Hillenbrand (HI) 14 Nov 242024 Q4 Earnings call transcript

Greetings, and welcome to the Hillenbrand's Fourth Quarter Fiscal Year '24 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Sam Mynsberge, Vice President, Investor Relations. Thank you.

You may begin.

good and operator, you, morning, everyone. Thank Hillenbrand's Call. to Fourth Quarter Earnings XXXX Year-End Fiscal and Welcome by President VanHimbergen. joined Vice I'm our President our Ryan; and Senior and CFO, Bob and CEO, Kim

the I'd direct IR that be like will posted on call. your to website today's to referenced on supplemental attention our slides

performance, that guarantees X. laws. our harbor contain provisions and the comments securities certain of to forward-looking differ to Slide our subject safe Turning statements statements the not are These future Please note could results may that are actual of materially.

organic you I information, XX-K, our exchange call, discontinued this could which Also, a exclude which results. which the continuing and rates. on course of presentation, Slide on call discussion performance currency as month as excludes from comparisons encourage of impacts as during certain the earnings factors risk our including website basis, of operations the we the found statements divestitures for impact to this will operations our as and the the non-GAAP be actual filed of foreign discussing later operating well review results our segments, any deeper will be acquisitions, well Batesville be X from can impact non-GAAP a forward-looking for appendix that on which our measures,

FPM was as Finally, as to our under rebranded existing business today's Food a be Coperion Materials referred reminder, on but Performance August Processed X, call. the and brand, will Schenck throughout

With that, to Kim. I'll turn over now the call

their determination the and today. associates joining by our us I'd and good like you throughout for start Sam, morning, recognizing for Thanks, to Hillenbrand year. Thank everyone. dedication

costs the our by embodies purpose capital customers, by I'm optimize initiatives structure to for drive margins our pursue teams discretionary diligently integration. communities, our persistent and collaboration rose working our shape from While we every for and our accelerating team and by what delivering pressure FPM day. to face macroeconomic execution colleagues continue through truly purpose by excellence, that our stronger-than-planned for trade occasion the and that managing and cost each tomorrow, to efficiencies our challenges, demand we innovation and to Guided grateful of matters a our

process our remain global about year a our markets to pure-play we've an solutions. driven and to and our compelling future. increasing product confident by end breadth engineered as completed serving systems leading transformation, growth highly technology capabilities expertise enable integration we us global large and a sustainable exceptional we've The attractive an portfolio company, Throughout expanding middle offering, industrial customers. of value class full that's on first our processing and applications As brands and with our proposition long-term engineering focus technologies, of a world-class established offer

systems output and anywhere upgrade modernize equipment are for and this for We the the global our a future leverage throughout trusted our as value partnerships fosters positions customers needs. This and preferred us quality cycle. service enduring customers and highest to highest strong its equipment life to then deliver in to our supplier and maintain, and maximize of its world network able professionals

investments. aftermarket originally capital than large geopolitical more were inflation, and interest expected equipment capital as was robust around year, polyolefin quoting rates, parts for Project mitigate end impact economic and to pipelines midsized the While global demand for for systems challenged many number key during of help slowed activity and across uncertainty but orders of service full, investment events remain delayed several markets. line. customers executed remain year labs test and their strategic the In the a response, we decisions the our bottom to initiatives significantly active very

necessary environment evaluate additional actions and normalizes. until implement as to the We demand will continue

from X% organically, aftermarket level supported prior delivered by XX% quarter. performance. expectations in an touching was improvement record above quarter, total, This We million, $XXX this of of Now performance. down revenue another slightly the on QX but coming up reflects our our into though

did also executing that segments job both in an orders excellent Teams from backlog.

