Batesville Casket’s parent company, Hillenbrand Industries, reported Fiscal Year 2021 and FY 4th Quarter 2021 results last week. In that report, that you can read here, they reported that the Batesville segment produced revenue of $623 million for the year. . . a 13% increase over FY2020. It should be mentioned here that FY2020 included the months of October, November, and December of 2019. . . a period in which no Covid deaths were reported in North America. In contrast, FY2021 includes 12 full months of covid-related deaths.
To put into perspective that 13% increase, it has been widely speculated that casket revenues in North America could expect to see 2-4% declines as cremation and other forms of disposition increased in percentage use. So, there is no doubt that the pandemic had more than a small role in the 13% increase of what is historically casket revenue for Batesville during the company’s fiscal year.
In the forward looking Fiscal 2022 Outlook portion of the Hillenbrand report, the company suggests that Batesville may fall in the revenue range of $540-$555 million, dropping from the $623 million number of FY2021. That would be a decrease in predominantly casket sales of 11-13% over the next 12 months. And, while no one would like to see a company lose sales, if the expected decline is because of a decline in covid-related deaths, it would be welcome news to all. On the Hillenbrand earnings call, which you can read here, Senior Vice President and Chief Financial Officer Kristina Cerniglia made this comment about that number moving forward, “While we are closely monitoring the continued impact of COVID-19, we expect deaths to normalize as we progress through fiscal year 2022.”
CFO Cerniglia also commented on the company’s 4th Quarter of FY 2021 (July, August, September) and Batesville’s sales by saying this, “Batesville performed above our expectations for both revenue and margin given the unfortunate circumstances with the Delta variant. Revenue of $155 million increased 5%, due to higher average selling price and an estimated increase in deaths associated with the pandemic. . . . . Adjusted EBITDA margin of 21.6% declined 270 basis points compared to the prior year, primarily due to cost inflation and higher transportation and manufacturing cost premiums required to respond to the increased demand driven by the ongoing COVID-19 pandemic.”
Funeral Director Daily take: It’s interesting to me to read the report. It reads somewhat differently than the public companies we have reported July, August, and September numbers for, in part, because Batesville (Hillenbrand) is a manufacturer as compared to the personal service consumer companies that operate funeral homes and cemeteries.
For instance, the Fiscal 2022 Outlook on the Hillenbrand press release sounds very much like what you hear on the news every day. Here’s a quote from the release, “As the basis of our outlook, we expect supply chain disruptions, elevated transportation costs, and labor market shortages to persist through the majority of the fiscal year. Additionally, we expect commodity costs to remain elevated through at least the first half of the fiscal year.”
I’m of the opinion that good old ingenuity and doing some things out of the ordinary is what can bring long-term consumer confidence in companies. Reading that quote from Batesville, the leader in casket market share across North America, I get the idea that casket availability could possibly be difficult in the next six months. If I was still operating my funeral home, I may look at this as a time where I needed to bulk up my own inventory with a larger than normal purchase or at least look to what options I may have for getting units from a secondary supplier.
I’m guessing that the good people at Batesville will be doing all they can to supply their accounts, but if a family comes in and you don’t have the preferred preneed casket or a similar casket, you are the business on the front line, not Batesville. My word of advice is “make sure that you don’t get caught up in another company’s situation if you can help it”. It’s always good to think like a Boy Scout — “Be prepared”.
Disclaimer-– The author of this article holds a stock position in Hillenbrand Industries.
More news from the world of Death Care:
- With human composting, Death goes “Green”. U.S. News and World Report
- This historic Brooklyn cemetery shows us a future without lawns. Popular Science
- Seth Beardsley becomes partner and owner of family funeral home business. Gant News (PA)
- Beardsley Funeral Home and Crematory website.
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