<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 3, 1995 COMMISSION FILE NO. 1-6651
HILLENBRAND INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1160484
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 STATE ROUTE 46 EAST
BATESVILLE, INDIANA 47006-8835
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (812) 934-7000
NOT APPLICABLE
(Former name, former address and former
fiscal year, if changed since last report)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
Yes X No
---------- ----------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
Common Stock, without par value - 70,792,284 as of July 1, 1995.
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1
<PAGE>
HILLENBRAND INDUSTRIES, INC.
INDEX TO FORM 10-Q
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Income for the Three Months 3
and Six Months Ended 6/03/95 and 5/28/94
Consolidated Cash Flows for the Six Months 4
Ended 6/03/95 and 5/28/94
Consolidated Balance Sheet, 5
6/03/95 and 12/03/94
Notes to Consolidated Financial Statements 6-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 4 - Submission of Matters to a Vote
of Security Holders 12
Item 6 - Exhibits and Reports on Form 8-K 12
SIGNATURES 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
06/03/95 05/28/94 06/03/95 05/28/94
--------- -------- -------- --------
(In Thousands Except Per Share Data)
<S> <C> <C> <C> <C>
Net revenues . . . . . . . . . . . . . . . . . . . $404,859 $382,705 $801,136 $760,111
Cost of revenues . . . . . . . . . . . . . . . . . 224,712 203,774 445,401 402,996
Administrative, distribution
and selling expenses. . . . . . . . . . . . . . . 130,964 121,131 256,680 234,223
--------- ---------- --------- ---------
Operating profit . . . . . . . . . . . . . . . . . 49,183 57,800 99,055 122,892
Interest expense . . . . . . . . . . . . . . . . . (5,436) (6,620) (10,703) (11,490)
Other income, net. . . . . . . . . . . . . . . . . 1,163 1,828 1,064 2,594
--------- ---------- --------- ---------
Income before income taxes . . . . . . . . . . . . 44,910 53,008 89,416 113,996
Income taxes . . . . . . . . . . . . . . . . . . . 17,156 20,250 34,157 43,547
--------- ---------- --------- ---------
Net income . . . . . . . . . . . . . . . . . . . . $ 27,754 $ 32,758 $ 55,259 $ 70,449
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Earnings per common share. . . . . . . . . . . . . $ .39 $ .46 $ .78 $ .99
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Dividends per common share . . . . . . . . . . . . $ .15 $ .1425 $ .30 $ .285
--------- ---------- --------- ---------
--------- ---------- --------- ---------
Average shares outstanding . . . . . . . . . . . . 70,799 71,411 70,842 71,395
--------- ---------- --------- ---------
--------- ---------- --------- ---------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
-----------------
06/03/95 05/28/94
-------- --------
(In Thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,259 $ 70,449
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . 53,255 47,344
Change in noncurrent deferred
income taxes. . . . . . . . . . . . . . . . . . . . . . . . (3,619) (5,679)
Change in net working capital
excluding cash, current debt and
acquisitions. . . . . . . . . . . . . . . . . . . . . . . . (7,495) (21,318)
Change in insurance items:
Deferred policy acquisition costs . . . . . . . . . . . . . (28,262) (31,107)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . 17,806 8,304
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . (5,135) (6,909)
-------- -------
Net cash flows from operating activities . . . . . . . . . . . . 81,809 61,084
------- -------
Cash flows from investing activities:
Capital expenditures, net. . . . . . . . . . . . . . . . . . . (43,114) (54,143)
Acquisition of businesses. . . . . . . . . . . . . . . . . . . - (45,531)
Other investments. . . . . . . . . . . . . . . . . . . . . . . - (13,000)
Insurance investments:
Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . (230,281) (326,612)
Proceeds on maturities . . . . . . . . . . . . . . . . . . . 25,291 155,976
Proceeds on sales prior to maturity. . . . . . . . . . . . . 104,619 57,857
-------- --------
Net cash flows from investing
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . (143,485) (225,453)
-------- ---------
Cash flows from financing activities:
Additions to debt, net . . . . . . . . . . . . . . . . . . . . 16,213 19,048
Payment of cash dividends. . . . . . . . . . . . . . . . . . . (21,240) (20,362)
