Matthews International Corporation (NASDAQ GSM: MATW) today
announced financial results for its third quarter of fiscal 2024.
In discussing the results for the Company’s
fiscal 2024 third quarter, Joseph C. Bartolacci, President and
Chief Executive Officer, stated:
“Our consolidated financial results continue to
be underpinned by the strength of our core businesses, particularly
from our Memorialization and SGK Brand Solutions segments, which
generated another quarter of solid performance. The Memorialization
segment reported sales relatively consistent with the same quarter
last year, despite a decline in U.S. casketed deaths. The impact of
unit volume declines in cemetery memorials and caskets related to
the lower deaths was substantially offset by improved pricing and
higher sales of mausoleums.
“Sales for the SGK Brand Solutions segment were
modestly higher for the current quarter. The segment’s improvement
primarily reflected growth in the private label market and in its
European packaging business. The pricing environment to mitigate
inflationary cost increases in this business also continues to
improve.
“With respect to the Industrial Technologies
segment, sales for our product identification business also
remained relatively consistent with a year ago. However, further
customer delays of shipments and related installations for our
energy storage business unfavorably impacted the segment’s sales
compared to a year ago. Additionally, slow conditions in the
general warehouse automation market contributed to the
year-over-year decline in sales for this segment.
“For the three months ended June 30, 2024, we
reported another quarter of solid cash flow which facilitated
further reduction of $12.6 million in our outstanding debt. We are
currently projecting further debt reduction in the fiscal 2024
fourth quarter. With respect to our outstanding bonds, which are
scheduled to mature on December 1, 2025, we expect this refinancing
to be completed in advance of December 1, 2024.
“Looking forward to our fiscal 2024 fourth
quarter, we currently project adjusted EBITDA to be relatively
consistent with a year ago. The Memorialization segment is expected
to be generally in line with last year despite lower projected
deaths, and the SGK Brand Solutions segment is expected to finish
fiscal 2024 relatively consistent as well. We expect energy storage
shipments and installations to pick up in the fiscal 2024 fourth
quarter, and into fiscal 2025. Also, order rates for the warehouse
automation business began to improve in the third quarter, which
has continued into the early part of our fourth quarter. As a
result, we are currently projecting adjusted EBITDA for fiscal 2024
to be in the range of $205 million to $210 million.
“As we have previously indicated, our
proprietary dry battery electrode equipment technology
significantly reduces the production cost of batteries. As you are
aware, Tesla recently filed a suit attempting to restrict us from
offering our innovative solutions to others. We remain confident in
our ability to sell our equipment solutions into the growing
electric vehicle market as our experienced global engineering
talent brings a unique and valuable knowledge base to this market.
Battery and automobile equipment manufacturers from around the
world continue to solicit us for an opportunity to work with our
Company and we have continued to receive orders. We do not
currently believe Tesla's suit will have a material impact on the
Company and we continue to strongly believe that there is no merit
to the claims against the Company.
“Lastly, beginning in our fiscal 2024 fourth
quarter, we are initiating cost reduction programs which will span
several of our business units as well as our corporate functions.
We are targeting annual consolidated savings from these programs of
up to $50 million, with the most significant portion from our
engineering and tooling operations in Europe. These initiatives are
designed to position these businesses to capitalize on future
growth opportunities. We currently estimate our one-time costs to
achieve these savings to approximate $40 million.”
