Hillenbrand (HI) Q4 2024 earnings summary

Executive summary

• Q4 revenue rose 10% year-over-year to $838M, driven by the FPM acquisition and strong aftermarket, but organic revenue declined 1%; adjusted EPS for Q4 was $1.01, slightly above guidance, with operating cash flow at $167M and leverage reduced to 3.3x.

• FY 2024 revenue increased 13% to $3.18B, primarily from the FPM acquisition and aftermarket growth, but organic revenue declined 5%.

• FY 2024 GAAP EPS was $(3.03), down from $1.53, mainly due to a $265M non-cash impairment in MTS; adjusted EPS was $3.32, down 6%.

• Teams executed cost optimization and integration initiatives, achieving significant cost synergies and margin improvements in FPM; completed MTS restructuring for $20M run-rate savings in FY25.

• FY25 guidance anticipates a year-over-year revenue and earnings decline due to lower backlog and ongoing macroeconomic uncertainty, partially offset by cost actions and synergies.

Financial highlights

• Q4 adjusted EBITDA was $144M, down 2% year-over-year (down 13% organically) due to cost inflation and lower volume; Q4 net income was $12M, with adjusted net income at $71M.

• FY 2024 adjusted EBITDA was $512M, up 6%; organic adjusted EBITDA declined 12%.

• Operating cash flow for FY 2024 was $191M, down $16M from prior year; $63M returned to shareholders via dividends.

• Net debt at year-end was $1.69B; liquidity stood at $799M; net leverage improved to 3.3x.

• Q4 adjusted EPS was $1.01, down 11% year-over-year.

Outlook and guidance

• FY 2025 revenue expected at $2.93B–$3.09B, down 8%–3% year-over-year; adjusted EBITDA guidance: $452M–$488M (down 12%–5%); adjusted EPS: $2.80–$3.15 (down 16%–5%).

• APS segment revenue projected to decline 5%–10%; MTS segment expected to be flat to down 2% or up 2%.

• Operating cash flow targeted at $200M; capital expenditures planned at $50M.

• Q1 2025 revenue guidance: $685M–$705M; adjusted EPS: $0.52–$0.57.

• Orders expected consistent with FY24; focus on mitigating lower capital equipment volumes with pricing, productivity, and synergies.