Treasury stock acquisitions. . . . . . . . . . . . . . . . . . (3,971) (6,144)
Insurance premiums received. . . . . . . . . . . . . . . . . . 215,941 222,570
Insurance benefits paid. . . . . . . . . . . . . . . . . . . . (103,368) (85,591)
-------- --------
Net cash flows from financing
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . 103,575 129,521
-------- --------
Net increase (decrease) in cash and cash equivalents . . . . . . 41,899 (34,848)
Cash and cash equivalents:
At beginning of period. . . . . . . . . . . . . . . . . . . . . 120,359 210,157
------- --------
At end of period. . . . . . . . . . . . . . . . . . . . . . . . $162,258 $175,309
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Balance Sheet
<TABLE>
<CAPTION>
ASSETS 06/03/95 12/03/94
---------- ----------
(In Thousands)
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . $ 162,258 $ 120,359
Trade receivables. . . . . . . . . . . . . . . . 281,576 299,598
Inventories. . . . . . . . . . . . . . . . . . . 121,750 104,229
Other. . . . . . . . . . . . . . . . . . . . . . 44,812 42,275
---------- ----------
Total current assets. . . . . . . . . . . . . . 610,396 566,461
Equipment leased to others, net. . . . . . . . . . 83,530 76,122
Property, net. . . . . . . . . . . . . . . . . . . 277,258 282,470
Other assets:
Intangible assets, net . . . . . . . . . . . . . 191,444 188,268
Other assets . . . . . . . . . . . . . . . . . . 50,378 44,254
---------- ----------
Total other assets. . . . . . . . . . . . . . . 241,822 232,522
Insurance assets:
Investments. . . . . . . . . . . . . . . . . . . 1,301,102 1,198,539
Deferred policy acquisition costs. . . . . . . . 309,451 281,189
Deferred income taxes. . . . . . . . . . . . . . 48,042 43,051
Other. . . . . . . . . . . . . . . . . . . . . . 37,113 33,799
---------- ----------
Total insurance assets. . . . . . . . . . . . . 1,695,708 1,556,578
---------- ----------
Total assets . . . . . . . . . . . . . . . . . . . $2,908,714 $2,714,153
---------- ----------
---------- ----------
LIABILITIES 06/03/95 12/03/94
---------- ----------
(In Thousands)
Current liabilities:
Short-term debt. . . . . . . . . . . . . . . . . $ 41,774 $ 25,206
Current portion of long-term debt. . . . . . . . 1,683 1,805
Trade accounts payable . . . . . . . . . . . . . 62,396 52,427
Other. . . . . . . . . . . . . . . . . . . . . . 169,032 179,751
---------- ----------
Total current liabilities . . . . . . . . . . . 274,885 259,189
Other liabilities:
Long-term debt . . . . . . . . . . . . . . . . . 208,496 208,729
Other long-term liabilities. . . . . . . . . . . 84,275 78,045
Deferred income taxes. . . . . . . . . . . . . . 21,609 19,470
---------- ----------
Total other liabilities . . . . . . . . . . . . 314,380 306,244
Insurance liabilities:
Benefit reserves . . . . . . . . . . . . . . . . 1,155,375 1,059,984
Unearned revenue . . . . . . . . . . . . . . . . 418,229 380,593
General liabilities. . . . . . . . . . . . . . . 15,401 14,652
---------- ----------
Total insurance liabilities . . . . . . . . . . 1,589,005 1,455,229
---------- ----------
Total liabilities. . . . . . . . . . . . . . . . . 2,178,270 2,020,662
---------- ----------
Commitments and contingencies (Note 6)
SHAREHOLDERS' EQUITY
Common stock . . . . . . . . . . . . . . . . . . 4,442 4,442
Additional paid-in capital . . . . . . . . . . . 13,173 11,587
Retained earnings. . . . . . . . . . . . . . . . 862,763 828,744
Accumulated unrealized gain on
investments . . . . . . . . . . . . . . . . . . 1,425 -
Foreign currency translation adjustment. . . . . 14,122 10,478
Treasury stock . . . . . . . . . . . . . . . . . (165,481) (161,760)
---------- ----------
Total shareholders' equity. . . . . . . . . . . 730,444 693,491
---------- ----------
Total liabilities and
shareholders' equity. . . . . . . . . . . . . . . $2,908,714 $2,714,153
---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands)
1. Basis of Presentation
The unaudited, condensed consolidated financial statements appearing in
this quarterly report on Form 10-Q should be read in conjunction with the
financial statements and notes thereto included in the Company's latest
annual report. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The
statements herein have been prepared in accordance with the Company's
understanding of the instructions to Form 10-Q. In the opinion of
management, such financial statements include all adjustments necessary to
present fairly the financial position, results of operations, and cash
flows, for the interim periods.
