[10-Q] Matthews International Corp Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Matthews International (MATW) Q3-FY25 10-Q highlights:
- Top-line pressure: Sales fell 18% YoY to $349.4 million and are down 13% YTD to $1.18 billion, hurt by the May 1 divestiture of the SGK Brand Solutions business and softer demand in Industrial Technologies.
- SGK divestiture: Company contributed the majority of its Brand Solutions unit to Propelis Group, recognizing a $57.1 million pre-tax gain this quarter. Consideration received: 40% equity stake in Propelis (recorded at $213 million) and $50 million preferred equity.
- Earnings swing: Operating profit jumped to $75.2 million from $6.7 million last year, but excluding the SGK gain management鈥檚 operating profit was roughly $18 million. Net income rose to $15.4 million ($0.49 diluted EPS) versus $1.8 million; YTD EPS is $0.10.
- Margins: Q3 gross margin expanded 380 bps to 34.9% on improved Memorialization mix and lower SGK contribution.
- Balance sheet moves: Debt cut 9.5% YTD to $702.5 million; cash fell to $20.4 million after $12.1 million share repurchases and $24.7 million dividends. Equity climbed 17% to $513.8 million due mainly to FX translation gains (+$98.8 million) and the SGK transaction.
- Cash flow weak: YTD operating cash outflow of $33.9 million vs. +$43.3 million prior year, driven by working-capital build and tax on SGK gain; partly offset by $228 million SGK proceeds.
- Guidance: No forward guidance provided.
Key risks: revenue concentration in Memorialization, integration of Propelis stake, high leverage (Net debt 鈮� $682 million, 4.16% avg. cost).
Matthews International (MATW) Q3-FY25 10-Q punti salienti:
- Pressione sui ricavi: Le vendite sono diminuite del 18% su base annua a 349,4 milioni di dollari e sono in calo del 13% da inizio anno a 1,18 miliardi di dollari, penalizzate dalla cessione del 1掳 maggio dell鈥檃ttivit脿 SGK Brand Solutions e dalla domanda pi霉 debole nel settore Industrial Technologies.
- Cessione SGK: L鈥檃zienda ha trasferito la maggior parte della sua unit脿 Brand Solutions al gruppo Propelis, registrando in questo trimestre un guadagno ante imposte di 57,1 milioni di dollari. Controvalore ricevuto: partecipazione del 40% in Propelis (valutata a 213 milioni di dollari) e 50 milioni di dollari in azioni privilegiate.
- Variazione degli utili: L鈥檜tile operativo 猫 salito a 75,2 milioni di dollari rispetto ai 6,7 milioni dell鈥檃nno precedente, ma escludendo il guadagno SGK, l鈥檜tile operativo gestito si attesta intorno a 18 milioni di dollari. L鈥檜tile netto 猫 cresciuto a 15,4 milioni di dollari (EPS diluito di 0,49 dollari) contro 1,8 milioni; l鈥橢PS da inizio anno 猫 0,10 dollari.
- Margini: Il margine lordo del terzo trimestre 猫 aumentato di 380 punti base al 34,9%, grazie a un miglior mix di Memorialization e a un contributo minore di SGK.
- Movimenti di bilancio: Il debito 猫 stato ridotto del 9,5% da inizio anno a 702,5 milioni di dollari; la liquidit脿 猫 scesa a 20,4 milioni dopo riacquisti di azioni per 12,1 milioni e dividendi per 24,7 milioni. Il patrimonio netto 猫 salito del 17% a 513,8 milioni, principalmente per i guadagni da traduzione valutaria (+98,8 milioni) e la transazione SGK.
- Flussi di cassa deboli: Flusso di cassa operativo da inizio anno negativo per 33,9 milioni di dollari contro un positivo di 43,3 milioni l鈥檃nno precedente, a causa dell鈥檃umento del capitale circolante e delle tasse sul guadagno SGK; parzialmente compensato dai proventi SGK per 228 milioni.
- Previsioni: Nessuna indicazione futura fornita.
Rischi principali: concentrazione dei ricavi in Memorialization, integrazione della partecipazione in Propelis, elevata leva finanziaria (debito netto 鈮� 682 milioni di dollari, costo medio 4,16%).
Aspectos destacados del 10-Q del tercer trimestre del a帽o fiscal 25 de Matthews International (MATW):
- Presi贸n en la l铆nea superior: Las ventas cayeron un 18% interanual a 349,4 millones de d贸lares y bajaron un 13% en lo que va del a帽o a 1,18 mil millones de d贸lares, afectadas por la desinversi贸n del 1 de mayo del negocio SGK Brand Solutions y una demanda m谩s d茅bil en Industrial Technologies.
- Desinversi贸n de SGK: La compa帽铆a aport贸 la mayor parte de su unidad Brand Solutions al grupo Propelis, reconociendo una ganancia antes de impuestos de 57,1 millones de d贸lares este trimestre. Consideraci贸n recibida: participaci贸n del 40% en Propelis (registrada en 213 millones de d贸lares) y 50 millones de d贸lares en acciones preferentes.
- Variaci贸n en ganancias: La utilidad operativa salt贸 a 75,2 millones de d贸lares desde 6,7 millones el a帽o pasado, pero excluyendo la ganancia de SGK, la utilidad operativa gestionada fue aproximadamente de 18 millones de d贸lares. El ingreso neto aument贸 a 15,4 millones de d贸lares (EPS diluido de 0,49 d贸lares) frente a 1,8 millones; el EPS acumulado es de 0,10 d贸lares.
- 惭谩谤驳别苍别蝉: El margen bruto del tercer trimestre se expandi贸 380 puntos b谩sicos hasta 34,9% debido a una mejor mezcla en Memorialization y menor contribuci贸n de SGK.
- Movimientos en el balance: La deuda se redujo un 9,5% en lo que va del a帽o a 702,5 millones de d贸lares; el efectivo cay贸 a 20,4 millones tras recompras de acciones por 12,1 millones y dividendos por 24,7 millones. El patrimonio subi贸 un 17% a 513,8 millones, principalmente por ganancias por traducci贸n de divisas (+98,8 millones) y la transacci贸n SGK.
- Flujo de caja d茅bil: Flujo de caja operativo acumulado negativo de 33,9 millones de d贸lares frente a +43,3 millones del a帽o anterior, impulsado por aumento del capital de trabajo y impuestos sobre la ganancia SGK; parcialmente compensado por ingresos de SGK por 228 millones.
- 骋耻铆补: No se proporcion贸 orientaci贸n futura.
Riesgos clave: concentraci贸n de ingresos en Memorialization, integraci贸n de la participaci贸n en Propelis, alta apalancamiento (deuda neta 鈮� 682 millones de d贸lares, costo promedio 4,16%).
Matthews International (MATW) 2025 須岅硠鞐半弰 3攵勱赴 10-Q 欤检殧 雮挫毄:
- 毵れ稖 鞎曤皶: 毵れ稖鞚� 鞝勲厔 雽�牍� 18% 臧愳唽頃� 3鞏� 4,940毵� 雼煬毳� 旮半頄堨溂氅�, 鞐办磮 雽�牍� 13% 臧愳唽頃� 11鞏� 8觳滊 雼煬搿� 歆戧硠霅橃棃鞀惦媹雼�. 鞚措姅 5鞗� 1鞚� SGK 敫岆灉霌� 靻旊（靺� 靷梾攵� 毵り皝瓿� 靷办梾 旮办垹 攵�氍胳潣 靾橃殧 鞎届劯鞐� 旮办澑頃╇媹雼�.
- SGK 毵り皝: 須岇偓電� 敫岆灉霌� 靻旊（靺� 攵�氍胳潣 雽�攵�攵勳潉 Propelis 攴鸽９鞐� 於滌瀽頃橂┌ 鞚措矆 攵勱赴鞐� 5,710毵� 雼煬鞚� 靹胳爠 鞚挫澋鞚� 鞚胳嫕頄堨姷雼堧嫟. 氚涭潃 雽�臧�: Propelis 歆�攵� 40% (2鞏� 1,300毵� 雼煬搿� 旮半) 氚� 5,000毵� 雼煬鞚� 鞖办劆欤�.
- 靾橃澋 氤�頇�: 鞓侅梾鞚挫澋鞚� 歆�雮滍暣 670毵� 雼煬鞐愳劀 7,520毵� 雼煬搿� 旮夓頄堨溂雮� SGK 鞚挫澋鞚� 鞝滌櫢頃橂┐ 瓴届榿歆勳潣 鞓侅梾鞚挫澋鞚� 鞎� 1,800毵� 雼煬 靾橃鞚挫棃鞀惦媹雼�. 靾滌澊鞚奠潃 1,540毵� 雼煬(頋劃 欤茧嫻靾滌澊鞚� 0.49雼煬)搿� 鞝勲厔 180毵� 雼煬鞐愳劀 歃濌皜頄堨溂氅�, 鞐办磮 鞚错泟 欤茧嫻靾滌澊鞚奠潃 0.10雼煬鞛呺媹雼�.
- 毵堨: 3攵勱赴 齑濍歆勳潃 氅旊毽柤霛检澊鞝滌澊靺� 氙轨姢 臧滌劆瓿� SGK 旮办棳 臧愳唽搿� 380bps 靸侅姽頃� 34.9%毳� 旮半頄堨姷雼堧嫟.
- 鞛 靸來儨 氤�頇�: 攵�毂勲姅 鞐办磮 雽�牍� 9.5% 臧愳唽頃� 7鞏� 2,250毵� 雼煬, 順勱笀鞚� 1,020毵� 雼煬搿� 臧愳唽頄堨溂氅�, 欤检嫕 頇橂Г鞐� 1,210毵� 雼煬, 氚半嫻旮堨溂搿� 2,470毵� 雼煬臧� 歆�於滊悩鞐堨姷雼堧嫟. 鞛愲掣鞚� 頇橃湪 氤�霃� 鞚挫澋(+9,880毵� 雼煬)瓿� SGK 瓯半灅搿� 鞚疙暣 17% 歃濌皜頃� 5鞏� 1,380毵� 雼煬毳� 旮半頄堨姷雼堧嫟.
- 順勱笀 頋愲 鞎届劯: 鞐办磮 鞚错泟 鞓侅梾頇滊彊 順勱笀 頋愲鞚� 3,390毵� 雼煬 鞙犾稖搿� 鞝勲厔霃勳潣 4,330毵� 雼煬 鞙犾瀰瓿� 雽�牍勲悩氅�, 鞖挫爠鞛愲掣 歃濌皜鞕� SGK 鞚挫澋鞐� 雽�頃� 靹戈笀鞚� 鞗愳澑鞛呺媹雼�. 雼る SGK 毵り皝 雽�旮� 2鞏� 2,800毵� 雼煬臧� 攵�攵勳爜鞙茧 靸侅噭頄堨姷雼堧嫟.
- 臧赌鞚措崢鞀�: 頄ロ泟 臧�鞚措崢鞀る姅 鞝滉车霅橃 鞎婌晿鞀惦媹雼�.
欤检殧 鞙勴棙 鞖旍澑: 氅旊毽柤霛检澊鞝滌澊靺� 毵れ稖 歆戩, Propelis 歆�攵� 韱淀暕, 雴掛潃 霠堧矂毽(靾滊秬毂� 鞎� 6鞏� 8,200毵� 雼煬, 韽夑窢 牍勳毄 4.16%).
Points cl茅s du 10-Q du T3 de l鈥檈xercice 25 de Matthews International (MATW) :
- Pression sur le chiffre d鈥檃ffaires : Les ventes ont chut茅 de 18 % en glissement annuel 脿 349,4 millions de dollars et sont en recul de 13 % depuis le d茅but de l鈥檃nn茅e 脿 1,18 milliard de dollars, impact茅es par la cession au 1er mai de l鈥檃ctivit茅 SGK Brand Solutions et une demande plus faible dans les Technologies Industrielles.
- Cession de SGK : La soci茅t茅 a apport茅 la majeure partie de son unit茅 Brand Solutions au groupe Propelis, enregistrant ce trimestre un gain avant imp么t de 57,1 millions de dollars. Contrepartie re莽ue : une participation de 40 % dans Propelis (comptabilis茅e 脿 213 millions de dollars) et 50 millions de dollars en actions privil茅gi茅es.
- Variation des r茅sultats : Le r茅sultat op茅rationnel a bondi 脿 75,2 millions de dollars contre 6,7 millions l鈥檃n dernier, mais hors gain SGK, le r茅sultat op茅rationnel ajust茅 de la direction 茅tait d鈥檈nviron 18 millions de dollars. Le r茅sultat net est pass茅 脿 15,4 millions de dollars (BPA dilu茅 de 0,49 $) contre 1,8 million ; le BPA cumul茅 est de 0,10 $.
- Marges : La marge brute du T3 s鈥檈st 茅largie de 380 points de base 脿 34,9 %, gr芒ce 脿 une meilleure r茅partition dans la Memorialization et une contribution moindre de SGK.
- Mouvements au bilan : La dette a 茅t茅 r茅duite de 9,5 % depuis le d茅but de l鈥檃nn茅e 脿 702,5 millions de dollars ; la tr茅sorerie est tomb茅e 脿 20,4 millions apr猫s des rachats d鈥檃ctions de 12,1 millions et des dividendes de 24,7 millions. Les capitaux propres ont augment茅 de 17 % 脿 513,8 millions, principalement gr芒ce aux gains de change (+98,8 millions) et 脿 la transaction SGK.
- Flux de tr茅sorerie faibles : Flux de tr茅sorerie op茅rationnel cumul茅 n茅gatif de 33,9 millions contre +43,3 millions l鈥檃n dernier, d没 脿 l鈥檃ugmentation du fonds de roulement et aux imp么ts sur le gain SGK ; partiellement compens茅 par les produits SGK de 228 millions.
- Pr茅visions : Aucune guidance fournie.
Risques cl茅s : concentration des revenus dans la Memorialization, int茅gration de la participation dans Propelis, levier 茅lev茅 (dette nette 鈮� 682 millions de dollars, co没t moyen de 4,16 %).
Matthews International (MATW) Q3-FY25 10-Q Highlights:
- Umsatzdruck: Die Ums盲tze sanken im Jahresvergleich um 18 % auf 349,4 Millionen US-Dollar und liegen im bisherigen Jahresverlauf 13 % niedriger bei 1,18 Milliarden US-Dollar, belastet durch die Ver盲u脽erung des SGK Brand Solutions-Gesch盲fts zum 1. Mai und eine schw盲chere Nachfrage im Bereich Industrial Technologies.
- 厂骋碍-痴别谤盲耻脽别谤耻苍驳: Das Unternehmen trug den Gro脽teil seiner Brand Solutions-Einheit in die Propelis-Gruppe ein und verbuchte in diesem Quartal einen Vorsteuergewinn von 57,1 Millionen US-Dollar. Erhaltene Gegenleistung: 40 % Beteiligung an Propelis (mit 213 Millionen US-Dollar bewertet) sowie 50 Millionen US-Dollar Vorzugsaktien.
- Gewinnentwicklung: Der operative Gewinn stieg auf 75,2 Millionen US-Dollar von 6,7 Millionen im Vorjahr, wobei ohne den SGK-Gewinn der operative Gewinn des Managements etwa 18 Millionen US-Dollar betrug. Der Nettogewinn stieg auf 15,4 Millionen US-Dollar (verw盲ssertes EPS von 0,49 US-Dollar) gegen眉ber 1,8 Millionen; das EPS im bisherigen Jahresverlauf betr盲gt 0,10 US-Dollar.