Third Quarter
Fiscal 2024 Consolidated Results
(Unaudited)
| ($ in millions, except per
share data) |
Q3 FY2024 |
|
Q3 FY2023 |
|
Change |
|
|
% Change |
|
|
Sales |
$ |
427.8 |
|
|
$ |
471.9 |
|
|
$ |
(44.1 |
) |
|
|
(9.3 |
)% |
| Net income attributable to
Matthews |
$ |
1.8 |
|
|
$ |
8.7 |
|
|
$ |
(7.0 |
) |
|
|
(79.7 |
)% |
|
Diluted earnings per share |
$ |
0.06 |
|
|
$ |
0.28 |
|
|
$ |
(0.22 |
) |
|
|
(78.6 |
)% |
| Non-GAAP adjusted net
income |
$ |
17.3 |
|
|
$ |
23.0 |
|
|
$ |
(5.7 |
) |
|
|
(24.7 |
)% |
|
Non-GAAP adjusted EPS |
$ |
0.56 |
|
|
$ |
0.74 |
|
|
$ |
(0.18 |
) |
|
|
(24.3 |
)% |
| Adjusted EBITDA |
$ |
44.7 |
|
|
$ |
56.2 |
|
|
$ |
(11.4 |
) |
|
|
(20.4 |
)% |
| Note: See the
attached tables for additional important disclosures regarding
Matthews’ use of non-GAAP measures as well as reconciliations of
non-GAAP measures to corresponding GAAP measures. |
| |
Consolidated sales for the quarter ended
June 30, 2024 were $427.8 million, compared to $471.9 million
for the same quarter a year ago, representing a decrease of $44.1
million, or 9.3%. Changes in foreign currency exchange rates were
estimated to have an unfavorable impact of $4.1 million on fiscal
2024 third quarter sales compared to the prior year.
Net income attributable to the Company for the
quarter ended June 30, 2024 was $1.8 million, or $0.06 per
share, compared to $8.7 million, or $0.28 per share in the prior
year. On a non-GAAP adjusted basis, earnings for the fiscal 2024
third quarter were $0.56 per share, compared to $0.74 per share a
year ago. The decrease was primarily attributable to lower
consolidated adjusted EBITDA and higher interest expense for the
current quarter compared to a year ago, partially offset by income
tax benefits. Adjusted EBITDA for the fiscal 2024 third quarter was
$44.7 million, compared to $56.2 million a year ago, primarily
reflecting lower adjusted EBITDA in the Industrial Technologies
segment, partially offset by lower corporate and non-operating
costs.
Fiscal 2024
Year-to-Date Consolidated Results (Unaudited)
| ($ in millions, except per
share data) |
YTD FY2024 |
|
YTD FY2023 |
|
Change |
|
|
% Change |
|
|
Sales |
$ |
1,349.0 |
|
|
$ |
1,400.7 |
|
|
$ |
(51.7 |
) |
|
|
(3.7 |
)% |
| Net income attributable to
Matthews |
$ |
8.5 |
|
|
$ |
21.6 |
|
|
$ |
(13.1 |
) |
|
|
(60.6 |
)% |
|
Diluted earnings per share |
$ |
0.27 |
|
|
$ |
0.69 |
|
|
$ |
(0.42 |
) |
|
|
(60.9 |
)% |
| Non-GAAP adjusted net
income |
$ |
50.5 |
|
|
$ |
59.8 |
|
|
$ |
(9.3 |
) |
|
|
(15.6 |
)% |
|
Non-GAAP adjusted EPS |
$ |
1.62 |
|
|
$ |
1.92 |
|
|
$ |
(0.30 |
) |
|
|
(15.6 |
)% |
| Adjusted EBITDA |
$ |
147.0 |
|
|
$ |
163.9 |
|
|
$ |
(16.9 |
) |
|
|
(10.3 |
)% |
| Note: See the
attached tables for additional important disclosures regarding
Matthews’ use of non-GAAP measures as well as reconciliations of
non-GAAP measures to corresponding GAAP measures. |
| |
Consolidated sales for the nine months ended
June 30, 2024 were $1.35 billion, compared to $1.40 billion a
year ago, representing an decrease of $51.7 million, or 3.7%.
Changes in foreign currency rates were estimated to have a
favorable impact of $660,000 on fiscal 2024 consolidated sales
compared to last year.
Net income attributable to the Company for the
nine months ended June 30, 2024 was $8.5 million, or $0.27 per
share, compared to $21.6 million, or $0.69 per share in the prior
year. On a non-GAAP adjusted basis, earnings for the nine months
ended June 30, 2024 were $1.62 per share, compared to $1.92
per share a year ago. The decrease was primarily attributable to
lower consolidated adjusted EBITDA and higher interest expense for
the current period compared to a year ago, partially offset by
income tax benefits. Adjusted EBITDA for the first nine months of
fiscal 2024 was $147.0 million, compared to $163.9 million a year
ago, reflecting lower adjusted EBITDA in the Industrial
Technologies and Memorialization segments, partially offset by
higher adjusted EBITDA in the SGK Brand Solutions segment and lower
corporate and non-operating costs.
