Joe Raver - President and CEO Kristina Cerniglia - SVP and CFO Bill Canady - SVP, Corporate Strategy and Industrial Products.

Daniel Moore - CJS Securities John Franzreb - Sidoti & Company, LLC Liam Burke - Wunderlich Securities.

Good morning, everyone. And welcome to Hillenbrand's Earnings Teleconference for the First Quarter of Fiscal 2016. A replay of this call will be available until midnight Eastern February 11, 2016, by dialing 1-855-859-2056 toll free in the United States and Canada, or 1-404-537-3406 internationally. And using the conference ID number, 74166697.

This webcast will be archived on the company's website at www.hillenbrand.com through February 19, 2016. If you ask a question during today's call, it will be included in any future use of this recording. Also note that any recording transcript or other transmission of the text or audio is not permitted without Hillenbrand's written consent.

At this time, it is my pleasure to turn the conference over to Joe Raver, President and Chief Executive Officer of Hillenbrand. Mr. Raver, please go ahead..

Thank you, Don. Good morning, everyone, and thanks for joining us on our first quarter fiscal year 2016 earnings call. Joining me today on the call will be Kristina Cerniglia, our Chief Financial Officer. During the Q&A portion of the call, we'll be joined by Bill Canady, Senior Vice President, Industrial Products and Corporate Strategy.

Prior to getting into our prepared remarks about the business, I'd like to remind you that during this call, we may use certain forward-looking statements that are subject to the Safe Harbor provisions of the securities laws. These statements are not guarantees of future performance, and our actual results could differ materially.

Also during the course of this call, we will be discussing certain non-GAAP operating performance measures. I encourage you to take a look at our 10-K, which can be found on our website for a deeper discussion of forward-looking statements.

The risk factors that could impact our actual results, and more information on our use of non-GAAP operating measures and their reconciliation to GAAP financial measures. Today, I'll discuss our first quarter results, provide an update on our outlook for the remainder of 2016.

But first, I'd like to take a few minutes to remind you of Hillenbrand's strategy, and tell you about our latest acquisitions. As you know, our vision is to transform Hillenbrand into a world-class global diversified industrial company.

We seek to leverage our strong financial foundation in the Hillenbrand operating model to deliver sustainable profit growth, revenue expansion and free cash flow. In turn, we reinvest that cash in new growth initiatives for our existing businesses as well as in strategic acquisitions to drive profitable growth.

The key enabler of our strategy is the Hillenbrand operating model, which is a framework and process that we follow to produce consistent and sustainable results across the business.

It incorporates management practices that have long been among Hillenbrand's strengths, including our strategy management process, lean business practices and intentional talent development.

We continue to evolve the model to strengthen its application to our changing business, and recently added management practices that help us understand our businesses better and bring focus to the critical few things that we believe will have the greatest impact on creating sustainable value for our shareholders.

One of the ways we have grown Hillenbrand is by making strategic investments in the businesses that now form our Process Equipment Group.

Over the past several years, those acquisitions have held transform Hillenbrand from a North American death care company to a diversified industrial company, serving end markets around the world with solid potential for long-term growth.

Going forward, we seek to build on our portfolio by adding asset-light companies that manufacture mission-critical equipment for a variety of growing end markets. Recently, we announced our second acquisition within a few months in the area of flow control.

And I am pleased that earlier this week, we were able to close the transaction and welcome Red Valve to the Hillenbrand family of companies. Our flow control platform strategy is to become a leader in highly-engineered and differentiated products that safely move, measure, and manage high value fluid.

We like the flow control space for a number of reasons. It's a market with solid underlying growth potential in both developed and emerging economies.

It's a fragmented space with a number of niche businesses that differentiate themselves with a core technology and strong applications expertise, thereby generating strong competitive positions, good profit margins, and in many cases, recurring revenues streams from parts and service.

We believe many businesses in this space can benefit from our global footprint over the long run and expand into new geographies with a benefit of local market expertise and reduced cost structure. Red Valve is a company with a long history of providing high-quality valve products and engineering services for demanding flow control applications.

