Matthews International Reports Results for Fiscal 2024 Third Quarter
Matthews International (NASDAQ: MATW) reported financial results for its fiscal 2024 third quarter. Key highlights include:
- Outstanding debt reduced by $12.6 million during the quarter
- Q3 GAAP EPS of $0.06; non-GAAP adjusted EPS of $0.56
- SGK Brand Solutions segment reports sales growth
- Energy storage sales impacted by customer delays
- Cost reduction initiatives announced
The company's consolidated sales decreased 9.3% to $427.8 million. Net income attributable to Matthews was $1.8 million, down from $8.7 million in the prior year. Adjusted EBITDA for Q3 was $44.7 million, compared to $56.2 million a year ago. The company projects fiscal 2024 adjusted EBITDA to be in the range of $205 million to $210 million.
Matthews International (NASDAQ: MATW) ha comunicato i risultati finanziari per il terzo trimestre dell'anno fiscale 2024. Punti salienti includono:
- Il debito totale è stato ridotto di 12,6 milioni di dollari durante il trimestre
- Utile per azione GAAP del terzo trimestre di 0,06 dollari; utile per azione rettificato non-GAAP di 0,56 dollari
- Il segmento SGK Brand Solutions riporta una crescita delle vendite
- Le vendite di sistemi di accumulo energetico sono state influenzate da ritardi dei clienti
- Annunciate iniziative di riduzione dei costi
Le vendite consolidate dell'azienda sono diminuite del 9,3% a 427,8 milioni di dollari. Il reddito netto attribuibile a Matthews è stato di 1,8 milioni di dollari, in calo rispetto agli 8,7 milioni dell'anno precedente. L'EBITDA rettificato per il terzo trimestre è stato di 44,7 milioni di dollari, rispetto ai 56,2 milioni dell'anno scorso. L'azienda prevede che l'EBITDA rettificato per l'anno fiscale 2024 si attesti tra i 205 milioni e i 210 milioni di dollari.
Matthews International (NASDAQ: MATW) informó los resultados financieros para su tercer trimestre fiscal de 2024. Los aspectos destacados incluyen:
- La deuda total se redujo en 12,6 millones de dólares durante el trimestre
- BPA GAAP en Q3 de 0,06 dólares; BPA ajustado no GAAP de 0,56 dólares
- El segmento SGK Brand Solutions reporta crecimiento en ventas
- Las ventas de almacenamiento de energía se vieron afectadas por retrasos de los clientes
- Iniciativas de reducción de costos anunciadas
Las ventas consolidadas de la compañía cayeron un 9,3%, alcanzando los 427,8 millones de dólares. El ingreso neto atribuible a Matthews fue de 1,8 millones de dólares, frente a 8,7 millones del año anterior. El EBITDA ajustado del tercer trimestre fue de 44,7 millones de dólares, en comparación con 56,2 millones del año pasado. La empresa proyecta que el EBITDA ajustado para el año fiscal 2024 se encuentre en el rango de 205 millones a 210 millones de dólares.
매튜스 인터내셔널 (NASDAQ: MATW)은 2024 회계연도 3분기 재무 결과를 발표했습니다. 주요 하이라이트는 다음과 같습니다:
- 분기 동안 총 부채가 1,260만 달러 감소했습니다
- 3분기 GAAP 주당순이익 0.06달러; 비GAAP 조정 주당순이익 0.56달러
- SGK 브랜드 솔루션 부문에서 매출 성장 보고
- 에너지 저장 매출이 고객 지연으로 영향을 받음
- 비용 절감 이니셔티브 발표
회사의 매출은 9.3% 감소하여 4억 2,780만 달러에 달했습니다. 매튜스에 귀속되는 순이익은 180만 달러로, 지난해 870만 달러에서 감소했습니다. 3분기 조정 EBITDA는 4,470만 달러로, 지난 해의 5,620만 달러와 비교됩니다. 회사는 2024 회계연도 조정 EBITDA가 2억 5백만 달러에서 2억 1천만 달러 범위에 이를 것으로 예상합니다.
Matthews International (NASDAQ: MATW) a rapporté les résultats financiers pour son troisième trimestre de l'exercice fiscal 2024. Les points clés comprennent :
- La dette totale a été réduite de 12,6 millions de dollars au cours du trimestre
- BPA GAAP au T3 de 0,06 $ ; BPA ajusté non-GAAP de 0,56 $
- Le segment SGK Brand Solutions fait état d'une croissance des ventes
- Les ventes de stockage d'énergie ont été affectées par des retards de clients
- Initiatives de réduction des coûts annoncées
Les ventes consolidées de l'entreprise ont diminué de 9,3 % pour atteindre 427,8 millions de dollars. Le revenu net attribuable à Matthews s'est élevé à 1,8 million de dollars, contre 8,7 millions de dollars l'année précédente. L'EBITDA ajusté pour le T3 était de 44,7 millions de dollars, par rapport à 56,2 millions de dollars l'année dernière. L'entreprise projette un EBITDA ajusté pour l'exercice fiscal 2024 dans une fourchette de 205 millions à 210 millions de dollars.