Webcast
The Company will host a conference call and
webcast on Friday, August 2, 2024 at 9:00 a.m. Eastern Time to
review its financial and operating results and discuss its
corporate strategies and outlook. A question-and-answer session
will follow. The conference call can be accessed by dialing (201)
689-8471. The audio webcast can be monitored at www.matw.com. As
soon as available after the call, a transcript of the call will be
posted on the Investor Relations section of the Company’s website
at www.matw.com.
About Matthews International
Corporation
Matthews International Corporation is a global
provider of memorialization products, industrial technologies, and
brand solutions. The Memorialization segment is a leading provider
of memorialization products, including memorials, caskets,
cremation-related products, and cremation and incineration
equipment, primarily to cemetery and funeral home customers that
help families move from grief to remembrance. The Industrial
Technologies segment includes the design, manufacturing, service
and distribution 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 SGK Brand Solutions segment is a
leading provider of packaging solutions and brand experiences,
helping companies simplify their marketing, amplify their brands
and provide value. The Company has approximately 12,000 employees
in more than 30 countries on six continents that are committed to
delivering the highest quality products and services.
Forward-looking Information
Any forward-looking statements contained in this
release 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, 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 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, 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 and divestitures, 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 outcome of the Company's
dispute with Tesla, Inc. ("Tesla"), and other factors described in
the Company’s Annual Report on Form 10-K and other periodic filings
with the U.S. Securities and Exchange Commission.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)(In thousands, except per share
data) |
| |
| |
Three Months EndedJune 30, |
|
|
|
Nine Months EndedJune 30, |
|
|
| |
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
Sales |
$ |
427,833 |
|
|
$ |
471,908 |
|
|
|
(9.3 |
)% |
|
$ |
1,349,042 |
|
|
$ |
1,400,728 |
|
|
|
(3.7 |
)% |
|
Cost of sales |
|
(295,996 |
) |
|
|
(333,603 |
) |
|
|
(11.3 |
)% |
|
|
(936,670 |
) |
|
|
(973,870 |
) |
|
|
(3.8 |
)% |
|
Gross profit |
|
131,837 |
|
|
|
138,305 |
|
|
|
(4.7 |
)% |
|
|
412,372 |
|
|
|
426,858 |
|
|
|
(3.4 |
)% |
|
Gross margin |
|
30.8 |
% |
|
|
29.3 |
% |
|
|
|
|
|
|
30.6 |
% |
|
|
30.5 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative expenses |
|
(116,098 |
) |
|
|
(106,141 |
) |
|
|
9.4 |
% |
|
|
(347,124 |
) |
|
|
(333,556 |
) |
|
|
4.1 |
% |
|
Amortization of intangible assets |
|
(9,037 |
) |
|
|
(10,640 |
) |
|
|
(15.1 |
)% |
|
|
(27,791 |
) |
|
|
(31,499 |
) |
|
|
(11.8 |
)% |
|
Operating profit |
|
6,702 |
|
|
|
21,524 |
|
|
|
(68.9 |
)% |
|
|
37,457 |
|
|
|
61,803 |
|
|
|
(39.4 |
)% |
|
Operating margin |
|
1.6 |
% |
|
|
4.6 |
% |
|
|
|
|
|
|
2.8 |
% |
|
|
4.4 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other deductions, net |
|
(13,754 |
) |
|
|
(13,411 |
) |
|
|
2.6 |
% |
|