2. Supplementary Income Statement Information
Investment income (non-insurance) in the second quarter of 1995 and 1994
was $3,307 and $2,496, respectively. Investment income in the first six
months of 1995 and 1994 was $6,159 and $5,051, respectively.
3. Supplementary Balance Sheet Information
The following information pertains to non-insurance assets and consolidated
shareholders' equity:
<TABLE>
<CAPTION>
06/03/95 12/03/94
-------- --------
<S> <C> <C>
Allowance for possible losses and
discounts on trade receivables . . . . . . . $ 13,613 $ 13,982
Accumulated depreciation of equipment
leased to others and property. . . . . . . . $514,778 $477,634
Accumulated amortization of intangible
assets . . . . . . . . . . . . . . . . . . . $139,365 $133,181
Capital Stock:
Preferred stock, without par value:
Authorized 1,000,000 shares;
Shares issued. . . . . . . . . . . . None None
Common stock, without par value:
Authorized 199,000,000 shares; . . . .
Shares issued 80,323,912 80,323,912
</TABLE>
The Company reclassified the current deferred income tax asset from "other
current liabilities" to "other current assets". The balance sheet at
December 3, 1994 was restated to reflect this change. This asset was $20.3
million at December 3, 1994 and $21.3 million at June 3, 1995.
6
<PAGE>
4. Earnings per Common Share
Earnings per common share were computed by dividing net income by the
average number of common shares outstanding during each period (70,798,713
for the three months of 1995; 70,841,730 for the six months of 1995;
71,411,324 for the three months of 1994; and 71,394,798 for the six months
of 1994). Under a program begun in 1983, the Company has acquired to date
10,968,672 shares of common stock of which 1,497,889 shares have been
reissued for general corporate purposes. The remaining treasury stock has
been excluded in determining the average number of shares outstanding
during each period. Common share equivalents arising from shares awarded
under the Senior Executive Compensation Program which was initiated in
fiscal year 1978 and various deferred share equivalents have also been
excluded from the computation because of their insignificant dilutive
effect.
5. Accounting Changes
Effective December 4, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." In accordance with the provisions of this
standard, investment assets of the Company's insurance subsidiary
(Forethought) classified as "available-for-sale" were written up from
their amortized cost of $1,298.9 million, $2.2 million, to their fair
value of $1,301.1 million on June 3, 1995. The insurance deferred tax
asset was decreased $767 thousand to record the income tax effect and
shareholders' equity ("accumulated unrealized gain on investments") was
increased $1.4 million. Adoption of this standard did not affect results
of operations or cash flows.
Effective with the second quarter of 1995, the Company's statement of
consolidated cash flows reflects certain changes in the reporting of the
cash flows of its insurance subsidiary. Cash flows relative to investments
have been reclassified from operating activities to investing activities
and expanded to disclose purchases, maturities and sales. Premiums
received and benefits paid on policies (long duration whole life policies)
have been classified as financing activities. Prior year results have
been restated to conform to the current presentation.
6. Contingencies
In 1993, the Company's subsidiary, Hill-Rom, was notified that it was
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. On June 13, 1995, the Company
was notified by the DOJ that the Department had officially closed this
civil investigation with no action being taken. This investigation did not
have a significant effect on the Company's financial condition, results of
operations or cash flows.
