Thank you, operator. Good morning, everyone, and welcome to Hillenbrand's third quarter fiscal 2020 conference call.

I'm joined by our President and CEO, Joe Raver; and our Senior Vice President and CFO, Kristina Cerniglia. I want to direct your attention to the supplemental slides posted on our IR website that will be referenced on today's call.

Turning to Slide 3. Just a friendly reminder that our comments may contain 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, including pro forma comparisons for our Milacron segment.

I encourage you to review Slide 3 of the presentation and our 10-Q, which can be found on our website, for a deeper discussion of forward-looking statements and the risk factors that could impact our actual results. With that, I'll turn the call over to Joe.

Thank you, Rich, and good morning, everyone. Thanks for joining us today.

And from all of us at Hillenbrand, we hope that you and your families are doing well and staying safe. I'd like to begin by acknowledging the tremendous efforts of Hillenbrand's employees as we manage the business through the unprecedented challenges brought on by the COVID-19 pandemic.

We remain steadfast in our commitment to ensure the health and well-being of our employees and their families, to meet the needs of our customers and to execute strategic initiatives that we believe will position Hillenbrand well for the future. Our team is quickly and effectively adapted to significant changes over the past few months, including new working environments and new ways of serving our customers.

While change of this magnitude is never easy, our team is resilient. They are accustomed to challenging and changing the way we do things and always looking for opportunities to improve.

It's part of our culture and reinforced every day by the Hillenbrand operating model. As a result of these efforts, we delivered a solid third quarter with outstanding performance in the Batesville business, better-than-expected results in our industrial businesses, exceptional margin performance across the enterprise and strong free cash flow.

Before I turn to the details on the quarter, I want to spend a few minutes on our long-term strategy. As many of you know, our vision is to transform Hillenbrand into a world-class global diversified industrial company with a proven track record of success driven by the Hillenbrand operating model.

The acquisition of Milacron is a meaningful step forward in the execution of our strategy. Over the past few years, we've consistently articulated four key pillars to our strategy.

The first is to strengthen and build business platforms, both organically and through M&A. Milacron has added two sizable complementary businesses to the Hillenbrand portfolio.

We expect to leverage our strong positions in the plastics value chain to cross-sell product lines, to expand our combined product offering in key end markets, and over the long run, leverage our combined technical know-how to win in emerging segments such as recycling and biodegradable plastics. Despite the challenges associated with the current macro environment in a number of our key end markets, we remain bullish on the long-term financial and strategic value we can create through the Milacron acquisition.

As we've previously communicated, we continually review the makeup of our portfolio as a management team and do a formal review of the portfolio with the full Board at least once a year. Coming out of our most recent portfolio review, we identified certain smaller businesses that we believe are subscale and noncore as we execute our strategy to continue to strengthen our larger platforms.

Specifically, we've made the decision to divest our TerraSource and Flow Control businesses and have started the process of getting these businesses ready for sale. We are cognizant of the fact that the current economic and market conditions may have an impact on timing, and we'll keep you updated as appropriate.

Our second strategic pillar is to manage Batesville for cash. Batesville has a long history of manufacturing excellence and deep and long-standing customer relationships that make it an industry leader.

Batesville continues to provide strong free cash flow for us to invest in our industrial businesses and offset long-term risk associated with decreasing burial demand. It has historically been less sensitive to economic cycles and has provided stable and predictable cash flow.

Batesville's results for the quarter underscore the importance of its role in our portfolio as it generated strong cash flow in a very challenging macro environment. That cash flow helped us pay down debt and strengthened our liquidity and balance sheet during the quarter.

The third pillar of our strategy is to build a scalable foundation for growth using the Hillenbrand operating model. With the acquisition of Milacron, we see the opportunity to deploy our model to drive significant improvement in the business.

From an operational perspective, we're continuing to improve manufacturing and supply chain productivity across the enterprise, and we're focused on expanding margins and reducing inventory. And I would say there's a particularly strong opportunity for improvements in the Milacron injection molding and extrusion business.

Our margin performance in the legacy Hillenbrand businesses this quarter is a direct result of the operating model being consistently deployed throughout both Batesville and the Process Equipment Group. And as I just mentioned, we see significant opportunity as we continue to roll out the operating model across the Milacron segment.

Our fourth and final pillar is to effectively deploy strong free cash flow. We've been clear that we are reshaping our portfolio through organic and inorganic actions, and that it will take some time to achieve our end state goal.

We have a track record of maintaining a flexible balance sheet to grow through strategic acquisitions and a history of quickly paying down debt post-close. We're employing that playbook and prioritizing debt pay down.

And while the COVID-19 pandemic is creating unforeseen challenges, we are confident in our ability to effectively generate free cash flow to do so. Lastly, on the topic of our long-term strategy, we announced yesterday the election of a new member to our Board of Directors.

