Hillenbrand Profit Narrows

August 1, 2012

News Release

Batesville, Ind. -- Hillenbrand (NYSE: HI) revenue for the third quarter of 2012 grew 13% to $238 million compared to the same quarter last year. This was driven by Process Equipment Group revenue growth of 53% to $93 million (5% organic growth). In addition to the strong revenue growth, the group's order backlog continued to grow sequentially, ending the quarter at $140 million, an increase of 3% over the second quarter.

Batesville revenue dropped 3% to $146 million primarily due to an estimated 5% decrease in North American burials. The decline in burials was driven by an estimated 2% decline in North American deaths compared to the same quarter last year. Burial volume was also impacted by the rate at which consumers opted for cremation.

Consolidated gross profit margin in the third quarter was 38.1% compared to 40.8% in the prior year. The decrease was largely driven by Batesville as they experienced declines in volume and average selling price as well as short-term transition costs including those related to a manufacturing shift consolidation. On an adjusted basis, which excludes restructuring charges at both business platforms, the consolidated gross profit margin was 38.6%.

Net income decreased 5% over the prior year to $21 million, with diluted EPS down 6% to $0.34. On an adjusted basis, net income declined 3% to $23 million and diluted EPS declined 3% to $0.37, as the continued strong growth from the Process Equipment Group was more than offset by lower Batesville volumes. EBITDA was $42 million, a 3% decrease from the prior year. On an adjusted basis, EBITDA decreased by 1% to $45 million. Hillenbrand once again delivered strong cash flow from operations, reporting $50 million compared to $102 million in the prior year. The prior year included $60 million from the collection of the Forethought Note.

"We are pleased with the success of the Process Equipment Group as it continues to grow both organically and through acquisitions," said Kenneth A. Camp, president and chief executive officer of Hillenbrand. "While the funeral products industry, including Batesville, continued to face the challenges of a significant drop in North American burials, Batesville has successfully enhanced its market position and continued to provide the consistent cash flow that assists us in pursuing our acquisition strategy and delivering returns to shareholders."

Year-to-Date Summary

For the nine months ended June 30, 2012, Hillenbrand's revenue increased 12% over the prior year to $730 million. Gross profit margin was 39.6% (40.1% on an adjusted basis) compared to 42.8% in the prior year. Other income and expense decreased $10 million largely due to the full collection of the Forethought Note in April 2011 ($6 million) and a decrease in investment gains ($3 million). Cash flow from operations was $110 million compared to $155 million in the prior year. The prior year included $60 million from the collection of the Forethought Note. Net income of $80 million decreased 3% and diluted EPS of $1.28 decreased 4%. On an adjusted basis, net income decreased 7% to $79 million ($1.26 per diluted share). EBITDA decreased 8% to $140 million from the prior year and 3% to $151 million on an adjusted basis.

The company will host a conference call and simultaneous webcast Thursday, August 2, 2012, at 8 a.m. ET to discuss the results for the third quarter of fiscal year 2012, which ended June 30, 2012. The webcast will be available at http://ir.hillenbrand.com and will be archived on the company's website through August 2, 2013. To access the conference call, listeners in the United States and Canada may dial 1-877-853-5642, and international callers may dial 1-253-237-1134. Use conference call ID number 43746905. A replay of the call will be available until midnight ET, Thursday, August 23, 2012, by dialing 1-855-859-2056 toll free in the United States and Canada or 1-404-537-3406 internationally, and using the conference ID number 43746905.

Hillenbrand's financial statements on Form 10-Q are expected to be filed jointly with this release and are available on the Company's website (www.Hillenbrand.com).

Hillenbrand (www.Hillenbrand.com) is a global diversified industrial company that makes and sells premium business-to-business products and services for a wide variety of industries. We pursue profitable growth and meaningful dividends for our shareholders by leveraging our leading brands, robust cash generation capabilities and strong core competencies. HI-INC-F

Source: Hillenbrand Inc.