Hillenbrand Reports Earnings for Third Quarter of 2011

BATESVILLE, Ind., Aug. 8, 2011 /PRNewswire/ — Hillenbrand, Inc. (NYSE: HI)

CEO Comments

“We’re pleased with our third-quarter results, which were in line with our
expectations,” said Kenneth A. Camp, Hillenbrand’s president and chief executive
officer. “Once again, K-Tron has demonstrated strong growth in revenue, backlog,
and EBITDA. At the same time, Batesville continues to generate strong and
consistent cash flow, while minimizing the impact of increasing commodity
costs.”

Quarterly Summary

Hillenbrand reported revenue of $211.2 million for the third quarter of fiscal
2011, a $5.4 million (3%) increase over the prior year. K-Tron’s revenue
contribution was $60.6 million for the quarter, an increase of $9.7 million
(19%), or $4.8 million (10%) on a constant currency basis. Its order backlog of
$94.4 million represented a 19% sequential increase compared to the second
quarter of fiscal 2011. At $150.6 million, revenue for the Batesville business
decreased by $4.3 million (3%), largely due to burial unit volume.

Higher commodity costs for Batesville, primarily for fuel and steel, drove a
decrease in consolidated gross profit margin from 42.5% (adjusted in 2010) to
40.8% in the third quarter of 2011.

Net income increased $9.2 million (69%) to $22.5 million, with EPS growing 64%
over the prior year to $0.36. In the same period, EBITDA increased $12.6 million
(41%) to $43.5 million. Cash flow from operations was $102.1 million, an
increase of $74.1 million over the prior year, including $60 million of interest
from the early collection of the Forethought note.

On an adjusted basis, net income of $23.7 million decreased $4.4 million (16%)
and EPS decreased 16% over the prior year to $0.38. At $45.3 million, adjusted
EBITDA decreased $4.8 million (10%), primarily due to the decline in adjusted
gross profit.

Year-to-Date Summary

For the nine months ended June 30, 2011, Hillenbrand’s revenue was $652.2
million, a $115 million (21%) increase over the prior year. Gross profit margin
decreased to 42.8% from 44.0% on an adjusted basis in 2010. Net income of $82.6
million ($1.33 per share) increased 14% compared to the prior year, although on
an adjusted basis, net income decreased 3% to $84.6 million ($1.36 per share).
At $152.9 million, EBITDA increased $28.3 million (23%) over the prior year and
$11.9 million (8%) on an adjusted basis. Cash flow from operations was $155.3
million compared to $117 million in the prior year.

Conference Call and Webcast

The company will host a conference call and simultaneous webcast on Tuesday,
August 9, at 8 a.m. ET to discuss the results for the third quarter of fiscal
2011. The webcast will be available at http://ir.hillenbrandinc.com and will be
archived on the company’s website through August 9, 2012.

To access the conference call, listeners in the United States and Canada may
dial 1-877-856-1965, and international callers may dial 1-719-325-4853. A replay
of the call will be available until midnight ET, Tuesday, August 23, 2011, by
dialing 1-888-203-1112 in the United States and Canada or 1-719-457-0820
internationally, and using the passcode 7914711.

Consolidated Statements of Income (Unaudited)
(in millions, except per share data)

Three Months Ended
June 30,
——–
2011 2010
—- —-

Net revenue $211.2 $205.8
Cost of goods sold 125.1 130.2
—– —–
Gross profit 86.1 75.6
Operating expenses 51.2 55.8
—- —-
Operating profit 34.9 19.8
Interest expense (2.6) (1.0)
Investment income and
other 0.7 3.8
— —
Income before income
taxes 33.0 22.6
Income tax expense 10.5 9.3
—- —
Net income $22.5 $13.3
===== =====

EPS – basic and diluted $0.36 $0.22

Weighted average shares
outstanding – basic and
diluted 62.1 62.0

Cash dividends per share 0.1900 0.1875

Nine Months Ended
June 30,
——–
2011 2010
—- —-

Net revenue $652.2 $537.2
Cost of goods sold 373.0 312.6
—– —–
Gross profit 279.2 224.6
Operating expenses 154.4 121.5
—– —–
Operating profit 124.8 103.1
Interest expense (8.3) (1.5)
Investment income and
other 9.3 11.9
— —-
Income before income
taxes 125.8 113.5
Income tax expense 43.2 41.3
—- —-
Net income $82.6 $72.2
===== =====

EPS – basic and diluted $1.33 $1.17

Weighted average shares
outstanding – basic and
diluted 62.0 61.9

Cash dividends per share 0.5700 0.5625

Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)

Nine Months Ended
June 30,
2011 2010
—- —-
Net cash provided by operating
activities $155.3 $117.0
Net cash used in investing activities 98.7 (356.8)
Net cash provided by financing
activities (165.5) 287.9
Effect of exchange rate changes on
cash and cash equivalents 11.4 (1.1)
—- —-

Net cash flows 99.9 47.0

Cash and cash equivalents:
At beginning of period 98.4 35.2
—- —-
At end of period $198.3 $82.2
====== =====

Hillenbrand’s financial statements on Form 10-Q were filed jointly with this
release and are available on the Company’s website (www.HillenbrandInc.com).

