Hillenbrand Inc.
08/11/2025 | Press release | Distributed by Public on 08/11/2025 14:33
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(financial amounts in millions, except share and per share data, throughout Management's Discussion and Analysis)
FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
Throughout this Quarterly Report on Form 10-Q, we make a number of "forward-looking statements," including statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and that are intended to be covered by the safe harbor provided under these sections. These are statements about future capital structure, operations, and financial flexibility, or, as applicable, sales, earnings, cash flow, results of operations, uses of cash, financings, share repurchases, ability to meet deleveraging goals, and other measures of financial performance or potential future plans or events, strategies, objectives, beliefs, prospects, assumptions, expectations, and projected costs or savings or transactions of the Company that might or might not happen in the future, as contrasted with historical information. Forward-looking statements are based on assumptions that we believe are reasonable, but by their very nature are subject to a wide range of risks. If our assumptions prove inaccurate or unknown risks and uncertainties materialize, actual results could vary materially from Hillenbrand's expectations and projections.
The following list, though not exhaustive, contains words that could indicate a forward-looking statement.
| intend | believe | plan | expect | may | goal | would | project | position | future | outlook | ||||||||||||||||||||||
| become | pursue | estimate | will | forecast | continue | could | anticipate | remain | likely | |||||||||||||||||||||||
| target | encourage | promise | improve | progress | potential | should | impact | strategy | assume | |||||||||||||||||||||||
Any number of factors, many of which are beyond our control, could cause our performance to differ significantly from what is described in the forward-looking statements. These factors include, but are not limited to: global market and economic conditions, including those related to the continued volatility in the financial markets, including as a result of the United States ("U.S.") presidential election and the new U.S. administration's recently announced tariffs and changed trade policies; the risk of business disruptions associated with information technology, cyber-attacks, or catastrophic losses affecting infrastructure; increasing competition for highly skilled and talented workers, as well as labor shortages; closures or slowdowns and changes in labor costs and labor difficulties; uncertainty related to environmental regulation and industry standards, as well as physical risks of climate change; increased costs, poor quality, or unavailability of raw materials or certain outsourced services and supply chain disruptions; economic and financial conditions including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; uncertainty in U.S. global trade policy and risks with governmental instability in certain parts of the world; our level of international sales and operations; negative effects of acquisitions, including the Schenck Process Food and Performance Materials ("FPM") business and Linxis Group SAS ("Linxis") acquisitions, on the Company's business, financial condition, results of operations and financial performance; competition in the industries in which we operate, including on price; cyclical demand for industrial capital goods; the ability to recognize the benefits of any acquisition or divestiture, including the Milacron injection molding and extrusion business sale (the "Transaction"), including potential synergies and cost savings or the failure of the Company or any acquired company, or the Transaction, to achieve its plans and objectives generally; any strategic and operational initiatives implemented by the parties after the consummation of the Transaction; potential adverse effects of the announcement or results of the Transaction on the market price of the Company's common stock or on the ability of the Company to develop and maintain relationships with its personnel and customers, suppliers and others with whom it does business or otherwise on the Company's business, financial condition, results of operations and financial performance; risks related to diversion of management's attention from our ongoing business operations due to the Transaction; impacts of decreases in demand or changes in technological advances, laws, or regulation on the net revenues that we derive from the plastics industry; the impact to the Company's effective tax rate of changes in the mix of earnings or in tax laws and certain other tax-related matters; exposure to tax uncertainties and audits; involvement in claims, lawsuits, and governmental proceedings related to operations; uncertainty in the U.S. political and regulatory environment; adverse foreign currency fluctuations; and labor disruptions.
Shareholders, potential investors, and other readers are urged to consider these risks and uncertainties in evaluating forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. For a more in-depth discussion of certain factors that could cause actual results to differ from those contained in forward-looking statements, see the discussion under the heading "Risk Factors" in Part I, Item 1A of Hillenbrand's Form 10-K for the year ended September 30, 2024, filed with the SEC on November 19, 2024, and in Part II, Item 1A of Hillenbrand's Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on April 29, 2025, as well as other risks and uncertainties detailed in our filings with the
SEC from time to time. The forward-looking information in this quarterly report on Form 10-Q speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statement, whether written or oral, made to reflect new information, future developments or otherwise.
EXECUTIVE OVERVIEW
Hillenbrand (www.Hillenbrand.com) is a global industrial company that provides highly-engineered processing equipment and solutions to customers around the world. Our portfolio is composed of leading industrial brands that serve large, attractive end markets, including durable plastics, food, and recycling. Guided by our Purpose, Shape What Matters For TomorrowTM, we pursue excellence, collaboration, and innovation to shape solutions that best serve our people, our customers, and our communities. Customers choose Hillenbrand due to our reputation for designing, manufacturing, and servicing highly-engineered, mission-critical equipment and solutions that meet their unique and complex processing requirements.
Divestiture of Milacron
On March 31, 2025, the Company completed the divestiture of its majority interest in the Milacron injection molding and extrusion business ("Milacron") pursuant to the Contribution and Purchase Agreement ("Agreement") between the Company and an affiliate of Bain Capital ("Bain"). In accordance with the terms of the Agreement, Hillenbrand contributed the net assets of Milacron, and its wholly-owned subsidiaries, to a newly formed limited liability company, Milacron Holdings, LLC ("Milacron Holdings"). Hillenbrand retained 48.74% minority ownership of Milacron Holdings upon contribution of Milacron. Hillenbrand received total consideration of $286.0 for its contribution of Milacron, subject to closing adjustments. The total consideration was comprised of $98.0 of cash proceeds paid by Bain and $188.0 of debt assumed by Bain (as described below), in exchange for obtaining 51.26% majority ownership of Milacron Holdings.
In connection with the closing of the transactions contemplated by the Agreement, certain wholly-owned subsidiaries of Milacron entered into a long-term credit agreement with Midcap Financial Trust, which included initial term loans in an aggregate principal amount of $188.0, which were then assumed by Bain as described above. The maturity date of the long-term credit agreement is March 31, 2032 and includes standard financial and non-financial covenants. The Company was in compliance with all covenants prior to the execution of the Agreement. The long-term credit agreement also included revolving credit loans available to certain wholly-owned subsidiaries of Milacron not to exceed $30.0.
