"We have developed into a world class, global, diversified industrial company," Joe Raver, Hillenbrand Inc. president and chief executive officer, said during the Feb. 22 annual shareholders' meeting.
"The Hillenbrand Operating Model (HOM) is a consistent and repeatable framework designed to produce sustainable and predictable results .... It helps us run a variety of businesses around the world."
Board Chairman Joe Loughrey noted, "The company's core strategy is to leverage its strong financial foundation and the Hillenbrand Operating Model to deliver sustainable profitable revenue growth and substantial free cash flow and then re-invest this cash in new growth initiatives that are focused on building leadership positions in our core markets and adjacent markets, both organically and inorganically, in order to create long-term shareholder value.
"The board's support of this strategy remains as strong as ever. We believe staying true to this core strategy has fueled Hillenbrand's transformation from a North American death care business to a global diversified industrial company. We are encouraged by the work management is doing."
In the 2016 annual report, Raver said, "This year was successful from a profitability perspective as we expanded margins, despite a 4 percent revenue decline compared to last year. We took swift and significant actions early in 2016 to protect profitability by restructuring our businesses and improving operational execution through the application of the HOM.
"An area of focus for the company ... was improving our balance sheet and making more efficient capital investments, which contributed to record operating cash flow of $238 million for the year. Our strengthened balance sheet puts us in good position to run our business for profitable growth and pay an attractive dividend. The annual dividend paid out this year was 81 cents per share, and increase of 1 cent per share over 2015. Since becoming a public company in 2008, we have increased our dividend annually."
In addition, "the Process Equipment Group finished the year with revenue of $965 million .... representing 63 percent of total Hillenbrand revenue .... We re-aligned the business to effectively manage costs and improve profitability, despite declines in demand for equipment that processes proppants used for hydraulic fracturing and equipment and parts used in power and mining."
The Batesville segment generated revenue of $574 million, representing 37 percent of Hillenbrand revenue, he said. "Batesville experienced a decline in demand for burial caskets, as 2016 marked the first year that the rate of families who chose cremation rose above the 50 percent mark in the U.S. and Canada, according to the Cremation Association of America."
During fiscal year 2016, HI added ABEL pumps and Red Valve to its portfolio. Both are "recognized leaders in diaphragm pumps and highly engineered valves ... (and) had solid growth in the municipal water and wastewater markets," according to the annual report.
Loughrey reported that board members were supportive of HI's community outreach and involvement in 2016. "One of the core values at Hillenbrand is individual worth and integrity. It includes being a good corporate citizen and a sound partner in our local communities .... (We) are proud of the efforts of Joe and his team as they led the company in a significant community engagement initiative in 2016 referred to as 'The One Campaign,' which has had a tremendous positive impact on the Batesville community, so much that Hillenbrand plans to expand ... (it) to other parts of the company in 2017."