Financial Data and Key Metrics Changes - The company reported a net loss of $8.9 million or $0.29 per share for Q2 2025, compared to a net income of $9 million or $0.29 per share a year ago [20] - Consolidated sales for Q2 2025 were $427.6 million, down from $471.2 million in the same quarter last year, primarily due to lower sales in the industrial technology segment [21] - Adjusted EBITDA for Q2 2025 was $51.4 million, down from $56.8 million in the prior year, reflecting declines in industrial technologies and memorialization segments [22] Business Line Data and Key Metrics Changes - Memorialization segment sales decreased to $205.6 million from $222.2 million year-over-year, primarily due to lower US casketed deaths and the disposal of unprofitable operations [23] - Industrial Technology segment sales fell to $80.8 million from $116.1 million, driven by lower engineering sales and warehouse automation sales [25] - SGK Brand Solutions segment sales increased to $141.2 million from $132.9 million, reflecting higher merchandising sales in the US and Asia Pacific markets [26] Market Data and Key Metrics Changes - The company has reengaged with multiple battery manufacturers and auto OEMs, issuing quotes exceeding $100 million, indicating significant demand for dry battery electrode technology [6] - The energy solutions business is seeing renewed interest from South Korea, North America, and Europe, particularly in the grid storage market [37] - The memorialization segment is expected to stabilize, while warehouse automation is anticipated to show improved results in the second half of the fiscal year [17] Company Strategy and Development Direction - The company is focused on expanding its energy solutions business, particularly through dry battery electrode technology, and is building solutions to retrofit existing facilities [7] - The SGK transaction is expected to close soon, with an initial consideration of $350 million, which will primarily be used to reduce debt [9] - The company is committed to unlocking shareholder value and is exploring various strategic initiatives despite current market turbulence [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the sales lead time in the energy solutions industry is long, but demand for innovative engineering solutions remains strong [6] - The company expects another stable year for the memorialization business and improved results in warehouse automation as the market begins to recover [17] - Cost reduction initiatives are on track to exceed initial projections of $50 million, with significant savings expected from engineering and administrative costs [30] Other Important Information - The company’s outstanding debt increased to $822 million as of March 31, 2025, with expectations of significant reduction following the SGK transaction [28] - A quarterly dividend of $0.25 per share was declared, payable on May 26, 2025 [31] Q&A Session Summary Question: How does the $100 million in customer quotes compare to last year? - Management indicated that the current quotes are dramatically higher than the same period last year, as the company was relatively out of the market previously [35][36] Question: What are the expectations for organic growth in the memorialization segment? - Management noted that there was normalization in the market, with expectations for continued growth in the upcoming quarters [39][40] Question: Can you elaborate on the cost reduction actions? - Management confirmed that the cost reduction target is running about $20 million this year and $30 million next year [42] Question: What is the status of customer engagement in battery solutions? - Management stated that most of the $100 million in quotes is for mass production, indicating customers are beyond the testing phase [48][49] Question: How does the retrofit opportunity work? - Management explained that the retrofit process allows existing facilities to utilize their equipment, significantly increasing production efficiency without major changes to the factory [66][70]

