First Quarter Fiscal 2026 Earnings Review February 4, 2026 Joseph C. Bartolacci President and Chief Executive Officer Daniel E. Stopar Chief Financial Officer and Treasurer www.matw.com | Nasdaq: MATW DISCLAIMER Any forward-looking statements contained in this release are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions ...

Matthews International (MATW) came out with a quarterly loss of $0.19 per share versus the Zacks Consensus Estimate of $0.05. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -522.22%. A quarter ago, it was expected that this global provider of industrial technologies, memorialization products and brand solutions would post earnings of $0.22 per share when it actually produced earnings of $0.5 ...

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Core Viewpoint - Matthews International Corporation has reached an agreement with Barington Capital, resulting in Barington withdrawing its director nominations, which is seen as a constructive resolution for all shareholders [1][2]. Group 1: Agreement Details - The agreement includes Barington agreeing to standstill provisions and other restrictions, with full details to be disclosed in a Current Report on Form 8-K with the U.S. Securities and Exchange Commission [2][3]. - The dialogue between Matthews and Barington has provided valuable insights that have helped refine Matthews' ongoing strategic initiatives [2]. Group 2: Company Strategy and Governance - Matthews has taken decisive steps over the past 12 months to simplify its business mix, strengthen its balance sheet, and enhance board composition and corporate governance [2]. - The company is focused on advancing its strategic review and positioning itself for long-term shareholder value creation [2]. Group 3: Company Overview - Matthews International Corporation operates through two core global businesses: Industrial Technologies and Memorialization, both aimed at driving operational efficiency and long-term growth [4]. - The Industrial Technologies segment is a leading global innovator in precision technologies, while the Memorialization segment provides memorial products primarily to cemetery and funeral home customers [4]. - The company has over 5,400 employees across 19 countries on 4 continents [4]. Group 4: Barington Capital Overview - Barington Capital Group is a value-oriented activist investment firm that invests in undervalued publicly traded companies, aiming for significant appreciation through changes in corporate strategy or governance [5]. - The firm utilizes its strategic, operating, and boardroom experience to assist companies in improving long-term shareholder value [5].

Core Viewpoint - Matthews International Corporation successfully closed the sale of its Warehouse Automation business to Duravant, receiving total consideration of $232.1 million, which will be used to reduce outstanding debt and enhance shareholder value [2][3]. Financial Summary - The total consideration for the Warehouse Automation business includes cash of $225.4 million and the assumption of certain liabilities [2]. - The Warehouse Automation business generated sales of $72 million in fiscal 2025 [2]. Strategic Insights - The transaction is part of Matthews' ongoing strategic review aimed at unlocking shareholder value and achieving a long-term net leverage ratio goal of 2.5x [3]. - The purchase price reflects a compelling valuation multiple that is significantly accretive to Matthews' current trading range [3]. Company Overview - Matthews International operates through two core global businesses: Industrial Technologies and Memorialization, focusing on operational efficiency and long-term growth through innovation and strategic expansion [4]. - The Industrial Technologies segment is a leading global innovator in precision technologies, while the Memorialization segment provides memorial products primarily to cemetery and funeral home customers [4]. - The company has over 5,400 employees across 19 countries, committed to delivering high-quality products and services [4].