I'd like to welcome Jennifer Rumsey to Hillenbrand. Jennifer brings an experience and skill set well aligned with the company's profitable growth strategy, and the management team looks forward to working with her and benefiting from her perspective and expertise.

Okay. Now let me turn to some execution highlights for the quarter.

As we manage through this challenging and very dynamic environment, our team remains committed to executing against the three near-term initiatives we've discussed previously. And they are: first, running our businesses well and leveraging the Hillenbrand operating model to drive improved top and bottom line performance; second, integrating Milacron and achieving the full strategic and financial benefits of the combination; and third, generating cash to pay down debt.

Regarding our first near-term priority, the company performed well against the backdrop of an incredibly challenging environment. Batesville delivered very strong year-over-year revenue growth as the business responded to the needs of communities that have been deeply affected by COVID-19.

We were well positioned to handle the increase in volume, and results for the quarter reflect that. Over the past few years, the team has made significant progress in simplifying the business and improving the supply chain.

And that was evident in the way Batesville was able to flex in response to spikes in demand and drive the benefits of operating leverage to the bottom line. As expected, the Process Equipment Group and Milacron segments were impacted by softening demand as the effects of COVID-19 exacerbated already challenged industrial end markets.

Still, results were better than our internal expectations. Despite lower revenues, we delivered record Process Equipment Group adjusted EBITDA margin and held pro forma Milacron adjusted EBITDA margin essentially flat year-over-year.

Notably, combined backlog totaled over $1 billion and held up relatively well against the COVID-19 pandemic. We continue to closely monitor the pipeline while remaining focused on delivering our significant backlog.

Now let me move to the integration of Milacron, which is progressing better than expected, especially when we factor in the limitations of some integration activities due to COVID-19. We are on track to realize the targeted year one cost synergies of $20 million to $25 million within our current fiscal year, which is a faster pace than our original expectation.

As we executed the first wave of integration initiatives, we identified additional near and mid-term opportunities. This, coupled with the results we've achieved to date, gives us increased confidence in our ability to capture more synergies.

As a result, we are increasing the all-in three-year run rate synergy target by 50% to $75 million. Our dedicated integration management office and integration teams are focused on integrating and optimizing manufacturing, procurement and key functional operations.

We are working on vendor and contract consolidation and moving towards centralized functions and centers of excellence. We believe that our effort to standardize processes and services and leverage best practices across our operating companies globally will drive meaningful efficiencies, improve effectiveness and quality, and provide a scalable foundation for future growth.

We're also driving efficiencies and best practices in our operations by leveraging our combined spend through our global supply management group and, of course, driving Lean business practices, which are at the core of the Hillenbrand operating model. Finally, as the economy improves, we're focusing on efforts to capture revenue synergies, which are not included in the $75 million target.

Overall, we're pleased to report very good progress related to the integration. Our third near-term objective is to generate cash and pay down debt.

All three segments delivered solid cash flow in the quarter on the strength of our operating results as well as the benefits from actions we've taken to reduce expenses, manage our cost structure and preserve our financial flexibility. We were pleased with our cash performance for the quarter, and we meaningfully improved the health of our balance sheet.

While we are aggressively managing our business in the context of the current challenging economic environment, we remain laser-focused on our long-term strategy and investing for the future with a focus on product innovation and quality, increased productivity and serving our customers at the highest level. Okay.

As I did last quarter, let me now provide additional insights into the operating dynamics of the business during the quarter. As a reminder, it might be helpful to think about our businesses in three buckets.

First is capital equipment and systems, which comprise long, medium and short-cycle businesses. This part of our business accounted for 53% of total revenues in the third quarter.

The second bucket is aftermarket parts and services, which contributed about 24%. And the third bucket is Batesville, which accounted for 23%.

Our long-cycle large polyolefin systems have been an area of strength for several quarters and generally behaved as expected this past quarter. We've been winning in this part of the business with our state-of-the-art technology and expertise in high-capacity polyolefin production plants and our global footprint.

We are unique in offering complete systems that have both extrusion and the material handling equipment to go with it, and we're networked globally to offer customized support and system design and implementation. This allows us to engineer and fine-tune complete systems for optimal performance and efficiency.

We can also deliver increased throughput for more efficient equipment that requires less overhead and energy to operate, resulting in lower total cost of ownership for our customers. We believe these are real competitive advantages that have helped us grow over the last few years.

Revenue and order momentum for our long-cycle business slowed in the third quarter as the impact of COVID-19 contributed to customer delays in both the execution of current in-process projects and the inflow of new orders. I do think it's important to highlight that we remain very engaged with customers and have not experienced any large project cancellations to date.

