Quarterly report at Hillenbrand reinforces recent results
Hillenbrand Industries, the parent company of Batesville Casket, reported its 3rd Quarter results earlier in the week. The 3rd Quarter for Hillenbrand encompasses the April thru June time period.
It’s interesting to note that the Batesville segment of the business carried through with what we have been seen in the death care profession with other public companies April thru June 2022 reports. That includes slightly elevated dollar sales volume, compressed EBITDA margins, and what appears to be less volume in numbers of deaths (or in Batesville’s case — a smaller number of caskets sold). . . which gives some credence to a national pull-forward death effect of the Covid-19 pandemic.
For Batesville specifically, here’s what the 3rd Quarter press release, which you can access here, said:
“Revenue of $141 million was up 2% compared to the prior year primarily resulting from the price surcharges implemented this year to offset the significant increase in commodity costs. Burial casket volume was lower (FDD emphasis added) compared to the prior year primarily due to an estimated decrease in deaths associated with the COVID-19 pandemic and an estimated increase in the rate at which families opted for cremation.
Adjusted EBITDA of $25 million decreased 15% compared to the prior year, while adjusted EBITDA margin of 17.9% decreased 370 basis points primarily due to the dilutive effect of price-cost coverage and the impact of lower volume, which were partially offset by productivity improvements.”
In her comments on the Hillenbrand Industries earnings call, here’s what CEO Kim Ryan said specifically to Batesville, “In regards to Batesville, we signed a long-term contract with a key customer in the quarter, and the Batesville team continues to have great success in attracting and partnering with other large customers as well, which is a testament to their industry-leading products and services. . . . . we also announced the initiation of a process to explore a range of strategic alternatives for Batesville. Batesville continues to be a leader in the death care industry in North America, with an exceptional team that has been tireless in their efforts to deliver best-in-class quality, innovation and service to our customers. Batesville is a significant part of our history, and we are confident this process will determine the best path forward to benefit our associates, customers and shareholders. As we mentioned, there is no specific timetable for this review, but we will update you again at the conclusion of the process.”
Funeral Director Daily take: One of the things I found interesting in the report and earnings call was the apparent decreasing emphasis on Batesville. It appears that more emphasis was put on the other two business segments of Hillenbrand than was put on Batesville. It then
dawned on me that Batesville contributed about $141 million in revenue to Hillenbrand in the quarter while the other two segments combined to contribute about $580 million. . . .that makes Batesville’s contribution to the total revenue of the company under 20% (actually 19.5%). And, my guess is that the other two segments have much higher growth potential which has led to the “announcement of a range of strategic alternatives for Batesville” moving forward.
I found a contrast with the April thru June time period with Matthews International interesting. Both companies are what would be termed industrial conglomerates with their business in several different areas. However, both have a division that caters to Death Care. With Hillenbrand it is Batesville Casket, which as mentioned above dropped to about 19.5% of the company’s total sales for the quarter. With Matthews it is their “Memorialization Segment” which consists of among other companies, their Aurora casket brand and cremation products. Matthews seems to be moving in the other direction as year-to date sales in the Memorialization segment have risen to 48.5% of company sales, an increase of about 2% over the same period last year.
And, while Hillenbrand’s Batesville division totaled sales of about $141 million for the April thru June 2022 time period, Matthews International’s Memorialization Segment totaled sales of about $203 million for the same time period.
For someone who has grown up in the funeral home profession, and always saw Batesville Casket as the leading generator of sales and income to Hillenbrand Industries as well as “The Leader” to the funeral industry in many aspects, that seems strange. However, change does happen and it will be interesting to watch how the saga of Batesville plays out if it is indeed separated from the Hillenbrand companies in due time.
More news from the world of Death Care:
- Unlicensed funeral director who ran businesses in Akron guilty of 31 charges. Akron Beacon Journal (OH)
- New Mexico to consider selling land for new VA cemetery in Rio Rancho. Video story and print article. KRQE News – Albuquerque (NM)
- What is the average cost for cremation? Ask Money
- 5 steps to cremation planning you need to follow. Newswire
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