Edgar Filing: K TRON INTERNATIONAL INC

dfan14a.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14A-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 1)

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K-TRON INTERNATIONAL, INC.

(Name of Registrant as Specified in Its Charter)

HILLENBRAND, INC.

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Filed by Hillenbrand, Inc.

Pursuant to Rule 14a-12

of the Securities Exchange Act of 1934

Subject Company: K-Tron International, Inc.

Commission File No: 000-09576

On January 14, 2010, Hillenbrand, Inc. posted the following investor presentation to its website at http://ir.hillenbrandinc.com. This investor presentation represents an amended version of the investor presentation posted on the Hillenbrand, Inc. website on January 11, 2010 and filed on the Schedule 14A filed by Hillenbrand, Inc. dated January 11, 2010:

Certain statements in this presentation contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the
company’s future plans, objectives, beliefs, expectations, representations and projections. The company has tried, wherever possible, to identify these forward-looking
statements using words such as “intend,” “anticipate,” “believe,” “plan,” “encourage,” “expect,” “may,” “goal,” “become,” “pursue,” “estimate,” “strategy,” “will,”
“projection,” “forecast,” “continue,” “accelerate,” “promise,” “increase,” “higher,” “lower,” “reduce,” “improve,” “expand,” “progress,” “potential” or the negative of
those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. It is
important to note that forward-looking statements are not guarantees of future performance, and the company's actual results could differ materially from those set forth in
any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: the company’s ongoing
antitrust litigation; the company’s dependence on its relationships with several large national providers; continued fluctuations in mortality rates and increased cremations;
ongoing involvement in claims, lawsuits and governmental proceedings related to operations; failure of the company’s announced strategic initiatives to achieve expected
growth, efficiencies or cost reductions; disruptions in the company’s business or other adverse consequences resulting from the separation of Hillenbrand Industries into
two operating companies; failure of the company to execute its acquisition and business alliance strategy through the consummation and successful integration of
acquisitions (such as the acquisition of K-Tron International, Inc.) or entry into joint ventures or other business alliances; competition from nontraditional sources in the
funeral services business; volatility of the company’s investment portfolio; increased costs or unavailability of raw materials; labor disruptions; the ability to retain
executive officers and other key personnel; and certain tax-related matters. For a more in-depth discussion of these and other factors that could cause actual results to
differ from those contained in forward-looking statements, see the discussions under the heading “Risk Factors” in Item 1 of the company’s Annual Report on Form 10-K
for the year ended September 30, 2009, filed November 24, 2009. The company assumes no obligation to update or revise any forward-looking information.

Additional Information and Where to Find It

This investor presentation may be deemed to be solicitation material in respect of the proposed acquisition of K-Tron International, Inc. (“K-Tron”) by Hillenbrand, Inc.
(“Hillenbrand”). In connection with the proposed acquisition, K-Tron plans to file a proxy statement with the SEC. INVESTORS AND SECURITY HOLDERS OF K-
TRON ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION.
The final proxy statement will be mailed to shareholders of K-Tron. Investors and security holders may obtain a free copy of the proxy statement when it
becomes available, and other documents filed by K-Tron with the SEC, at the SEC’s web site at http://www.sec.gov. Free copies of the proxy statement, when it
becomes available, and K-Tron’s other filings with the SEC may also be obtained from K-Tron by directing a request to K-Tron International, Inc., Attention:
Investor Relations, Route 55 and 553, P.O. Box 888, Pitman, N.J. 08071, or by calling 856-589-0500.

Hillenbrand, K-Tron and their respective directors, executive officers and other members of their management and employees may be deemed to be soliciting proxies
from K-Tron shareholders in favor of the proposed acquisition. Information regarding Hillenbrand’s directors and executive officers is available in its 2009 Annual
Report on Form 10-K filed with the SEC on November 24, 2009, and definitive proxy statement relating to its 2010 Annual Meeting of Shareholders filed with the SEC
on January 5, 2010. Information regarding K-Tron’s directors and executive officers is available in its 2008 Annual Report on Form 10-K filed with the SEC on March
13, 2009, and definitive proxy statement relating to its 2009 Annual Meeting of Shareholders filed with the SEC on April 6, 2009. Additional information regarding the
interests of such potential participants will be included in the proxy statement and the other relevant documents filed with the SEC when they become available.

Forward-looking Statements

Hillenbrand / K-Tron International Team Introductions

Cindy Lucchese
Senior Vice President &

Chief Financial Officer
Hillenbrand, Inc.

Mark Lanning
Vice President of Investor
Relations & Treasurer

Hillenbrand, Inc.