The project pipeline remains solid, and we expect to see continued strength in this part of the business as macroeconomic uncertainty recedes. Our mid-cycle capital equipment products, including compounders, feeders and separation equipment in the Process Equipment Segment and injection molding in the Milacron segment continued to face weaker demand during the quarter as we expected.

Sales and orders were down broadly across this part of the portfolio and COVID-19 further pressured already softening industrial markets. The injection molding business was hit particularly hard by continued weakness in automotive and other end markets, although we did see increases in orders for medical products and consumer goods.

North America and India are the two largest geographic markets for our injection molding business, and the government-mandated shutdown in India also had an impact on the quarter. Offsetting some of this weakness in our mid-cycle product lines are gains we've made in projects for the production of highly technical engineered plastic systems.

This is another area where we've been very successful, particularly in Asia, where we're seeing long-term investment from our customers. We have leading technical know-how and can apply many of the same innovations from our larger polyolefin systems to these engineered plastics projects.

We have successful reference lines in place, demonstrating our allocations expertise, and we believe there's opportunity for continued growth in this part of our business. Finally, our short-cycle capital equipment products.

As a reminder, this group includes hot runners, process control systems and mold bases that are part of the Milacron segment. As we discussed last quarter, we started to see order trends improve in April, and that trend continued for the rest of the quarter as hot runners recovered from weak markets and the shutdown in China earlier in the year.

Sales were down modestly year-over-year as automotive remained weak. But we saw growth in certain other end markets, including medical and electronics.

Overall, orders were relatively flat year-over-year but grew sequentially with strength in Asia. As I mentioned last quarter, this part of our business historically responds quickly to the dynamics of the overall economy in particular end markets.

Now moving to aftermarket parts and service. Aftermarket sales decreased 8% organically, which is just slightly softer than expected.

Demand for wear parts was adversely affected by reduced customer production volumes and operating budgets. Additionally, the pandemic limited the ability of our field service organization to travel to and access customer locations.

We expect the aftermarket business to pick up quickly when activity rebounds. In the meantime, we've adopted creative new approaches to deliver solutions for our customers' critical service needs.

For example, we successfully linked our home and office-based engineers with our local field service teams at customer sites to deliver service directly. Additionally, we're virtually consulting with customers on system setups and problem solving.

Importantly, we're continuing to develop new approaches to stay connected with our customers and provide the service they need to support their operation. We expect that many of these new approaches will become part of the way we do work going forward.

As mentioned, Batesville experienced increased demand as a result of the pandemic. Sales remained high throughout the quarter, particularly in the areas that were heavily impacted by the mortality associated with the pandemic.

In addition to COVID-related volume, Batesville made gains in some customer segments we've historically underserved. So in summary, our businesses performed well given the impact of COVID-19 and the associated market headwinds in the quarter.

We remain confident in the strength and resilience of our portfolio, both in the short term as we manage through the current environment and in the longer term as we move through the economic cycle. We're focused on executing our strategy and positioning Hillenbrand for long-term profitable growth.

At this time, I'll turn it over to Kristina to provide more specific details on our overall financial performance, segment performance and the outlook.

Thanks, Joe, and good morning, everyone. Our teams performed well with continued revenue growth in Batesville and meaningful organic margin expansion across the portfolio.

We finished our third quarter with results that were better than we expected heading into the quarter, given the uncertainty of the pandemic. We delivered total revenue of $608 million, an increase of 36%, primarily driven by the Milacron acquisition.

Organically, revenue decreased 6% or 5% excluding the impact of foreign exchange. Batesville had a strong quarter, and as expected, the Process Equipment Group and Milacron segments experienced a difficult backdrop as many industrial end markets already facing sluggish demand were further challenged by COVID-19.

Adjusted EBITDA of $121 million increased 74%, primarily due to the Milacron acquisition and strong Batesville performance. Adjusted EBITDA margin increased 430 basis points, driven by Batesville and the Process Equipment Group.

The actions we've taken to contain costs and limit decremental margins have been highly effective across all segments. Organically, adjusted EBITDA increased 19%, and adjusted EBITDA margin increased 410 basis points despite lower volumes.

We reported GAAP net income of $24 million or $0.32 per share, a decrease of $0.16, primarily as a result of acquisition-related expenses and increased interest expense. Adjusted net income of $61 million resulted in adjusted earnings per share of $0.81, an increase of 25%, mainly driven by the addition of Milacron and strong Batesville performance.

As a reminder, beginning with this quarter, we are now reporting adjusted earnings per share that excludes after-tax amortization of acquired intangible assets. We believe reporting adjusted earnings per share in this manner better reflects our core operating results and will provide greater consistency and transparency going forward.

For comparison purposes, applying the previous approach to the third quarter, would have resulted in an adjusted earnings per share of $0.65. Amortization expense was $16 million in the quarter, an impact of $0.16 to earnings per share.

