Hillenbrand Inc

Greetings. Welcome to Hill and Brand's second quarter fiscal year 2024 earnings call. This time all participants are in listen only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time I'll turn the conference over to Sam Minesburg, Vice President of Investor Relations. Mr. Minesburg, you may now begin your presentation.

Thank you, Operator. Good morning, everyone. Welcome to Helen Brand's earnings call for our second quarter of fiscal year 2024. I'm joined by our President and CEO, Kim Ryan, and our Senior Vice President and CFO, Bob Van Hembergen. I'd like to direct your attention to the supplemental slides posted on our IR website that will be referenced on today's call. Turning to slide three, a reminder that our comments may contain certain forward-looking statements that are subject to the safe harbor provisions of the security laws. These statements are not guaranteed with beach performance, and our actual results could differ materially. Also, during the course of this call, we will be discussing certain non-GAAP operating performance measures, including organic comparisons for our segments to exclude the impacts from acquisitions, divestitures, and foreign currency exchange rates. Also, we will be discussing our results on a continuing operations basis, which excludes the discontinued operations of Batesville, which we divested in February of last year. I encourage you to review the appendix and slide three of the presentation, as well as our 10Q, which can be found on our website, for a deeper discussion of non-GAAP information, forward-looking statements, and the risk factors that could impact our actual results. With that, I'm going to turn the call over to Kim.

Thank you, Sam, and good morning, everyone. Thanks for joining us on today's call. We continue to operate in a challenging demand environment as global macroeconomic uncertainty continues to impact customer order decisions across many parts of our business. We'll discuss this further in our updated outlook for the remainder of 2024, but first I'll give a little more color on the dynamics we're seeing in our segments and the actions we're taking in response to the volume headwinds we're facing. Starting with the quarter, we had total revenue growth of 14%, driven by the acquisition of Schenck Processed Food and Performance Materials business, or FPM, and we delivered adjusted earnings per share of 76 cents, which was in line with our expectations. However, while order rates improved sequentially in both segments, they did not rebound to the levels we expected coming into the year. In our advanced process solutions segment, we continue to see strong aftermarket performance and solid demand from our Pauli Oleson customers, where the investment cycle has remained resilient and our technological capabilities, allowing for the highest output and quality, gives us a strong competitive advantage. However, this was offset by lower-than-expected orders for mid-sized capital projects in other end markets. Order pipelines remain robust, and utilization at our test facilities remains high. However, final customer decisions continue to be slower than expected, which is negatively impacting the segment's top line for the year. In response, we began implementing cost actions during the quarter, including targeted restructuring and strict limitations on hiring, travel, and other discretionary costs. I'm pleased with the urgency in which the teams have been implementing these actions, which continue to contribute to the 100 basis points of adjusted EBITDA margin expansion that we saw in the quarter. While we anticipate some of these costs will come back, we'll be disciplined until we see orders returning to expected levels. Additionally, we continue to make good progress leveraging the Hillenbrand operating model to integrate FPM and Linksys. And we're pleased with the traction that we're getting on margin expansion in these businesses, which is tracking ahead of schedule. We have seen a few larger projects get delayed to later in the fiscal year or early fiscal 2025, which puts some pressure on near-term volumes. Nevertheless, we remain highly confident in the opportunities we see for these businesses to drive long-term growth and value for Hillenbrands. Turning to our molding technology segment, we're pleased to see orders improve over 10% sequentially, but we've yet to see a clear inflection point in the demand environment, as orders in the quarter were relatively consistent with what we experienced throughout last year. We remain cautiously optimistic that we've hit the trough, but do not expect a material recovery in fiscal 2024, which is reflected in our updated guidance that Bob will cover in more detail later in the call. Additionally, we continue to see pressure in our short cycle high margin hot runner products, causing MIX to be a headwind to our previously expected margin profile. As we announced last quarter, we've launched a restructuring program for the MTS segment. We've been working diligently on the execution of this program and increased its scope to include an additional facility consolidation, which we executed in March. This is reflected in the $25 million charge we took this quarter, which was higher than the $20 million charge we had previously announced. We also expect an increase in the annual run rate savings associated with the program to be approximately $20 million, up from our previous estimate of $15 million. We believe these actions are appropriate and necessary given the prolonged demand softness, and we're confident that we'll be well-positioned to return to higher levels of growth and profitability once demand recovers. Since completing the strategic acquisitions that enabled our transformation, debt reduction has been our number one priority in terms of capital allocation. Sustained order delays have continued to negatively impact our cash flow and put pressure on our fee leveraging timeline in the near term, but our priorities have not changed. We're confident that ongoing working capital optimization initiatives, together with the implemented cost controls, will drive stronger back half performance as we move forward. Across the enterprise, we've charged ourselves and our global teams to take the necessary actions to position the business for success. We remain energized by our portfolio transformation and believe the secular trends that underpin our key end markets will perform as anticipated over the long term, and that our enhanced technological capabilities, engineering expertise, and global reach will allow us to drive differentiated performance in these markets. With that, I'll now turn the call over to Bob to provide more detail on our financial performance and outlook.