- Margen: Die Bruttomarge im dritten Quartal stieg um 380 Basispunkte auf 34,9 %, bedingt durch eine verbesserte Memorialization-Mischung und einen geringeren SGK-Beitrag.
- Bilanzbewegungen: Die Verschuldung wurde im bisherigen Jahresverlauf um 9,5 % auf 702,5 Millionen US-Dollar reduziert; die liquiden Mittel sanken auf 20,4 Millionen US-Dollar nach Aktienr眉ckk盲ufen in H枚he von 12,1 Millionen und Dividenden von 24,7 Millionen. Das Eigenkapital stieg um 17 % auf 513,8 Millionen US-Dollar, haupts盲chlich aufgrund von Wechselkursgewinnen (+98,8 Millionen US-Dollar) und der SGK-Transaktion.
- Schwacher Cashflow: Der operative Cashflow im bisherigen Jahresverlauf war mit 33,9 Millionen US-Dollar im Abfluss negativ gegen眉ber +43,3 Millionen im Vorjahr, verursacht durch den Aufbau des Working Capital und Steuern auf den SGK-Gewinn; teilweise ausgeglichen durch SGK-Erl枚se in H枚he von 228 Millionen US-Dollar.
- Ausblick: Keine Prognose f眉r die Zukunft abgegeben.
Wesentliche Risiken: Umsatzkonzentration im Bereich Memorialization, Integration der Propelis-Beteiligung, hohe Verschuldung (Nettoverbindlichkeiten 鈮� 682 Millionen US-Dollar, durchschnittliche Kosten 4,16 %).
Positive
- $57.1 million gain from SGK sale lifted quarterly operating profit and strengthened equity.
- Debt reduced by $73.9 million YTD, lowering leverage and interest burden.
- Gross margin +380 bps YoY to 34.9%, reflecting favorable mix and divestiture impact.
Negative
- Revenue down 18% YoY and 13% YTD, indicating core demand weakness post-divestiture.
- Operating cash flow 鈥�$33.9 million YTD, reversing prior-year inflow.
- Net income only $3 million YTD; without SGK gain, profitability remains low.
- Goodwill impairment risk after $181 million decrease from divestiture could spotlight remaining units.
Insights
TL;DR: Sale of SGK boosts optics, but core revenue softness and negative cash flow temper enthusiasm.
The $57 million gain masks an 18% revenue decline and weak underlying earnings. Ex-gain EPS would be near breakeven. Memorialization remains stable, yet Industrial Technologies slipped 4% and Brand Solutions is now minority-owned, removing a growth lever. Net debt/EBITDA likely stays >3脳 despite 9% debt cut. Equity stake in Propelis offers upside, but it is illiquid and carries execution risk. Overall impact: neutral.
TL;DR: Leverage trending lower, liquidity adequate, but cash burn raises caution.
Debt reduced to $702 million and swaps limit rate risk; revolver covenant headroom intact. However, negative $34 million operating cash and $12 million buybacks signal ongoing free-cash challenges. SGK proceeds largely redeployed to investments, not deleveraging. Interest coverage (~3.0脳) acceptable but sensitive to EBITDA normalization. Outlook: slightly credit-positive yet watch working capital.
Matthews International (MATW) Q3-FY25 10-Q punti salienti:
- Pressione sui ricavi: Le vendite sono diminuite del 18% su base annua a 349,4 milioni di dollari e sono in calo del 13% da inizio anno a 1,18 miliardi di dollari, penalizzate dalla cessione del 1掳 maggio dell鈥檃ttivit脿 SGK Brand Solutions e dalla domanda pi霉 debole nel settore Industrial Technologies.
- Cessione SGK: L鈥檃zienda ha trasferito la maggior parte della sua unit脿 Brand Solutions al gruppo Propelis, registrando in questo trimestre un guadagno ante imposte di 57,1 milioni di dollari. Controvalore ricevuto: partecipazione del 40% in Propelis (valutata a 213 milioni di dollari) e 50 milioni di dollari in azioni privilegiate.
- Variazione degli utili: L鈥檜tile operativo 猫 salito a 75,2 milioni di dollari rispetto ai 6,7 milioni dell鈥檃nno precedente, ma escludendo il guadagno SGK, l鈥檜tile operativo gestito si attesta intorno a 18 milioni di dollari. L鈥檜tile netto 猫 cresciuto a 15,4 milioni di dollari (EPS diluito di 0,49 dollari) contro 1,8 milioni; l鈥橢PS da inizio anno 猫 0,10 dollari.
- Margini: Il margine lordo del terzo trimestre 猫 aumentato di 380 punti base al 34,9%, grazie a un miglior mix di Memorialization e a un contributo minore di SGK.
- Movimenti di bilancio: Il debito 猫 stato ridotto del 9,5% da inizio anno a 702,5 milioni di dollari; la liquidit脿 猫 scesa a 20,4 milioni dopo riacquisti di azioni per 12,1 milioni e dividendi per 24,7 milioni. Il patrimonio netto 猫 salito del 17% a 513,8 milioni, principalmente per i guadagni da traduzione valutaria (+98,8 milioni) e la transazione SGK.
- Flussi di cassa deboli: Flusso di cassa operativo da inizio anno negativo per 33,9 milioni di dollari contro un positivo di 43,3 milioni l鈥檃nno precedente, a causa dell鈥檃umento del capitale circolante e delle tasse sul guadagno SGK; parzialmente compensato dai proventi SGK per 228 milioni.
- Previsioni: Nessuna indicazione futura fornita.
Rischi principali: concentrazione dei ricavi in Memorialization, integrazione della partecipazione in Propelis, elevata leva finanziaria (debito netto 鈮� 682 milioni di dollari, costo medio 4,16%).
Aspectos destacados del 10-Q del tercer trimestre del a帽o fiscal 25 de Matthews International (MATW):
- Presi贸n en la l铆nea superior: Las ventas cayeron un 18% interanual a 349,4 millones de d贸lares y bajaron un 13% en lo que va del a帽o a 1,18 mil millones de d贸lares, afectadas por la desinversi贸n del 1 de mayo del negocio SGK Brand Solutions y una demanda m谩s d茅bil en Industrial Technologies.
- Desinversi贸n de SGK: La compa帽铆a aport贸 la mayor parte de su unidad Brand Solutions al grupo Propelis, reconociendo una ganancia antes de impuestos de 57,1 millones de d贸lares este trimestre. Consideraci贸n recibida: participaci贸n del 40% en Propelis (registrada en 213 millones de d贸lares) y 50 millones de d贸lares en acciones preferentes.
- Variaci贸n en ganancias: La utilidad operativa salt贸 a 75,2 millones de d贸lares desde 6,7 millones el a帽o pasado, pero excluyendo la ganancia de SGK, la utilidad operativa gestionada fue aproximadamente de 18 millones de d贸lares. El ingreso neto aument贸 a 15,4 millones de d贸lares (EPS diluido de 0,49 d贸lares) frente a 1,8 millones; el EPS acumulado es de 0,10 d贸lares.
- 惭谩谤驳别苍别蝉: El margen bruto del tercer trimestre se expandi贸 380 puntos b谩sicos hasta 34,9% debido a una mejor mezcla en Memorialization y menor contribuci贸n de SGK.
- Movimientos en el balance: La deuda se redujo un 9,5% en lo que va del a帽o a 702,5 millones de d贸lares; el efectivo cay贸 a 20,4 millones tras recompras de acciones por 12,1 millones y dividendos por 24,7 millones. El patrimonio subi贸 un 17% a 513,8 millones, principalmente por ganancias por traducci贸n de divisas (+98,8 millones) y la transacci贸n SGK.
- Flujo de caja d茅bil: Flujo de caja operativo acumulado negativo de 33,9 millones de d贸lares frente a +43,3 millones del a帽o anterior, impulsado por aumento del capital de trabajo y impuestos sobre la ganancia SGK; parcialmente compensado por ingresos de SGK por 228 millones.
- 骋耻铆补: No se proporcion贸 orientaci贸n futura.
Riesgos clave: concentraci贸n de ingresos en Memorialization, integraci贸n de la participaci贸n en Propelis, alta apalancamiento (deuda neta 鈮� 682 millones de d贸lares, costo promedio 4,16%).
Matthews International (MATW) 2025 須岅硠鞐半弰 3攵勱赴 10-Q 欤检殧 雮挫毄:
- 毵れ稖 鞎曤皶: 毵れ稖鞚� 鞝勲厔 雽�牍� 18% 臧愳唽頃� 3鞏� 4,940毵� 雼煬毳� 旮半頄堨溂氅�, 鞐办磮 雽�牍� 13% 臧愳唽頃� 11鞏� 8觳滊 雼煬搿� 歆戧硠霅橃棃鞀惦媹雼�. 鞚措姅 5鞗� 1鞚� SGK 敫岆灉霌� 靻旊（靺� 靷梾攵� 毵り皝瓿� 靷办梾 旮办垹 攵�氍胳潣 靾橃殧 鞎届劯鞐� 旮办澑頃╇媹雼�.
- SGK 毵り皝: 須岇偓電� 敫岆灉霌� 靻旊（靺� 攵�氍胳潣 雽�攵�攵勳潉 Propelis 攴鸽９鞐� 於滌瀽頃橂┌ 鞚措矆 攵勱赴鞐� 5,710毵� 雼煬鞚� 靹胳爠 鞚挫澋鞚� 鞚胳嫕頄堨姷雼堧嫟. 氚涭潃 雽�臧�: Propelis 歆�攵� 40% (2鞏� 1,300毵� 雼煬搿� 旮半) 氚� 5,000毵� 雼煬鞚� 鞖办劆欤�.
- 靾橃澋 氤�頇�: 鞓侅梾鞚挫澋鞚� 歆�雮滍暣 670毵� 雼煬鞐愳劀 7,520毵� 雼煬搿� 旮夓頄堨溂雮� SGK 鞚挫澋鞚� 鞝滌櫢頃橂┐ 瓴届榿歆勳潣 鞓侅梾鞚挫澋鞚� 鞎� 1,800毵� 雼煬 靾橃鞚挫棃鞀惦媹雼�. 靾滌澊鞚奠潃 1,540毵� 雼煬(頋劃 欤茧嫻靾滌澊鞚� 0.49雼煬)搿� 鞝勲厔 180毵� 雼煬鞐愳劀 歃濌皜頄堨溂氅�, 鞐办磮 鞚错泟 欤茧嫻靾滌澊鞚奠潃 0.10雼煬鞛呺媹雼�.
- 毵堨: 3攵勱赴 齑濍歆勳潃 氅旊毽柤霛检澊鞝滌澊靺� 氙轨姢 臧滌劆瓿� SGK 旮办棳 臧愳唽搿� 380bps 靸侅姽頃� 34.9%毳� 旮半頄堨姷雼堧嫟.
- 鞛 靸來儨 氤�頇�: 攵�毂勲姅 鞐办磮 雽�牍� 9.5% 臧愳唽頃� 7鞏� 2,250毵� 雼煬, 順勱笀鞚� 1,020毵� 雼煬搿� 臧愳唽頄堨溂氅�, 欤检嫕 頇橂Г鞐� 1,210毵� 雼煬, 氚半嫻旮堨溂搿� 2,470毵� 雼煬臧� 歆�於滊悩鞐堨姷雼堧嫟. 鞛愲掣鞚� 頇橃湪 氤�霃� 鞚挫澋(+9,880毵� 雼煬)瓿� SGK 瓯半灅搿� 鞚疙暣 17% 歃濌皜頃� 5鞏� 1,380毵� 雼煬毳� 旮半頄堨姷雼堧嫟.
- 順勱笀 頋愲 鞎届劯: 鞐办磮 鞚错泟 鞓侅梾頇滊彊 順勱笀 頋愲鞚� 3,390毵� 雼煬 鞙犾稖搿� 鞝勲厔霃勳潣 4,330毵� 雼煬 鞙犾瀰瓿� 雽�牍勲悩氅�, 鞖挫爠鞛愲掣 歃濌皜鞕� SGK 鞚挫澋鞐� 雽�頃� 靹戈笀鞚� 鞗愳澑鞛呺媹雼�. 雼る SGK 毵り皝 雽�旮� 2鞏� 2,800毵� 雼煬臧� 攵�攵勳爜鞙茧 靸侅噭頄堨姷雼堧嫟.
- 臧赌鞚措崢鞀�: 頄ロ泟 臧�鞚措崢鞀る姅 鞝滉车霅橃 鞎婌晿鞀惦媹雼�.
欤检殧 鞙勴棙 鞖旍澑: 氅旊毽柤霛检澊鞝滌澊靺� 毵れ稖 歆戩, Propelis 歆�攵� 韱淀暕, 雴掛潃 霠堧矂毽(靾滊秬毂� 鞎� 6鞏� 8,200毵� 雼煬, 韽夑窢 牍勳毄 4.16%).
Points cl茅s du 10-Q du T3 de l鈥檈xercice 25 de Matthews International (MATW) :
- Pression sur le chiffre d鈥檃ffaires : Les ventes ont chut茅 de 18 % en glissement annuel 脿 349,4 millions de dollars et sont en recul de 13 % depuis le d茅but de l鈥檃nn茅e 脿 1,18 milliard de dollars, impact茅es par la cession au 1er mai de l鈥檃ctivit茅 SGK Brand Solutions et une demande plus faible dans les Technologies Industrielles.
- Cession de SGK : La soci茅t茅 a apport茅 la majeure partie de son unit茅 Brand Solutions au groupe Propelis, enregistrant ce trimestre un gain avant imp么t de 57,1 millions de dollars. Contrepartie re莽ue : une participation de 40 % dans Propelis (comptabilis茅e 脿 213 millions de dollars) et 50 millions de dollars en actions privil茅gi茅es.
- Variation des r茅sultats : Le r茅sultat op茅rationnel a bondi 脿 75,2 millions de dollars contre 6,7 millions l鈥檃n dernier, mais hors gain SGK, le r茅sultat op茅rationnel ajust茅 de la direction 茅tait d鈥檈nviron 18 millions de dollars. Le r茅sultat net est pass茅 脿 15,4 millions de dollars (BPA dilu茅 de 0,49 $) contre 1,8 million ; le BPA cumul茅 est de 0,10 $.
- Marges : La marge brute du T3 s鈥檈st 茅largie de 380 points de base 脿 34,9 %, gr芒ce 脿 une meilleure r茅partition dans la Memorialization et une contribution moindre de SGK.
- Mouvements au bilan : La dette a 茅t茅 r茅duite de 9,5 % depuis le d茅but de l鈥檃nn茅e 脿 702,5 millions de dollars ; la tr茅sorerie est tomb茅e 脿 20,4 millions apr猫s des rachats d鈥檃ctions de 12,1 millions et des dividendes de 24,7 millions. Les capitaux propres ont augment茅 de 17 % 脿 513,8 millions, principalement gr芒ce aux gains de change (+98,8 millions) et 脿 la transaction SGK.
- Flux de tr茅sorerie faibles : Flux de tr茅sorerie op茅rationnel cumul茅 n茅gatif de 33,9 millions contre +43,3 millions l鈥檃n dernier, d没 脿 l鈥檃ugmentation du fonds de roulement et aux imp么ts sur le gain SGK ; partiellement compens茅 par les produits SGK de 228 millions.
