<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 1, 1993)
$100,000,000
HILLENBRAND INDUSTRIES, INC.
7% DEBENTURES DUE 2024
------------------
Interest Payable February 15 and August 15
------------------------
The Debentures will mature on February 15, 2024. The Debentures may not be
redeemed prior to maturity
and are not subject to any sinking fund.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS (2) COMPANY (1)(3)
<S> <C> <C> <C>
Per Debenture.................... 98.762% .875% 97.887%
Total............................ $98,762,000 $875,000 $97,887,000
<FN>
(1) Plus accrued interest, if any, from February 23, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $235,000.
</TABLE>
------------------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the Debentures
will be made at the offices of Lehman Brothers Inc., New York, New York, on or
about February 23, 1994.
------------------------
LEHMAN BROTHERS MORGAN STANLEY & CO.
INCORPORATED
February 15, 1994
<PAGE>
FOR NORTH CAROLINA PURCHASERS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS.
RECENT DEVELOPMENTS
The Company reported net income of $44.9 million on revenues of $393.5
million for the fiscal quarter ended November 27, 1993, compared to net income
of $24.1 million on revenues of $346.8 million for the corresponding period of
1992. Income from continuing operations was $33.3 million in the fourth quarter
1993 compared to $29.5 million in the fourth quarter 1992.
Net income was $145.8 million on revenues of $1,447.9 million for the fiscal
year ended November 27, 1993 compared to net income of $116.3 million on
revenues of $1,303.1 million for 1992. The 1993 net income was adversely
impacted $14.0 million by the write-down of goodwill related to the acquisition
of BLOCK Medical and favorably impacted $11.6 million by the sale of American
Tourister, Inc. Income from continuing operations was $132.5 million in fiscal
1993 compared to $111.2 million in fiscal 1992.
The Company's improved results in 1993 were primarily the result of
increased volume and new model introductions for both the traditional casket
market and the cremation market at Batesville Casket, increased insurance in
force at Forethought, increased units in use at SSI Medical Services, strong
demand for new and existing products at Hill-Rom, new product introductions at
Medeco, increased sales of the Verifuse-R- electronic infusion pump at BLOCK
Medical as well as improved efficiencies and cost containment measures at all
operations.
On February 7, 1994, the Company completed its acquisition of L. & C. Arnold
AG, a German manufacturer of hospital and nursing home beds and patient room
furniture.
Hill-Rom Company, Inc., a major operating subsidiary of the Company, was
recently notified that it is part of an investigation into the hospital bed
industry by the Antitrust Division of the Department of Justice (the "DOJ"). As
a result, the Company was issued a Civil Investigation Demand by the DOJ and
served with a subpoena to allow review of internal Hill-Rom files and business
practices to determine any irregularities. The Company is cooperating with the
DOJ in its investigation. Although the Company believes that it is not in
violation of any antitrust law or statute and expects no material adverse
financial effect, it is impossible to predict with certainty when the
investigation will be concluded, what the outcome of the investigation will be
and what effect, if any, the outcome might have on the Company's financial
condition or results of operations.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the periods shown.
<TABLE>
<CAPTION>
Fiscal Year Ended
- -----------------------------------------------------------
Dec 2, Dec 1, Nov 30, Nov 30, Nov 27,
1989 1990 1991 1992 1993
- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
5.4 6.1 8.1 7.4 8.9
</TABLE>
The ratio of earnings to fixed charges was computed by dividing income from
continuing operations before income taxes (as adjusted for fixed charges) by
fixed charges for the period. Fixed charges are comprised of interest on debt of
the Company, imputed interest on contingent earn-out payments relative to the
acquisition in 1985 of the business of SSI and the portion of rental expense
representative of interest.
S-2
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
November 27, 1993 and as adjusted to give effect to the sale of Debentures
offered hereby. The net proceeds will be used for general corporate purposes.
See "Use of Proceeds."
<TABLE>
<CAPTION>
November 27, 1993
------------------------
As Reported As Adjusted
----------- -----------
(in thousands)
<S> <C> <C>
Short-term debt (a).......................... $ 90,026 $ 90,026
----------- -----------
Long-term debt:
Debentures offered hereby................ -- 100,000
Other long-term debt..................... 107,887 107,887
----------- -----------
Total long-term debt................... 107,887 207,887
----------- -----------
Shareholders' equity......................... 639,932 639,932
----------- -----------
Total debt and shareholders' equity.... $ 837,845 $ 937,845
----------- -----------
----------- -----------
<FN>
- ------------------------
(a) Includes current maturities of long-term debt.
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of Debentures offered hereby will be used for
general corporate purposes, including working capital, capital expenditures and
possible future acquisitions.
S-3
<PAGE>
DESCRIPTION OF DEBENTURES
The following description of the terms of the Debentures offered hereby
(referred to in the Prospectus (the "Prospectus") that this Prospectus
Supplement accompanies as the "Offered Debt Securities") supplements, and to the
extent inconsistent therewith replaces, insofar as such description relates to
the Debentures, the description of the Offered Debt Securities set forth in the
Prospectus, to which description reference is hereby made.
GENERAL
The Debentures will be limited to $100,000,000 aggregate principal amount,
will be issued in fully registered form without coupons in denominations of
$1,000 and integral multiples thereof, and will mature on February 15, 2024.
Interest on the Debentures at the annual rate set forth on the cover of this
Prospectus Supplement will accrue from February 23, 1994 and will be payable
semi-annually on February 15 and August 15 in each year, commencing on August
15, 1994, to the persons (subject to certain exceptions) in whose names the
Debentures are registered at the close of business on the preceding February 1
or August 1, respectively.
REDEMPTION PROVISIONS
The Debentures will not be redeemable prior to maturity and will not be
entitled to the benefits of any sinking fund.
APPLICATION OF DEFEASANCE PROVISION
The Debentures are subject to defeasance and covenant defeasance as
described under "Description of the Debt Securities -- Defeasance and Covenant
Defeasance" in the Prospectus.