Ken Camp
President &

Chief Executive Officer

Hillenbrand, Inc.

Lukas Guenthardt
Senior Vice President,

Corporate Development

K-Tron International, Inc.

Agenda

Transaction Summary

Strategic Benefits

Financial Highlights

Business Summary

Wrap-up

Appendix

Transaction Summary

Overview

Purchase Price

Ownership

Closing Conditions

Timing

Hillenbrand, Inc. to acquire K-Tron International, Inc. (Nasdaq: KTII) for 100%
cash consideration

The net purchase price associated with this transaction is approximately $390
million based on equity purchase price of $435 million and a net cash balance at
10/3/09 of approximately $45 million. This net purchase price implies a
multiple of 10.3x EBITDA

Upon completion of the transaction, Hillenbrand stockholders would own 100%
of the combined company

The transaction is subject to approval by K-Tron International shareholders, as
well as the satisfaction of customary closing conditions and regulatory approvals

The transaction is expected to close near the end of March

Transaction Rationale

• Hillenbrand’s sole operating unit, Batesville Casket, remains a high-margin cash generator
with a leading brand and excellent management

• However, revenue growth is historically challenging in death care and has been even more
challenging in the current economic environment

• Therefore, our strategy focuses on effective high value opportunities for our robust cash flow,
creating a strong and enduring enterprise outside death care

• Through disciplined due diligence, we identified K-Tron International, a well-run company
with excellent financials, that will provide growth and diversification and maintain our strong
financial profile

• To fund this acquisition, we will utilize a combination of existing and potentially new (if
needed) credit and cash-on-hand

Strategic Benefits

It’s the Right Acquisition

• $435MM cash purchase ($390MM net purchase price) provides approximately $200MM
of revenue

• Preserves Hillenbrand’s high quality of earnings and cash flows while improving growth
potential

• EBITDA multiple of 10.3x EBITDA is in line with recent market comparables

• We expect the transaction to be immediately accretive to EPS and cash flow, excluding
acquisition costs, transition costs, and non-recurring purchase accounting adjustments

• Attractive product, industry and customer diversification

• Creates sizable new global platforms in two attractive sectors

• Ideal fit with Hillenbrand’s stringent acquisition criteria

• K-Tron International has limited lean experience. Meaningful improvement opportunities exist
through the application of lean business practices

• Strong cultural fit with proven management

• Adds leading brands and market positions with two new platforms

• A proven high margin, high growth business

Operational

and Cultural

Financial

Strategic

K-Tron International’s Corporate Profile Is Very Attractive
to Hillenbrand

• 2008 Revenues and EBITDA of $243 MM and $44.6 MM

• 21% Total revenue CAGR over last 5 years;

• 10% Organic revenue CAGR over last 5 years

• Two attractive segments within bulk solids material handling equipment sector

• Leading, respected brands

• Serves diverse base of global customers through wholly-owned subsidiaries and independent representatives

• Highly productive operation with more than 650 employees

• Operates 7 manufacturing facilities: 5 in the U.S. and 1 each in Switzerland and China

• Numerous meaningful opportunities have been identified to grow as economy recovers

Estimated Revenue by Business Line (1)

Estimated EBITDA by Business Line (1)

(1) For FY 2008

Size
Reduction
Group

Process
Group

Size
Reduction
Group

Process
Group

BCC

Diversifies Hillenbrand’s Platforms and Markets

Pulp, Paper &
Forest Products /
Biomass Energy

Food Processing

Power
Generation

Chemical Detergent & Other
Process Group Industries

Other

Plastics Compounding & Base
Resin Manufacturing

Post Acquisition Revenue By
End Market(1)

Post Acquisition
EBITDA By Platform(1)

Death Care

75%

K-Tron

BCC

(1) Represents FY ending 2009 for Hillenbrand and LTM ending 10/03/09 for K-Tron

Provides Hillenbrand With a Global Business Platform

Belleville, IL

54,000 sq. ft.

Wuxi, China

30,000 sq. ft.

K-Tron HQ

Pitman, NJ

92,000 sq. ft.

Cuyahoga Falls , OH

70,000 sq. ft.

Woodruff, SC

149,000 sq. ft.

Niederlenz, Switzerland

65,000 sq. ft.

Batesville, IN

494,000 sq. ft.

Salina, KS

134,000 sq. ft.

Manchester, TN

375,000 sq. ft.

Mexico City, Mexico

58.700 sq. ft.

Chihauhau, Mexico

125,000 sq. ft.

Batesville, MS

180,000 sq. ft.

