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]

[Fiscal 2025 Third Quarter Overview](index=1&type=section&id=Fiscal%202025%20Third%20Quarter%20Overview) [Fiscal 2025 Third Quarter Financial Highlights](index=1&type=section&id=1.1%20Fiscal%202025%20Third%20Quarter%20Financial%20Highlights) Matthews International Corporation reported a significant increase in GAAP EPS for Q3 FY2025, driven by the SGK divestiture gain. Both Memorialization and Industrial Technologies segments showed higher adjusted EBITDA, while the company successfully reduced outstanding debt and corporate costs - GAAP Earnings per share increased to **$0.49** from **$0.06** a year ago[3](index=3&type=chunk)[6](index=6&type=chunk) - Memorialization and Industrial Technologies segments reported higher adjusted EBITDA[3](index=3&type=chunk)[6](index=6&type=chunk) - Outstanding debt was reduced by **$120 million**[6](index=6&type=chunk)[9](index=9&type=chunk) - The company is realizing benefits from cost reduction actions, including an **11.4% ($4.9 million)** year-to-date reduction in corporate and non-operating costs[4](index=4&type=chunk)[6](index=6&type=chunk) - Strategic alternatives evaluation is progressing well, with an update expected in the coming months[6](index=6&type=chunk)[11](index=11&type=chunk) - The company maintains its fiscal 2025 outlook for adjusted EBITDA of at least **$190 million**[6](index=6&type=chunk)[12](index=12&type=chunk) [President and CEO Commentary](index=1&type=section&id=1.2%20President%20and%20CEO%20Commentary) Joseph C. Bartolacci, President and CEO, expressed satisfaction with Q3 FY2025 operating results, highlighting the positive impact of the SGK divestiture and cost reduction initiatives. He noted segment-specific performance, including the Memorialization segment's growth from the Dodge Company acquisition and the Industrial Technologies segment's recovery in warehouse automation despite the Tesla dispute. He also emphasized significant debt reduction and the progress of strategic alternatives - GAAP EPS of **$0.49** for Q3 FY2025, up from **$0.06** a year ago, significantly influenced by the SGK divestiture gain[3](index=3&type=chunk) - Cost reduction actions initiated last year were a key contributor to year-over-year improvement in the Industrial Technologies segment and a reduction in corporate and non-operating costs[4](index=4&type=chunk) - Memorialization segment sales were higher due to the acquisition of The Dodge Company, which is expected to be accretive to earnings[5](index=5&type=chunk) - Industrial Technologies segment saw a modest sales decline due to the Tesla dispute, but outstanding quotes are now over **$150 million** post-favorable ruling, with warehouse automation sales improving[8](index=8&type=chunk) - Consolidated outstanding debt was reduced by **$120 million** in Q3 FY2025, primarily from SGK divestiture proceeds[9](index=9&type=chunk) - Propelis Group (formed from SGK merger) has shown solid operating results and increased projected cost synergy estimates to approximately **$60 million**[10](index=10&type=chunk) - The Board, with J.P. Morgan, is evaluating strategic alternatives to improve shareholder value, with an update expected in several months[11](index=11&type=chunk) - The company maintains its fiscal 2025 adjusted EBITDA guidance of at least **$190 million**, including its estimated **40%** share of Propelis adjusted EBITDA[12](index=12&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) [Third Quarter Fiscal 2025 Consolidated Results](index=2&type=section&id=2.1%20Third%20Quarter%20Fiscal%202025%20Consolidated%20Results) Consolidated sales for Q3 FY2025 decreased significantly due to the SGK divestiture, but net income attributable to Matthews saw a substantial increase, primarily driven by the gain on the SGK sale. Adjusted EBITDA remained relatively consistent year-over-year, though non-GAAP adjusted EPS declined | ($ in millions, except per share data) | Q3 FY2025 | Q3 FY2024 | Change | % Change | | :----------------------------------- | :-------- | :-------- | :----- | :------- | | Sales | $349.4 | $427.8 | $(78.4) | (18.3)% | | Net income attributable to Matthews | $15.4 | $1.8 | $13.6 | NM | | Diluted earnings per share | $0.49 | $0.06 | $0.43 | NM | | Non-GAAP adjusted net income | $9.2 | $17.3 | $(8.1) | (46.9)% | | Non-GAAP adjusted EPS | $0.28 | $0.56 | $(0.28)| (50.0)% | | Adjusted EBITDA | $44.6 | $44.7 | $(0.2) | (0.4)% | - Consolidated sales decreased by **$78.4 million (18.3%)** to **$349.4 million**, primarily due to the **$80.2 million** impact of the SGK divestiture[12](index=12&type=chunk)[14](index=14&type=chunk) - Net income attributable to the Company increased to **$15.4 million ($0.49 per share)** from **$1.8 million ($0.06 per share)** in the prior year, largely due to the gain on the SGK divestiture[12](index=12&type=chunk)[15](index=15&type=chunk) - Non-GAAP adjusted earnings per share decreased to **$0.28** from **$0.56** a year ago[12](index=12&type=chunk)[15](index=15&type=chunk) - Adjusted EBITDA was relatively consistent at **$44.6 million**, but would be **$51.3 million (up 14.6%)** including the **40%** interest in Propelis's estimated adjusted EBITDA for May and June 2025[12](index=12&type=chunk)[15](index=15&type=chunk)[18](index=18&type=chunk) [Fiscal 2025 Year-to-Date Consolidated Results](index=3&type=section&id=2.2%20Fiscal%202025%20Year-to-Date%20Consolidated%20Results) For the first nine months of fiscal 2025, consolidated sales declined, mainly due to the SGK divestiture and lower Industrial Technologies sales. Net income and non-GAAP adjusted EPS also decreased significantly year-over-year, as did adjusted EBITDA | ($ in millions, except per share data) | YTD FY2025 | YTD FY2024 | Change | % Change | | :----------------------------------- | :--------- | :--------- | :----- | :------- | | Sales | $1,178.8 | $1,349.0 | $(170.2)| (12.6)% |\n| Net income attributable to Matthews | $3.0 | $8.5 | $(5.5) | (64.7)% |\n| Diluted earnings per share | $0.10 | $0.27 | $(0.17)| (63.0)% |\n| Non-GAAP adjusted net income | $24.0 | $50.5 | $(26.5)| (52.5)% |\n| Non-GAAP adjusted EPS | $0.76 | $1.62 | $(0.86)| (53.1)% |\n| Adjusted EBITDA | $136.0 | $147.0 | $(11.0)| (7.5)% | - Consolidated sales for the nine months ended June 30, 2025, were **$1.18 billion**, a decrease of **$170.2 million (12.6%)** from **$1.35 billion** a year ago, primarily due to the SGK divestiture (**$80.2 million** impact) and lower Industrial Technologies sales[19](index=19&type=chunk)[22](index=22&type=chunk) - Net income attributable to the Company for the nine months decreased to **$3.0 million ($0.10 per share)** from **$8.5 million ($0.27 per share)** in the prior year[19](index=19&type=chunk)[23](index=23&type=chunk) - Non-GAAP adjusted earnings per share for the nine months decreased to **$0.76** from **$1.62** a year ago[19](index=19&type=chunk)[23](index=23&type=chunk) - Adjusted EBITDA for the first nine months of fiscal 2025 was **$136.0 million**, down from **$147.0 million** a year ago[19](index=19&type=chunk)[23](index=23&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) [Memorialization Segment Performance](index=1&type=section&id=3.1%20Memorialization%20Segment%20Performance) The Memorialization segment reported higher sales in Q3 FY2025, primarily due to the acquisition of The Dodge Company, which is expected to be accretive to earnings. Despite modestly lower sales volumes for caskets and cemetery memorials, improved operating margins were achieved through inflationary price realization and productivity initiatives. Year-to-date sales were lower - Q3 FY2025 sales were higher than a year ago, primarily reflecting the acquisition of The Dodge Company, which is expected to be nicely accretive to earnings[5](index=5&type=chunk) - Sales volumes for caskets and cemetery memorials were modestly lower due to lower U.S. casketed deaths and prior year granite backlog reductions[5](index=5&type=chunk) - Earnings impact of declines was offset by inflationary price realization and significant productivity initiatives, leading to improved operating margins[7](index=7&type=chunk) | (In thousands) | 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 | $203,728 | $202,664 | $599,834 | $632,891 | | Adjusted EBITDA| $42,801 | $38,737 | $124,451 | $122,051 | [Industrial Technologies Segment Performance](index=1&type=section&id=3.2%20Industrial%20Technologies%20Segment%20Performance) The Industrial Technologies segment experienced a modest sales decline