S-4
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated February 15, 1994, the Underwriters named below have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
respective principal amounts of Debentures set forth opposite their respective
names below:
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Debentures
- --------------------------------------------- ----------------
<S> <C>
Lehman Brothers Inc.......................... $ 50,000,000
Morgan Stanley & Co. Incorporated............ 50,000,000
----------------
Total.................................. $ 100,000,000
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Debentures are subject to the
approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters propose to offer part of the Debentures directly to the
public at the public offering price set forth on the cover page hereof, and to
certain dealers at such price less a concession not in excess of 0.50% of the
principal amount. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of 0.25% of the principal amount to certain other
dealers. After the initial public offering, the public offering price and such
concessions may be changed.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company does not intend to apply for listing of the Debentures on a
national securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Debentures, as permitted by applicable
laws and regulations. The Underwriters are not obliged, however, to make a
market in the Debentures and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of, or trading markets for, the Debentures.
The Underwriters and their affiliates may engage in transactions with and
perform services for the Company or one or more of its affiliates in the
ordinary course of business.
LEGAL MATTERS
Certain legal matters will be passed upon for the Underwriters by Simpson
Thacher & Bartlett (a partnership which includes professional corporations), 425
Lexington Avenue, New York, New York 10017. Simpson Thacher & Bartlett will rely
upon Mark R. Lindenmeyer, General Counsel of the Company, with respect to
matters of Indiana law.
S-5
<PAGE>
PROSPECTUS
HILLENBRAND INDUSTRIES, INC.
DEBT SECURITIES
------------------
Hillenbrand Industries, Inc. (the "Company") may offer from time to time up
to $200,000,000 aggregate principal amount or the equivalent thereof in one or
more currency units of its debt securities consisting of debentures, notes and/
or other unsecured evidences of indebtedness (the "Debt Securities") in one or
more series, in amounts, at prices and on terms to be determined at the time of
sale and to be set forth in supplements to this Prospectus. As used herein, Debt
Securities shall include securities denominated in United States dollars or, at
the option of the Company if so specified in the applicable Prospectus
Supplement, in any other currency or in composite currencies or in amounts
determined by reference to an index. The specific designation, aggregate
principal amount, authorized denominations, purchase price, maturity, rate
(which may be fixed or variable) and time of payment of any interest, if any,
any redemption terms or other specific terms and any listing on a securities
exchange of the Debt Securities in respect of which this Prospectus is being
delivered ("Offered Debt Securities") are set forth in the accompanying
prospectus supplement ("Prospectus Supplement"), together with the terms of the
offering of the Offered Debt Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Company may sell Debt Securities to or through dealers, acting as
principals for their own accounts ("underwriters") or as agents ("agents"), or
directly to other purchasers. See "Plan of Distribution." The Prospectus
Supplement sets forth the names of such underwriters or agents and any
applicable commissions or discounts. The net proceeds to the Company from such
sale are also set forth in the Prospectus Supplement.
November 1, 1993
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING
CONTAINED HEREIN OR THEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE PROSPECTUS
SUPPLEMENT NOR ANY SALES MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS IN THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE
DATES. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER
OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
IN CONNECTION WITH THE OFFERING OF DEBT SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, New York, New
York 10048; and Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60621. Copies of such material can
also be obtained by mail from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information can also be inspected and copied
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005. The Company's common stock is listed on such Exchange.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-6651) are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended November 28,
1992.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
February 27, 1993, May 29, 1993 and August 28, 1993.
3. The Company's Current Report on Form 8-K dated August 30, 1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of the
2
<PAGE>
Registration Statement and this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any person to whom a copy of the Prospectus has been delivered, on the
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such copies should be directed
to the Corporate Secretary of Hillenbrand Industries, Inc., 1069 State Route 46
East, Batesville, Indiana 47006-9166, telephone (812) 934-7000.
THE COMPANY
Hillenbrand Industries, Inc., headquartered in Batesville, Indiana, is a
diversified, public holding company with six wholly owned operating companies.
Unless the context otherwise requires, the terms "Hillenbrand" and the "Company"
refer to Hillenbrand Industries, Inc. and its consolidated subsidiaries.
Hillenbrand is organized into two Groups: Industrial and Insurance. The
Industrial Group has two business segments: Caskets and Health Care. The
Insurance Group consists of a special-purpose life insurance company and a
customer-focused marketing company.
The Casket Segment consists of a single company: Batesville Casket Company,
Inc. ("Batesville"). Batesville, headquartered in Batesville, Indiana, is a
leading producer of metal and hardwood burial caskets. Batesville serves more
than 16,000 funeral homes through 66 company-operated Customer Service Centers
in North America. The Company's production facilities are located in Indiana,
Kentucky, New Hampshire, Mississippi, Tennessee and Canada.
The Insurance Group, headquartered in Batesville, Indiana, consists of
Forecorp, Inc., and its subsidiaries, Forethought Life Insurance Company and The
Forethought Group, Inc. These companies serve the country's largest network of
funeral planning professionals with marketing support for Forethought-R- funeral
plans funded by life insurance policies. This specialized funeral planning
product is offered through licensed funeral homes.
The Health Care Segment consists of four companies: Hill-Rom Company, Inc.
("Hill-Rom"), SSI Medical Services, Inc. ("SSI"), BLOCK Medical, Inc. ("BLOCK")
and Medeco Security Locks, Inc. ("Medeco"). (Medeco is not in the health care
industry but it is included in the Health Care Segment for reporting purposes
due to its relative size.) Hill-Rom, headquartered in Batesville, Indiana, is a
leading producer of electric hospital beds, patient room furniture and patient
handling equipment specifically designed to meet the needs of medical-surgical,
critical care and perinatal providers. Hill-Rom's domestic manufacturing
facilities are located in Batesville, Indiana. In 1991, Hill-Rom acquired Le
Couviour SA ("Le Couviour"), of Pluvigner, in the Brittany region of western
France. Le Couviour is the leading manufacturer of hospital beds and patient
room furniture in France and a leader in Europe. In June 1993, Hill-Rom
announced, subject to German government approval, a capital addition
representing a 25.7% interest in L&C Arnold AG ("Arnold"), of Schorndorf/Kempen
in western Germany. Arnold is one of the oldest and largest manufacturers of
hospital beds in Germany. Known to the Medical Community as Support Systems
International, SSI is headquartered in Charleston, South Carolina and is a
leading provider of specialty therapy units and services for rent to healthcare
facilities for wound therapy and the management of pulmonary complications,
trauma and incontinence associated with critically ill patients. SSI's products
assist in the treatment and prevention of decubitis ulcers (pressure sores) with
low-pressure patient sleep surfaces. SSI's domestic production facility is
located in Charleston, South Carolina. SSI's international operations are
headquartered in Solihull (near Birmingham) in England, with a production
facility located in Montpellier in southern France. SSI also has numerous
service centers located throughout North America and Europe. BLOCK, located in
Carlsbad, California, is a manufacturer of medical instrumentation,
3
<PAGE>
testing devices and disposable and ambulatory electronic infusion pumps for
antibiotic, nutritional, chemotherapy and other home drug infusion therapies.
