Batesville Casket plots life untethered from Hill-Rom - Business Courier of Cincinnati:

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The casket maker has long beena cash-generatinvg company of the sort popular with dividend Those qualities have been diluted, however, by its connection to a growth company with higher capital Batesville CEO Kenneth Camp will outline growtu plans in coming weeks in investor presentations. And Batesville will, in a few introduce its new board, which will give it more funeral-industrhy leadership than does the currentHillenbrandx board, dominated by health-care interests.
" don't think our investors shoulfd expect any big left turnfrom us," Camp "Over the next couple of years we'll increase the pace of innovatioj and primarily reinvest in the Batesville put nearly $104 milliomn into Hillenbrand Industries in fiscal 2007. Reinvestment and a single-industry focues might be what keepBatesville strong. The with revenue of $667 million in the year endint Sept. 30, faces competitionb from domestic companies, as well as from overseas makers, even as demographicx trends work againstcasket manufacturers. Compoundinbg the problem: Cremation is becoming increasingly In 2004, about 31 percengt of people who died in the U.S.
were up from 25 percent in 1999, accordingh to statistics compiled bythe . By 2025, the numbefr could hit 51 Batesville sells cremation urns at profitas as high as thoseof caskets, but their dollar-valuse is lower. "The pie has gotten a littlre bit smaller," said Mark Allen, executive director of the , "ande there's not much you can do to increase the size of that Vying against Batesville are twomajofr competitors: in Aurora, Ind., and the , a subsidiaryu of Pittsburgh-based . But there are more than 100 smalle r companies inthe U.S., Camp and the industry has significant overcapacity. Batesville will continud to try to acquiresmall players.
It also has competitionj from "non-traditional" casket sources, including domestic retailera such as and manufacturersin China. Such sourcees make up a small portion of the Camp said imports are about 2 He and some other industry experts feelthat won'tg change much. "Funeral homes have always been for the most part the plac e where people go todiscusxs death-related issues, and I do not see that changintg dramatically," said Pat Lynch, a spokesman for the . More important mighf be demographictrends - how many people were born 75 to 80 yearsd ago and are likely to die soon. Deathsx have been relatively flat in recen t years but are expected toincrease gradually.
All things considered, Camp expects a more-or-less flat markeg going forward. How to grow revenues under such conditions? "By taking a sale from one of our he said. Some key strategies: introducing new products; allowingf customization of the includingby computer; and improving product mix. Batesvills expects to increase organic revenue and operatingh income by 3 percent to 4 percent annuallt throughfiscal 2008-2009. For operating profit was $160 million and net incomee was $104 million. In the Hillenbrand Industries, with Hill-Rom as the remaining operating company, will change its name to Batesville Holdingsw will change its name to but continue to use the BatesvilleCaskey name.
The decision to splity came following pressure frommajor shareholder