The Company is required to provide additional disclosures about fair value measurements as part of the Consolidated Financial Statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including the initial equity method investment in Milacron Holdings). Due to the variability of the required rates of return, established by the members of Milacron Holdings in connection with the Agreement, for Bain as the majority member, and the Company, as the minority member, the Company's initial equity method investment was valued using Level 3 inputs, which are unobservable by nature, and included an option pricing methodology ("OPM") and a debt like liquidation preference of the pro rata ownership of the members. Inputs to the OPM valuation were volatility, time to exit, equity value and estimated strike price. Significant increases (decreases) in any of those unobservable inputs, as of the date of the valuation, in isolation could result in a significantly lower (higher) fair value measurement. Management used a third-party valuation firm to assist in the determination of the initial equity method investment of Milacron Holdings, and specifically those considered Level 3 measurements. Management ultimately oversaw the third-party valuation firm to ensure that the transaction-specific assumptions are appropriate for the Company. As of the transaction date, the Company recorded an initial fair value of $68.7 related to its 48.74% ownership in Milacron Holdings.
As a result of the Milacron divestiture, the Company recorded a pre-tax loss of $1.5 and $56.1, after post-closing adjustments, in the Consolidated Statement of Operations during the three and nine months ended June 30, 2025, respectively. The Company incurred $0.8 and $4.9 of transaction costs associated with the divestiture during the three and nine months ended June 30, 2025, which were recorded within the Molding Technology Solutions reportable operating segment. Upon the divestiture of Milacron, the Company's equity interest in Milacron Holdings is accounted for under the equity method of accounting as prescribed by GAAP.
OPERATING PERFORMANCE MEASURES
The following discussion compares our results for the three and nine months ended June 30, 2025, to the same periods in 2024. The Company's fiscal year ends on September 30. Unless otherwise stated, references to years refer to fiscal years. We begin the discussion at a consolidated level and then provide separate detail about Advanced Process Solutions, Molding Technology Solutions, and Corporate. These results of operations are prepared in accordance with GAAP.
We also provide certain non-GAAP operating performance measures. These non-GAAP financial measures are referred to as "adjusted" measures and generally exclude expenses associated with business acquisition, divestiture, and integration costs, restructuring and restructuring-related charges, gains and losses on divestitures, impairment charges, pension settlement charges (gains), and inventory step-up (adjustments) costs.
Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.
We use this non-GAAP information internally to measure operating segment performance and make operating decisions and believe it is helpful to investors because it allows more meaningful period-to-period comparisons of our ongoing operating results. The information can also be used to perform trend analysis and to better identify operating trends that may otherwise be masked or distorted by items such as the above excluded items. We believe this information provides a higher degree of transparency.
An important non-GAAP financial measure that we use is adjusted earnings before interest, income tax, depreciation, and amortization ("adjusted EBITDA"). A part of Hillenbrand's strategy is to selectively acquire companies that we believe can benefit from the Hillenbrand Operating Model ("HOM") to spur faster and more profitable growth. Given that strategy, it is a natural consequence to incur related expenses, such as amortization from acquired intangible assets and additional interest expense from debt-funded acquisitions. Accordingly, we use adjusted EBITDA, among other measures, to monitor our business performance. Adjusted EBITDA is not a recognized term under GAAP and therefore does not purport to be an alternative to net income. Further, the Company's measure of adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Another important operational measure used is backlog. Backlog is not a term recognized under GAAP; however, it is a common measurement used in industries with extended lead times for order fulfillment (long-term contracts), like those in which our reportable operating segments compete. Backlog represents the amount of net revenue that we expect to realize on contracts awarded to our reportable operating segments. For purposes of calculating backlog, 100% of estimated net revenue attributable to consolidated subsidiaries is included. Backlog includes expected net revenue from large systems and equipment, as well as aftermarket parts, components, and service. The length of time that projects remain in backlog can span from days for aftermarket parts or service to approximately 18 to 24 months for larger system sales within the Advanced Process Solutions reportable operating segment. The majority of the backlog within the Molding Technology Solutions reportable operating segment is expected to be fulfilled within the next twelve months. Backlog includes expected net revenue from the remaining portion of firm orders not yet completed, as well as net revenue from change orders to the extent that they are reasonably expected to be realized. We include in backlog the full contract award, including awards subject to further customer approvals, which we expect to result in net revenue in future periods. In accordance with industry practice, our contracts may include provisions for cancellation, termination, or suspension at the discretion of the customer.
We expect that future net revenue associated with our reportable operating segments will be influenced by order backlog because of the lead time involved in fulfilling engineered-to-order equipment for customers. Although backlog can be an indicator of future net revenue, it does not include projects and parts orders that are booked and shipped within the same quarter. The timing of order placement, size, extent of customization, and customer delivery dates can create fluctuations in backlog and net revenue. Net revenue attributable to backlog may also be affected by foreign exchange fluctuations for orders denominated in currencies other than U.S. dollars.
We calculate the foreign currency impact on net revenue, gross profit, selling, general and administrative expenses, backlog, consolidated net income, and adjusted EBITDA in order to better measure the comparability of results between periods. We calculate the foreign currency impact by translating current year results at prior year foreign exchange rates. This information is provided because exchange rates can distort the underlying change in these metrics, either positively or negatively. The cost structure for Corporate is generally not significantly impacted by the fluctuation in foreign exchange rates, and we do not disclose the foreign currency impact in the Operations Review section below where the impact is not significant.
See page 38 for a reconciliationof adjusted EBITDA to consolidated net income (loss), the most directly comparable GAAP financial measure. We use other non-GAAPfinancial measures in certain other instances and include information reconciling such non-GAAP measures to the respective most directly comparable GAAP financial measures. Given that backlog is an operational measure and that the Company's methodology for calculating backlog does not meet the definition of a non-GAAP financial measure, as that term is defined by the SEC, a quantitative reconciliation is not required or provided.
CRITICAL ACCOUNTING ESTIMATES
For the three and nine months ended June 30, 2025, there were no significant changes to our critical accounting estimates as outlined in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC on November 19, 2024.
