HI - Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to Hillenbrand's Fiscal Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sam Mynsberge, Senior Director of Investor Relations. ahead. go Please

Sam Mynsberge

Vice and supplemental third operator, today's by everyone. to website your be our Welcome President I'd will Bob Thank to that posted like of good on XXXX call. fiscal direct Senior and Ryan; quarter CEO, to joined on and earnings Hillenbrand's CFO, and VanHimbergen. the you, attention Kim morning, President slides call. referenced our IR I'm our

forward-looking for our comparisons of including to actual XX-Q, forma Slide can securities are course statements on Kim. in could you discussing X. our the results. not as of during certain encourage call and impact non-GAAP our non-GAAP reminder performance, I'll turn may Turning results over performance harbor the laws. the our well With website factors materially. I future and be are that the deeper for certain operating the found that to of comments this pro safe that which Slide to our now statements the risk guarantees call, to subject appendix of Also, review could information, will forward-looking measures, segments. a differ the actual contain A provisions These be discussion statements as that, of presentation X our we

Kim Ryan

a in Molding our revenue EPS we a segment. for of delivered determination performance like grateful and today. Thank truly acknowledging in you, throughout Overall, Sam, and sustained our executing by joining led enterprise. Thank to Hillenbrand solid start and I'm I'd by you again good strategy Solutions us morning, everyone. dedication associates the quarter. this their for Technology growth, to quarter strong our their

improved large, challenges our deployment model, inflation and Through pleased fully to foreign coverage inflation effective I'm again our responded. price offset broader disruptions, across with of at dollar-for-dollar industry currency overall pose operating on we the chain supply business saw our this how have and quarter a While teams the our cost to basis. continued headwinds Hillenbrand

plan runner by help monitoring that the outlook, have incorporated shutdowns Based future COVID-related recovery our we've our hot in to any mitigate situation line China, to caused our current on communicated we the in our in call. disruptions not Additionally, QX we shutdowns executed on China closely the but situation. impact COVID-XX China we are from related the product into

and quarter, seen Our that In signed polyolefin which and delays remain customer pipelines large bottom the in APS quarter, some the MTS performance. across Middle great the have China, to few top for testament products factors that regards to attracting We for demand quarter order solid services. their particularly continues laser-focused were those the remain and did a decisions plastic both partnering of to We decisions our healthy East. customers current already and is see India and with drive large systems, and contract key but Batesville with success a we've we to a in line Batesville, long-term we the a in our on materialize as other expected large to in well, customer segment. close experience continue industry-leading in team and the

this profitable We allow will growth levers expenses to that will in for us investing nimble long-term environment. we various pull remain navigate can and through managing successfully

move as down record the up are a execution of enabled you that I'm and and cycles, positioned operating Hillenbrand we through we know, well confident strong track As forward. have we by model,

briefly on Now our journey. provide on update including I'll strategy and our sustainability key made an priorities, progress

first, us well long-term manage Batesville deliver shareholders. strong to we fill to business have foundation M&A; platforms, centered meaningful cash positioned four around pillars and free profitable growth which believe are: These value is As you both effectively know, our growth drive our and to third, model; strategy the flow. for organically build operating finally, a for deploy Hillenbrand scalable cash; second, using through and pillars,

synergies by quarter, A the for Milacron we through end effectively Hillenbrand sustainability further evolving defining despite on three synergy successfully across annual of of years. integration annual specific norms global organic that are: third serve for of schedule. more I priorities. past in not against pleased over few During proud of and the higher-growth later. the more growth focused target achieved our culture, company accomplishments, We needs purpose. their our our to historically the continued in could workforce, I'm communicated in strategy. on of to a detail execution integration be ahead discuss published and our company communicated environment examples teams and we a for long-term run our also execute and markets our line sometimes inorganic enterprise little we million integration achieved we the schedule. into working challenging these We report to target ahead our that our operating positioning with the the global rate of our I'll expanded throughout expand values this And supported $XX Milacron To announce dynamic opportunities creation

and key processes global HOM place supply acquisitions. of integration, a this confident part put foundation are our shared in capabilities be the to management, foundation a success services, during enabler we've We financial as in the of in future and that the will few. created This just global name the engineering integrating including developed, a

and end characteristics. of know, engineered and you growth, our with has footprint markets growth taking a key solutions for As equipment in highly another attractive ours focus capabilities our on long-term been priority expanding with processing existing

weeks, and LINXIS five leader food solutions, a Group, of plastics to we leading agreements process Herbold Meckesheim, in past recycling announced industry. provider and automation the the acquire for Over global a solutions equipment