$X.XX With of the our guidance. was above our incremental just volume per of adjusted previous share end the continued cost high and discipline, earnings

in working Additionally, in on down. us our debt cash our capital allowing down and to our ongoing cash focus priority optimization of million pay X.Xx. $XXX This to X.Xx, underlines reduce stated resulted leverage quarter, the from of operating flow sequentially

performance. total For revenue XX%, revenue Technology customer decision molding our Solutions, equipment declined segment injection FPM primarily capital APS equipment the or X%. driven the orders, Organic delays growth. offset demand soft aftermarket aftermarket record which hot the more ongoing our Molding strong year, MTS by by primarily but consolidated and in Advanced was X%, was entering revenue within on increased Process full driven lower acquisition reflecting down for and segment, down year XX%, for Revenue in globally, particularly runners America. North than Solutions, or backlog Organically,

to near executed I'm term, the While our with we in the our teams over how pleased demand remain finish year. cautious outlook

pleased year-over-year more provide now little basis the fourth in by MTS, each orders performance sequential Starting injection and I'll of demand. color a we the factors see with equipment improve on to driven were segments. again once driving our in a quarter, molding on primarily both

yet in not Although inflection this encouraging, this overall progress enough is call the we demand seen an to market. have growth

perform second improved are provider demand historical we runner levels. continues equipment, of though sequentially relative China to and quarter, molding low consecutive remained to year-over-year And it hot for leading a well. India, injection where the

for pockets increased U.S. saw of we injection India. mentioned, and equipment I quarter investment molding the in the in As

However, hot be relatively continues runner to demand globally. flat

XXXX. remain relatively assumes MTS Our XXXX fiscal for consistent with will outlook demand

cost expect of expected restructuring a productivity incremental the margin, relative which stronger and price lower at pressure benefits molding $XX to continued and is We previously the million offset comes announced partially relatively from performance, injection program.

costs. be continue will we on discretionary addition, In all to disciplined

into remains APS. to midsized for expected were quarter. equipment, demand Orders sequentially generally with equipment the overall but quarter, line capital we up in Turning what though this soft coming

decisions across key as test demand specialty lab such experienced delays markets and remains pipelines throughout robust, in have year coal we engineering food plastics, mentioned, I other and the but materials. end recycling, pet As customer significant

lead the nature revenue on in to with in in down longer quarter's last generally As line discussed this and call. the a performance on projects result, but expected time backlog pressure we expectations fiscal is put XXXX, is given of year-over-year APS,

remained great investments the subdued we aftermarket within food see equipment year, modernization but newer aftermarket, Capital in during our for and larger continue businesses. making to performance driving for particularly we're demand solid projects, strides

of focus aftermarket. double-digit Our base, strength our in resulted expansion of consecutive with in coupled organic aftermarket, installed years on the

highly this perform our expect growth we XXXX. moderate stable, While profitable more business in of going forward, we continue anticipate to part rates well to will

focus been year. continued well the our of has integration this program, which Finally, area execution year progressed a key throughout the

including of made of pleased of additional delivered go-to-market and are enhancements We standardization the we've million realized, improved to of that operational margin as and efficiencies we've strategies, performance We Nutrition pricing on remain still opportunities portfolio significant by strong us. the Health our and practices in Food, exemplified the track portion rate the combined part alignment run we of by savings, cost this achieve business. already ahead have $XX with a across

path We footprint model opportunities. very coming structure these the targeted remain expected to focus around systems headwind top achieving year once backlog environment continue growth XXXX, optimization, into believe accelerating assets cost is a confident expansion capabilities commercial demand lower on fit as initiatives in strategic a segment. clear continued is we the the We and to and we be normalizes. APS line pricing global of there to While operating the leverage across expertise, our solid margin strategic in and

Board turn I call before to sustainability our Bob, like the disclosures. recent Now some to our I'd over Directors of highlight and updates related to

We the the direction company. development of our are priorities committed of Board the skill and of ensuring to sets aligned directors and our with strategic the

strategic we business election to ] planning, financial set is of Lower in with skill month, Joe finance the Last announced capital executive and markets Board. deep our development. a Joseph seasoned [ operations,

excited Joe our to forward and long-term for Board together for to look X, December to are deliver expertise we value join shareholders. the his We work as leveraging on

and X Governance Nominating the we of Chairperson or the announced addition, Committee. Corporate for and NCG establishment In roles committees: Audit the key Committee Vice