The adjusted effective tax rate for the quarter was 26.7%, an increase of 10 basis points year-over-year. Hillenbrand generated cash flow from operations of $75 million in the quarter, an increase of 19% compared to the prior year.

This increase was the result of cash generated by Milacron, improved profitability and a reduction in cash paid for taxes. Capital expenditures were approximately $5 million in the quarter, and we returned $16 million to our shareholders in the form of cash dividend.

Moving to segment performance. Batesville revenue of $140 million increased 7% year-over-year, mainly driven by higher volume as a result of increased deaths associated with COVID-19, partially offset by an estimated increase in the rate at which families opted for cremation.

Batesville leveraged the strength of its manufacturing and distribution footprint to respond efficiently to the elevated burial casket sales volume. Batesville's third quarter execution was outstanding, and the benefits of the Hillenbrand operating model are evident in the results as we exceeded our expectations for profitability and cash generation.

Productivity initiatives and aggressive cost management, along with increased operating leverage, contributed to exceptional margin performance as adjusted EBITDA margin of 26% improved 670 basis points over the prior year. Process Equipment Group revenue of $281 million decreased 11%.

Excluding the impact of foreign exchange, revenue decreased to 10%. The revenue decline was driven by lower demand for capital equipment and aftermarket parts and service across the segment, partially offset by favorable pricing.

Adjusted EBITDA margin of 20.5% was a record for the segment and increased 310 basis points, with favorable mix, productivity improvements, short-term cost-containment actions and improved cost of quality. We continue to see the benefits from our global procurement initiative and the deployment of the Hillenbrand operating model to drive continuous improvement across our operations globally.

Order backlog of $939 million remains strong at the end of the third quarter and was down less than 1% year-over-year. Excluding the impact of foreign exchange, backlog increased 1%.

Sequentially, backlog decreased 4% from the second quarter's record high. We continue to see solid demand in the pipeline for new large projects during the quarter.

Milacron revenue of $186 million decreased 23% on a pro forma basis in comparison to the prior year before the acquisition and adjusting for the CIMCOOL divestiture. Order backlog of $185 million decreased 3% compared to the prior year and 1% sequentially, driven by a decrease in injection molding and extrusion equipment orders.

Sales remained weak for injection molding and extrusion equipment, decreasing 37% year-over-year. We experienced continued weakness in the global automotive market, and the impact of COVID-19 was a big factor in the quarter.

As Joe mentioned, India is an important market for this part of the business, and we felt the effects of the country's broad-based shutdown. Not only were our operations limited, but we also had customer-driven project delays given the extent of the disruption.

Offsetting the weak performance in injection molding, the hot runner business experienced a rebound in China and strong growth in medical and electronics. The strength in these areas could not fully offset the weakness in automotive and consumer goods markets, and hot runner sales were down modestly year-over-year in total.

Adjusted EBITDA of $38 million decreased 24%, but we were able to deliver adjusted EBITDA margin of 20.5%, which was only 20 basis points below the prior year through focused efforts on cost-containment and productivity improvements. This result speaks to the tremendous efforts of our team.

In addition to discretionary cost containment, we've taken swift action to mitigate the significant volume decline in the injection molding business by taking structural cost actions in the areas of site consolidations, eliminating a third shift and initiating restructuring actions to right size the business. Clearly, we need to see improvement in the markets to return the business to the level of performance we expect over the longer term.

However, we're focused on the things we can control to protect the profitability of the business. Turning to the balance sheet.

Net debt at the end of the quarter was $1.4 billion, and the net debt to adjusted EBITDA ratio was 3.3x. As of the quarter end, we had liquidity of approximately $900 million, including $260 million in cash on hand and the remainder available under our revolver.

During the quarter, we took proactive steps to further strengthen our financial flexibility. In May, we amended our credit agreement to provide additional headroom under our leverage ratio covenants.

And in June, we completed a $400 million public debt offering due in 2025. We used the proceeds to pay down our revolver balance in June and then use cash and the revolver to repay $150 million of notes that were due in July.

We plan to use the remaining proceeds for general corporate purposes, including reducing leverage. We do not have any other debt maturities until calendar year 2022.

Turning to capital deployment. We continue to prioritize deleveraging, and we're confident in our ability to return to a range more consistent with preacquisition levels over time.

As we said previously, the current economic uncertainty caused by the pandemic has shifted our expectations for the pace at which we expect to pay down debt but has not changed our resolve to build on our successful track record of deleveraging following acquisitions. Since we acquired Milacron, we've made good progress in reducing net leverage by half a turn.

Last quarter, we announced the reduction of near-term capital expenditures of approximately $40 million. Importantly, we continue to make targeted strategic investments while remaining mindful of the economic landscape.

Our investment focus has been on advancing product innovation, digitalization and productivity. We believe these investments are enabling profitable growth and will serve to position Hillenbrand well when markets recover.

