Hillenbrand Industries reported 1st Quarter 2018 earnings on January 31. You can read the company’s press release here.
President Joe Raver made the following comment, “We are off to a strong start for 2018 with continued momentum in the Process Equipment Group. We remain closely aligned with our customers by providing applications expertise and high engineered product solutions to solve their most challenging business needs. As a result, we delivered continued revenue growth, strong operating leverage, and a solid order backlog.”
Here are some of the highlights that Funeral Director Daily took from the press release:
- Revenue of $397 million was up about 12% over the same time period for 2017.
- Revenue in the Process Equipment Group grew by about 19% to a 1st quarter $264 million.
- Revenue in the Batesville Casket Group declined about 1% to $133 million for the quarter.
- GAAP Net income actually decreased, but only because Hillenbrand chose to re-patriotize foreign earnings which resulted in a onetime tax expense of $29 million.
- Adjusted Net Income increased 28% to $35 million or $.54 per share
- The company adjusted their guidance for the rest of 2018, partially based on the fact that their effective tax rate will be 26-28% as compared to the previous estimate of approximately 31%. This raises the guidance from a per share $2.16 – $2.28 to a per share $2.28 – to $2.40.
Funeral Director Daily take: Since I entered the business, and even before, when my father sold Batesville caskets to our consumer clients, Hillenbrand Industries and Batesville Casket has always been a well run company. It appears that is continuing even as funeral service business becomes less and less a percentage of their revenue stream.
A couple of things really caught my eye in this report. First of all, casket sales continue to decline. That is reflective of the American public’s rapidly changing memorialization habits. And, there is no coming back on that. The writing is not only on the wall – it’s in the consumer’s mind – that casketed burials will not only be less in percentage of services, but less in actual raw numbers as well. There has been some hope that as America’s population grows that casketed sales (in raw numbers) will stop the drop and level off. . . .but, I just don’t see that happening.
Secondly, it was interesting to see that the company took the tax hit and recognized unremitted foreign earnings. I’m a believer that the Tax Cuts and Jobs Act of 2017 will increasingly raise tax revenues for America. . . .even while we all pay less.