Medeco, headquartered in Salem, Virginia, is a leading producer of
high-security, pick and tamper-resistant mechanical locks, lock cylinders, high-
security electronic access controls and electronic collection systems. Medeco's
mechanical and electronic lock production facilities are located in Salem,
Virginia.
On August 30, 1993, the Company sold its luggage business, American
Tourister, Inc., to Astrum International Corp., for a cash payment of
approximately $64.0 million. The sale has resulted in a gain. The results of
American Tourister, Inc., representing a substantial portion of the previously
reported Durables Segment, have been reported separately as discontinued
operations in the Statement of Consolidated Income, with prior periods restated
to conform to the current presentation.
The principal executive offices of the Company are located at 1069 State
Route 46 East, Batesville, Indiana 47006-9166, and the telephone number is (812)
934-7000.
USE OF PROCEEDS
Unless otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used for general corporate
purposes, including working capital, capital expenditures, possible future
acquisitions, refinancing of indebtedness and redemption of securities. Any
specific allocation of the net proceeds of an offering of Debt Securities to a
specific purpose will be determined at the time of such offering and will be
described in the related Prospectus Supplement.
4
<PAGE>
SELECTED FINANCIAL INFORMATION
The following data, insofar as it relates to each of the fiscal years
1988-1992, has been derived from the Company's annual financial statements,
including those incorporated in this prospectus by reference to the Company's
Current Report on Form 8-K dated August 30, 1993. The data as of and for the
nine months ended August 29, 1992 and August 28, 1993 has been derived from
unaudited financial statements which, in the opinion of management, include all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair statement of the results for the unaudited interim periods.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED THREE QUARTERS ENDED
----------------------------------------------------------- -----------------------
DEC. 3, DEC. 2, DEC. 1, NOV. 30, NOV. 28, AUG. 29, AUG. 28,
1988(A) 1989(A) 1990(A) 1991(A) 1992(A) 1992(A) 1993
----------- ---------- ---------- ---------- ---------- ---------- -----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net revenues:
Industrial........................ $ 776,323 $ 852,326 $ 943,301 $1,022,478 $1,217,457 $ 894,253 $ 969,604
Insurance......................... 6,497 19,677 38,627 62,009 85,605 61,967 84,825
----------- ---------- ---------- ---------- ---------- ---------- -----------
Total net revenues.................. 782,820 872,003 981,928 1,084,487 1,303,062 956,220 1,054,429
----------- ---------- ---------- ---------- ---------- ---------- -----------
Cost of revenues:
Industrial........................ 407,214 455,895 506,797 541,203 628,412 467,220 499,548
Insurance......................... 1,274 4,069 14,011 31,086 45,965 32,967 51,624
----------- ---------- ---------- ---------- ---------- ---------- -----------
Total cost of revenues.............. 408,488 459,964 520,808 572,289 674,377 500,187 551,172
----------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative, distribution and
selling expenses:
Industrial (b).................... 244,900 268,935 303,906 324,757 398,820 288,120 303,692
Insurance......................... 15,740 20,617 26,013 28,371 33,072 24,228 27,232
----------- ---------- ---------- ---------- ---------- ---------- -----------
Total administrative, distribution
and selling expenses............... 260,640 289,552 329,919 353,128 431,892 312,348 330,924
----------- ---------- ---------- ---------- ---------- ---------- -----------
Operating profit.................... 113,692 122,487 131,201 159,070 196,793 143,685 172,333
Interest expense.................... (17,789) (17,558) (15,934) (13,199) (21,233) (14,868) (15,860)
Investment income................... 5,360 6,030 9,048 10,512 8,434 5,721 5,298
Other income (expense), net......... 587 (2,363) (4,017) (9,500) (6,241) (4,016) 263
----------- ---------- ---------- ---------- ---------- ---------- -----------
Income from continuing operations
before income taxes................ 101,850 108,596 120,298 146,883 177,753 130,522 162,034
Income taxes........................ 42,271 44,967 48,217 56,898 66,588 48,872 62,891
----------- ---------- ---------- ---------- ---------- ---------- -----------
Income from continuing operations... 59,579 63,629 72,081 89,985 111,165 81,650 99,143
Income (loss) from discontinued
operations net of income taxes..... 6,794 7,689 3,597 (798) (5,642) (231) 1,778
----------- ---------- ---------- ---------- ---------- ---------- -----------
Income before cumulative effect of a
change in accounting principle..... 66,373 71,318 75,678 89,187 105,523 81,419 100,921
Cumulative effect of change in
method of accounting for income
taxes.............................. -- -- -- -- 10,747 10,747 --
----------- ---------- ---------- ---------- ---------- ---------- -----------
Net income.......................... $ 66,373 $ 71,318 $ 75,678 $ 89,187 $ 116,270 $ 92,166 $ 100,921
----------- ---------- ---------- ---------- ---------- ---------- -----------
----------- ---------- ---------- ---------- ---------- ---------- -----------
Earnings per common share:
Income from continuing
operations....................... $ 0.79 $ 0.86 $ 0.97 $ 1.23 $ 1.55 $ 1.13 $ 1.39
Income from discontinued
operations net of income taxes... 0.09 0.10 0.05 (0.01) (0.08) -- 0.02
Cumulative effect of change in
method of accounting for income
taxes............................ -- -- -- -- 0.15 0.15 --
----------- ---------- ---------- ---------- ---------- ---------- -----------
Net income per common share......... $ 0.88 $ 0.96 $ 1.02 $ 1.22 $ 1.62 $ 1.28 $ 1.41
----------- ---------- ---------- ---------- ---------- ---------- -----------
Dividends per common share.......... $ 0.20 $ 0.25 $ 0.275 $ 0.29 $ 0.35 $ 0.2625 $ 0.3375
----------- ---------- ---------- ---------- ---------- ---------- -----------
----------- ---------- ---------- ---------- ---------- ---------- -----------
Average number of common shares
outstanding (thousands)............ 75,117 74,377 73,971 72,885 71,915 72,012 71,455
----------- ---------- ---------- ---------- ---------- ---------- -----------
----------- ---------- ---------- ---------- ---------- ---------- -----------
Ratio of earnings to fixed charges
(c)................................ 5.3 5.4 6.1 8.1 7.4 7.6 8.7