Vicksburg, MS

142,000 sq. ft.

Process Group and Size Reduction Group have
~175 sales reps. (mostly independent) in U.S.,
Canada, France, Germany, the United Kingdom,
Singapore and China.

Size Reduction Manufacturing

Process Group Manufacturing

Batesville Manufacturing

Post Acquisition Locations

Batesville Warehouse Distribution, Service or Sales

(165 sales reps in the U.S. and Canada.)

Penn Crusher HQ

Creates Multiple Pathways to Strong Revenue Growth
Through New Platforms

• Proven history of modest acquisitions ($10-$30MM)

• Opportunities for bolt-on acquisitions in both
platforms

• Size Reduction Group well positioned to
capture Biomass Energy growth

• Pharmaceutical Industry trending from batch to
continuous process

• Expand Pneumatics into Europe, Asia and the
Middle East

• Swiss facility offers competitive advantage to
serve high growth Eastern Europe markets

• China & India for coal mining

• Aggressively grow Wuxi K-Tron Colormax
division in China

• Enhance Sales & Marketing efforts for Penn
Crusher in China

• Strong growth in demand from mineral mining
sector

Complementary Acquisitions

Attractive New End Markets

New Platform

Key

Growth Drivers

New Geographics

Growth Within Existing Regions

(1) Excludes a $3.0 MM gain in 2009 on sale of 19.9% investment in Hasler International. Including the gain, K-Tron’s LTM EPS would have been $7.81 and the EBITDA would have been $42MM.

Contributes to Hillenbrand’s Ability to Deliver Predictable
Performance

K-Tron International Financial Highlights
$ IN MILLIONS, EXCEPT PER SHARE DATA	2004	2005	2006	2007	2008	LTM 10/03/09(1)	2004 - 2008
Total Revenue	$113	$119	$148	$202	$243	$213
Gross Profit	$46	$50	$62	$86	$101	$88
EBITDA	$14	$17	$25	$38	$44	$39
Diluted EPS	$2.65	$2.85	$4.95	$7.93	$9.37	$6.79
Growth (yr/yr)							CAGR
Revenue	18.8%	5.7%	24.6%	36.2%	20.5%	(9.9%)	21.2%
EBITDA	43.3%	23.0%	46.8%	49.4%	17.1%	(11.0%)	33.3%
As a % of Revenue							Average
Gross Profit	41.2%	42.1%	42.1%	42.7%	41.7%	41.3%	42.0%
EBITDA	12.4%	14.4%	16.9%	18.6%	18.1%	18.2%	16.1%

K-Tron International Is Strongly Positioned to Weather the
Current Economic Downturn and Thrive Post Recession

• K-Tron revenues declined in the first nine months of 2009 by $30.2 MM, or 17%,
compared to the same period in 2008

• A significant component of the revenue decline was K-Tron’s Process Group
plastics business, which was impacted when automotive and other end customers
were hurt by the “great recession”

• However, revenues in the Size Reduction Group increased during the year,
buffering the decline in plastics

• We believe the strength of K-Tron’s brands was, and will continue to be, critical to its
ability to outperform their markets in economic downturns

• K-Tron has a large installed base that generates recurring replacement parts business,
thereby softening the impact of economic downturns in the capital equipment business

• As the economy strengthens, K-Tron is in a strong position to grow revenues in both
base businesses and potential add-on business lines