|
(39,633 |
) |
|
|
(36,224 |
) |
|
|
9.4 |
% |
| (Loss) income before
income taxes |
|
(7,052 |
) |
|
|
8,113 |
|
|
|
(186.9 |
)% |
|
|
(2,176 |
) |
|
|
25,579 |
|
|
|
(108.5 |
)% |
|
Income taxes |
|
8,829 |
|
|
|
558 |
|
|
|
NM |
|
|
|
10,677 |
|
|
|
(4,136 |
) |
|
|
NM |
|
|
Net income |
|
1,777 |
|
|
|
8,671 |
|
|
|
(79.5 |
)% |
|
|
8,501 |
|
|
|
21,443 |
|
|
|
(60.4 |
)% |
|
Non-controlling interests |
|
— |
|
|
|
67 |
|
|
|
(100.0 |
)% |
|
|
— |
|
|
|
125 |
|
|
|
(100.0 |
)% |
| Net income
attributable to Matthews |
$ |
1,777 |
|
|
$ |
8,738 |
|
|
|
(79.7 |
)% |
|
$ |
8,501 |
|
|
$ |
21,568 |
|
|
|
(60.6 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share --
diluted |
$ |
0.06 |
|
|
$ |
0.28 |
|
|
|
(78.6 |
)% |
|
$ |
0.27 |
|
|
$ |
0.69 |
|
|
|
(60.9 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share --
non-GAAP (1) |
$ |
0.56 |
|
|
$ |
0.74 |
|
|
|
(24.3 |
)% |
|
$ |
1.62 |
|
|
$ |
1.92 |
|
|
|
(15.6 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends declared per
share |
$ |
0.24 |
|
|
$ |
0.23 |
|
|
|
4.3 |
% |
|
$ |
0.72 |
|
|
$ |
0.69 |
|
|
|
4.3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted
Shares |
|
31,228 |
|
|
|
31,244 |
|
|
|
|
|
31,223 |
|
|
|
31,129 |
|
|
|
|
|
|
(1) See reconciliation of non-GAAP financial information provided
in tables at the end of this release |
|
NM: Not meaningful |
|
|
|
SEGMENT INFORMATION (Unaudited)(In
thousands) |
| |
| |
Three Months EndedJune 30, |
|
Nine Months EndedJune 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Sales: |
|
|
|
|
|
|
|
|
Memorialization |
$ |
202,664 |
|
|
$ |
208,728 |
|
|
$ |
632,891 |
|
|
$ |
638,119 |
|
|
Industrial Technologies |
|
91,731 |
|
|
|
130,533 |
|
|
|
319,241 |
|
|
|
365,190 |
|
|
SGK Brand Solutions |
|
133,438 |
|
|
|
132,647 |
|
|
|
396,910 |
|
|
|
397,419 |
|
|
|
$ |
427,833 |
|
|
$ |
471,908 |
|
|
$ |
1,349,042 |
|
|
$ |
1,400,728 |
|
| Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
Memorialization |
$ |
38,737 |
|
|
$ |
39,929 |
|
|
$ |
122,051 |
|
|
$ |
127,096 |
|
|
Industrial Technologies |
|
4,196 |
|
|
|
15,041 |
|
|
|
23,846 |
|
|
|
42,808 |
|
|
SGK Brand Solutions |
|
16,054 |
|
|
|
16,364 |
|
|
|
44,317 |
|
|
|
39,616 |
|
|
Corporate and Non-Operating |
|
(14,241 |
) |
|
|
(15,146 |
) |
|
|
(43,186 |
) |
|
|
(45,594 |
) |
|
Total Adjusted EBITDA (1) |
$ |
44,746 |
|
|
$ |
56,188 |
|
|
$ |
147,028 |
|
|
$ |
163,926 |
|
| |
|
|
|
|
|
|
|
|
(1) See reconciliation of non-GAAP financial information provided
in tables at the end of this release |
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(Unaudited)(In thousands) |
| |
|
|
June 30, 2024 |
September 30, 2023 |
|
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
42,745 |
|
|
$ |
42,101 |
|
| Accounts
receivable, net |
|
|
192,817 |
|
|
|
207,526 |
|
|
Inventories, net |
|
|
248,644 |
|
|
|
260,409 |
|
| Other
current assets |
|
|
157,873 |
|
|
|
138,221 |
|
|
Total current assets |
|
|
642,079 |
|
|
|
648,257 |
|
|
Property, plant and equipment, net |
|
|
272,875 |
|
|
|
270,326 |
|
|
Goodwill |
|
|
706,219 |
|
|
|
698,109 |
|
| Other
intangible assets, net |
|
|
134,801 |
|
|
|
160,478 |
|
| Other
long-term assets |
|
|
105,903 |
|
|
|
110,211 |
|
|
Total assets |
|
$ |
1,861,877 |
|
|
$ |
1,887,381 |
|
| |
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Long-term debt, current maturities |
