Quarterly sales for U.S.-based plastics machinery and hot runner manufacturer Milacron dropped 23 percent compared with the same quarter a year ago, parent company Hillenbrand Inc. reported Aug. 6.
The drop was "primarily driven by lower demand for injection molding and extrusion equipment, largely due to the pandemic-related shutdown in India and weakness in the automotive end market," the company reported.
"The decline was partially offset by increased hot runner sales in the medical and electronics end markets."
The company also reported a 24 percent drop in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and adjusted EBITDA margin of 20.5 percent decreased 20 basis points.
Blue Ash, Ohio-based Milacron has an order backlog of $185 million, down 3 percent compared with the same quarter a year ago, driven by lower injection molding and extrusion equipment orders. The order backlog is down 1 percent compared with the second quarter. The results reported Aug. 6 are for the quarter that ended June 30.
Batesville, Ind.-based Hillenbrand acquired Milacron for $1.9 billion in November 2019, in a move that diversified Hillenbrand from its traditional focus on burial caskets. Hillenbrand is publicly traded.
In a news release, Hillenbrand President and CEO Joe Raver highlighted the company's efforts to integrate the Milacron business.
"Since the Milacron acquisition, our team has done a great job executing our strategy in a challenging environment. We have focused on leveraging our operating model to improve profitability, drive free cash flow, pay down debt and integrate Milacron," he said.
"The integration remains on track, and we've made significant progress toward achieving the full strategic and financial benefits of the deal, while accelerating the realization of announced synergies and identifying incremental opportunities," Raver said.
Hillenbrand has a three-year cost synergy target of $75 million for Milacron, and reported that it is on track to achieve $20 million to $25 million in cost synergies in the current fiscal year.
In reporting its outlook for fiscal year 2020, Hillenbrand said Milacron's sales are "expected to decrease modestly. Hot runner sales for medical projects related to COVID-19 are expected to decrease in the fourth quarter, and injection molding sales are expected to remain weak."
For the parent company, Hillenbrand reported sales of $608 million, up 36 percent compared with the same quarter a year ago, which was before the Milacron purchase. Hillenbrand reported a net profit of $24 million, a drop of 33 percent.
Hillenbrand is also the parent company of compounding extruder maker Coperion and auxiliary equipment firms K-Tron and Rotex, which are in the firm's Process Equipment Group. For the quarter, that unit reported sales of $281 million, a drop of 11 percent compared with the same quarter a year ago. The decline was driven by "lower demand for capital equipment and aftermarket parts and service across the segment, partially offset by favorable pricing," Hillenbrand reported.
The Process Equipment Group's backlog of $939 million was roughly flat compared to the prior year, but down 4 percent from the second quarter, "with order softness across the segment due primarily to the impact of the COVID-19 pandemic."