in Q3 FY2025, mainly due to the ongoing Tesla dispute impacting engineering sales. However, post-favorable ruling, outstanding quotes have grown significantly, and warehouse automation business sales were higher with improving order rates and backlog. Adjusted EBITDA for the quarter increased substantially - Reported a modest decline in sales for Q3 FY2025, primarily from lower engineering sales due to the Tesla dispute[8](index=8&type=chunk) - Following a favorable ruling in February 2025, outstanding quotes are over **$150 million** and converting to orders, with further increases expected[8](index=8&type=chunk) - Sales for the warehouse automation business were higher, reflecting ongoing market recovery and improved order rates/backlog[8](index=8&type=chunk) | (In thousands) | 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 | $87,901 | $91,731 | $249,269 | $319,241 | | Adjusted EBITDA| $9,047 | $4,196 | $16,921 | $23,846 | [Brand Solutions Segment Performance (SGK/Propelis)](index=2&type=section&id=3.3%20Brand%20Solutions%20Segment%20Performance%20(SGK%2FPropelis)) The Brand Solutions segment, which included SGK prior to its divestiture on May 1, 2025, showed sales growth before the transaction. Post-divestiture, SGK was contributed to Propelis Group, in which Matthews holds a 40% equity interest. Propelis has reported solid operating results and increased its projected cost synergy estimates to $60 million - SGK reported sales growth for Q3 FY2025 prior to its divestiture on May 1, 2025[14](index=14&type=chunk) - The SGK business was contributed to Propelis Group, with Matthews receiving **40% common equity**, **$50 million preferred equity**, and **$250 million cash proceeds ($228 million net)**[16](index=16&type=chunk) - Propelis Group has indicated solid operating results since the May 1, 2025 closing date and recently increased its projected cost synergy estimates to approximately **$60 million**[10](index=10&type=chunk) - Matthews' **40%** portion of Propelis's estimated adjusted EBITDA for May and June 2025 was **$6.7 million**[18](index=18&type=chunk) | (In thousands) | 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 | $57,748 | $133,438 | $329,745 | $396,910 | | Adjusted EBITDA| $5,004 | $16,054 | $32,892 | $44,317 | [Strategic Developments and Financial Position](index=2&type=section&id=Strategic%20Developments%20and%20Financial%20Position) [Divestiture of the SGK Business](index=3&type=section&id=4.1%20Divestiture%20of%20the%20SGK%20Business) On May 1, 2025, Matthews International contributed its SGK business to a new entity, Propelis, in exchange for a 40% equity stake, a preferred equity investment, and significant cash proceeds. This divestiture was a major factor in the company's Q3 financial results and debt reduction - On May 1, 2025, the SGK business was contributed to Propelis in exchange for **40% common equity**, a **$50 million preferred equity investment**, and **$250 million in cash proceeds ($228 million net)**[16](index=16&type=chunk) - The consolidated financial information in the release reflects SGK's results only through the closing date, with Matthews' **40%** interest in Propelis's results to be reported on a one-quarter lag[17](index=17&type=chunk) - The gain on the divestiture of SGK was the most significant factor in the increase in net income attributable to the Company for Q3 FY2025[15](index=15&type=chunk) - The SGK divestiture contributed to a **$120 million** reduction in consolidated outstanding debt during Q3 FY2025[9](index=9&type=chunk) [Strategic Alternatives Evaluation](index=2&type=section&id=4.2%20Strategic%20Alternatives%20Evaluation) Matthews International is actively evaluating strategic alternatives with the support of J.P. Morgan to enhance shareholder value and better align with the organization's underlying value. This evaluation is expected to conclude within the next several months - The strategic alternatives evaluation is progressing well, with the Board and J.P. Morgan identifying several options for further consideration[11](index=11&type=chunk) - The goal of the evaluation is to improve shareholder value and achieve better alignment with the underlying value of the organization[11](index=11&type=chunk) - The company expects to