We expect to continue to return cash to shareholders in the form of quarterly dividends and do not anticipate any changes to our dividend policy. Our share repurchase program remains suspended, and we've curtailed acquisition activity while we continue to integrate Milacron.

We believe we've taken appropriate actions to mitigate the financial impact of the pandemic without compromising our ability to capitalize on opportunities when the global economy recovers. As Joe mentioned earlier, our teams are working hard on critical business areas.

I'd like to highlight three major initiatives. First is cost containment.

Last quarter, we identified an additional $25 million of near-term cost savings in addition to the Milacron synergy target this year. While several measures we've taken are temporary, we estimate that we can retain about half of these incremental annual savings on a permanent basis.

We expect these actions to reduce potential decremental margins in a scenario where we experience further pressure on demand. Second is working capital improvement.

We continue to look at all aspects of working capital, including expanding our successful supply chain financing program across the company and continuing to aggressively manage and optimize inventory levels. We see considerable opportunity to deploy sustainable processes within Milacron specifically.

Third is supply chain optimization. As you heard from Joe, we are increasing our three-year target for synergies by $25 million.

Optimizing supply chain is the biggest driver of that increase. We recently created an enterprise-wide global supply management center of excellence and brought on a new leader with a proven track record of success.

The focus will be on developing global supply management and procurement strategies, executing our synergies and driving accountability for the enterprise. We believe these efforts will support profitability improvements and further strengthen free cash flow generation.

Let me conclude my prepared remarks with our near-term outlook. We are providing guidance at a high level for the fourth quarter with the assumption that we'll continue to see gradual stabilization of the global economy without any new broad-based COVID-related shutdowns or disruption.

First, let me provide some insight into what we saw in our businesses in July. In the Process Equipment Group, we saw sequential improvement in two key areas in July as large plastics projects and aftermarket parts and service gained momentum.

We booked more than $100 million in large-scale plastics projects since the end of the quarter, mainly for polyolefin and engineered plastics production. At the same time, customer-requested project delays continue to be a challenge given persistent uncertainty around COVID-19.

Mid-cycle capital equipment continued to face sluggish demand. Overall, we expect segment revenue to be modestly higher sequentially in the fourth quarter.

Following record EBITDA margin in the third quarter, we expect modestly lower margins sequentially as we are making targeted investments to capture growth and given a less favorable product mix. Milacron had an encouraging start to the quarter in July as hot runner sales improved sequentially.

We expect that to moderate over the quarter as we don't anticipate recent strength in COVID-19-related medical sales will continue at the same pace. Additionally, hot runner sales have been seasonally stronger in our fiscal third quarter historically.

On the injection molding side, sales remained weak in July, and we expect that to continue through the fourth quarter. Overall, on a sequential basis, we forecast Milacron revenue to be down slightly, and we expect fourth quarter EBITDA margin to be lower due to mix impact from lower hot runner sales, which typically carry a higher margin.

Batesville volumes remained higher in July in certain geographic regions experiencing more severe effects from the pandemic. We expect volumes to moderate during the fourth quarter and return to a more normal trend as mortality associated with COVID-19 diminishes.

In total, we're forecasting Batesville revenue to decrease modestly from third quarter to fourth quarter, and we project adjusted EBITDA margin for the full fiscal year to be in the range of 22% to 22.5%, which is higher than our previous guidance. Importantly, we expect Batesville will continue to provide an important offset to cyclical pressure facing the Process Equipment Group and Milacron.

On a consolidated basis, we expect Hillenbrand revenue to be relatively flat in the fourth quarter on a sequential basis. Adjusted EPS is forecasted to be in the range of $0.60 to $0.70 for the fourth quarter.

We expect the decrease from the third quarter will be driven in part by lower Batesville sales, which would also have an adverse mix effect on overall margins. Additionally, we plan to ramp up strategic investments in the business, and we expect interest expense to increase sequentially.

Our expectations for other key metrics are shown on Slide 14. We recognize that there is still a high degree of volatility and uncertainty around the world.

Having said that, our team has demonstrated the ability to execute through challenging circumstances, and I have confidence in our ability to achieve these results and finish the year on a positive note. And now I'll turn the call back over to Joe.

Thanks, Kristina. The management team remains focused on our near-term priorities of running our businesses well, integrating Milacron with excellence and generating strong cash flow to pay down debt.

We've taken decisive actions to weather the challenges brought on by COVID-19 and to position Hillenbrand to capture growth and continued profitability as conditions improve. We continue to deploy the Hillenbrand operating model to manage the business in a challenging demand environment, and we're being mindful of both the short- and long-term implications of the actions we're taking in our businesses.

With that, let me end this part of the call with a few key takeaways before we open the line for your questions. First, we delivered strong quarterly performance in the face of a very challenging environment.