----------- ---------- ---------- ---------- ---------- ---------- -----------
----------- ---------- ---------- ---------- ---------- ---------- -----------
BALANCE SHEET DATA (AT PERIOD END):
Working capital (Industrial)........ $ 151,863 $ 192,086 $ 216,207 $ 156,645 $ 278,950 $ 271,243 $ 300,772
Total assets........................ 832,414 1,044,799 1,268,885 1,532,160 1,935,207 1,810,167 2,151,841
Total debt (d)...................... 134,229 124,853 117,500 148,425 234,044 235,843 213,466
Shareholders' equity................ 348,527 396,659 436,474 490,823 547,744 526,241 605,143
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR
-------------------------------------------------------
1988(A) 1989(A) 1990(A) 1991(A) 1992(A)
--------- --------- --------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
SEGMENT DATA (E):
Net revenues:
Industrial:
Health Care............................. $ 433,921 $ 502,109 $ 559,084 $ 625,584 $ 791,042
Caskets................................. 342,402 350,217 384,217 396,894 426,415
--------- --------- --------- ---------- ----------
Total industrial.......................... 776,323 852,326 943,301 1,022,478 1,217,457
Insurance................................. 6,497 19,677 38,627 62,009 85,605
--------- --------- --------- ---------- ----------
Total net revenues........................ 782,820 872,003 981,928 1,084,487 1,303,062
--------- --------- --------- ---------- ----------
Operating profit by segment:
Industrial:
Health Care............................. 71,253 83,695 74,825 90,445 116,429
Caskets................................. 65,721 56,891 68,270 78,792 91,524
--------- --------- --------- ---------- ----------
Total industrial.......................... 136,974 140,586 143,095 169,237 207,953
Insurance................................. (10,517) (5,009) (1,397) 2,552 6,568
--------- --------- --------- ---------- ----------
Total operating profit by segment......... 126,457 135,577 141,698 171,789 214,521
Other items (f)........................... (24,607) (26,981) (21,400) (24,906) (36,768)
Income taxes.............................. 42,271 44,967 48,217 56,898 66,588
--------- --------- --------- ---------- ----------
Income from continuing operations......... 59,579 63,629 72,081 89,985 111,165
Income (loss) from discontinued operations
net of income taxes...................... 6,794 7,689 3,597 (798) (5,642)
Cumulative effect of change in method of
accounting for income taxes.............. -- -- -- -- 10,747
--------- --------- --------- ---------- ----------
Net income................................ $ 66,373 $ 71,318 $ 75,678 $ 89,187 $ 116,270
--------- --------- --------- ---------- ----------
--------- --------- --------- ---------- ----------
<FN>
- ------------------------
(a) Results for fiscal years 1988, 1989, 1990, 1991 and 1992 and the three
quarters ended August 29, 1992 have been restated to reflect the
discontinued operations of the Company's luggage business, American
Tourister, Inc., which was sold to Astrum International Corp. on August 30,
1993. The results of American Tourister, Inc., representing a substantial
portion of the previously-reported Durables Segment, have been reported
separately as discontinued operations in the Statement of Consolidated
Income.
(b) Industrial, administrative, distribution and selling expenses include
general corporate overhead.
(c) The ratio of earnings to fixed charges was computed by dividing income from
continuing operations before income taxes (as adjusted for fixed charges)
by fixed charges for the period. Fixed charges are comprised of interest on
debt of the Company, imputed interest on contingent earn-out payments
relative to the acquisition in 1985 of the business of SSI and the portion
of rental expense representative of interest.
(d) Total debt is comprised of short-term debt, current portion of long-term
debt and long-term debt.
(e) Segment data is reported for fiscal year results only.
(f) Other items include general corporate overhead, interest expense,
investment income, net and other income and expense.
</TABLE>
6
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BUSINESS
Hillenbrand manufactures and supplies a variety of products and services
through six wholly owned operating companies. The following is a description of
the operating companies and the major product and service lines of the Company.
CASKETS
Batesville, founded in 1884 and acquired by the Hillenbrand family in 1906,
manufactures and sells several types of steel, copper, bronze and hardwood
caskets, including caskets for the cremation market. In addition to caskets,
Batesville sells a line of urns used in cremations. All Batesville metal caskets
are protective caskets which are electrically welded and made resistant to the
entry of air, water and gravesite substances through the use of rubber gaskets
and a locking bar mechanism.
Batesville Monoseal-R- steel caskets also employ a magnesium alloy bar to
cathodically protect the casket from rust and corrosion. The Company believes
that this system of Cathodic Protection is featured only on Batesville caskets.
Batesville hardwood caskets are made from walnut, mahogany, cherry, maple,
pine, oak and poplar. Except for a limited line of hardwood caskets with a
protective copper liner, the majority of hardwood caskets are not protective.
Batesville caskets are marketed by Batesville's direct sales force to
licensed funeral directors throughout the United States, Australia, Canada and
Puerto Rico. Batesville maintains an inventory of caskets at 66 company-operated
Customer Service Centers in North America. Batesville caskets are delivered in
specially equipped vehicles owned by Batesville.
INSURANCE
Forecorp, Inc., including The Forethought Group and Forethought Life
Insurance Company, was founded in 1985 to provide funeral planning insurance
products through a network of independent funeral homes. Customers choose the
funeral home, type of service and merchandise they want. The selected funeral
home contracts to provide the funeral services and merchandise when needed. With
funds provided by a life insurance policy from Forethought Life Insurance
Company, the Forethought program offers inflation protection by enabling the
funeral home to guarantee that the planned funeral will be available as
specified.
Certificates of authority to sell life insurance have been obtained in
forty-eight (48) states, Puerto Rico and the District of Columbia. Forethought
Life Insurance products are available through a network of over 5,000
independent funeral homes in thirty-nine (39) of these jurisdictions.
