cash equivalents to $208.0 million, while trade receivables and inventories showed minor fluctuations. The effective tax rate for the quarter rose to 41.8%, up from 33.9% in the prior year, primarily due to changes in tax benefits and the expiration of reduced incentive rates for certain operations in China.

Looking ahead, Hillenbrand anticipates continued challenges in the market, including inflationary pressures and fluctuating demand for its products. The company remains committed to maintaining financial flexibility and expects to utilize its existing cash and credit facilities to support operations and strategic initiatives. The outlook for the upcoming quarters will depend on the company's ability to navigate these market conditions and capitalize on its backlog of orders, which currently stands at $1.82 billion, with 88% expected to be fulfilled within the next twelve months.