It's one of the world's largest manufacturers and suppliers of pinch valves. Red Valve is recognized globally, for its quality-engineered products, time for challenging, municipal and industrial applications. It's a business that compliments a recent investment in ABEL, enhancing our position in flow control.

As with the other Process Equipment Group businesses, both Red Valve and ABEL are market segment leaders, and are highly valued by the customers for their applications expertise and ability to solve difficult technical problem.

We've already begun to integrate Red Valve and we are bullish about the opportunities we see to leverage our global footprint in the Hillenbrand operating model to drive accelerated growth, to strengthen our position in the flow control market. Okay, now let me turn to our results for the first quarter.

I'll make a few summary remarks and then Kristina will walk through our results and guidance in more detail. Last quarter, we talked about the increasingly difficult macro environment. As we were finishing our fiscal year 2015, it was apparent that many of the headwinds we were facing were likely to persist.

We planned for a challenging economic climate to continue through fiscal 2016, and our experience this quarter reinforced many of those expectations. We anticipated our revenue and adjusted earnings in the first quarter were down from the prior year. A portion of that was attributable to a strong dollar.

But, it was mainly the result, the softness we experienced in a number of industrial markets. Revenue was lower in the Batesville business as well, in line with an estimated decrease in burial volume.

On the other hand, we were encouraged to see an uptick in Process Equipment Group order volume and backlog compared to the fourth quarter and both business segments delivered higher margins and they get [ph] a year ago. Gross margin in the Process Equipment Group was particularly strong.

As you saw on our press release last night, we have lowered organic revenue and EPS guidance for the full fiscal year. I'd like to take a few minutes to outline the logic for this reduction. Let me begin with the Batesville segment. Last year, we experienced strong demand, due to an especially strong flu season.

We do not expect that to repeat this year. However, through the end of January, we are experiencing an even lower burial market than we expected. Mortality associated with the flu is very low, due to the combination of what appears to be a less variant strain of the virus and a good vaccine match this year.

Cremation rate continues to grow and the result of the market that is below expectations. We originally guided to a Batesville revenue decline of 1% to 3%, and now expect to decline in the 3% to 5% range, which is consistent with our market expectations. Now, let me turn to the Process Equipment Group segment.

The market environment for the Process Equipment Group has been bit of a mix bag. On the positive side, we continue to see demand for plastics and processed food equipment as we had expected. We're seeing a solid pipeline of large projects around the globe, and we were able to close some of those projects in the first quarter.

And we expect to have solid orders again in the second quarter. In general, however, the current global economic environment is one characterized by slow growth. Commodity prices continue to fall. EDP estimates have been revised downward. And that really seems to have settled [ph] investments through much of the industrial sector.

Looking back, clearly for some end markets, even the cautious forecast put forth by some industry experts may have been too optimistic. Conditions have been particularly difficult overall for general commodities and we have seen significant declines in several key end markets, including coal power and mining, and potash.

With that said, I'd like to focus on three key areas that have most impacted our forecast for the Process Equipment Group through the remainder of the year. First, while we anticipated low capital equipment sales in coal mining and power, we expected relatively flat demand for consumable parts.

However, persistently low natural gas prices combined with the very warm winter that reduced coal production and consumptions thereby reducing demand for these consumable parts. We're experiencing a similar pattern for equipment used in the production of frac sands.

As you know, this is a very cyclical business, and after coming off a strong 2015, we expected very low demand for capital equipment in 2016, but stable demand for parts. We're experiencing low demand for capital equipment, but as sand production has slowed, demand for ware parts has dropped more than we anticipated.

Finally, global potash demand has been lower than anticipated due to low global crop prices. So, several large projects get cancelled or pushed out beyond our fiscal year very recently. Potash is required to maintain crop yields, so we fully expect this market to recover.

But, it appears unlikely that a recovery in time to have an impact on our fiscal year. The net effect of these market conditions has been challenging for our business. Last quarter, we shared with you some of the actions, we were taking to aggressively manage costs, and align the business with the new reality of demand expectations.

We continue to evaluate our global cost structure with the goal of optimizing our footprint, to provide the best possible service to our customers in the most cost-efficient manner.