complete this evaluation over the next several months and will provide an update to shareholders[11](index=11&type=chunk) [Debt Reduction and Financial Management](index=2&type=section&id=4.3%20Debt%20Reduction%20and%20Financial%20Management) Matthews International significantly reduced its consolidated outstanding debt by $120 million in Q3 FY2025, primarily utilizing proceeds from the SGK divestiture. The company anticipates further debt reduction in Q4 FY2025 based on operating cash flow projections and the potential sale of its European packaging business, leading to an improved Net Debt Leverage Ratio - Consolidated outstanding debt was reduced by **$120 million** during Q3 FY2025, mainly from SGK divestiture proceeds, partially offset by the Dodge Company acquisition and other transaction costs[9](index=9&type=chunk) - Further debt reduction is expected in Q4 FY2025, driven by current operating cash flow projections and the potential sale of the European packaging business[9](index=9&type=chunk) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | | :--------------------- | :------------ | :------------- | :---------------- | :----------------- | | Total debt | $702,499 | $822,180 | $809,211 | $776,467 | | Less: Cash and cash equivalents | $(20,383) | $(40,246) | $(33,513) | $(40,816) | | Net Debt | $682,116 | $781,934 | $775,698 | $735,651 | | Adjusted EBITDA (trailing 12 months) | $194,116 | $194,312 | $199,698 | $205,157 | | Net Debt Leverage Ratio| 3.5 | 4.0 | 3.9 | 3.6 | [Company Information and Outlook](index=2&type=section&id=Company%20Information%20and%20Outlook) [About Matthews International Corporation](index=4&type=section&id=5.1%20About%20Matthews%20International%20Corporation) Matthews International Corporation is a global provider operating through two core businesses: Industrial Technologies and Memorialization, both focused on efficiency, growth, and innovation. The company also holds a significant investment in Propelis, a brand solutions business, and employs over 5,400 people across 19 countries - Matthews International operates through two core global businesses: Industrial Technologies (precision technologies and intelligent processes) and Memorialization (memorials, caskets, cremation/incineration equipment)[25](index=25&type=chunk) - The company has a significant investment in Propelis, a brand solutions business formed from the merger of SGK and SGS & Co., offering integrated solutions[25](index=25&type=chunk) - Matthews International has over **5,400 employees** in **19 countries** on four continents[25](index=25&type=chunk) [Fiscal 2025 Outlook](index=2&type=section&id=5.2%20Fiscal%202025%20Outlook) Based on results through June 30, 2025, and fourth-quarter projections, Matthews International is maintaining its previous earnings guidance for fiscal 2025, expecting adjusted EBITDA of at least $190 million, which includes its estimated 40% share of Propelis's adjusted EBITDA - The company is maintaining its previous earnings guidance for fiscal 2025[12](index=12&type=chunk) - Adjusted EBITDA is projected to be at least **$190 million** for fiscal 2025[12](index=12&type=chunk) - The adjusted EBITDA guidance includes the estimated **40%** share of Propelis adjusted EBITDA from May 1, 2025, through September 30, 2025[12](index=12&type=chunk) [Webcast Details](index=4&type=section&id=5.3%20Webcast%20Details) Matthews International hosted a conference call and webcast on Wednesday, August 6, 2025, to discuss its financial and operating results, corporate strategies, and outlook, followed by a Q&A session - A conference call and webcast were held on Wednesday, August 6, 2025, at **9:00 a.m. Eastern Time**[24](index=24&type=chunk) - The webcast reviewed financial and operating results, corporate strategies, and outlook, including a question-and-answer session[24](index=24&type=chunk) - Access was available via phone at (201) 689-8471 and audio webcast at www.matw.com, with a transcript to be posted on the Investor Relations section of the website[24](index=24&type=chunk) [Forward-looking Information](index=5&type=section&id=5.4%20Forward-looking%20Information) This section contains forward-looking statements subject to the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations, including