Given Vice the been he Sawhney, Director, named Audit and extensive financial of Chairperson Inderpreet of NCG Mr. the Committee. as has Vice background, been has as Lower's named Chairperson Committee; the current

we task This our Finally, progress achieving disclosures, of towards the meeting climate-related regulatory or this demonstrates TCFD proud transparency in the on our October, report report. financial force global disclosures I'm milestone. and in requirements. published sustainability first continued efforts team's and

Bob our With discuss that, the I'll outlook. call over now financials turn our to to and

everyone. morning, good Kim, Thanks, and

markets. lower Slide our parts Turning volume of which offset overall acquisition, XX% performance equipment million, the strength was FPM quarter revenue services, partially by was capital to variety $XXX due prior compared of consolidated to on favorable across in a Organically, X. We the revenue and X%. and year aftermarket an to pricing for of down end increase midsized fourth APS delivered

X% inflation from MTS due or organically Adjusted including to partially and volume, restructuring EBITDA savings of XX% million $XXX cost actions, and program. by the offset cost pricing lower decreased

a in sale-leaseback expense million, transaction. offset integration net the costs primarily due business restructuring in $XX related prior the from million We increase by quarter the reported GAAP tax an of partially income in gain announced higher year, $XX corporate to actions, down related previously to and to

inflation, to [ lower in income XX% resulted cost our net but of pricing the above share than in FPM slightly contribution quarter, expectations the earnings and interest of coming the Adjusted organic volume year was ] and of as increase expense incremental which prior the million offset per compared cost actions. more $X.XX, $XX into acquisition, an down

quarter was Our rate adjusted in tax effective the XX.X%.

pension in generated prior capital over We related million million the due U.S. increase quarter. in the Capital settlement of year, our the primarily plans. operations of expenditures and an working million trade to cash to received of flow $XX $XXX quarter, benefits cash from were $XX the

starting XX% year-over-year FPM to $XXX revenue primarily capital moving record of quarter year, segment volume. Now equipment driven the million revenue Slide by performance, lower Organic was than on revenue by as increased X% prior for favorable decreased offset X. aftermarket the with acquisition. APS to the and APS more pricing compared

XX% at $XXX pricing cost year-over-year, of was year, XXX and for synergies. inflation high than down Adjusted the Adjusted points quarter. EBITDA but over more offset our the end lower but of of and million essentially XX.X% flat down EBITDA as was expectations volume the margin organically prior basis

$X.X macro discussed prior remained billion As to XX% markets decision Order in our as Kim anticipated. we environment. end of be decreased regions. and compared Backlog we the overall, timing key across mentioned, to this But year X% most improved healthy uncertain customer pipelines but remain sequentially and previously, sequentially. of orders as soft continues

Now essentially of execution better-than-expected prior backlog revenue of was ahead MTS on to turning and higher flat due X. and million to year to expectations the of $XXX Slide QX our orders.

by offset with other Adjusted EBITDA decreased margin restructuring driven by Adjusted million largely benefit decreased the in prior actions. X%, points inflation partially and and $XX XX% was expectations. EBITDA generally year, to unfavorable of XXX mix, the cost line basis of compared product but cost

the remained $XXX muted. million by sequentially. up and of year XX% decreased X% hot injection compared while molding runner to prior Orders X% equipment, and were Backlog sequentially, driven primarily year-over-year X%

exceeded Although in the this return to such activity driving discretionary once see quarter's on well environment remained and growth ensure soft, to yet have orders utilization remains and costs productivity machine sustained recovery as positioned team profitable external to improves. we are signs mold-making managing to we slightly market our demand. expectations, demand The and focused indicators relatively a of

organically prior of year, order equipment. for on the polyolefin for by briefly revenue record I'll XX% offset aftermarket and increase favorable full large but cover as revenue capital revenue increased an delays midsized X. Slide systems were in Consolidated year $X.XX Now X% over persistent results decreased billion the pricing,

XX% more compared of Adjusted methods, million organically down year cost as productivity. restructuring and and inflation EBITDA prior offset the lower increased but pricing, $XXX to volume was synergies X%, than

million reported year, loss million, in impairment net prior largely noncash the to MTS our driven segment. $XXX QX We down $XXX by income GAAP net related from charge the taken of of in

