Matthews International Reports Results for Fiscal 2020 Third Quarter
Matthews International Corporation (NASDAQ: MATW) reported its financial results for Q3 FY2020, showing a decrease in consolidated sales to $359.4 million, down 5.2% year-over-year. The net income dropped significantly to $2.3 million ($0.07 per share), an 84.5% decline compared to $14.6 million in Q3 FY2019. Noteworthy was a substantial debt reduction of $104.9 million and strong operating cash flow exceeding $57 million. The Memorialization segment saw revenue growth, while the SGK Brand Solutions and Industrial Technologies segments experienced declines due to COVID-19 impacts. Adjusted EBITDA fell to $49.4 million.
- Debt reduction of $104.9 million in Q3.
- Operating cash flow exceeded $57 million, up $34.2 million year-over-year.
- Memorialization segment sales grew to $162.1 million, reflecting higher casket and cremation equipment sales.
- Consolidated sales decreased by 5.2% year-over-year.
- Net income fell to $2.3 million, an 84.5% drop from Q3 FY2019.
- SGK Brand Solutions segment sales declined by 8.9% to $165.8 million.
Financial Highlights:
- Significant third quarter reduction in debt of
$104.9 million - Strong third quarter operating cash flow exceeded
$57.0 million ; YTD exceeded prior year by$34.2 million - Memorialization segment reports higher sales for third fiscal quarter and YTD
- Third quarter GAAP EPS of
$0.07 ; Non-GAAP adjusted EPS of$0.80
PITTSBURGH, July 30, 2020 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) today announced financial results for its third quarter of fiscal 2020 and nine months ended June 30, 2020.
In discussing the results for the Company’s fiscal 2020 third quarter, Joseph C. Bartolacci, President and Chief Executive Officer, stated:
“I am very pleased with the performance of our overall business during these challenging times. The relative stability of our consolidated results reflects the diversity of our core businesses and highlights what we believe to be the strength of the franchise … leading market positions in stable end markets. Our performance has allowed us to deliver very strong cash flow for the fiscal 2020 third quarter and corresponding debt reduction which well exceeded last year’s performance.
“The Memorialization segment reported sales growth compared to a year ago, reflecting higher casket sales and an increase in sales of cremation equipment. These gains were partially offset by lower cemetery memorial products sales, which were impacted by many local stay-at-home orders that limited families’ access with cemeteries to arrange for their memorials. However, we anticipate most of these orders are deferred to a future date.
“Also, while economic conditions were slower during the quarter due to the pandemic, our SGK Brand Solutions segment performed well, particularly in our core brand packaging portion of the business. Despite more competitive customer pricing, sales volumes for our brand packaging business were relatively steady, particularly in the North America and Asia Pacific regions. Engineering sales, which are included in our SGK Brand Solutions segment, increased during the quarter reflecting our recent expansion into the energy storage market, but sales of cylinders and surfaces, primarily in the European region, declined for the quarter reflecting the economic impacts on those markets.
“Sales for our Industrial Technologies segment declined for the quarter compared to a year ago, also reflecting the slower global economy. Incoming orders for our warehouse automation solutions remained strong, but access to job sites to complete these orders was temporarily restricted due to the pandemic. Backlogs for the warehouse automation business continued to build, and, like our memorial products business, we anticipate these orders are deferred to a future date.
“I remain extremely proud of the efforts of our leadership team to ensure the safety and well-being of our employees under these challenging conditions and I continue to be equally as proud of the work and commitment of our employees.”