	Cash Flow	Accretion
	+++++	+++++
	+++	+++
	++	++
	0/+	0/+

Looking Through the Economic Trough to Assess Future
Value

SMALL CAP INDUSTRIAL MACHINERY
Company Name	Market Cap	TEV	Revenue	Gross Margin	EBITDA	EBITDA Margin	P/E Ratio	Return (NI) Net Assets(1)	on	TEV / Revenue EBITDA(2)
Gardner Denver Inc.	$2,198.4	$2,506.2	$1,851.6	30.7%	$276.1	$14.9%	NM	NM		1.4x	9.1x
Nordson Corporation	2,121.1	2267.1	819.2	57.2%	163.0	19.9%	NM	NM		2.8x	13.9x
Graco Inc.	1,762.6	1,878.7	599.6	49.5%	100.1	16.7%	42.2x	17.2%		3.1x	18.8x
Varian, Inc.	1,496.1	1305.6	806.7	44.0%	100.6	12.5%	38.6x	17.4%		1.6x	13.0x
Watts Water Technologies, Inc.	1,145.6	1275.6	1272.3	34.5%	159.1	12.5%	39.3x	NM		1.0x	8.0x
Robbins & Myers Inc.	835.8	772.2	591.8	33.7%	90.1	15.3%	15.2x	17.1%		1.3x	8.5x
John Bean Technologies Corp.	472.1	605.9	830.1	26.8%	75.2	9.1%	14.9x	17.0%		0.7x	8.1x
Badger Meter Inc.	625.8	629.5	261.5	38.5%	52.8	20.2%	22.4x	29.6%		2.4x	11.9%
Astec Industries Inc	617.2	579.3	755.7	21.6%	53.8	7.1%	22.9x	6.7%		0.8x	10.6x
Organo Corp.	394.3	460.6	739.6	24.3%	52.0	7.0%	19.6x	4.1%		0.6x	8.9x
Gorman-Rupp Co.	469.1	438.9	285.0	22.4%	35.9	12.6%	24.3x	12.0%		1.5x	12.2x
Columbus McKinnon Corp.	277.4	357.8	535.1	25.7%	43.0	8.0%	NM	NM		0.7x	8.3x
PMFG, Inc.	227.6	247.0	145.7	36.6%	19.7	13.5%	NM	4.3%		1.7x	12.5x
Kadant Inc.	190.8	183.2	236.0	40.8%	14.2	6.0%	NM	NM		0.8x	12.9x
Met-Pro Corp.	151.5	124.0	84.9	34.6%	9.9	11.7%	28.4x	13.1%		1.5x	12.5x
Key Technology Inc.	61.4	49.5	105.5	37.3%	2.8	2.7%	NM	NM		0.5x	17.5x
Low	$61.4	$49.5	$84.9	21.6%	$2.8	2.7%	14.9x	4.1%		0.5x	8.0x
1st Quartile	265.0	330.1	255.2	26.6%	31.8	7.8%	20.3x	8.0%		0.8x	8.8x
Median	544.7	592.6	595.7	34.6%	53.3	12.5%	23.6x	15.0%		1.3x	12.1x
3rd Quartile	1233.3	1283.1	809.8	39.1%	100.2	15.0%	36.1x	17.2%		1.6x	12.9x
Max	2198.4	2506.2	1851.6	57.2%	276.1	20.2%	42.2x	29.6%		3.1x	18.8x
K-Tron	$330.6	$277.6	$212.8	41.3%	$38.8	18.2%	14.6x	46.1%		1.3x	7.1x

An EBITDA Multiple of 10.3 Is Below the Median, Despite
K-Tron’s More Favorable Profitability Ratios

Financial Highlights

Financial Highlights of Combination

• We believe the acquisition increases net revenue and EBITDA growth rates
in first year excluding acquisition and purchase accounting costs.

• We believe the transaction will be immediately accretive to EPS and cash
flow, excluding acquisition costs, transition costs, and non-recurring
purchase accounting adjustments

• Acquisition and transition expenses estimated to be $10MM to $12MM

• Strong liquidity position maintained

• Capital deployment strategy remains unchanged

• Pro forma capital structure & strategy consistent with previously discussed
financial principles

Combination Provides a Superior Financial Profile

• Combined entity has nearly identical gross margin percentage

Twelve Months Ended
$ IN MILLIONS	Hillenbrand 9/30/09	K-Tron 10/03/09	Pro forma Non-GAAP(1) Combined
Net Revenue	$649.0	$213.0	$862.0
Gross Profit	$274.0	$88.0	$362.0
Margin %	42.2%	41.3%	42.0%
EBITDA % of Revenue	$181.0 27.9%	$39.0 18.3%	$220.0 25.5%
Net Income	$102.0	$23.0	$125.0
Operating cash flow % of Revenue	$123.0 19.0%	$37.0 17.3%	$160.0 18.6%

(1) Excludes effects of purchase accounting which may be significant

The Acquisition Will Be Funded With a Combination of
Cash and Borrowings

ü We will remain in compliance with the Hill-Rom covenant

$ IN MILLIONS	Acquisition Funding
Credit Facility	$300-$350
Cash & Other Borrowings	$85-$135
Total Purchase Price	$435

Financial Principles

Pro-Forma Capital Structure & Strategy Remains Consistent
with Hillenbrand’s Previously Discussed Guidelines

Generate stable and predictable revenues and cash flows

Maintain a healthy capital structure that minimizes risks and provides flexibility

Maintain a solid investment grade credit rating

Return capital to shareholders through dividends and share repurchases

Overview of Hillenbrand’s Key Financial Policies

Dividend Policy

• Payout amounts will be
reviewed and approved
quarterly by the board of
directors

