Outlook for Fiscal Year 2009
Looking ahead for fiscal year 2009, the company expects net revenues to be in the range of $650- $670 million, net income to be in the range of $97- $105 million and diluted net income per share to be in the range of $1.57- $1.70.
“Our volume and sales results in the second quarter were lower than we expected, but consistent with reports by peers and customers in the public sector,” said Kenneth A. Camp, president and chief executive officer of Hillenbrand “The funeral services industry has experienced a decline in burials that is largely consistent with a mild influenza and pneumonia season, combined with an increase in cremations that may be more pronounced in the current economic environment. There also has been more intense competition in both the casket and cremation businesses.”
Gross margin has remained constant at 43.5%, equal to the last year. Although manufacturing productivity improvements resulted in savings of $1.4 million and fuel costs decreased $1.7 million over the prior year, commodity costs overall were $2.8 million higher than in the same period in 2008, particularly for carbon steel. Second-quarter operating expenses were $29.6 million, down from a high of $42.3 million in the prior year, which included $12.9 million of costs related to establishing Hillenbrand as a stand-alone public company a year ago. Investment income was down $1.2 million against the last year, primarily as a result of aggregate losses in limited partnership investments of $4.5 million.
Cash flow from operations for the second quarter of fiscal 2009 remained consistent at $28.3 million, up slightly from $26.8 million in the prior year.
“These are unprecedented economic times, and our recently revised guidance reflects our best estimate of performance in the face of unanticipated declines in volume and product mix,” Camp said. “We remain cautiously optimistic about future results and are taking specific, decisive actions to address market pressures. We also have enduring strengths in customer service and support, lean business practices and financial stability that will help us weather this downturn as we continue to invest in the Batesville Casket brand and growth opportunities for Hillenbrand.”
Hillenbrand is the parent holding company of its wholly owned subsidiary, Batesville Services, Inc. (Batesville Casket). Through Batesville Casket, the Company is engaged in the North American death care industry where it manufactures, distributes and sells funeral service products to funeral directors who operate funeral homes.