Third Quarter Fiscal 2020 Consolidated Results (Unaudited)
| ($ in millions, except per share data) | Q3 FY2020 | Q3 FY2019 | Change | % Change | |||||||||
| Sales | $ | 359.4 | $ | 379.3 | $ | (19.9 | ) | (5.2 | )% | ||||
| Net income attributable to Matthews | $ | 2.3 | $ | 14.6 | $ | (12.3 | ) | (84.5 | )% | ||||
| Diluted earnings per share | $ | 0.07 | $ | 0.46 | $ | (0.39 | ) | (84.8 | )% | ||||
| Non-GAAP adjusted net income | $ | 24.8 | $ | 28.4 | $ | (3.6 | ) | (12.7 | )% | ||||
| Non-GAAP adjusted EPS | $ | 0.80 | $ | 0.90 | $ | (0.10 | ) | (11.1 | )% | ||||
| Adjusted EBITDA | $ | 49.4 | $ | 59.0 | $ | (9.6 | ) | (16.3 | )% | ||||
| 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. Organic sales represent changes in sales excluding the impact of acquisitions, divestitures, and changes in foreign currency exchange rates. | |||||||||||||
Consolidated sales for the quarter ended June 30, 2020 were
Adjusted EBITDA (net income before interest expense, income taxes, depreciation and amortization, and other adjustments) for the fiscal 2020 third quarter was
Sales for the Memorialization segment for the fiscal 2020 third quarter were
The SGK Brand Solutions segment reported sales of
Sales for the Industrial Technologies segment for the fiscal 2020 third quarter were
Nine Months Fiscal 2020 Consolidated Results (Unaudited)
| ($ in millions, except per share data) | YTD FY2020 | YTD FY2019 | Change | % Change | ||||||||||
| Sales | $ | 1,099.2 | $ | 1,144.9 | $ | (45.7 | ) | (4.0 | )% | |||||
| Net (loss) income attributable to Matthews | $ | (94.6 | ) | $ | 33.1 | $ | (127.7 | ) | (385.3 | )% | ||||
| Diluted (loss) earnings per share | $ | (3.04 | ) | $ | 1.05 | $ | (4.09 | ) | (389.5 | )% | ||||
| Non-GAAP adjusted net income | $ | 59.1 | $ | 72.8 | $ | (13.7 | ) | (18.8 | )% | |||||
| Non-GAAP adjusted EPS | $ | 1.90 | $ | 2.30 | $ | (0.40 | ) | (17.4 | )% | |||||
| Adjusted EBITDA | $ | 139.0 | $ | 161.6 | $ | (22.6 | ) | (14.0 | )% | |||||
| 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. Organic sales represent changes in sales excluding the impact of acquisitions, divestitures, and changes in foreign currency exchange rates. | ||||||||||||||
Consolidated sales for the nine months ended June 30, 2020 were
Net loss attributable to the Company for the first nine months of fiscal 2020 was
Adjusted EBITDA for the nine months ended June 30, 2020 was
Outlook
Mr. Bartolacci further stated: “With respect to the remaining three months of our fiscal year, COVID-19 continues to create uncertainty in the global markets and the industries that we serve. However, with the stable nature of our largest businesses, we expect the impact on our operating results to continue to be relatively limited on a consolidated basis.
“In the Memorialization segment, demand remains steady compared to a year ago for caskets and cremation equipment and, more importantly, order rates for cemetery memorials have recently normalized. For the SGK Brand Solutions segment, sales volumes for the brand packaging portion of the business have continued to remain relatively stable, particularly for packaging of consumer products such as food, cleaning products, household goods, and pharmaceuticals. Sales of cylinders and surfaces in Europe have been unfavorably impacted by the current economic conditions but are expected to improve next quarter while sales of engineered products into the energy storage market are expected to grow. Our Industrial Technologies segment has a solid backlog for our warehouse automation business, but our ability to complete projects is dependent on access to customer sites and the economy.
“Cash flow management efforts will continue to be a high priority for the remainder of the fiscal year and we currently expect additional debt reduction in the fourth fiscal quarter.”
Webcast
The Company will host a conference call and webcast on Friday, July 31, 2020 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 calling (201) 689-8471. The audio webcast can be monitored at www.matw.com. A telephonic replay will be available from 12:00 p.m. ET on the day of the teleconference call until Friday, August 14, 2020. To listen to the archived call, dial (412) 317-6671 and enter the conference ID number 13706865. The webcast replay will be available on the Company’s website at www.matw.com, where a transcript will also be posted once available.
About Matthews International Corporation
Matthews International Corporation is a global provider of brand solutions, memorialization products and industrial technologies. The SGK Brand Solutions segment is a leader in providing brand development, deployment and delivery services that help build our clients’ brands and consumers’ desire for them. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The Industrial Technologies segment designs, manufactures and distributes marking, coding and industrial automation technologies and solutions. The Company has approximately 11,000 employees in more than 25 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. 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. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, 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 the cost of materials used in the manufacture of the Company's products, 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, 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, cybersecurity concerns, 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, such as coronavirus disease 2019 ("COVID-19") or other disruptions to our industries, customers, or supply chains, 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.
Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, PA 15212-5851
Phone: (412) 442-8200
| Steven F. Nicola | William D. Wilson |
| Chief Financial Officer and Secretary | Senior Director, Corporate Development |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||||||||
| Sales | $ | 359,422 | $ | 379,294 | (5.2 | )% | $ | 1,099,166 | $ | 1,144,871 | (4.0 | )% | ||||||||||
| Cost of sales | (238,469 | ) | (242,116 | ) | (1.5 | )% | (737,722 | ) | (745,001 | ) | (1.0 | )% | ||||||||||
| Gross profit | 120,953 | 137,178 | (11.8 | )% | 361,444 | 399,870 | (9.6 | )% | ||||||||||||||
| Gross margin | 33.7 | % | 36.2 | % | 32.9 | % | 34.9 | % | ||||||||||||||
| Selling and administrative expenses | (97,882 | ) | (97,944 | ) | (0.1 | )% | (302,191 | ) | (302,584 | ) | (0.1 | )% | ||||||||||
| Amortization of intangible assets | (17,825 | ) | (9,543 | ) | 86.8 | % | (53,639 | ) | (27,165 | ) | 97.5 | % | ||||||||||
| Goodwill write-down | — | — | 100.0 | % | (90,408 | ) | — | 100.0 | % | |||||||||||||
| Operating profit (loss) | 5,246 | 29,691 | (82.3 | )% | (84,794 | ) | 70,121 | (220.9 | )% | |||||||||||||
| Operating margin | 1.5 | % | 7.8 | % | (7.7 | )% | 6.1 | % | ||||||||||||||
| Interest and other deductions, net | (9,606 | ) | (11,278 | ) | (14.8 | )% | (32,930 | ) | (33,090 | ) | (0.5 | )% | ||||||||||
| (Loss) income before income taxes | (4,360 | ) | 18,413 | (123.7 | )% | (117,724 | ) | 37,031 | (417.9 | )% | ||||||||||||
| Income taxes | 6,209 | (3,989 | ) | (255.7 | )% | 22,672 | (4,429 | ) | (611.9 | )% | ||||||||||||
| Net income (loss) | 1,849 | 14,424 | (87.2 | )% | (95,052 | ) | 32,602 | (391.6 | )% | |||||||||||||
| Non-controlling interests | 420 | 205 | 104.9 | % | 491 | 541 | (9.2 | )% | ||||||||||||||
| Net income (loss) attributable to Matthews | $ | 2,269 | $ | 14,629 | (84.5 | )% | $ | (94,561 | ) | $ | 33,143 | (385.3 | )% | |||||||||
| Earnings (loss) per share -- diluted | $ | 0.07 | $ | 0.46 | (84.8 | )% | $ | (3.04 | ) | $ | 1.05 | (389.5 | )% | |||||||||
| Earnings per share -- non-GAAP(1) | $ | 0.80 | $ | 0.90 | (11.1 | )% | $ | 1.90 | $ | 2.30 | (17.4 | )% | ||||||||||
| Dividends declared per share | $ | 0.21 | $ | 0.20 | 5.0 | % | $ | 0.63 | $ | 0.60 | 5.0 | % | ||||||||||
| (1) See reconciliation of non-GAAP financial information provided in tables at the end of this release | ||||||||||||||||||||||
SEGMENT INFORMATION (Unaudited)
(In thousands)
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Sales: | |||||||||||||||
| SGK Brand Solutions | $ | 165,780 | $ | 181,930 | $ | 513,515 | $ | 557,881 | |||||||
| Memorialization | 162,118 | 158,217 | 478,342 | 474,279 | |||||||||||
| Industrial Technologies | 31,524 | 39,147 | 107,309 | 112,711 | |||||||||||
| $ | 359,422 | $ | 379,294 | $ | 1,099,166 | $ | 1,144,871 | ||||||||
| Adjusted EBITDA: | |||||||||||||||
| SGK Brand Solutions | $ | 20,846 | $ | 29,891 | $ | 61,808 | $ | 86,612 | |||||||
| Memorialization | 37,734 | 36,075 | 103,020 | 101,361 | |||||||||||
| Industrial Technologies | 4,679 | 7,278 | 15,205 | 15,665 | |||||||||||
| Corporate and Non-Operating | (13,862 | ) | (14,290 | ) | (41,009 | ) | (42,015 | ) | |||||||
| Total Adjusted EBITDA(1) | $ | 49,397 | $ | 58,954 | $ | 139,024 | $ | 161,623 | |||||||
| (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, 2020 | September 30, 2019 | |||||
| ASSETS | ||||||
| Cash and cash equivalents | $ | 42,904 | $ | 35,302 | ||
| Accounts receivable, net | 271,238 | 318,756 | ||||
| Inventories, net | 182,351 | 180,274 | ||||
| Other current assets | 73,175 | 49,384 | ||||
| Total current assets | 569,668 | 583,716 | ||||
| Property, plant and equipment, net | 239,070 | 237,442 | ||||
| Goodwill | 756,056 | 846,807 | ||||
| Other intangible assets, net | 347,205 | 400,650 | ||||
| Other long-term assets | 172,617 | 121,988 | ||||
| Total assets | $ | 2,084,616 | $ | 2,190,603 | ||
| LIABILITIES | ||||||
| Long-term debt, current maturities | $ | 23,114 | $ | 42,503 | ||
| Other current liabilities | 281,918 | 237,376 | ||||
| Total current liabilities | 305,032 | 279,879 | ||||
