BATESVILLE, IN — Hillenbrand, Inc. on Friday provided the following update regarding its actions to address the impact of the COVID-19 pandemic on the company's business.
"The COVID-19 pandemic has affected all of us. Hillenbrand's priority in responding to the crisis has been on protecting the health and wellbeing of our employees and serving our customers globally," said Joe Raver, President and CEO of Hillenbrand. "In addition, we are taking several decisive actions we believe will lessen the financial impact on the business while protecting our ability to continue to generate profitable growth over the long term. I am proud of our organization for stepping up to the challenges we are currently facing and working collaboratively for the safety of our people, continuity of our operations and service to our customers."
As of April 6, all significant global production locations remained open and able to operate at or near normal production levels. We are working with the appropriate authorities with a goal to keep our critical operations open as suppliers to essential businesses.
We have experienced disruptions at some smaller facilities in locations such as India as we take actions to comply with temporary government restrictions related to the COVID-19 pandemic. These affected facilities account for approximately 5 percent of expected revenue. We are closely monitoring the supply chain and taking actions as needed to mitigate disruptions. We continue to work with our suppliers and customers to preserve business continuity and prepare for anticipated developments.
Hillenbrand has taken proactive measures to maintain its financial flexibility. We believe the company has a solid financial position with sufficient liquidity to operate in the current business environment. Hillenbrand recently increased cash holdings by about $200 million, including a portion of the proceeds from the recent sale of the Cimcool business and a draw from its existing revolving credit facility. As of March 31, the company was in full compliance with all covenants under its revolving credit facility, and estimates that as of that date, it had liquidity of approximately $475 million, including approximately $375 million in cash on hand. The company continues to evaluate additional measures to maintain its financial flexibility.
Due to the uncertainty of the current environment, Hillenbrand has implemented proactive measures to help mitigate the financial and operational impact of COVID-19 by reducing expenses and conserving cash. These measures include:
- Voluntary reduction in CEO base salary by 30% through at least the end of the fiscal year;
- Voluntary waiver by the Board of Directors of its scheduled cash compensation increase for 2020;
- Cancellation of all regularly scheduled merit-based salary increases for salaried US- and Canada-based employees for 2020;
- Suspension of all hiring for exempt and nonexempt positions, except for critical positions;
- Reduction in capital spend while prioritizing critical maintenance, safety and regulatory projects;
- Additional actions may be taken in certain businesses in response to lower customer demand, including temporary reductions in work hours, furloughs or layoffs, if required; and
- The company's share repurchase program remains suspended.
Given the uncertainty related to the impact of the COVID-19 virus on its business, Hillenbrand is suspending fiscal year 2020 guidance.
Hillenbrand has used, and intends to continue to use, the homepage and the investor relations section of the company's website at www.hillenbrand.com as a means of disclosing additional information, which may include material non-public information.
"While we are not able to predict the duration or the extent of the disruptions caused by COVID-19, we are taking necessary actions, are confident we are well-positioned to manage through the challenges, and expect we will be in a good position when the environment improves," Raver concluded.
Hillenbrand is a global diversified industrial company with businesses that serve a wide variety of industries around the world. We pursue profitable growth and robust cash generation to drive increased value for our shareholders. Hillenbrand's portfolio includes industrial businesses such as Coperion, Milacron Injection Molding & Extrusion, and Mold-Masters, in addition to Batesville, a recognized leader in the death care industry in North America. Hillenbrand is publicly traded on the NYSE under "HI."