OPERATIONS REVIEW - CONSOLIDATED
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 598.9 | 100.0 | $ | 786.6 | 100.0 | $ | 2,021.7 | 100.0 | $ | 2,345.2 | 100.0 | |||||||||||||||||||||||||||||||||||
| Gross profit | 202.6 | 33.8 | 266.4 | 33.9 | 674.0 | 33.3 | 768.1 | 32.8 | |||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 146.3 | 24.4 | 174.2 | 22.1 | 497.2 | 24.6 | 513.5 | 21.9 | |||||||||||||||||||||||||||||||||||||||
| Amortization expense | 22.9 | 25.5 | 71.2 | 76.7 | |||||||||||||||||||||||||||||||||||||||||||
| Loss on divestiture | 1.5 | - | 56.1 | - | |||||||||||||||||||||||||||||||||||||||||||
| Impairment charges | - | 265.0 | - | 265.0 | |||||||||||||||||||||||||||||||||||||||||||
| Pension settlement charges (gain) | - | 26.9 | (1.7) | 35.2 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 21.3 | 32.2 | 69.6 | 92.8 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 6.5 | (10.5) | 7.2 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net revenuedecreased $187.7 (24%).
•Advanced Process Solutions net revenue decreased $62.4 (11%), primarily driven by a decrease in volume, partially offset by favorable pricing. Foreign currency impact increased net revenue by 2%.
•Molding Technology Solutions net revenue decreased $125.3 (58%), primarily driven by the divestiture of Milacron.
Gross profitdecreased $63.8 (24%) and gross profit margin decreased 10 basis points to 33.8%. On an adjusted basis, which excludes business acquisition, divestiture, and integration costs and restructuring and restructuring-related charges, adjusted gross profit decreased $65.1 (24%), and adjusted gross profit margin was flat (34.6%).
•Advanced Process Solutions gross profit decreased $37.5 (18%), primarily driven by lower volume, unfavorable product mix, cost inflation and an increase in restructuring and restructuring-related costs, partially offset by favorable pricing and productivity improvements. Gross profit margin decreased 290 basis points to 33.1%, primarily driven by cost inflation and unfavorable product mix, partially offset by productivity improvements.
Advanced Process Solutions gross profit included restructuring and restructuring related charges ($4.1 in 2025 and $0.5 in 2024) and business acquisition, disposition, and integration costs ($0.6 in 2025.) Excluding these non-recurring items, adjusted gross profit decreased $33.3 (16%) and adjusted gross profit margin decreased 210 basis points to 34.0%.
•Molding Technology Solutions gross profit decreased $26.3 (43%) primarily driven by the divestiture of Milacron, partially offset by a decrease in restructuring and restructuring-related costs. Foreign currency impact increased gross profit by 1%. Gross profit margin improved 980 basis points to 38.0%, primarily driven by productivity improvements, including savings from restructuring actions, partially offset by cost inflation.
Molding Technology Solutions gross profit included restructuring and restructuring related charges of $5.7 in 2024. Excluding these non-recurring items, adjusted gross profit decreased $31.7 (47%) and adjusted gross profit margin improved 750 basis points to 38.3%.
Selling, general and administrative expensesdecreased $27.9 (16%), primarily driven by the divestiture of Milacron, productivity improvements, decreases in business acquisition, divestiture, and integration costs and variable compensation, partially offset by an increase in restructuring and restructuring-related charges. Foreign currency impact increased selling, general and administrative expenses by 2%. These expenses as a percentage of net revenue increased by 230 basis points to 24.4%. Selling, general and administrative expenses included the following items:
| Three Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Business acquisition, divestiture, and integration costs (1)
|
$ | 12.1 | $ | 24.9 | |||||||
| Restructuring and restructuring-related charges (adjustments) | 1.2 | (5.2) | |||||||||
(1)Includes acquisition costs of $0.0 and $0.0 for the three months ended June 30, 2025 and 2024, respectively, divestiture costs of $0.8 and $0.0 for the three months ended June 30, 2025 and 2024, respectively, and integration costs of $11.3 and $24.9 for the three months ended June 30, 2025 and 2024, respectively.
On an adjusted basis, which excludes business acquisition, divestiture, and integration costs and restructuring and restructuring-related charges, selling, general and administrative expenses decreased $21.5 (14%). Adjusted selling, general and administrative expenses as a percentage of net revenue increased 260 basis points to 22.2%.
Amortization expensedecreased $2.6 (10%) primarily driven by the impact of the divestiture of Milacron.
Loss on divestiture of $1.5 was due to the loss realized on the divestiture of Milacron. See Note 4 of Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
Impairment charges were $265.0 in the prior year due to goodwill and indefinite-lived intangible asset impairments. See Note 7 of Part I, Item 1 of this Form 10-Q for further information on the impairment charges.
Interest expense, netdecreased $10.9 (34%), primarily due to lower weighted average borrowings. See Note 8 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of borrowing activity.
The effective tax ratewas 61.3% in 2025 compared to 4.1% in 2024. The increase in the effective tax rate was primarily driven by an unfavorable geographic mix of earnings and an increase in unrecognized tax benefits, partially offset by a discrete benefit resulting from enacted state income tax legislation.
Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024
Net revenuedecreased $323.5 (14%).
•Advanced Process Solutions net revenue decreased $184.8 (11%), primarily driven by a decrease in volume, partially offset by favorable pricing.
•Molding Technology Solutions net revenue decreased $138.7 (21%), primarily driven by the divestiture of Milacron and a decrease in volume. Foreign currency impact decreased net revenue by 1%.
Gross profitdecreased $94.1 (12%). Gross profit margin improved 50 basis points to 33.3%. On an adjusted basis, which excludes inventory step-up costs related to acquisitions, business acquisition, divestiture, and integration costs, and restructuring and restructuring-related charges, adjusted gross profit decreased $104.2 (13%), and adjusted gross profit margin improved 20 basis points to 33.8%.
•Advanced Process Solutions gross profit decreased $82.7 (14%), primarily driven by lower volume, unfavorable product mix, cost inflation, and an increase in restructuring and restructuring-related charges, partially offset by favorable pricing and productivity improvements. Gross profit margin decreased 110 basis points to 33.9%.
Advanced Process Solutions gross profit included inventory step-up costs related to acquisitions ($0.6 in 2024), business acquisition, divestiture, and integration costs ($0.7 in 2025) and restructuring and restructuring-related charges ($8.1 in 2025).Excluding these charges, adjusted gross profit decreased $75.5 (13%) and adjusted gross profit margin decreased 70 basis points to 34.4%.