strategy the have of attractive and acquisition, secular and build completed specialized tuck-in transactions markets and addition, to our to food, a extrusion positions products Gabler These growth which food further strategic in complementary long-term In are we existing recycling Engineering, company. a potential. small leadership highly our solutions end

for on in our July Batesville North Batesville. their that this of a team XX, exceptional determine will with deliver also a a associates, the and to customers. Batesville to tireless to in strategic innovation America, our in service process confident an Next, quality, be has explore shareholders. and best death of part continues is initiation industry we forward and path to the efforts been customers are alternatives a process care to of announced significant benefit our leader best-in-class history, we the range

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DE&I purpose. to our to June. and part continue as annual as In third alignment collaboration share operational Goals, disclosed and the we that first Global Shape what major our regarding the For Global with report innovation in of excited our as both Development Tomorrow, with all the United standards. to are Initiative it Sustainable report, we will on In all customers, time and leverage Nations' how SASB What our purpose: additional and sustainability our Reporting in the Shape. our of Compact we organization. signatory we report the company's across a published ESG we emissions that Nations shape Scope as introduced progress efforts global sites will deliberate United made a leveraging our best of to We we on X disclosures as our and communities The commitment other organization which for selecting we Matters associates, Finally, governance do our the our company, Scope propel report, Hillenbrand's initiatives. progress very that includes we careful commitment solutions also making define I'm the do forward a words demonstrate and and and X a published stakeholders. excellence, will serve was culture you were in and

pride molders in What the designers, and together engineers, technical the expertise to customers. new to the our forward our capability and solutions Company are allow for manufacturers pieces matters. and We right take put bring who

products They affect life heal. end impact people play, work, eat, world. travel across the and how Our live,

tomorrow. For

at We continue to next. look what's

four to industries, for respective As than innovators shape XX,XXX purpose Embedded future a more global of work world. values Hillenbrand's in will stronger set we core associates. in our is a our our unifying

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create, our Next, our of of partner Drive core where define are, to finally, going as we're values matter. a we story embed proud make helping I'm stakeholders. our for details made drive into over to all shape outlook. Then, excited that purpose overall to Deliver. who us and and tell the now associates continue our organization. the time confident to collective the pivotal global And This Together, value and turn performance it efforts for long-term our very Hillenbrand, with to to and segment is what the and financial a and provide for purpose future we have possibility. positioned about in we to matters of I'm stand what Bob and of of all growth for are well for tomorrow. our call I'll organization performance,

Bob VanHimbergen

Thanks, everyone. Kim, and morning, good

will has Process As TerraSource adjusted on a basis, our forma the We our this ongoing and discussing Solutions from my assessment I Global believe been Red of segment. section, divestitures of be a performance throughout a Advanced the reminder, which pro for ABEL, provides better Valve operations.

reconciliation forma appendix and earnings slide find the will deck. pro a the of You in results of reported

or increase in quarter, $XXX higher Solutions compared we Turning segments. of our currency an of the to and volume In impact Advanced Solutions Technology pricing year, This third our and XX% by excluding to led was the Slide growth XX. delivered foreign of exchange. Molding revenue Process prior X% million,

throughout euro. supply dollar accelerate parity currency earlier, with Adjusted later mentioned Kim neared X%, we EBITDA our the I'll the on as for currency the but increased have when As constraints impact and excluding QX and of and discuss million foreign challenges the remain inflation outlook $XXX touch has quarter, foreign persistent chain seen full I the this of exchange. decreased X% headwinds year.

offset operating increase share, the X% cost basis EBITDA per adjusted prior primarily industrial of lower prior outstanding of higher the Adjusted high offset the tax XX.X%, was effective XX% segment. which from $X.XX due the slightly a our XX.X% compared segments expectations and The We higher by year. had share in $X.XX basis to to year the more year. large risks related related higher inflation inventory in favorable above from or due primarily our income the supply and of points was quarter $XXX an and volume effect points, exchange. came in to in decrease XXX foreign quarter, compared of the $XX decreased increase prior higher $X of of end to capital adjusted We pricing, rate XX global plastic to million million industrial as currency earnings million working disruptions. our volume from price per were in to dilutive timing flow offset year-over-year, $X.XX partially customer to operations volume or the and and of cash impact reported of of Batesville, projects of chain lower of a support and than shares in net margin leverage the GAAP demand decrease an While

in prevented In experienced supply which quarter. addition, in completion projects some we the delays sourcing the otherwise certain of parts, chain