• Payout levels structured to
provide long-term stability

• Dividend payout currently
higher than peers

• Dividend level should
grow modestly over the
next 3 years, but less than
earnings growth, to bring
payout levels more in-line
with peers

Capital Spending

• Strong budgetary controls
and targets

• Annual approval process for
overall plans

• Project by project approval
process during the year

• $15-$18MM annual spend ~
equal to depreciation

Acquisitions

• The company continues to
evaluate prudent strategic
opportunities

• Will avoid negative effect
on capital structure or credit
rating, and ensure
compliance with
distribution agreement

Share Purchases

• Periodically purchase
treasury shares to off-set the
dilution from equity
compensation programs

• Opportunistic share
repurchases to enhance
shareholder value

Business Overview

Hillenbrand’s Batesville Casket Commands a
Premium as the Industry’s Most Respected Brand

World’s Largest Casket Manufacturer

• Iconic brand with 100+ years of history

• Industry leader: volume, revenue, margin share

• Superior mix of products sold

• Brand of choice for funeral directors’ families

Unparalleled Commitment

• Superior products

• Exceptional service

• Leader in innovation

• Highly valued business partner

“Every family deserves a Batesville”

Hillenbrand Post
Acquisition Revenue
By Platform

BCC

Funeral Products
($2.6 Billion Industry)

Batesville Casket Is the Largest Player in the Largest
Segment of the Death Care Industry

Caskets

$1.3

Grave

Markers

$0.6

Cremation

$0.3

Source: Company estimates and public filings

Vaults

$0.4

Caskets 90%

Other (100+)

Options

NorthStar

Batesville

Importers

Aurora

Matthews

Caskets

(Total Revenue $1.3 Billion)

Batesville Casket

(Total 2009 Revenue: $649 Million)

Other

Batesville Casket Has Generated Solid Financial
Results in a Declining Casket Market

Revenue

Gross Margin

Net Income

Operating Margin

Cash Flow

* $28 million, after tax pension funding ** $13 million, after tax separation costs

N.A. Casket Market

Death Care Industry Is Stable, but Challenges Remain

• Cost conscious consumers have been mixing down, opting for less expensive caskets

• It remains to be seen whether the severe economic downturn will cause lasting pricing
repercussions

• Slow and steady increases in cremations have reduced burials in a flat death market

• While projected deaths will increase at some point as baby boomers age, this will likely
be offset by continued increases in cremations

• Cremations are projected to grow steadily at 1.2% annually as a percentage of total
deaths

• Market share may be under pressure, as new entrants and Chinese imports continue to
compete

• Significant increases in the prices of raw materials that cannot be recovered through
increases in the price of our products could adversely affect our results of operations and
cash flows

Reduced
Burial
Demand

Reduced
Consumer
Spending

Increased
Competition

Commodity

Risk

By Investing Prudently in Batesville Casket, We Will Continue to Focus
on Future Revenue and Earnings Growth From This Segment and
Generate Strong Cash Flow

Top-line Growth

• Focused sales coverage that leverages strong customer relationships and premium brand

• Targeted investments to drive innovative product development

• Merchandising programs increase value on every casket sale

• Growth in NorthStar and Options product lines

• Enhanced offerings in E-business

Margin Improvement

• Operational excellence

• Lean manufacturing

• Continuous improvement in all business processes

New Platform: K-Tron Process Group Is a Leader
in Feeding and Conveying With a Clear Growth
Path

Feeders

Provide accurate feeding of “hard-to-handle” materials in a wide variety of manufacturing
processes, enabling customers in key end markets to produce high quality products and
optimize raw material usage

Conveyers

Product
Summary

Brand Names

(1) Higher sensitivity to economic cycles.

Convey bulk solids with positive or negative pressure through mass-customized pneumatic
conveying equipment and systems

Growth Strategy

• Differentiated by material flow expertise (multiple types)

• Leading brand position in each category

• Expanding back into value chain: same sales, engineering & service channels, and same customers

Feeders

Conveyers

Gravimetric Feeders

Twin Screw Micro-Ingredient Feeder

Pneumatic Conveying Components

Sanitary Pneumatic Conveying Systems

for Food and Pharmaceutical

New Platform: K-Tron Size Reduction Group Is a
Brand Leader Supported by its High Margin,
Recurring Consumable Parts Business

Size

Reduction

Coal Processing: Hammermills, sizers, roll crushers

Wood/pulp Processing/Biomass: Wood/bark hogs, chip screens

Mining: Potash and mineral mining crushers

Significant recurring parts revenue

Product Summary

Brand Names

Growth Strategy

Leverage installed base and brand equity (#1 or #2 brand presence)

