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

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The casket maker has long beena cash-generating company of the sort popular with dividend investors. Those qualities have been diluted, however, by its connection to a growth company with highercapital needs. Batesville CEO Kennethh Camp will outline growth plans in comingv weeks ininvestor presentations. And Batesville in a few weeks, introduce its new board, whicuh will give it more funeral-industrhy leadership than does the currentHillenbrand board, dominatesd by health-care interests.
"I don't think our investors shoulx expect any big left turnfrom us," Camp "Over the next couple of years we'll increases the pace of innovatiob and primarily reinvest in the business." Batesvill e put nearly $104 million into Hillenbrand Industries in fiscal 2007. Reinvestment and a single-industrh focus might be what keepBatesville strong. The with revenue of $667 million in the year ending Sept. 30, faces competition from domestic as well as fromoverseax makers, even as demographic trendas work against casket manufacturers. Compounding the Cremation is becomingincreasinglh popular. In 2004, about 31 percent of people who died inthe U.S.
were up from 25 percent in according to statistics compiled bythe . By 2025, the numbe r could hit 51 percent. Batesvillse sells cremation urns at profit as high as thoseof caskets, but their dollar-value is "The pie has gotten a littlse bit smaller," said Mark Allen, executivee director of the , "and there'ss not much you can do to increas the size of that pie." Vying againstr Batesville are two major competitors: in Aurora, Ind., and the , a subsidiaruy of Pittsburgh-based . But therse are more than 100 smaller companies in the Camp said, and the industry has significant overcapacity. Batesville will continue to try to acquiresmallo players.
It also has competition from "non-traditional" casket including domestic retailers such as and manufacturer sin China. Such sourcez make up a small portionj ofthe market; Camp said importsz are about 2 percent. He and some othedr industry experts feelthat won't change "Funeral homes have always been for the most part the placer where people go to discuss death-relatesd issues, and I do not see that changing said Pat Lynch, a spokesman for the . More importang might be demographictrends - how many peoplde were born 75 to 80 years ago and are likelgy to die soon. Deaths have been relatively flat in recenf years but are expected toincreasde gradually.
All things considered, Camp expects a more-or-less flat markeft going forward. How to grow revenuews under such conditions? "By taking a sale from one of our he said. Some key strategies: introducing new allowing customization ofthe casket, including by computer; and improvinfg product mix. Batesville expects to increase organic revenur and operating income by 3 percent to 4 percent annually through fiscal For 2007, operating profit was $160 millionn and net income was $104 million.
In the split, Hillenbrand Industries, with Hill-Rom as the remaining operating company, will changwe its name to Batesville Holdings will changer its name to but continue to use the BatesvillewCasket name. The decision to spligt came following pressure frommajorr shareholder