In addition to cost saving initiatives already in progress, we are initiating further restructuring, which will take place over the next few months to reduce cost and put us in a better position, compete effectively and navigate these challenging markets.

Kristina will provide additional detail on the effect of those actions and our discussion on guidance. With that, let me turn the call over to Kristina for a bit more detail on the quarter.

Kristina?.

Thanks, Joe, and good morning everyone. As we reported in our filings yesterday, we finished the quarter with consolidated revenue of $352 million. That was down 12% from last year, or down 14% organically, when we look at our results without ABEL. Excluding the impact of currency, revenue was down 8%.

Process Equipment Group revenue was down 17% or 11% excluding currency impact, and Batesville was down 5% or 4% without currency. Adjusted EBITDA of $58 million, decreased 9%, but we continue to see positive results from our efforts to improve profitability.

Higher gross margins both Process Equipment Group and Batesville contributed to year-over-year EBITDA margin improvement of 60 basis points to 16.4%. Looking at our bottom-line for the quarter, adjusted net income of $26 million resulted in an earnings per share of $0.41, to approximately 16% below last year.

Our adjusted effective tax rate for the quarter was 30.5%, 200 basis points higher than prior year as certain discrete tax benefits in 2015 did not repeat. We anticipate that our tax rate will be approximately 30% for the full year, which is in line with historical levels.

Operating cash flow in the quarter was $36 million; that was significantly better than the prior year first quarter, which included a substantial use of working capital for large projects at the Process Equipment Group, as well as payments related to the conclusion of a one-time litigation settlement.

During the quarter, we paid nearly $13 million [ph] of cash dividend. We also repurchased approximately a 106,000 shares of our common stock for total cost of approximately $3 million. Turning to the next slide. I will discuss segment performance beginning with the Process Equipment Group.

Process Equipment Group delivered $214 million of revenue in the quarter, down 11% excluding the negative effect of foreign exchange. We experienced lower demand across our industrial businesses, which affected large project orders, as well as the volume equipment used in the areas of mining, and the processing of proppants for hydraulic fracturing.

Order backlog of $505 million grew 10% sequentially over the fourth quarter, but finished 14% below the prior year. Again, the effects of foreign exchange had an impact on the change in backlog, which year-over-year was down $47 million or 8% when viewed in constant currency.

Order volume increased 30% sequentially, but it was down 11% or 4% excluding the effective currency in comparison to the prior year. The decline in order volume was driven by the reduction of orders for equipment used to process proppants for using hydraulic fracturing.

This was offset by an increase in orders for equipment used in the production of plastics, as well as processed food. We continue to face soft order volume in some key industrial markets. We expected 2016 to be a continuation of the economic climate we faced in 2015.

However, as Joe mentioned, there was a significant shift and a short period of time in some of the end markets we serve. We do not expect to see major improvements in the short-term, but we remain optimistic about long-term demand, and we still expect to close the few large orders over the next couple of quarters.

Despite the challenging macro environment, we are committed to doing everything within our control to drive profitability. The Process Equipment Group adjusted gross margin was up 390 basis points to 36.8% helped by various process improvement initiatives and favorable mix, including higher margins from the addition of ABEL.

We continue to see the positive effects of our strategy play out and the improved margin profile of the Process Equipment Group. Few years ago, we reported an adjusted EBITDA margin of 11% after consecutive quarters with year-over-year margin expansion; we delivered an adjusted EBITDA margin of 15.4% in the Process Equipment Group.

That gives us confidence that we are generating positive results through the Hillenbrand operating model. Moving to the Batesville business, revenue for the quarter was $138 million, which was down 4% from last year in constant currency. The decrease was the result of lower volume.

Burial unit volume was estimated to be down year-over-year, due primarily to the increased rate at which families opted for cremations. Batesville's adjusted gross margin of 38.3% for the quarter, was up 20 basis points from last year, and adjusted EBITDA margin of 23.1%, was up 60 basis points.

Batesville continues to be vigilant about managing costs and has a culture based on lean business practices and continuous improvement initiative. We expect the teams to remain focused on protecting the profitability of the business.

Overall, while the first quarter results were not that far off from our expectations, our outlook for the markets in which we participate has softened, given the magnitude and expected duration of the headwinds, we are facing. With that, let me turn to our guidance for the rest of fiscal 2016.

