Hillenbrand Reports Fiscal Third Quarter 2025 Results
Revenue of $599 million decreased 24% compared to prior year; pro forma revenue decreased 10%
GAAP EPS of $0.03 increased from $(3.53) in the prior year; adjusted EPS of $0.51 decreased 40% compared to prior year
Achieved $30 million of run-rate cost synergies associated with Linxis and FPM acquisitions earlier than planned
On July 1, 2025, executed the divestiture of minority stake in TerraSource and used proceeds of approximately $115 million to pay down debt; successfully amended credit facilities
Fiscal 2025 Outlook: Updating core outlook; maintaining adjusted EPS midpoint
BATESVILLE, Ind., Aug. 11, 2025 /PRNewswire/ -- Hillenbrand, Inc. (NYSE:HI), a leading global provider of highly-engineered processing equipment and integrated solutions, reported results for the fiscal third quarter, which ended June 30, 2025. Reported results for the fiscal third quarter exclude the divested MIME business in both the consolidated and Molding Technology Solutions (MTS) segment results.
"We continued to advance our strategic initiatives this quarter, including refining our portfolio, reducing debt, and advancing the integration and commercial synergy potential of our Food, Health, and Nutrition (FHN) business, despite the ongoing uncertainty stemming from macroeconomic conditions and tariffs. We used proceeds from the MIME divestiture and the sale of our minority interest in TerraSource to reduce debt by over $300 million during the fiscal year. These portfolio moves allow us to focus on our higher margin, higher growth, and higher ROIC businesses serving the performance materials and FHN end markets. Within our FHN business, we recently achieved the $30 million in run-rate cost synergies from the Linxis and FPM acquisitions, and over the last several quarters we are beginning to see the proof points of the combined assets' commercial synergy potential," said Kim Ryan, President and Chief Executive Officer of Hillenbrand.
"During our fiscal third quarter, we delivered revenue ahead of and adjusted EPS in line with our expectations, despite customers continuing to delay purchasing decisions due to the dynamic tariff landscape. I am grateful for our teams, who took quick and deliberate action to mitigate these impacts through our in-region for-region approach and other initiatives we outlined. I remain confident our durable business segments, our differentiated technologies, and our people will continue to deliver best-in-class systems and solutions to our customers around the world."
Summary of Third Quarter 2025 Results
Three Months Ended
June 30,
Change
(unaudited, dollars in millions, except EPS)
2025
2024
$
%
Net revenue
$ 598.9
$ 786.6
$ (187.7)
(24) %
GAAP net income (loss) attributable to HI
1.9
(248.9)
250.8
101 %
Adjusted EBITDA1
84.3
131.0
(46.7)
(36) %
GAAP diluted EPS
0.03
(3.53)
3.56
101 %
Adjusted diluted EPS1
0.51
0.85
(0.34)
(40) %
Cash flows from operating activities
(1.5)
45.6
(47.1)
(103) %
Pro Forma Net Revenue1
598.9
663.0
(64.1)
(10) %
Pro Forma Adjusted EBITDA1
84.3
116.6
(32.3)
(28) %
Net revenue of $599 million decreased 24% compared to the prior year primarily due to the divestiture of the MIME business and lower capital equipment volume in APS, partially offset by favorable pricing. Pro forma net revenue decreased 10%.
GAAP net income of $2 million, or $0.03 per share, increased from a loss of $(3.53) per share in the prior year primarily due to the non-cash impairment charge recorded in the same period in the prior fiscal year related to the hot runner product line within the MTS segment.
Adjusted net income of $36 million resulted in adjusted EPS of $0.51, a decrease of $0.34, or 40%, primarily due to the divestiture of MIME and lower volume. Pro forma adjusted EBITDA of $84 million decreased 28% compared to the prior year, primarily due to lower volume, unfavorable product mix, and inflation, partially offset by productivity and favorable pricing.
The adjusted effective tax rate for the quarter was 29.4%, an increase of 80 basis points compared to the prior year due to unfavorable geographic mix of income.