FPM million $XXX year cost of compared the an organic was as of year actions. share and of XX.X%, effective impact prior X% in volume, adjusted a $X.XX, income for lower increase the net resulted the pricing The with our and expectations. the offset cost was tax of rate than inflation decrease consistent acquisition, more to will Adjusted expense which in earnings interest adjusted per

lower were the We year large by $XX $XX and approximately reduced through cash for were projects Capital offset and flow to million, $XXX down partially on earnings year of we to quarterly compared operating customer generated million fewer shareholders dividends. as year million, expenditures the inventory. advances million prior full returned $XX

Debt debt was and Turning for continues to reduction adjusted net was #X the to end priority capital Slide debt billion, EBITDA X. ratio at allocation. Net X.Xx. the fourth our to of quarter $X.XX be

of transaction. good solid an made the opportunistic flow leaseback and execution We quarter sale cash with this progress

over the the of uncertain orders timing year, our prolonged. trajectory anticipated given remains However, coming deleverage

this quarter, flow, timing and the starting as full quarter Due to relatively in due timing our cash remain and annual expectation QX, the our year. seasonality fiscal cash with soft lower leverage of orders in typical expect normally that is increase of of we along earnings cash will first backlog to the and throughout a to certain to the impact orders payments the out slightly

anticipate X% the decline segment, by prior company be XX%. to to $X.XX of primarily which revenues year. to we We total is expect $X.XX down billion This X% down to approximately our compared to driven billion, X% APS

relatively be with revenues to be X% expected X%. to down to steady segment up MTS our expect We

XX%, million $XXX adjusted of to an million We're $X.XX. range the adjusted to in million, approximately per $X.XX earnings be of expense of approximately rate $XXX XX% share to of and X% EBITDA adjusted assuming for and effective tax year. expect $XXX the down We to interest

targeting operating cash initiatives. related reflecting million $XXX lower synergy associated are realization to timing XXXX, We productivity flow payments with the accelerated actions approximately previously fiscal restructuring and payment and announced in for earnings, year

efficiency. than We by trade enhance expect ongoing capital our to efforts offset be to these more working impacts

We expect the capital million expenditures year. to be $XX approximately for

Now our for I'll segments. color additional quickly provide some

anticipate customer flat growth a X% starting by $X.XX modest billion decrease driven $X.XXX due improvement lower with sequential For to are reset we budgets expected I partially timing quarter fiscal our billion, volume to in capital calendar the XXXX, essentially by year. midpoint, second we equipment APS, starting on down in orders backlog, as of aftermarket. revenue to remain in modest new decision mentioned, offset in assuming as to the capital based At XX%,

spend, of decremental aftermarket focus We better to standard ongoing be on revenue. productivity expect initiatives due and our to synergy to flow-through discretionary and reflects XX.X%, adjusted EBITDA mix accelerating cost which than XX% margin margin managing favorable

and of $XXX $XXX million, MTS, X% injection midpoint. the down line in anticipate For flat in growth to performance runner relatively with line at our revenue we X%, up million hot product product to slight our assumed molding

expansion realize to adjusted XXXX mix partially unfavorable margin XX costs and benefit of on higher points proportion by We reflecting driving from equipment. of basis approximately at molding are EBITDA restructuring cost pressure controlling we taken midpoint carryover in and targeting margin of productivity, ongoing offset XX%, the the product focus of actions injection a XX.X% expected the as continued price and

Due we to ongoing QX providing macro uncertainty, are guidance as well.

per revenues assumptions. down of earnings to and of million We volume $X.XX, backlog. expect Slide $XXX driven total $XXX starting XX million additional to review lower primarily Please to adjusted decreased for guidance due year-over-year, $X.XX share by

turn Kim. With the over that, I'll to call back

Bob. Thanks,

results few the proud team year. line closing presentation incredibly I'll fiscal open delivering we for Before I'm our remarks. Q&A, with of a end the solid end for our to

the meaningful once a of signals position growth which clear to of and end solid uncertainties we are recovery health current fully return strength underlying seen in the haven't market we strategy, our demand our our will trajectory markets, macro anticipate resolved. we're yet, Although confident of

our right tools business through teams the believe come these stronger and other near-term on to capabilities firmly side. the have headwinds I and the out manage