|
$ |
5,476 |
|
|
$ |
3,696 |
|
| Other
current liabilities |
|
|
380,676 |
|
|
|
390,904 |
|
|
Total current liabilities |
|
|
386,152 |
|
|
|
394,600 |
|
|
Long-term debt |
|
|
824,745 |
|
|
|
786,484 |
|
| Other
long-term liabilities |
|
|
147,288 |
|
|
|
181,016 |
|
|
Total liabilities |
|
|
1,358,185 |
|
|
|
1,362,100 |
|
| |
|
|
|
|
| SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Total shareholders' equity |
|
|
503,692 |
|
|
|
525,281 |
|
|
Total liabilities and shareholders' equity |
|
$ |
1,861,877 |
|
|
$ |
1,887,381 |
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED CASH FLOWS INFORMATION
(Unaudited)(In thousands) |
| |
| |
Nine Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ |
8,501 |
|
|
$ |
21,443 |
|
|
Adjustments to reconcile net income to net cash flows from
operating activities: |
|
|
|
Depreciation and amortization |
|
70,441 |
|
|
|
71,813 |
|
|
Changes in working capital items |
|
(29,154 |
) |
|
|
(16,131 |
) |
|
Other operating activities |
|
(6,452 |
) |
|
|
(219 |
) |
|
Net cash provided by operating activities |
|
43,336 |
|
|
|
76,906 |
|
| |
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
|
(33,180 |
) |
|
|
(37,107 |
) |
|
Acquisitions, net of cash acquired |
|
(5,825 |
) |
|
|
(15,341 |
) |
|
Other investing activities |
|
374 |
|
|
|
(1,269 |
) |
|
Net cash used in investing activities |
|
(38,631 |
) |
|
|
(53,717 |
) |
| |
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Net payments from long-term debt |
|
27,780 |
|
|
|
(31,442 |
) |
|
Purchases of treasury stock |
|
(20,525 |
) |
|
|
(2,818 |
) |
|
Dividends |
|
(24,063 |
) |
|
|
(21,184 |
) |
|
Other financing activities |
|
12,712 |
|
|
|
(913 |
) |
|
Net cash used in financing activities |
|
(4,096 |
) |
|
|
(56,357 |
) |
| |
|
|
|
| Effect
of exchange rate changes on cash |
|
35 |
|
|
|
1,049 |
|
| |
|
|
|
|
Net change in cash and cash equivalents |
$ |
644 |
|
|
$ |
(32,119 |
) |
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP Financial
Measures
Included in this report are measures of
financial performance that are not defined by GAAP, including,
without limitation, adjusted EBITDA, adjusted net income and EPS,
constant currency sales, constant currency adjusted EBITDA, net
debt and net debt leverage ratio. The Company defines net debt
leverage ratio as outstanding debt (net of cash) relative to
adjusted EBITDA. 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, ERP integration costs, strategic initiative 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. Constant currency sales and constant
currency adjusted EBITDA remove the impact of changes due to
foreign exchange translation rates. To calculate sales and adjusted
EBITDA on a constant currency basis, amounts for periods in the
current fiscal year are translated into U.S. dollars using exchange
rates applicable to the comparable periods of the prior fiscal
year. 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's calculations of its
non-GAAP financial measures, however, may not be comparable to
similarly titled measures reported by other companies. 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, provide investors with an additional understanding
of the factors and trends affecting the Company’s business that
could not be obtained absent these disclosures.