Core Insights - The ongoing strategic review has led to significant divestitures, simplifying Matthews' business mix and strengthening its balance sheet [1][2][3] - The company has received another notice of director nominations from Barington Capital, following an unsuccessful proxy contest in 2025 [1][10] - Shareholder proposals for the upcoming 2026 Annual Meeting will include board declassification and majority voting [10][11] Strategic Initiatives - The Board engaged J.P. Morgan in November 2024 to assist with a review of strategic alternatives, leading to decisive actions to enhance shareholder value [2] - Recent divestitures are aimed at reducing debt towards a long-term net leverage ratio goal of 2.5x [3] - The company is focusing on growth in the Memorialization and energy storage solutions markets, leveraging competitive technologies [3] Financial Performance - Recent fourth quarter earnings showed higher EBITDA and adjusted EPS compared to the previous year, excluding the impact of the SGK divestiture [5] - The Memorialization segment reported increased revenues and adjusted EBITDA year-over-year [5] - The company reduced total debt by $65.6 million during the fiscal year and returned over $12 million in share repurchases and $32 million in dividends [8] Recent Transactions - The sale of SGK Brand Solutions to Propelis generated $350 million in upfront consideration and a 40% stake in Propelis [6] - The Warehouse Automations business was sold to Duravant for $230 million, with cash consideration of $223.3 million [6] - Other transactions include the acquisition of The Dodge Company and pending sales of European packaging and tooling businesses [6] Board and Governance - The Board has been refreshed with four new directors since 2023, enhancing its expertise and experience [9] - The company has engaged constructively with Barington, despite the latter's attempts to run a proxy contest [9][13] - Shareholders are not required to take action at this time regarding the upcoming Annual Meeting [11]

Financial Performance - In fiscal 2025, consolidated sales reached $1,795,737,000, a decrease of 4.5% from $1,880,896,000 in 2023[15] - The Memorialization segment generated sales of $809,514,000 in 2025, down from $842,997,000 in 2023, reflecting a decline of 3.9%[15] - Industrial Technologies sales were $342,229,000 in 2025, a significant drop of 32.3% from $505,751,000 in 2023[15] - Brand Solutions segment sales decreased to $345,946,000 in 2025 from $532,148,000 in 2023, marking a decline of 34.9%[15] - The Company generated approximately 30% of its sales from international markets in fiscal 2025, indicating a strong reliance on non-U.S. revenue sources[67] - Adjusted EBITDA for fiscal 2025 was $187.5 million, compared to $205.2 million in fiscal 2024, reflecting declines across segments[174] - The net loss for fiscal 2025 was $24.5 million, an improvement from a net loss of $59.7 million in fiscal 2024[184] - Gross profit for fiscal 2025 was $507.6 million, down from $529.7 million in fiscal 2024, influenced by lower sales and higher material costs[171] - Selling and administrative expenses for fiscal 2025 were $467.2 million, a decrease from $488.3 million in fiscal 2024, but as a percentage of sales, they increased to 31.2% from 27.2%[173] Segment Performance - The Memorialization segment is a leading manufacturer of caskets and related funeral home products, with a comprehensive product line to meet diverse customer needs[21][32] - The Industrial Technologies segment includes high-tech custom energy storage solutions and warehouse automation technologies, catering to major vehicle producers and tier 1 battery manufacturers[35][36] - Memorialization segment adjusted EBITDA increased to $169.5 million in fiscal 2025 from $162.6 million in fiscal 2024, driven by improved price realization[174] - Industrial Technologies segment adjusted EBITDA decreased to $27.9 million in fiscal 2025 from $39.7 million in fiscal 2024, primarily due to lower sales[174] - Brand Solutions segment adjusted EBITDA dropped to $40.3 million in fiscal 2025 from $61.6 million in fiscal 2024, impacted by the divestiture of the SGK Business[174] Market and Economic Conditions - The U.S. government announced a 10% tariff on product imports from almost all countries effective April 2, 2025, which could adversely affect the Company's operating results[76] - Changes in mortality and cremation rates may impact the Company's cash flows and revenues, with an expected increase in cremation rates benefiting the Memorialization segment[80] - The Company faces competitive pressures, including increased offshore manufacturing, primarily from China, which may affect future results[81] - The Company is subject to various risks related to economic conditions, which could negatively impact sales volume and revenues due to factors like consumer confidence and global pandemics[109] Legal and Regulatory Risks - The Company is facing significant legal challenges from Tesla, including allegations of trade secret misappropriation and breach of contract, which could adversely affect its financial condition and operating results[93] - The Company does not expect ongoing legal matters to have a material adverse effect on its financial condition or results of operations[142] - The Company is subject to extensive environmental laws and regulations, which may lead to unforeseen expenses and liabilities that could materially affect its business[96] - Compliance with data privacy laws such as GDPR and CCPA may incur substantial operational costs and could result in significant penalties if not adhered to[101] - The Company operates in a regulated environment, and non-compliance with laws could result in sanctions that materially affect its business[103] Supply Chain and Operational Challenges - The Company relies on limited suppliers for critical components, which may lead to supply chain disruptions and increased costs[83] - Customer delays in the energy storage business have impacted project timing and invoicing delays[211] - Labor shortages and increased labor costs could adversely affect the Company's operations and financial results[111] - The Company relies on third-party providers for critical IT services, and any failure in these services could disrupt operations and harm its business[99] Intellectual Property and Technology - The Company holds over 100 domestic and foreign patents, continuously assessing and expanding its intellectual property portfolio[48] - The Company is actively pursuing additional patent filings and developing processes to safeguard its trade secrets and intellectual property assets[48] - The Company must keep pace with technological changes to maintain its competitive position, and failure to do so may hinder its ability to develop and market new products[100] - The Company has established an Artificial Intelligence Council to ensure ethical and effective use of AI across its business[128] Financial Position and Capital Management - The Company has $300.0 million in 8.625% senior secured second lien notes due October 1, 2027, which may face refinancing challenges due to higher interest rates[74] - Cash used in financing activities for the year ended September 30, 2025, was $144.3 million, significantly higher than $35.0 million in 2024 and $50.2 million in 2023, primarily due to long-term debt repayments of $67.0 million[190] - The Company has a stock repurchase program with an authorization for an additional 5,000,000 shares during fiscal year 2025, with 5,043,567 shares remaining available for repurchase as of September 30, 2025[153] - The Company has 1,250,000 shares remaining for sale under its At-The-Market equity offering program, with no near-term intention to utilize this program[210] Cybersecurity and Risk Management - The Company has implemented a comprehensive cybersecurity program to protect its information systems and manage risks from cybersecurity threats[117] - Matthews maintains a cybersecurity Incident Response Plan to handle incidents effectively, involving multiple departments[127] - The Chief Information Officer and Chief Information Security Officer are responsible for managing cybersecurity risks and report directly to the Chief Financial Officer[132] - The Company maintains cybersecurity insurance coverage to protect against losses from cyber incidents, reviewing it annually for adequacy[129] - The Company has experienced cyber-attacks in the past, but none have resulted in material disruption to its business[130]