large As we customer delays few in project decisions the Kim mentioned, saw quarter. and a

free conversion know, Coperion The these capital significant cash relates year our lumpy in XXX% conversion which nearly accompanied our of line, large metrics 'XX. of model. be can enabled advanced consistent to the a of the the capital flow payments, but working working by often of you Hillenbrand capital timing it confident operating remain projects our which turns our are of in underlying exceptional orders in performance cash world-class factor and including As working by level, in of XXx And we strength deployment are product large as were average flow fundamentals, are XXX%. free over fiscal long-term a

originally to due disruptions. conversion than expected of this with year flow cash to timing due supply coupled free expect to large We lower orders, higher-than-planned chain inventory be

strong with be area of a X% results Capital remain are And to continue conversion X.X% free expect quarter, were range in our the now drive and to supply cash average targeting Once over $XX ability and particularly overall begins we in XXX% over to conversion we term. CapEx as of as We well for in automation be growth we revenue million. anticipate high-return approximately the our investments long which still innovation efficiency. year, the to flow full our on three-year to year XX% confident XXX%. chain improve normalize, the CapEx businesses, in to focus the million full $XX of we as continue in for approximately expenditures conversion of to of to

excluding currency. at Our record impact the the MTS impact to foreign total excluding Overall, in decreased but flat of Sequentially, X%, billion backlog levels, down but of X% high X%, backlog rates. historically of was up year, $X.XX our segment. remains compared our prior exchange was backlog backlog including the

prior Backlog impact basis dilutive margin to moving year, effect XX. plastic prior the foreign than by billion Adjusted foreign the segment the offset Now productivity to higher of million points compared $X.X EBITDA of by parts compared aftermarket XXX of large currency. and X%, impact but cost. increased as but currency, operating XX% Slide from higher systems revenue currency. year-over-year, $XXX more volume APS $XX excluding of X% was leverage the services. and price the excluding flat X% impact of X% Adjusted and performance of the on decreased decreased improvements and foreign XX.X% EBITDA was of year down increased of to million driven volume of or were margin including pricing

we remains see Looking of another forward, the pipeline X. book-to-bill healthy, order for to aftermarket strong quarter than patterns continue and greater with

Molding which the were injection hot Slide volume China. or excluding XX% currency, is of XX. the foreign product line line, by to pricing to on in XX% as the Solutions the volume product year-over-year COVID-XX-related due lower Turning molded impact higher $XXX and increased million shutdowns from from runner of Technology favorable partially offset Revenue

quarter. to we our teams some impact did good the As shortfall we job activating mentioned in in on of the anticipated plans and a this QX the call, mitigate

situation the offset impact from currency XX.X% operating continue the unfavorable the as EBITDA during were but volume increased of inflation to of in EBITDA and margin excluding mix. XX% to monitor recover primarily as productivity the $XX leverage we to Adjusted the fiscal expect fourth China, of quarter. improvements shortfall Adjusted prior and higher by of foreign today, flat favorable XX% compared exchange. or year, was We million pricing,

to at comes a margin reminder, to molding was driven primarily compared compared $XXX injection-only As prior injection or an in of hot year, equipment. the the Record of currency, and million relative equipment equipment. runner a by excluding impact X% lower increase extrusion backlog XX% foreign up

across We the to for continue a solid see applications. molders, demand particularly pipeline segment, automotive and of packaging custom

Adjusted $XXX price lower of basis and million commodity XX. rate the compared estimated in implemented prior this burial in significant revenue XX.X% to expectations deaths This XXX increased of casket turning to increase to decreased families pre-pandemic in Slide on year which Now opted Batesville to trends. and demands for normalize Burial the as volume. X% XX% begin lower million of EBITDA cost cremation. line Compared due and adjusted dilutive to declined to the offset in costs. with year, with at casket EBITDA prior margin points $XX due an to due was effect our year, performance the is surcharges price COVID-XX of to to decrease volume increase primarily an estimated associated

pricing in cost an in to resulted have mid-May costs, response As commodity on quarter's coverage. committed which price we last fuel surcharge in our rise additional the call, in continued sequential in and improvement mentioned

We with expect exit inflation. offsetting to fully price the year

as business expect begin has our quarter. enhancements fourth see Additionally, on which the volumes focus productivity the normalize, positive in increased to we margin improvements, to

third adjusted X.Xx. the XX. million, to of EBITDA quarter Slide debt end the Net balance at on Turning the with debt sheet a net to of $XXX was ratio

credit under including cash of million available of hand our $X.X the on had As of approximately end, we quarter liquidity and billion, facilities. current remainder $XXX