|
ADJUSTED EBITDA RECONCILIATION
(Unaudited)(In thousands) |
| |
| |
Three Months EndedJune 30, |
|
Nine Months EndedJune 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net
income |
$ |
1,777 |
|
|
$ |
8,671 |
|
|
$ |
8,501 |
|
|
$ |
21,443 |
|
|
Income tax (benefit) provision |
|
(8,829 |
) |
|
|
(558 |
) |
|
|
(10,677 |
) |
|
|
4,136 |
|
| (Loss) income before
income taxes |
$ |
(7,052 |
) |
|
$ |
8,113 |
|
|
$ |
(2,176 |
) |
|
$ |
25,579 |
|
|
Net loss attributable to noncontrolling interests |
|
— |
|
|
|
67 |
|
|
|
— |
|
|
|
125 |
|
|
Interest expense, including RPA and factoring financing fees
(1) |
|
14,005 |
|
|
|
12,136 |
|
|
|
40,539 |
|
|
|
35,944 |
|
|
Depreciation and amortization * |
|
23,657 |
|
|
|
23,936 |
|
|
|
70,441 |
|
|
|
71,813 |
|
|
Acquisition and divestiture related items (2)** |
|
2,266 |
|
|
|
308 |
|
|
|
5,565 |
|
|
|
4,445 |
|
|
Strategic initiatives and other charges (3)** |
|
6,246 |
|
|
|
4,694 |
|
|
|
17,128 |
|
|
|
7,755 |
|
|
Highly inflationary accounting losses (primarily non-cash) (4) |
|
185 |
|
|
|
1,826 |
|
|
|
895 |
|
|
|
3,074 |
|
|
Stock-based compensation |
|
5,331 |
|
|
|
5,023 |
|
|
|
14,309 |
|
|
|
13,635 |
|
|
Non-service pension and postretirement expense (5) |
|
108 |
|
|
|
85 |
|
|
|
327 |
|
|
|
1,556 |
|
| Total Adjusted
EBITDA |
$ |
44,746 |
|
|
$ |
56,188 |
|
|
$ |
147,028 |
|
|
$ |
163,926 |
|
|
Adjusted EBITDA margin |
|
10.5 |
% |
|
|
11.9 |
% |
|
|
10.9 |
% |
|
|
11.7 |
% |
| |
|
|
|
|
|
|
|
|
(1) Includes fees for receivables sold under the RPA and factoring
arrangements totaling $1,225 and $1,212 for the three months ended
June 30, 2024 and 2023, respectively, and $3,638 and $2,758
for the nine months ended June 30, 2024 and 2023,
respectively. |
|
(2) Includes certain non-recurring items associated with recent
acquisition and divestiture activities. |
|
(3) Includes certain non-recurring costs associated with
commercial, operational and cost-reduction initiatives, and costs
associated with global ERP system integration efforts. Fiscal 2024
also includes legal costs related to an ongoing dispute with Tesla,
which totaled $3,166 and $8,138 for the three and nine months ended
June 30, 2024, respectively. Fiscal 2023 includes loss recoveries
totaling $2,154 for the nine months ended June 30, 2023, 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. |
|
(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 $7,073 and
$5,807 for the Memorialization segment, $5,796 and $5,815 for the
Industrial Technologies segment, $9,702 and $11,164 for the SGK
Brand Solutions segment, and $1,086 and $1,150 for Corporate and
Non-Operating, for the three months ended June 30, 2024 and
2023, respectively. Depreciation and amortization was $20,400 and
$17,092 for the Memorialization segment, $17,744 and $17,584 for
the Industrial Technologies segment, $28,943 and $33,543 for the
SGK Brand Solutions segment, and $3,354 and $3,594 for Corporate
and Non-Operating, for the nine months ended June 30, 2024 and
2023, respectively.** Acquisition costs, ERP integration costs, and
strategic initiatives and other charges were $1,108 and $270 for
the Memorialization segment, $4,490 and $120 for the Industrial
Technologies segment, $1,473 and $3,897 for the SGK Brand Solutions
segment, and $1,441 and $715 for Corporate and Non-Operating, for
the three months ended June 30, 2024 and 2023, respectively.