Advanced Process Solutions (APS)
Three Months Ended
June 30,
Change
(unaudited, dollars in millions)
2025
2024
$
%
Net revenue
$ 507.0
$ 569.4
$ (62.4)
(11) %
Adjusted EBITDA1
80.1
109.2
(29.1)
(27) %
Adjusted EBITDA Margin1
15.8 %
19.2 %
(340) bps
Net revenue of $507 million decreased 11% compared to the prior year primarily due to lower capital equipment volume, partially offset by favorable pricing.
Adjusted EBITDA of $80 million decreased 27% primarily due to lower volume, unfavorable product mix, and inflation, partially offset by productivity and favorable pricing. Adjusted EBITDA margin of 15.8% decreased 340 basis points primarily due to unfavorable operating leverage as a result of lower volume and product mix, partially offset by productivity and price.
Backlog of $1.57 billion decreased 10% compared to the prior year primarily due to lower capital equipment order intake, partially offset by favorable foreign currency impact. Sequentially, backlog decreased 2%.
Molding Technology Solutions (MTS)
Three Months Ended
June 30,
Change
(unaudited, dollars in millions)
2025
2024
$
%
Net revenue
$ 91.9
$ 217.2
$ (125.3)
(58) %
Adjusted EBITDA1
18.3
34.6
(16.3)
(47) %
Adjusted EBITDA Margin1
19.9 %
15.9 %
400 bps
Pro Forma Net revenue1
$ 91.9
$ 93.6
$ (1.7)
(2) %
Pro Forma Adjusted EBITDA1
18.3
20.2
(1.9)
(9) %
Pro Forma Adjusted EBITDA Margin1
19.9 %
21.6 %
(170) bps
Net revenue of $92 million was down 58% year over year primarily due to the MIME divestiture. Pro forma net revenue decreased 2% primarily due to lower volumes.
Adjusted EBITDA of $18 million decreased 47%, primarily due to the divestiture of MIME. Pro forma adjusted EBITDA decreased 9% and pro forma adjusted EBITDA margin of 19.9% decreased 170 basis points from the prior year primarily due to inflation and tariffs, partially offset by productivity.
Pro forma backlog of $55 million increased 7% compared to the prior year. Sequentially, backlog was flat.
Balance Sheet, Cash Flow and Capital Allocation
Hillenbrand's cash flow from operations represented a use of $2 million in the quarter, primarily due to lower customer advances from decreased order volume. During the quarter, the Company had capital expenditures of approximately $10 million and returned approximately $16 million to shareholders in the form of quarterly dividends.
As of June 30, 2025, net debt was $1.51 billion, and the net debt to pro forma adjusted EBITDA ratio was 3.9x. Liquidity was approximately $512 million, including $163 million in cash on hand and the remainder available under our revolving credit facility.
On July 1, 2025, the Company, in conjunction with its majority stake joint-venture partner, completed the divestiture of its minority stake interest in TerraSource to Astec Industries, in a transaction with a total purchase price of approximately $245 million. Hillenbrand received approximately $115 million from the transaction, which was used for debt pay down, resulting in an approximate 0.2x favorable impact and implying net leverage of 3.7x.
On July 22, 2025, the Company redeemed in full its $375 million notes due September 2026. The Company also announced the successful amendment and extension of its syndicated credit agreement and amendment of its L/G facility agreement. These actions mark a significant step in optimizing the Company's capital structure, allowing for greater operational and financial flexibility.
Fiscal 2025 Outlook
Hillenbrand is updating its core outlook for fiscal year 2025 and maintaining the mid-point of its full year adjusted EPS range based on year-to-date performance and its outlook for the fiscal fourth quarter.
Updated Guidance
$ millions, except EPS
Total Hillenbrand
Advanced Process Solutions
Molding Technology Solutions
Net Revenue
$2,595 - $2,630
$2,005 - $2,030
$590 - $600
YoY
(18%) - (17%)
(12%) - (11%)
(34%) - (33%)
Adj. EBITDA $ / Margin %1
$370 - $385
16.6% - 16.8%
16.0% - 16.7%
YoY
(28%) - (25%)
(190) - (170) bps
10 - 80 bps
Adj. EPS1
$2.20 - $2.35
YoY
(34%) - (29%)
Operating Cash Flow
~$60
CapEx
~$40
1These are non-GAAP financial measures, which are unaudited. See the reconciliations of Non-GAAP financial measures to their most directly comparable GAAP financial measures at the end of this release.
