Matthews International Reports Results for Fiscal 2023 Second Quarter
Fiscal 2023 2nd Quarter Financial Highlights:
- Sales increased
$34.6 million or7.8% , from a year ago;10% on a constant currency basis - Industrial Technologies sales over
60% higher; on track to approach$500 million for fiscal 2023 - Memorialization segment also reports year-over-year sales growth
- Company re-affirms guidance for fiscal 2023
- Webcast: Friday, April 28, 2023, 9:00 a.m., (201) 689-8471
PITTSBURGH, April 27, 2023 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) today announced financial results for its second quarter of fiscal 2023.
In discussing the results for the Company’s fiscal 2023 second quarter, Joseph C. Bartolacci, President and Chief Executive Officer, stated:
“I am pleased to report very good operating results on a consolidated basis for the fiscal 2023 second quarter. Our consolidated sales increased
“For the fiscal 2023 second quarter, our Industrial Technologies segment reported an increase of
“Our Memorialization segment also reported sales growth for the current quarter despite a significant decline in U.S. casketed deaths. The increase for the current quarter primarily reflected growth in sales of cemetery memorial products and mausoleums, improved price realization, and the acquisition of Eagle Granite Company (February 2023). These increases were partially offset by lower casket unit volume reflecting the lower death rates.
“Sales for the SGK Brand Solutions business continued to be challenged due to unfavorable currency rate changes and difficult European market conditions. However, recent cost reduction actions mitigated some of this impact. In addition, further cost structure actions have been initiated in our European operations which, together with our actions to date, should yield improved margins for the balance of the fiscal year.
“Additionally, as a result of strong operating cash flow, we reported a
Second Quarter Fiscal 2023 Consolidated Results (Unaudited)
| ($ in millions, except per share data) | Q2 FY2023 | Q2 FY2022 | Change | % Change | |||||||||
| Sales | $ | 479.6 | $ | 445.0 | $ | 34.6 | 7.8 | % | |||||
| Net income (loss) attributable to Matthews | $ | 9.1 | $ | (1.9 | ) | $ | 11.0 | NM | |||||
| Diluted earnings (loss) per share | $ | 0.29 | $ | (0.06 | ) | $ | 0.35 | NM | |||||
| Non-GAAP adjusted net income | $ | 20.3 | $ | 23.5 | $ | (3.2 | ) | (13.6 | )% | ||||
| Non-GAAP adjusted EPS | $ | 0.65 | $ | 0.74 | $ | (0.09 | ) | (12.2 | )% | ||||
| Adjusted EBITDA | $ | 58.4 | $ | 55.2 | $ | 3.2 | 5.8 | % | |||||
| 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. | |||||||||||||
| NM: Not meaningful | |||||||||||||
Consolidated sales for the quarter ended March 31, 2023 were
Net income attributable to the Company for the quarter ended March 31, 2023 was
Fiscal 2023 Year-to-Date Consolidated Results (Unaudited)
| ($ in millions, except per share data) | YTD FY2023 | YTD FY2022 | Change | % Change | |||||||||
| Sales | $ | 928.8 | $ | 883.6 | $ | 45.2 | 5.1 | % | |||||
| Net income (loss) attributable to Matthews | $ | 12.8 | $ | (21.7 | ) | $ | 34.5 | 159.1 | % | ||||
| Diluted earnings (loss) per share | $ | 0.41 | $ | (0.68 | ) | $ | 1.09 | 160.3 | % | ||||
| Non-GAAP adjusted net income | $ | 36.8 | $ | 47.1 | $ | (10.3 | ) | (21.9 | )% | ||||
| Non-GAAP adjusted EPS | $ | 1.18 | $ | 1.48 | $ | (0.30 | ) | (20.3 | )% | ||||
| Adjusted EBITDA | $ | 107.7 | $ | 108.5 | $ | (0.8 | ) | (0.7 | )% | ||||
| 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 six months ended March 31, 2023 were
Net income attributable to the Company for the first six months of fiscal 2023 was
On a non-GAAP adjusted basis, earnings for the first six months of fiscal 2023 were
Outlook
Mr. Bartolacci further stated: “With respect to the balance of fiscal 2023, we are pleased with the progress and direction of each of our businesses and we are on track to our guidance. In our energy storage solutions business, we are in the earlier stages of the orders that we announced in January 2023, which will benefit the balance of this fiscal year into mid-fiscal 2024. For our Warehouse Automation business, backlog remains solid, particularly for deliveries through the end of this fiscal year. In addition, our Memorialization business continues to perform well despite the return to normal death rates following coronavirus disease 2019 ("COVID-19"). Lastly, pricing conditions for the SGK Brand Solutions business appear to be improving and we have started to realize the benefits from our recent cost reduction actions.