We to success. our position and costs, manage will long-term Hillenbrand to drive continue plans diligently execute innovation productivity and integration for

line for that, With the open questions. please operator,

CJS with Securities. comes [Operator Daniel from of question line Instructions] Moore first And the our

across to like fiscal gave -- You modestly down trends starting order to on Any QX. color might just grow do you more into pretty maybe maybe or you end you markets? backlogs level expect 'XX improve comments to in 'XX today? trend It Is good and And based rates again? you fiscal late then just a additional playing order orders bit. just drill it sounds off would likely those start 'XX when little color, -- gave? out in see begin How relative to to see what

So I'll question that take here.

capital that ago, clearly we we we rates back also So on would unknowns. but year. calendar of land, the rest or this presidential budgets so economic had mentioned topics, locked And election, as of being call, I say. XX a One, months certainly the where down broader had, really for would see obviously, X ago, just days we the macro and last interest couple

And with But where that's early us, the behind election so obviously, obviously, to still environment. Trump of so exactly to being interest things it's land. unknown. going have spoken what have are determine obviously, But we he's thinking. the And he's we days rate elected, still about kind

our that budgets then based that continue we'll are where just as start orders with in fiscal interest with But recovery through second accelerate I here quarter capital in said, and ultimately unlocked rates seeing going, think trickle starting we're base a on we But QX. in our half the in, of expecting the discussions being not steep see customer second year. quarter, to here second and obviously

more Helpful. just as on continues seeing perspective? you an along industries any you're market bounce got Demand the kind the And granularity shifting Can well I've to a it of what give from specifically like more hot And follow-up maybe bottom. quick geographies runner. seems end there. as across

Yes.

So row a quarter this continued a stability Dan, hot see in we've and it's that is What little second growth bit Kim. good is bit in to of runner seen a of market. that we've the

India. we've been at originally we obviously, continued to And good lower stability we've China, Specifically, see also there. had than in strong levels a experiencing quarter in although seen

India that expand. expand moved that we some top end are of new markets Some end of we're and markets into of with and that think of us, hit innovation, moving that order through some mid-tier, really a products in we've I to product the products looking are to some And our to taken create into the -- going to activities actively variety for of areas China that going those are are a in kind opportunities specifically couple reach.

end also positive additional address continue market we order to coming in infusion to opportunities. XX to signs show continuing capital markets, will those of medical believe like months, We're of monitor which in and will the some some require markets growth

markets challenges kind of Great. But spending And the whether few in and maybe a wondering and macro you're I downturn and back digits? pharma, that of last your maybe to the -- spending, to beyond to duration kind subject budget in of better growth call? outsized pullback for comments just just pent-up the only capital I'll constraints. generally too me, the degree if I'm in It's been sense high the will hold Or food quarters, around see terms surprised period does a those but the demand and in single to thesis up and jump cycle of when that of in queue. you it's curious maybe is early the expect turn, if would a just for mid- same realize for kind typical of

] pent the is of to a I call. -- think [ up the little question early bit part too your

there factors demand the types topics. obviously that think markets those we of that discretionary affected the by those in consumer interest are key and driver and inflation income, rates and I those is brought and forward,

incremental And of things watch. in and the looking are those is consumer continue companies to for And to new so demand those are products. things drive the that what are some in that we capacity investments order

would of FPM businesses combination markets. is side, materials. performance on remember, the stable I also a food food pretty seen We've say and

performance, relatively that's this in to expected as good people investments with pausing some even in And what see really performance, stable we side are market. seen line I food on equation. the of this think the of we've

on to cost energies the these have efficiencies, to as attack advantage these integration way which dynamic drive continue we've to opportunity in that use orders of be the conditions also seen, scale and less We're timing those able getting market those a with businesses, to you to taking the continuing stabilize. and time markets leverage little of focus created this then coordinated a done becomes our as this really really

line the from of Davidson. Summerville is question Matt D.A. next with Our

material XX%, impact generating are So that kind And the with is influencing think record down guide it aftermarket X%, was I What the EBITDA look with deleverage. down at benefit your revenue. of when from drove a factors of I deleverage? deleveraging less organic that APS embedded the in

have So would if follow-up. a you bridge can then that, kind helpful. And I be that of