| Long-term debt | 837,770 | 898,194 | ||||
| Other long-term liabilities | 340,072 | 293,294 | ||||
| Total liabilities | 1,482,874 | 1,471,367 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Total shareholders' equity | 601,742 | 719,236 | ||||
| Total liabilities and shareholders' equity | $ | 2,084,616 | $ | 2,190,603 | ||
CONDENSED CONSOLIDATED CASH FLOWS INFORMATION (Unaudited)
(In thousands)
| Nine Months Ended June 30, | |||||||
| 2020 | 2019 | ||||||
| Cash flows from operating activities: | |||||||
| Net (loss) income | $ | (95,052 | ) | $ | 32,602 | ||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 88,418 | 60,759 | |||||
| Changes in working capital items | 41,726 | (14,543 | ) | ||||
| Goodwill write-down | 90,408 | — | |||||
| Other operating activities | (1,892 | ) | 10,596 | ||||
| Net cash provided by operating activities | 123,608 | 89,414 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (25,486 | ) | (31,963 | ) | |||
| Acquisitions, net of cash acquired | — | (11,525 | ) | ||||
| Other investing activities | 32,885 | (23,311 | ) | ||||
| Net cash provided by (used in) investing activities | 7,399 | (66,799 | ) | ||||
| Cash flows from financing activities: | |||||||
| Net proceeds from long-term debt | (92,060 | ) | 16,395 | ||||
| Purchases of treasury stock | (2,372 | ) | (21,815 | ) | |||
| Dividends | (19,813 | ) | (19,254 | ) | |||
| Other financing activities | (8,845 | ) | (5,489 | ) | |||
| Net cash used in financing activities | (123,090 | ) | (30,163 | ) | |||
| Effect of exchange rate changes on cash | (315 | ) | (421 | ) | |||
| Net change in cash and cash equivalents | $ | 7,602 | $ | (7,969 | ) | ||
Reconciliations of 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 costs, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to 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, 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 Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net income (loss) | $ | 1,849 | $ | 14,424 | $ | (95,052 | ) | $ | 32,602 | ||||||
| Income tax (benefit) provision | (6,209 | ) | 3,989 | (22,672 | ) | 4,429 | |||||||||
| (Loss) income before income taxes | $ | (4,360 | ) | $ | 18,413 | (117,724 | ) | 37,031 | |||||||
| Net losses attributable to noncontrolling interests | 420 | 205 | 491 | 541 | |||||||||||
| Interest expense | 8,082 | 10,508 | 26,935 | 31,068 | |||||||||||
| Depreciation and amortization * | 30,168 | 20,483 | 88,418 | 60,759 | |||||||||||
| Acquisition costs (1)** | 304 | 2,980 | 2,912 | 8,386 | |||||||||||
| ERP integration costs (2)** | 745 | 2,355 | 2,160 | 6,337 | |||||||||||
| Strategic initiatives and other charges (3)** | 5,570 | 1,037 | 25,040 | 3,149 | |||||||||||
| (Gain) loss on sale of ownership interests in a subsidiary (4) | (11,208 | ) | — | (11,208 | ) | 4,465 | |||||||||
| Legal matter reserve (5) | 10,566 | — | 10,566 | — | |||||||||||
| Non-recurring / incremental COVID-19 costs (6) | 1,871 | — | 2,534 | — | |||||||||||
| Goodwill write-down (7) | — | — | 90,408 | — | |||||||||||
| Joint Venture depreciation, amortization, interest expense and other charges (8) | 2,473 | 866 | 4,732 | 866 | |||||||||||
| Stock-based compensation | 2,539 | 1,156 | 7,078 | 6,169 | |||||||||||
| Non-service pension and postretirement expense (9) | 2,227 | 951 | 6,682 | 2,852 | |||||||||||
| Total Adjusted EBITDA | $ | 49,397 | $ | 58,954 | $ | 139,024 | $ | 161,623 | |||||||
| Adjusted EBITDA margin | 13.7 | % | 15.5 | % | 12.6 | % | 14.1 | % | |||||||
| (1) Includes certain non-recurring costs associated with recent acquisition activities. | |||||||||||||||
| (2) Represents costs associated with global ERP system integration efforts. | |||||||||||||||
| (3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels. | |||||||||||||||
| (4) Represents a (gain) loss on the sale of ownership interests in a subsidiary within the Memorialization segment. | |||||||||||||||
| (5) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment. | |||||||||||||||
| (6) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||
| (7) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment. | |||||||||||||||