HEALTH CARE
Hill-Rom has been in the hospital equipment business since its founding in
1929. Hill-Rom manufactures a variety of mechanically, electrically and
hydraulically controlled adjustable hospital beds, hospital procedural
stretchers, hospital patient room furniture and architectural systems.
The Hill-Rom line of electrically and manually adjustable hospital beds
includes models which, through sideguard controls, can be raised and lowered,
retracted and adjusted to varied orthopedic and therapeutic contours and
positions. Hill-Rom also produces beds for special departments such as intensive
care, emergency, recovery rooms and labor and delivery rooms. Other Hill-Rom
products include sideguard communications, wood finished bedside cabinets,
adjustable height overbed tables, mattresses and wood and upholstered chairs.
Its architectural products include customized, prefabricated modules, either
wall-mounted or on freestanding columns, enabling medical gases, communications
and electrical services to be distributed in patient rooms.
Hill-Rom products are sold directly to hospitals throughout the United
States and Canada by Hill-Rom account executives. Most Hill-Rom products sold in
the United States are delivered by trucks owned by Hill-Rom. Hill-Rom also
operates a Canadian division which distributes Hill-Rom products,
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<PAGE>
principally in Canada, and a German subsidiary which distributes Hill-Rom
products throughout Europe. Hill-Rom also sells its domestically produced
products through distributorships throughout the world.
In 1991, Hill-Rom acquired Le Couviour, a French company which manufactures
a variety of mechanically, hydraulically and electrically controlled beds and
patient room furniture. Its products are sold directly to hospitals and nursing
homes throughout Europe.
In June 1993, Hill-Rom announced, subject to German government approval, a
capital addition representing a 25.7% interest in Arnold, of Schorndorf/Kempen
in western Germany. Arnold is one of the oldest and largest manufacturers of
hospital beds in Germany.
SSI is engaged in the manufacture of therapy beds and support surfaces and
the rental of these products in the wound care and pulmonary/trauma markets.
Clinical support for SSI products is provided by a sales force composed of
registered nurses and physician assistants. Technical support is made available
by technicians and service personnel who provide maintenance and technical
assistance from SSI Service Centers.
Within the wound care market, CLINITRON-R- Air Fluidized Therapy is provided
as a therapeutic adjunct in the treatment of advanced pressure sores, flaps,
grafts and burns. The CLINITRON unit achieves its support characteristics from
the fluid effect created by forcing air up and through medical-grade ceramic
microspheres contained in the unit's fluidization chamber.
SSI also offers low airloss therapy through its RESTCUE-R- and FLEXICAIR-R-
units. Low airloss support is achieved by distributing air through cushions
specially designed to allow some of the air to escape slowly. The advent of
RESTCUE Dynamic Air Therapy in 1989 marked SSI's entry into the pulmonary/trauma
market by incorporating three low airloss therapies into an integrated system.
In 1992, SSI introduced the RESTCUE-R- CC therapy unit which provides two
additional therapies. The RESTCUE CC is the only unit on the market with five
therapies on one self-contained hospital bed. FLEXICAIR Low Airloss Therapy is
provided for pressure sore prevention and wound treatment when ambulation is a
priority or continuous head elevation is desired. The FLEXICAIR unit, which also
includes a Hill-Rom bed frame unit, regulates air pressure in five zones
corresponding to patient body areas.
Also in 1992, SSI introduced the CLENSICAIR-TM- Incontinence Management
System. This innovative unit combines SSI's pressure-relieving Low Airloss
Therapy with a break-through design for managing incontinence and patient
cleansing needs.
Other SSI wound care products include the ACUCAIR-R- Continuous Air Flow
System and the CLINISERT-R- Pressure Relief System. Both are offered as more
effective alternatives to conventional overlays and mattresses.
SSI therapy systems are made available to medical institutions on a rental
basis through 150 Service Centers located in the United States, Canada and
Western Europe.
BLOCK is a manufacturer of home infusion products for antibiotic,
nutritional, chemotherapy and other drug therapies, including HOMEPUMP-TM-, a
disposable infusion pump, and VERIFUSE-TM-, an ambulatory electronic infusion
pump. HOMEPUMP-TM-, which can be carried in a pocket or specially designed
pouch, provides a simple and convenient way for patients to administer their
medication with minimum disruption of their lives. VERIFUSE-TM- is a
computerized electronic infusion pump that is designed to handle more complex
infusion medications while enabling the patient to be ambulatory. It is
programmed through the use of a built-in bar-code scanner and is capable of
delivering four infusion therapies.
BLOCK's products are sold to homecare providers throughout the United States
and internationally by a direct sales force and through distributors.
8
<PAGE>
OTHER
Medeco, founded in 1968, was purchased by the Company in 1984. Medeco
manufactures and sells a wide variety of deadbolts, padlocks, switch locks,
camlocks, electro-mechanical and other special purpose locks for the high
security market. Medeco's double locking mechanism provides a higher level of
security than is achievable by more common, single locking devices. Medeco locks
are primarily constructed of brass and hardened steel and are manufactured in
its Salem, Virginia plant.
In 1991, Medeco created the Medeco Security Electronics (MSE) division and
entered the electronic high security market with two innovative products. INSITE
VLS-TM- replaces the thousands of mechanical keys used in pay telephone and
vending machine collection. The INSITE SITEKEY-TM- provides the state-of-the-art
in electronic door security.
Medeco products are sold domestically and internationally by its sales
organization to locksmith supply distributors, original equipment manufacturers
and government agencies. Original equipment applications include vending
machines, pay telephones, safe and lock boxes, computer equipment, coin-operated
laundry machines and communications security devices.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities. The particular
terms of the Offered Debt Securities and the extent, if any, to which such
general provisions may apply to the Offered Debt Securities will be described in
the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities will be issued under an indenture dated as of December
1, 1991 (the "Indenture"), between the Company and Harris Trust and Savings
Bank, as Trustee (the "Trustee"). A copy of the Indenture has been filed with
the Commission as an exhibit to the Registration Statement of which this
Prospectus is a part and is incorporated by reference herein. The terms of the
Debt Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular provisions or defined terms of the Indenture
are referred to, such provisions or defined terms are incorporated herein by
reference.