Yes.

of impact think little your So you if is mix into if quarter. volumes. And quarter was thought better question quarter going was incentive of us have compensation did we headwind our But more the QX, year. a of We projects, this have certainly, than a EBITDA year-over-year, that then quarter. for year-over-year, lower what did an the about we think versus projects in -- last timing I margin percent bit we on we a Matt, last that have did versus executed

within fiscal our 'XX as and order the business just If on some Health we to I'm pricing. But call, is Nutrition improvements going I we volume flat. see our thinking forward and do modest relatively well. we say, be mentioned mix guide, I'd volume Food, we're to -- aftermarket and see some What is pressure, in as going earlier to see

that So think highlighted. going that continue cost said, to focus with being all actions and on we're just containment Kim to integration I

And maybe relative the APS to see fiscal quantify then 'XX business. in that on in thinking to capture about -- to MTS of talk incremental last your your you price for comment, terms 'XX? side Can bit it. is what prepared seeing and you're that the of price you a your remarks fiscal mentioned pressure Got Bob, in little continuing

Sure. Yes, sure.

So all consistent if it's from year. been what pricing in seen think about I QX, relatively we've

So see been MTS, and total coverage to is been XXX%. XXX%, well and which above we've year all great. continues pressured price Hillenbrand APS below XXX% above cost

a saw we pleased QX, seen think to in as throughout at pricing. quarter 'XX, and of some this MTS in not from we actually point, forward see. certainly we've steep to something quarters, fiscal couple continued But specifically, this last though, the we're recovery assuming that's what improvements I'd we're say so

going into 'XX. that assuming some still So muted front pressure on we're

line Capital ] Markets. [ Our KeyBanc Mitch the of questions from with next Moore are

came in to. had bit higher guided than a you quarter This

to quarter months relative a speak expectations trended could you if of wondering what your better for you in kind to ago? Just the couple of

Yes, I'd say.

about think revenue on revenue quarter the if So was EBITDA Nutrition well the as side. on FPM specifically Food, us certainly, Health plastic outperform and we the APS, continues another side. I and record higher as to Aftermarket for

that we seen, at ago that a Kim And the that are of year our some integrations expectations ahead business highlighted XX% margins. bought So on as front. we're well we've has what of on

see that And that so XXXX. recently we'll margins I think mid-teens business operating consistently going and at as we had into here

And so we'll well. continue perform business to see that

business, On in MTS came that revenues molding side, we as stronger both strength on the the Americas injection India. the as and saw in well

cycle, On automotive bouncing bottom say space. business, around some in China, slight although in the we I'd the the runner the improvements still of particularly see did hot

it return, does business, that when so it up. does is And spike

assuming now, some that signs we're We seeing are but not of some recovery there.

So drove quarter we the gave. that in guide that's really really versus what the the benefit

stable potentially on becoming and corner MTS. of like here. just seems kind a it's helpful. Great. then low at It turning And That's a level

Just with your comfortable initial sales for year? flat the with guidance, how you get the guide did

in so -- with next and we've customers, where month discussions month I good is have our year on Yes. a based we last then the bit a mean seen muted. again, the spikes

is rates little a to checked. that certainly, see. more we and But subject Trump, here interest bit sit something that's interest rate today, so wait And box still got within a that MTS is as environment. And the one the customer is base obviously,

molding here little that sit less maybe recovery. in injection seeing we're bit we the side, hot recovery runner a today, as So business,

kind just see And now, a cautious. so this gotten some in point of wait right and time, see orders unlocked. we until it's being And really at

restructuring though highlighted is last actions, I thing would did one of in the we we've couple quarters. the take And as some highlight

so improvement restructuring $XX see margin do through incremental that MTS have of and benefit on so the will million coming all see we And fiscal 'XX. actions, because those we we side completed

a $XX have we did million reminder, coming that as $XX from charge of synergies that. So million, of

see so throughout that XXXX. here And we'll

John the line Company. next of question & Sidoti The from Instructions] Franzreb [Operator is with

both China? [ going Could changes regions. points It demand like about ] in geography inflection in a little discuss in both and on there's you bit and seems the India

of a relative say in would to I India. see continue Yes. lot opportunity we to India,