As we look forward, we are adjusting our guidance to reflect to match [ph] expectations for some of the markets we serve. We are lowering our organic growth estimate to a range of negative 2% to flat. Previously, we had expected organic growth of flat to 2% [ph].

With the acquisitions of ABEL and Red Valve, we are maintaining guidance for total revenue growth at 2% to 4%. Revenue growth from the Process Equipment Group is now projected to be in the range of negative 1% to plus 1% organically, and Batesville is expected to deliver revenue that is down 3% to 5%.

We still expect approximately 3% of negative translation impact to revenue compared to 2015. We are lowering guidance and narrowing the range for adjusted EPS for 2016 to $2.05 to $2.15 versus our original guidance of $2.10 to $2.25.

As Joe mentioned, we continue to evaluate our cost structure and are initiating further restructuring activities in response to the challenging end markets. The total savings from the restructuring efforts are expected to be approximately $10 million on an annualized basis within estimated benefit of $4 million expected in fiscal 2016.

The approximate cost of these actions will be $5 million. Finally, considering the expected timing of the projects in our backlog as well as the rest of year flu season than we had originally forecast, we expect to see some modest improvement sequentially on our second quarter results. However, still lower than prior year.

Followed by improvement in the third and fourth quarters. The second half of the year tends to be larger than the first for Process Equipment Group businesses, and we believe that this trend will continue in 2016. At this time, I will turn the call back to Joe for his concluding remarks..

Thanks, Kristina. Quite a challenging market environment in both of our segments. We remain committed to executing our strategy to become a world-class global diversified industrial company.

Continue to implement the Hillenbrand operating model across the enterprise are focused on growing our most profitable parts of the business, but we expect to integrate our most recent acquisitions with XLN [ph].

We're taking responsible cost cutting actions to size our businesses to current demand, and are constantly improving processes to serve our customers more effectively and efficiently. That concludes our prepared remarks. For today's Q&A session, we're joined by Bill Canady, Senior Vice President, Industrial Products and Corporate Strategy.

We're ready to take your questions.

Don, will you please open the lines?.

[Operator Instructions]. We will take our first question from Daniel Moore from CJS Securities. Your line is open..

Good morning..

Good morning, Dan..

Good morning, Dan..

I want to focus first on the Process Equipment, and obviously we knew frac sand would be weak, but in power and mining, are we in conversations with customers? Is it simply delaying orders for replacement equipment? Or are you seeing folks actually exiting the market or do you see that their weakness pretending, maybe a more protracted decline?.

So, Dan, when we think about our power and mining business, it's mostly here in North America, and the majority of that is spare parts. And so, we had anticipated a relatively flat capital year; there is not a lot of capital being spent right now in North America as it relates to power and mining and that's especially for us coal power and mining.

And so, what we did expect and what projections we're - after a relatively poor 2015 in terms of coal production and consumption are relatively flat 2016.

Instead what we've seen is with the warm winter and continued very low natural gas prices, they're not burning a lot of coal for power and so, what we've seen is a larger than expected decline in our ware parts, which are really the hammers that crush the coal and so we've seen less orders for ware parts, for coal power and again that's primarily in North America..

Got it. And maybe just to touch on the mining side as well, what's you're hearing from customers, I know it's largely potash..

Yeah. So, we do both coal mining and potash. We've just talked about coal and again much of that is in the United States. On the potash side, there was - demand for potash is relatively subdued last year. And that can only go on for so long because the soil needs the potash to remain productive.

But it's more like a balance sheet item as opposed to, an income statement item in the sense that there is so much potash that needs to be in the soil and it needs to be - it can - they can continue to plant crops as it drops, but once it gets to a certain level, they have to replenish.

Crop prices have been very low, and so we believe that the combination of low crop prices and still some room for farmers to continue to plan and get yields without adding significant potash that hurt demand more than expected. Quite frankly, we - experts predicted and we expected more potash in 2016 than what we’re seeing.