- Pr茅visions : Aucune guidance fournie.
Risques cl茅s : concentration des revenus dans la Memorialization, int茅gration de la participation dans Propelis, levier 茅lev茅 (dette nette 鈮� 682 millions de dollars, co没t moyen de 4,16 %).
Matthews International (MATW) Q3-FY25 10-Q Highlights:
- Umsatzdruck: Die Ums盲tze sanken im Jahresvergleich um 18 % auf 349,4 Millionen US-Dollar und liegen im bisherigen Jahresverlauf 13 % niedriger bei 1,18 Milliarden US-Dollar, belastet durch die Ver盲u脽erung des SGK Brand Solutions-Gesch盲fts zum 1. Mai und eine schw盲chere Nachfrage im Bereich Industrial Technologies.
- 厂骋碍-痴别谤盲耻脽别谤耻苍驳: Das Unternehmen trug den Gro脽teil seiner Brand Solutions-Einheit in die Propelis-Gruppe ein und verbuchte in diesem Quartal einen Vorsteuergewinn von 57,1 Millionen US-Dollar. Erhaltene Gegenleistung: 40 % Beteiligung an Propelis (mit 213 Millionen US-Dollar bewertet) sowie 50 Millionen US-Dollar Vorzugsaktien.
- Gewinnentwicklung: Der operative Gewinn stieg auf 75,2 Millionen US-Dollar von 6,7 Millionen im Vorjahr, wobei ohne den SGK-Gewinn der operative Gewinn des Managements etwa 18 Millionen US-Dollar betrug. Der Nettogewinn stieg auf 15,4 Millionen US-Dollar (verw盲ssertes EPS von 0,49 US-Dollar) gegen眉ber 1,8 Millionen; das EPS im bisherigen Jahresverlauf betr盲gt 0,10 US-Dollar.
- Margen: Die Bruttomarge im dritten Quartal stieg um 380 Basispunkte auf 34,9 %, bedingt durch eine verbesserte Memorialization-Mischung und einen geringeren SGK-Beitrag.
- Bilanzbewegungen: Die Verschuldung wurde im bisherigen Jahresverlauf um 9,5 % auf 702,5 Millionen US-Dollar reduziert; die liquiden Mittel sanken auf 20,4 Millionen US-Dollar nach Aktienr眉ckk盲ufen in H枚he von 12,1 Millionen und Dividenden von 24,7 Millionen. Das Eigenkapital stieg um 17 % auf 513,8 Millionen US-Dollar, haupts盲chlich aufgrund von Wechselkursgewinnen (+98,8 Millionen US-Dollar) und der SGK-Transaktion.
- Schwacher Cashflow: Der operative Cashflow im bisherigen Jahresverlauf war mit 33,9 Millionen US-Dollar im Abfluss negativ gegen眉ber +43,3 Millionen im Vorjahr, verursacht durch den Aufbau des Working Capital und Steuern auf den SGK-Gewinn; teilweise ausgeglichen durch SGK-Erl枚se in H枚he von 228 Millionen US-Dollar.
- Ausblick: Keine Prognose f眉r die Zukunft abgegeben.
Wesentliche Risiken: Umsatzkonzentration im Bereich Memorialization, Integration der Propelis-Beteiligung, hohe Verschuldung (Nettoverbindlichkeiten 鈮� 682 Millionen US-Dollar, durchschnittliche Kosten 4,16 %).
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
____________________________________________________________
FORM 10-Q
For the Quarterly Period Ended June 30, 2025
or
For the Transition Period from _____ to _____
Commission File No. 0-09115
____________________________________________________________
(Exact name of registrant as specified in its charter)
____________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(412 ) 442-8200
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
ý | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ý
As of June 30, 2025, shares of common stock outstanding were: Class A Common Stock 30,790,906 shares.
PART I ‑ FINANCIAL INFORMATION
Item 1. Financial Statements
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands)
| June 30, 2025 | September 30, 2024 | ||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||||||||
| Accounts receivable, net | |||||||||||||||||||||||
| Inventories, net | |||||||||||||||||||||||
| Contract assets | |||||||||||||||||||||||
| Other current assets | |||||||||||||||||||||||
| Total current assets | |||||||||||||||||||||||
| Investments | |||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||||||||
| Deferred income taxes | |||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||
| Other intangible assets, net | |||||||||||||||||||||||
| Other non-current assets | |||||||||||||||||||||||
| Total assets | $ | $ | |||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||
| Long-term debt, current maturities | $ | $ | |||||||||||||||||||||
| Current portion of operating lease liabilities | |||||||||||||||||||||||
| Trade accounts payable | |||||||||||||||||||||||
| Accrued rebates | |||||||||||||||||||||||
| Accrued compensation | |||||||||||||||||||||||
| Accrued income taxes | |||||||||||||||||||||||
| Contract liabilities | |||||||||||||||||||||||
| Other current liabilities | |||||||||||||||||||||||
| Total current liabilities | |||||||||||||||||||||||
| Long-term debt | |||||||||||||||||||||||
| Operating lease liabilities | |||||||||||||||||||||||
| Deferred income taxes | |||||||||||||||||||||||
| Other non-current liabilities | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| SHAREHOLDERS' EQUITY | |||||||||||||||||||||||
| Shareholders' equity-Matthews: | |||||||||||||||||||||||
| Common stock | $ | $ | |||||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||
| Retained earnings | |||||||||||||||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||
| Treasury stock, at cost | ( | ( | |||||||||||||||||||||
| Total shareholders' equity-Matthews | |||||||||||||||||||||||
| Noncontrolling interests | |||||||||||||||||||||||
| Total shareholders' equity | |||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts in thousands, except per share data)
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | ( | ( | ( | ( | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling expense | ( | ( | ( | ( | |||||||||||||||||||
| Administrative expense | ( | ( | ( | ( | |||||||||||||||||||
| Intangible amortization | ( | ( | ( | ( | |||||||||||||||||||
| Gain on sale of SGK Business | |||||||||||||||||||||||
| Operating profit | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income (deductions), net | ( | ( | ( | ||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | |||||||||||||||||||||
| Income tax (provision) benefit | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net loss attributable to noncontrolling interests | |||||||||||||||||||||||
| Net income attributable to Matthews shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share attributable to Matthews shareholders: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(Dollar amounts in thousands)
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| Matthews | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income: | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) ("OCI"), net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||
| Pension plans and other postretirement benefits | ( | ( | |||||||||||||||||||||||||||||||||
| Unrecognized (loss) gain on cash flow hedges: | |||||||||||||||||||||||||||||||||||
| Net change from periodic revaluation | ( | ( | |||||||||||||||||||||||||||||||||
| Net amount reclassified to earnings | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net change in unrecognized loss on cash flow hedges | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| OCI, net of tax | ( | ( | |||||||||||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| Matthews | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income: | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| OCI, net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | |||||||||||||||||||||||||||||||||||
| Pension plans and other postretirement benefits | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Unrecognized (loss) gain on cash flow hedges: | |||||||||||||||||||||||||||||||||||
| Net change from periodic revaluation | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net amount reclassified to earnings | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net change in unrecognized (loss) gain on cash flow hedges | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| OCI, net of tax | |||||||||||||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
for the three and nine months ended June 30, 2025 and 2024 (Unaudited)
(Dollar amounts in thousands, except per share data)
| Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Non- controlling Interests | Total | |||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net loss | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total comprehensive loss | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net loss | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Total comprehensive loss | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Divestiture | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
5
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued
for the three and nine months ended June 30, 2025 and 2024 (Unaudited)
(Dollar amounts in thousands, except per share data)
| Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Non- controlling Interests | Total | |||||||||||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Net loss | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Transactions with non-controlling interest | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Minimum pension liability | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Translation adjustment | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Fair value of cash flow hedges | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
| Nine Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Deferred tax expense (benefit) | ( | ||||||||||
| Gain on sale of assets, net | ( | ( | |||||||||
| Gain on sale of SGK Business | ( | ||||||||||
| Loss on other divestitures | |||||||||||
| Changes in working capital items | ( | ( | |||||||||
| Decrease in other non-current assets | |||||||||||
| Decrease in other non-current liabilities | ( | ( | |||||||||
| Other operating activities, net | ( | ||||||||||
| Net cash (used in) provided by operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Acquisitions, net of cash acquired | ( | ( | |||||||||
| Proceeds from sale of assets | |||||||||||
| Proceeds from sale of SGK Business | |||||||||||
| Proceeds from other divestitures | |||||||||||
| Investments and advances | ( | ( | |||||||||
| Other investing activities, net | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from long-term debt | |||||||||||
| Payments on long-term debt | ( | ( | |||||||||
| Purchases of treasury stock | ( | ( | |||||||||
| Dividends | ( | ( | |||||||||
| Proceeds from net investment hedges | |||||||||||
| Payments on net investment hedges | ( | ||||||||||
| Acquisition holdback and deferred purchase price payments | ( | ||||||||||
| Payments of debt issuance costs | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash | ( | ||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of year | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 2025
(Dollar amounts in thousands, except per share data)
Note 1. Nature of Operations
Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of memorialization products, industrial technologies and brand solutions. The Company manages its businesses under three segments: Memorialization, Industrial Technologies and Brand Solutions. Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. Industrial Technologies includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. Brand Solutions consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment (the "SGK Business") to a newly-formed entity, Propelis Group (“Propelis”), in exchange for a 40 % ownership interest in Propelis and other consideration. Propelis is expected to be a leading global provider of brand solutions. Following the completion of this transaction, the Company's Brand Solutions segment consists of its printing plates and cylinders business, and its 40 % ownership interest in Propelis. See Notes 6, "Investments" and 15, "Acquisitions and Divestitures" for further information with respect to the Company's sale of its interest in the SGK Business.
As of June 30, 2025, the Company had facilities in North America, Europe, Asia, Australia, and Central America.
Note 2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information for commercial and industrial companies and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control and any variable interest entities for which the Company is the primary beneficiary. Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. All intercompany accounts and transactions have been eliminated. Activity prior to May 1, 2025 for the SGK Business is included within the consolidated financial statements of the Company. As of May 1, 2025 the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis. See Note 6, "Investments" for further information with respect to the equity-method investment in Propelis.
The Company applies highly inflationary accounting for subsidiaries when the cumulative inflation rate for a three-year period meets or exceeds 100 percent. Effective April 1, 2022, the Company has applied highly inflationary accounting to its Turkish subsidiaries. Under highly inflationary accounting, the financial statements of these subsidiaries are remeasured into the Company's reporting currency (U.S. dollar) and exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than accumulated other comprehensive loss on the Consolidated Balance Sheets, until such time as the applicable economy is no longer considered highly inflationary. As of June 30, 2025 and September 30, 2024, the Company had net monetary assets related to its Turkish subsidiaries of $7,306 and $5,327 , respectively. Exchange losses related to highly inflationary accounting totaled $325 and $1,036 for the three and nine months ended June 30, 2025, respectively, and $185 and $895 for the three and nine months ended and June 30, 2024, respectively. Such amounts were included in the Consolidated Statements of Income within other income (deductions), net.
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 2. Basis of Presentation (continued)
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements:
Issued
In November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which improves financial reporting by requiring disclosure of specified information about certain costs and expenses on an annual and interim basis for all public entities, including enhanced disaggregation disclosures. The ASU is effective for annual periods for the Company beginning in fiscal year 2028, and interim periods beginning in fiscal year 2029. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) which enhances the transparency and decision usefulness of income tax disclosures including rate reconciliations and income taxes paid among other tax disclosures. The ASU is effective for annual periods for the Company beginning in fiscal year 2026. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities, including enhanced disclosures about significant segment expenses. The amendments in this ASU do not affect the recognition, measurement, or financial statement presentation of expenses, but will require increased disclosures in annual and interim financial statements. The ASU is effective for annual periods for the Company beginning in fiscal year 2025, and interim periods beginning in fiscal year 2026. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements, but will require modified disclosures effective for annual periods beginning in fiscal year 2025.
In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements. The amendments in this update affect the presentation and disclosure of a variety of topics in the Accounting Standards Codification, and align them with the Securities and Exchange Commission ("SEC") regulations. The effective date of the amendments of this ASU will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure from Regulation S-X or Regulation S-K. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, then this ASU will not become effective. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 3. Revenue Recognition
The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
| Memorialization | Industrial Technologies | Brand Solutions | Consolidated | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| North America | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Central and South America (1) | ||||||||||||||||||||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||
| Asia | ||||||||||||||||||||||||||||||||||||||
| Total Sales | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Memorialization | Industrial Technologies | Brand Solutions | Consolidated | |||||||||||||||||||||||||||||||||||
| Nine Months Ended June 30, | Nine Months Ended June 30, | Nine Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| North America | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Central and South America (1) | ||||||||||||||||||||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||
| Asia | ||||||||||||||||||||||||||||||||||||||
| Total Sales | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
(1) Following the contribution of the SGK Business to Propelis in the third quarter of fiscal 2025, the Company no longer had operations in South America.
Revenue recognized using the over time method accounted for approximately 14 % and 13 % of revenue for the three months ended June 30, 2025 and 2024, respectively and 13 % and 17 % of revenue for the nine months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and September 30, 2024, the Company had net contract assets for projects recognized using the over time method totaling $70,159 and $64,246 , respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings. Net contract assets at June 30, 2025 and September 30, 2024 predominantly related to ongoing projects with the Company's largest energy storage customer.
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 4. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level fair value hierarchy is used to prioritize the inputs used in valuations, as defined below:
| Level 1: | Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. | |||||||
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | |||||||
| Level 3: | Unobservable inputs for the asset or liability. | |||||||
The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:
| June 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivatives (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Equity and fixed income mutual funds | |||||||||||||||||||||||||||||||||||||||||||||||
| Life insurance policies | |||||||||||||||||||||||||||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Derivatives (1) (2) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1) Interest rate swaps and cross currency swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.
(2) Derivative amounts at June 30, 2025 and September 30, 2024 reflect $40,186 and $58,432 of partial advance payments received from the counterparties to certain cross-currency swaps, respectively. See Note 8, "Derivatives and Hedging Activities" for further details.
The carrying values for other financial assets and liabilities approximated fair value at June 30, 2025 and September 30, 2024.
Note 5. Inventories
Inventories consisted of the following:
| June 30, 2025 | September 30, 2024 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| $ | $ | ||||||||||
Note 6. Investments
Non-current investments consisted of the following:
| June 30, 2025 | September 30, 2024 | ||||||||||
| Equity and fixed income mutual funds | $ | $ | |||||||||
| Life insurance policies | |||||||||||
| Equity-method investments | |||||||||||
| Preferred equity investment | |||||||||||
| Other (primarily cost-method) investments | |||||||||||
| $ | $ | ||||||||||
11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 6. Investments (continued)
On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for consideration which included 40 % of the common equity of Propelis and a $50,000 preferred equity investment in Propelis. The Company initially recognized these investments at fair value, which totaled $263,000 ($213,000 equity-method and $50,000 preferred equity investment). The Company will subsequently adjust the carrying amount of its equity-method investment for its share of earnings and losses reported by the investee, distributions received, and other-than-temporary impairments. The Company recognizes its portion of the earnings or losses for its equity-method investment in Propelis on a three-month lag to ensure consistency and timely filing of the Company’s financial statements. As a result, the Company has not recorded earnings or losses for its investment in Propelis during the quarter ended June 30, 2025.