•Molding Technology Solutions gross profit decreased $11.4 (7%), primarily driven by the divestiture of Milacron and cost inflation, partially offset by a reduction in restructuring and restructuring-related charges and productivity improvements. Foreign currency impact decreased gross profit by 1%. Gross profit margin increased 510 basis points to 31.8%, primarily driven by a decrease in restructuring and restructuring-related charges and productivity improvements, including savings from restructuring actions, partially offset by cost inflation.
Molding Technology Solutions gross profit included restructuring and restructuring-related charges ($0.4 in 2025 and $17.8 in 2024). Excluding these charges, adjusted gross profit decreased $28.7 (15%) and adjusted gross profit margin increased 240 basis points to 31.9%.
Selling, general and administrative expensesdecreased $16.3 (3%), primarily driven by the divestiture of Milacron and productivity improvements, offset by increases in business acquisition, divestiture, and integration costs and cost inflation. These expenses as a percentage of net revenue increased by 270 basis points to 24.6%. Selling, general and administrative expenses included the following items:
| Nine Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Business acquisition, divestiture, and integration costs (1)
|
$ | 55.2 | $ | 39.6 | |||||||
| Restructuring and restructuring-related charges | 5.5 | 8.6 | |||||||||
| Other non-recurring costs related to a discrete commercial dispute | - | 6.1 | |||||||||
(1)Includes acquisition costs of $0.0 and $0.4 for the nine months ended June 30, 2025 and 2024, respectively, divestiture costs of $4.9 and $0.0 for the nine months ended June 30, 2025 and 2024, respectively, and integration costs of $50.3 and $39.2 for the nine months ended June 30, 2025 and 2024, respectively.
On an adjusted basis, which excludes business acquisition, divestiture, and integration costs, restructuring and restructuring-related charges, and other non-recurring costs in the prior year related to the discrete commercial dispute stemming from a customer contract entered into prior to the acquisition of the Molding Technology solutions reportable operating segment, selling, general and administrativeexpenses decreased $22.7. Adjusted selling, general and administrativeexpenses as a percentage of net revenue increased 200 basis points to 21.6%.
Amortization expensedecreased $5.5 (7%) primarily driven by the impact of the divestiture of Milacron.
Pension settlement charges (gain)decreased $36.9 due to lump-sum payments made from the Company's U.S. pension plan to former employees who elected to receive such payments in 2024, partially offset by premium refunds received in 2025. See Note 9 of Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on these pension settlement charges (gain).
Loss on divestiture of $56.1 was due to the loss on divestiture of Milacron. See Note 4 of Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
Impairment charges were $265.0 in the prior year due to goodwill and indefinite-lived intangible asset impairments. See Note 7 of Part I, Item 1 of this Form 10-Q for further information on the impairment charges.
Interest expense, netdecreased $23.2 (25%), primarily due to lower weighted average borrowings. See Note 8 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of borrowing activity.
The effective tax ratewas (39.1)% in 2025 compared to (1.7)% in 2024. The decrease in the effective tax rate was primarily driven by an impairment charge that did not recur, a decrease in unrecognized tax benefits, and a discrete benefit resulting from enacted state tax legislation. This decrease was partially offset by the estimated tax expense related to the preliminary income tax gain recorded on the divestiture of Milacron on March 31, 2025, the current period expiration of a reduced incentive tax rate for certain operations located in China, and an unfavorable geographic mix of earnings.
OPERATIONS REVIEW - Advanced Process Solutions
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 507.0 | 100.0 | $ | 569.4 | 100.0 | $ | 1,512.1 | 100.0 | $ | 1,696.9 | 100.0 | |||||||||||||||||||||||||||||||||||
| Gross profit | 167.7 | 33.1 | 205.2 | 36.0 | 512.0 | 33.9 | 594.7 | 35.0 | |||||||||||||||||||||||||||||||||||||||
|
Selling, general and administrative expenses
|
107.8 | 21.3 | 112.2 | 19.7 | 332.2 | 22.0 | 327.4 | 19.3 | |||||||||||||||||||||||||||||||||||||||
| Amortization expense | 16.3 | 16.7 | 48.5 | 50.3 | |||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net revenue decreased $62.4 (11%) primarily driven by a decrease in volume, partially offset by favorable pricing. Foreign currency impact increased net revenue by 2%.
Order backlog decreased $166.1 (10%) from $1,735.7 at June 30, 2024 to $1,569.6 at June 30, 2025. The decrease in order backlog was primarily driven by a decrease in capital equipment orders, partially offset by favorable foreign currency impact (5%). On a sequential basis, order backlog decreased $25.3 (2%) to $1,569.6 at June 30, 2025, down from $1,594.9 at March 31, 2025, primarily driven by a decrease in capital equipment orders, partially offset by favorable foreign currency impact (5%).
Gross profitdecreased $37.5 (18%) primarily driven by lower volume, unfavorable product mix, cost inflation and an increase in restructuring and restructuring-related costs, partially offset by favorable pricing and productivity improvements. Foreign currency impact increased gross profit by 2%. Gross profit margin decreased 290 basis points to 33.1%, primarily driven by cost inflation and unfavorable product mix, partially offset by productivity improvements.
Advanced Process Solutions gross profit included restructuring and restructuring related charges ($4.1 in 2025 and $0.5 in 2024) and business acquisition, disposition, and integration costs ($0.6 in 2025.) Excluding these non-recurring items, adjusted gross profit decreased $33.3 (16%) and adjusted gross profit margin decreased 210 basis points to 34.0%.
Selling, general and administrative expensesdecreased $4.4 (4%) primarily driven by productivity improvements, including savings from restructuring actions, and a decrease in variable compensation. These expenses as a percentage of net revenue increased 160 basis points to 21.3%.
Selling, general and administrative expenses included business acquisition, divestiture, and integration costs ($8.0 in 2025 and $8.4 in 2024) and restructuring and restructuring-related charges ($1.1 in 2025). Excluding these items, adjusted selling, general and administrative expenses decreased $4.8 (5%) and adjusted selling, general and administrative expenses as a percentage of net revenue increased 130 basis points to 19.5%.
Amortization expensedecreased $0.4 (2%) primarily driven by favorable foreign currency impact and an intangible asset that became fully amortized during the three months ended March 31, 2025.
Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024
Net revenue decreased $184.8 (11%), primarily driven by a decrease in volume, partially offset by favorable pricing.
Gross profitdecreased $82.7 (14%), primarily driven by lower volume, unfavorable product mix, cost inflation, and an increase in restructuring and restructuring-related charges, partially offset by favorable pricing and productivity improvements. Gross profit margin decreased 110 basis points to 33.9%.
Advanced Process Solutions gross profit included inventory step-up costs related to acquisitions ($0.6 in 2024), business acquisition, divestiture, and integration costs ($0.7 in 2025) and restructuring and restructuring-related charges ($8.1 in 2025). Excluding these charges, adjusted gross profit decreased $75.5 (13%) and adjusted gross profit margin decreased 70 basis points to 34.4%.
Selling, general and administrative expensesincreased $4.8 (2%), primarily due to cost inflation and increases in restructuring and restructuring-related charges and business acquisition, divestiture, and integration costs, partially offset by productivity improvements. These expenses as a percentage of net revenue increased 270 basis points to 22.0%.
Selling, general and administrative expenses included business acquisition, divestiture, and integration costs ($27.4 in 2025 and $15.0 in 2024) and restructuring and restructuring-related charges ($4.3 in 2025 and $0.3 in 2024). Excluding these items, adjusted selling, general and administrative expenses decreased $11.5 (4%) and adjusted selling, general and administrative expenses as a percentage of net revenue increased 150 basis points to 19.9%.
Amortization expensedecreased $1.8 (4%) primarily driven by favorable foreign currency impact and an intangible asset that became fully amortized during the three months ended March 31, 2025.
OPERATIONS REVIEW - Molding Technology Solutions
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
Amount |
% of Net Revenue |
||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 91.9 | 100.0 | $ | 217.2 | 100.0 | $ | 509.6 | 100.0 | $ | 648.3 | 100.0 | |||||||||||||||||||||||||||||||||||
| Gross profit | 34.9 | 38.0 | 61.2 | 28.2 | 162.0 | 31.8 | 173.4 | 26.7 | |||||||||||||||||||||||||||||||||||||||
|
Selling, general and administrative expenses
|
21.3 | 23.2 | 41.4 | 19.1 | 106.7 | 20.9 | 130.5 | 20.1 | |||||||||||||||||||||||||||||||||||||||
| Amortization expense | 6.6 | 8.8 | 22.7 | 26.4 | |||||||||||||||||||||||||||||||||||||||||||
| Impairment charges | - | 265.0 | - | 265.0 | |||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net revenuedecreased $125.3 (58%), primarily driven by the divestiture of Milacron.
Order backlog decreased $183.9 (77%) from $238.5 at June 30, 2024, to $54.6 at June 30, 2025, primarily due to the Milacron divestiture. On a sequential basis, order backlog decreased $0.1 (0%) to $54.6 at June 30, 2025, down from $54.7 at March 31, 2025.
Gross profitdecreased $26.3 (43%) primarily driven by the divestiture of Milacron, partially offset by a decrease in restructuring and restructuring-related costs. Foreign currency impact increased gross profit by 1%. Gross profit margin improved 980 basis points to 38.0%, primarily driven by productivity improvements, including savings from restructuring actions, partially offset by cost inflation.
Molding Technology Solutions gross profit included restructuring and restructuring-related charges of $5.7 in 2024. Excluding these charges, adjusted gross profit decreased $31.7 (47%) and adjusted gross profit margin improved 750 basis points to 30.8%.
Selling, general and administrative expensesdecreased $20.1 (49%), primarily driven by the divestiture of Milacron and an increase in restructuring and restructuring-related costs, offset by a decrease in business acquisition, divestiture and integration costs. These expenses as a percentage of net revenue increased 410 basis points to 23.2%.
Selling, general and administrative expenses included business acquisition, divestiture, and integration costs ($1.8 in 2025 and $9.1 in 2024), restructuring and restructuring related costs (adjustments) ($0.3 in 2025 and ($5.2) in 2024). Excluding these charges, adjusted selling, general and administrative expenses decreased $18.3 (49%) and adjusted selling, general and administrative expenses as a percentage of net revenue increased 360 basis points to 20.9%.
Amortization expensedecreased $2.2 (25%) primarily driven by the impact of the divestiture of Milacron.
Impairment charges were $265.0 in the prior year due to goodwill and indefinite-lived intangible asset impairments. See Note 7 of Part I, Item 1 of this Form 10-Q for further information on the impairment charges.
Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024
Net revenuedecreased $138.7 (21%), primarily driven by the divestiture of Milacron and a decrease in volume. Foreign currency impact decreased net revenue by 1%.
Gross profitdecreased $11.4 (7%), primarily driven by the divestiture of Milacron and cost inflation, partially offset by a reduction in restructuring and restructuring-related charges and productivity improvements. Foreign currency impact decreased gross profit by 1%. Gross profit margin increased 510 basis points to 31.8%, primarily driven by a decrease in restructuring and restructuring-related charges and productivity improvements, including savings from restructuring actions, partially offset by cost inflation.
Molding Technology Solutions gross profit included restructuring and restructuring-related charges ($0.4 in 2025 and $17.8 in 2024). Excluding these charges, adjusted gross profit decreased $28.7 (15%) and adjusted gross profit margin increased 240 basis points to 31.9%.
Selling, general and administrative expensesdecreased $23.8 (18%), primarily driven by the divestiture of Milacron and a reduction of restructuring and restructuring related charges, partially offset by an increase in business acquisition, divestiture, and integration costs. Foreign currency impact decreased selling, general and administrative expenses by 1%. These expenses as a percentage of net revenue increased 80 basis points to 20.9%.
Selling, general and administrative expenses included business acquisition, divestiture, and integration costs ($11.1 in 2025 and $9.1 in 2024), non-recurring costs related to a discrete commercial dispute described above ($6.1 in 2024), and restructuring and restructuring related charges ($1.3 in 2025 and $8.1 in 2024). Excluding these items, adjusted selling, general and administrative expenses decreased $12.9 (12%) and adjusted selling, general and administrative expenses as a percentage of net revenue increased 200 basis points to 18.5%.
Amortization expensedecreased $3.7 (14%) primarily driven by the impact of the divestiture of Milacron.
Impairment charges were $265.0 in the prior year due to goodwill and indefinite-lived intangible asset impairments. See Note 7 of Part I, Item 1 of this Form 10-Q for further information on the impairment charges.