7
<PAGE>
The Company has voluntarily entered into remediation agreements with
environmental authorities, and has been issued Notices of Violation
alleging violations of certain permit conditions. Accordingly, the Company
is in the process of implementing plans of abatement in compliance with
agreements and regulations. The Company has also been notified as a
potentially responsible party in investigations of certain offsite disposal
facilities. The cost of all plans of abatement and waste site cleanups in
which the Company is currently involved is not expected to exceed $10.0
million. The Company has provided adequate reserves in its financial
statements for these matters. Changes in environmental law might affect
the Company's future operations, capital expenditures and earnings. The
cost of complying with these provisions is not known.
The Company is subject to various other claims and contingencies arising
out of the normal course of business, including those relating to
commercial transactions, product liability, safety, health, taxes,
environmental and other matters. Management believes that the ultimate
liability, if any, in excess of amounts already provided or covered by
insurance, is not likely to have a material adverse effect on the Company's
financial condition, results of operations or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Second Quarter 1995 Compared with Second Quarter 1994
Net revenues of $404.9 million were up $22.2 million, or 5.8%, with growth
reported in both segments. In the Funeral Services segment, Batesville Casket
Company revenues were higher due to a first quarter price increase, growth in
traditional burial casket unit volume and increased sales of Options-TM-
cremation products (cremation caskets and urns). At Forethought, investment
income grew significantly due to a larger investment portfolio and higher
yields. Earned premium revenue was higher due to increased insurance in force.
However, policy sales in the second quarter were below the comparable period in
1994 due primarily to product changes designed to enhance Forethought's overall
long term profitability. Revenues in the Health Care segment increased only
modestly. Net revenues of Hill-Rom's combined operations were up marginally in
the second quarter, year over year. Orders for capital products in the U.S.
acute care market remain soft and shipments in the second quarter were below the
prior year. Therapy rental revenues in the long-term care and home care
markets continued to grow year over year as increased units in use were
partially offset by lower average rental rates reflecting a shift in product
mix. Hill-Rom's European operations reported net revenue growth in the second
quarter. Increased therapy rental revenue and the effect of exchange rates
8
<PAGE>
were largely offset by lower capital shipments. Sales at Block Medical
increased due to higher disposable infusion pump unit volume, partially offset
by lower per unit selling prices, and increased ambulatory electronic pump
shipments. Medeco Security Locks reported revenue growth as increased sales in
its route management and door security businesses were partially offset by lower
other OEM and export sales.
Gross profit of $180.1 million was up $1.2 million, or 0.7%, compared with the
second quarter of 1994. As a percentage of net revenues, gross profit declined
from 46.8% in 1994 to 44.5% in 1995. In the Funeral Services segment,
Batesville Casket's margins were favorably affected by unit volume growth of
traditional caskets, partially offset by increased sales of lower margin
cremation products. Forethought's profitability was negatively affected by an
increase in the crediting rate on policies in force which was implemented in the
fourth quarter of 1994 for competitive reasons. The crediting rate is the
interest rate that Forethought uses to grow the face amount on insurance
policies to have the benefit grow with inflation. Margins in the Health Care
segment continue to run below 1994 levels. Hill-Rom's gross profit margin was
negatively affected by European operations (lower margin products combined
with operating inefficiencies, especially in Germany), the decline in U.S.
acute care capital shipments, increased used furniture sales (lower margin
products), increased discount levels, and lower average therapy rental rates.
Block and Medeco both realized improved profitability due to increased operating
efficiency and higher sales.
Administrative, distribution and selling expenses increased $9.8 million, or
8.1%. As a percentage of revenues they increased from 31.7% to 32.3%. The
Funeral Services segment continues to benefit from improved efficiency and
economies of scale at both Batesville Casket and Forethought as growth in these
expenses was well below the growth in revenues. In the Health Care segment,
these expenses and their relationship to revenues were, as in the first
quarter, negatively affected by European operations (especially Germany), lower
capital shipments in the U.S. acute care market and increased new product
development costs, partially offset by lower expenses related to the integration
of Hill-Rom and SSI and improved efficiency at Block and Medeco.