During the first quarter of fiscal 2025, the Company completed the disposal of its investment in Liquid X Printed Metals Inc. (“Liquid X”), a private company specializing in ink technologies. The Company's investment in Liquid X was previously written-down in fiscal 2024, and had a net carrying value of zero at the time of the disposal transaction. The President and CEO of Liquid X is a former executive officer of the Company and a former member of Matthews' Board of Directors.
Note 7. Debt and Financing Arrangements
Long-term debt at June 30, 2025 and September 30, 2024 consisted of the following:
| June 30, 2025 | September 30, 2024 | ||||||||||
| Revolving credit facilities | $ | $ | |||||||||
| 2027 Senior Secured Notes | |||||||||||
| Other borrowings | |||||||||||
| Finance lease obligations | |||||||||||
| Total debt | |||||||||||
| Less current maturities | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 2024. The amended and restated loan agreement includes a $750,000 senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility. The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. A portion of the revolving credit facility (not to exceed $350,000 ) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 1.00 % to 2.00 % (1.50 % at June 30, 2025) based on the Company's leverage ratio. The leverage ratio is defined as total indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15 % to 0.30 % (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the amended and restated agreement. Unamortized costs were $4,218 and $4,961 at June 30, 2025 and September 30, 2024, respectively.
The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $75,000 ) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at June 30, 2025 and September 30, 2024 were $380,420 and $410,527 , respectively. There were no outstanding Euro denominated borrowings on the revolving credit facility at June 30, 2025. Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 were €30.0 million ($33,485 ). The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2025 and 2024 was 4.16 % and 4.61 %, respectively.
12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 7. Debt and Financing Arrangements (continued)
The Company has $300,000 aggregate principal amount of 8.625 % senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes"). The 2027 Senior Secured Notes bear interest at a rate of 8.625 % per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year. The Company's obligations under the 2027 Senior Secured Notes are secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2027 Senior Secured Notes. The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes. Unamortized costs related to the Company’s notes were $4,371 and $5,249 at June 30, 2025 and September 30, 2024, respectively.
The Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC has a receivables purchase agreement (“RPA”) to sell up to $110,000 of receivables as of June 30, 2025 to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables. The RPA will reduce to $75,000 as of August 1, 2025, and matures in April 2027.
The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of June 30, 2025 and September 30, 2024, the amount sold to the Purchasers was $85,600 and $96,300 , respectively, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $79,495 and $58,183 as of June 30, 2025 and September 30, 2024, respectively.
The following table sets forth a summary of receivables sold as part of the RPA:
| Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |||||||||||||
Gross receivables sold | $ | $ | ||||||||||||
Cash collections reinvested | ( | ( | ||||||||||||
| Net cash (reinvested) received | $ | ( | $ | |||||||||||
The Company, through its U.K. subsidiary, previously participated in a non-recourse factoring arrangement. In connection with this arrangement, the Company periodically sold trade receivables to a third-party purchaser in exchange for cash. These transfers of financial assets were recorded at the time the Company surrendered control of the assets. As these transfers qualified as true sales under the applicable accounting guidance, the receivables were de-recognized from the Company's Consolidated Balance Sheets upon transfer. As a result of the sale of the Company's interest in the SGK Business, this arrangement no longer exists for the Company at June 30, 2025. The principal amount of receivables sold under this arrangement was $45,813 and $53,087 during the nine months ended June 30, 2025 and 2024, respectively. The discounts on the trade receivables sold are included within administrative expense in the Consolidated Statements of Income. The proceeds from the sale of receivables are classified as operating activities in the Company's Consolidated Statements of Cash Flows. As of September 30, 2024, the amount of factored receivables that remained outstanding were $15,665 . See Note 15, "Acquisitions and Divestitures" for further information with respect to the sale of the Company's interest in the SGK Business.
13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 7. Debt and Financing Arrangements (continued)
The Company facilitates a voluntary supply chain finance program (the "Program") to provide certain suppliers with the opportunity to sell receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier's decision to sell a receivable. The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the Program. All outstanding payments owed under the Program are recorded within trade accounts payable in the Consolidated Balance Sheets. The Company accounts for all payments made under the Program as a reduction to operating cash flows in changes in working capital within the Consolidated Statements of Cash Flows. The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $4,398 and $3,014 at June 30, 2025 and September 30, 2024, respectively.
The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €6.0 million ($7,046 ). The facility also provides €14.0 million ($16,441 ) for bank guarantees. This facility has no stated maturity date and is available until terminated. Outstanding borrowings under the credit facility totaled €311,000 ($366 ) at June 30, 2025. There were no outstanding borrowings under the credit facility at September 30, 2024. The weighted-average interest rate on outstanding borrowings under this facility was 4.16 % and 5.88 % at June 30, 2025 and 2024, respectively.
Other borrowings totaled $5,836 and $15,602 at June 30, 2025 and September 30, 2024, respectively. The weighted-average interest rate on all other borrowings was 3.42 % and 2.61 % at June 30, 2025 and 2024, respectively.
As of June 30, 2025 and September 30, 2024, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets. The Company was in compliance with all of its debt covenants as of June 30, 2025.
On March 11, 2025, in connection with the filing of an automatic shelf registration statement on Form S-3 pursuant to which the Company re-registered 3,000,000 shares of Class A Common Stock, the Company entered into an Equity Distribution Agreement for an At-The-Market equity offering program ("ATM Program") where the Company may issue and sell, from time to time, up to 1,250,000 shares of its Class A Common Stock under the shelf registration. For the three months ended June 30, 2025, the Company did not sell any shares of its Class A Common Stock under its ATM Program. As of June 30, 2025, the Company had 1,250,000 shares remaining for sale under the ATM Program. The Company has no near-term intention to utilize the ATM Program.
Note 8. Derivatives and Hedging Activities
The Company operates internationally and utilizes certain derivative financial instruments to manage its foreign currency, debt and interest rate exposures. At June 30, 2025 and September 30, 2024, derivative instruments were reflected on a gross-basis in the Consolidated Balance Sheets as follows:
| Derivatives: | June 30, 2025 | September 30, 2024 | ||||||||||||||||||
| Interest Rate Swaps | Cross-Currency Swaps | Interest Rate Swaps | Cross-Currency Swaps | |||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Other current assets | $ | $ | $ | $ | ||||||||||||||||
| Long-term assets: | ||||||||||||||||||||
| Other non-current assets | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Other current liabilities | ( | ( | ( | ( | ||||||||||||||||
| Long-term liabilities: | ||||||||||||||||||||
| Other non-current liabilities | ( | ( | ( | ( | ||||||||||||||||
Total derivatives(1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 8. Derivatives and Hedging Activities (continued)
The following table presents information related to interest rate swaps entered into by the Company and designated as cash flow hedges:
| June 30, 2025 | September 30, 2024 | |||||||||||||
| Notional amount | $ | $ | ||||||||||||
| Weighted-average maturity period (years) | ||||||||||||||
| Weighted-average received rate | % | % | ||||||||||||
| Weighted-average pay rate | % | % | ||||||||||||
The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.
The fair value of the interest rate swaps reflected a net unrealized loss of $2,209 ($1,655 after tax) and $2,606 ($1,948 after tax) at June 30, 2025 and September 30, 2024, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1,914 ($1,431 after tax) and $3,848 ($2,874 after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of June 30, 2025 and September 30, 2024, respectively. Assuming market rates remain constant with the rates at June 30, 2025, a gain (net of tax) of approximately $252 included in AOCI is expected to be recognized in earnings over the next twelve months.
The Company utilizes certain cross currency swaps as net investment hedges of foreign operations and assesses effectiveness for these contracts based on changes in fair value attributable to changes in spot prices. The following table presents information related to cross currency swaps entered into by the Company and designated as net investment hedges:
(1) Total unrealized gains (losses) are presented net of tax of $4,506 and $2,156 as of June 30, 2025 and September 30, 2024, respectively.
| Notional Amount | Unrealized Gains (Losses) Recognized in AOCI | |||||||||||||||||||||||||
| Swap Currencies | Maturity Date | June 30, 2025 | September 30, 2024 | June 30, 2025 | September 30, 2024 | |||||||||||||||||||||
| USD/EUR | September 2027 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||
| USD/SEK | June 2026 | ( | ( | |||||||||||||||||||||||
| USD/SGD | August 2026 | ( | ||||||||||||||||||||||||
| USD/EUR | August 2026 | ( | ( | |||||||||||||||||||||||
| USD/CAD | May 2025 | |||||||||||||||||||||||||
| $ | $ | $ | ( | (1) | $ | ( | (1) | |||||||||||||||||||
In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S. dollar leg of the swaps. Outstanding advance payment amounts totaled $40,186 at June 30, 2025, of which $17,416 and $22,770 were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively. Outstanding advance payment amounts totaled $58,432 at September 30, 2024, of which $17,416 and $41,016 were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively.
During the third quarter of fiscal 2025, certain cross currency swaps were terminated or modified following the sale of the Company's interest in the SGK Business. The Company made payments totaling $37,092 in connection with the settlement or modification of these cross currency swap contracts.
The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of €30.0 million ($33,485 ) as of September 30, 2024. Currency losses of $3,820 (net of income taxes of $1,113 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2024.
15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 8. Derivatives and Hedging Activities (continued)
Refer to Note 12, "Accumulated Other Comprehensive Income" for further details regarding amounts recorded in AOCI and the Consolidated Statements of Income (Loss) related to derivatives.
Note 9. Restructuring
During the fourth quarter of fiscal 2024, the Company initiated restructuring programs focused primarily on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions. Total estimated restructuring costs for these programs are currently expected to be approximately $42,000 , of which $39,500 relates to severance and employee termination benefits, and $2,500 relates to other exit and disposal activities. These restructuring activities are expected to be completed by fiscal 2026.
The following table sets forth amounts recognized by the Company in connection with its restructuring programs:
Restructuring amounts by line item in the Statement of Income (a) | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Cost of sales | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
| Selling expense | ( | ( | ( | |||||||||||||||||||||||
| Administrative expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Income (loss) before income taxes | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
(a) Positive amounts represent income and negative amounts represent expense.
The costs associated with the Company's restructuring programs principally relate to severance and employee termination benefits. The following table provides a summary of the severance and employee termination restructuring activities for the nine-month period ended June 30, 2025.
| Severance and Employee Termination Restructuring Activities | |||||||||||||||||||||||||||||
| Memorialization | Industrial Technologies | Brand Solutions | Corporate/Non-Operating | Consolidated | |||||||||||||||||||||||||
| Liability at September 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Amounts charged (credited) to expense | ( | ( | ( | ||||||||||||||||||||||||||
| Net cash payments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Other adjustments(1) | ( | ( | ( | ||||||||||||||||||||||||||
| Sale of SGK Business | ( | ( | |||||||||||||||||||||||||||
| Liability at June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Cumulative severance and employee termination costs incurred to date(2) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1) Other adjustments primarily reflects reclassifications of certain balance sheet amounts.
(2) Substantially all estimated severance and employee termination costs related to the restructuring programs have been recognized as of June 30, 2025.
The severance and employee termination liability is included in accrued compensation in the accompanying Consolidated Balance Sheets.
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 10. Share-Based Payments
The Company maintains an equity incentive plan (as amended and restated, the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, restricted share units ("RSUs"), stock-based performance units and certain other types of stock-based awards. Under the 2017 Equity Incentive Plan, which has a ten-year term from the date the Company's Board of Directors approved of the second amendment and restatement of the 2017 Equity Incentive Plan, the maximum number of shares available for grants or awards is an aggregate of 4,950,000 (subject to adjustment upon certain events such as stock dividends or stock splits), following the second amendment and restatement of the 2017 Equity Incentive Plan at the Company's 2025 Annual Shareholder Meeting. At June 30, 2025, 1,886,557 shares have been issued under the 2017 Equity Incentive Plan. 1,517,963 time-based RSUs, 1,961,834 performance-based RSUs, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan. 1,655,845 of these share-based awards are outstanding as of June 30, 2025. The 2017 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors. The number of shares issued under performance-based RSUs may be up to 200 % of the number of performance-based RSUs, based on the satisfaction of specific criteria established by the plan administrator.
For the three-month periods ended June 30, 2025 and 2024, stock-based compensation cost totaled $8,841 and $5,331 , respectively. For the nine-month periods ended June 30, 2025 and 2024, stock-based compensation cost totaled $19,838 and $14,309 , respectively. The associated future income tax benefit recognized for stock-based compensation was $2,233 and $1,351 for the three-month periods ended June 30, 2025 and 2024, respectively, and $4,572 and $3,128 for the nine-month periods ended June 30, 2025 and 2024, respectively.
With respect to the grants of RSUs, awards generally vest on the third anniversary of the grant date. The number of units that vest depend on certain time and performance thresholds. Such performance thresholds include adjusted earnings per share, return on invested capital, appreciation in the market value of the Company's Class A Common Stock, or other targets established by the Compensation Committee of the Board of Directors. Approximately 40 % of the outstanding share units vest
based on time, while the remaining vest based on pre-defined performance thresholds. The Company issues common stock from treasury shares once the units become vested.
In conjunction with the sale of the Company's interest in the SGK Business, outstanding RSU awards for SGK Business employees were modified to remove future service requirements and to guarantee vesting at a minimum of 100 percent of target for certain performance-based RSUs (Type III modification under Accounting Standards Codification ("ASC") 718). Consequently, the outstanding RSU awards for these individuals were remeasured as of the date of the sale transaction, and any resulting additional expense or benefit was immediately recognized in the Consolidated Statements of Income.
The transactions for RSUs for the nine months ended June 30, 2025 were as follows:
| RSUs | Weighted- average Grant-date Fair Value | ||||||||||
| Non-vested at September 30, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Expired or forfeited | ( | ||||||||||
| Non-vested at June 30, 2025 | $ | ||||||||||
As of June 30, 2025, the total unrecognized compensation cost related to all unvested stock-based awards was $16,771 and is expected to be recognized over a weighted average period of 1.9 years.
The fair value of certain stock-based awards that are subject to performance conditions are estimated on the date of grant using a binomial lattice valuation model. The following table indicates the assumptions used in estimating the fair value of certain stock-based awards granted or modified during the nine-month period ended June 30, 2025.
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 10. Share-Based Payments (continued)
| Nine Months Ended June 30, 2025 | |||||||||||||||||
| November 2024 RSU Grant - Matthews | Modified November 2024 RSU Grant - SGK Business | Modified November 2023 RSU Grant - SGK Business | |||||||||||||||
| Expected volatility | % | % | % | ||||||||||||||
| Dividend yield | % | % | % | ||||||||||||||
| Average risk-free interest rate | % | % | % | ||||||||||||||
| Average expected term (years) | |||||||||||||||||
The risk-free interest rate is based on United States Treasury yields at the date of grant or modification. The dividend yield is based on the most recent dividend payment and average stock price over the 12 months prior to the grant or modification date. Expected volatilities are based on the historical volatility of the Company's stock price. The expected term for grants in the nine months ended June 30, 2025 represents an estimate of the average period of time for RSUs to vest.