Conference Call InformationDate/Time: Tuesday, August 12, 2025, 8:00 a.m. ETDial-In for U.S. and Canada: 1-877-407-8012Dial-In for International: +1-412-902-1013Conference call ID number: 13754423Webcast link: http://ir.hillenbrand.com under the News & Events tab (archived through Friday, September 12, 2025)
Replay - Conference CallDate/Time: Available until midnight ET, Tuesday, August 26, 2025Replay ID number: 13754423Dial-In for U.S. and Canada: 1-877-660-6853Dial-In for International: +1-201-612-7415
Hillenbrand's financial statements on Form 10-Q are expected to be filed jointly with this release and will be made available on the company's website (https://ir.hillenbrand.com).
In addition to the financial measures prepared in accordance with United States generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP operating performance measures. These non-GAAP financial measures are referred to as "adjusted" measures and generally exclude the following items:
business acquisition, divestiture, and integration costs;
restructuring and restructuring-related charges;
intangible asset amortization;
pension settlement charges (gain);
inventory step-up costs;
loss on divestiture;
costs associated with debt financing activities;
other non-recurring costs related to a discrete commercial dispute;
the related income tax impact for all of these items; and
the revaluation of deferred tax balances resulting from fluctuations in currency exchange rates and non-routine changes in tax rates for certain foreign jurisdictions.
Refer to the Reconciliation of Non-GAAP Measures for further information on these adjustments. 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.
Hillenbrand uses this non-GAAP information internally to measure operating segment performance and make operating decisions and believes it is helpful to investors because it allows more meaningful period-to-period comparisons of 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. Hillenbrand believes this information provides a higher degree of transparency.
One important non-GAAP financial measure Hillenbrand uses 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. We also use "adjusted net income" and "adjusted diluted earnings per share (EPS)," which are defined as net income and earnings per share, respectively, each excluding items described in connection with adjusted EBITDA. Adjusted EBITDA, adjusted net income, and adjusted diluted EPS are not recognized terms under GAAP and therefore do not purport to be alternatives to net income or to diluted EPS, as applicable. Further, Hillenbrand's measures of adjusted EBITDA, adjusted net income, and adjusted diluted EPS may not be comparable to similarly titled measures of other companies.
Intangible assets relate to our acquisition activities and are amortized over their useful lives. The amortization of acquired intangible assets is reported separately in our Consolidated Statements of Operations as amortization expense. We exclude the amortization of acquisition-related intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to sales generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized.
Pro forma net revenue and pro forma adjusted EBITDA are defined respectively as net revenue and adjusted EBITDA excluding the Milacron injection molding and extrusion business that was divested on March 31, 2025. In addition, the ratio of net debt to pro forma adjusted EBITDA is a key financial measure that is used by management to assess Hillenbrand's borrowing capacity (and is calculated as the ratio of total debt less cash and cash equivalents to the trailing twelve months pro forma adjusted EBITDA). The Company presents net debt to pro forma adjusted EBITDA because it believes it is representative of the Company's financial position as it is reflective of the Company's ability to cover its net debt obligations with results from its core operations.
Hillenbrand calculates the foreign currency impact on net revenue, adjusted EBITDA, and backlog 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 sales, either positively or negatively.
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 consolidated 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 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.
Hillenbrand expects 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. Pro forma backlog is defined as backlog excluding recent divestitures, including the Milacron injection molding and extrusion business.
See below for a reconciliation from GAAP operating performance measures to the most directly comparable non-GAAP (adjusted) performance 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 U.S. Securities and Exchange Commission, a quantitative reconciliation is not required or provided. In addition, forward-looking revenue, adjusted EBITDA, and adjusted earnings per share for fiscal 2025 exclude potential charges or gains that may be recorded during the fiscal year, including among other things, items described above in connection with these and other "adjusted" measures. Hillenbrand thus also does not attempt to provide reconciliations of such forward-looking non-GAAP earnings guidance to the comparable GAAP measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of Hillenbrand's financial performance.
Hillenbrand, Inc.
Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
Three Months Ended
June 30,
Nine Months Ended
June 30,
2025
2024
2025
2024
Net revenue
$ 598.9
$ 786.6
$ 2,021.7
$ 2,345.2
Cost of goods sold
396.3
520.2