In summary, consolidated operating profit of $49.2 million declined $8.6
million, or 14.9%. The Funeral Services segment was up as growth at Batesville
Casket was partially offset by the decline at Forethought. Health Care segment
operating profit was down significantly due to Hill-Rom's performance, with both
Block and Medeco reporting improvement.
Interest expense of $5.4 million was down $1.2 million due to interest in 1994
on a $75.0 million note relative to the acquisition of SSI Medical Services in
1985 that was paid-off during the second quarter of 1994. This was partially
offset by higher levels of debt in Europe.
Other income, net, includes interest income and other miscellaneous income and
expense. Compared with 1994, higher miscellaneous expenses associated with
European operations were partially offset by higher interest income.
9
<PAGE>
Six Months Ended June 3, 1995 Compared with Six Months Ended May 28, 1994
Net revenues of $801.1 million were up $41.0 million, or 5.4%. Revenues in the
Funeral Services segment grew due to increased prices and growth in cremation
product sales, partially offset by lower traditional burial casket unit volume
in the first quarter at Batesville Casket. At Forethought, higher investment
income and earned premium revenue (reflecting increased insurance in force)
offset the effect of lower policy sales in the second quarter of 1995. Year to
date revenues in the Health Care segment were up marginally for essentially the
same reasons discussed under second quarter results, although growth was
slightly higher than for the second quarter due to the acquisition of L. & C.
Arnold AG by Hill-Rom in February of 1994.
Gross profit of $355.7 million was down $1.4 million, or 0.4%. As a percentage
of revenues, gross profit declined from 47.0% to 44.4%. In addition to the
issues discussed under second quarter results, the Funeral Services segment was
negatively affected by casket unit volume shortfalls at Batesville Casket in the
first quarter. Margin declines in the Health Care segment were consistent with
the second quarter.
Administrative, distribution and selling expenses increased $22.5 million, or
9.6%. As a percentage of revenues they increased from 30.8% to 32.0%. Year to
date comparisons are consistent with the second quarter.
Consolidated operating profit of $99.1 million declined $23.8 million, or 19.4%.
Both Batesville Casket and Forethought reported growth in the Funeral Services
segment. In the Health Care segment, the significant decline in operating
profit at Hill-Rom was partially offset by improvement at Block and Medeco.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flows from operating activities and selected borrowings represent the
Company's primary sources of funds for growth of the business, including capital
expenditures and acquisitions. Cash and cash equivalents (excluding the
investments of insurance operations) increased from $120.4 million at the end of
1994 to $162.3 million at the end of the second quarter of 1995.
10
<PAGE>
Net cash flows from operating activities of $81.8 million were $20.7 million
higher than in the first six months of 1994. Lower net income was offset by a
smaller increase in net working capital. Accounts receivable have declined
$18.0 million from year end 1994 due primarily to lower capital shipments at
Hill-Rom. Days sales outstanding was 72 at quarter-end compared with 78 at
year-end 1994. Inventories were up $17.5 million reflecting increased field
evaluation units at Hill-Rom. Annualized inventory turns on revenues of 11.7
fell from 13.7 at year-end 1994.
Capital expenditures of $43.1 million were $11.0 million lower than in 1994 due
to reduced production of therapy rental units at Hill-Rom, vehicle replacements
and other items. Acquisitions in the first half of 1994 consisted primarily
of Arnold and Industrias Arga, a Mexican casket manufacturer and distributor.
Forethought's investment strategy is to purchase high grade investment
securities with maturities that match the expected cash outflows of policy
benefit payments. For this reason, securities in excess of $100.0 million
were sold in the second quarter of 1995 (at a small capital gain) with the
proceeds reinvested in securities with longer durations to better match the
expected future benefit payments.
Additions to debt in the first half of 1995 were related to European operations.