"Based on these considerations, we are maintaining our previously reported guidance for fiscal 2023 (adjusted EBITDA range of
Webcast
The Company will host a conference call and webcast on Friday, April 28, 2023 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 designs, manufactures, services and distributes high-tech custom energy storage solutions, product identification, and warehouse automation technologies and solutions. 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. 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 interest 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, 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, 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, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, 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 Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||
| Sales | $ | 479,580 | $ | 444,978 | 7.8 | % | $ | 928,820 | $ | 883,557 | 5.1 | % | |||||||||
| Cost of sales | (329,957 | ) | (320,459 | ) | 3.0 | % | (640,267 | ) | (627,401 | ) | 2.1 | % | |||||||||
| Gross profit | 149,623 | 124,519 | 20.2 | % | 288,553 | 256,156 | 12.6 | % | |||||||||||||
| Gross margin | 31.2 | % | 28.0 | % | 31.1 | % | 29.0 | % | |||||||||||||
| Selling and administrative expenses | (116,055 | ) | (105,200 | ) | 10.3 | % | (227,415 | ) | (204,512 | ) | 11.2 | % | |||||||||
| Amortization of intangible assets | (10,517 | ) | (11,953 | ) | (12.0 | )% | (20,859 | ) | (33,499 | ) | (37.7 | )% | |||||||||
| Operating profit | 23,051 | 7,366 | NM | 40,279 | 18,145 | 122.0 | % | ||||||||||||||
| Operating margin | 4.8 | % | 1.7 | % | 4.3 | % | 2.1 | % | |||||||||||||
| Interest and other deductions, net | (10,544 | ) | (6,025 | ) | 75.0 | % | (22,813 | ) | (43,242 | ) | (47.2 | )% | |||||||||
| Income (loss) before income taxes | 12,507 | 1,341 | NM | 17,466 | (25,097 | ) | 169.6 | % | |||||||||||||
| Income taxes | (3,382 | ) | (3,277 | ) | 3.2 | % | (4,694 | ) | 3,351 | NM | |||||||||||
| Net income (loss) | 9,125 | (1,936 | ) | NM | 12,772 | (21,746 | ) | 158.7 | % | ||||||||||||
| Non-controlling interests | 2 | 31 | (93.5 | )% | 58 | 38 | NM | ||||||||||||||
| Net income (loss) attributable to Matthews | $ | 9,127 | $ | (1,905 | ) | NM | $ | 12,830 | $ | (21,708 | ) | 159.1 | % | ||||||||
| Earnings (loss) per share -- diluted | $ | 0.29 | $ | (0.06 | ) | NM | $ | 0.41 | $ | (0.68 | ) | 160.3 | % | ||||||||
| Earnings per share -- non-GAAP(1) | $ | 0.65 | $ | 0.74 | (12.2 | )% | $ | 1.18 | $ | 1.48 | (20.3 | )% | |||||||||
| Dividends declared per share | $ | 0.23 | $ | 0.22 | 4.5 | % | $ | 0.46 | $ | 0.44 | 4.5 | % | |||||||||
| Diluted Shares | 31,179 | 31,692 | 31,071 | 31,695 | |||||||||||||||||
| (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 Ended March 31, | Six Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Sales: | |||||||||||||||
| Memorialization | $ | 222,889 | $ | 220,004 | $ | 429,391 | $ | 430,710 | |||||||
| Industrial Technologies | 125,514 | 78,154 | 234,657 | 152,485 | |||||||||||
| SGK Brand Solutions | 131,177 | 146,820 | 264,772 | 300,362 | |||||||||||
| $ | 479,580 | $ | 444,978 | $ | 928,820 | $ | 883,557 | ||||||||
| Adjusted EBITDA: | |||||||||||||||