Acquisition costs, ERP integration costs, and strategic initiatives
and other charges were $2,204 and $981 for the Memorialization
segment, $14,288 and $3,494 for the Industrial Technologies
segment, $2,694 and $7,028 for the SGK Brand Solutions segment, and
$3,507 and $697 for Corporate and Non-Operating, for the nine
months ended June 30, 2024 and 2023, respectively.
|
ADJUSTED NET INCOME AND EPS RECONCILIATION
(Unaudited)(In thousands, except per share
data) |
| |
| |
Three Months EndedJune 30, |
|
Nine Months EndedJune 30, |
| |
2024 |
|
2023 |
|
2024 |
|
2023 |
| |
|
per share |
|
|
per share |
|
|
per share |
|
|
per share |
|
Net income attributable to Matthews |
$ |
1,777 |
$ |
0.06 |
|
$ |
8,738 |
$ |
0.28 |
|
$ |
8,501 |
$ |
0.27 |
|
$ |
21,568 |
$ |
0.69 |
|
Acquisition and divestiture costs (1) |
|
1,626 |
|
0.05 |
|
|
233 |
|
— |
|
|
4,036 |
|
0.13 |
|
|
3,248 |
|
0.10 |
|
Strategic initiatives and other charges (2) |
|
6,715 |
|
0.22 |
|
|
4,129 |
|
0.14 |
|
|
15,812 |
|
0.51 |
|
|
7,069 |
|
0.23 |
|
Highly inflationary accounting losses (primarily non-cash) (3) |
|
185 |
|
0.01 |
|
|
1,826 |
|
0.06 |
|
|
895 |
|
0.03 |
|
|
3,074 |
|
0.10 |
|
Non-service pension and postretirement expense (4) |
|
82 |
|
— |
|
|
64 |
|
— |
|
|
246 |
|
0.01 |
|
|
1,167 |
|
0.04 |
|
Amortization |
|
6,777 |
|
0.22 |
|
|
7,980 |
|
0.26 |
|
|
20,843 |
|
0.67 |
|
|
23,624 |
|
0.76 |
|
Tax-related (5) |
|
136 |
|
— |
|
|
— |
|
— |
|
|
136 |
|
— |
|
|
— |
|
— |
| Adjusted net
income |
$ |
17,298 |
$ |
0.56 |
|
$ |
22,970 |
$ |
0.74 |
|
$ |
50,469 |
$ |
1.62 |
|
$ |
59,750 |
$ |
1.92 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Note: Adjustments to net income for non-GAAP reconciling items were
calculated using an income tax rate of 13.0% and 18.8% for the
three and nine months ended June 30, 2024, respectively, and 24.1%
and 25.3% for the three and nine months ended June 30, 2023,
respectively. |
|
(1) Includes certain non-recurring costs associated with recent
acquisition and divestiture activities. |
|
(2) Includes certain non-recurring costs associated with
commercial, operational and cost-reduction initiatives, and costs
associated with global ERP system integration efforts. Fiscal 2024
also includes legal costs related to an ongoing dispute with Tesla,
which totaled $3,166 and $8,138 for the three and nine months ended
June 30, 2024, respectively. Fiscal 2023 includes loss
recoveries totaling $2,154 for the nine months ended June 30,
2023, which were related to a previously disclosed theft of funds
by a former employee initially identified in fiscal 2015. |
|
(3) Represents exchange losses associated with highly inflationary
accounting related to the Company's Turkish subsidiaries. |
|
(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) Represents tax-related items incurred in connection with the
derecognition of deferred tax assets for a joint venture that is
being terminated. |
|
|
|
CONSTANT CURRENCY SALES AND ADJUSTED EBITDA RECONCILIATION
(Unaudited)(In thousands) |
| |
|
|
Memorialization |
|
Industrial Technologies |
|
SGK Brand Solutions |
|
Corporate and Non-Operating |