Penn Crusher & Reversible Hammermill

Jeffrey EZ Access Wood/Bark Hog

Gundlach Cage Paktor

Grundlach Two-stage Four-roll Breaker

Duratip® Wood Hog Hammers

Big Buster™ Hammer

Stant-Flow® Screen Grates

Buster® Bar

To Maximize Value Creation, We Will Leverage Hillenbrand’s Core
Competencies Across New Platforms

Lean Business

(Capabilities nationally recognized
beyond the death care industry)

Culture of
Execution

Management

Team

§ High quality

§ Low-cost

§ Flexible

§ Safety-conscious

§ Innovative

§ Profitability improvement

§ Highly effective merchandising

§ History of successful acquisition
integration

§ Manage for strong cash flow

Supply Chain Optimization

(Favorably benchmarked against FedEx & UPS)

§ Efficient

§ Dependable

§ Fast

§ Optimizes finished goods inventory

§ Deep acquisition &
integration skills

§ Robust business development
& lean skills

New Platforms

Processes & People

§ Strategic planning

§ People development

§ Policy deployment

Wrap-up

K-Tron International Represents a Very Attractive Strategic
Opportunity

• Matches Hillenbrand’s growth strategy

• Market leader with preeminent brands

• Strong platforms in growing industries/markets

• Proven growth potential (organic and acquisition)

• Attractive markets - large, diversified, fragmented, growing and global

• Reduces risk and dependence on death care

• Proven management team eager to continue

• Risks are manageable

• Solid financials

• Predictable, strong cash flows and margins

• Strong balance sheet with little debt

• Growing revenues with stable gross profit margins

• Proven high margin, high growth business

• We believe this acquisition will provide a platform for creating significant
shareholder value over the next several years

Appendix

K-Tron International Has a Proven Senior Management Team

30+ Year Industry Veteran

Ground-up Knowledge of Coal Industry

Long-standing Industry Executive

Donald W. Melchiorre

SVP Size Reduction Group

30+ Yrs with the Company

Well Regarded Sales & Marketing Expertise

Extensive Knowledge of each K-Tron Divisions

Kevin C. Bowen

SVP Process Group

Point Person on Each Acquisition Since 2003

Extensive Global Experience

Regarded as a Strategy Enabler

Lukas Guenthardt

SVP Corporate Development

Corporate Finance and Private Equity Background

Former Siemens Executive and 11 years at Ernst & Young

Newest Management Team Member (2008)

Robert E. Wisniewski

SVP & CFO

Turnaround and Acquisition Expertise

Diverse Industry Knowledge

Strong Legal / M&A Background

Edward B. Cloues,II

Chairman & CEO

K-Tron International Historical Results Show Strong Growth
and Cash Generation Capabilities

Revenue

EBITDA

Total Debt

Cash

K-Tron International Historical Credit Metrics Complement
Hillenbrand’s Credit Strength

Debt / EBITDA

K-Tron International - Operating Performance Summary

FISCAL YEAR ENDING
$ IN MILLIONS	2005 ACTUAL	2006 ACTUAL	2007 ACTUAL	2008 ACTUAL	LTM 10/03/09 ACTUAL
Net Revenue % Y/Y Growth	$119 5.3%	$148 24.4%	$202 36.5%	$243 20.3%	$213 N/A
Gross Profit % of Revenue	$50 42.0%	$62 41.9%	$86 42.6%	$101 41.6%	$88 41.3%
Operating Expenses % of Revenue	$37 31.1%	$42 28.4%	$54 26.7%	$63 25.9%	$55 25.8%
Operating Income	$13	$20	$32	$38	$35
EBITDA % of Revenue	$17 14.3%	$25 16.9%	$38 18.8%	$44 18.1%	$39 18.3%
Net Income	$7	$13	$21	$26	$23

K-Tron International - Balance Sheet Summary

FISCAL YEAR ENDING
$ IN MILLIONS	2005 ACTUAL	2006 ACTUAL	2007 ACTUAL	2008 ACTUAL	10/03/09 ACTUAL
ASSETS
Cash	$15	$14	$31	$42	$63
Accounts Receivable	18	23	31	37	27
Inventory	15	23	30	29	24
Other Current Assets	4	7	10	6	9
Current Assets	52	67	102	114	123
PP&E	22	29	27	27	25
Other Assets	15	45	55	58	57
Total Assets	89	141	184	199	205
LIABILITIES
Current Liabilities	26	38	50	47	37
Debt	13	34	37	22	17
Other LT Liabilities	1	4	3	4	4
Total Liabilities	40	76	90	73	58
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity	49	65	94	126	147
Total Liabilities & Equity	$89	$141	$184	$199	$205