REVIEW OF CORPORATE EXPENSES
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Amount | % of Net Revenue | Amount | % of Net Revenue | Amount | % of Net Revenue | Amount | % of Net Revenue | ||||||||||||||||||||||||||||||||||||||||
| Core corporate expenses | $ | 14.9 | 2.5 | $ | 13.3 | 1.7 | $ | 41.6 | 2.1 | $ | 40.1 | 1.7 | |||||||||||||||||||||||||||||||||||
| Business acquisition, divestiture, and integration costs | 2.3 | 0.4 | 7.3 | 0.9 | 16.7 | 0.8 | 15.4 | 0.7 | |||||||||||||||||||||||||||||||||||||||
| Restructuring and restructuring-related charges | - | - | - | - | - | - | 0.1 | - | |||||||||||||||||||||||||||||||||||||||
|
Corporate expenses
|
$ | 17.2 | 2.9 | $ | 20.6 | 2.6 | $ | 58.3 | 2.9 | $ | 55.6 | 2.4 | |||||||||||||||||||||||||||||||||||
Corporate expenses include the cost of providing management and administrative services to each reportable operating segment. These services include treasury management, human resources, legal, business development, information technology, tax compliance, procurement, sustainability, and other public company support functions such as internal audit, investor relations, and financial reporting. Corporate expenses also include costs related to business acquisition, divestiture, and integration, which we incur as a result of our strategy to grow through selective acquisitions. Core corporate expenses primarily represent corporate expenses excluding costs related to business acquisition, divestiture, and integration costs and restructuring and restructuring-related charges.
Business acquisition, divestiture, and integration costs include legal, tax, accounting, and other advisory fees and due diligence costs associated with investigating opportunities (including acquisitions and divestitures) and integrating completed acquisitions, and accelerating synergies and cost saving initiatives across the Company. These expenses are incurred in the Advanced Process Solutions and Molding Technology Solutions reportable operating segments, and at Corporate.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Corporate expenses decreased $3.4 (17%), primarily driven by a decrease in business acquisition, divestiture, and integration costs and lower variable compensation. These expenses as a percentage of net revenue were 2.9%, an increase of 30 basis points from the prior year.
Core corporate expenses increased $1.6 (12%), primarily due to cost inflation. These expenses as a percentage of net revenue were 2.5%, an increase of 80 basis points from the prior year.
Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024
Corporate expenses increased $2.7 (5%), primarily due to cost inflation. These expenses as a percentage of net revenue were 2.9%, an increase of 50 basis points from the prior year.
Core corporate expenses increased $1.5. These expenses as a percentage of net revenue were 2.1%, an increase of 40 basis points from the prior year.
NON-GAAP OPERATING PERFORMANCE MEASURES
The following is a reconciliation from consolidated net income (loss), the most directly comparable GAAP operating performance measure, to our non-GAAP adjusted EBITDA from continuing operations.
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Consolidated net income (loss) | $ | 4.1 | $ | (246.9) | $ | (25.6) | $ | (219.1) | |||||||||||||||
| Interest expense, net | 21.3 | 32.2 | 69.6 | 92.8 | |||||||||||||||||||
| Income tax expense (benefit) | 6.5 | (10.5) | 7.2 | 3.7 | |||||||||||||||||||
| Depreciation and amortization | 32.7 | 38.7 | 104.7 | 118.8 | |||||||||||||||||||
| Consolidated EBITDA | 64.6 | (186.5) | 155.9 | (3.8) | |||||||||||||||||||
| Loss from discontinued operations (net of income tax benefit) | - | - | - | 0.3 | |||||||||||||||||||
|
Impairment charges (1)
|
- | 265.0 | - | 265.0 | |||||||||||||||||||
|
Pension settlement charges (gain) (2)
|
- | 26.9 | (1.7) | 35.2 | |||||||||||||||||||
|
Business acquisition, divestiture, and integration costs (3)
|
12.7 | 24.9 | 55.9 | 39.6 | |||||||||||||||||||
| Inventory step-up costs | - | - | - | 0.6 | |||||||||||||||||||
|
Restructuring and restructuring-related charges (4)
|
5.5 | 0.7 | 13.9 | 24.8 | |||||||||||||||||||
|
Loss on divestiture (5)
|
1.5 | - | 56.1 | - | |||||||||||||||||||
| Other non-recurring costs related to a discrete commercial dispute | - | - | - | 6.1 | |||||||||||||||||||
| Adjusted EBITDA from continuing operations | $ | 84.3 | $ | 131.0 | $ | 280.1 | $ | 367.8 | |||||||||||||||
(1)Hillenbrand recorded impairment charges to goodwill and certain indefinite-lived intangible assets within the Molding Technology Solutions reportable operating segment during the three and nine months ended June 30, 2024. See Note 7 of Part I, Item 1 of this Form 10-Q for more information.
(2)The pension settlement gain during the nine months ended June 30, 2025, was due to one-time premium refunds received related to the termination of the Company's U.S. pension plan. The pension settlement charges during the three and nine months ended June 30, 2024 were due to lump-sum payments made from the Company's U.S. pension plan to former employees who elected to receive such payments.
(3)Business acquisition, divestiture, and integration costs during the three and nine months ended June 30, 2025 and 2024, primarily included costs associated with the integration of recent acquisitions. Includes acquisition costs of $0.6 and $0.0 for the three months ended June 30, 2025 and 2024, respectively, divestiture costs of $0.8 and $0.0 for the three months ended June 30, 2025 and 2024, respectively, and integration costs of $11.3 and $24.9 for the three months ended June 30, 2025 and 2024, respectively. Includes acquisition costs of $0.7 and $0.0 for the nine months ended June 30, 2025 and
2024, respectively, divestiture costs of $4.9 and $0.4 for the nine months ended June 30, 2025 and 2024, respectively, and integration costs of $50.3 and $39.2 for the nine months ended June 30, 2025 and 2024, respectively.
(4)Restructuring and restructuring-related charges primarily included severance costs during the three and nine months ended June 30, 2025 and 2024.