I as as India a to comment we think the we need we on anticipate you investments growth of fact level an on business, think underpinning middle good due an as side that know, about injection continue our in why to good growing heard molding a that APS opportunity continues is hot business, products the further and projects runner in our our the in equation the going quarter region, saw to well be and us you quarter for services as class, to that hence India additional in grow global are which, and of for equipment. that

as I side last to of has leveled able Dan's of upper we're kind to we mid-tier growth to opportunities and continue China hot -- bounce kind it be runners, mentioned on of markets and businesses some while not China, our I but MTS been end continues as especially rates, experienced in terms at of interesting continue think to us, the for especially growth be to volume In me, It's footprint growing invest, out really excuse to that had there. -- that market continues on the question stable and our look over X.X for downsizing going has years, to and leverage we a significant historical around. in that

U.S., allows very us in to, focused able for local the approach, in and India on over to local we which in are supply compete real and term. from chain both China be We a believe, standpoint a the long

geographies. in out, best positioned opportunities with think that to attack these we each situations Even we're macroeconomic be as footprint able some work of of to those

is Fair And test kind us as being labs in future demand. still enough. about activity? on test talked the an lab of the Can that indicator of case? And update the past, you you

Yes.

those -- And and environment. for of capital almost to collaborative are that's test continued do them precursor We concept, labs, lot because with pay-to-play are allows typically, investments, and lab proof customers. a a we what see those their to R&D test is specifically of those in do often, have always, experiments that experience

they So where in an and trials. facilities, it's environment come not utilize they just paying for test also those are

And so side investment it on lines. their very a there viability for say really on our those serious -- and to can investigate side

labs are are full. the polyols full, recycling The The full. labs food are labs

So as seen if by lab are occurred parts see that nor has mentioned we that. really a those downcycling we encouraged before, our we we not And feel trials very here of And entering down down have do cycle. typically, business. slow have and we services

to very as continue we've robust. those mentioned, In have, fact, be could

bellwethers the of to And double and year. the as enter capital so themselves calendar decisions of pipeline some feel we working we through beginning these look those that things year are look the the optimism some to as as for the we of start on next continue into the both of some down for we we

Our next Daniel question of CJS Securities. is Moore the line from a with follow-up

I of 'XX you what's synergies it, in for September as benefit much the apologize and left $XX And of were have XX? beyond? if incremental How may missed of terms it. mentioned I million realized

Yes.

like continue and And in Xx we XXXX guide about to of and to that achieved, acceleration our as into we'd amount -- here have thought the we'll there the year. X that XXXX within Dan, on I So think original see going we're year, closer well. X into to

co-branding collaboration see October from implementation able a in to number performed that the as completed on synergies, also also that approach margin. obviously all of lot June the pipeline. a of the Dan, being shared marketplace, place implementation And then and of and feel synergies their their in we completed coming was model model organizationally well reminder put opportunities bring the and had in create its simplification services of And in a how implemented food They've cost we're that synergies October see X. approaching forward very and now branding you that very has and among started that. story all benefit companies through of valuable well projects they the comfortable September, with that created synergies, and and aftermarket They the really which just that we also operating on the operating that on the went organization also they those that place the execution for aftermarket in from cost and into to are into combined been and X

we're which implementation are that that the with So the the the managing our on pleased and teams. and way with is that that folks doing cadence rigor are and we really going

Got rates, it. for 'XX one, EPS material Really answer helpful. in And I tax assume think this the correct? doesn't change terms guidance any I cash in can of but

Correct. That's right.

