Batesville / IN. (hil) Hillenbrand Inc., a global industrial company operating in over 40 countries with more than 10,000 associates serving a wide variety of industries around the world, in May reported results for the fiscal 2022 second quarter, which ended in Indiana on March 31, 2022.
«We delivered another solid quarter of results as demand continued to be healthy for our industrial products and solutions, and Batesville performed above expectations due to the unfortunate effects of the Omicron variant,» said Kim Ryan, President and Chief Executive Officer. «Our employees remain relentlessly focused on executing through this challenging operating environment, despite escalating headwinds from supply chain disruption, inflation, and foreign currency, which have been exacerbated by a return of COVID-related shutdowns in China and the war in Ukraine. With our healthy balance sheet and strong backlog, we remain well positioned to generate long-term value for our shareholders.»
Second Quarter 2022 Results
Revenue of USD 742 million increased 3 percent compared to the prior year primarily driven by increased pricing and growth in large plastics projects in the Advanced Process Solutions segment, partially offset by the divestitures of ABEL and TerraSource Global. Excluding the impact of foreign currency exchange, revenue increased 5 percent. On a pro forma basis, which excludes the divested ABEL and TerraSource businesses from the Advanced Process Solutions segment, revenue increased 5 percent year over year, or 8 percent excluding the impact of foreign currency exchange.
Net income of USD 54 million resulted in USD 0.74 per share, a decrease from USD 1.03 per share in the prior year primarily due to a gain on the sale of ABEL in the prior year that did not repeat. Adjusted net income of USD 74 million resulted in adjusted EPS of USD 1.01, an increase of USD 0.03, or 3 percent, as favorable pricing, productivity improvements, and higher volume were partially offset by inflation, a higher tax rate, increased strategic investments, and the impact of foreign currency exchange. The adjusted effective tax rate for the quarter was 30.1 percent, an increase of 300 basis points from the prior year due to the timing of discrete items.
Adjusted EBITDA of USD 137 million increased 2 percent year over year. On a pro forma basis, adjusted EBITDA increased 4 percent, while adjusted EBITDA margin of 18.5 percent decreased 20 basis points compared to a year ago primarily due to inflation, increased strategic investments, and the impact of lower volume in Batesville, which more than offset favorable pricing, productivity improvements, and operating leverage from higher volume in Advanced Process Solutions.
Balance Sheet, Cash Flow and Capital Allocation
Hillenbrand generated cash flow from operations of USD 46 million in the quarter, a decrease of USD 147 million year-over-year, primarily due to timing of working capital. During the quarter, the Company repurchased approximately 583,000 shares for USD 26.6 million at an average share price of USD 45.62 and returned approximately USD 16 million to shareholders in the form of quarterly dividends. Subsequent to the quarter, the Company repurchased an additional 926,000 shares through May 5, 2022 for USD 40.5 million at an average share price of USD 43.76.
Net debt at the end of the quarter was USD 769 million, and the net debt to adjusted EBITDA ratio was 1.4x. Liquidity at the end of the quarter was approximately USD 1.3 billion, including USD 445 million in cash on hand and the remainder available under our revolving credit facility.
Leadership Transition
Effective April 30, 2022, Bob VanHimbergen became Hillenbrand’s Senior Vice President and Chief Financial Officer following a transition period that began in March. Mr. VanHimbergen is responsible for leading Hillenbrand’s global finance organization, ensuring the Company’s continued strong financial and operational performance, and helping lead the evolution and execution of Hillenbrand’s long-term profitable growth strategy. Mr. VanHimbergen was most recently Vice President and Corporate Controller at Johnson Controls.
For additional information please read the Company’s PDF file below (109 KB):
20220720-HILLENBRAND-02-2022.