K-Tron International - Cash Flow Summary

*Free cash flow is defined as operating cash flow less capital expenditures

FISCAL YEAR ENDING
					LTM 10/03/09 ACTUAL
$ IN MILLIONS	2005 ACTUAL	2006 ACTUAL	2007 ACTUAL	2008 ACTUAL	LTM 10/03/09 ACTUAL
Operating Activities
Net Income	$7	$13	$21	$26	$23
Depreciation & Amortization	4	5	6	6	6
Change in Working Capital	(1)	0	(1)	(7)	9
Other, Net	1	1	1	2	(1)
Cash Flow from Operating Activities	11	19	27	27	37

Capex & Purchase of Intangibles	(2)	(3)	(2)	(4)	(3)
Other Investing Activities	0	(33)	(17)	0	0
Debt Transactions	(6)	16	3	(14)	(8)
Capital Stock Increase	1	0	3	2	0
Other	(1)	0	3	0	3
Net Change in Cash	$3	$(1)	$17	$11	$29
Free Cash Flow*	$9	$16	$25	$23	$34

Hillenbrand
Financials

Hillenbrand, Inc. - 2009 versus 2008

FISCAL YEAR ENDING SEPTEMBER 30
	2009 ACTUAL	2008 ACTUAL
$ IN MILLIONS	2009 ACTUAL	2008 ACTUAL
Net Revenue % Y/Y Growth	$649 (4.3%)	$678 1.6%
Gross Profit % of Revenue	$274 42.3%	$281 41.4%
Operating Expenses % of Revenue	$119 18.3%	$131 19.3%
Operating Income	$155	$150
EBITDA % of Revenue	$181 27.9%	$175 25.8%
Net Income	$102	$93

NET REVENUES

Revenue lower because of relatively mild flu and
pneumonia season, combined with higher
cremation rate and product mix-down from
economic recession

GROSS PROFIT

Gross profit percentage higher due to cost control
and lower materials cost, primarily fuel

OPERATING EXPENSES

Opex percentage lower due to decreased
separation and anti-trust costs

Hillenbrand, Inc. 2010 Guidance - Pre K-Tron Acquisition
(Unaudited)

FISCAL YEAR ENDING SEPTEMBER 30
AMOUNTS IN MILLIONS (EXCEPT PER SHARE DATA)	FY09	FY10 RANGE
AMOUNTS IN MILLIONS (EXCEPT PER SHARE DATA)	FY09	LOW	HIGH
Net Revenues	$649	$630	$670
Income before Taxes	$161	$137	$161
Tax Rate	36.4%	37%	36%
Net Income	$102	$86	$103
Average Diluted Shares Outstanding	62	62	62
Diluted Net Income per Share	$1.66	$1.40	$1.67

Excluding Certain Non-operating Costs (Antitrust Litigation and Separation*)
Net Income	$104	$89	$105
Diluted Net Income per Share	$1.68	$1.45	$1.70

*Anti-trust litigation and separation estimated to be $7.2MM in 2009; see appendix for reconciliation to GAAP

Hillenbrand, Inc. - Non-GAAP Financial Disclosures and
Reconciliations for 2009 Actual and 2010 Guidance
(Unaudited) (Excluding K-Tron International)

While Hillenbrand, Inc. reports financial results in accordance with U.S. GAAP, this press release includes non-GAAP
measures. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Hillenbrand
uses the non-GAAP measures to evaluate and manage its operations and provides the information to investors so they can see
the results “through the eyes” of management. Hillenbrand further believes that providing this information better enables
investors to understand the ongoing operating performance of the company. Investors should consider non-GAAP measures in
addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

$ IN MILLIONS	TWELVE MONTHS ENDED SEPTEMBER 30, 2009			FISCAL YEAR 2010 GUIDANCE (MIDPOINT)
$ IN MILLIONS	PRE- TAX	INCOME TAXES	POST- TAX	PRE-TAX	INCOME TAXES	POST- TAX
GAAP Income	$160.8	$58.5	$102.3	$148.9	$54.3	$94.6
Certain non-operating Costs:
Antitrust Litigation	$2.2	$0.8	$1.4	$4.0	$1.5	$2.5
Separation	$0.1	-	$0.1	-	-	-
Adjusted Income	$163.1	$59.3	$103.8	$152.9	$55.8	$97.1