The Company maintains the Amended and Restated 2019 Director Fee Plan, the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan (collectively, the "Director Fee Plans"). There will be no further fees or share-based awards granted under the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan. Under the Amended and Restated 2019 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2025, either cash or shares of the Company's Class A Common Stock with a value equal to $90 . The annual retainer fee for fiscal 2025 paid to the non-employee Chairman of the Board under the Amended and Restated 2019 Director Fee Plan is $210 . Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board. The total number of shares of stock that have been authorized to be issued under the Amended and Restated 2019 Director Fee Plan or credited to a deferred stock compensation account for subsequent issuance is 300,000 shares of Class A Common Stock (subject to adjustment upon certain events such as stock dividends or stock splits), following the amendment and restatement of the 2019 Director Fee Plan at the Company's 2023 Annual Shareholder Meeting. The value of deferred shares is recorded in other non-current liabilities. A total of 56,663 shares and share units had been deferred under the Director Fee Plans as of June 30, 2025. Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares or units) with a value of $140 for fiscal 2025. As of June 30, 2025, 439,740 restricted shares and RSUs have been granted under the Director Fee Plans, 266,511 of which were issued under the 2019 Director Fee Plan. 98,945 RSUs are unvested at June 30, 2025 under the Director Fee Plans.
Note 11. Earnings Per Share Attributable to Matthews' Shareholders
The information used to compute earnings per share attributable to Matthews' common shareholders was as follows:
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income attributable to Matthews shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average shares outstanding (in thousands): | |||||||||||||||||||||||
| Basic shares | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Diluted shares | |||||||||||||||||||||||
| Dividends declared per common share | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive securities excluded from the dilutive calculation were insignificant for applicable periods.
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 12. Accumulated Other Comprehensive Income
The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2025 and 2024 were as follows:
| Post-retirement benefit plans | Currency translation adjustment | Cash Flow Hedges | Total | |||||||||||||||||||||||
| Attributable to Matthews: | ||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| OCI before reclassification | ( | |||||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | (a) | ( | (b) | ||||||||||||||||||||||
| Net current-period OCI | ( | |||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
| OCI before reclassification | ||||||||||||||||||||||||||
| Net current-period OCI | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
| Post-retirement benefit plans | Currency translation adjustment | Cash Flow Hedges | Total | |||||||||||||||||||||||
| Attributable to Matthews: | ||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| OCI before reclassification | ( | ( | ( | |||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | (a) | ( | ( | (b) | ( | ||||||||||||||||||||
| Net current-period OCI | ( | ( | ( | ( | ||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||
| OCI before reclassification | ||||||||||||||||||||||||||
| Net current-period OCI | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||
(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans.
(b) Amounts were included in interest expense in the periods in which the hedged item affected earnings (see Note 8).
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 12. Accumulated Other Comprehensive Income (continued)
The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2025 and 2024 were as follows:
| Post-retirement benefit plans | Currency translation adjustment | Cash Flow Hedges | Total | |||||||||||||||||||||||
| Attributable to Matthews: | ||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| OCI before reclassification | ( | ( | ( | |||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | (a) | ( | (b) | ||||||||||||||||||||||
| Net current-period OCI | ( | ( | ||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||
| OCI before reclassification | ||||||||||||||||||||||||||
| Net current-period OCI | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
| Post-retirement benefit plans | Currency translation adjustment | Cash Flow Hedges | Total | |||||||||||||||||||||||
| Attributable to Matthews: | ||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| OCI before reclassification | ( | |||||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | (a) | ( | ( | (b) | ( | ||||||||||||||||||||
| Net current-period OCI | ( | ( | ||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | ||||||||||||||||||||||
| OCI before reclassification | ||||||||||||||||||||||||||
| Net current-period OCI | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||
(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans.
(b) Amounts were included in interest expense in the periods in which the hedged item affected earnings (see Note 8).
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 12. Accumulated Other Comprehensive Income (continued)
Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2025 and 2024 were as follows:
| Amount reclassified from AOCI | ||||||||||||||||||||
| Details about AOCI Components | Three Months Ended June 30, 2025 | Nine Months Ended June 30, 2025 | Affected line item in the Financial Statements | |||||||||||||||||
| Postretirement benefit plans | ||||||||||||||||||||
Prior service credit (a) | $ | $ | ||||||||||||||||||
| Actuarial losses | Other income (deductions), net | |||||||||||||||||||
Income before income tax (b) | ||||||||||||||||||||
| ( | ( | Income taxes | ||||||||||||||||||
| $ | $ | Net income | ||||||||||||||||||
| Derivatives | ||||||||||||||||||||
| Cash flow hedges | $ | $ | Interest expense | |||||||||||||||||
| Net investment hedges | Interest expense | |||||||||||||||||||
Income before income tax (b) | ||||||||||||||||||||
| ( | ( | Income taxes | ||||||||||||||||||
| $ | $ | Net income | ||||||||||||||||||
| Other | ||||||||||||||||||||
| Sale of SGK Business | $ | ( | $ | ( | Gain on sale of SGK Business | |||||||||||||||
| Other divestitures | ( | Other current liabilities (c) | ||||||||||||||||||
| Details about AOCI Components | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2024 | Affected line item in the Statement of income | ||||||||||||||||||||
| Postretirement benefit plans | |||||||||||||||||||||||
Prior service credit (a) | $ | $ | |||||||||||||||||||||
| Actuarial losses | Other income (deductions), net | ||||||||||||||||||||||
Income before income tax (b) | |||||||||||||||||||||||
| ( | ( | Income taxes | |||||||||||||||||||||
| $ | $ | Net income | |||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Cash flow hedges | $ | $ | Interest expense | ||||||||||||||||||||
| Net investment hedges | Interest expense | ||||||||||||||||||||||
Income before income tax (b) | |||||||||||||||||||||||
| ( | ( | Income taxes | |||||||||||||||||||||
| $ | $ | Net income | |||||||||||||||||||||
(a) Prior service cost amounts are included in the computation of pension and other postretirement benefit expense, which is reported in cost of goods sold and selling and administrative expenses. | ||
(b) For pre-tax items, positive amounts represent income and negative amounts represent expense. | ||
(c) Reflects the release of a reserve that was established for currency translation amounts related to certain net assets classified as held-for-sale as of September 30, 2024. See Note 15, "Acquisitions and Divestitures." | ||
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 13. Income Taxes
Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first nine months of fiscal 2025 represented an expense of $38,391 , compared to a benefit of $10,677 for the first nine months of fiscal 2024. The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2025 compared to the same period for fiscal 2024 resulted from consolidated pre-tax income in fiscal 2025 compared to a consolidated pre-tax loss in fiscal 2024, net discrete tax expense related to the divestiture of the Company's interest in the SGK Business, net discrete tax benefits related to adjustments in tax reserves resulting from the progression of tax audits, and recognition of certain previously unrecognized deferred tax assets. The Company’s fiscal 2025 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, discrete tax related to the sale of the Company's interest in the SGK Business, and other net discrete tax benefits. The Company’s fiscal 2024 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to tax credits, jurisdictional tax rate netting, recognition of certain previously unrecognized deferred tax assets and other net discrete tax benefits.
The Company had unrecognized tax benefits (excluding penalties and interest) of $2,051 and $4,506 on June 30, 2025 and September 30, 2024, respectively, which would impact the annual effective rate at June 30, 2025 and September 30, 2024, respectively. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $366 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.
The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $248 and $588 at June 30, 2025 and September 30, 2024, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing the impact on its consolidated financial statements.
The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions. As of June 30, 2025, the tax years that remain subject to examination by major jurisdictions generally are:
| United States – Federal | 2019, 2020, 2022 and forward | ||||
| United States – State | 2020 and forward | ||||
| Canada | 2021 and forward | ||||
| Germany | 2019 and forward | ||||
| United Kingdom | 2023 and forward | ||||
| Singapore | 2020 and forward | ||||
| Australia | 2021 and forward | ||||
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 14. Segment Information
The Company manages its businesses under three segments: Memorialization, Industrial Technologies and Brand Solutions. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. The Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for a 40 % ownership interest in Propelis and other consideration. Propelis is expected to be a leading global provider of brand solutions. Following the completion of this transaction, the Company's Brand Solutions segment consists of its printing plates and cylinders business, and its 40 % ownership interest in Propelis. Activity prior to May 1, 2025 for the SGK Business is included within the consolidated financial statements of the Company. As of May 1, 2025 the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis. See Notes 6, "Investments" and 15, "Acquisitions and Divestitures" for further information with respect to the Company's sale of its interest in the SGK Business.
The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, gains and losses on divestitures, enterprise resource planning ("ERP") system integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.
In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis. Accordingly, for segment reporting purposes, the Company does not allocate corporate costs to its reportable segments. Corporate costs include management and administrative support to the Company, which consists of certain aspects of the Company’s executive management, legal, compliance, human resources, information technology (including operational support) and finance departments. These costs are included within "Corporate and Non-Operating" in the following table to reconcile to consolidated adjusted EBITDA and are not considered a separate reportable segment. Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 14. Segment Information (continued)
The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income.
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Sales: | ||||||||||||||||||||||||||
| Memorialization | $ | $ | $ | $ | ||||||||||||||||||||||
| Industrial Technologies | ||||||||||||||||||||||||||
| Brand Solutions | ||||||||||||||||||||||||||
| Consolidated Sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||
| Memorialization | $ | $ | $ | $ | ||||||||||||||||||||||
| Industrial Technologies | ||||||||||||||||||||||||||
| Brand Solutions | ||||||||||||||||||||||||||
| Corporate and Non-Operating | ( | ( | ( | ( | ||||||||||||||||||||||
| Total Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
Acquisition and divestiture related items (1)** | ( | ( | ( | |||||||||||||||||||||||
Strategic initiatives and other items (2)**† | ( | ( | ( | ( | ||||||||||||||||||||||
| Gain on sale of SGK Business | ||||||||||||||||||||||||||
Highly inflationary accounting losses (primarily non-cash) (3) | ( | ( | ( | ( | ||||||||||||||||||||||
| Stock-based compensation | ( | ( | ( | ( | ||||||||||||||||||||||
Non-service pension and postretirement expense (4) | ( | ( | ( | ( | ||||||||||||||||||||||
Depreciation and amortization * | ( | ( | ( | ( | ||||||||||||||||||||||
Interest expense, including RPA and factoring financing fees (5) | ( | ( | ( | ( | ||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ||||||||||||||||||||||||
| Income tax (provision) benefit | ( | ( | ||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 14. Segment Information (continued)
(1) Includes certain non-recurring items associated with recent acquisition and divestiture activities and also includes a loss of $ | ||
(2) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts. Also includes legal costs related to an ongoing dispute with Tesla, Inc. ("Tesla"), which totaled $ | ||
(3) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation"). | ||
(4) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. | ||
(5) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ | ||
* Depreciation and amortization was $7,394 and $7,073 for the Memorialization segment, $5,489 and $5,796 for the Industrial Technologies segment, $2,357 and $9,702 for the Brand Solutions segment, and $596 and $1,086 for Corporate and Non-Operating, for the three months ended June 30, 2025 and 2024, respectively. Depreciation and amortization was $21,766 and $20,400 for the Memorialization segment, $16,807 and $17,744 for the Industrial Technologies segment, $15,935 and $28,943 for the Brand Solutions segment, and $2,063 and $3,354 for Corporate and Non-Operating, for the nine months ended June 30, 2025 and 2024, respectively.
** Acquisition and divestiture costs, ERP system integration costs, and strategic initiatives and other charges were $552 and $1,108 for the Memorialization segment, $9,079 and $4,490 for the Industrial Technologies segment, $1,692 and $1,473 for the Brand Solutions segment, and income of $10,481 and costs of $1,441 for Corporate and Non-Operating, for the three months ended June 30, 2025 and 2024, respectively. Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $4,265 and $2,204 for the Memorialization segment, $15,462 and $14,288 for the Industrial Technologies segment, $2,822 and $2,694 for the Brand Solutions segment, and $631 and $3,507 for Corporate and Non-Operating, for the nine months ended June 30, 2025 and 2024, respectively.
† Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling expenses of $2,438 and $1,079 for the three months ended June 30, 2025 and 2024, respectively, and expenses of $1,133 and $3,862 for the nine months ended June 30, 2025 and 2024, respectively. Refer to Note 9, "Restructuring" for further details.
Note 15. Acquisitions and Divestitures
Fiscal 2025:
In May 2025, the Company acquired The Dodge Company ("Dodge") within the Memorialization segment for a purchase price of $55,624 (net of cash acquired). Dodge is a leading supplier of embalming chemicals and supplies in North America and sells a variety of other related products to Funeral Homes. Annual sales for this business were approximately $43,000 prior to the acquisition. The preliminary purchase price allocation was not finalized as of June 30, 2025 and remains subject to change as the Company obtains additional information related to working capital and other intangibles assets.
On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for 40 % of the common equity of Propelis, a $50,000 preferred equity investment in Propelis, and cash proceeds of $228,004 (net of $22,996 of divested cash). The Company retained its European cylinders (packaging) business and other related investments following the completion of this transaction. The Company recognized a gain on sale of the SGK Business totaling $57,103 ($14,155 after-tax) during the third quarter of fiscal 2025.
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 15. Acquisitions and Divestitures (continued)
The following table summarizes the carrying values of the SGK Business assets and liabilities divested on May 1, 2025.
| May 1, 2025 | |||||
| Assets: | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable, net | |||||
| Inventories, net | |||||
| Property, plant and equipment, net | |||||
| Operating lease right-of-use assets | |||||
| Goodwill | |||||
| Other intangible assets, net | |||||
| Other current and non-current assets | |||||
| Total assets | |||||
| Liabilities: | |||||
| Current portion of operating lease liabilities | |||||
| Trade accounts payable | |||||
| Accrued compensation | |||||
| Long-term debt | |||||
| Operating lease liabilities | |||||
| Deferred income taxes | |||||
| Other current and non-current liabilities | |||||
| Total liabilities | |||||
| Net assets | $ | ||||
Income before income taxes for the divested SGK Business totaled $4,477 and $12,647 for the three and nine months ended June 30, 2025, respectively, and $5,435 and $14,226 for the three and nine months ended June 30, 2024, respectively.
In March 2025, the Company completed a small divestiture within the Industrial Technologies segment. Net proceeds from the divestiture totaled $2,049 , and the transaction resulted in a pre-tax loss of $2,072 , which was recorded as a component of administrative expense for the period ended June 30, 2025.
In October 2024, the Company completed a small acquisition within the Memorialization segment for a purchase price of $2,218 . The preliminary purchase price allocation was not finalized as of June 30, 2025 and remains subject to change as the Company obtains additional information related to working capital.
During the first quarter of fiscal 2025, the Company completed a small divestiture within the Memorialization segment. The net assets for this business were fully written-down in fiscal 2024 in anticipation of the disposal transaction.
Fiscal 2024:
In January 2024, the Company completed a small acquisition within the Memorialization segment for a purchase price of $5,825 (net of holdbacks and other adjustments, including working capital). The Company finalized the allocation of the purchase price in the fourth quarter of fiscal 2024, resulting in no significant adjustments.
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 16. Goodwill and Other Intangible Assets
A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:
| Memorialization | Industrial Technologies | Brand Solutions | Consolidated | ||||||||||||||||||||
Net goodwill at September 30, 2024 | $ | $ | $ | $ | |||||||||||||||||||
| Additions during period | |||||||||||||||||||||||
| Translation and other adjustments | ( | ( | |||||||||||||||||||||
| Sale of SGK Business | ( | ( | |||||||||||||||||||||
Net goodwill at June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
The net goodwill balances at June 30, 2025 and September 30, 2024 included $45,673 and $277,913 of accumulated impairment losses, respectively. Accumulated impairment losses at June 30, 2025 were $5,000 40,673 5,000 40,673 232,240
The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2025 (January 1, 2025) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, and, therefore, no impairment charges were necessary at such time.