Slide to XX. Turning on deployment capital

X.X additional back shares five the XXX,XXX $XXX third brings approach This approximately million. $XX million As quarter repurchases, the to million. our subsequent our repurchases approximately shares million for close for last an quarters been share to we've you quarter, over know, to approximately total in diligent buying in $XXX the

reminder, a remaining under our current As have $XXX we authorization. million

high-return organic M&A. continue to investments focus a allocation, returns on through and long-term approach with maintain We disciplined to capital shareholder a maximizing

LINXIS and long-term growth shareholders. We expect drive transactions the profitable Herbold value accelerate for recently announced and will our

calendar anticipate by will We of closing close the year. the quarter, the fourth Herbold end LINXIS continue in to with

Herbold our forma we LINXIS, be of approximately closing upon So leverage net project X.Xx. and pro to

are our a of so, the be doing year. fiscal by track We well and next to end proven record deleveraging leverage within X.Xx have to committed to of guardrails of the expect X.X and

my XX, remarks Now and will outlook turning to quarter our fourth with conclude Slide prepared I update an on for full our year.

the ABEL a Valve, our pro and adjusted divestitures is a of for reminder, which basis, As guidance TerraSource. is Red on forma

include expectations not closing from dates. impact announced the and current LINXIS the does acquisitions guidance their on Our based of of any Herbold

the lower a now maintaining potential $X.XX to revenue assume to driver full the of to X% growth future. currency any as our $X.XX $X, are Overall, foreign be $X.XX our for COVID-XX-related in previous EPS expect X%. does our range with to top from of year to year X% and the Additionally, guidance the of range shutdowns We adjusted narrowing impact of not previous unfavorable midpoint estimate compared to the primary our from X% end the range. of approximately we full

Now segments. the turning to

to revenue unfavorable APS of down supply our XX%, expect to growth to We disruptions. foreign impacts X%, primarily X% continued chain from previous due and of currency X% estimate

APS for margin modest margins XX%, EBITDA expansion flat year-over-year. to adjusted to reflecting expect of the to XX.X% be range We

previous product estimates expect full in of For of X%, our X% driven injection to stronger-than-expected up year MTS, we growth X% revenue X%, line. molding from performance by to

margins of XX.X% modest adjusted to XX.X%, We be expansion expect range to margin for flat the year-over-year. MTS to EBITDA reflecting in

up flat our which volume. full is from expect to higher we year Batesville, for up due primarily Finally, estimate, be to previous X%, revenue to

XX%. our presentation to for We assumptions. of turn previous year to review call our full be over back guidance to of have Kim. compared I'll now additional estimate XX.X% the to XX earnings to And XX% Slide XX% increased Please expectation the margin

Kim Ryan

end Thanks, discussion questions. Bob. few taking final remarks I'll our before with

we economy our mentioned, might changes I we the environment, impact prepared As respond vigilant remain will that external the business. towards to are and in to

remains well accordance solutions capabilities deploying our position with innovation our of long-term meeting growing our value. backlog focused and profitable for the effectively our have actions this Our we of provide remain better In announced last We healthy, to customers on expanding markets. we purpose, intensely the environment. Hillenbrand challenging couple to the drive through Matters focused team, execute on over end and and help teams Shape Tomorrow, our will believe Hillenbrand and growth remain operating we model the strategic What for to shareholder needs months global

will forward vision we on look longer-term New targets growth for Finally, December XX Investor York our more to to for see about our in sharing City. hope We details there. Day you Hillenbrand and at

will for We line questions. your now open the

Operator

is first from Daniel CJS Instructions] [Operator of Securities. Our question Moore

Daniel Moore

of start me relatively with flat there? there is volume the back maybe pricing flat well? an as basis Let FX-adjusted sequentially with start FX. adjusting on backlog, sort for -- in Was much Or

Bob VanHimbergen

Yes.

exchange. sequentially, exchange. it's primarily had if sequentially, probably negative but on that, yes, headwind looking But foreign then primarily is it's Dan, So you're a the about impact, price. foreign basically FX $XXX And difference million year-over-year,

Daniel Moore

And that for FX adjusted is Yes. in on a much pricing basis, there flat? being sequential

Bob VanHimbergen

No, no.

