The Batesville Casket part of the company is still making money even though there was a 4% decrease in revenue. The growth is in the great K-Tron results (see the detail below).
Cash is up too. The litigation should be denied by the appeals court within the next 9 months.
K-Tron’s revenue increased $9.7 (19.1%) for the three months ended June 30, 2011, compared to the prior year. This increase was driven by volume of $4.8 and favorable foreign currency impact of $4.9.
Future revenue associated with K-Tron’s business lines is influenced by order backlog. There is a lead time involved in manufacturing specialized equipment and parts for customers. Backlog can be an indicator of future revenue; however, it may not include many projects and parts orders that are booked and shipped within the same quarter. The timing of order placement, size, and customer delivery dates can create unusual fluctuations in backlog and revenue. Backlog is also affected by foreign exchange fluctuations for orders denominated in currencies other than U.S. dollars.
Based upon new orders accepted, less orders completed and shipped during the third quarter of 2011, K-Tron’s backlog increased from $79.3 on March 31, 2011, to $94.4 on June 30, 2011. K-Tron’s backlog increased from $57.1 on September 30, 2010, to $94.4 on June 30, 2011.
Where is K-Tron foreign business. Europe, Asia or both. The Casket business looks like a cash cow in steady decline, so K-tron is key. Any special aspect of the business that makes it stand out with a competitive advantage. For all the cash flow and cheap price, no buybacks. Why is that? Too much debt?
K-Tron is headquartered in Pitman, New Jersey, USA. The K-Tron group of companies has more than 690 employees in the United States, Mexico, Europe and Asia. K-Tron's manufacturing facilities are located in the United States, Switzerland in, and China.
The margin compression in Batesville didn't seem all that great, but from listening to the CC it seems as if management thinks they will be able to push some of the commodity price increases they absorbed down to the customers. Either way, with commodity costs decreasing right now, we should see a pop in margins next quarter.
I like the two acquisitions and it seems as if they have been doing a good job of paying off debt (albeit with the proceeds of a one-time note receivable) from the K-tron acquisition.
The key for this company will be how they manage to integrate these two new additions and if Rotex can show growth much as Ktron was able to do. Would like to see management pause here, pay off some of the debt, and, once that is complete, continue to grow by finding undervalued acquisitions.
However, the stock price drop seems to have provided a nice entry point for those looking to scale in.
While I'm not anxious for HI to buy more companies, I am pleased that at least they bought another in the same type of business as K-tron and did not pay more than a couple of years earnings for it. Also that Rotex is located fairly close to home. The director from K-tron should have a pretty fair idea of the value of Rotex so that is positive for the acquisition also.