Core Insights - Matthews International Corporation (NASDAQ:MATW) is recognized as one of the Best Dividend Stocks for a Dividend Champions List, highlighting its strong dividend performance [1] Company Strategy - The company operates across diverse sectors, including industrial technologies, brand solutions, and memorialization, and is focused on reshaping its portfolio for long-term growth [2] - Key strategies include tailoring offerings in memorialization to align with demographic trends, leveraging innovation in industrial technologies, and maximizing value from joint ventures post-SGK divestiture [3] - Emphasis is placed on disciplined cost controls, steady cash flow, and simplifying the reporting structure, particularly regarding the Propelis partnership [3] Dividend Performance - Matthews International Corporation has achieved its 31st consecutive year of dividend growth as of 2025, making it a strong candidate for income investors [4] - The current quarterly dividend is $0.25 per share, resulting in a dividend yield of 4.01% as of October 2 [4]

Core Insights - The United States District Court for the Northern District of California confirmed an arbitration decision in favor of Matthews International Corporation, denying Tesla's attempt to overturn it [1] - This ruling reinforces Matthews' leadership in the design and manufacturing of continuous process machinery for battery electrode production, particularly its proprietary dry battery electrode (DBE) solutions [2] Company Overview - Matthews International Corporation operates through two main segments: Industrial Technologies and Memorialization, focusing on operational efficiency and long-term growth through innovation [3] - The Industrial Technologies segment is a global innovator in precision technologies, while the Memorialization segment provides products such as memorials and cremation equipment [3] - The company employs over 5,400 individuals across 19 countries, committed to delivering high-quality products and services [3]

Core Insights - Matthews International Corporation is showcasing its MPERIA® Axian Inkjet AX1000 Series printer at PACK EXPO Las Vegas, highlighting its commitment to packaging innovation [1] - The Axian printer is designed to enhance primary packaging operations with advanced marking technology, promoting efficiency and reduced maintenance [2] - The printer features a compact design and an innovative 52-nozzle ink delivery system, allowing for quick adjustments and minimal downtime [3][4] Product Features - The Axian printer operates on the MPERIA® Control Platform, which is recognized as the industry's leading solution for marking and coding automation [6] - Key features include plug-and-print simplicity, solvent-free operation, and the ability to print up to five lines of text and 2D codes at speeds of up to 200 feet per minute (60 mpm) [9] - The printer is designed for eco-friendliness, consuming less than 25 watts of power and utilizing a closed ink system to minimize solvent emissions [9] Company Overview - Matthews Marking Systems is dedicated to providing precision marking and coding solutions that ensure compliance and brand protection for manufacturers [10] - The company operates under Matthews International Corporation, which has two main segments: Industrial Technologies and Memorialization, focusing on operational efficiency and innovation [12] - With over 5,400 employees across 19 countries, Matthews International is committed to delivering high-quality products and services [12]

Core Insights - Matthews International Corporation's Matthews Marking Systems is launching the Axian Inkjet (XIJ) printing technology, which aims to revolutionize high-speed, high-resolution product marking in the consumer-packaged goods (CPG) and fast-moving consumer goods (FMCG) sectors [1][2] Technology Overview - The new MPERIA® Axian XIJ AX1000 Series printer combines the advantages of Continuous Inkjet (CIJ) and Thermal Inkjet (TIJ) technologies into a single platform, utilizing proprietary micro-electromechanical systems (MEMS) technology for simultaneous ink droplet ejection [2][4] - XIJ technology offers significant improvements over traditional inkjet systems, including higher resolution (up to 100 DPI compared to 70 DPI), simpler maintenance, and an eco-friendly closed ink system that eliminates solvent fumes [4][5] Performance and Benefits - The Axian XIJ printer can achieve speeds of up to 200 ft/min (60 m/min) and maintain full print resolution while printing multi-line text and 2D codes without reducing line speed [9][10] - The technology is designed for versatile substrate compatibility, allowing confident marking on various materials such as flexible films and plastics [7][14] - The closed ink system reduces emissions and power consumption, drawing less than 25 watts, contributing to a lower carbon footprint [5][14] Market Positioning - Matthews Marking Systems positions the XIJ technology as a game-changer for industrial printing, enhancing efficiency and sustainability for manufacturers [10] - The company emphasizes its commitment to operational excellence and innovation, aiming to empower manufacturers with reliable marking and coding solutions [11][13]

Group 1: Event Overview - Matthews International Corporation is hosting an Energy Summit at its Development Center in Vreden, Germany on September 17-18, 2025 [1] - The summit will gather industry experts, leading battery manufacturers, automotive OEMs, and innovators to discuss advancements in battery manufacturing and energy technologies [2][3] Group 2: Summit Details - Attendees will learn about dry transfer coating for DBE, powder processing, next-gen battery types, and hydrogen fuel cell production solutions [3] - The event will be moderated by Dr. Veronika Wright, featuring presentations from experts from The University of Chicago, Fraunhofer IWS, Fraunhofer UMSICHT, Technical University of Braunschweig, Addionics, and Factorial Energy [4] Group 3: Company Background - Matthews Engineering specializes in designing and manufacturing specialty machines and production equipment for continuous industrial manufacturing processes, with over 75 years of experience [5] - The company operates through two core global businesses: Industrial Technologies and Memorialization, focusing on operational efficiency and long-term growth through innovation [6]

Core Insights - Matthews International Corporation announced the retirement of Chief Financial Officer Steven F. Nicola effective December 31, 2025, after over three decades with the company [1][2] - Daniel E. Stopar has been appointed as the new CFO and Treasurer, effective December 1, 2025, bringing extensive financial experience from his previous roles within Matthews and other companies [2] Company Overview - Matthews International operates through two main segments: Industrial Technologies and Memorialization, focusing on operational efficiency and long-term growth through innovation and strategic expansion [3] - The Industrial Technologies segment is a leading global innovator in precision technologies and intelligent processes, while the Memorialization segment provides products such as memorials, caskets, and cremation equipment to cemetery and funeral home customers [3] - The company has a significant investment in Propelis, a brand solutions business that offers integrated solutions including brand creative, packaging, and content production [3] - Matthews International employs over 5,400 individuals across 19 countries on four continents, dedicated to delivering high-quality products and services [3]

