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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 9, 1999
HILLENBRAND INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 1-6651 35-1160484
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) 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 or former address,
if changed since last report.)
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ITEM 5. OTHER EVENTS
On August 9, 1999, Hillenbrand Industries, Inc., an Indiana corporation
(the "Company"), announced that it expects its earnings per share for the third
quarter of 1999 and for the year ended November 27, 1999 to be lower than
analysts' estimates, as more fully described in the press release filed as
Exhibit 99.1 to this Current Report on Form 8-K. The contents of such Exhibit
are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release dated August 9, 1999 issued by the Company
regarding the Company's earnings per share.
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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 hereunto duly authorized.
HILLENBRAND INDUSTRIES, INC.
DATE: August 10, 1999 BY: /s/ Donald G. Barger, Jr.
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Donald G. Barger, Jr.
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Exhibit Description
99.1 Press Release dated
August 9, 1999 issued
by the Company.
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EXHIBIT 99.1
HILLENBRAND INDUSTRIES
FINANCIAL NEWS RELEASE
HILLENBRAND EXPECTS THIRD QUARTER EARNINGS
BELOW ANALYSTS' ESTIMATES
BATESVILLE, INDIANA, AUGUST 9, 1999 - Hillenbrand Industries Inc. (NYSE:HB)
announced today that it expects earnings per share from continuing operations in
the third quarter ending August 28, 1999 to be below First Call consensus
estimates of $0.64 per share and the Company no longer expects record earnings
for the year.
The Company expects there will be two components to the shortfall: (1) earnings
from continuing operations are expected to be between $0.25 to $0.30 per share
below First Call consensus estimates, and (2) an unanticipated Medicare
determination that could impact earnings from continuing operations by $0.0 to
$0.09 per share in the third quarter. In total, earnings from continuing
operations are expected to be between $0.25 to $0.39 per share lower than First
Call estimates.
The largest part of the shortfall is from continuing operations at its Hill-Rom
subsidiary where significantly lower than anticipated sales and orders of acute
care capital products and fewer than expected rentals of long-term care therapy
products are adversely impacting the third quarter. To a lesser degree, the
Batesville Casket Company (BCC) is experiencing lower than anticipated sales as
a result of a lower death rate this summer. However, BCC continues to perform
significantly better than last year.
In contrast to the second quarter earnings shortfall which was primarily cost
driven, the unexpected shortfall in the third quarter is primarily
revenue-driven. Resolution of the second quarter issues is on track. The Company
is reviewing the causes for reduced third quarter health care orders and
believes that the decline is a result of increasing market uncertainty related
to:
* mounting cuts in Medicare funding mandated by the Balanced Budget Act of
1997 (BBA);
* order delays and cancellations caused by reduced earnings and cash flow of
health care providers; and
* customers reallocating capital expenditures to address Y2K concerns.
In light of the reduced volume, the Company will take the following actions to
increase the profitability of its businesses:
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* review the Company's cost structure;
* continue to invest in new products and businesses; and
* rely on its ongoing continuous improvement process to increase efficiencies
in all its operations.
Hillenbrand President and Chief Executive Officer Gus Hillenbrand said, "I am
disappointed that our earnings will not meet expectations. We are concerned
about the sudden, unanticipated softness in acute care sales and are developing
action plans to raise our profitability in this uncertain market. While we
anticipated a downturn in our long-term care rental business and had adjusted
our 1999 plan accordingly, therapy units in use have not rebounded as we had
expected this quarter. Despite these issues, year-to-date health care capital
sales are above last year's and we continue to maintain our leadership
position."
Hillenbrand continued, "We have recently installed a new president and CEO,
chief financial officer, and vice president of human resources at Hill-Rom and
they and the entire Hill-Rom management team have begun to focus on reducing our
overall costs to enhance profitability."
The recent Medicare determination made by the Statistical Analysis Durable
Medical Equipment Regional Carrier (SADMERC) to recode some of Hill-Rom's rental
products would result in reduced reimbursement rates. While this decision is
currently under review by the Health Care Financing Administration (HCFA), the
Company does not know when a final decision by HCFA will be made. If the Company
is unsuccessful in its appeal, annualized earnings per share could be adversely
impacted by up to $0.20 per share. In addition, the Company could recognize an
additional non-recurring charge of up to $0.10 per share to revalue related
assets at the end of the third quarter.
The Company plans to continue its stock repurchase program and has remaining
authorization to repurchase 3.6 million shares. It has been an active
repurchaser of its stock, buying back 2.3 million shares in the past 20 months.
Hillenbrand, headquartered in Batesville, Indiana, is a publicly traded holding
Company for three major wholly owned businesses serving the funeral services and
health care industries. All three businesses have headquarters in Batesville,
Indiana. The company's Funeral Services Group consists of : Batesville Casket
Company, the leading manufacturer and supplier of burial caskets, cremation
products and related services to licensed funeral homes; and Forethought
Financial Services, the leading provider of insurance and trust-based financial
products and services for pre-planning funeral services.
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Hillenbrand's Health Care Group consists of the Hill-Rom Company, a recognized
leader in the worldwide health care community providing sales, rentals, service
and support for products including beds, therapy surfaces, stretchers, infant
warmers, incubators, furniture, communication systems, surgical columns, medical
gas management systems, modular headwalls, lighting systems and operating room
equipment.
Disclosure Regarding Forward-Looking Statements: Certain statements made in this
press release contain forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act, regarding the Company's future plans,
objectives and expected performance. Specifically, statements in this release
that are not historical facts, including statements accompanied by words such as
"believe," "expect," "anticipate," "estimate," "intend," or "plan" are intended
to identify forward-looking statements and convey the uncertainty of future
events or outcomes. The Company cautions readers that any such forward-looking
statements are based on assumptions that the Company believes are reasonable,
but are subject to a wide-range of risks, and, there is no assurance that actual
results may not differ materially. Important factors that could cause actual
results to differ include but are not limited to: differences in anticipated and
actual product introduction dates, the ultimate success of those products in the
marketplace, continuation of production scheduling issues, changes in Medicare
reimbursement trends, the success of cost control and restructuring efforts, the
success of Year 2000 (Y2K) remediation efforts, and the integration of
acquisitions among other things.
CONTACTS: Financial Analysts and Investors: Mark R. Lanning, Vice President and
Treasurer, 812-934-7256; or, News Media: Christopher P. Feeney, Director,
Corporate Communications, 812-934-8197, both of Hillenbrand Industries.
www.hillenbrand.com