And then the second part of that is, we did see a couple of large projects cancel, so it’s both the parts issue as well as a capital issue. And those that are canceled recently, and are pushed out beyond our fiscal year. So, we think of those projects will happen. They've just come out of our backlog and pushed out beyond our fiscal year.

The thing about potash is it sort of has to come back to continue to get the crop yields that are required. So, for us that long-term market is still good, it’s just a matter of timing..

Helpful. And then, obviously backlog did increased a bit sequentially. I think you talked about, you closed a couple of projects recently, is that largely in petrochem and plastics? And maybe talk about your confidence in continuing to close orders for the next quarter or two.

And as your revised guidance predicated, do you need to close a few orders in the next few months in order to hit the revised numbers?.

Yeah, so we had a pretty good first quarter in terms of closing big orders and that’s mostly plastics and base resins. So polyethylene and polypropylene.

So, we feel pretty confident in that and it sounds a little calendar intuitive, but one of the things that's actually been a little bit of a benefit is, we saw a bunch of projects over the last couple of years in North America that were based on low shale gas prices.

What we're seeing with the drop in oil prices is that oil-based production is more viable now, and so we’ve seen a shift in the capital projects from North America to Asia and the Middle East. So, we are continuing to see a pretty good pipeline of projects for the larger projects related to base resin plastics. So we remain pretty confident.

We still have to close some orders in the second quarter. We have a pretty good line of sight to a number of those orders, but we still have to close some orders in the second quarter. But compared to a quarter ago, our confidence is essentially the same.

So our revised guidance is really based on what we’ve seen in some of our other markets that have been more depressed than we expected, and not so much on the larger projects that Coperion business closes..

Okay. Thank you. I’ll jump back in queue..

Yeah. Thanks, Dan..

Your next question comes from the line of John Franzreb from Sidoti. Your line is open..

Good morning, Joe..

Good morning, John..

Just to go back to the spare parts issue, could you just remind me how much of that business has sold to distribution, and how much of that is a direct sale from you?.

Sure. The majority of that is direct sale - I'm sorry, the majority of that is third party sales reps. So they're not stocking distributors where they hold the inventory and then sell it.

It’s typically a third party sales rep that they’re selling it, but it is shipped and billed directly from us to the customer and then we pay a commission to the sales rep. We do have a little bit of direct sales, but most of it is through a third party sales rep..

Okay.

So, it’s not a function of distributors pulling back on inventory, which really just the customers wear and tear from usage?.

Yes. There is a pretty tight timing from usage to the orders that we get order in shipping. That’s real quick stuff..

Okay..

So, it gets booked and shipped very quickly..

Got it.

And the orders that you expect to book in the coming quarters, are they the same plastics and resin end markets? Or is it different end markets that you’re seeing strengthen now?.

Well, these are the same engineered plastics and again base resins, polyethylene and polypropylene. And these are long-term projects. So, we got to watch these projects over the course of quarters and years as they evolve and there are large projects, we’re relatively small part of some of these - particularly the really large projects.

And so, we track those projects on a monthly basis and so that is the same projects. And again, we still feel pretty good about those projects closing, despite some of the economic headwinds that are out there..

Okay.

And regards to restructuring actions that you are going to take, could you just discuss a little bit about what are you doing specifically the timeline to completion, and how much of these actions are variable and will come back, as volumes come back?.

John, this is Kristina. As we look at the restructuring, we are taking actions in both the SG&A area and across the sales. But primarily SG&A, so as we look as an example in our Process Equipment Group, we had some really good gross margin expansion, but we weren't able to hold that through to the bottom-line on EBITDA.

So, we're taking the opportunity now to right-size the business for the volume. And so, we'll see reductions on both SG&A and cost to sales. We intend to initiate those actions very shortly, mostly within second and third quarter and then tail off in the fourth quarter.

So, as we mentioned there will be about, we're estimating about $4 million of annualized savings this year. And as it relates to the permanent aspect, right now, obviously we're taking the opportunity to right-size the business. And when volume does come back, we will be very careful in adding back any incremental cost..

Okay.

So Kristina, by the first quarter of next fiscal year, you should be at your full run rate as far as the cost savings?.

Yeah, that's right..

Okay.