| (8) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment. | |||||||||||||||
| (9) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial 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. 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
** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were
ADJUSTED NET INCOME AND EPS RECONCILIATION (Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
| per share | per share | per share | per share | ||||||||||||||||||||||||
| Net income (loss) attributable to Matthews | $ | 2,269 | $ | 0.07 | $ | 14,629 | $ | 0.46 | $ | (94,561 | ) | $ | (3.04 | ) | $ | 33,143 | $ | 1.05 | |||||||||
| Acquisition costs (1) | 228 | — | 2,373 | 0.08 | 2,184 | 0.07 | 6,373 | 0.20 | |||||||||||||||||||
| ERP integration costs (2) | 559 | 0.02 | 1,869 | 0.06 | 1,620 | 0.05 | 4,816 | 0.15 | |||||||||||||||||||
| Strategic initiatives and other charges (3) | 4,177 | 0.15 | 830 | 0.03 | 18,915 | 0.62 | 2,393 | 0.08 | |||||||||||||||||||
| (Gain) loss on sale of ownership interests in a subsidiary (4) | (8,406 | ) | (0.27 | ) | 90 | — | (8,406 | ) | (0.27 | ) | 3,394 | 0.10 | |||||||||||||||
| Legal matter reserve (5) | 7,924 | 0.25 | — | — | 7,924 | 0.25 | — | — | |||||||||||||||||||
| Non-recurring / incremental COVID-19 costs (6) | 1,403 | 0.04 | — | — | 1,900 | 0.06 | — | — | |||||||||||||||||||
| Goodwill write-down (7) | — | — | — | — | 81,861 | 2.63 | — | — | |||||||||||||||||||
| Joint Venture amortization and other charges (8) | 1,561 | 0.05 | 210 | 0.01 | 2,433 | 0.08 | 210 | 0.01 | |||||||||||||||||||
| Non-service pension and postretirement expense (9) | 1,671 | 0.06 | 759 | 0.02 | 5,012 | 0.16 | 2,167 | 0.07 | |||||||||||||||||||
| Amortization | 13,368 | 0.43 | 7,606 | 0.24 | 40,229 | 1.29 | 20,646 | 0.65 | |||||||||||||||||||
| Tax-related | — | — | — | — | — | — | (300 | ) | (0.01 | ) | |||||||||||||||||
| Adjusted net income | $ | 24,754 | $ | 0.80 | $ | 28,366 | $ | 0.90 | $ | 59,111 | $ | 1.90 | $ | 72,842 | $ | 2.30 | |||||||||||
| Note: Adjustments to net income for non-GAAP reconciling items were calculated using an income tax rate of | |||||||||||||||||||||||||||
| (1) Includes certain non-recurring costs associated with recent acquisition activities. | |||||||||||||||||||||||||||
| (2) Represents costs associated with global ERP system integration efforts. | |||||||||||||||||||||||||||
| (3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels. | |||||||||||||||||||||||||||
| (4) Represents a (gain) loss on the sale of ownership interests in a subsidiary within the Memorialization segment. | |||||||||||||||||||||||||||
| (5) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment. | |||||||||||||||||||||||||||
| (6) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||||||||||||||
| (7) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment. | |||||||||||||||||||||||||||
| (8) Represents the Company's portion of intangible amortization and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment. | |||||||||||||||||||||||||||
| (9) The non-GAAP adjustment to pension and postretirement expense represents the add-back of the non-service related components of these costs. Non-service related components include interest cost, expected return on plan assets and amortization of actuarial gains and losses. The service cost and prior service cost components of pension and postretirement expense are considered to be a better reflection of the ongoing service-related costs of providing these benefits. The other components of GAAP pension and postretirement expense are primarily influenced by general market conditions impacting investment returns and interest (discount) rates. 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. | |||||||||||||||||||||||||||
FAQ
What were the earnings results for Matthews International in Q3 FY2020?
How did Matthews International perform financially compared to last year?
What segments contributed to Matthews International's revenue growth?
What is the outlook for Matthews International following their Q3 results?