Daniel Moore

our words, other as well. is flat pretty volume In

Bob VanHimbergen

Exactly. It flat. is pretty

volume sequentially. much So and of the difference not in pricing

Daniel Moore

terms at in polyolefin wins. that of all And it to wins shifted the post generate to got of out? generated quarter possible you expected you or relative some either the In mentioned is that quantify size

Bob VanHimbergen

Yes.

QX we're so So -- strong. be to we expect -- we

in expected alluded, two both QX come $XX really QX. of in each. hit million those large to we are that Kim But we As orders north did have

Daniel Moore

Got it. helpful. Very

Batesville. Okay. to Shifting gears

in it sort longer-term has shift there of in to that pretty cremation. You opting trajectory Or with the burials the consistent change been longer-term the Is of from slope? mentioned changes any to cremation?

Kim Ryan

quite been quarter. we long to Yes, Dan. any over did Frankly, consistent. that's so that time, and be a continued very in period consistent not see shift It of has this

Daniel Moore

mentioned... you And Perfect.

Kim Ryan

That other we that XX-ish points typically that's see, basis same the range.

Daniel Moore

all? Any agreement I think light you quickly, you some but at a can typing a you -- new And mentioned, color on sort. Perfect. I was of can that shine customer

Kim Ryan

to those those for periodically. we customer -- as our able agreements up come are things one can large time been agreements against consistently agreements future of sure quarter. imagine, partnership. those over to with Well, we for those all deploy able our have renewal to And another we're the make keeping large And the secure we and last longer-term we secure current. we've those were you for that a And customers,

sure last especially says their think team, realign two very care I the and kind to customers the take over have to to that and us continued to been of our years, that last of global service despite had with were of re-up their doing of delivery, we're the we that things we've able that that. and And work of for of that on some those about supply customers challenges all the right So customers make challenges pleased especially the Batesville these continue through years to together. couple speaks of types changes prices

Daniel Moore

still Perfect. pre-pandemic where relative cremation, And above? you of run are that were to Or sort rate right pre-pandemic? now we to closer for where you're kind we volume of XX% terms adjust levels, are of we sort to in shift X%, of if

Bob VanHimbergen

Yes. Yes.

I'd I think now, we're closer we're to say levels, QX, Dan. pre-pandemic QX, right --

think is line slightly the it. with way QX, the line really in QX right we think pre-pandemic would where thought, about I maybe but levels I better is right with in performance in would So

Daniel Moore

back disruptions it. queue. not incremental you from some I'll And COVID side, of supply mentioned better for injection as But hot things there, in jump on guide. -- but or molding me, last runner the disruptions and excuse there's the side the disruptions Got expected, getting chain, on me, in sort the

ability your the Just challenging more deliver little hearing bit how on environment. you're your maybe what than customers week-to-week, from cadence that quarter-to-quarter, in to that's a of and improving

Kim Ryan

Yes.

obviously had relative type workers on back work. thing, of that. at including the and to you been generally return on subs And have to that many was read May, success China of three kind weeks associates policies all full facilities at I what's we've we've many, we down, getting of -- the our and of status. news -- the if of of April in since had pretty our we've us the think the to back going able shut our been that many first facility It to beginning in zero-COVID

most line, other Mold-Masters China Just product that in our around of relatively by really, were unaffected operations this.

the talking we're So product Mold-Masters line. about really

we at expected part beginning of back suppliers' them we're those of to come QX. improvement demand, able since been in, through Obviously, in in it general the operations our three QX we orders in, to and to well. volume have May. with run, another our -- continuing Dan. part high working in And We've shutdown to through and really of were of them We that continue our to so come or delayed, as see weeks working to way catch and see ability up continued way

So improved. of parts I got log of I a our that effort least around still Asian for has, it is say manual jam ability to it And our on I I improving. bit But at still and for supply has requires various think our a amount a we've slowly very say, business, think but huge itself arms that there's would to components manage would manage. it of situation the

Bob VanHimbergen

QX. rest where April. that of about the other in quarter to say, up picked in with We half line in had of we actual our in the Yes, the right were revenue expect million this the $XX quarter I a back and results would Dan, impact expectations, called half be

Operator

Summerville question is Davidson. D.A. Matt from The of next

Matt Summerville

a dilution and a hoping bit seeing of that's across put theme, point maybe a you're could segments? recurring little the of on was price three the finer I cost you magnitude

Bob VanHimbergen

Yes. Sure.

our to So covering right, entered we're where the didn't with pricing you, costs. pleased, our remind quarter. where we the we cover in price execute year we cost have And with got obviously, just need the to backlog