And I guess one last question if I can, could you talk a little bit about the Red Valve and ABEL mix and how much of those two businesses fit with each other and in Red Valve, how much of that business is an aftermarket relative to the current process mix?.

John, this is Bill Canady. And - so, let me walk you through the two businesses. So, when we look at Red Valve is very strong in North America. We think we can help our ABEL business here, and the exact opposite for ABEL strong in Europe and we believe they can help Red Valve there.

When we look at the two primary channels they have, Red Valve is primarily an industrial dealing around water and wastewater as well as the power market. You look at Red Valve as municipal going into industrial. So, we think they can help each other, get stronger in industrial municipal, cross-selling between those.

And then when we look over in area such as India and China with our carrier TerraSource business as well as what we have with a pretty strong business with ABEL, we think we can drag Red Valve over into those areas because there is demand for those types of products.

So, basically leveraging the channels to take and take things that they're pretty good at making stronger. In addition to that helping expand across that global footprint. When I look at the parts business of it for Red Valve. Red Valve, for me valves that when they replace them, it's not so much the ware items that ended.

So typically replace the whole valve from a ware item standpoint, they're about 15-ish percentage. But, if you look at the overall piece going into the markets, more around 35% to 40% going into customers that have the product.

ABEL has a very similar piece, except those are mainly ware items and they're in that 35-ish-40% business in the aftermarket side..

Got it. Thanks. Let me get back to queue now. Thank you..

Sure..

Your next question comes from the line Liam Burke from Wunderlich. Your line is open..

Thank you. Good morning, Joe. Good morning, Kristina..

Good morning, Liam.

Good morning, Liam.

Joe, during Kristina's prepared remarks, you mentioned some activity in the food processing space. Understanding, it's a much smaller part of your end market.

Could you give us a sense as to whether or not they're gaining any traction in that vertical?.

Sure. That's one of the bright spots in our business right now. We've had a pretty good focus on food for a couple of years. We're starting to make some headway, close some projects, review some very nice reference projects with high-end global food producers, which has been very effective.

That business is a little bit more components oriented right now. So we sell less of the larger systems in that business. We saw feeders and valves and extruders and other components into that end market.

So, that's a big focus for one of the Coperion divisions and it's one of the places where we expect the most growth outside of service in that business, and we feel very good about that business right now..

Okay. And this maybe a little early to tell, but ABEL has been folded into the peg.

Could you give us a sense as to whether you can see or you could sense whether, you would be able to generate growth of the acquired revenue understanding, there's going to be a currency translation issue there?.

Yes. We expect to get growth off the acquired revenue. So, it’s a business that’s being growing nicely. We expect it to continue to grow. And we’ve had particular good success in some of the emerging markets and those [inaudible] just to move high concentrated slurry.

What we’re being successful right now is in fly ash, and it prevents it from getting into the air and causing environmental problems, so they pump it in concentrated slurry, let it dry and then they can use it for other applications after it dries.

So, we expect very solid growth from that business and we don't really have a big comparable in terms of the translation back from euros to dollars, but it’s not all bad, if you will recall that cost basis in euros.

And so, right now the euro is relative weak against the dollar, and so that makes us pretty competitive in the global marketplace, which is good on the revenue side..

Great. Thank you, Joe..

Sure..

[Operator Instructions] Your next question comes from the line of Daniel Moore from CJS Securities. Your line is open..

Thank you, again. And appreciate the color on Red Valve and ABEL.

Maybe just describe the competitive landscape a little bit more detail there? And as you look forward, probably 5% of pro forma of the overall business, I am sure you’re looking to grow, what are the capabilities that you would look for in additional tuck-in or add-on acquisitions around flow control?.

Dan, this is Bill Canady again. When we look at the capabilities that we’re interested in, it’s really around these niche pieces where they bring something very interesting to the table, something that they can be a leader within. When you look at both Red Valve and ABEL, that’s exactly what we see.

They are the - one of the dominant player in that niche. So, Red Valve, I mean it’s a smallest company with the rubber line valve, they're the number one in that, in fact they're bigger than their two next nearest competitors combined in it. So, they have technology that is unique and differentiated.