The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2025 and September 30, 2024, respectively.
| Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
| June 30, 2025 | |||||||||||||||||
| Indefinite-lived trade names | $ | $ | $ | ||||||||||||||
| Definite-lived trade names | ( | ||||||||||||||||
| Customer relationships | ( | ||||||||||||||||
| Copyrights/patents/other | ( | ||||||||||||||||
| $ | $ | ( | $ | ||||||||||||||
September 30, 2024: | |||||||||||||||||
| Indefinite-lived trade names | $ | $ | $ | ||||||||||||||
| Definite-lived trade names | ( | ||||||||||||||||
| Customer relationships | ( | ||||||||||||||||
| Copyrights/patents/other | ( | ||||||||||||||||
| $ | $ | ( | $ | ||||||||||||||
The net change in intangible assets during the nine months ended June 30, 2025 primarily reflected the sale of the Company's interest in the SGK Business, the impact of foreign currency fluctuations during the period and additional amortization.
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
Note 17. Legal Matter
On October 7, 2024, the United States District Court for the Northern District of California granted the Company’s motion to compel arbitration in response to a complaint filed by Tesla on June 14, 2024 against the Company in the Northern District of California, Civil Action No. 5:24-cv-03615 (N.D. Cal.), which alleged trade secret misappropriation under the Defend Trade Secrets Act (the "DTSA") and California's Uniform Trade Secrets Act (the "CUTSA"), breach of contract and unfair business practices. Given the Court’s favorable ruling, the matter filed by Tesla has been effectively stayed pending arbitration, which Tesla has initiated. The Company maintains the claims vaguely stated in the complaint are without merit and continues to vigorously defend itself against the allegations in the arbitration.
In addition, on February 13, 2025, Tesla filed another additional complaint against the Company in the United States District Court for the Northern District of California alleging, in part, claims related to correction of inventorship, breach of contract, promissory estoppel and quasi-contract/restitution arising from and/or related to various U.S. patents and provisional patents, including but not limited to U.S. Patent No. 12,136,727. Similar to the prior matter, the Company has already filed a motion to compel arbitration and maintains the claims vaguely stated in the complaint filed on February 13, 2025 are also without merit. The Company intends to vigorously defend itself against the allegations.
An estimate of the possible loss or range of loss related to both matters cannot be made at this time given the continued lack of specificity in the applicable pleadings and/or proceedings. In light of the substantial harm caused to the Company by Tesla's actions, the Company is now pursuing counterclaims against Tesla.
Note 18. Related Party Transactions
In connection with the sale of the Company's interest in the SGK Business, the Company has agreed to provide certain administrative services for Propelis under a Transitional Services Agreement (the “TSA”). The services provided under the TSA include ERP system access and related information technology support; tax, treasury and accounting support; transactional processing such as, invoicing, collections, cash application, purchasing, payroll and payment processing; and certain other services. The Company receives an administrative support fee from Propelis for providing these ongoing services. Such administrative support fees are intended to approximate the underlying cost of providing such services for Propelis. During the third quarter of fiscal 2025, the Company recognized $1,612 of administrative support fees under the TSA, which were included as a component of administrative expense. Sales to and purchase from Propelis were immaterial for the three months ended June 30, 2025. As of June 30, 2025, amounts due to Matthews from Propelis totaled $5,887 , which reflected outstanding administrative fees, and net transactional amounts pending settlement under the TSA. Such amounts were included as a component of accounts receivable.
28
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES:
The following discussion should be read in conjunction with the consolidated financial statements of Matthews International Corporation ("Matthews" or the "Company") and related notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the joint venture transaction with Propelis Group ("Propelis"), and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include our ability to achieve the anticipated benefits of the joint venture transaction with Propelis that recently closed, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, including changes in costs due to adjustments to tariffs, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, divestitures, and business combinations, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, the Company's plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company's plans and expectations with respect to its Board, and other factors described in Item 1A - "Risk Factors" in this Form 10-Q and Item 1A - "Risk Factors" in the Company's Form 10-K for the fiscal year ended September 30, 2024. In addition, although the Company does not currently have any customers that would be considered individually significant to consolidated sales, changes in the distribution of the Company's products or the potential loss of one or more of the Company's larger customers are also considered risk factors. Matthews cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward looking statements, which reflect management's analysis only as of the date of this report, even if subsequently made available by Matthews on its website or otherwise. Matthews does not undertake to update any forward looking statement, whether written or oral, that may be made from time to time by or on behalf of Matthews to reflect events or circumstances occurring after the date of this report unless required by law.
Included in this report are measures of financial performance that are not defined by generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures assist management in comparing the Company's performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company's core operations. For additional information and reconciliations from the consolidated financial statements see "Non-GAAP Financial Measures" below.
29
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
RESULTS OF OPERATIONS:
The Company manages its businesses under three segments: Memorialization, Industrial Technologies and Brand Solutions. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. The Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment (the "SGK Business") to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Propelis is expected to be a leading global provider of brand solutions. Following the completion of this transaction, the Company's Brand Solutions segment consists of its printing plates and cylinders business, and its 40% ownership interest in Propelis. The Company recognizes its portion of the earnings or losses for its equity-method investment in Propelis on a three-month lag to ensure consistency and timely filing of the Company’s financial statements. As a result, the Company has not recorded earnings or losses for its investment in Propelis during the quarter ended June 30, 2025. See Notes 6, "Investments" and 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further information with respect to the Company's sale of its interest in the SGK Business.
The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, gains and losses on divestitures, enterprise resource planning ("ERP") system integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.
In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis. Accordingly, for segment reporting purposes, the Company does not allocate corporate costs to its reportable segments. Corporate costs include management and administrative support to the Company, which consists of certain aspects of the Company’s executive management, legal, compliance, human resources, information technology (including operational support) and finance departments. These costs are included within "Corporate and Non-Operating" in the following table to reconcile to consolidated adjusted EBITDA and are not considered a separate reportable segment. Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.
The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2025 and 2024. Refer to Note 14, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment. Net income was $15.4 million and $1.8 million for the three months ended June 30, 2025 and 2024, respectively, and $3.0 million and $8.5 million for the nine months ended June 30, 2025 and 2024, respectively. Refer to "Non-GAAP Financial Measures" below for a reconciliation of net income to adjusted EBITDA.
30
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Sales: | (Dollar amounts in thousands) | |||||||||||||||||||||||||
| Memorialization | $ | 203,728 | $ | 202,664 | $ | 599,834 | $ | 632,891 | ||||||||||||||||||
| Industrial Technologies | 87,901 | 91,731 | 249,269 | 319,241 | ||||||||||||||||||||||
| Brand Solutions | 57,748 | 133,438 | 329,745 | 396,910 | ||||||||||||||||||||||
| Consolidated Sales | $ | 349,377 | $ | 427,833 | $ | 1,178,848 | $ | 1,349,042 | ||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||||
| Memorialization | $ | 42,801 | $ | 38,737 | $ | 124,451 | $ | 122,051 | ||||||||||||||||||
| Industrial Technologies | 9,047 | 4,196 | 16,921 | 23,846 | ||||||||||||||||||||||
| Brand Solutions | 5,004 | 16,054 | 32,892 | 44,317 | ||||||||||||||||||||||
| Corporate and Non-Operating | (12,302) | (14,241) | (38,277) | (43,186) | ||||||||||||||||||||||
Total Adjusted EBITDA (1) | $ | 44,550 | $ | 44,746 | $ | 135,987 | $ | 147,028 | ||||||||||||||||||
(1) Total Adjusted EBITDA is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section below.
Sales for the nine months ended June 30, 2025 were $1.18 billion, compared to $1.35 billion for the nine months ended June 30, 2024. The decrease in fiscal 2025 sales reflected a sales reduction of $80.2 million resulting from the divestiture of the Company's interest in the SGK Business on May 1, 2025 (see Acquisitions and Divestitures below). The fiscal 2025 sales decline also reflected lower sales in the Industrial Technologies and Memorialization segments. On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $1.1 million on fiscal 2025 sales compared to the prior year.
Memorialization segment sales for the first nine months of fiscal 2025 were $599.8 million, compared to $632.9 million for the first nine months of fiscal 2024. The sales decrease principally reflected lower unit sales of caskets, bronze and granite memorial products, and cremation equipment, primarily reflecting a decline in U.S. death rates. These declines were partially offset by improved price realization and the favorable net impact of recently completed acquisitions and divestitures (see Acquisitions and Divestitures below). Industrial Technologies segment sales were $249.3 million for the first nine months of fiscal 2025, compared to $319.2 million for the first nine months of fiscal 2024. The decrease in sales reflected lower sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market and coating and converting equipment). The decrease also reflected lower sales of R+S automotive engineering solutions, as the Company has discontinued these product offerings. Fiscal 2025 sales for the Industrial Technologies segment were impacted by customer delays impacting the timing of projects within the energy storage business. Changes in foreign currency exchange rates had a favorable impact of $1.0 million on the segment's sales compared to the prior year. In the Brand Solutions segment, sales for the first nine months of fiscal 2025 were $329.7 million, compared to $396.9 million for the first nine months of fiscal 2024. The decrease in sales primarily reflected the divestiture of the Company's interest in the SGK Business on May 1, 2025. Sales for the SGK Business prior to the divestiture (versus the comparable period of the prior year) reflected higher brand sales in the U.S. and Asia-Pacific regions, improved retail-based sales, increased private-label brand sales, and improved price realization to mitigate inflationary cost increases. These increases were partially offset by lower brand sales in Europe and the impact of unfavorable changes in foreign exchange rates. Brand Solutions segment sales also reflected lower sales for the European cylinders (packaging) business, which was not part of the sale of the SGK Business and remains part of the Company. Changes in foreign currency exchange rates had an unfavorable impact of $1.8 million on the segment's sales compared to the prior year.
Gross profit for the nine months ended June 30, 2025 was $391.8 million, compared to $412.4 million for the same period a year ago. Consolidated gross profit as a percent of sales was 33.2% and 30.6% for the first nine months of fiscal 2025 and fiscal 2024, respectively. The decrease in gross profit reflected a reduction of $19.3 million resulting from the divestiture of the Company's interest in the SGK Business. The gross profit decline also reflected the impact of lower sales, and higher material and labor costs. These decreases were partially offset by the impact of improved price realization, benefits from the realization of productivity improvements and other cost-reduction initiatives, and the favorable net impact of recently completed acquisitions and divestitures within the Memorialization segment. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $3.9 million and $9.2 million for the nine months ended June 30, 2025 and 2024, respectively.
Selling and administrative expenses for the nine months ended June 30, 2025 were $345.7 million, compared to $347.1 million for the first nine months of fiscal 2024. Consolidated selling and administrative expenses, as a percent of sales, were 29.3% for
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
the nine months ended June 30, 2025, compared to 25.7% for the same period last year. Selling and administrative expenses in fiscal 2025 reflected benefits from ongoing cost-reduction initiatives, and a $12.1 million reduction in selling and administrative expenses from the divestiture of the Company's interest in the SGK Business, partially offset by higher compensation costs. Fiscal 2025 selling and administrative expenses included $5.1 million of costs related to the Company's 2025 contested proxy, $8.7 million of net gains on the sales of certain significant property and other assets, $3.5 million of accelerated stock-based compensation costs related to the Company's divestiture of its interest in the SGK Business, and a $2.1 million loss on a small divestiture in the Industrial Technologies segment. Selling and administrative expenses included legal costs related to an ongoing dispute in the Company's energy storage business totaling $14.4 million in fiscal 2025 and $8.1 million in fiscal 2024 (see Legal Matter below). Selling and administrative expenses included fees for receivables sold under a receivables purchase agreement and factoring arrangement totaling $3.3 million in fiscal 2025 and $3.6 million in fiscal 2024. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with certain commercial, operational and cost-reduction initiatives totaling $8.0 million in fiscal 2025, compared to $5.5 million in fiscal 2024. Intangible amortization for the nine months ended June 30, 2025 was $16.4 million, compared to $27.8 million for the nine months ended June 30, 2024. The fiscal 2025 decrease in intangible amortization reflected certain intangible assets reaching the end of their amortizable lives, and lower amortization following the Company's divestiture of its interest in the SGK Business. During the third quarter of fiscal 2025, the Company recognized a $57.1 million pre-tax gain on the sale of its interest in the SGK Business (See Acquisitions and Divestitures below).
Adjusted EBITDA was $136.0 million for the nine months ended June 30, 2025 and $147.0 million for the nine months ended June 30, 2024. Memorialization segment adjusted EBITDA was $124.5 million for the first nine months of fiscal 2025 compared to $122.1 million for the first nine months of fiscal 2024. The increase in segment adjusted EBITDA reflected the impact of improved price realization, benefits from productivity initiatives, and the favorable net impact of recent acquisitions and divestitures. These increases were partially offset by the impact of lower unit sales, and higher material and labor costs. Adjusted EBITDA for the Industrial Technologies segment was $16.9 million for the nine months ended June 30, 2025 compared to $23.8 million for the nine months ended June 30, 2024. The decrease in segment adjusted EBITDA primarily reflected the impact of lower sales of engineered products, partially offset by benefits from cost-reduction initiatives. Adjusted EBITDA for the Brand Solutions segment was $32.9 million for the first nine months of fiscal 2025 compared to $44.3 million for the same period a year ago. The decrease in segment adjusted EBITDA primarily reflected a reduction of $11.0 million resulting from the divestiture of the Company's interest in the SGK Business. Adjusted EBITDA for the SGK Business prior to the divestiture (versus the comparable period of the prior year) reflected the impact of higher labor costs, partially offset by the impact of improved price realization and benefits from cost-reduction initiatives. Brand Solutions segment adjusted EBITDA also reflected declines for the European cylinders (packaging) business, which was not part of the sale of the SGK Business and remains part of the Company.
Interest expense for the first nine months of fiscal 2025 was $47.4 million, compared to $36.9 million for the same period last year. The increase in interest expense reflected higher average interest rates, partially offset by a decrease in average borrowing levels in the current fiscal year. Other income (deductions), net, for the nine months ended June 30, 2025 represented an increase in pre-tax income of $2.0 million, compared to a decrease in pre-tax income of $2.7 million for the same period last year. Other income (deductions), net includes investment income, banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances.
Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first nine months of fiscal 2025 represented a provision of $38.4 million, compared to a benefit of $10.7 million for the first nine months of fiscal 2024. The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2025 compared to the same period for fiscal 2024 resulted from consolidated pre-tax income in fiscal 2025 compared to a consolidated pre-tax loss in fiscal 2024, net discrete tax expense related to the divestiture of the Company's interest in the SGK Business, net discrete tax benefits related to adjustments in tax reserves resulting from the progression of tax audits, and recognition of certain previously unrecognized deferred tax assets. The Company’s fiscal 2025 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, discrete tax related to the sale of the Company's interest in the SGK Business, and other net discrete tax benefits. The Company’s fiscal 2024 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to tax credits, jurisdictional tax rate netting, recognition of certain previously unrecognized deferred tax assets and other net discrete tax benefits.
