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

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The casket maker has long beena cash-generating companhy of the sort popular with dividend investors. Those qualities have been however, by its connection to Hill-Rom, a growtyh company with higher capital Batesville CEO Kenneth Camp will outlinde growth plans in coming weeks in investor AndBatesville will, in a few introduce its new board, which will give it more funeral-industrhy leadership than does the current Hillenbrand board, dominateed by health-care interests. "I don't thini our investors should expect any big left turn from Camp said. "Over the next couplre of years we'll increase the pace of innovation and primarilg reinvest inthe business.
" Batesville put nearlyg $104 million into Hillenbrand Industries in fiscall 2007. Reinvestment and a single-industry focus might be what keepBatesvillw strong. The company, with revenu e of $667 million in the year endingt Sept. 30, faces competition from domestid companies, as well as from overseas makers, even as demographi trends work againstcasket manufacturers. Compoundiny the problem: Cremation is becoming increasingly popular. In about 31 percent of people who died inthe U.S. were up from 25 percent in according to statistics compiledd bythe . By 2025, the numbed could hit 51 percent.
Batesvillr sells cremation urns at profits as high as those of buttheir dollar-value is "The pie has gotten a little bit smaller," said Mark executive director of the , "anrd there's not much you can do to increase the size of that Vying against Batesville are two major competitors: in Aurora, and the , a subsidiary of Pittsburgh-based . But there are more than 100 smallere companies in the Camp said, and the industry has significant overcapacity. Batesville will continur to try to acquiresmall players. It also has competitionh from "non-traditional" casket sources, including domestic retailers such as and manufacturersxin China.
Such sources make up a smalp portion ofthe market; Camp said imports are about 2 He and some other industry experts feel that won'g change much. "Funeral homes have alwayas been for the most part the place where people go todiscuss death-relates issues, and I do not see that changing said Pat Lynch, a spokesman for the . More important mighy be demographictrends - how many peopl were born 75 to 80 yeards ago and are likely to die soon. Deaths have been relativeluy flat in recent years but are expected to increase Allthings considered, Camp expects a more-or-leses flat market going How to grow revenues under such conditions? "By taking a sale from one of our he said.
Some key strategies: introducing new products; allowing customization of the includingby computer; and improving product mix. Batesville expects to increase organic revenues and operating income by 3 percent to 4 percengt annually throughfiscal 2008-2009. For operating profit was $160 million and net income was $104 In the split, Hillenbrand Industries, with Hill-Rok as the remaining operating company, will changes its name to Batesvilld Holdings will change its name to but continuer to use the BatesvilleCasket name.
The decision to spli came following pressure frommajor shareholderr