GENERAL
The Indenture provides for the issuance, from time to time in one or more
series, of unsecured obligations of the Company. The Indenture does not limit
the amount of Debt Securities that may be authenticated and delivered
thereunder. Each series of Debt Securities may be established in or pursuant to
a resolution of the Company's Board of Directors or in one or more indentures
supplemental to the Indenture. The Indenture does not limit the amount of other
indebtedness or securities that may be issued by the Company. Reference is made
to the Prospectus Supplement for the following terms of the Offered Debt
Securities: (1) the designation, aggregate principal amount and authorized
denominations of the Offered Debt Securities; (2) the percentage of the
principal amount at which the Offered Debt Securities will be issued; (3) the
date or dates on which the Offered Debt Securities will mature; (4) the rate or
rates (which may be fixed or variable), or the method by which such rate or
rates will be determined, at which the Offered Debt Securities will bear
interest, if any, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the dates on which such
interest will be payable and the regular record dates with respect thereto; (5)
the dates, if any, on which the price or prices at which the Offered Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund provisions, be redeemed by the Company,
and the other detailed terms and provisions of such sinking fund; (6) the date,
if any, after which the price or prices at which the Offered Debt Securities
may, pursuant to any optional redemption provisions, be redeemed at the option
of the Company or of the holders thereof and the other detailed terms and
provisions of such optional redemptions; (7) any
9
<PAGE>
additional or substituted restrictive covenants included for the benefit of the
Offered Debt Securities or any provision that any restrictive covenant in the
Indenture will not apply with respect to the Offered Debt Securities; (8) any
additional Events of Default provided with respect to the Offered Debt
Securities; (9) the currency or currencies of payment of principal of and
premium, if any, and interest on the Offered Debt Securities; (10) any index
used to determine the amount of payments of principal of and premium, if any,
and interest on the Offered Debt Securities; (11) the application of defeasance
or covenant defeasance provisions to the Offered Debt Securities; and (12) any
other terms (which may not be inconsistent with the provisions of the
Indenture). (Section 301). However, with respect to Offered Debt Securities sold
through agents, the maturities and interest rates of such Offered Debt
Securities may be fixed by the Company from time to time, in which case such
maturities and rates are not set forth in the Prospectus Supplement relating
thereto but instead will be made available through such agents.
The Debt Securities will be unsecured obligations of the Company and will
rank on a parity with all other unsecured and unsubordinated indebtedness of the
Company.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal, premium, if any, and interest will be payable, and the Offered Debt
Securities will be exchangeable and transferable, at the office of the Trustee
which is located at 311 West Monroe Street, Chicago, Illinois 60606. At the
Company's option, interest may be paid by check mailed to the registered holders
of the Offered Debt Securities. No service charge will be made for any
registration of transfer or exchange of the Offered Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the terms of the Offered Debt Securities and of the Indenture will not afford
holders of the Offered Debt Securities protection in the event of a highly
leveraged transaction involving the Company that may adversely affect holders of
the Offered Debt Securities.
Certain of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below the stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
CERTAIN COVENANTS OF THE COMPANY
LIMITATION ON LIENS. Except as described below under "Exempted Liens and
Sale and Leaseback Transactions," the Company covenants that it will not, nor
will it permit any Restricted Subsidiary to, create, incur, grant or suffer to
exist any mortgage, security interest, pledge or lien ("Lien") of or upon any
Principal Property, or any shares of capital stock or evidences of indebtedness
for borrowed money issued by any Restricted Subsidiary and owned by the Company
or any Restricted Subsidiary, without providing that the Debt Securities of any
series outstanding be secured equally and ratably by such Lien with any and all
other indebtedness or obligations thereby secured, so long as such indebtedness
or obligations are so secured. This restriction does not apply to (i) Liens
existing at the date of the Indenture; (ii) Liens on Principal Property, shares
of stock or indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (iii) Liens on Principal Property
or shares of stock existing at the time of acquisition of such property or stock
by the Company or a Restricted Subsidiary; (iv) Liens to secure the payment of
all or any part of the price of acquisition, construction or improvement of
Principal Property or stock by the Company or a Restricted Subsidiary, or to
secure any indebtedness or obligation incurred by the Company or a Restricted
Subsidiary,
10
<PAGE>
prior to, at the time of, or within 90 days after, the later of the acquisition
or completion of construction (including any improvements on an existing
property), which indebtedness or obligation is incurred for the purpose of
financing all or any part of the purchase price thereof or construction of
improvements thereon; provided, however, that, in the case of any such
acquisition, construction or improvement, the Lien does not apply to any
property theretofore owned by the Company or a Restricted Subsidiary, other
than, in the case of any such construction or improvement, any theretofore
substantially unimproved real property on which the property or improvement so
constructed is located; (v) Liens securing any indebtedness or obligation of a
Restricted Subsidiary owing to the Company or to another Restricted Subsidiary;
(vi) Liens on property of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Restricted Subsidiary or at
the time of a sale, lease or other disposition of the properties of a
corporation or firm as an entirety or substantially as an entirety to the
Company or a Restricted Subsidiary; (vii) Liens on property of a Person existing
at the time the Company is merged into or consolidated with such other Person or
at the time of a sale, lease or other disposition of the properties of the
Company as an entirety or substantially as an entirety to such other Person;
(viii) Liens on property of the Company or a Restricted Subsidiary in favor of
any domestic or foreign government or governmental body or any of their agencies
and instrumentalities, to secure partial progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens; or (ix) any extension,
renewal or replacement (or successive extensions, renewals or replacements) in
whole or in part of any Lien referred to in the foregoing clauses (i) through
(viii), inclusive; PROVIDED, HOWEVER, that the principal amount of the
indebtedness or obligations secured thereby may not exceed the principal amount
of the indebtedness or obligations so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement is
limited to all or a part of the property or the category of property (such as
inventory or receivables) which secured the Lien so extended, renewed or
replaced (plus improvements and construction on such property). (Section
1007(a)).
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Except as described below
under "Exempted Liens and Sale and Leaseback Transactions," sale and leaseback
transactions by the Company or any Restricted Subsidiary (except for
transactions involving temporary leases for a term, including renewals at the
option of the lessee, of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries) of
any Principal Property are prohibited unless the net proceeds of such sale are
at least equal to the fair value (as determined by the Board of Directors by
resolution) of the property sold and the Company applies an amount equal to the
net proceeds of such sale to the retirement of Securities or Funded Debt (as
defined in the Indenture) of the Company or a Restricted Subsidiary ranking
prior to or on a parity with the Debt Securities. (Section 1008(a)).