Group 1 - Matthews International (NASDAQ: MATW) reported earnings with notable performance in the Industrial Technologies segment, particularly in warehouse automation, which has shown signs of recovery [2] - The company is part of an investment group called The Value Lab, which focuses on long-only value investment strategies and aims for a portfolio yield of approximately 4% [1][2] - The Valkyrie Trading Society, another analytical team, emphasizes high conviction and obscure developed market ideas that are expected to yield non-correlated and outsized returns in the current economic climate [3] Group 2 - The Value Lab provides members with real-time portfolio updates, 24/7 chat support, regular global market news, feedback on stock ideas, monthly new trades, quarterly earnings write-ups, and daily macro opinions [2]

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q) This section provides the cover page details for Matthews International Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2025 - Matthews International Corporation filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) Securities Registered | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Class A Common Stock, $1.00 par value | MATW | Nasdaq Global Select Market | - The registrant is a large accelerated filer and is not a shell company[7](index=7&type=chunk)[8](index=8&type=chunk) - As of June 30, 2025, there were **30,790,906 shares of Class A Common Stock outstanding**[8](index=8&type=chunk) [PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%91%20FINANCIAL%20INFORMATION) This part contains the unaudited consolidated financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Matthews International Corporation and its subsidiaries, including the balance sheets, statements of income, comprehensive income, shareholders' equity, and cash flows for the periods ended June 30, 2025, and comparative periods. It also includes detailed notes explaining the company's operations, accounting policies, financial instruments, segment performance, and recent corporate actions like the SGK Business divestiture and acquisitions [Consolidated Balance Sheets](index=2&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheets show a decrease in total assets and liabilities from September 30, 2024, to June 30, 2025, primarily driven by changes in current assets, goodwill, and other intangible assets, alongside a significant increase in investments Consolidated Balance Sheet Highlights (Amounts in thousands) | Item | June 30, 2025 | September 30, 2024 | Change (vs. Sep 30, 2024) | | :-------------------------- | :------------ | :----------------- | :------------------------ | | Total assets | $1,705,965 | $1,834,890 | -$128,925 | | Total liabilities | $1,192,133 | $1,397,684 | -$205,551 | | Total shareholders' equity | $513,832 | $437,206 | +$76,626 | | Cash and cash equivalents | $20,383 | $40,816 | -$20,433 | | Accounts receivable, net | $158,891 | $205,984 | -$47,093 | | Inventories, net | $210,539 | $237,888 | -$27,349 | | Investments | $285,398 | $23,076 | +$262,322 | | Goodwill | $516,050 | $697,123 | -$181,073 | | Other intangible assets, net | $83,840 | $126,026 | -$42,186 | | Long-term debt | $696,120 | $769,614 | -$73,494 | [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the three months ended June 30, 2025, the company reported a significant increase in net income and operating profit compared to the prior year, largely due to a gain on the sale of the SGK Business. For the nine months, net income decreased despite an increase in operating profit, influenced by higher interest and tax expenses Consolidated Statements of Income Highlights (Amounts in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Sales | $349,377 | $427,833 | $1,178,848 | $1,349,042 | | Gross profit | $121,956 | $131,837 | $391,760 | $412,372 | | Operating profit | $75,191 | $6,702 | $86,813 | $37,457 | | Interest expense | $(15,830) | $(12,780) | $(47,377) | $(36,901) | | Gain on sale of SGK Business | $57,103 | — | $57,103 | — | | Net income attributable to Matthews shareholders | $15,387 | $1,777 | $2,999 | $8,501 | | Basic EPS | $0.50 | $0.06 | $0.10 | $0.28 | | Diluted EPS | $0.49 | $0.06 | $0.10 | $0.27 | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Comprehensive income for Matthews shareholders significantly increased for both the three and nine months ended June 30, 2025, primarily driven by a substantial positive foreign currency translation adjustment, despite some losses from cash flow hedges Consolidated Statements of Comprehensive Income (Loss) Highlights (Amounts in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income (Matthews) | $15,387 | $1,777 | $2,999 | $8,501 | | Foreign currency translation adjustment | $98,801 | $(970) | $92,542 | $4,689 | | Net change in unrecognized loss on cash flow hedges | $(1,399) | $(401) | $(1,150) | $(3,798) | | Comprehensive income (Matthews) | $112,833 | $172 | $94,013 | $8,796 | [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20EQUITY) Shareholders' equity for Matthews increased from September 30, 2024, to June 30, 2025, primarily due to net income and a significant positive change in accumulated other comprehensive loss, partially offset by dividends and treasury stock purchases Shareholders' Equity Changes (Amounts in thousands) | Item | September 30, 2024 | June 30, 2025 | Change | | :-------------------------------- | :----------------- | :------------ | :----- | | Total shareholders' equity-Matthews | $437,158 | $513,832 | +$76,674 | | Retained earnings | $623,063 | $601,007 | -$22,056 | | Accumulated other comprehensive loss | $(168,742) | $(77,728) | +$91,014 | | Treasury stock, at cost | $(212,994) | $(197,534) | +$15,460 | | Net income (Q3 2025) | — | $15,387 | +$15,387 | | Dividends (Q3 2025) | — | $(8,338) | -$8,338 | | Purchase of treasury stock (Q3 2025) | — | $(7,696) | -$7,696 | [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the nine months ended June 30, 2025, the company experienced net cash used in operating activities, a significant increase in cash provided by investing activities due to the SGK Business sale, and substantial cash used in financing activities for debt repayments and dividends Consolidated Statements of Cash Flows Highlights (Nine Months Ended June 30, Amounts in thousands) | Cash Flow Activity | 2025 | 2024 | | :------------------------------------ | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(33,881) | $43,336 | | Net cash provided by (used in) investing activities | $153,249 | $(38,631) | | Net cash used in financing activities | $(139,440) | $(4,096) | | Net change in cash and cash equivalents | $(20,433) | $644 | | Cash and cash equivalents at end of period | $20,383 | $42,745 | | Proceeds from sale of SGK Business | $228,004 | — | | Acquisitions, net of cash acquired | $(57,842) | $(5,825) | | Payments on long-term debt | $(998,647) | $(686,634) | | Purchases of treasury stock | $(12,122) | $(20,525) | | Dividends | $(24,740) | $(24,063) | [Notes to Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations and breakdowns of the figures presented in the consolidated financial statements, covering the company's business segments, accounting policies, recent transactions, debt, equity, and other significant financial activities. Key events include the divestiture of the SGK Business, acquisitions, and ongoing legal matters [Note 1. Nature of Operations](index=9&type=section&id=Note%201.