| Memorialization | $ | 48,030 | $ | 42,944 | $ | 87,167 | $ | 86,314 | |||||||
| Industrial Technologies | 15,565 | 14,385 | 27,767 | 21,568 | |||||||||||
| SGK Brand Solutions | 11,020 | 13,462 | 23,252 | 28,876 | |||||||||||
| Corporate and Non-Operating | (16,168 | ) | (15,601 | ) | (30,448 | ) | (28,235 | ) | |||||||
| Total Adjusted EBITDA(1) | $ | 58,447 | $ | 55,190 | $ | 107,738 | $ | 108,523 | |||||||
| (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) | |||||
| March 31, 2023 | September 30, 2022 | ||||
| ASSETS | |||||
| Cash and cash equivalents | $ | 41,916 | $ | 69,016 | |
| Accounts receivable, net | 216,140 | 221,015 | |||
| Inventories, net | 254,557 | 225,440 | |||
| Other current assets | 105,626 | 113,145 | |||
| Total current assets | 618,239 | 628,616 | |||
| Property, plant and equipment, net | 268,247 | 256,065 | |||
| Goodwill | 708,767 | 675,421 | |||
| Other intangible assets, net | 190,387 | 202,154 | |||
| Other long-term assets | 111,633 | 120,515 | |||
| Total assets | $ | 1,897,273 | $ | 1,882,771 | |
| LIABILITIES | |||||
| Long-term debt, current maturities | $ | 2,825 | $ | 3,277 | |
| Other current liabilities | 391,616 | 408,098 | |||
| Total current liabilities | 394,441 | 411,375 | |||
| Long-term debt | 775,202 | 795,291 | |||
| Other long-term liabilities | 215,239 | 189,029 | |||
| Total liabilities | 1,384,882 | 1,395,695 | |||
| SHAREHOLDERS' EQUITY | |||||
| Total shareholders' equity | 512,391 | 487,076 | |||
| Total liabilities and shareholders' equity | $ | 1,897,273 | $ | 1,882,771 | |
| CONDENSED CONSOLIDATED CASH FLOWS INFORMATION (Unaudited) | |||||||
| (In thousands) | |||||||
| Six Months Ended March 31, | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net income (loss) | $ | 12,772 | $ | (21,746 | ) | ||
| Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||
| Depreciation and amortization | 47,877 | 57,225 | |||||
| Changes in working capital items | (10,885 | ) | 18,842 | ||||
| Other operating activities | (5,053 | ) | 18,402 | ||||
| Net cash provided by operating activities | 44,711 | 72,723 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (23,772 | ) | (28,096 | ) | |||
| Acquisitions, net of cash acquired | (7,586 | ) | — | ||||
| Other investing activities | 155 | 3,357 | |||||
| Net cash used in investing activities | (31,203 | ) | (24,739 | ) | |||
| Cash flows from financing activities: | |||||||
| Net payments from long-term debt | (27,120 | ) | (10,538 | ) | |||
| Purchases of treasury stock | (2,739 | ) | (12,138 | ) | |||
| Dividends | (14,126 | ) | (13,952 | ) | |||
| Other financing activities | (914 | ) | (2,047 | ) | |||
| Net cash used in financing activities | (44,899 | ) | (38,675 | ) | |||
| Effect of exchange rate changes on cash | 1,893 | (1,580 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | $ | (29,498 | ) | $ | 7,729 | ||
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 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 Ended March 31, | Six Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) | $ | 9,125 | $ | (1,936 | ) | $ | 12,772 | $ | (21,746 | ) | |||||
| Income tax provision (benefit) | 3,382 | 3,277 | 4,694 | (3,351 | ) | ||||||||||
