Hillenbrand Inc Reports Strong Adjusted Earnings Growth Amidst Transformational Year
Fourth quarter revenue up 26% year-over-year, driven by acquisitions.
Full-year adjusted EPS increased by 31% to $3.52, reflecting successful acquisitions and organic growth.
Net debt to pro forma adjusted EBITDA ratio stands at 3.2x, with a targeted reduction by end of fiscal Q1 2025.
Fiscal 2024 guidance anticipates adjusted EPS between $3.60 and $3.95.
On November 15, 2023, Hillenbrand Inc (NYSE:HI) released its 8-K filing, detailing the fiscal fourth quarter and full year 2023 results. The company, a global provider of highly-engineered processing equipment and solutions, has reported a significant increase in revenue and adjusted earnings per share (EPS), marking a transformational year as it completed its pivot to a pure-play industrial company.
Fiscal Fourth Quarter and Full Year 2023 Performance
Hillenbrand Inc's fourth quarter revenue saw a 26% increase to $763 million compared to the previous year, with the Schenck Process Food and Performance Materials (FPM) acquisition contributing $43 million. However, organic revenue saw a slight decrease of 1%. The GAAP EPS for the quarter fell to $0.24 from $0.44 in the prior year, while adjusted EPS soared by 45% to $1.13, benefiting from recent acquisitions including a $0.02 net contribution from FPM.
For the full fiscal year, Hillenbrand Inc's revenue climbed by 22% to $2.83 billion, with organic revenue growing by 4%. The GAAP EPS saw a modest increase of 1% to $1.53, while the adjusted EPS jumped by 31% to $3.52. The adjusted EBITDA margin for the year slightly decreased by 20 basis points to 17.1%, primarily due to the dilutive effect of price-cost coverage.
Financial Highlights and Outlook
The company's balance sheet reflects a strong cash flow from operations, which increased by $144 million year-over-year to $207 million. This improvement was driven by reductions in inventory and unbilled receivables, coupled with higher earnings. Hillenbrand Inc also returned approximately $61 million to shareholders through quarterly dividends. As of September 30, 2023, the company's net debt stood at $1,767 million, with a net debt to pro forma adjusted EBITDA ratio of 3.2x. The company's liquidity was approximately $718 million, including cash on hand and availability under its revolving credit facility.
Looking ahead to fiscal 2024, Hillenbrand Inc has provided guidance with an adjusted EPS range of $3.60 to $3.95. The company's outlook does not assume a broader economic recession but does reflect the ongoing uncertainty within the global economic and geopolitical environment.
Strategic Acquisitions and Market Positioning
President and CEO Kim Ryan highlighted the company's strategic moves, stating,
Fiscal 2023 was a transformational year for Hillenbrand. We executed our strategy to position the portfolio for long-term success as a pure-play, global industrial company and delivered solid performance against the backdrop of a challenging macroeconomic environment."
The acquisitions of Linxis, Peerless, and Schenck FPM have strengthened Hillenbrand Inc's foundation for future growth, particularly in the less cyclical food end market.
Chief Financial Officer Bob VanHimbergen expressed confidence in the company's direction, emphasizing the momentum from recent acquisitions and the focus on driving efficiencies and optimizing costs to offset top-line headwinds.
Hillenbrand Inc's financial statements and non-GAAP reconciliations are available in the full 8-K filing. The company uses non-GAAP measures to provide a clearer picture of ongoing operations and to assist investors in making meaningful period-to-period comparisons.
For more detailed information on Hillenbrand Inc's financial performance, including income statements, balance sheets, and cash flow statements, investors and interested parties are encouraged to review the complete filing.
As Hillenbrand Inc continues to navigate a dynamic environment, it remains committed to its strategy of growth, productivity, and integration to shape what matters for tomorrow.
Explore the complete 8-K earnings release (here) from Hillenbrand Inc for further details.
This article first appeared on GuruFocus.