%20Nature%20of%20Operations) Matthews International Corporation, founded in 1850, is a global provider operating in three segments: Memorialization, Industrial Technologies, and Brand Solutions. A significant event was the contribution of most of its Brand Solutions segment (SGK Business) to a new entity, Propelis Group, in exchange for a 40% ownership interest and other consideration on May 1, 2025 - Matthews International Corporation operates in three segments: Memorialization, Industrial Technologies, and Brand Solutions[22](index=22&type=chunk) - On May 1, 2025, the Company contributed the majority of its Brand Solutions segment (SGK Business) to Propelis Group, receiving a **40% ownership interest** and other consideration; the remaining Brand Solutions segment consists of printing plates and cylinders business and the Propelis ownership[22](index=22&type=chunk) [Note 2. Basis of Presentation](index=9&type=section&id=Note%202.%20Basis%20of%20Presentation) The unaudited consolidated financial statements are prepared in accordance with GAAP for interim information. The SGK Business was deconsolidated from May 1, 2025, and is now accounted for as an equity-method investment in Propelis. The company applies highly inflationary accounting to its Turkish subsidiaries, impacting reported exchange gains/losses - The SGK Business was deconsolidated from the Company's financial statements as of May 1, 2025, and is now accounted for as an equity-method investment in Propelis[24](index=24&type=chunk) - The Company applies highly inflationary accounting to its Turkish subsidiaries, with exchange losses of **$325 thousand** and **$1.04 million** for the three and nine months ended June 30, 2025, respectively, included in other income (deductions), net[25](index=25&type=chunk) [New Accounting Pronouncements](index=10&type=section&id=New%20Accounting%20Pronouncements) The FASB has issued several new ASUs, including those on Expense Disaggregation Disclosures (effective FY2028), Income Taxes (effective FY2026), and Segment Reporting (effective FY2025). The company is assessing their impact, with Segment Reporting expected to require modified disclosures but no material financial statement impact - ASU No. 2024-03 (Expense Disaggregation Disclosures) is effective for the Company in fiscal year 2028[27](index=27&type=chunk) - ASU No. 2023-09 (Income Taxes) is effective for the Company in fiscal year 2026[28](index=28&type=chunk) - ASU No. 2023-07 (Segment Reporting) is effective for the Company in fiscal year 2025, requiring increased disclosures but not expected to have a material impact on financial statements[29](index=29&type=chunk) [Note 3. Revenue Recognition](index=11&type=section&id=Note%203.%20Revenue%20Recognition) The company disaggregates revenue by geography and segment. Consolidated sales for the three months ended June 30, 2025, were $349.4 million, down from $427.8 million in 2024, with Brand Solutions experiencing the largest decline due to the SGK Business divestiture. Revenue recognized over time accounted for approximately 14% and 13% of revenue for the three months ended June 30, 2025 and 2024, respectively Disaggregated Sales by Segment and Region (Three Months Ended June 30, Amounts in thousands) | Segment/Region | 2025 Sales | 2024 Sales | | :------------------------ | :--------- | :--------- | | **Memorialization** | $203,728 | $202,664 | | North America | $194,959 | $192,575 | | Europe | $5,717 | $7,496 | | Australia | $3,052 | $2,593 | | **Industrial Technologies** | $87,901 | $91,731 | | Europe | $53,372 | $56,558 | | North America | $32,886 | $33,526 | | Asia | $1,643 | $1,647 | | **Brand Solutions** | $57,748 | $133,438 | | North America | $24,996 | $62,960 | | Europe | $24,303 | $50,671 | | Asia | $7,285 | $15,931 | | Central and South America | $451 | $1,641 | | **Consolidated Total Sales** | $349,377 | $427,833 | Disaggregated Sales by Segment and Region (Nine Months Ended June 30, Amounts in thousands) | Segment/Region | 2025 Sales | 2024 Sales | | :------------------------ | :--------- | :--------- | | **Memorialization** | $599,834 | $632,891 | | North America | $573,335 | $601,793 | | Europe | $17,674 | $23,374 | | Australia | $8,825 | $7,724 | | **Industrial Technologies** | $249,269 | $319,241 | | Europe | $149,758 | $214,913 | | North America | $95,196 | $99,482 | | Asia | $4,315 | $4,846 | | **Brand Solutions** | $329,745 | $396,910 | | North America | $159,175 | $188,832 | | Europe | $124,120 | $153,534 | | Asia | $38,043 | $43,782 | | Central and South America | $3,089 | $4,203 | | **Consolidated Total Sales** | $1,178,848 | $1,349,042 | - Revenue recognized using the 'over time' method accounted for approximately **14%** and **13%** of revenue for the three months ended June 30, 2025 and 2024, respectively[31](index=31&type=chunk) [Note 4. Fair Value Measurements](index=13&type=section&id=Note%204.%20Fair%20Value%20Measurements) The company categorizes its fair value measurements into a three-level hierarchy. As of June 30, 2025, total assets at fair value were $6.2 million and total liabilities at fair value were $62.0 million, primarily consisting of Level 2 derivatives Assets and Liabilities at Fair Value (June 30, 2025, Amounts in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | **Assets:** | | | | | | Derivatives | $— | $115 | $— | $115 | | Equity and fixed income mutual funds | $— | $862 | $— | $862 | | Life insurance policies | $— | $5,256 | $— | $5,256 | | **Total assets at fair value** | $— | $6,233 | $— | $6,233 | | **Liabilities:** | | | | | | Derivatives | $— | $62,041 | $— | $62,041 | | **Total liabilities at fair value** | $— | $62,041 | $— | $62,041 | - Interest rate swaps and cross currency swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy[32](index=32&type=chunk) [Note 5. Inventories](index=13&type=section&id=Note%205.%20Inventories) Total inventories, net, decreased from $237.9 million at September 30, 2024, to $210.5 million at June 30, 2025, with reductions across raw materials, work in process, and finished goods Inventories Breakdown (Amounts in thousands) | Item | June 30, 2025 | September 30, 2024 | | :-------------- | :------------ | :----------------- | | Raw materials | $60,543 | $61,333 | | Work in process | $77,132 | $96,488 | | Finished goods | $72,864 | $80,067 | | **Total Inventories** | $210,539 | $237,888 | [Note 6. Investments](index=13&type=section&id=Note%206.%20Investments) Non-current investments significantly increased from $23.1 million at September 30, 2024, to $285.4 million at June 30, 2025, primarily due to the equity-method investment ($213.0 million) and preferred equity investment ($50.0 million) in Propelis Group following the SGK Business contribution Non-Current Investments (Amounts in thousands) | Item | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :------------ | :----------------- | | Equity and fixed income mutual funds | $862 | $839 | | Life insurance policies | $5,256 | $5,493 | | Equity-method investments | $213,000 | $349 | | Preferred equity investment | $50,000 | — | | Other (primarily cost-method) investments | $16,280 | $16,395 | | **Total Non-Current Investments** | $285,398 | $23,076 | - On May 1, 2025, the Company recognized a **$213.0 million equity-method investment** and a **$50.0 million preferred equity investment** in Propelis after contributing its SGK Business[36](index=36&type=chunk) - The Company recognizes its share of Propelis's earnings/losses on a three-month lag, so no earnings/losses were recorded for the investment in Propelis during the quarter ended June 30, 2025[36](index=36&type=chunk) [Note 7. Debt and Financing Arrangements](index=14&type=section&id=Note%207.