economic conditions, currency fluctuations, material costs, and the ability to achieve anticipated benefits from strategic transactions - Forward-looking statements are included under the 'safe harbor' provisions of the Private Securities Litigation Reform Act of **1995**[26](index=26&type=chunk) - Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from management's expectations[26](index=26&type=chunk) - Key risk factors include changes in economic conditions, foreign currency exchange rates, interest rates, material costs, goodwill impairment, environmental liabilities, service disruptions, changes in mortality/cremation rates, competitive pressures, ability to achieve cost-reduction objectives, and risks related to acquisitions, divestitures, and cybersecurity[26](index=26&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [Statements of Income](index=6&type=section&id=6.1%20Statements%20of%20Income) The condensed consolidated statements of income show a significant increase in net income and diluted EPS for Q3 FY2025 compared to the prior year, primarily driven by a substantial gain on the sale of the SGK Business. However, year-to-date net income and EPS declined | (In thousands, except per share data) | 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 | | Net income attributable to Matthews | $15,387 | $1,777 | $2,999 | $8,501 | | Diluted earnings per share | $0.49 | $0.06 | $0.10 | $0.27 | | Non-GAAP earnings per share | $0.28 | $0.56 | $0.76 | $1.62 | - Sales decreased by **18.3%** for the three months and **12.6%** for the nine months ended June 30, 2025, primarily due to the SGK divestiture[27](index=27&type=chunk) - Operating profit significantly increased for both the three-month (NM) and nine-month (**131.8%**) periods, largely due to a **$57,103 thousand** gain on the sale of the SGK Business[27](index=27&type=chunk) - Net income attributable to Matthews increased substantially for the three months (NM) but decreased by **64.7%** for the nine months ended June 30, 2025[27](index=27&type=chunk) [Balance Sheet Information](index=7&type=section&id=6.2%20Balance%20Sheet%20Information) The condensed consolidated balance sheet shows a decrease in total assets from September 30, 2024, to June 30, 2025, primarily driven by reductions in goodwill, other intangible assets, and current assets. Total liabilities also decreased, while total shareholders' equity increased | (In thousands) | June 30, 2025 | September 30, 2024 | | :------------- | :------------ | :----------------- | | Total current assets | $516,279 | $632,543 | | Goodwill | $516,050 | $697,123 | | Other intangible assets, net | $83,840 | $126,026 | | Total assets | $1,705,965 | $1,834,890 | | Total current liabilities | $310,750 | $434,775 | | Long-term debt | $696,120 | $769,614 | | Total liabilities | $1,192,133 | $1,397,684 | | Total shareholders' equity | $513,832 | $437,206 | - Total assets decreased from **$1,834,890 thousand** at September 30, 2024, to **$1,705,965 thousand** at June 30, 2025[31](index=31&type=chunk) - Goodwill decreased by **$181,073 thousand** and other intangible assets, net, decreased by **$42,186 thousand**[31](index=31&type=chunk) - Total liabilities decreased from **$1,397,684 thousand** to **$1,192,133 thousand**, including a reduction in long-term debt[31](index=31&type=chunk) - Total shareholders' equity increased from **$437,206 thousand** to **$513,832 thousand**[31](index=31&type=chunk) [Cash Flows Information](index=9&type=section&id=6.3%20Cash%20Flows%20Information) For the nine months ended June 30, 2025, cash flows from operating activities turned negative, while investing activities generated a significant net cash inflow, primarily due to proceeds from the SGK Business sale. Financing activities resulted in a substantial net cash outflow, leading to an overall net decrease in cash and cash equivalents | (In thousands) | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 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 | - Net cash used in operating activities was **$33,881 thousand** for the nine months ended June 30, 2025, compared to net cash provided of **$43,336 thousand** in the prior year[32](index=32&type=chunk) - Net cash provided by investing activities was **$153,249 