And ending QX, year. so to XXX% about XX%. at were get at to And XX% expecting of the to coverage. QX, we by we were we got

did we And the going expect we in cover covered QX, quarter to get so forward. and that that certainly in

you pleased on year, teams about if impact, dilution what the have done management we're team But commercial Matt. and chain supply the full our think about that. So, just global

on impact. For basis XXX the XX. Batesville, a the on it's probably XXX about line, MTS basis points. it's side, point probably about then then And And it's EPS

of inflation you blend when cost it's XXX kind that, so the price on throughout all the dilution because basis of had points of And we've impact margin year. about

Matt Summerville

That's better years, writing had last the actions over if the think keep that it, you'd push taking up we time, part out sure order with kind very productivity the you've normal helpful. about cetera. of demand. sort et I to would extra And shifts you're then at of in of imagine, be for to two Batesville I'm

productivity are Now some that sort looking targeting what improvements to volume? subsided, the the XX you that help may you of pressure extent XX that's margin to of in dollar-wise see for months, from business over out next may the that cushion lower expectedly

Bob VanHimbergen

Yes.

QX, of certainly that that to been on We I in. those the automation of some going But So been programs. some I the incremental forward. equipment the do mean, now of have -- I implementing supply impacting right would dropping, volumes volumes. team focused margins think in range delayed have we're XX% in improvements of impact longer of term, -- still on XX% chain But think getting because so you're right, productivity where because the has would

And so evaluate we'll to need cost certainly and drive to to continue XX% to XX%. productivity our maintain structure that

Matt Summerville

then one follow-up. just more Got And it. quick maybe

revenue bit, think, business In that mentioned, ideal recover, guess to APS for continue a to look mix feel imagine. you year-to-date? I'm should I QX. world, respect improving to much more I there an a would in over trying parts one. in with I obviously, spare as you generated would in still volume, going going is how get how Just have volume guys little to Book-to-bill forward as fiscal parts

Bob VanHimbergen

Yes.

color, there. in double that our our those I'll orders But I up So digits low revenue more hopefully, is you. mid-single digits. in give will are some And APS, you mean, help

$XX backlog about in $XX $XX aftermarket So $X million, closer our grew even sequentially, million. to about then to And year-over-year million million.

And so our closer we're one, world, that. book-to-bill in executing to perfect and our is

I kind But little being still part sales percent range able need think for of we're was focused But reason we'll that. that as be would than in that highly and aftermarket our EPS, more a and we XX% of down execute margins overall improve, and executing XX% to chain a to parts thought. we bit supply of of we're So to of kind range. what that on in

Operator

question Howe of is Barrington from Research. Chris next The

Chris Howe

Just throw where broader you wanted this to you, question take to see answer. a

about euro. consistent quarter of think the more currency, what's this the past theme dollar strengthening related As we been to the specifically the versus

the about trends pending that about headwind acquisitions, should the we the How think we the underneath regions should into at the across think forward global foreign with as taken acquisitions look we consideration? exposure business the with moving overall As headwinds demand currency shortly. here of which close

Kim Ryan

a so let's -- different into couple buckets. With lump them of

of Meckesheim the acquisition, Herbold was So first acquisition. systems which the recycling all,

imagine, those you as having and recycling does lot can the Europe, in inputs exist to progressive pertains who activities systems. more of their appropriate is much business As a install it in order to

the continues so does for we've the And recycling the exist Europe, seen to some lot that, a demand that of And of in demand increase. on. their and and underlying despite business there, in systems recycling of own pretty underlying signing even invited the challenges but of our the was being that business number -- particular inquiries before projects discussions substantial we our of target, acquisition were of into this seeing increase a even before

to for continued So end expand have systems in we do particular advantage they I we them but in footprint a conditions macroeconomic types the our are of taking locations they the to and of have Europe relative to global, that, acquisition, player. these are will Asia order LINXIS U.S. strength have obviously, and Relative of despite in see And would in global market. solutions. the market they of also into in that say help be to products some that some that locations, They Europe,

one do this have and really because where geographically because we nicely a strength a we mean, standpoint. complement and where together complement product And we despite where potential so investments in Europe, growth we other North end us see And continued and in attractive some have -- portfolio markets was nice very another we Asia that, very America. and working believe in systems from I -- that softness

we of ability these that execute entirely our could through We And value control operating thesis remain was equations. the revenue we acquisitions said, confident model. that. Hillenbrand the side each so on of create can't these to around our the in That

targets, cost So these we these we value we're with in are on going deliver able very that us. and team focused for to our we be control to this the worked make to sure as assess our how order of Board and side

side of as we're these that So two make from be well. to on that we focused confident decisions sense they as made cost that ability on and targets, perspective again but our this, the on the control both, synergy highly we will