%20Debt%20and%20Financing%20Arrangements) Total debt decreased from $776.5 million at September 30, 2024, to $702.5 million at June 30, 2025, primarily driven by a reduction in revolving credit facilities. The company maintains a $750.0 million senior secured revolving credit facility and $300.0 million in 8.625% senior secured second lien notes due 2027. The receivables purchase agreement (RPA) amount sold to purchasers decreased, and a non-recourse factoring arrangement no longer exists post-SGK divestiture Long-Term Debt (Amounts in thousands) | Item | June 30, 2025 | September 30, 2024 | | :-------------------------- | :------------ | :----------------- | | Revolving credit facilities | $380,785 | $444,011 | | 2027 Senior Secured Notes | $295,629 | $294,751 | | Other borrowings | $5,836 | $15,602 | | Finance lease obligations | $20,249 | $22,103 | | **Total debt** | $702,499 | $776,467 | | Less current maturities | $(6,379) | $(6,853) | | **Long-term debt** | $696,120 | $769,614 | - The Company has a **$750.0 million senior secured revolving credit facility** maturing in January 2029, with outstanding U.S. dollar borrowings of **$380.4 million** at June 30, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) - The Company has **$300.0 million** aggregate principal amount of **8.625% senior secured second lien notes** due October 1, 2027[41](index=41&type=chunk) - The amount sold to purchasers under the receivables purchase agreement (RPA) was **$85.6 million** at June 30, 2025, down from **$96.3 million** at September 30, 2024[43](index=43&type=chunk) - The non-recourse factoring arrangement no longer exists for the Company at June 30, 2025, due to the sale of the SGK Business[44](index=44&type=chunk) [Note 8. Derivatives and Hedging Activities](index=16&type=section&id=Note%208.%20Derivatives%20and%20Hedging%20Activities) The company uses derivative financial instruments, including interest rate swaps and cross-currency swaps, to manage foreign currency, debt, and interest rate exposures. Interest rate swaps, designated as cash flow hedges, had a net unrealized loss of $2.2 million at June 30, 2025. Cross-currency swaps, used as net investment hedges, had a total unrealized loss of $13.3 million at June 30, 2025, and some were terminated or modified following the SGK Business sale Derivative Instruments (Amounts in thousands) | Derivative Type | June 30, 2025 | September 30, 2024 | | :---------------- | :------------ | :----------------- | | Interest Rate Swaps | $(2,209) | $(2,606) | | Cross-Currency Swaps | $(59,717) | $(66,967) | | **Total Derivatives** | $(61,926) | $(69,573) | - Interest rate swaps designated as cash flow hedges had a notional amount of **$225.0 million** at June 30, 2025, with a net unrealized loss of **$2.2 million** (**$1.7 million** after tax) included in AOCI[52](index=52&type=chunk)[53](index=53&type=chunk) Cross-Currency Swaps (Net Investment Hedges, Amounts in thousands) | Swap Currencies | Maturity Date | Notional Amount (June 30, 2025) | Unrealized Gains (Losses) in AOCI (June 30, 2025) | | :-------------- | :------------ | :------------------------------ | :---------------------------------------------- | | USD/EUR | September 2027 | $81,392 | $(5,786) | | USD/SEK | June 2026 | $20,000 | $(2,683) | | USD/EUR | August 2026 | $25,000 | $(4,878) | | **Total** | | $126,392 | $(13,347) | - During the third quarter of fiscal 2025, the Company made payments totaling **$37.1 million** to settle or modify cross-currency swap contracts following the SGK Business sale[55](index=55&type=chunk) [Note 9. Restructuring](index=18&type=section&id=Note%209.%20Restructuring) The company initiated restructuring programs in Q4 fiscal 2024, primarily in European engineering and tooling operations and general/administrative functions, with estimated costs of $42.0 million. As of June 30, 2025, the severance and employee termination liability was $4.5 million, and cumulative costs incurred to date were $41.3 million - Restructuring programs initiated in Q4 fiscal 2024 are expected to cost approximately **$42.0 million**, primarily for severance and employee termination benefits[58](index=58&type=chunk) Severance and Employee Termination Restructuring Activities (Nine Months Ended June 30, 2025, Amounts in thousands) | Item | Memorialization | Industrial Technologies | Brand Solutions | Corporate/Non Operating | Consolidated | | :---------------------------------- | :-------------- | :---------------------- | :-------------- | :---------------------- | :----------- | | Liability at September 30, 2024 | $181 | $35,368 | $1,247 | $4,226 | $41,022 | | Amounts charged (credited) to expense | $— | $(753) | $473 | $(48) | $(328) | | Net cash payments | $(149) | $(31,143) | $(553) | $(3,514) | $(35,359) | | Sale of SGK Business | $— | $— | $(1,011) | $— | $(1,011) | | **Liability at June 30, 2025** | $15 | $4,005 | $— | $452 | $4,472 | | Cumulative costs incurred to date | $181 | $34,879 | $1,720 | $4,481 | $41,261 | [Note 10. Share-Based Payments](index=19&type=section&id=Note%2010.%20Share-Based%20Payments) The company's 2017 Equity Incentive Plan allows for various stock-based awards, with 1,655,845 share-based awards outstanding at June 30, 2025. Stock-based compensation cost increased to $8.8 million for the three months and $19.8 million for the nine months ended June 30, 2025, compared to the prior year. RSU awards for SGK Business employees were modified due to the divestiture, resulting in immediate expense recognition - Stock-based compensation cost totaled **$8.8 million** for the three months ended June 30, 2025 (up from **$5.3 million** in 2024) and **$19.8 million** for the nine months ended June 30, 2025 (up from **$14.3 million** in 2024)[62](index=62&type=chunk) - As of June 30, 2025, **1,655,845 share-based awards** were outstanding under the 2017 Equity Incentive Plan, with total unrecognized compensation cost of **$16.8 million** expected to be recognized over 1.9 years[61](index=61&type=chunk)[65](index=65&type=chunk) - Outstanding RSU awards for SGK Business employees were modified due to the divestiture, removing future service requirements and guaranteeing vesting, leading to immediate expense recognition[64](index=64&type=chunk) [Note 11. Earnings Per Share Attributable to Matthews' Shareholders](index=21&type=section&id=Note%2011.%20Earnings%20Per%20Share%20Attributable%20to%20Matthews'%20Shareholders) Basic EPS for Matthews shareholders increased to $0.50 for the three months ended June 30, 2025, from $0.06 in the prior year, while for the nine months, it decreased to $0.10 from $0.28. Dividends declared per common share were $0.25 for the three months and $0.75 for the nine months ended June 30, 2025 Earnings Per Share and Dividends (Amounts in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income attributable to Matthews shareholders | $15,387 | $1,777 | $2,999 | $8,501 | | Basic EPS | $0.50 | $0.06 | $0.10 | $0.28 | | Diluted EPS | $0.49 | $0.06 | $0.10 | $0.27 | | Dividends declared per common share | $0.25 | $0.24 | $0.75 | $0.72 | [Note 12. Accumulated Other Comprehensive Income](index=22&type=section&id=Note%2012.