(5)The current year amount represents the loss on divestiture of Milacron during the three and nine ended June 30, 2025. See Note 4 of Part I, Item 1 of this Form 10-Q for more information.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Consolidated net income (loss) increased $251.0 (102%) for the three months ended June 30, 2025, compared to the same period in fiscal 2024. The increase was primarily driven by impairment charges and pension settlement charges in 2024 that did not repeat in 2025, favorable pricing, productivity improvements, and decreases in business acquisition, divestiture, and integration costs and interest expense. The increase in consolidated net income (loss) was partially offset by an increase in restructuring and restructuring-related charges, an increase in income tax expense, lower Advanced Process Solutions reportable operating segment volume, and cost inflation.
Consolidated adjusted EBITDA from continuing operations decreased $46.7 (36%) for the three months ended June 30, 2025, compared to the same period in fiscal 2024. The decrease was primarily driven by lower Advanced Process Solutions reportable operating segment volume and cost inflation, partially offset by favorable pricing and productivity improvements. Foreign currency impact increased adjusted EBITDA by $1.6.
Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024
Consolidated net income (loss) increased $193.5 (88%) for the nine months ended June 30, 2025, compared to the same period in 2024. The increase was primarily driven by impairment charges and pension settlement charges in 2024 that did not repeat in 2025, favorable pricing, productivity improvements, and decreases in income taxes, interest expense, restructuring and restructuring-related charges and other non-recurring costs related to a discrete commercial dispute. The increase in consolidated net income (loss) was partially offset by an increase in business acquisition, divestiture, and integration costs, lower volume, and cost inflation. Foreign currency impact decreased consolidated net income by $1.4.
Consolidated adjusted EBITDA from continuing operations decreased $87.7 (24%) for the nine months ended June 30, 2025, compared to the same period in 2024. The decrease was primarily driven by the divestiture of Milacron, lower volume, unfavorable product mix and cost inflation, partially offset by favorable pricing and productivity improvements. Foreign currency impact decreased adjusted EBITDA by $1.1.
LIQUIDITY AND CAPITAL RESOURCES
In this section, we discuss our ability to access cash to meet business needs. We discuss how we see cash flow being affected for the next twelve months and how we intend to use it. We describe actual results in generating and using cash by comparing the first nine months of 2025 to the same period last year. Finally, we identify other significant matters that could affect liquidity on an ongoing basis.
Ability to Access Cash
Our debt financing has historically included revolving credit facilities, term loans, and long-term notes as part of our overall financing strategy. We regularly review and adjust the mix of fixed-rate and variable-rate debt within our capital structure in order to achieve a target range based on our financing strategy.
We have taken proactive measures to maintain financial flexibility within the landscape of various uncertainties. We believe the Company ended the quarter with and continues to have sufficient liquidity to operate in the current business environment.
$700 Revolving Credit Facility, $175 Term Loan, and €240 Term Loan Commitment
Subsequent to June 30, 2025, Hillenbrand entered into a Fifth Amended and Restated Credit Agreement (the "Credit Agreement"), on July 9, 2025 (the "Effective Date").
The Credit Agreement amends and restates the Company's Fourth Amended and Restated Credit Agreement, dated as of June 8, 2022 (the "Prior Credit Agreement"). The Credit Agreement provides for a $700 revolving credit facility (the "Revolving
Credit Facility"). The Credit Agreement also contains two term loan facilities: a U.S. Dollar-denominated $175 term loan facility (the "Dollar Term Loans") drawn by the Company on the Effective Date to refinance the U.S. Dollar-denominated term loans outstanding under the Prior Credit Agreement, and a Euro-denominated delayed-draw term loan facility available to Hillenbrand Switzerland GmbH, a wholly owned subsidiary of the Company, providing for term loans in an aggregate principal amount of up to €240 (the "Euro Term Loans").
€325 L/G Facility Agreement
On July 17, 2025 (the "LG Effective Date"), the Company completed an amendment (the "L/G Facility Amendment") to its €325 Syndicated L/G Facility Agreement, dated as of June 21, 2022 (as amended or modified prior to the LG Effective Date, the "Existing L/G Facility Agreement"). The L/G Facility Amendment amends the Existing L/G Facility Agreement by, among other things, increasing the maximum permitted leverage ratio to (i) 4.25x for the fiscal quarters ending June 30, 2025, through and including June 30, 2026; (ii) 4.00x for the fiscal quarter ending September 30, 2026; (iii) 3.75x for the fiscal quarter ending December 31, 2026; and (iv) 3.50x for the fiscal quarter ending March 31, 2027, and each fiscal quarter thereafter. The L/G Facility Amendment contains substantially the same affirmative and negative covenants and events of default. The L/G Facility Amendment matures on June 22, 2027.
Repayment of $375 senior unsecured notes
On September 25, 2019, the Company issued $375.0 of senior unsecured notes due September 2026 (the "2019 Notes"). The 2019 Notes had a fixed coupon rate of 5.0% per year, payable semi-annually. Effective July 21, 2025, the 2019 Notes were repaid by the Company, using the net proceeds from the TerraSource divestiture and the proceeds of the Euro Term Loans defined above.
Other
As of June 30, 2025, we had $399.6 of borrowing capacity under the Facility, of which $348.9 was immediately available based on our most restrictive covenant. The available borrowing capacity reflects a reduction of $16.4 for outstanding letters of credit issued under the Facility. The Company may request an increase of up to $600.0 in the total borrowing capacity under the Facility, subject to approval of the lenders.
In the normal course of business, operating companies within our reportable operating segments provide to certain customers bank guarantees and other credit arrangements in support of performance, warranty, advance payment, and other contractual obligations. This form of trade finance is customary in the industry and, as a result, we maintain adequate capacity to provide the guarantees. As of June 30, 2025, we had guarantee arrangements totaling $667.4, under which $353.8 was used for guarantees. These arrangements are included in Company's Existing L/G Facility Agreement, subsequently amended by the L/G Facility Amendment. The Company may request an increase to the total capacity under the L/G Facility Amendment by an additional €100.0, subject to approval of the lenders.
We have significant operations outside the U.S. We continue to assert that the basis differences in the majority of our foreign subsidiaries continue to be permanently reinvested outside of the U.S. We have recorded tax liabilities associated with distribution taxes on expected distributions of available cash and current earnings. The Company has made, and intends to continue to make, substantial investments in our businesses in foreign jurisdictions to support the ongoing development and growth of our international operations. As of June 30, 2025, we had a transition tax liability of $6.2 pursuant to the 2017 Tax Cuts and Jobs Act (the "Tax Act"). The cash at our foreign subsidiaries, including U.S. subsidiaries participating in non-U.S. cash pooling arrangements, totaled $147.4 at June 30, 2025. We continue to actively evaluate our global capital deployment and cash needs.