thousand**, primarily driven by **$228,004 thousand** in proceeds from the sale of the SGK Business[32](index=32&type=chunk) - Net cash used in financing activities significantly increased to **$139,440 thousand**, mainly due to net proceeds from long-term debt, purchases of treasury stock, and dividends[32](index=32&type=chunk) - Overall, there was a net decrease of **$20,433 thousand** in cash and cash equivalents for the nine months ended June 30, 2025[32](index=32&type=chunk) [Reconciliations of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliations%20of%20Non-GAAP%20Financial%20Measures) [Adjusted EBITDA Reconciliation](index=11&type=section&id=7.1%20Adjusted%20EBITDA%20Reconciliation) The Adjusted EBITDA reconciliation provides a detailed breakdown of adjustments made to net income to arrive at Adjusted EBITDA, including income tax, interest expense, depreciation and amortization, acquisition/divestiture items, strategic initiatives, gain on SGK sale, and stock-based compensation. For Q3 FY2025, Adjusted EBITDA was $44.55 million, with an Adjusted EBITDA margin of 12.8% - Adjusted EBITDA for the three months ended June 30, 2025, was **$44,550 thousand**, with an Adjusted EBITDA margin of **12.8%**[35](index=35&type=chunk) - Adjustments include a significant gain on the sale of the SGK Business (**$57,103 thousand**) and costs related to strategic initiatives and the Tesla dispute (**$10,315 thousand** for Q3 FY2025)[35](index=35&type=chunk) - For the nine months ended June 30, 2025, Adjusted EBITDA was **$135,987 thousand**, with an Adjusted EBITDA margin of **11.5%**[35](index=35&type=chunk) | (In thousands) | 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 | $15,387 | $1,777 | $2,999 | $8,501 | | Income tax provision (benefit) | $43,477 | $(8,829) | $38,391 | $(10,677) | | Interest expense | $16,804 | $14,005 | $50,668 | $40,539 | | Depreciation and amortization | $15,836 | $23,657 | $56,571 | $70,441 | | Gain on sale of SGK Business | $(57,103) | — | $(57,103) | — | | Total Adjusted EBITDA | $44,550 | $44,746 | $135,987 | $147,028 | [Adjusted Net Income and EPS Reconciliation](index=12&type=section&id=7.2%20Adjusted%20Net%20Income%20and%20EPS%20Reconciliation) The reconciliation of Adjusted Net Income and EPS details the non-GAAP adjustments made to GAAP net income, including acquisition/divestiture costs, strategic initiatives, the gain on SGK sale, and amortization. For Q3 FY2025, Adjusted Net Income was $9.189 million, resulting in an Adjusted EPS of $0.28, a decrease from the prior year - Adjusted net income for the three months ended June 30, 2025, was **$9,189 thousand**, resulting in an Adjusted EPS of **$0.28**, compared to **$0.56** in the prior year[38](index=38&type=chunk) - Key adjustments include a **$14,155 thousand** after-tax gain on the sale of the SGK Business and **$10,615 thousand** for strategic initiatives and other charges for Q3 FY2025[38](index=38&type=chunk) - For the nine months ended June 30, 2025, Adjusted net income was **$23,986 thousand**, with an Adjusted EPS of **$0.76**, down from **$1.62** a year ago[38](index=38&type=chunk) | (In thousands, except per share data) | Three Months Ended June 30, 2025 (per share) | Three Months Ended June 30, 2024 (per share) | Nine Months Ended June 30, 2025 (per share) | Nine Months Ended June 30, 2024 (per share) | | :------------------------------------ | :------------------------------------------- | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net income attributable to Matthews | $15,387 ($0.49) | $1,777 ($0.06) | $2,999 ($0.10) | $8,501 ($0.27) | | Acquisition and divestiture costs | $(6,901) ($(0.22)) | $1,626 ($0.05) | $5,807 ($0.19) | $4,036 ($0.13) | | Strategic initiatives and other charges | $10,615 ($0.33) | $6,715 ($0.22) | $14,516 ($0.45) | $15,812 ($0.51) | | Gain on sale of SGK Business | $(14,155) ($(0.45)) | — (—) | $(14,155) ($(0.45)) | — (—) | | Amortization | $2,605 ($0.08) | $6,777 ($0.22) | $12,271 ($0.39) | $20,843 ($0.67) | | Adjusted net income | $9,189 ($0.28) | $17,298 ($0.56) | $23,986 ($0.76) | $50,469 ($1.62) | [Constant Currency Sales and Adjusted EBITDA Reconciliation](index=13&type=section&id=7.3%20Constant%20Currency%20Sales%20and%20Adjusted%20EBITDA%20Reconciliation) This