%20Accumulated%20Other%20Comprehensive%20Income) Accumulated Other Comprehensive Income (AOCI) attributable to Matthews significantly improved from a loss of $(175.2) million at March 31, 2025, to a loss of $(77.7) million at June 30, 2025, primarily due to a large positive currency translation adjustment. Reclassifications out of AOCI included a $(92.7) million gain on the sale of the SGK Business for the nine months ended June 30, 2025 Changes in AOCI (Matthews, Three Months Ended June 30, Amounts in thousands) | Component | Balance, March 31, 2025 | Net current-period OCI | Balance, June 30, 2025 | | :-------------------------- | :---------------------- | :--------------------- | :--------------------- | | Post-retirement benefit plans | $4,533 | $44 | $4,577 | | Currency translation adjustment | $(180,882) | $98,801 | $(82,081) | | Cash Flow Hedges | $1,175 | $(1,399) | $(224) | | **Total AOCI** | $(175,174) | $97,446 | $(77,728) | Changes in AOCI (Matthews, Nine Months Ended June 30, Amounts in thousands) | Component | Balance, September 30, 2024 | Net current-period OCI | Balance, June 30, 2025 | | :-------------------------- | :-------------------------- | :--------------------- | :--------------------- | | Post-retirement benefit plans | $4,955 | $(378) | $4,577 | | Currency translation adjustment | $(174,623) | $92,542 | $(82,081) | | Cash Flow Hedges | $926 | $(1,150) | $(224) | | **Total AOCI** | $(168,742) | $91,014 | $(77,728) | - A gain of **$(92.68 million)** related to the sale of the SGK Business was reclassified from AOCI to the income statement for the nine months ended June 30, 2025[73](index=73&type=chunk) [Note 13. Income Taxes](index=26&type=section&id=Note%2013.%20Income%20Taxes) The company recorded an income tax provision of $38.4 million for the nine months ended June 30, 2025, compared to a benefit of $10.7 million in the prior year, primarily due to a shift from pre-tax loss to income, discrete tax expense from the SGK divestiture, and tax reserve adjustments. Unrecognized tax benefits decreased to $2.1 million at June 30, 2025, from $4.5 million at September 30, 2024 - Consolidated income taxes for the first nine months of fiscal 2025 represented an expense of **$38.4 million**, compared to a benefit of **$10.7 million** for the same period in fiscal 2024[74](index=74&type=chunk) - The effective tax rate for fiscal 2025 varied from the U.S. statutory rate of **21.0%** due to state taxes, tax credits, non-tax benefited foreign losses, and discrete tax related to the SGK Business sale[74](index=74&type=chunk) - Unrecognized tax benefits (excluding penalties and interest) decreased to **$2.1 million** at June 30, 2025, from **$4.5 million** at September 30, 2024[75](index=75&type=chunk) - The company is assessing the impact of the newly enacted One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements[77](index=77&type=chunk) [Note 14. Segment Information](index=27&type=section&id=Note%2014.%20Segment%20Information) The company manages its businesses under three segments: Memorialization, Industrial Technologies, and Brand Solutions. Segment profitability is measured by adjusted EBITDA. For the nine months ended June 30, 2025, consolidated sales decreased to $1.18 billion from $1.35 billion, and total adjusted EBITDA decreased to $136.0 million from $147.0 million, largely due to the SGK Business divestiture and lower sales in Industrial Technologies - The Company's primary measure of segment profitability is adjusted EBITDA, which excludes certain non-cash and non-recurring items[80](index=80&type=chunk) Segment Sales and Adjusted EBITDA (Nine Months Ended June 30, Amounts in thousands) | Segment | 2025 Sales | 2024 Sales | 2025 Adjusted EBITDA | 2024 Adjusted EBITDA | | :---------------------- | :--------- | :--------- | :------------------- | :------------------- | | Memorialization | $599,834 | $632,891 | $124,451 | $122,051 | | Industrial Technologies | $249,269 | $319,241 | $16,921 | $23,846 | | Brand Solutions | $329,745 | $396,910 | $32,892 | $44,317 | | Corporate and Non-Operating | — | — | $(38,277) | $(43,186) | | **Consolidated Total** | $1,178,848 | $1,349,042 | $135,987 | $147,028 | - The decrease in consolidated sales for the nine months ended June 30, 2025, reflected an **$80.2 million** reduction from the SGK Business divestiture, lower sales in Industrial Technologies, and unfavorable foreign currency exchange rates[110](index=110&type=chunk) - Memorialization segment adjusted EBITDA increased due to improved price realization and productivity, while Industrial Technologies and Brand Solutions adjusted EBITDA decreased due to lower sales and the SGK divestiture, respectively[115](index=115&type=chunk) [Note 15. Acquisitions and Divestitures](index=30&type=section&id=Note%2015.%20Acquisitions%20and%20Divestitures) In fiscal 2025, the company acquired The Dodge Company for $55.6 million within the Memorialization segment and completed a small acquisition for $2.2 million. On May 1, 2025, the SGK Business was contributed to Propelis Group for a 40% equity interest, a $50.0 million preferred equity investment, and $228.0 million in cash, resulting in a $57.1 million pre-tax gain. A small divestiture in Industrial Technologies resulted in a $2.1 million pre-tax loss - In May 2025, the Company acquired The Dodge Company for **$55.6 million**, a leading supplier of embalming chemicals and supplies[87](index=87&type=chunk) - On May 1, 2025, the Company contributed its SGK Business to Propelis Group, receiving a **40% common equity interest**, a **$50.0 million preferred equity investment**, and **$228.0 million in cash proceeds**, recognizing a **$57.1 million pre-tax gain**[88](index=88&type=chunk) SGK Business Assets and Liabilities Divested (May 1, 2025, Amounts in thousands) | Item | May 1, 2025 | | :-------------------------- | :------------ | | Cash and cash equivalents | $22,996 | | Accounts receivable, net | $72,146 | | Inventories, net | $31,236 | | Property, plant and equipment, net | $40,425 | | Goodwill | $223,719 | | Other intangible assets, net | $23,672 | | Total assets | $449,687 | | Total liabilities | $96,545 | | **Net assets** | $353,142 | - A small divestiture in the Industrial Technologies segment in March 2025 resulted in a pre-tax loss of **$2.1 million**[91](index=91&type=chunk) [Note 16. Goodwill and Other Intangible Assets](index=32&type=section&id=Note%2016.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill decreased significantly from $697.1 million at September 30, 2024, to $516.1 million at June 30, 2025, primarily due to the sale of the SGK Business. Other intangible assets also decreased. The annual impairment review in Q2 fiscal 2025 found no impairment charges necessary. Amortization expense decreased due to assets reaching the end of their lives and the SGK divestiture Goodwill by Segment (Amounts in thousands) | Segment | September 30, 2024 | June 30, 2025 | | :---------------------- | :----------------- | :------------ | | Memorialization | $373,144 | $416,048 | | Industrial Technologies | $99,545 | $100,002 | | Brand Solutions | $224,434 | $— | | **Consolidated Total** | $697,123 | $516,050 | - The sale of the SGK Business resulted in a reduction of goodwill by **$218.0 million**[95](index=95&type=chunk) Intangible Assets, Net (Amounts in thousands) | Item | June 30, 2025 | September 30, 2024 | | :-------------------------- | :------------ | :----------------- | | Indefinite-lived trade names | $30,540 | $30,540 | | Definite-lived trade names | $4,663 | $23,769 | | Customer relationships | $46,265 | $68,766 | | Copyrights/patents/other | $2,372 | $2,951 | | **Total Intangible Assets, Net** | $83,840 | $126,026 | - Amortization expense on intangible assets decreased to **$3.5 million** for the three months and **$16.4 million** for the nine months ended June 30, 2025, due to assets reaching the end of their lives and the SGK divestiture[98](index=98&type=chunk) [Note 17. Legal Matter](index=33&type=section&id=Note%2017.