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Group 1 - Matthews International (MATW) has sold its warehouse automation business at an attractive price, indicating a significant shift in the board's strategy regarding portfolio exits, which aligns with the intentions of activist investors [2] - The Valkyrie Trading Society is a team of analysts focused on high conviction and obscure developed market ideas, aiming for downside-limited investments that are likely to yield non-correlated and outsized returns in the current economic environment [2] - The Value Lab, led by the Valkyrie Trading Society, offers members a portfolio with real-time updates, 24/7 chat support, regular global market news reports, feedback on stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions [2]

Group 1 - Matthews International (MATW) has sold its warehouse automation business at an attractive price, indicating a significant shift in the board's strategy regarding portfolio exits, which aligns with the intentions of activist investors [2] - The Valkyrie Trading Society is a team of analysts focused on high conviction and obscure developed market ideas, aiming for downside-limited investments that are likely to yield non-correlated and outsized returns in the current economic environment [2] - The Value Lab, led by the Valkyrie Trading Society, offers members a portfolio with real-time updates, 24/7 chat support, regular global market news reports, feedback on stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions [2] Group 2 - The company has demonstrated a proactive approach to portfolio management by divesting from non-core businesses, which may enhance overall shareholder value [2] - The focus on long-only value ideas and international mispriced equities suggests a strategic emphasis on value investing, targeting a portfolio yield of approximately 4% [1] - The past five years have seen successful performance for the Value Lab, attributed to active engagement in international markets [1]