Hillenbrand Industries Announces Consolidation

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Batesville Casket's Nashua, New Hampshire Plant Production Into Its Panola, Mississippi PlantBATESVILLE, Ind., May 26 /PRNewswire-FirstCall/ -- Hillenbrand Industries, Inc. today announced that Batesville Casket has finalized its decision to close its plant in Nashua, New Hampshire and consolidate production into Batesville Casket's Panola, Mississippi plant. This follows Hillenbrand's announcement on May 9, 2005 that Batesville Casket had begun discussions to explore the possibility of closing the plant, or other economically equivalent alternatives. Batesville Casket's efforts at continuous improvement have enabled the consolidation at this time and will help reduce fixed and variable manufacturing costs.

The consolidation of the two plants will result in total charges of approximately $4.4 million. Of these charges, approximately $2.0 million will be incurred in Hillenbrand's fiscal 2005 third quarter. The additional $2.4 million in costs will occur over the course of the plant closing which is expected to continue through Hillenbrand's 2006 fiscal second quarter. These costs will be treated as additional operating expenses -- consistent with GAAP accounting principles. The components of these charges include employee- related cash expenditures of approximately $2.4 million, non-cash charges resulting from the accelerated depreciation of equipment totaling approximately $0.5 million, and approximately $1.5 million in other associated cash expenditures. The consolidation will also result in additional capital expenditures of approximately $1.9 million.

The expenditures are expected to lower operating costs and reduce depreciation charges and total approximately $4.3 million in annual cost savings.