In the first quarter of 1994, the Company issued $100.0 million of its 7%
Debentures and, in the second quarter, prepaid a $75.0 million note relative to
the acquisition of SSI. The long-term debt-to-equity ratio was 28.5% on June 3,
1995 compared with 30.1% at year-end. Additional debt capacity affords the
Company considerable flexibility in the funding of future growth. The decline
in insurance premiums received reflects the lower policy unit sales as discussed
in "results of operations". The increase in benefits paid was due
primarily to increased insurance in force.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company expects that shipments to U.S. acute care hospitals will remain soft
for the near future. There is a growing trend to minimize hospital stays in the
U.S. which is driving the growth in sub-acute markets, including long-term care
and home care. Operating losses in certain European markets will continue until
after restructuring efforts are completed. Higher than anticipated operating
losses in Europe, combined with lower than expected U.S. earnings before tax,
would cause the Company to increase its fiscal 1995 consolidated effective
income tax rate in the second half of the year.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1993, the Company's subsidiary, Hill-Rom, was notified that it was 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. On June 13, 1995, the Company was notified by the DOJ that the
Department had officially closed this civil investigation with no action being
taken. This investigation did not have a significant effect on the Company's
financial condition, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of shareholders on April 11, 1995. Matters
voted upon by proxy were: the election of three directors nominated for three
year terms expiring in 1998, approval of amendments to and restatement of the
Company's Senior Executive Compensation Program, and the ratification of the
Board of Directors' appointment of Price Waterhouse as independent auditors for
the Company.
<TABLE>
<CAPTION>
Voted Withheld/ Broker
For Abstained Non-Vote
---------- --------- --------
<S> <C> <C> <C>
Election of directors in Class II for
terms expiring in 1998:
Lawrence R. Burtschy 59,785,262 1,188,853 400
Daniel A. Hillenbrand 60,814,048 160,067 400
Ray J. Hillenbrand 60,815,853 158,262 400
Messrs. Peter F. Coffaro, Edward S. Davis, Leonard Granoff and W August
Hillenbrand will continue to serve as Class I directors and Messrs. John C.
Hancock, George M. Hillenbrand II, John A. Hillenbrand II and Lonnie M. Smith
will continue to serve as Class III directors.
</TABLE>
<TABLE>
<CAPTION>
Voted Voted Withheld/ Broker
For Against Abstained Non-Vote
--- ------- --------- --------
<S> <C> <C> <C> <C>
Approval of amendments
to and restatement of the
Company's Senior Executive
Compensation Program: 58,566,638 946,342 259,291 1,202,244
Proposal to ratify Price Waterhouse
as the Company's independent
auditors: 60,818,879 78,276 76,960 400
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
B. Reports on Form 8-K
There were no reports filed on Form 8-K during the second quarter
ended June 3, 1995.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HILLENBRAND INDUSTRIES, INC.
DATE: July 13, 1995 BY: /s/ Tom E. Brewer
--------------------------------
Tom E. Brewer
Senior Vice President
and Chief Financial Officer
DATE: July 13, 1995 BY: /s/ James D. Van De Velde
-------------------------------
James D. Van De Velde
Vice President - Controller
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED UNDER ITEM 1 OF THE COMPANY'S FORM
10-Q FOR THE QUARTER ENDED JUNE 3, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-02-1995
<PERIOD-START> DEC-04-1994
<PERIOD-END> JUN-03-1995
<CASH> 162,258
<SECURITIES> 0
<RECEIVABLES> 295,189
<ALLOWANCES> (13,613)
<INVENTORY> 121,750
<CURRENT-ASSETS> 610,396
<PP&E> 875,566
<DEPRECIATION> (514,778)
<TOTAL-ASSETS> 2,908,714
<CURRENT-LIABILITIES> 274,885
<BONDS> 208,496
<COMMON> 4,442
0
0
<OTHER-SE> 726,002
<TOTAL-LIABILITY-AND-EQUITY> 2,908,714
<SALES> 0
<TOTAL-REVENUES> 801,136
<CGS> 0
<TOTAL-COSTS> (445,401)
<OTHER-EXPENSES> (256,680)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,703)
<INCOME-PRETAX> 89,416
<INCOME-TAX> 34,157
<INCOME-CONTINUING> 55,259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,259
<EPS-PRIMARY> .78
<EPS-DILUTED> .78
</TABLE>