Reconciliation of Non-GAAP Measures (Unaudited)
(in millions)

Three Months Ended Nine Months Ended
June 30, June 30,
——– ——–
2011 2010 2011 2010
—- —- —- —-
GAAP net income $22.5 $13.3 $82.6 $72.2
Antitrust
litigation 0.7 1.4 1.3 1.9
Inventory & backlog
step-up – 13.3 – 13.3
Business
acquisition 0.4 6.2 1.7 10.0
Sales tax
adjustment – – (0.7) (4.1)
Restructuring 0.7 – 0.7 -
Income tax on
adjustments (0.6) (6.1) (1.0) (6.3)
—- —- —- —-
Net income -
adjusted $23.7 $28.1 $84.6 $87.0
===== ===== ===== =====

EPS – adjusted $0.38 $0.45 $1.36 $1.40

Three Months Ended Nine Months Ended
June 30, June 30,
——– ——–
2011 2010 2011 2010
—- —- —- —-
GAAP net income $22.5 $13.3 $82.6 $72.2
Interest income (0.8) (3.2) (7.2) (9.9)
Interest expense 2.6 1.0 8.3 1.5
Income tax
expense 10.5 9.3 43.2 41.3
Depreciation and
amortization 8.7 10.5 26.0 19.5
— —- —- —-
EBITDA 43.5 30.9 152.9 124.6

Antitrust
litigation 0.7 1.4 1.3 1.9
Inventory step-
up – 11.6 – 11.6
Business
acquisition 0.4 6.2 1.7 10.0
Sales tax
adjustment – – (0.7) (4.1)
Restructuring 0.7 – 0.7 -
— — — —
EBITDA – adjusted $45.3 $50.1 $155.9 $144.0
===== ===== ====== ======

While Hillenbrand, Inc. reports financial results in accordance with accounting
principles generally accepted in the United States (GAAP), this press release
includes non-GAAP measures. These non-GAAP measures are not in accordance with,
nor are they a substitute for, GAAP measures. Hillenbrand uses the non-GAAP
measures to evaluate and manage its operations and provides the information to
investors so they can see the results “through the eyes” of management.
Hillenbrand further believes that providing this information better enables
investors to understand the ongoing operating performance of the company.
Investors should consider non-GAAP measures in addition to, not as a substitute
for, or as superior to, measures of financial performance prepared in accordance
with GAAP.

Guidance for Fiscal Year 2011 (Unaudited)

This guidance does not include the effects of the pending acquisition
of Rotex Global, LLC or any of Hillenbrand’s related business
acquisition and transition costs.

(in millions, except per share data)
Fiscal Year Ending September
30, 2011
Low High
— —-
Net revenue (constant currency) $855 $875
Tax rate 34.5% 33.5%
Average diluted shares outstanding 62 62
EPS $1.69 $1.75
EPS – Adjusted (excluding antitrust
litigation expenses,
business acquisition costs, and sales
tax recoveries) $1.72 $1.78
Capital expenditures $22 $26

Disclosure Regarding Forward-Looking Statements

Throughout this release, we make a number of forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. As the
words imply, forward-looking statements are statements about the future, as
contrasted with historical information. Our forward-looking statements are based
on assumptions and current expectations of future events that we believe are
reasonable, but by their very nature they are subject to a wide range of risks.
If our assumptions prove inaccurate or unknown risks and uncertainties
materialize, actual results could vary materially from Hillenbrand’s
expectations and projections.

Words that could indicate we’re making forward-looking statements include the
following:

intend believe plan expect may goal would
become pursue estimate will forecast continue could
targeted encourage promise improve progress potential should

This isn’t an exhaustive list, but is simply intended to give you an idea of how
we try to identify forward-looking statements. The absence of any of these
words, however, does not mean that the statement is not forward-looking.

Here’s the key point: Forward-looking statements are not guarantees of future
performance, and our actual results could differ materially from those set forth
in any forward-looking statements. Any number of factors — many of which are
beyond our control — could cause our performance to differ significantly from
what is described in the forward-looking statements. These factors include, but
are not limited to: recent global market and economic conditions, including
those related to the credit markets; the impact – positive or negative – of the
company’s ability to execute its planned acquisition and successful integration
of Rotex Global, LLC;volatility of our investment portfolio; foreign currency
fluctuations; ongoing involvement in claims, lawsuits and governmental
proceedings related to operations; labor disruptions; our ability to continue
the successful integration of K-Tron International; the dependence of our
business units on relationships with several large national providers; increased
costs or unavailability of raw materials; continued fluctuations in mortality
rates and increased cremations; competition from nontraditional sources in the
funeral services business; our ongoing antitrust litigation; cyclical demand for
industrial capital goods; and certain tax-related matters. For a more in-depth
discussion of these and other factors that could cause actual results to differ
from those contained in forward-looking statements, see the discussions under
the heading “Risk Factors” in item 1A of Hillenbrand’s Annual Report on Form
10-K for the year ended September 30, 2010, filed with the Securities and
Exchange Commission (SEC) November 23, 2010. The company assumes no obligation
to update or revise any forward-looking information.

About Hillenbrand, Inc.

Hillenbrand (www.HillenbrandInc.com) is a diversified enterprise with multiple
subsidiaries focused around two separate operating businesses. Batesville Casket
(www.batesville.com) is a leader in the North American death care industry
through the sale of funeral services products, including burial caskets,
cremation caskets, containers and urns, burial vaults, selection room display
fixturing, and other personalization and memorialization products. K-Tron
International is a recognized leader in the design, production, marketing, and
servicing of material handling equipment and systems. The company serves many
different industrial markets through two product lines. The Process Group
focuses primarily on feeding and pneumatic conveying equipment, doing business
under two main brands: K-Tron Feeders and K-Tron Premier. The Size Reduction
Group concentrates on size reduction equipment, conveying systems, and screening
equipment, operating under three brands: Pennsylvania Crusher, Gundlach, and
Jeffrey Rader. HI-INC-F

SOURCE Hillenbrand, Inc.