%20Legal%20Matter) The company is involved in ongoing legal disputes with Tesla, Inc., including allegations of trade secret misappropriation and claims related to inventorship and breach of contract. The company has successfully compelled arbitration for the initial complaint and intends to vigorously defend itself against all allegations, while also pursuing counterclaims against Tesla - The U.S. District Court for the Northern District of California granted the Company's motion to compel arbitration in response to Tesla's complaint alleging trade secret misappropriation[99](index=99&type=chunk) - Tesla filed an additional complaint in February 2025 alleging claims related to correction of inventorship, breach of contract, and promissory estoppel, which the Company also intends to compel arbitration for and vigorously defend against[100](index=100&type=chunk) - The Company is pursuing counterclaims against Tesla due to substantial harm caused by Tesla's actions[101](index=101&type=chunk) [Note 18. Related Party Transactions](index=33&type=section&id=Note%2018.%20Related%20Party%20Transactions) Following the SGK Business sale, the company entered into a Transitional Services Agreement (TSA) with Propelis Group to provide administrative services. For Q3 fiscal 2025, the company recognized $1.6 million in administrative support fees under the TSA, and $5.9 million was due from Propelis at June 30, 2025 - The Company provides administrative services to Propelis Group under a Transitional Services Agreement (TSA) following the SGK Business sale[102](index=102&type=chunk) - For the third quarter of fiscal 2025, the Company recognized **$1.6 million** in administrative support fees under the TSA[102](index=102&type=chunk) - As of June 30, 2025, **$5.9 million** was due to Matthews from Propelis, included in accounts receivable[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, and capital resources, including a detailed analysis of operating results by segment, a reconciliation of non-GAAP financial measures, and discussions of debt arrangements, cash flows, and strategic outlook. It highlights the impact of the SGK Business divestiture and ongoing restructuring efforts [Cautionary Statements Regarding Forward Looking Statements and Non-GAAP Financial Measures](index=34&type=section&id=Cautionary%20Statements%20Regarding%20Forward%20Looking%20Statements%20and%20Non-GAAP%20Financial%20Measures) This section outlines the inherent risks and uncertainties associated with forward-looking statements, including economic conditions, foreign currency fluctuations, material costs, and the anticipated benefits of the Propelis joint venture. It also introduces the use of non-GAAP financial measures to provide a consistent view of core operations - Forward-looking statements are subject to known and unknown risks, including changes in economic conditions, foreign currency exchange rates, material costs, and the ability to achieve anticipated benefits from the Propelis joint venture[103](index=103&type=chunk) - Non-GAAP financial measures are used to assist management in comparing performance on a consistent basis by removing the impact of items not directly reflecting core operations[104](index=104&type=chunk) [Results of Operations](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) Consolidated sales for the nine months ended June 30, 2025, decreased by $170.2 million to $1.18 billion, primarily due to the SGK Business divestiture and lower sales in Industrial Technologies. Gross profit margin improved to 33.2%, but total adjusted EBITDA declined to $136.0 million. Interest expense increased, and the company recorded an income tax provision compared to a benefit in the prior year Consolidated Sales and Adjusted EBITDA (Nine Months Ended June 30, Amounts in thousands) | Item | 2025 | 2024 | | :---------------------- | :--------- | :--------- | | Consolidated Sales | $1,178,848 | $1,349,042 | | Total Adjusted EBITDA | $135,987 | $147,028 | - The **$170.2 million decrease** in consolidated sales for the nine months ended June 30, 2025, was primarily due to an **$80.2 million reduction** from the SGK Business divestiture and lower sales in Industrial Technologies and Memorialization segments[110](index=110&type=chunk) - Consolidated gross profit as a percent of sales increased to **33.2%** for the first nine months of fiscal 2025, up from **30.6%** in fiscal 2024, despite lower sales[112](index=112&type=chunk) - Selling and administrative expenses as a percent of sales increased to **29.3%** in fiscal 2025 from **25.7%** in fiscal 2024, influenced by proxy costs, legal costs related to the Tesla dispute, and accelerated stock-based compensation[113](index=113&type=chunk)[114](index=114&type=chunk) - Interest expense increased to **$47.4 million** for the nine months ended June 30, 2025, from **$36.9 million** in the prior year, reflecting higher average interest rates[116](index=116&type=chunk) - The company recorded an income tax provision of **$38.4 million** for the first nine months of fiscal 2025, compared to a benefit of **$10.7 million** in the prior year, due to a shift from pre-tax loss to income and discrete tax items[117](index=117&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) The company uses non-GAAP financial measures, such as Adjusted EBITDA, to provide investors with supplemental information on core operations by excluding non-recurring or non-cash items. Adjusted EBITDA for the nine months ended June 30, 2025, was $136.0 million, down from $147.0 million in the prior year - Non-GAAP financial measures, including Adjusted EBITDA, are used to provide meaningful supplemental information by excluding items like acquisition/divestiture costs, ERP integration costs, stock-based compensation, and non-service pension expense[120](index=120&type=chunk)[121](index=121&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (Nine Months Ended June 30, Amounts in thousands) | Item | 2025 | 2024 | | :-------------------------------------------------- | :--------- | :--------- | | Net income | $2,999 | $8,501 | | Income tax provision (benefit) | $38,391 | $(10,677) | | Interest expense, including RPA and factoring financing fees | $50,668 | $40,539 | | Depreciation and amortization | $56,571 | $70,441 | | Acquisition and divestiture related items | $6,877 | $5,565 | | Strategic initiatives and other items | $16,303 | $17,128 | | Gain on sale of SGK Business | $(57,103) | — | | Highly inflationary accounting losses | $1,036 | $895 | | Stock-based compensation | $19,838 | $14,309 | | Non-service pension and postretirement expense | $407 | $327 | | **Total Adjusted EBITDA** | $135,987 | $147,028 | [Liquidity and Capital Resources](index=40&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Net cash used in operating activities was $33.9 million for the nine months ended June 30, 2025, a significant shift from cash provided in the prior year, mainly due to working capital changes. Cash provided by investing activities surged to $153.2 million, driven by $228.0 million from the SGK Business sale. Cash used in financing activities was $139.4 million, primarily for debt repayments and dividends. The company maintains a $750.0 million revolving credit facility and $300.0 million in senior secured notes, and expects sufficient liquidity to meet future capital needs - Net cash used in operating activities was **$33.9 million** for the first nine months of fiscal 2025, compared to net cash provided of **$43.3 million** in the prior year, primarily due to changes in working capital[126](index=126&type=chunk) - Cash provided by investing activities was **$153.2 million** for the nine months ended June 30, 2025, largely driven by **$228.0 million** in proceeds from the sale of the SGK Business[127](index=127&type=chunk) - Cash used in financing activities was **$139.4 million** for the nine months ended June 30, 2025, reflecting **$70.3 million** in net debt repayments, **$24.7 million** in dividends, and **$12.1 million** in treasury stock purchases[129](index=129&type=chunk) - The company has a **$750.0 million senior secured revolving credit facility** and **$300.0 million** in **8.625% senior secured second lien