12-month Outlook
The Company is required to pay a transition tax on unremitted earnings of its foreign subsidiaries, resulting in an estimated liability of $6.2 recorded as of June 30, 2025. The transition tax liability is expected to be paid within the next twelve months.
On December 2, 2021, our Board of Directors authorized a new share repurchase program of up to $300.0, which replaced the previous $200.0 share repurchase program. The repurchase program has no expiration date but may be terminated by the Board of Directors at any time. We had approximately$125.0 remaining for share repurchases under the existing authorization at June 30, 2025.
Our anticipated contribution to our defined benefit pension plans in fiscal 2025 is $11.3, of which $5.6 was made during the nine months ended June 30, 2025. We will continue to monitor plan funding levels, performance of the assets within the plans, and overall economic activity, and we may make additional discretionary funding decisions based on the net impact of the above factors.
We currently expect to pay quarterly cash dividends of approximately $15.8 based on our outstanding common stock at June 30, 2025. We increased our quarterly dividend in 2025 to $0.2250 per common share from $0.2225 per common share paid in 2024.
We believe existing cash and cash equivalents, cash flows from operations, borrowings under existing arrangements, and the issuance of debt will be sufficient to fund our operating activities and cash commitments for investing and financing activities. Based on these factors, we believe our current liquidity position is sufficient and will continue to meet all of our financial commitments in the current business environment.
Cash Flows
| Nine Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows (used in) provided by: | |||||||||||
| Operating activities from continuing operations | $ | (11.5) | $ | 24.8 | |||||||
| Investing activities from continuing operations | 84.4 | (40.2) | |||||||||
| Financing activities from continuing operations | (107.0) | 13.4 | |||||||||
| Net cash flows from discontinued operations | - | (23.3) | |||||||||
| Effect of exchange rates on cash and cash equivalents | (3.8) | (0.3) | |||||||||
| Net cash flows | $ | (37.9) | $ | (25.6) | |||||||
Operating Activities
Operating activities from continuing operations used $11.5 of cash during the nine months ended June 30, 2025, and provided $24.8 of cash during the nine months ended June 30, 2024, a $36.3 decrease. The decrease in operating cash flow used in continuing operations was primarily due to unfavorable timing of working capital requirements.
Working capital requirements for our reportable operating segments fluctuate and may continue to fluctuate in the future due primarily to the type of product and geography of customer projects in process at any point in time. Working capital needs are lower when advance payments from customers are more heavily weighted toward the beginning of the project. Conversely, working capital needs are higher when a larger portion of the cash is to be received in later stages of manufacturing.
Investing Activities
The $124.6 increase in net cash flows from investing activities from continuing operations during the nine months ended June 30, 2025, was primarily due to a portion of the proceeds received on the divestiture of Milacron in the current year and an increase in collection of deferred purchase price receivables.
Financing Activities
Net cash flows from financing activities from continuing operations was largely impacted by net borrowing activity. Our general practice is to use available cash to pay down debt unless it is needed for an acquisition. Cash used in financing activities from continuing operations during the nine months ended June 30, 2025 was $107.0, primarily due to the repayment of the €185 term loan, net repayments on the Facility of $28.4 and payment of dividends on common stock, partially offset by the execution of a long-term credit agreement prior to the divestiture of Milacron. Cash provided by financing activities from continuing operations for the nine months ended June 30, 2024 was $13.4, primarily due to the proceeds from the $500 senior unsecured notes, partially offset by repayment of the $400 senior unsecured notes, net repayments on the Facility of $10.4 and payment of dividends on common stock.
We returned $47.5 to shareholders during the nine months ended June 30, 2025in the form of quarterly dividends. We increased our quarterly dividend in fiscal 2025 to $0.2250 per common share from $0.2225 per common share paid during fiscal 2024.
Summarized Financial Information for Guarantors and the Issuer of Guaranteed Securities
Summarized financial information of Hillenbrand (the "Parent") and our subsidiaries that are guarantors of our senior unsecured notes (the "Guarantor Subsidiaries") is shown below on a combined basis as the "Obligor Group." The Company's senior unsecured notes are guaranteed by certain of our wholly-owned domestic subsidiaries and rank equally in right of payment with all of our existing and financial information of the Obligor Group. All intercompany balances and transactions between the Parent and Guarantor Subsidiaries have been eliminated and all information excludes subsidiaries that are not issuers or guarantors of our senior unsecured notes, including earnings from and investments in these entities.
Upon the divestiture of Milacron on March 31, 2025, certain subsidiaries of Milacron that were Guarantor Subsidiaries ceased to be a guarantor of the senior unsecured notes.
| June 30, 2025 | September 30, 2024 | ||||||||||
| Combined Balance Sheets Information: | |||||||||||
|
Current assets (1)
|
$ | 1,769.1 | $ | 2,077.4 | |||||||
| Non-current assets | 5,439.2 | 6,453.1 | |||||||||
|
Current liabilities (1)
|
1,108.9 | 753.3 | |||||||||
| Non-current liabilities | 1,567.0 | 1,591.6 | |||||||||
|
Nine Months Ended June 30, 2025 |
|||||||||||
| Combined Statements of Operations Information: | |||||||||||
|
Net revenue (2)
|
$ | 267.7 | |||||||||
| Gross profit | 90.3 | ||||||||||
| Consolidated net loss from continuing operations attributable to Obligors | (26.0) | ||||||||||
| Total loss from discontinued operations (net of income tax expense) attributable to Obligors | - | ||||||||||
| Net loss attributable to Obligors | (26.0) | ||||||||||
(1)Current assets include intercompany receivables from non-guarantors of and$1,487.7 as of September 30, 2024. Current assets include intercompany receivables from non-guarantors of $623.5as of June 30, 2025.
(2)Net revenue includes intercompany sales with non-guarantors of$12.6 for the six months ended June 30, 2025.
Recently Adopted and Issued Accounting Standards
For a summary of recently issued and adopted accounting standards applicable to us, see Item 1, Note 2 of Part I of this Form 10-Q.
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