EXEMPTED LIENS AND SALE AND LEASEBACK TRANSACTIONS. Notwithstanding the
limitations on Liens and sale and leaseback transactions outlined above, the
Company or any Restricted Subsidiary may create, incur or grant Liens or enter
into sale and leaseback transactions not otherwise permitted as described above,
provided that at the time of such event, and after giving effect thereto, the
sum of outstanding indebtedness for borrowed money of the Company and Restricted
Subsidiaries secured by such Liens plus all Attributable Debt in respect of such
sale and leaseback transactions entered into by the Company and Restricted
Subsidiaries does not exceed 15% of shareholders' equity properly appearing on
the most recently prepared consolidated balance sheet of the Company and its
Subsidiaries as at the end of a fiscal quarter of the Company, prepared in
accordance with generally accepted accounting principles. (Sections 1007(b) and
1008(b)).
MERGER AND CONSOLIDATION. The Company may not merge, consolidate or convey,
transfer or lease its properties and assets substantially as an entirety and the
Company may not permit any Person (as defined in the Indenture) to consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company unless, among other things,
(a) the successor Person is the Company or another corporation organized and
existing
11
<PAGE>
under the laws of the United States, any state thereof or the District of
Columbia that assumes the Company's obligations on the Debt Securities and under
the Indenture, (b) immediately after giving effect to such transaction, the
Company or the successor Person would not be in default under the Indenture and
(c) if, as a result of any such consolidation or merger or such conveyance,
transfer or lease, any Principal Property of the Company would become subject to
a Lien that would not be permitted by the Indenture, the Company or such
successor Person takes such steps as are necessary effectively to secure the
Debt Securities equally and ratably with (or, at the option of the Company,
prior to) all indebtedness secured thereby. (Section 801).
DEFINITIONS
"Attributable" Debt with respect to any sale and leaseback transaction that
is subject to the restrictions described under "Certain Covenants of the Company
- -- Limitation on Sale and Leaseback Transactions" above means the present value
of the total net amount of rent required to be paid during the remaining term of
the related lease (including any period for which such lease has been extended),
discounted at the weighted average interest rate borne by the Outstanding
Securities (as defined in the Indenture), compounded semi-annually.
"Principal Property" means the corporate headquarters of the Company and the
offices of Forecorp, Inc. and each manufacturing facility of the Company or any
Subsidiary in excess of 100,000 square feet located in the United States (other
than its territories or possessions) or Puerto Rico, other than any such
facility or portion thereof that the Board of Directors by resolution reasonably
determines is not of material importance to the business conducted by the
Company and its Subsidiaries as an entirety.
"Restricted Subsidiary" means any Subsidiary that owns, operates or leases
one or more Principal Properties.
"Subsidiary" means each corporation of which the Company, or the Company and
one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own securities entitling the holders thereof to elect a majority of
the directors, either at all times or so long as there is no default or
contingency that permits the holders of any other class or classes of securities
to vote for the election of one or more directors.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is defined
in the Indenture as being: (a) default for 30 days in the payment of any
installment of interest on any Debt Security of that series; (b) default in the
payment of any principal of, or premium, if any, on any Debt Security of that
series; (c) default by the Company in the performance of any other covenant or
agreement contained in the Indenture (other than a covenant included in the
Indenture solely for the benefit of series of Debt Securities other than that
series) which shall not have been remedied for a period of 90 days after written
notice of such default to the Company by the Trustee or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of
outstanding Debt Securities of that series; or (d) certain events of bankruptcy,
insolvency or reorganization of the Company. (Section 501).
The Indenture provides that if an Event of Default under clause (a), (b) or
(c) above shall have occurred and be continuing with respect to any series of
Debt Securities, either the Trustee or the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series may declare
the principal of all the Debt Securities of that series (or, if such Debt
Securities are discounted Debt Securities, such portion of the principal as may
be specified in the terms of such series), together with any accrued interest,
to be due and payable immediately. If an Event of Default under clause (d) above
shall have occurred and be continuing with respect to any series of Debt
Securities, then the principal of all the Debt Securities of that series,
together with any accrued interest, will be due and payable immediately without
any declaration or other act on the part of the Trustee or any holder of Debt
Securities of that series. Upon certain conditions such declaration (including a
declaration caused by a default in the payment of principal or interest, the
payment for which has subsequently
12
<PAGE>
been provided) may be annulled by the holders of a majority in principal amount
of the outstanding Debt Securities of that series. In addition, prior to the
declaration of the acceleration of the maturity of the Debt Securities of any
series, past defaults may be waived by the holders of a majority in principal
amount of the outstanding Debt Securities of that series, except a default in
the payment of principal of or interest or premium, if any, on any Debt Security
or in respect of a covenant or provision of the Indenture which cannot be
modified or amended without the approval of the holder of each Debt Security.
(Sections 502 and 513).
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the holders of the Debt Securities before proceeding to
exercise any right or power under the Indenture at the request of the holders of
the Debt Securities. (Section 603).
The Indenture also provides that the holders of a majority in principal
amount of the Debt Securities of any series then outstanding will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee. (Section 512).
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are discounted Debt Securities for the particular
provisions relating to acceleration of the maturity of a portion of the
principal amount of such discounted Debt Securities upon the occurrence of an
Event of Default and the continuation thereof.
The Indenture contains a covenant that the Company will file annually with
the Trustee an officers' certificate as to the absence of any default or
specifying any default that exists. (Section 1009).
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Debt Securities of any series,
as expressly provided for in the Indenture) as to all of the Debt Securities of
that series when (i) either (a) all outstanding Debt Securities of that series
(except lost, stolen or destroyed Debt Securities of that series that have been
replaced or paid) have been delivered to the Trustee for cancellation or (b)
with respect to all Debt Securities of that series not theretofore delivered to
the Trustee for cancellation which (x) have become due and payable, (y) will
become due and payable within one year or (z) are to be called for redemption
within one year, the Company has deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness on the Debt Securities of that series not theretofore delivered to
the Trustee for cancellation for unpaid principal and interest to maturity; (ii)
the Company has paid or caused to be paid all other sums payable by it under the
Indenture; and (iii) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel each stating that all conditions precedent
under the Indenture to the satisfaction and discharge of the Indenture have been
complied with. (Article IV).