We think we can take that around the world, an area for water, wastewater, mining, chemical, another type of applications that we already have a pretty strong footprint. And we think we can take those in and use that.

So, our channels to market and our global footprint using their differentiated technology, we believe we can go out and win projects around the world. And in fact, we’re already seeing that both in Red Valve and ABEL. They have terrific reference projects out there.

And interesting thing about ABEL is, it actually has a great line of sight into the mining. They have a stronger product portfolio for that than their competitors. And what makes them so interesting is mining is having a tough time; there our payback in that area is typically under a year. So, mines are looking to save money.

They’re looking to go out and have opportunities for that. ABEL helps them with that. On a competitive landscape on both of those, there are some big competitors out in the market, but because they are in niche and they’re vertically focused in very specific areas. They typically dominate the niche that they’re in.

They typically are one of the leaders in the space that they’re in on that. So, we think they have good strong competitive position. We think in the long-term they can actually win..

Another any individual niches that you'd be willing to share that you’d be interested in?.

Well, for both our short-term is leveraging the strength that they have in one niche and bring the other one in. So, since one is strong in industrial and the other one is strong in municipal, they both sell in the both pieces. We think the reps and the channel of the market, they can leverage and that we think that’s a pretty short-term win.

In addition, we’re looking at things that there are today. The markets are actually having a tougher time, and they’re looking for quick payback, things such as the tar sands up in Canada, mining down in Chile, we're actually winning reference project there today, because of the quickness in the payback..

Okay. And one of the - just shifting gears, you mentioned, Kristina and Joe cremation a couple of times in the prepared remarks. Are you seeing the rate of shift from burials to cremation actually accelerate or tick-up, just any update you might have there..

Yeah, that’s still in the very short run and that’s a really tough question to answer. We get a lot of data and we can look at that. And the cremation rate, if you look at it over a long period of time, it's a pretty smooth S-curve, a substitution curve.

But when you look at it quarter-by-quarter, even a little bit year-by-year, it bounces around that line. We only of course can estimate what we think is happening. We do believe that the cremation rate was just a little bit higher in the first quarter than what we typically see.

But again, I want to stress that that's an estimate, it does bounce around from quarter-to-quarter, but there is nothing out there that says that there is any shift, fundamental shift in the overall death market or the overall rate of cremation rates. So again, it bounces around a little bit, we think the first quarter was maybe a little bit higher.

But that's just an estimate and we don't really see anything that's driving a shift in the cremation rates..

Okay. Appreciate the color..

Your next question comes from the line of John Franzreb from Sidoti. Your line is open..

Just to stick with Batesville for a second.

With the weak flu season, could you talk a little bit about the competitive landscape, the pricing environment, what you're seeing out there?.

Sure. I think we're seeing a pretty typical competitive environment and pricing environment right now. When volumes are good, there is a bit less pressure on price. So, it could be the smaller distributors have inventory, if they're moving their inventory, they're much less likely to be aggressive on price.

When there is relatively weak flu season, there is a lot of inventory in the marketplace and the smaller competitors would discount to try to move that inventory and get cash flow. And so, we see a little bit of a tougher pricing environment, but it's typical for this kind up here.

So, we're not really seeing any major structural changes from a competitive landscape or in the pricing environment, it's really just a reflection of a pretty tough volume year for everybody in the industry given the light flu season..

So, are you maintaining a market share, Joe? Or there is share shift going on in this kind of environment?.

So, we don't really comment on market share. I would tell you that we feel pretty good about our market position right now. And I would also say that there is the Mathews, Aurora combination. And again, we feel like, we have an opportunity as they continue to try to sell all the product lines, sales reps, service.

All those things that they need to do to hit those synergies that they've announced. We think that creates opportunity for us. It's still very early in that game. They have not taken a ton of actions. But right now, I would say, it's a pretty stable competitive environment out there..

Okay. Thank you very much. Appreciate it..

Yeah..

We have no more questions. So, I'd now like to turn the call back over to Joe Raver for final comments..

Thank you very much. I would just like to thank everyone for joining the call today, and we look forward to talking to you again in April, when we discuss our second quarter results. Thanks, everyone and have a good day..

This concludes today's conference call, and you may now disconnect..