Chris Howe

Have That And Can to backlog? their was two molding very molding. margin injection the just of backlog Okay. the business? helpful. if status you help MTS give business, of maturation for injection in shift and the side a the the to off you lines of worked a update we segment on bit older the

Bob VanHimbergen

So they're actually growing. still

and that revenue orders part the tell QX, in volume mix both performed I in was So the on that in our quarter. well price grew both in they actually and you, that quarter. the standpoint. can But And business happened of our in has quarter

So extremely they're And was favorable. cost coverage well. doing price slightly

the model put to is guess to enabled supply place summary continues So continue obviously, share to business And we're business management And their the in would be be improve and with I'd and that that global really the by But team. the that performing improving. targeting I chain operating margins. Hillenbrand that you. business fundamentals well,

Kim Ryan

bubble year a we pent-up call the -- two a been think of that for, ago, of quarters. add, came -- continuing that quarter is referred executed. would were as big kind of to X-, of orders that has in And But I bubble technically of year. last that I through what would demand -- the that it, then Chris, we saw we let's we And lacking that price kind X.X-ish side, generally was executing that what on

processes. now more priced in we operating And so that accordance our are new were those on with items

-- lower in volume other yet hot runner have would the did that quarter. does increased degradation and you of that the margin thing even see margin of that you business, know business is injection think point a our the I the not than a lot molding I with injection So molding to

margin that were really still runners to speaks well we carry to that in overall. business maintain think I reduced hot for the additional able the and improvements that seeing compared that So the we're a at margin to segment volume

Chris Howe

answer. a the is time the was tuck-in integration other is and we to pause consider Do LINXIS Herbold you and do a acquisitions, still the perfect and about this or you here? occurring? integration That capacity think line? foresee complementary have acquisitions nature The question, acquisitions. as acquisitions these of last Gabler while Engineering, of Or these the How

Kim Ryan

No.

them. their continue those to we've concert of tuck-in are working And organization we in that in separate then in team of work generally their and think Engineering it in some just to be looking those look to a -- we know would We a terms would we that well. at three I they the partner, to I itself, rather look at food that But think for worked integrations, the end markets. potential with dedicated great opportunities were our and to Gabler more pretty so going related capabilities on integrated Relative quite food they anticipate is that so describe be have -- are addition. smaller, work company Coperion important smaller we and pipeline. with recycling how say very The have understand we that to things some a fair a we by continue They that would at, time close. as I really the were team. be company they be quickly we organization, on thought much teams can their

across And into can quickly. tap we engineering can quickly companies with move help those organization, the to working synergy get have integration, we with teams management to center, able from to with finance built have us And And infrastructure global so because through organizations very teams that we Milacron on reach feel execute. IT to that multiple and with the the targets. we ability greater comfortable are multiple towards coordination the global integrated the integrations, organization, moving to teams it these we our bandwidth supply creates allows which in be separate those we local the bandwidth additional

Chris Howe

release, Gabler Okay. a see press I'm Engineering, go for. there's a acquired you return see on that funnel here And perhaps I But in at tuck-in generate don't here think perhaps disclosed. them is you multiple then you you into acquisitions getting queue. more my future, question these do the what the the acquisition. last before of What quick higher back small tuck-in don't the these in the

Kim Ryan

capabilities some to I be. customers. lot certainly, are our think to food mean, technologies. into to that we we offer be There specific that add These the guys I -- had I a keen very in could think there extrusion very of able were niche portfolio

very Gabler type size, a with other does very given process niche LINXIS regardless through our making one So again, process. great making. I markets. these sound that through the of financial can may all go of the tuck-ins, and think, process But given of Board that unique but that of that think own a absolutely, of Engineering, our especially But for there certain Every in we we're be to small, good, add appropriate But great, where could especially with larger the be differentiator open. places go these, assets returns we the very something for the other M&A Group sure very Directors shareholders. really decisions There M&A we is are of rigorous in. acquisition there us application, process we're in nature our are make

Bob VanHimbergen

you. Kim less million Chris, a with that it's great on than think that this, on us. asset Purchase that's just Yes. see And then frame why $XX it joined press mentioned, was too much we as we've didn't price to for you one. But

Operator

[Operator from is question Instructions] next Company. John & Franzreb of Sidoti Our