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, if such provision is made applicable to the Debt
Securities of any series, that the Company may elect either (A) to defease and
be discharged from any and all obligations with respect to the Debt Securities
of any series (except for the obligations to register the transfer or exchange
of such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (B) to be
released from the obligations with respect to the Debt Securities under Sections
801, 1007 and 1008 of the Indenture (being the restrictions described under
"Merger and Consolidation", "Limitations on Liens" and "Limitation on Sale and
Leaseback Transactions", respectively) and any omission to comply with such
obligations will not constitute an Event of Default with respect to the Debt
Securities ("covenant defeasance"), upon the irrevocable deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money
and/or Government Obligations (as defined in the Indenture) which through the
payment of principal and interest in
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<PAGE>
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any) and interest on the Debt Securities on
the scheduled due dates therefor. Such a trust may only be established if, among
other things, the Company has delivered to the Trustee an Opinion of Counsel (as
specified in the Indenture) to the effect that the Holders of the Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred. Such opinion, in the case of defeasance under clause (A)
above, must refer to and be based upon a ruling of the Internal Revenue Service
or a change in applicable federal income tax law occurring after the date of the
Indenture. (Article XIII).
In the event the Company effects covenant defeasance with respect to Debt
Securities of any series and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default other than the Event of
Default described in clause (c) under "Events of Default" with respect to
Section 801, 1007 or 1008 of the Indenture, the amount of money and Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
such Debt Securities at the time of their maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such Event of Default. However, the Company will remain liable
for such payments at the time of the acceleration.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of Debt Securities of each series affected thereby at
the time outstanding; provided, however, that no such modification or amendment
may, without the consent of the holder of each Debt Security, (i) change the
stated maturity of the principal of, or any installment of interest on, any Debt
Security or reduce the principal amount thereof or the rate of interest (or
premium, if any) thereon, or change the coin or currency in which any Debt
Security or the interest (or premium, if any) thereon is payable, or impair the
right to institute suit for the enforcement of any such payment after the stated
maturity thereof; (ii) reduce the percentage in principal amount of the Debt
Securities then outstanding necessary to waive compliance with certain
provisions of the Indenture or to waive certain defaults or (iii) modify any of
the provisions relating to supplemental indentures requiring the consent of
holders or relating to the waiver of past defaults or relating to the waiver of
certain covenants, except to increase the percentage of outstanding Debt
Securities required for such action or to provide that certain other provisions
of the Indenture cannot be modified or waived without the consent of the holder
of each Debt Security. (Section 902).
The holders of not less than 66 2/3% in principal amount of the outstanding
Debt Securities of any series may on behalf of the holders of all such Debt
Securities waive compliance by the Company with certain restrictive provisions
of the Indenture. The holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series may on behalf of the holders of
all such Debt Securities waive any past default under the Indenture with respect
to such Debt Securities, except a default in the payment of principal of and
interest on any Debt Security or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of
each outstanding Debt Security. The Indenture or the Debt Securities may be
amended or supplemented, without the consent of any holder of Debt Securities,
to cure any ambiguity or inconsistency or to make any change that does not have
a materially adverse effect on the rights of any holder of Debt Securities.
THE TRUSTEE
The Trustee acts as depositary for funds of, makes loans to, and performs
other services for, the Company in the ordinary course of business.
14
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or agents,
or directly to other purchasers. Underwriters may sell Offered Debt Securities
directly to other purchasers or through other dealers, who may receive
compensation from the underwriters in the form of discounts, concessions or
commissions. The Prospectus Supplement with respect to the Offered Debt
Securities sets forth the terms of the offering, including the name or names of
any underwriters or agents, any discounts, commissions and other items
constituting compensation from the Company, and any discounts, concessions or
commissions allowed or reallowed or paid by any underwriters to other dealers.
Underwriters, dealers and agents participating in the distribution of the
Offered Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them and any profits realized by them on the resale
thereof may be deemed to be underwriting discounts and commissions, under the
Securities Act of 1933.
The Debt Securities may be sold from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such market prices or at
negotiated prices. The Company also may, from time to time, authorize dealers,
acting as the Company's agents, to solicit offers to purchase the Offered Debt
Securities upon the terms and conditions set forth in any Prospectus Supplement.
If indicated in the Prospectus Supplement, the Company may authorize
underwriters or agents to solicit offers by specified institutions to purchase
Offered Debt Securities from the Company at the offering price set forth in the
Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the Prospectus Supplement and any
commission payable for solicitation of such contracts is set forth in the
Prospectus Supplement.
Underwriters and agents may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution by
the Company to payments they may be required to make in respect thereof. Such
underwriters and agents may be customers of, engage in transactions with, or
perform services for the Company and its subsidiaries in the ordinary course of
business.
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for the Company by
Hughes Hubbard & Reed, One Battery Park Plaza, New York, New York 10004. Hughes
Hubbard & Reed will rely upon Mark R. Lindenmeyer, General Counsel of the
Company, with respect to matters of Indiana law. Edward S. Davis, a partner in
Hughes Hubbard & Reed, is also a director of the Company and owns of record and
beneficially 2000 shares of Hillenbrand common stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Current Report on Form 8-K dated August 30, 1993 have been so
incorporated in reliance on the report of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
15
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH THEY RELATE OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Supplement
Recent Developments......................... S-2
Ratio of Earnings to Fixed Charges.......... S-2
Capitalization.............................. S-3
Use of Proceeds............................. S-3
Description of Debentures................... S-4
Underwriting................................ S-5
Legal Matters............................... S-5
Prospectus
Available Information....................... 2
Incorporation of Certain Documents by
Reference.................................. 2
The Company................................. 3
Use of Proceeds............................. 4
Selected Financial Information.............. 5
Business.................................... 7
Description of the Debt Securities.......... 9
Plan of Distribution........................ 15
Legal Matters............................... 15
Experts..................................... 15
</TABLE>
$100,000,000
HILLENBRAND
INDUSTRIES, INC.
7% DEBENTURES DUE 2024
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PROSPECTUS SUPPLEMENT
FEBRUARY 15, 1994
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LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
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