|
Consolidated |
|
Reported sales for the quarter ended June 30, 2024 |
$ |
202,664 |
|
|
$ |
91,731 |
|
|
$ |
133,438 |
|
|
$ |
— |
|
|
$ |
427,833 |
|
|
Changes in foreign exchange translation rates |
|
147 |
|
|
|
1,398 |
|
|
|
2,559 |
|
|
|
— |
|
|
|
4,104 |
|
| Constant
currency sales for the quarter ended June 30, 2024 |
$ |
202,811 |
|
|
$ |
93,129 |
|
|
$ |
135,997 |
|
|
$ |
— |
|
|
$ |
431,937 |
|
| |
|
|
|
|
|
|
|
|
|
| Reported sales for the nine
months ended June 30, 2024 |
$ |
632,891 |
|
|
$ |
319,241 |
|
|
$ |
396,910 |
|
|
$ |
— |
|
|
$ |
1,349,042 |
|
|
Changes in foreign exchange translation rates |
|
(256 |
) |
|
|
(3,277 |
) |
|
|
2,873 |
|
|
|
— |
|
|
|
(660 |
) |
| Constant
currency sales for the nine months ended June 30, 2024 |
$ |
632,635 |
|
|
$ |
315,964 |
|
|
$ |
399,783 |
|
|
$ |
— |
|
|
$ |
1,348,382 |
|
| |
|
|
|
|
|
|
|
|
|
|
Reported adjusted EBITDA for the quarter ended June 30,
2024 |
$ |
38,737 |
|
|
$ |
4,196 |
|
|
$ |
16,054 |
|
|
$ |
(14,241 |
) |
|
$ |
44,746 |
|
|
Changes in foreign exchange translation rates |
|
25 |
|
|
|
217 |
|
|
|
168 |
|
|
|
21 |
|
|
|
431 |
|
| Constant currency adjusted
EBITDA for the quarter ended June 30, 2024 |
$ |
38,762 |
|
|
$ |
4,413 |
|
|
$ |
16,222 |
|
|
$ |
(14,220 |
) |
|
$ |
45,177 |
|
| |
|
|
|
|
|
|
|
|
|
| Reported adjusted EBITDA for
the nine months ended June 30, 2024 |
$ |
122,051 |
|
|
$ |
23,846 |
|
|
$ |
44,317 |
|
|
$ |
(43,186 |
) |
|
$ |
147,028 |
|
|
Changes in foreign exchange translation rates |
|
122 |
|
|
|
(292 |
) |
|
|
299 |
|
|
|
(86 |
) |
|
|
43 |
|
| Constant currency adjusted
EBITDA for the nine months ended June 30, 2024 |
$ |
122,173 |
|
|
$ |
23,554 |
|
|
$ |
44,616 |
|
|
$ |
(43,272 |
) |
|
$ |
147,071 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT AND NET DEBT LEVERAGE RATIO RECONCILIATION
(Unaudited)(Dollars in thousands) |
| |
| |
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
| |
|
|
|
|
|
|
|
|
Long-term debt, current maturities |
$ |
5,476 |
|
|
$ |
5,419 |
|
|
$ |
4,948 |
|
|
$ |
3,696 |
|
|
Long-term debt |
|
824,745 |
|
|
|
837,357 |
|
|
|
857,423 |
|
|
|
786,484 |
|
| Total debt |
|
830,221 |
|
|
|
842,776 |
|
|
|
862,371 |
|
|
|
790,180 |
|
| |
|
|
|
|
|
|
|
|
Less: Cash and cash equivalents |
|
(42,745 |
) |
|
|
(45,497 |
) |
|
|
(37,921 |
) |
|
|
(42,101 |
) |
| |
|
|
|
|
|
|
|
| Net Debt |
$ |
787,476 |
|
|
$ |
797,279 |
|
|
$ |
824,450 |
|
|
$ |
748,079 |
|
| |
|
|
|
|
|
|
|
|
Adjusted EBITDA (trailing 12 months) |
$ |
208,911 |
|
|
$ |
220,353 |
|
|
$ |
222,000 |
|
|
$ |
225,809 |
|
| |
|
|
|
|
|
|
|
| Net Debt Leverage
Ratio |
|
3.8 |
|
|
|
3.6 |
|
|
|
3.7 |
|
|
|
3.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthews International CorporationCorporate
OfficeTwo NorthShore CenterPittsburgh, PA 15212-5851Phone: (412)
442-8200
| |
Contact |
Steven F.
Nicola |
William D.
Wilson |
| |
|
Chief Financial Officerand Secretary |
Senior Director,Corporate Development |
| |
|
|
|
Matthews (NASDAQ:MATW)
Gráfica de Acción Histórica
De Jul 2024 a Ago 2024
Matthews (NASDAQ:MATW)
Gráfica de Acción Histórica
De Ago 2023 a Ago 2024