Matthews International (NASDAQ: MATW) hat die finanziellen Ergebnisse für das dritte Quartal des Geschäftsjahres 2024 veröffentlicht. Wesentliche Highlights sind:
- Die Gesamtverschuldung wurde im Quartal um 12,6 Millionen Dollar reduziert
- Q3 GAAP EPS von 0,06 Dollar; non-GAAP bereinigtes EPS von 0,56 Dollar
- Das Segment SGK Brand Solutions berichtet von Umsatzwachstum
- Die Energieverkaufszahlen wurden durch Kundeverzögerungen beeinträchtigt
- Angekündigte Kostensenkungsinitiativen
Der konsolidierte Umsatz des Unternehmens fiel um 9,3% auf 427,8 Millionen Dollar. Der Nettogewinn, der Matthews zuzurechnen ist, betrug 1,8 Millionen Dollar, zurückgegangen von 8,7 Millionen Dollar im Vorjahr. Das bereinigte EBITDA für Q3 betrug 44,7 Millionen Dollar, verglichen mit 56,2 Millionen Dollar im Vorjahr. Das Unternehmen rechnet im Geschäftsjahr 2024 mit einem bereinigten EBITDA in der Größenordnung von 205 Millionen bis 210 Millionen Dollar.
- Debt reduced by $12.6 million during the quarter
- SGK Brand Solutions segment reports sales growth
- Solid cash flow facilitating debt reduction
- Projected adjusted EBITDA for fiscal 2024 in the range of $205 million to $210 million
- Cost reduction programs targeting annual consolidated savings of up to $50 million
- Q3 consolidated sales decreased 9.3% to $427.8 million
- Net income attributable to Matthews decreased to $1.8 million from $8.7 million in the prior year
- Q3 Adjusted EBITDA decreased to $44.7 million from $56.2 million a year ago
- Energy storage sales impacted by customer delays
- Slow conditions in the general warehouse automation market
Insights
Matthews International's Q3 FY2024 results present a mixed picture. Sales declined
The Memorialization and SGK Brand Solutions segments showed resilience, with the latter reporting modest growth. However, the Industrial Technologies segment faced headwinds due to customer delays in the energy storage business and slow conditions in the warehouse automation market.
Looking ahead, management projects Q4 adjusted EBITDA to be consistent with last year, with full-year FY2024 adjusted EBITDA expected in the range of
The ongoing legal dispute with Tesla over battery technology is a point of concern, but management remains confident it won't materially impact the company. Investors should monitor this situation closely, as it could affect future growth prospects in the electric vehicle market.
Overall, while facing some challenges, Matthews International appears to be taking proactive steps to manage costs and position itself for future growth. The company's ability to execute its cost reduction plan and capitalize on opportunities in the energy storage market will be important for its performance in the coming quarters.
Matthews International's Q3 results reflect broader market trends and economic conditions. The company's performance in different segments provides insights into various industries:
- The resilience of the Memorialization segment, despite a decline in U.S. casketed deaths, suggests effective pricing strategies and diversification within the funeral industry.
- Growth in the SGK Brand Solutions segment, particularly in private label and European packaging, aligns with the trend of increased private label adoption and the importance of packaging in brand differentiation.
- The challenges faced by the Industrial Technologies segment, especially in energy storage and warehouse automation, indicate ongoing supply chain issues and potential shifts in capital expenditure patterns in these industries.
The company's focus on dry battery electrode equipment technology positions it well in the growing electric vehicle market. However, the legal challenge from Tesla highlights the competitive and litigious nature of this rapidly evolving sector.
The announced cost reduction initiatives, targeting up to
Investors should consider these market dynamics and Matthews' strategic responses when evaluating the company's future prospects. The ability to navigate industry-specific challenges while capitalizing on growth opportunities will be important for Matthews' performance in the coming quarters.
Fiscal 2024 Third Quarter Financial Highlights:
- Outstanding debt reduced by
$12.6 million during the quarter - 3rd Quarter GAAP EPS of
$0.06 ; non-GAAP adjusted EPS of$0.56 - SGK Brand Solutions segment reports sales growth for the quarter
- Energy storage sales impacted by customer delays
- Company announces cost reduction initiatives
- Webcast: Friday, August 2, 2024, 9:00 a.m., (201) 689-8471
PITTSBURGH, Aug. 01, 2024 (GLOBE NEWSWIRE) -- 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
“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
“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
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
Net income attributable to the Company for the quarter ended June 30, 2024 was
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
Net income attributable to the Company for the nine months ended June 30, 2024 was
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 Ended June 30, | Nine Months Ended June 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 Ended June 30, | Nine Months Ended June 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 Ended June 30, | Nine Months Ended June 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 | |||||||||||||||
| (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 | |||||||||||||||
| (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
** 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, | ||||||||||||||||||
| 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 | |||||||||||||||||||
| (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) 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 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 | ||
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