Batesville delivered a great quarter at both the top and bottom line. The Process Equipment Group recorded record EBITDA margins and maintained a strong backlog as we move into the fourth quarter.

And within the Milacron segment, we held EBITDA margins on a year-over-year basis. In addition, we saw sequential growth in the hot runner business.

That was offset by continued weakness in the injection molding business. However, we see opportunities to improve margins in this business as markets recover.

Second, the Milacron integration is on track, and we remain bullish on the long-term, strategic and financial benefits of the deal. In addition, we're executing on our initiatives to capture synergies, driving cost savings at an accelerated pace and increasing our 3-year synergy target by 50%.

Third, we believe we're in a solid financial position following our successful debt offering and strong cash flow in the quarter. And finally, we're committed to executing our long-term profitable growth strategy as we focus on strengthening and building our larger platforms and divesting several smaller businesses to drive increased shareholder value.

With that, we'll open the line for your questions.

Joe, Kristina, good morning.

Good morning.

Good morning, Dan.

And congratulations on what I would describe as very strong operating performance and vindicating results in a really difficult environment. I want to start with PEG.

Margins were exceptional there this quarter. Obviously, it tick a little lower in Q4, but maybe talk about the sustainability of those levels, given all the cost-reduction actions you've taken as we look into fiscal 2021 and beyond?

Yes. Thanks, Dan, for the comments earlier.

And so as it relates to PEG, we have made really good improvements in that business from a margin perspective. We've had our global procurement initiative that has been driving margin expansion, improved cost of quality in that segment.

When we think about next quarter, as you know, we were slightly down on aftermarket sales this quarter. We expect that to rebound slightly, so we should see some margin expansion there.

But that will be offset, frankly, by the large projects because we expect to see more large projects in the fourth quarter. And so I don't expect the margin to hold where it is.

We will also start to be making some more strategic investments in the quarter, in the fourth quarter. I still do believe that the margin expansion will be strong in the Process Equipment Group.

And I'm proud of the team's efforts, but I don't expect it to be at the level that it will be this quarter.

Helpful. I appreciate it.

And switching gears to Milacron. Given all the restructuring efforts, remind us what should incremental margins look like?

Any change for the hot runners are still the highest – generally high levels on injection molding when demand inevitably does return for those two end markets?

Yes. So I think as you know, our hot runner business has very strong margins.

And as we think about the improvements in the organization, particularly the synergies, we would expect most of that margin improvement to impact not only injection molding, but also some of our Process Equipment Group businesses as well. And so we do expect, obviously, incremental margins from this quarter.

I think we just need to wait and see what happens. Volume plays a very key element in leverage and margin expansion.

But we do expect – we have taken also structural cost actions in that business. So from the beginning of the year, we've reduced about 8% of the headcount in that business.

And so I think we're positioning ourselves well for the future. And we are reducing the decremental margin because of those actions that we've been taking.

No doubt. Maybe one or two more.

The decision on TerraSource and Flow Control, obviously, increases – helps you focus on your core business and simplifies the story a bit. You mentioned that process has begun or you're in preparation?

Any comment there? I know we're in the middle of the pandemic.

But what kind of time frame do you think is reasonable? Is it quarters or years?

And just remind us, if you could, the sort of current run rate EBITDA and revenue for those businesses?

Yes. Dan, thanks for the question.

Yes, I think as you mentioned, we feel like the – exiting those businesses is really well aligned with our strategy. We've talked to the last year or few quarters especially about increasing our investments and directing our investments towards the larger platforms where we think we get better returns.

So again, we felt it made sense to exit those businesses. Regarding timing, we're just beginning to prepare the businesses for sale.

And so – and we're cognizant of the overall macro environment. So really, our goal is to move as quickly as is prudent and execute quickly.

And again start now so that as the environment improves, we're well positioned for those processes. And generally, those businesses are probably – they're relatively small businesses, probably about – just think around 5% of Hillenbrand's overall revenue.

And from a margin perspective, the kind of businesses are in line overall with, I would say, the overall Process Equipment Group margin levels from that perspective. So we think this provides some clarity related to the portfolio.

Again, they're relatively small businesses, particularly with the acquisition of Milacron. And we feel that this decision – these are good businesses, but really, it's a strategic decision, and we feel like it aligns really well with our strategy of directing investment towards the larger platforms.

Yes. And last one and I'll jump out.

Of similar lines, assuming we divest Flow Control, TerraSource, post-sale of CIMCOOL, maybe just talk about the revenue synergies between the remaining businesses, plastics, polyolefin and maybe when we come out of the pandemic? We talk a lot about the cost synergies, but what type of incremental top line growth and where these businesses really fit together, if you could just give a little color on that, it would be appreciated.

Yes. Thanks, Dan.