| Income (loss) before income taxes | $ | 12,507 | $ | 1,341 | $ | 17,466 | $ | (25,097 | ) | ||||||
| Net loss attributable to noncontrolling interests | 2 | 31 | 58 | 38 | |||||||||||
| Interest expense | 12,047 | 6,260 | 22,262 | 12,767 | |||||||||||
| Depreciation and amortization* | 24,148 | 23,724 | 47,877 | 57,225 | |||||||||||
| RPA and factoring financing fees(1) | 1,090 | — | 1,546 | — | |||||||||||
| Acquisition and divestiture costs(2)** | 2,852 | — | 4,137 | — | |||||||||||
| Strategic initiatives and other charges(3)** | 1,280 | 6,750 | 3,040 | 10,573 | |||||||||||
| Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs(4)*** | — | 1,213 | — | 1,903 | |||||||||||
| Exchange losses related to highly inflationary accounting(5) | 160 | — | 1,248 | — | |||||||||||
| Defined benefit plan termination related items(6) | — | (79 | ) | 21 | 347 | ||||||||||
| Asset write-downs(7) | — | 10,486 | — | 10,486 | |||||||||||
| Stock-based compensation | 4,278 | 5,222 | 8,612 | 8,931 | |||||||||||
| Non-service pension and postretirement expense(8) | 83 | 242 | 1,471 | 31,350 | |||||||||||
| Total Adjusted EBITDA | $ | 58,447 | $ | 55,190 | $ | 107,738 | $ | 108,523 | |||||||
| Adjusted EBITDA margin | 12.2 | % | 12.4 | % | 11.6 | % | 12.3 | % | |||||||
| (1)Represents fees for receivables sold under the RPA and factoring arrangements. | |||||||||||||||
| (2)Includes certain non-recurring costs associated with recent acquisition and divestiture activities. | |||||||||||||||
| (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 and costs associated with global ERP system integration efforts, net of loss recoveries related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. | |||||||||||||||
| (4)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. | |||||||||||||||
| (5)Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries. | |||||||||||||||
| (6)Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan. | |||||||||||||||
| (7)Represents asset write-downs within the SGK Brand Solutions segment. | |||||||||||||||
| (8)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
** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were
*** Non-recurring/incremental COVID-19 costs were
| ADJUSTED NET INCOME AND EPS RECONCILIATION (Unaudited) | |||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| per share | per share | per share | per share | ||||||||||||||||||||
| Net income (loss) attributable to Matthews | $ | 9,127 | $ | 0.29 | $ | (1,905 | ) | $ | (0.06 | ) | $ | 12,830 | $ | 0.41 | $ | (21,708 | ) | $ | (0.68 | ) | |||
| Acquisition and divestiture costs(1) | 1,953 | 0.07 | — | — | 3,015 | 0.10 | — | — | |||||||||||||||
| Strategic initiatives and other charges(2) | 1,153 | 0.03 | 4,965 | 0.16 | 2,924 | 0.09 | 7,974 | 0.24 | |||||||||||||||
| Non-recurring / incremental COVID-19 costs(3) | — | — | 905 | 0.03 | — | — | 1,441 | 0.05 | |||||||||||||||
| Exchange losses related to highly inflationary accounting(4) | 160 | — | — | — | 1,248 | 0.04 | — | — | |||||||||||||||
| Defined benefit plan termination related items(5) | — | — | 82 | — | 16 | — | 401 | 0.01 | |||||||||||||||
| Asset write-downs(6) | — | — | 10,308 | 0.33 | — | — | 10,308 | 0.33 | |||||||||||||||
