Hillenbrand Inc., the parent company of compounding extruder maker Coperion, reported first quarter sales of $410 million.
The 3 percent increase in sales over the same period last year was primarily driven by its Process Equipment Group, the company said in a Jan. 30 conference call with financial analysts.
The Process Equipment Group's sales increased 7 percent, to $282 million, vs. 2017's first quarter. The growth was driven by strong demand for large plastics projects as well as increased demand for aftermarket parts and service, the company said.
Order backlog for the Process Equipment Group, which includes Coperion and four other brands that sell industrial equipment globally to the plastics industry and others, continued to increase in the first quarter and grew to a record $946 million, 33 percent higher than the prior year. This marks the ninth consecutive quarter of backlog growth in the group.
"Demand for large plastics projects remained strong in the first quarter, and we continued to capitalize on our differentiated capabilities to deliver comprehensive, end-to-end solutions to our customers," Hillenbrand President and CEO Joe Raver said. "This bodes well for the future of our highly profitable parts and service business, and advances our strategy to increase our base of recurring revenue."
Raver said the plastics business is the largest part of the Process Equipment Group and continues to be the company's strongest performing segment in the first quarter, particularly in North America and Asia.
"Our customers care about system uptime and productivity, and Coperion's extruders and material handling systems are unsurpassed in these areas," he said.
Hillenbrand is traded on the New York Stock Exchange.
Companywide, net profit increased 56 percent to $28 million due to a lower effective tax rate of 33 percent compared with 55.4 percent in fiscal 2018. The company said the lower tax rate was largely a result of the Tax Cuts and Jobs Act. Free cash flow was $32 million.
The company's Batesville casket business declined 4 percent compared with the first quarter of 2017, with sales of $128 million.
The first quarter also marked the completion of Hillenbrand's latest acquisition. The company bought BM&M Screening Solutions Ltd., a Canadian maker of high-speed gyratory screeners for the chemicals, minerals, foods and grains industries, for $26 million.
The Surrey, British Columbia-based company will operate as a business unit of Rotex Global, which is part of the Process Equipment Group. BM&M is expected to generate sales of $14 million annually, the company said.
"The acquisition of BM&M builds on our portfolio of leading separation technologies. We believe we can expand BM&M globally by leveraging Rotex's sales channels, footprint and diverse manufacturing and service capabilities," Raver said. "Acquisitions remain a key element of our profitable growth strategy. We will remain disciplined as we seek additional strategic opportunities we believe will benefit our business and our shareholders."