reconciliation adjusts reported sales and Adjusted EBITDA for the impact of foreign exchange translation rates to provide a clearer view of underlying business performance. For Q3 FY2025, constant currency sales were slightly lower than reported, while constant currency Adjusted EBITDA also saw a minor adjustment - Constant currency sales for the quarter ended June 30, 2025, were **$344,806 thousand**, compared to reported sales of **$349,377 thousand**, reflecting a negative impact from foreign exchange rates[42](index=42&type=chunk) - Constant currency adjusted EBITDA for the quarter ended June 30, 2025, was **$44,101 thousand**, slightly lower than the reported **$44,550 thousand**[42](index=42&type=chunk) | (In thousands) | Reported Sales Q3 FY2025 | Changes in FX Rates Q3 FY2025 | Constant Currency Sales Q3 FY2025 | | :------------- | :----------------------- | :---------------------------- | :-------------------------------- | | Memorialization| $203,728 | $(222) | $203,506 | | Industrial Technologies | $87,901 | $(2,944) | $84,957 | | Brand Solutions| $57,748 | $(1,405) | $56,343 | | Consolidated | $349,377 | $(4,571) | $344,806 | | (In thousands) | Reported Adjusted EBITDA Q3 FY2025 | Changes in FX Rates Q3 FY2025 | Constant Currency Adjusted EBITDA Q3 FY2025 | | :------------- | :-------------------------------- | :---------------------------- | :------------------------------------------ | | Memorialization| $42,801 | $4 | $42,805 | | Industrial Technologies | $9,047 | $(150) | $8,897 | | Brand Solutions| $5,004 | $(384) | $4,620 | | Corporate and Non-Operating | $(12,302) | $81 | $(12,221) | | Consolidated | $44,550 | $(449) | $44,101 | [Net Debt and Net Debt Leverage Ratio Reconciliation](index=14&type=section&id=7.4%20Net%20Debt%20and%20Net%20Debt%20Leverage%20Ratio%20Reconciliation) This reconciliation presents the company's net debt and net debt leverage ratio, which is calculated as outstanding debt (net of cash) relative to adjusted EBITDA. As of June 30, 2025, net debt significantly decreased, leading to an improved net debt leverage ratio of 3.5, down from 4.0 at March 31, 2025 - Net Debt as of June 30, 2025, was **$682,116 thousand**, a decrease from **$781,934 thousand** at March 31, 2025[43](index=43&type=chunk) - The Net Debt Leverage Ratio improved to **3.5** at June 30, 2025, from **4.0** at March 31, 2025[43](index=43&type=chunk) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | | :--------------------- | :------------ | :------------- | :---------------- | :----------------- | | Total debt | $702,499 | $822,180 | $809,211 | $776,467 | | Less: Cash and cash equivalents | $(20,383) | $(40,246) | $(33,513) | $(40,816) | | Net Debt | $682,116 | $781,934 | $775,698 | $735,651 | | Adjusted EBITDA (trailing 12 months) | $194,116 | $194,312 | $199,698 | $205,157 | | Net Debt Leverage Ratio| 3.5 | 4.0 | 3.9 | 3.6 |

Core Viewpoint - Matthews International (MATW) reported quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.33 per share, and down from $0.56 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -15.15%, with the company previously expected to post earnings of $0.36 per share but actually reporting $0.34 per share, resulting in a -5.56% surprise [2] - Revenues for the quarter ended June 2025 were $349.38 million, exceeding the Zacks Consensus Estimate by 7.73%, but down from $427.83 million year-over-year [3] - Over the last four quarters, the company has surpassed consensus revenue estimates two times [3] Stock Performance - Matthews International shares have declined approximately 16.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [4] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.42 on revenues of $290 million, and for the current fiscal year, it is $1.22 on revenues of $1.44 billion [8] - The outlook for the Funeral Services industry, where Matthews operates, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable environment for performance [9] Competitor Insights - Carriage Services (CSV), another company in the Funeral Services industry, is expected to report quarterly earnings of $0.72 per share, reflecting a year-over-year increase of +14.3% [10] - Carriage Services' anticipated revenues are $100.47 million, which is a decrease of 1.8% from the previous year [11]