Legal Matter
Refer to Note 17, "Legal Matter" in Item 1 - "Financial Statements" for details related to an ongoing dispute with Tesla.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
Related Party Transactions
Refer to Note 18, "Related Party Transactions" in Item 1 - "Financial Statements" for information regarding transactions with Propelis.
NON-GAAP FINANCIAL MEASURES:
Included in this report are measures of financial performance that are not defined by GAAP. The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition and divestiture costs, gains and losses on divestitures, ERP system integration costs, strategic initiatives and other charges (which includes non-recurring charges related to certain commercial and operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.
The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business. Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, gains and losses on divestitures, ERP system integration costs, and strategic initiatives and other charges. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and divestiture and ERP system integration costs, and items that do not reflect the ordinary earnings of the Company’s operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
The reconciliation of net income to adjusted EBITDA is as follows:
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||||||
| Net income | $ | 15,387 | $ | 1,777 | $ | 2,999 | $ | 8,501 | |||||||||||||||
| Income tax provision (benefit) | 43,477 | (8,829) | 38,391 | (10,677) | |||||||||||||||||||
| Income (loss) before income taxes | 58,864 | (7,052) | 41,390 | (2,176) | |||||||||||||||||||
Interest expense, including RPA and factoring financing fees (1) | 16,804 | 14,005 | 50,668 | 40,539 | |||||||||||||||||||
Depreciation and amortization * | 15,836 | 23,657 | 56,571 | 70,441 | |||||||||||||||||||
Acquisition and divestiture related items (2)** | (9,473) | 2,266 | 6,877 | 5,565 | |||||||||||||||||||
Strategic initiatives and other items (3)**† | 10,315 | 6,246 | 16,303 | 17,128 | |||||||||||||||||||
| Gain on sale of SGK Business | (57,103) | — | (57,103) | — | |||||||||||||||||||
Highly inflationary accounting losses (primarily non-cash) (4) | 325 | 185 | 1,036 | 895 | |||||||||||||||||||
| Stock-based compensation | 8,841 | 5,331 | 19,838 | 14,309 | |||||||||||||||||||
Non-service pension and postretirement expense (5) | 141 | 108 | 407 | 327 | |||||||||||||||||||
| Total Adjusted EBITDA | $ | 44,550 | $ | 44,746 | $ | 135,987 | $ | 147,028 | |||||||||||||||
(1) Includes fees for receivables sold under the RPA and factoring arrangements totaling $1.0 million and $1.2 million for the three months ended June 30, 2025 and 2024, respectively, and $3.3 million and $3.6 million for the nine months ended June 30, 2025 and 2024, respectively. | ||
(2) Includes certain non-recurring items associated with recent acquisition and divestiture activities and also includes a loss of $2.1 million for the nine months ended June 30, 2025 related to the divestiture of a business in the Industrial Technologies segment (See Note 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements and Supplementary Data"). The fiscal 2025 third quarter amount reflects a reclassification of transaction costs totaling $9.7 million, which have been presented as a component of gain on sale of SGK Business. | ||
(3) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts. Also includes legal costs related to an ongoing dispute with Tesla, which totaled $5.8 million and $3.2 million for the three months ended June 30, 2025 and 2024, respectively, and $14.4 million and $8.1 million for the nine months ended June 30, 2025 and 2024, respectively (see Note 17, "Legal Matter" in Item 1 - "Financial Statements and Supplementary Data"). Fiscal 2025 includes costs related to the Company's 2025 contested proxy which totaled $207,000 for the three months ended June 30, 2025 and $5.1 million for the nine months ended June 30, 2025. Fiscal 2025 includes net gains on the sales of certain significant property and other assets of $8.7 million for the nine months ended June 30, 2025. Fiscal 2025 also includes loss recoveries totaling $538,000 for the three months ended June 30, 2025 and $1.7 million for the nine months ended June 30, 2025 which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. | ||
(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation" in Item 1 - "Financial Statements and Supplementary Data"). | ||
(5) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. | ||
* Depreciation and amortization was $7.4 million and $7.1 million for the Memorialization segment, $5.5 million and $5.8 million for the Industrial Technologies segment, $2.4 million and $9.7 million for the Brand Solutions segment, and $596,000 and $1.1 million for Corporate and Non-Operating, for the three months ended June 30, 2025 and 2024, respectively. Depreciation and amortization was $21.8 million and $20.4 million for the Memorialization segment, $16.8 million and $17.7 million for the Industrial Technologies segment, $15.9 million and $28.9 million for the Brand Solutions segment, and $2.1 million and $3.4 million for Corporate and Non-Operating, for the nine months ended June 30, 2025 and 2024, respectively.
** Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $552,000 and $1.1 million for the Memorialization segment, $9.1 million and $4.5 million for the Industrial Technologies segment, $1.7 million and $1.5 million for the Brand Solutions segment, and income of $10.5 million and costs of $1.4 million for Corporate and Non-Operating, for the three months ended June 30, 2025 and 2024, respectively. Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $4.3 million and $2.2 million for the Memorialization segment, $15.5 million and $14.3 million for the Industrial Technologies segment, $2.8 million and $2.7 million for the Brand Solutions segment, and $631,000 and $3.5 million for Corporate and Non-Operating, for the nine months ended June 30, 2025 and 2024, respectively.
† Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling expenses of $2.4 million and $1.1 million for the three months ended June 30, 2025 and 2024, respectively, and expenses of $1.1 million and $3.9 million for the nine months ended June 30, 2025 and 2024, respectively. Refer to Note 9, "Restructuring" in Item 1 - "Financial Statements and Supplementary Data" for further details.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
LIQUIDITY AND CAPITAL RESOURCES:
Net cash used in operating activities was $33.9 million for the first nine months of fiscal 2025, compared to net cash provided by operating activities of $43.3 million for the first nine months of fiscal 2024. Operating cash flow for both periods principally included net income adjusted for depreciation and amortization, stock-based compensation expense, gains (losses) on divestitures and sales of assets, other non-cash adjustments, and changes in working capital items. Net changes in working capital items decreased operating cash flow by $50.6 million and $29.2 million in fiscal 2025 and fiscal 2024, respectively. The fiscal 2025 change in working capital principally reflected incentive compensation-related payments, payments of severance and other employee termination benefits, changes in contract assets and liabilities related to revenue recognized using the over time method, and changes in other accounts.
Cash provided by investing activities was $153.2 million for the nine months ended June 30, 2025, compared to cash used in investing activities of $38.6 million for the nine months ended June 30, 2024. Investing activities for the first nine months of fiscal 2025 primarily reflected capital expenditures of $26.4 million, acquisitions, net of cash acquired, of $57.8 million, proceeds from sale of assets of $14.9 million, proceeds from sale of the SGK Business, net of divested cash, of $228.0 million, proceeds from other divestitures of $2.0 million, and investments and advances of $7.4 million. Investing activities for the first nine months of fiscal 2024 primarily reflected capital expenditures of $33.2 million, acquisitions, net of cash acquired, of $5.8 million, and purchases of investments of $825,000.
Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, and facilities designed to improve product quality, increase manufacturing efficiency and capacity, lower production costs and meet regulatory requirements. Capital expenditures for the last three fiscal years were primarily financed through operating cash. Capital spending for property, plant and equipment has averaged $52.4 million for the last three fiscal years. Capital spending for fiscal 2025 is currently estimated to be in the range of approximately $30 million to $40 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.
Cash used in financing activities for the nine months ended June 30, 2025 was $139.4 million, primarily reflecting repayments, net of proceeds, on long-term debt of $70.3 million, treasury stock purchases of $12.1 million, dividends of $24.7 million, payments, net of proceeds, on net investment hedges of $22.1 million, and $10.2 million of holdback and deferred purchase price payments related to acquisitions from prior years. Cash used in financing activities for the nine months ended June 30, 2024 was $4.1 million, primarily reflecting proceeds, net of repayments, on long-term debt of $27.8 million, treasury stock purchases of $20.5 million, dividends of $24.1 million, payments of debt issuance costs of $4.7 million, and proceeds from a net investment hedge of $17.4 million.
The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 2024. The amended and restated loan agreement includes a $750.0 million senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility. The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. A portion of the revolving credit facility (not to exceed $350.0 million) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10% per annum rate spread adjustment, plus a factor ranging from 1.00% to 2.00% (1.50% at June 30, 2025) based on the Company's leverage ratio. The leverage ratio is defined as total indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15% to 0.30% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the amended and restated agreement. Unamortized costs were $4.2 million and $5.0 million at June 30, 2025 and September 30, 2024, respectively.
The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $75.0 million) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at June 30, 2025 and September 30, 2024 were $380.4 million and $410.5 million, respectively. There were no outstanding Euro denominated borrowings on the revolving credit facility at June 30, 2025. Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 were €30.0 million ($33.5 million). The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2025 and 2024 was 4.16% and 4.61%, respectively.
35
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
The Company has $300.0 million aggregate principal amount of 8.625% senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes"). The 2027 Senior Secured Notes bear interest at a rate of 8.625% per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year. The Company's obligations under the 2027 Senior Secured Notes are secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2027 Senior Secured Notes. The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes. Unamortized costs related to the Company’s notes were $4.4 million and $5.2 million at June 30, 2025 and September 30, 2024, respectively.
The Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC has a receivables purchase agreement (“RPA”) to sell up to $110.0 million of receivables as of June 30, 2025 to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables. The RPA will reduce to $75.0 million as of August 1, 2025, and matures in April 2027.
The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of June 30, 2025 and September 30, 2024, the amount sold to the Purchasers was $85.6 million and $96.3 million, respectively, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $79.5 million and $58.2 million as of June 30, 2025 and September 30, 2024, respectively.
The following table sets forth a summary of receivables sold as part of the RPA:
| Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||
Gross receivables sold | $ | 231,588 | $ | 291,189 | ||||||||||
Cash collections reinvested | (242,288) | (287,889) | ||||||||||||
| Net cash (reinvested) received | $ | (10,700) | $ | 3,300 | ||||||||||
The Company, through its U.K. subsidiary, previously participated in a non-recourse factoring arrangement. In connection with this arrangement, the Company periodically sold trade receivables to a third-party purchaser in exchange for cash. These transfers of financial assets were recorded at the time the Company surrendered control of the assets. As these transfers qualified as true sales under the applicable accounting guidance, the receivables were de-recognized from the Company's Consolidated Balance Sheets upon transfer. As a result of the sale of the Company's interest in the SGK Business, this arrangement no longer exists for the Company at June 30, 2025. The principal amount of receivables sold under this arrangement was $45.8 million and $53.1 million during the nine months ended June 30, 2025 and 2024, respectively. The discounts on the trade receivables sold are included within administrative expense in the Consolidated Statements of Income. The proceeds from the sale of receivables are classified as operating activities in the Company's Consolidated Statements of Cash Flows. As of September 30, 2024, the amount of factored receivables that remained outstanding were $15.7 million. See Note 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements and Supplementary Data" for further information with respect to the sale of the Company's interest in the SGK Business.
The Company facilitates a voluntary supply chain finance program (the "Program") to provide certain suppliers with the opportunity to sell receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier's decision to sell a receivable. The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the Program. All outstanding payments owed under the Program are recorded within trade accounts payable in the Consolidated Balance Sheets. The Company accounts for
36
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
all payments made under the Program as a reduction to operating cash flows in changes in working capital within the Consolidated Statements of Cash Flows. The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $4.4 million and $3.0 million at June 30, 2025 and September 30, 2024, respectively.
The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €6.0 million ($7.0 million). The facility also provides €14.0 million ($16.4 million) for bank guarantees. This facility has no stated maturity date and is available until terminated. Outstanding borrowings under the credit facility totaled €311,000 ($366,000) at June 30, 2025. There were no outstanding borrowings under the credit facility at September 30, 2024. The weighted-average interest rate on outstanding borrowings under this facility was 4.16% and 5.88% at June 30, 2025 and 2024, respectively.
Other borrowings totaled $5.8 million and $15.6 million at June 30, 2025 and September 30, 2024, respectively. The weighted-average interest rate on these borrowings was 3.42% and 2.61% at June 30, 2025 and 2024, respectively.
The Company operates internationally and utilizes certain derivative financial instruments to manage its foreign currency, debt and interest rate exposures. The following table presents information related to interest rate swaps entered into by the Company and designated as cash flow hedges:
| June 30, 2025 | September 30, 2024 | |||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||
| Notional amount | $ | 225,000 | $ | 175,000 | ||||||||||
| Weighted-average maturity period (years) | 2.9 | 3.2 | ||||||||||||
| Weighted-average received rate | 4.33 | % | 4.85 | % | ||||||||||
| Weighted-average pay rate | 3.80 | % | 3.83 | % | ||||||||||
The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments, which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.
The fair value of the interest rate swaps reflected a net unrealized loss of $2.2 million ($1.7 million after tax) and $2.6 million ($1.9 million after tax) at June 30, 2025 and September 30, 2024, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1.9 million ($1.4 million after tax) and $3.8 million ($2.9 million after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of June 30, 2025 and September 30, 2024, respectively. Assuming market rates remain constant with the rates at June 30, 2025, a gain (net of tax) of approximately $252,000 included in AOCI is expected to be recognized in earnings over the next twelve months.
37
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
The Company utilizes certain cross currency swaps as net investment hedges of foreign operations and assesses effectiveness for these contracts based on changes in fair value attributable to changes in spot prices. The following table presents information related to cross currency swaps entered into by the Company and designated as net investment hedges:
| Notional Amount | Unrealized Gains (Losses) Recognized in AOCI | |||||||||||||||||||||||||
| Swap Currencies | Maturity Date | June 30, 2025 | September 30, 2024 | June 30, 2025 | September 30, 2024 | |||||||||||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||||||||||||
| USD/EUR | September 2027 | $ | 81,392 | $ | 81,392 | $ | (5,786) | $ | (5,440) | |||||||||||||||||
| USD/SEK | June 2026 | 20,000 | 20,000 | (2,683) | (468) | |||||||||||||||||||||
| USD/SGD | August 2026 | — | 20,000 | — | (441) | |||||||||||||||||||||
| USD/EUR | August 2026 | 25,000 | 25,000 | (4,878) | (30) | |||||||||||||||||||||
| USD/CAD | May 2025 | — | — | — | — | |||||||||||||||||||||
| $ | 126,392 | $ | 146,392 | $ | (13,347) | (1) | $ | (6,379) | (1) | |||||||||||||||||
In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S. dollar leg of the swaps. Outstanding advance payment amounts totaled $40.2 million at June 30, 2025, of which $17.4 million and $22.8 million were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively. Outstanding advance payment amounts totaled $58.4 million at September 30, 2024, of which $17.4 million and $41.0 million were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively.
During the third quarter of fiscal 2025, certain cross currency swaps were terminated or modified following the sale of the Company's interest in the SGK Business. The Company made payments totaling $37.1 million in connection with the settlement or modification of these cross currency swap contracts.
The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of €30.0 million ($33.5 million) as of September 30, 2024. Currency losses of $3.8 million (net of income taxes of $1.1 million), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2024.
The Company has a stock repurchase program. The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its Class A Common Stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. Under the current authorization, 48,829 shares remained available for repurchase as of June 30, 2025. Refer to Item 2 - "Unregistered Sales of Equity Securities and Use of Proceeds" in Part II - "Other Information" for further details on the Company's repurchases in fiscal 2025.