So first of all, I would just say, you're exactly right. We were very focused on the deal to drive the kind of opportunities that we had more certainty in, which, of course, are the cost synergies.

So we're really on very focused on driving the cost synergies. I think COVID-19 also had a bit of an impact in our progress towards the revenue synergies as the teams were really adjusting to what happened during the past quarter.

I think we've got our feet under us now in terms of what's happening in the marketplace. And so there are a couple of areas where we see opportunity.

We have really strong positions across the plastic value chain. So we have a couple of key areas.

As an example, the extruder in plastics production is just like a key piece of equipment. And then we've demonstrated we could sell around that and integrate other products to build systems around that key piece of equipment.

It's the same idea with injection molding and the hot runner business. These are key pieces of technology where we can continue to add on and cross-sell product lines, as an example, material handling products in the injection molding space is a good example.

I think the other thing is, it enhances our product lines, and so it expands some of our product lines. As an example, Milacron makes extruders.

They tend to be smaller extruders. Those smaller extruders will better position us in some key end markets where we tend to just play at the very larger projects.

We will be able to play in more broadly. And so there, we see an opportunity as well.

And then I think over the long run, we see the opportunity to share R&D and technology, especially as the world moves to more recycled content in plastics and understanding how the materials behave all the way from engineered plastics through the hot runner into the final product in a mold. We think that there will be benefit to us as recycling – more use of recycling materials, biodegradable materials start to come into play.

So those are a few areas. And as we said in the prepared remarks, we've got the teams kicked off working on those opportunities.

I don't want to speculate on the size of those opportunities right now. We're still early.

But we do see opportunity to cross-sell products, expand our current offerings and then to share technology to really develop great solutions for some emerging markets, as I mentioned, like recycling, biodegradable plastics and those kinds of things.

That’s really helpful, Joe. I’ll jump back with any follow-up.

Thank you.

Thanks Dan.

Thanks. A couple of questions.

First, can you maybe quantify the cumulative impact of the shutdowns in India from the fiscal second quarter and fiscal third quarter in terms of what that's meant for revenue and earnings for the company?

Sure. So when we think about – really, from India, the second quarter was not – didn't have really a significant impact, but we saw a steep decline in the third quarter.

And so when we generally think about India as it relates to injection molding, it is about 20% of the revenue of that business. And so we did see a decline in – it was essentially shut down in April and May.

And in June, we started to see that come back. So I would say that generally, it had roughly a $10 million to $15 million revenue impact on the business between just the lack of shipping as well as some of the customer delay – decision delays that we saw in the quarter.

Did that answer your question, Matt? Sorry?

Yes. Yes.

And then maybe can you talk about, from a cost synergy standpoint, what you've realized thus far year-to-date and what sort of – if you look forward over the next couple of years as you build to that $75 million, what that cadence looks like year-by-year?

Yes. Sure.

So year-to-date, we have approximately $16 million of cost synergies. And as we said, we expect to get $20 million to $25 million in year.

And so as you know, we've take – we took really swift actions at the beginning of the acquisition. And so we're seeing really good progress there.

As we think about the next couple of years, I would say that you could probably expect next year a similar number to this year. So this year, in year savings, we would have $20 million to $25 million.

Next year, we would have $20 million to $25 million. And you can probably think about that as the impact year-by-year.

And I would just say the increase, as I mentioned in my prepared remarks, is really coming from primarily from procurement. As I mentioned, we have hired a new procurement leader, and he does have a proven track record of success.

So we are highly confident in the revised synergy target.

And then just as a last question, can you maybe talk about what a realistic free cash flow target might like for Hillenbrand in fiscal 2020? And then remind us how much onetime sort of stuff around the acquisition effectively goes away next year as we start to bridge out to fiscal 2021 cash flow?

Sure. So we are at approximately, on a year-to-date basis, about $100 million of free cash flow.

We expect our fourth quarter, obviously, to continue to generate free cash flow, likely not as high as this quarter, primarily because we did benefit from some deferred taxes, which will not repeat next quarter. But we expect to have nice free cash flow in the fourth quarter.

As it relates to the onetime items, I would say we had roughly $60 million to $70 million of onetime items that hit us from a cash flow perspective. Obviously, we will still be integrating the business, and we will still have some onetime expenses, if you will, associated with that integration.

So it's not fully going to be offset, but I would say the majority of that amount is going to be offset going into next year. So I'm confident in our ability to generate free cash flow.

I think the other thing that we have – that we've been working on is – or we will be working on now and as we continue to go through the year, is working capital improvement, so we should also see some benefit there as well.

Great, thank you.

Good morning, Joe and Kristina. I'd like to just switch over to Batesville for a second.

Joe, if I heard you correctly, you said that mix benefited the segment in the quarter. So I recall, in the June quarter, you had better-than-expected revenues, but mix was down.

