In the world that we are living in, it is certainly not unexpected, but to see Batesville’s sales soar 30% for the October, November, and December quarter is both mind boggling and sobering.
It is, in my opinion, mind boggling simply to see any company, without a major acquisition, grow their sales by 30% in a fiscal quarter. And, it is sobering, because in the COVID-19 pandemic world, we all know the major reason while Batesville has had this growth.
You can see Hillenbrand Industries’ 2021 1Q financial results here.
To be true to this story, we need to tell you that the consolidated Hillenbrand company had a very good first quarter for 1Q 2021 as compared to 1Q 2020. Sales for the company, in total, were $692.5 million for the quarter compared to $566.9 million one year ago. Only about $37.8 million of that $125.6 million increase can be attributed to Batesville, so it shows great success in Hillenbrand’s other divisions as well. One thing that did help that sales increase is that the Milicron acquisition had 50 extra days as a Batesville company during 1Q than the days after acquisition in 2019.
Getting to the Batesville section of the company. For 1Q 2021, Batesville had sales of $164.8 million as compared to quarterly sales of $127.0 million for the same period (October, November, December 2019) last fiscal year. That’s an increase of right at 30%.
Obviously, last year’s comparables were in a period that we would know as a non-COVID-19 pandemic time period. It should also be noted that on this year’s sales, 1Q 2021 sales showed an EBITDA of $53.2 million for the Batesville segment of Hillenbrand Industries as compared to an EBITDA of 23.0 million for the same period last year.
Here’s what management said about the demand for Batesville products this past quarter, “. . . .COVID-related burial casket demand that was higher than our expectations for the quarter.”
In the 2020 4Q report, Hillenbrand executives said they expected Batesville sales to go up about 12-15% for this quarter. For next quarter the Batesville segment guidance is for a 20-25% increase in sales.
Here’s how the Hillenbrand management concisely reported the results for Batesville’s quarter, “Revenue of $165 million was 30% higher year over year. The increase was driven by strong burial volume demand due to increased mortality associated with the COVID-19 pandemic. Adjusted EBITDA margin of 31.7% was 1,360 basis points higher than the prior year, mainly driven by higher burial volume and productivity initiatives, partially offset by higher inflation and variable compensation.”
Disclaimer — The author of this article holds a stock position in Hillenbrand Industries.
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Webinar: Coping through COVID for funeral directors. According to the registration page this free seminar from NFDA will encompass “Our trainers will provide new ideas for strategies for increasing your health and resiliency while working during a pandemic in a high stress field.” Scheduled for Wednesday, February 10.
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