| Non-service pension and postretirement expense(7) | 62 | 0.01 | 181 | — | 1,103 | 0.04 | 23,512 | 0.74 | |||||||||||||||
| Amortization | 7,887 | 0.25 | 8,964 | 0.28 | 15,644 | 0.50 | 25,124 | 0.79 | |||||||||||||||
| Adjusted net income | $ | 20,342 | $ | 0.65 | $ | 23,500 | $ | 0.74 | $ | 36,780 | $ | 1.18 | $ | 47,052 | $ | 1.48 | |||||||
| 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 and divestiture activities. | |||||||||||||||||||||||
| (2) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. | |||||||||||||||||||||||
| (3) 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. | |||||||||||||||||||||||
| (4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries. | |||||||||||||||||||||||
| (5) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan. | |||||||||||||||||||||||
| (6) Represents asset write-downs within the SGK Brand Solutions segment. | |||||||||||||||||||||||
| (7) 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. | |||||||||||||||||||||||
| 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 March 31, 2023 | $ | 222,889 | $ | 125,514 | $ | 131,177 | $ | — | $ | 479,580 | ||||||
| Changes in foreign exchange translation rates | 672 | 3,319 | 5,930 | — | 9,921 | |||||||||||
| Constant currency sales for the quarter ended March 31, 2023 | $ | 223,561 | $ | 128,833 | $ | 137,107 | $ | — | $ | 489,501 | ||||||
| Reported sales for the six months ended March 31, 2023 | $ | 429,391 | $ | 234,657 | $ | 264,772 | $ | — | $ | 928,820 | ||||||
| Changes in foreign exchange translation rates | 2,153 | 8,140 | 16,659 | — | 26,952 | |||||||||||
| Constant currency sales for the six months ended March 31, 2023 | $ | 431,544 | $ | 242,797 | $ | 281,431 | $ | — | $ | 955,772 | ||||||
| Reported adjusted EBITDA for the quarter ended March 31, 2023 | $ | 48,030 | $ | 15,565 | $ | 11,020 | $ | (16,168 | ) | $ | 58,447 | |||||
| Changes in foreign exchange translation rates | (46 | ) | 1,178 | 308 | 82 | 1,522 | ||||||||||
| Constant currency adjusted EBITDA for the quarter ended March 31, 2023 | $ | 47,984 | $ | 16,743 | $ | 11,328 | $ | (16,086 | ) | $ | 59,969 | |||||
| Reported adjusted EBITDA for the six months ended March 31, 2023 | $ | 87,167 | $ | 27,767 | $ | 23,252 | $ | (30,448 | ) | $ | 107,738 | |||||
| Changes in foreign exchange translation rates | (184 | ) | 2,289 | 1,291 | (266 | ) | 3,130 | |||||||||
| Constant currency adjusted EBITDA for the six months ended March 31, 2023 | $ | 86,983 | $ | 30,056 | $ | 24,543 | $ | (30,714 | ) | $ | 110,868 | |||||
| NET DEBT AND NET DEBT LEVERAGE RATIO RECONCILIATION (Unaudited) | |||||||
| (Dollars in thousands) | |||||||
| March 31, 2023 | September 30, 2022 | ||||||
| Long-term debt, current maturities | $ | 2,825 | $ | 3,277 | |||
| Long-term debt | 775,202 | 795,291 | |||||
| Total debt | 778,027 | 798,568 | |||||
| Less: Cash and cash equivalents | (41,916 | ) | (69,016 | ) | |||
| Net Debt | $ | 736,111 | $ | 729,552 | |||
| Adjusted EBITDA | $ | 209,623 | $ | 210,408 | |||
| Net Debt Leverage Ratio | 3.5 | 3.5 | |||||
Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, PA 15212-5851
Phone: (412) 442-8200
| Contact: | Steven F. Nicola | William D. Wilson | |
| Chief Financial Officer and Secretary | Senior Director, Corporate Development |