Hillenbrand, Inc. - Operating Performance Summary

FISCAL YEAR ENDING SEPTEMBER 30
	2007 ACTUAL	2008 ACTUAL	2009 ACTUAL
$ IN MILLIONS	2007 ACTUAL	2008 ACTUAL	2009 ACTUAL
Net Revenue % Y/Y Growth	$667 (1.2%)	$678 1.6%	$649 (4.3%)
Gross Profit % of Revenue	$279 41.8%	$281 41.4%	$274 42.3%
Operating Expenses % of Revenue	$123 18.4%	$131 19.3%	$119 18.3%
Operating Income	$156	$150	$155
EBITDA % of Revenue	$176 26.4%	$175 25.8%	$181 27.9%
Net Income	$100	$93	$102

Hillenbrand, Inc. - Balance Sheet Summary

FISCAL YEAR ENDING SEPTEMBER 30
$ IN MILLIONS	2007 ACTUAL	2008 ACTUAL	2009 ACTUAL
ASSETS
Cash	$12	$15	$35
Accounts Receivable	91	88	85
Inventory	48	49	43
Other Current Assets	19	30	70
Current Assets	170	182	233
PP&E	89	91	85
Other Assets	58	272	243
Total Assets	317	545	561
LIABILITIES
Current Liabilities	76	86	75
Debt	0	100	60
Other LT Liabilities	60	71	122
Total Liabilities	136	257	257
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity	181	288	304
Total Liabilities & Equity	$317	$545	$561

Hillenbrand, Inc. - Cash Flow Summary

*Free cash flow is defined as operating cash flow less capital expenditures

FISCAL YEAR ENDING SEPTEMBER 30
$ IN MILLIONS	2007 ACTUAL	2008 ACTUAL	2009 ACTUAL
Operating Activities
Net Income	$100	$93	$102
Depreciation & Amortization	19	19	19
Change in Working Capital	8	(16)	5
Other, Net	0	6	(3)
Cash Flow from Operating Activities	127	102	123

Capex & Purchase of Intangibles	(16)	(10)	(10)
Net Activity of Parent	(104)	(165)	0
Net Revolver Activity	0	100	(40)
Stock Repurchases	0	(6)	(12)
Dividends	0	(23)	(46)
Other	(3)	5	5
Net Change in Cash	4	3	20
Free Cash Flow*	$111	$92	$113

GAAP Reconciliation

	K-TRON INTERNATIONAL FISCAL YEAR ENDING						HILLENBRAND FISCAL YEAR ENDING SEPTEMBER 30
$ IN MILLIONS	2004	2005	2006	2007	2008	LTM 10/03/09	2007	2008	2009
Net Income	$7	$7	$13	$21	$26	$20	$100	$93	$102
Taxes	2	5	6	9	11	12	57	61	58
Interest	1	1	1	2	1	1	0	2	2
Depreciation & Amortization	4	4	5	6	6	6	19	19	19
EBITDA	$14	$17	$25	$38	$44	$39	$176	$175	$181

Additional Information and Where to Find it

This investor presentation may be deemed to be solicitation material in respect of the proposed acquisition of K-Tron International, Inc. (“K-Tron”) by Hillenbrand, Inc. (“Hillenbrand”). In connection with the proposed acquisition, K-Tron plans to file a proxy statement with the SEC. INVESTORS AND SECURITY HOLDERS OF K-TRON ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The final proxy statement will be mailed to shareholders of K-Tron. Investors and security holders may obtain a free copy of the proxy statement when it becomes available, and other documents filed by K-Tron with the SEC, at the SEC’s web site at http://www.sec.gov. Free copies of the proxy statement, when it becomes available, and K-Tron’s other filings with the SEC may also be obtained from K-Tron by directing a request to K-Tron International, Inc., Attention: Investor Relations, Route 55 and 553, P.O. Box 888, Pitman, N.J. 08071, or by calling 856-589-0500.

Hillenbrand, K-Tron and their respective directors, executive officers and other members of their management and employees may be deemed to be soliciting proxies from K-Tron shareholders in favor of the proposed acquisition. Information regarding Hillenbrand’s directors and executive officers is available in its 2009 Annual Report on Form 10-K filed with the SEC on November 24, 2009, and definitive proxy statement relating to its 2010 Annual Meeting of Shareholders filed with the SEC on January 5, 2010. Information regarding K-Tron’s directors and executive officers is available in its 2008 Annual Report on Form 10-K filed with the SEC on March 13, 2009, and definitive proxy statement relating to its 2009 Annual Meeting of Shareholders filed with the SEC on April 6, 2009. Additional information regarding the interests of such potential participants will be included in the proxy statement and the other relevant documents filed with the SEC when they become available.