notes** due 2027[130](index=130&type=chunk)[132](index=132&type=chunk) Contractual Cash Obligations (June 30, 2025, Amounts in thousands) | Obligation | Total | Remainder 2025 | 2026 to 2027 | 2028 to 2029 | After 2029 | | :-------------------------- | :-------- | :------------- | :----------- | :----------- | :--------- | | Revolving credit facilities | $380,785 | $— | $366 | $380,419 | $— | | 2027 Senior Secured Notes | $360,317 | $— | $51,750 | $308,567 | $— | | Finance lease obligations | $22,262 | $1,881 | $13,988 | $5,320 | $1,073 | | Non-cancelable operating leases | $55,987 | $5,040 | $30,951 | $14,545 | $5,451 | | Cross-currency swaps | $59,717 | $— | $59,717 | $— | $— | | Other | $15,593 | $4,472 | $8,478 | $— | $2,643 | | **Total** | $894,661 | $11,393 | $165,250 | $708,851 | $9,167 | [Regulatory Matters](index=44&type=section&id=Regulatory%20Matters) The company's operations are subject to various federal, state, and local environmental laws and regulations, requiring strict compliance. It has internal compliance programs and is performing environmental assessments and remediation at certain sites - The Company's operations are subject to strict compliance with federal, state, and local environmental laws and regulations[151](index=151&type=chunk) - The Company is performing environmental assessments and remediation at certain operating and non-operating sites[151](index=151&type=chunk) [Acquisitions and Divestitures](index=44&type=section&id=Acquisitions%20and%20Divestitures) This section refers to Note 15 for detailed information on the company's acquisition and divestiture activities, which include the acquisition of The Dodge Company and the contribution of the SGK Business to Propelis Group - Details on the Company's acquisitions and divestitures are provided in Note 15 to the financial statements[152](index=152&type=chunk) [Forward-Looking Information](index=44&type=section&id=Forward-Looking%20Information) Management is focused on continuous improvement in sales and operating results through organic growth and acquisitions. The Board of Directors has launched a comprehensive review of strategic alternatives for the entire business portfolio, expecting additional initiatives in fiscal 2025 to drive shareholder value, alongside ongoing cost reduction programs - The Board of Directors has launched a comprehensive review of strategic alternatives for the Company's entire portfolio of businesses, publicly announced in November 2024, to drive long-term value creation[156](index=156&type=chunk) - The Company expects to announce several additional initiatives in fiscal 2025 focused on driving shareholder value[156](index=156&type=chunk) - Cost reduction programs initiated in Q4 fiscal 2024, primarily in European engineering and tooling and general/administrative functions, are expected to be completed by fiscal 2026[156](index=156&type=chunk) - Sales growth in Industrial Technologies is influenced by economic conditions, new product development, EV and e-commerce trends, and timing of projects with its largest energy storage customer[154](index=154&type=chunk)[155](index=155&type=chunk) - Memorialization segment sales growth is expected to be influenced by North America death rates and the increasing trend toward cremation[155](index=155&type=chunk) [Critical Accounting Estimates and Policies](index=45&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) The preparation of financial statements requires management to make estimates and assumptions based on various factors, which may differ from actual results. Significant accounting policies are detailed in the Notes to Consolidated Financial Statements and the Annual Report on Form 10-K - Financial statements require management estimates and assumptions, which are based on historical experience, economic conditions, and actuarial techniques, and actual results may differ[157](index=157&type=chunk) - A summary of significant accounting policies is included in the Notes to Consolidated Financial Statements and the Annual Report on Form 10-K[158](index=158&type=chunk) [Recently Issued Accounting Pronouncements](index=45&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 2, 'Basis of Presentation,' for details on recently issued accounting pronouncements and their potential impact on the company's financial statements - Details on recently issued accounting pronouncements are provided in Note 2, 'Basis of Presentation,' in Item 1 - 'Financial Statements'[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's market risk during the three and nine months ended June 30, 2025, except as detailed in Note 8, 'Derivatives and Hedging Activities' - No material changes in market risk occurred during the three and nine months ended June 30, 2025, other than those disclosed in Note 8, 'Derivatives and Hedging Activities'[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that material information is accumulated, communicated, and reported timely. No material changes in internal controls over financial reporting occurred during the quarter - As of June 30, 2025, the Company's disclosure controls and procedures were effective to provide reasonable assurance that material information is accumulated, communicated, and properly reported[162](index=162&type=chunk) - No changes in internal controls over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal controls during the fiscal quarter ended June 30, 2025[163](index=163&type=chunk) [PART II - OTHER INFORMATION](index=47&type=section&id=PART%20II%20%E2%80%91%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity security sales, and other miscellaneous information relevant to the company's operations [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing legal disputes with Tesla, Inc., including allegations of trade secret misappropriation and claims related to inventorship and breach of contract. The company has successfully compelled arbitration for the initial complaint and intends to vigorously defend itself against all allegations, while also pursuing counterclaims against Tesla. Management does not expect these matters to have a material adverse effect on the company's financial condition, results of operations, or cash flows - The U.S. District Court for the Northern District of California granted the Company's motion to compel arbitration in response to Tesla's complaint alleging trade secret misappropriation[167](index=167&type=chunk) - Tesla filed an additional complaint in February 2025 alleging claims related to correction of inventorship, breach of contract, and promissory estoppel, which the Company also intends to compel arbitration for and vigorously defend against[168](index=168&type=chunk) - The Company is pursuing counterclaims against Tesla due to substantial harm caused by Tesla's actions[169](index=169&type=chunk) - Management does not expect these legal matters to have a material adverse effect on Matthews' financial condition, results of operations, or cash flows[169](index=169&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) New risk factors include the potential for the investment in Propelis Group to underperform, given the company's minority ownership and transfer restrictions. Additionally, changes in U.S. trade policy, such as new or increased tariffs (e.g., a 10% tariff on product imports announced April 2, 2025), could materially and adversely affect the company's business, financial condition, and results of operations - The Company's investment in Propelis Group, where it is a minority owner, could underperform, leading to losses and a material negative effect on its business[171](index=171&type=chunk) - Changes in U.S. trade policy, including