Hillenbrand's Q1 Earnings: Navigating Through Challenges with a Vision for Recovery
1min read Hillenbrand Inc. (NYSE: HI), a diverse global industrial leader, announced its financial outcomes for the first quarter of fiscal 2024, showcasing a mixed performance across its varied business segments, including durable plastics, food, and recycling.
The company witnessed an 18% year-over-year increase in reported revenue, reaching $773 million, despite a 7% dip in organic revenue attributed to reduced capital volume. Net income saw a decline to $18 million, or $0.25 per share, from the previous year's $0.35 per share, while adjusted net income slightly decreased by 1% year-over-year to $69 million, or $0.69 per share. Adjusted EBITDA rose to $114 million, marking a 13% increase over the prior year, albeit a 14% decline on an organic basis. The adjusted effective tax rate experienced a rise to 28.6%.
The Molding Technology Solutions segment, a key revenue driver for Hillenbrand, faced continued demand challenges. In response, Hillenbrand is embarking on a cost savings and restructuring program anticipated to save around $15 million annually, aiming to streamline the company's cost structure and enhance growth and profitability prospects in a market rebound.
The quarter also saw a $24 million cash usage increase from the previous year, primarily due to diminished earnings and working capital timing. With a net debt standing at approximately $1,843 million and liquidity at about $647 million, Hillenbrand reported a net debt to pro forma adjusted EBITDA ratio of 3.4x.
Looking forward, Hillenbrand reaffirms its fiscal 2024 outlook, projecting an adjusted EPS range of $3.60 to $3.95. The company now expects to hit its target net leverage range between 1.7x to 2.7x by Q2 fiscal 2025, slightly postponing the original target of Q1 fiscal 2025.
Hillenbrand's first quarter paints a picture of resilience amidst market adversities, with strategic actions in place to optimize costs and prepare for future growth and profitability. The company remains steadfast in its commitment to navigating the present challenges, poised to leverage emerging opportunities as market conditions improve.