Core Insights - Matthews International Corporation reported a significant increase in GAAP earnings per share to $0.49 for Q3 FY2025, up from $0.06 in the same quarter last year, largely due to a gain from the divestiture of the SGK business [2][12][8] - The company achieved a reduction in corporate and non-operating costs by 11.4%, amounting to $4.9 million year-over-year, contributing to improved operating results [3][8] - The Memorialization segment saw higher adjusted EBITDA, driven by the acquisition of The Dodge Company, despite a modest decline in sales volumes for caskets and cemetery memorials [4][27] - The Industrial Technologies segment experienced a slight decline in sales, primarily due to the ongoing litigation with Tesla, but has seen a positive trend in outstanding quotes exceeding $150 million [5][8] - Consolidated sales for Q3 FY2025 were $349.4 million, down 18.3% from $427.8 million in Q3 FY2024, primarily due to the impact of the SGK divestiture [10][11] - The company reduced its outstanding debt by $120 million during the quarter, reflecting proceeds from the SGK divestiture [6][8] Financial Performance - Net income attributable to Matthews for Q3 FY2025 was $15.4 million, compared to $1.8 million in the prior year, with a notable gain from the SGK divestiture [12][10] - Non-GAAP adjusted earnings per share decreased to $0.28 from $0.56 year-over-year, reflecting the impact of the divestiture and other factors [10][12] - Adjusted EBITDA for Q3 FY2025 was $44.6 million, slightly down from $44.7 million in the same quarter last year [10][27] Segment Performance - The Memorialization segment reported sales of $203.7 million, a slight increase from $202.7 million year-over-year, benefiting from the recent acquisition [27] - The Industrial Technologies segment's sales were $87.9 million, down from $91.7 million, impacted by the Tesla litigation but showing recovery in warehouse automation [27][5] - Brand Solutions segment sales dropped significantly to $57.7 million from $133.4 million, reflecting the divestiture of SGK [27] Strategic Developments - The integration of the SGK business into the newly formed Propelis Group is progressing well, with projected cost synergies now estimated at approximately $60 million [7][8] - The company is actively evaluating strategic alternatives to enhance shareholder value, with support from J.P. Morgan [9][8] - The company maintains its earnings guidance for fiscal 2025, projecting adjusted EBITDA of at least $190 million [9][8]

Core Viewpoint - Matthews International Corporation is set to release its third quarter fiscal year 2025 earnings results on August 5, 2025, after market close [1] Financial Results Announcement - The company will host a conference call and webcast on August 6, 2025, at 9:00 a.m. Eastern Time to review financial and operating results and discuss future outlook [2][3] - Key participants in the call will include Joseph C. Bartolacci, President and CEO, and Steven F. Nicola, Chief Financial Officer and Treasurer [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 and strategic expansion [4] - The Industrial Technologies segment is a 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 [4] - The company employs over 5,400 individuals across 19 countries on four continents, dedicated to delivering high-quality products and services [4]

Group 1 - Investors in Matthews International Corporation (MATW) should monitor the stock due to high implied volatility in the options market, particularly the Dec 19, 2025 $12.50 Call option [1] - Implied volatility indicates market expectations for significant price movement, suggesting potential upcoming events that could lead to a rally or sell-off [2] - Matthews International currently holds a Zacks Rank 4 (Sell) in the Funeral Services industry, which is in the bottom 10% of the Zacks Industry Rank [3] Group 2 - No analysts have increased earnings estimates for Matthews International in the last 30 days, with one analyst revising the estimate downward, reducing the Zacks Consensus Estimate from 41 cents to 33 cents per share [3] - The high implied volatility may indicate a developing trade opportunity, as options traders often seek to sell premium on such options to capture decay [4]