On March 11, 2025, in connection with the filing of an automatic shelf registration statement on Form S-3 pursuant to which the Company re-registered 3,000,000 shares of Class A Common Stock, the Company entered into an Equity Distribution Agreement for an At-The-Market equity offering program ("ATM Program") where the Company may issue and sell, from time to time, up to 1,250,000 shares of its Class A Common Stock under the shelf registration. For the three months ended June 30, 2025, the Company did not sell any shares of its Class A Common Stock under its ATM Program. As of June 30, 2025, the Company had 1,250,000 shares remaining for sale under the ATM Program. The Company has no near-term intention to utilize the ATM Program.
Consolidated working capital of the Company was $205.5 million at June 30, 2025, compared to $197.8 million at September 30, 2024. Cash and cash equivalents were $20.4 million at June 30, 2025, compared to $40.8 million at September 30, 2024. The Company's current ratio was 1.7 at June 30, 2025 and 1.5 at September 30, 2024, respectively.
38
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
Long-Term Contractual Obligations:
The following table summarizes the Company's contractual obligations at June 30, 2025, and the effect such obligations are expected to have on its liquidity and cash flows in future periods.
| Payments due in fiscal year: | |||||||||||||||||||||||||||||
| Total | 2025 Remainder | 2026 to 2027 | 2028 to 2029 | After 2029 | |||||||||||||||||||||||||
| Contractual Cash Obligations: | (Dollar amounts in thousands) | ||||||||||||||||||||||||||||
| Revolving credit facilities | $ | 380,785 | $ | — | $ | 366 | $ | 380,419 | $ | — | |||||||||||||||||||
| 2027 Senior Secured Notes | 360,317 | — | 51,750 | 308,567 | — | ||||||||||||||||||||||||
Finance lease obligations (1) | 22,262 | 1,881 | 13,988 | 5,320 | 1,073 | ||||||||||||||||||||||||
Non-cancelable operating leases (1) | 55,987 | 5,040 | 30,951 | 14,545 | 5,451 | ||||||||||||||||||||||||
| Cross-currency swaps | 59,717 | — | 59,717 | — | — | ||||||||||||||||||||||||
Other (2) | 15,593 | 4,472 | 8,478 | — | 2,643 | ||||||||||||||||||||||||
| Total contractual cash obligations | $ | 894,661 | $ | 11,393 | $ | 165,250 | $ | 708,851 | $ | 9,167 | |||||||||||||||||||
(1) Lease obligations have not been discounted to their present value.
(2) Includes $4,472 of severance and other employee termination benefit obligations, as well as $5,286 of deferred purchase price and contingent consideration obligations related to acquisitions completed in prior years.
Unrecognized tax benefits are positions taken, or expected to be taken, on an income tax return that may result in additional payments to tax authorities. If a tax authority agrees with the tax position taken, or expected to be taken, or the applicable statute of limitations expires, then additional payments will not be necessary. As of June 30, 2025, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $2.1 million. The timing of potential future payments related to the unrecognized tax benefits is not presently determinable. The Company believes that its current liquidity sources, combined with its operating cash flow and borrowing capacity, will be sufficient to meet its capital needs for the foreseeable future.
REGULATORY MATTERS:
The Company’s operations are subject to various federal, state and local laws and regulations requiring strict compliance, including, but not limited to, the protection of the environment. The Company has established numerous internal compliance programs to further enhance measures meant to ensure lawful satisfaction of the applicable regulations. In addition, the Company is party to specific environmental matters which include obligations to investigate and mitigate the effects on the environment of certain materials at operating and non-operating sites. The Company is currently performing environmental assessments and remediation at certain sites, as applicable.
ACQUISITIONS AND DIVESTITURES:
Refer to Note 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further details on the Company's acquisitions and divestitures.
FORWARD-LOOKING INFORMATION:
Management routinely develops and reviews with the Company’s Board of Directors strategic plans with the primary objective of continuous improvement in the Company’s consolidated sales and operating results, with a view towards enterprise-level strategic transactions. Strategic plans are developed at the business segment level and generally contain strategies for organic growth and acquisitions. Organic growth primarily reflects the Company’s internal efforts to grow its businesses including commercial activities, cost structure and productivity improvements, new product development, and the expansion into new markets with existing products. Growth through acquisitions reflects the benefits from acquired businesses and also includes related integration activities to achieve commercial and cost synergy benefits.
The significant factors influencing organic sales growth in the Industrial Technologies segment include economic/industrial market conditions, new product development, and the electric vehicles ("EV") and e-commerce trends. Sales within this
39
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
segment are influenced by the timing of work with the Company's largest energy storage customer, which may be impacted by continuing disputes with such customer, as well as the level of advancement by existing and potential new customers towards adopting new production solutions. For the Memorialization segment, the Company expects that sales growth will be influenced by North America death rates and the impact of the increasing trend toward cremation on the segment's product offerings, including caskets, cemetery memorial products and cremation-related products. On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Following the completion of this transaction, the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis. See Notes 6, "Investments" and 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further information with respect to the Company's sale of its interest in the SGK Business. The underlying business performance for the Company's investment in Propelis will be influenced by global economic conditions, brand innovation, the level of marketing spending by the investee's clients, government regulation, currency fluctuations, and the ability of the investee to effectively integrate and achieve anticipated synergy benefits from the joint venture.
The Matthews Board of Directors has launched a comprehensive review of strategic alternatives for the Company’s entire portfolio of businesses, which was publicly announced in November 2024. The Board is dedicated to driving long-term value creation, and the strategic alternatives process is a reflection of that commitment. In addition to the recent divestiture of the Company’s interest in the SGK Business, the Company expects to announce several additional initiatives over the course of fiscal 2025 that will focus on driving shareholder value. The Company also initiated cost reduction programs during the fourth quarter of fiscal 2024, which are primarily focused on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions. These cost reduction programs are expected to be completed by fiscal 2026.
CRITICAL ACCOUNTING ESTIMATES AND POLICIES:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Therefore, the determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, economic conditions, and in some cases, actuarial techniques. Actual results may differ from those estimates. A discussion of market risks affecting the Company can be found in Item 7A - "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
A summary of the Company's significant accounting policies are included in the Notes to Consolidated Financial Statements and in the critical accounting policies in Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the Company's operating results and financial condition.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
Refer to Note 2, "Basis of Presentation" in Item 1 - "Financial Statements," for further details on recently issued accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Except as set forth in Note 8, "Derivatives and Hedging Activities" in Item 1 - "Financial Statements," there have been no material changes in the Company’s market risk during the three and nine months ended June 30, 2025. For additional information, see Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
40
Item 4. Controls and Procedures
The Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to provide reasonable assurance that information required to be disclosed in our reports filed under that Act (the "Exchange Act"), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. These disclosure controls and procedures also are designed to provide reasonable assurance that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
Management, under the supervision and with the participation of our Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures in effect as of June 30, 2025. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2025, the Company's disclosure controls and procedures were effective to provide reasonable assurance that material information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, and that such information is recorded, summarized and properly reported within the appropriate time period, relating to the Company and its consolidated subsidiaries, required to be included in the Exchange Act reports, including this Quarterly Report on Form 10-Q.
There have been no changes in the Company's internal controls over financial reporting that occurred during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.
41
PART II ‑ OTHER INFORMATION
Item 1. Legal Proceedings
The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Management does not expect that the results of any of these ordinary course legal proceedings, as presently positioned, will have a material adverse effect on Matthews' financial condition, results of operations or cash flows.
In addition to these ordinary course legal proceedings, the Company is involved in the following legal proceedings.
On October 7, 2024, the United States District Court for the Northern District of California granted the Company’s motion to compel arbitration in response to a complaint filed by Tesla on June 14, 2024 against the Company in the Northern District of California, Civil Action No. 5:24-cv-03615 (N.D. Cal.), which alleged trade secret misappropriation under the DTSA and the CUTSA, breach of contract and unfair business practices. Given the Court’s favorable ruling, the matter filed by Tesla has been effectively stayed pending arbitration, which Tesla has initiated. The Company maintains the claims vaguely stated in the complaint are without merit and continues to vigorously defend itself against the allegations in the arbitration.
In addition, on February 13, 2025, Tesla filed another additional complaint against the Company in the United States District Court for the Northern District of California alleging, in part, claims related to correction of inventorship, breach of contract, promissory estoppel and quasi-contract/restitution arising from and/or related to various U.S. patents and provisional patents, including but not limited to U.S. Patent No. 12,136,727. Similar to the prior matter, the Company has already filed a motion to compel arbitration and maintains the claims vaguely stated in the complaint filed on February 13, 2025 are also without merit. The Company intends to vigorously defend itself against the allegations.
An estimate of the possible loss or range of loss related to both matters cannot be made at this time given the continued lack of specificity in the applicable pleadings and/or proceedings. In light of the substantial harm caused to the Company by Tesla's actions, the Company is now pursuing counterclaims against Tesla. As of the date of the filing of this Quarterly Report on Form 10-Q, the Company does not expect these matters will have a material adverse effect on Matthews' financial condition, results of operations or cash flows. Sales relating to dry battery electrode solutions were approximately 6% of the Company's sales for fiscal 2024. For a discussion of the risks to the Company associated with this matter, see Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 - "Risk Factors - Intellectual property infringement assertions by third parties, including those of Tesla, could result in significant costs and adversely affect the Company's business, financial condition, operating results and reputation."
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, except for the updated risk factors provided below. The risk factors disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, in addition to the other information set forth in this report, including the updated risk factors below, could adversely affect the Company's operating performance and financial condition. Additional risks not currently known or deemed immaterial may also result in adverse effects on the Company.
The Company's results of operations could be impacted if its investment in Propelis Group (“Propelis”) fails to perform as expected. On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment to a newly-formed entity, Propelis, in exchange for (i) 40% of the common equity of Propelis, (ii) certain preferred equity interests in Propelis, and (iii) cash consideration. Propelis is unconsolidated with the Company, and the Company is a minority owner therein; as such, the Company is not the ultimate decision-maker with respect to the operations of Propelis or distributions of cash to its unitholders. The Company may realize losses related to its investment in Propelis, which could have a material negative effect on its business, financial condition and results of operations. The Company is subject to customary restrictions on the transfer of its equity interests, limiting the Company's ability to dispose of its equity interests in Propelis. If the Company is unable to manage its interest in Propelis and realize the strategic and financial benefits that it expects, such inability may lead to a material adverse impact on its results of operations.
Changes to U.S. trade policy, including new or increased tariffs and changing import/export regulations, could have a material adverse effect on the Company's operating results. Changes in U.S. or international social, political, regulatory or economic conditions or in laws and policies governing foreign trade, and any potential negative sentiment toward the U.S. as a
42
Part II - Other Information, Continued
result of such changes, could materially and adversely affect the Company's business. The U.S. has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S. and other countries (such as the European Union, China, Canada and Mexico) where the Company conducts its business. For example, on April 2, 2025, the U.S. government announced a 10% tariff on product imports from almost all countries and individualized higher tariffs on certain other countries. While several tariff announcements have been followed by announcements of limited exemptions and temporary pauses, global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could further materially and adversely affect the Company's financial performance.
As a result of policy changes and government proposals, there may be greater restrictions and economic deterrents on international trade. New tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries and may trigger additional retaliatory actions in the future, and foreign governments have instituted or are considering imposing trade sanctions on U.S. goods. Such changes have the potential to adversely impact the U.S. economy, the industries in which the Company operates, and the global demand for its products, and as a result, could have a negative impact on its business, financial condition and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Stock Repurchase Plan
The Company has a stock repurchase program. The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its common stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. Under the current authorization, 48,829 shares remained available for repurchase as of June 30, 2025.
The following table shows the monthly stock repurchase activity for the third quarter of fiscal 2025:
| Period | Total number of shares purchased | Weighted-average price paid per share | Total number of shares purchased as part of a publicly announced plan | Maximum number of shares that may yet be purchased under the plan | ||||||||||||||||||||||
April 2025 | 146,886 | $ | 19.79 | 146,886 | 287,468 | |||||||||||||||||||||
May 2025 | 220,218 | 19.90 | 220,218 | 67,250 | ||||||||||||||||||||||
June 2025 | 18,421 | 22.02 | 18,421 | 48,829 | ||||||||||||||||||||||
| Total | 385,525 | $ | 19.96 | 385,525 | ||||||||||||||||||||||
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
43
Part II - Other Information, Continued
Item 5. Other Information
(a)
None.
(b)
None.
(c)
None of the Company’s directors or officers adopted terminated
Item 6. Exhibits and Reports on Form 8-K
| (a) | Exhibits | ||||||||||
| Exhibit No. | Description | Method of Filing | |||||||||
| 3.1 | Restated Articles of Incorporation* | Exhibit Number 3.1 to the Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2024 | |||||||||
| 3.2 | Amended and Restated By-laws of Matthews International Corporation* | Exhibit Number 3.2 to the Annual Report on Form 10-K for the fiscal year ended September 30, 2023 | |||||||||
| 10.1a | Amended Restricted Stock Unit Agreement For Certain Departing SGK Employees, dated May 1, 2025, by and between Matthews International Corporation and Gary R. Kohl* | Exhibit Number 10.1a to the Current Report on Form 8-K filed on May 1, 2025 | |||||||||
| 31.1 | Certification of Principal Executive Officer for Joseph C. Bartolacci | Filed herewith | |||||||||
| 31.2 | Certification of Principal Financial Officer for Steven F. Nicola | Filed herewith | |||||||||
| 32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Joseph C. Bartolacci | Furnished herewith | |||||||||
| 32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Steven F. Nicola | Furnished herewith | |||||||||
| 101.INS | XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | Filed herewith | |||||||||
| 101.SCH | XBRL Taxonomy Extension Schema | Filed herewith | |||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith | |||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith | |||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith | |||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith | |||||||||
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101) | Filed herewith | |||||||||
| * | Incorporated by reference | ||||||||||
| a | Represents a management contract or compensatory plan, contract or arrangement required to be filed by Item 601(b)(10)(iii) of Regulation S-K. | ||||||||||
44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MATTHEWS INTERNATIONAL CORPORATION | |||||||||||
| (Registrant) | |||||||||||
| Date: | August 6, 2025 | By: /s/ Joseph C. Bartolacci | |||||||||
| Joseph C. Bartolacci, President | |||||||||||
| and Chief Executive Officer | |||||||||||
| Date: | August 6, 2025 | By: /s/ Steven F. Nicola | |||||||||
| Steven F. Nicola, Chief Financial Officer | |||||||||||
| and Treasurer | |||||||||||
45
Source:
FAQ
Why did MATW's revenue decline in Q3 FY25?
Sales fell 18% mainly due to the divestiture of the SGK Brand Solutions business and softer Industrial Technologies demand.
What consideration did MATW receive for the SGK Brand Solutions sale?
MATW received a 40% equity interest in Propelis valued at $213 million and $50 million in preferred equity, plus cash proceeds of $228 million.
How much debt does Matthews International carry after the quarter?
Total debt is $702.5 million, down from $776.5 million at FY24 year-end; weighted average cost is about 4.16%.
What were MATW's earnings per share for Q3 FY25?
Diluted EPS was $0.49 compared with $0.06 in the prior-year quarter.
Did the company provide guidance for FY25?
No forward financial guidance was disclosed in the 10-Q filing.
Matthews Intl Corp
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