John Franzreb

Kim, touched this question here. on you kind It's kind before. of bigger just a picture of

injection the the pent-up jobs of the from last at about talked You year pre-pandemic. molding demand some from and was

that do on were enterprise as pre-pandemic are orders the making of caught that decisions of and whole, kind the customers up current So you deferred, feel purchasing a environment? operating your on right all you now, based those kind

Kim Ryan

instance, for instance, focus think I another injection for of business we've we we team, from mean molding We side Yes, sales do. continued that, not increases, in demand. demand, think good that the continuing that's on product We continued the of pent-up seen do. that are rollouts round the excellence.

places demand on -- a that's that of normal market. made feel We of want that on are So the to like any feel some grow products we curve feel on we launched. going that, don't don't things investments kind based in the we is there strange in we've a we've like

John Franzreb

businesses either of sticking more become that expect to would any just with And Great. order in first see which the recessionary that book conditions and evident, theme, should kind magnitude? you foremost or

Kim Ryan

the remember Well, where in we typically I think, businesses. see that that is short-cycle

that. it robust see business of continued aftermarket out in in So typically of mine we when the up first where those, the the first in see that first our demand place the the we is coal now, being is that's really also we where of slowdown. signs And businesses. ones some canary They're Aftermarket in right ends see.

our think business, products we short-cycle are And time, we quote been those an aftermarket And our in from these the suppliers businesses monitoring not slowdowns point business, experienced I is But eye to that's always types we pipelines thousands by We order are typically projects to products, and that runner that These so of thousands a keep create quote recognize that our large time. that line, orders feeding can the multiple have over have these the in have short-cycle These keep that our those leading projects, indicators. imagine, has be seeing projects. hot good of diligent really about yet. have you of on you all and to indicator, typically very trends. product it. continue would all to volumes which We we're over as of an what I to do continue geographically, you eye about, large order kind mega on talking hours order businesses, this.

as is conduct fighting around to of we said, move would bit in labor for not that large quarter. of line us have depending whether labor, on availability these very polyolefin jobs. or to those the unusual that we've this, so And it's time so for and materialize quotes other this to staff move everybody And seen it's of I quoting bit. mean for, it not around these on suppliers full is are for orders a some unusual a these already a

So good well. orders about as long-cycle we even feel those

John Franzreb

if cycle just on products in face little runner? risk? And any of Perfect. on such do cancellation sticking theme, there's businesses shorter they risk, would very any the as the be cancellation same the hot -- the the Or

Kim Ryan

not on but we Yes, -- be business, parts the do would that. see it it would

Bob VanHimbergen

We haven't historically even we and downturns, any yes seen haven't cancellations of seen, orders. previous in Yes.

John Franzreb

into just the back I'm comment XQ what That's talking how of was of business kind the in going about What hot revenue Perfect. to pushed for. much magnitude XQ? and then And we're runner there? the from coming quarter quarter,

Bob VanHimbergen

we'll and half about half Yes. in up the To the in I would XX so, We say, or think of million picked up QX QX. about $X John. pick other shortfall

John Franzreb

in And Or Great. that yourself? continue if build. does EPS? itself jobs so? satisfy And for you you talked large in building to Was of that of about process little just inventory those are inventory a bit

Bob VanHimbergen

Yes, I'd in really we had build three of really all inventory kind phases. say

have higher So we obviously volumes. we materials, and goods. couple of in had raw finished One, a WIP And things.

But IC are waiting -- we is we the long-term primarily still operating you, I up. Hillenbrand would now, electronics, we to -- And think the coupled bit almost carrying injection we a issues get business, we say more lead customer so we prebuying parts, supply that I'd can in come trucking availability molds. can been see being on down. through be have But longer complete, a we parts. get up and just our ship. challenges, chain have once just improve, supply as machines inventory still with focus the lead we're more model. we backed particularly And ports level continue would Obviously, chain that on that longer tell can couple to we MTS that, right and on will there with efficiency, those can do so transportation But of little meet sitting right continues inventory higher turns there commitments. But capital time so and working in, where

Operator

remarks. There Ryan questions closing I'd like Kim turn to for back to the at time. additional this are no call

Kim Ryan

a Great. November everyone, Hillenbrand, you on hope great Thanks and again, and healthy. again call I joining and annual in when interest us to forward and summer, for the our today. appreciate you have look report to Thank we we all We fourth will results. ownership and in your you. talking fiscal stay quarter safe

Operator

This concludes conference. today's

your You time. disconnect participation. lines you for at Thank this your may

Hillenbrand (HI) 6 Aug 222022 Q3 Earnings call transcript