OCF flow systems CapEx. demand guide working appreciate lastly, there as -- well a and capital $XXX recovers, mid- in cash million as of I operating how how headwind a the $XXX we tailwind that for for And in million the even embedded operating out demand could large-sized be guide an get and can Is as as to maybe back beyond? look 'XX wondering we pick where I'm quickly cash does in $XXX just flow and demand as to up. million, environment much

Yes.

So I'll that, you give some on color Dan.

cash free about just maybe about CapEx. think just $XXX talk you maybe if the of flow the net So million,

'XX, about had think in flow we of $XXX the door. cash fiscal in million you free If where coming landed we

like that earnings. 'XX, lower for have do fiscal about think you we what looks If

So obviously, that be would a headwind.

We a release and also pension saw our as that well. you our press remarks onetime had settlement in in

did we million there's cash previously and discussed, this an and assets our over that. company to from year, As insurance offload liabilities pension of $XX so left

that flow a cash item quarter. our here shown this was in onetime statement as So

things continue certainly, in some working on And year. advances focus capital that as of improvement, So you upside we the couple second can capital the inventory, there. AR control. headwinds and in lower that we expense working then trade And particularly is recovery then and half have really we of a of interest sales, what percent with to on see actually AP, a

obviously, Now say number little QX, pick trends I would that we north, what QX advances, guess, that bit up if I know that quicker, move order a in, cash flow cash would come $XXX free there. is million what probably could the really,

we million. The cash that in bridge did transaction It actually That's not that thing shown our in I sale leaseback trying coming want have flow to QX. you're million $XX about investing year-over-year, to highlight $XXX cash was is of in. cash your That we as announced is if flows. free

to down came So the additional pay door, used we it's debt. that in cash

second upside those And bridge when because of would the of it's advances hard of year. the predict then of again, in, to half the kind lumpiness in but be that's So year-over-year. the orders, come that certainly

had But on say, do don't -- I Those down both come places mega engineering are in for don't our projects, like where Yes. as large. fair look, POC mean space. that mean engineering to are we've as I I large. Dan, those is plastics I large, that It's think payments. to pressure with well the most down those buyouts. polyolefin. Those mid the tier, mean I been payments midsized hours And say when giant

these So down is with type of those break that of the we're to are the business that on accompanied orders payments. waiting is business types

businesses those smaller The been the that a -- the you payments pay year. the over last of quickly. very been little projects, steady And the with kind of those -- those and create more in businesses go, are if individual midsized business, that parts it's opportunity types down have as some more steady the of course that business, are have that steady equipment break the accompanying

And near sense. generation beyond use assume dividends remains at to debt of term? that it Makes as cash that repayment priority least a incremental safe to relates

Yes.

is question follow-up Davidson. the of Summerville line D.A. next from Matt Our with a

the is sooner bought secularly into your and least, had out more Just market pivot attractive quite context M&A versus think that of towards on I the activities the trajectory ahead laid later knowing kind In the maybe acquisitive the FPM to to up businesses. you successful, you seemingly desire get with following point. what business, that your integration back continue have been at when last of

thinking about And Kim, in that I be in later about guys to the how all sooner want we to market yield the versus context how If me dividend this are go? the where thinking an indeed that? of from X% is that thinking you want about back guess, standpoint. get M&A you case, probably should you idea

our topic discuss obviously as we a Yes, Dan, that's capital allocation priorities.

We our and Board base. continue our to consideration of discuss that and investor in evaluate with obviously, that

to continue we we at so that. look to And continue

look priorities, Board. our our portfolio, normal with we at of things, we our all those at processes As a look as part as our of

And are that benefit any of use about we have think active -- to that and And of do are shareholders, so considerations appropriate. continue the we'll we that I tell best if is we'll exactly for what obviously, if can you changes share cash horizon, and that. when we is on the

At the for this Kim time, remarks. turn closing floor back Ryan to I'll

interest and call appreciate We ownership for again, first Hillenbrand, look the us All Have Thanks with forward talking today. to results. great our and your your everyone, to in right. joining day. in again on you a quarter of February rest

conclude you does teleconference. Thank for participation. This thank you. We your today's

may disconnect this your at now You time. lines