new or increased tariffs (e.g., a **10% tariff** on product imports from almost all countries announced April 2, 2025), could materially and adversely affect the Company's operating results[172](index=172&type=chunk)[173](index=173&type=chunk) - Global trade disruption, significant trade barriers, and retaliatory actions by foreign governments could negatively impact the U.S. economy, the industries in which the Company operates, and global demand for its products[173](index=173&type=chunk)[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a stock repurchase program designed to increase shareholder value. During the third quarter of fiscal 2025 (April-June), the company repurchased 385,525 shares of its Class A Common Stock at a weighted-average price of $19.96 per share. As of June 30, 2025, 48,829 shares remained available for repurchase under the current authorization - The Company has a stock repurchase program to increase shareholder value and enlarge its holdings of Class A Common Stock[175](index=175&type=chunk) Monthly Stock Repurchase Activity (Q3 Fiscal 2025) | Period | Total number of shares purchased | Weighted average price paid per share | | :--------- | :------------------------------- | :------------------------------------ | | April 2025 | 146,886 | $19.79 | | May 2025 | 220,218 | $19.90 | | June 2025 | 18,421 | $22.02 | | **Total** | 385,525 | $19.96 | - As of June 30, 2025, **48,829 shares** remained available for repurchase under the current authorization[175](index=175&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No other material information is reported under this item. Specifically, no directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - None of the Company's directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025[181](index=181&type=chunk) [Item 6. Exhibits and Reports on Form 8-K](index=49&type=section&id=Item%206.%20Exhibits%20and%20Reports%20on%20Form%208-K) This section lists all exhibits filed with the Form 10-Q, including organizational documents, a restricted stock unit agreement, certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL interactive data files - Exhibits include Restated Articles of Incorporation, Amended and Restated By-laws, an Amended Restricted Stock Unit Agreement for departing SGK employees, and certifications from the CEO and CFO[182](index=182&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, and Label Linkbase are filed herewith[182](index=182&type=chunk) [SIGNATURES](index=50&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the accuracy of the report - The report was signed on August 6, 2025, by Joseph C. Bartolacci, President and Chief Executive Officer, and Steven F. Nicola, Chief Financial Officer and Treasurer[186](index=186&type=chunk)

Financial Data and Key Metrics Changes - Consolidated sales for Q3 2025 were $349 million, down from $428 million in Q3 2024, primarily due to the divestiture of SGK [5][28] - Net income increased to $15.4 million or $0.49 per share compared to $1.8 million or $0.06 per share a year ago, reflecting a gain from the SGK divestiture [27] - Consolidated adjusted EBITDA for Q3 2025 was $44.6 million, slightly down from $44.7 million in the previous year, indicating stability despite the divestiture [29] Business Line Data and Key Metrics Changes - Memorialization segment sales increased to $203.7 million from $202.7 million year-over-year, driven by the Dodge acquisition and inflationary pricing [31] - Industrial Technology segment sales decreased to $87.9 million from $91.7 million, primarily due to lower engineering sales, although warehouse automation showed improvement [33] - Brand Solutions segment sales fell to $57.7 million from $133.4 million, significantly impacted by the SGK divestiture [36] Market Data and Key Metrics Changes - The warehouse automation market is experiencing positive order trends, with significant increases in backlog due to renewed interest in automation technologies [14] - U.S. e-commerce is projected to grow by 10% in 2025, indicating a favorable market environment for the company's automation solutions [15] Company Strategy and Development Direction - The company is focused on a value creation plan aimed at simplifying corporate structure, reducing costs, and expanding into higher growth and margin businesses [6][9] - The merger of SGS and SGK is expected to create significant value, with projected annual adjusted EBITDA of about $100 million for Propellus Group [6][7] - The company is maintaining its previous earnings guidance of at least $190 million in adjusted EBITDA for 2025, despite the impact of the SGK divestiture [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early results of cost reduction initiatives and the potential for further debt reduction [9][24] - The company anticipates a return to normal revenue and pricing cadence in the memorialization segment for the remainder of the year [11] - Management noted ongoing legal disputes with Tesla but remains confident in the strength of its proprietary technology and market position [20][22] Other Important Information - The company expects to close the sale of remaining SGK German assets, further simplifying its structure and reducing debt levels [9] - Cash flow used in operating activities for Q3 2025 was $15.2 million, a decline from cash provided by operating activities of $13.5 million in the previous year [37] Q&A Session Summary Question: What was the EBITDA contribution from the Dodge Company this quarter? - The EBITDA contribution was approximately $1 million on $6 million in sales, consistent with previous estimates [43] Question: What was the energy storage related revenue for the quarter? - Sales in the energy business were down from a year ago, primarily due to ongoing issues discussed earlier [44] Question: How much synergy is expected between the new print head business and warehouse automation? - The connection between warehouse automation and the new print head business is significant, with expectations for future synergies as the products are rolled out [50][54] Question: Has the RotoGravir sale closed? - The sale is expected to close before September 30, generating over $30 million in net cash [70] Question: What is the status of the European packaging sale? - The European packaging business has an annual revenue run rate of about $50-60 million, with EBITDA being relatively breakeven [73] Question: Any updates on the legal front with Tesla? - Tesla has filed additional suits seeking to overturn a favorable ruling, but the likelihood of success is low [84]

Financial Performance - Q3 2025 sales decreased to $349.4 million from $427.8 million in Q3 2024 [17] - Q3 2025 diluted EPS increased to $0.49 from $0.06 in Q3 2024 [17] - Q3 2025 Non-GAAP Adjusted EPS decreased to $0.28 from $0.56 in Q3 2024 [17] - Q3 2025 Adjusted EBITDA decreased slightly to $44.6 million from $44.7 million in Q3 2024 [17] - Year-to-date sales decreased to $1,178.8 million from $1,349.0 million [17] - Year-to-date Non-GAAP Adjusted EPS decreased to $0.76 from $1.62 [17] - Year-to-date Adjusted EBITDA decreased to $136.0 million from $147.0 million [17] Segment Performance - Memorialization Q3 sales slightly increased to $203.7 million from $202.7 million [23] - Industrial Technologies Q3 sales decreased to $87.9 million from $91.7 million [28] - Brand Solutions Q3 sales decreased to $57.7 million from $133.4 million [33] Outlook - The company maintains adjusted EBITDA guidance of at least $190 million for fiscal year 2025, including the estimated 40% share of Propelis [14] - Customer quotes for energy storage solutions since early February 2025 have exceeded $150 million [14]