Why the change?

Yes. No, if I said that, I must have misspoken.

No, mix was not really a benefit in the quarter. I think we saw a similar trend, although it eased somewhat.

We saw kind of our traditional, I'll say, our traditional mix down that we expect on an industry-wide basis. And I think as we discussed in the last quarter, in these pandemic times, especially when there's limited funeral services, in some cases, because of gathering and social – reduced gathering and social distancing, we did see a decline in – a further decline in mix.

I think we've seen that come back, and that has improved. But generally, mix was unfavorable.

Volume was favorable. Mix was generally unfavorable, a little bit more than normal in the quarter, but an improvement sequentially, I think, from last quarter.

I probably misheard, Joe, than you misspoke. Okay.

That makes sense then. Okay.

And in the guidance for the fourth quarter, are you assuming that about, say, $0.22 of amortization expense on the EPS number?

Roughly – so we had about $0.16 this quarter, and we expect that to be similar next quarter, so about $0.16.

Okay. And lastly, on the rationalization of the supply chain, what was it that you realized that you could increase the cost savings by 50% that wasn't there, say, six months ago?

Yes. So as you know, we have been – we've had the companies combined now for about eight or nine months.

And so I think last quarter, obviously, we were focused on making sure – just given the pandemic, making sure that our supply chain was operating efficiently. I think one of the key elements that gives me a high level of confidence is we did bring on this new leader of global supply management, and he has had a track record of success.

And so as he's been onboard, he has created teams, essentially commodity teams to go and identify cost savings. And so they have identified incremental cost savings, this team.

And so it gives me a high level of confidence. And so that is really the main reason that the timing is now.

Okay, thank you very much, Kristina. I’ll get back in the queue.

Okay, thank you.

Thanks John.

Thank you again. Just on the hot runner business, obviously, saw some sequential improvement through the quarter.

Kristina, can you just remind me what you said about trends in July? And just more generally, what are you hearing from your customers or your customers' customers, maybe across end markets around any pickup in activity, outlook, et cetera, on that specific piece of the Milacron business?

Thanks.

Yes. Dan, this is Joe.

So in the quarter, we saw continued strength in Asia as the economies there, particularly China, came back. So that was a bright spot.

And I would say the other two end markets where we saw some strength. Well, first, we saw continued weakness in automotive in that business as with our other businesses.

On the flip side of that, we did see strength in medical products as capacities have increased around the globe for medical products, and then electronics as well. So we saw a nice order pattern for electronics during the third quarter.

As we move into July, we're continuing to see some of those same trends, where we've seen good order patterns in Asia. A little bit softer in India and Europe, and some – and a little bit of strength again in medical in North America.

So we're seeing pretty solid demand for the hot runner business as we move – as we've gone through July. Just a reminder, I mean, this is a pretty short-cycle business.

And so it's hard to see too far out, and it moves pretty quickly with the global sort of economy and certain end markets. But in July, decent orders in July.

That's helpful. And in India, on the injection molding side, back up and running in June.

To what level of capacity sort of pre-COVID would you say we are in India at this point?

Yes. So we've had some ups and downs in India.

I would say that we were pretty closed down as was the rest of – a large part of the country in the quarter – during the quarter. So it was a pretty tough quarter from both an order and delivery as well as an operational standpoint.

Now the good news is it hasn't really impacted our North American business as we've had enough capacity for some of the subassemblies and components that we would ship to the U.S. for that business.

We have – we've gone – we went back up. So we obviously, we were probably at 75% capacity during the month of June.

It's come back down to probably 60% or 65% capacity as the pandemic has kind of gone up and down a little bit where we have our production. And I would say, as of last week, we were in that 60% to 65% of capacity range.

And that's from an operational standpoint. We still are able to work from home from an engineering perspective, et cetera, as people are able to work from their homes and continue to do some of the office work at a higher level than the operations.

Perfect. And last one rearview mirror question.

But as we look to fiscal 2021, for modeling purposes, just remind us, Kristina, how much – if you have it there, how much revenue and adjusted EBITDA contribution we saw in fiscal 2020 from CIMCOOL?

From CIMCOOL, yes, let me get that...

I think I can get it off-line, if that's fine, but I just want to make sure people are modeling properly on a go-forward basis.

Yes. You know what, Dan, just give me one second.

I don't have that at the tip of my fingers.

Not a problem. That was – cover my follow-up.

Well, let's see, we might...

So in the year, we had roughly $38 million of revenue and about $7.5 million of EBITDA.

Perfect, okay. Thanks again.

Thank you.

Thanks Dan.

All right. Thank you, operator, and thanks to everyone for joining us today.

We look forward to talking with you again when we report our fourth quarter and full year results in November. Have a great day, and stay safe, everyone.