Financial Performance - Consolidated sales for Q2 FY2025 were $427.6 million, a decrease of 9.3% from $471.2 million in Q2 FY2024[9] - Net loss attributable to Matthews for Q2 FY2025 was $8.9 million, compared to a net income of $9.0 million in the prior year, representing a 198.8% decline[11] - Adjusted EBITDA for Q2 FY2025 was $51.4 million, down 9.5% from $56.8 million in Q2 FY2024[11] - Year-to-date consolidated sales for FY2025 were $829.5 million, a decrease of 10.0% from $921.2 million in FY2024[12] - Operating profit for the three months ended March 31, 2025, was $5,948, a significant decline of 72.1% from $21,328 in 2024[19] - Total Adjusted EBITDA for the six months ended March 31, 2025, was $91,437 thousand, down from $102,282 thousand in the prior year, reflecting a decrease of approximately 10.6%[27] - The Adjusted EBITDA for the trailing 12 months is $194,312,000, down from $199,698,000 in the previous quarter[35] - The decline in Adjusted EBITDA indicates potential challenges in operational performance[35] Debt and Cash Flow - Long-term debt increased to $815,823 as of March 31, 2025, from $769,614 as of September 30, 2024[23] - As of March 31, 2025, the total debt stands at $822,180,000, an increase from $809,211,000 on December 31, 2024[35] - Net Debt is reported at $781,934,000, showing a slight increase from $775,698,000 as of December 31, 2024[35] - Cash flows from operating activities for the six months ended March 31, 2025, resulted in a net cash used of $18,681, compared to $29,841 provided in 2024[24] - The company reported a net change in cash and cash equivalents of $(570) for the six months ended March 31, 2025, compared to a positive change of $3,396 in 2024[24] - Cash and cash equivalents decreased to $40,246,000 from $33,513,000 in the previous quarter[35] - The increase in the Net Debt Leverage Ratio suggests a higher reliance on debt financing[35] - The company may need to address cash flow management given the rising debt levels and declining EBITDA[35] Strategic Transactions - The SGK transaction is expected to close in early May 2025, with an upfront consideration of $350 million, including $250 million in cash for debt reduction[4] - The company projects a pro forma consolidated adjusted EBITDA of at least $190 million for FY2025, adjusted for the SGK transaction[8] - The company anticipates synergies exceeding $50 million from the combined entity post-SGK transaction[4] - Costs related to the pending sale of the company's interest in the SGK Brand Solutions business amounted to $10,586 thousand for the three months ended March 31, 2025[33] Shareholder Value and Cost Management - The company is evaluating strategic alternatives to unlock shareholder value, believing its inherent value is above current trading levels[6] - Cost reduction initiatives are on track to generate savings above the initial estimate of $50 million[3] Other Financial Metrics - Gross profit for the six months ended March 31, 2025, was $269,804, down 3.8% from $280,535 in 2024, with a gross margin of 32.5%[19] - Dividends declared per share increased by 4.2% to $0.25 for the three months ended March 31, 2025, compared to $0.24 in 2024[19] - The Adjusted EBITDA margin for the three months ended March 31, 2025, was 12.0%, compared to 12.1% for the same period in 2024[27] - The company incurred interest expenses of $17,010 thousand for the three months ended March 31, 2025, compared to $13,783 thousand in the prior year, representing an increase of approximately 23.5%[27] Legal and Acquisition Costs - Acquisition and divestiture costs for the three months ended March 31, 2025, totaled $12,353 thousand, significantly higher than $1,511 thousand in the same period of 2024[30] - Legal costs associated with an ongoing dispute with Tesla totaled $1,757 thousand for the three months ended March 31, 2025, compared to $2,602 thousand in the same period of 2024[33] - The company experienced a loss of $2,072 thousand related to the divestiture of a business in the Industrial Technologies segment for the three and six months ended March 31, 2025[33]

Core Viewpoint - Matthews International reported quarterly earnings of $0.34 per share, missing the Zacks Consensus Estimate of $0.36 per share, and down from $0.69 per share a year ago [1][2] Financial Performance - The company experienced an earnings surprise of -5.56% for the quarter, and previously, it had a significant earnings surprise of -46.15% when it reported $0.14 per share against an expectation of $0.26 per share [2] - Revenues for the quarter were $427.63 million, missing the Zacks Consensus Estimate by 1.79%, and down from $471.22 million year-over-year [3] - Over the last four quarters, Matthews International has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2][3] Stock Performance - Matthews International shares have declined approximately 22.4% since the beginning of the year, compared to a decline of -5.5% for the S&P 500 [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 consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $427 million, and for the current fiscal year, it is $1.73 on revenues of $1.74 billion [8] - The outlook for the Funeral Services industry, where Matthews International operates, is currently in the top 36% of over 250 Zacks industries, suggesting a favorable environment for performance [9]

Any forward-looking statements contained in this release are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the proposed joint venture transaction, and may be identified by the use of words such as " ...

Financial Performance - Consolidated sales for the six months ended March 31, 2025, were $829.5 million, a decrease from $921.2 million for the same period in 2024, reflecting lower sales in the Industrial Technologies and Memorialization segments[110] - Memorialization segment sales decreased to $396.1 million for the first six months of fiscal 2025 from $430.2 million in fiscal 2024, primarily due to lower unit sales of caskets and cremation equipment[111] - Industrial Technologies segment sales fell to $161.4 million for the first six months of fiscal 2025, down from $227.5 million in the prior year, impacted by slower market conditions and customer delays[111] - SGK Brand Solutions segment sales increased to $272.0 million for the first six months of fiscal 2025, compared to $263.5 million in fiscal 2024, driven by higher brand sales in the Asia-Pacific region[111] - Adjusted EBITDA for the six months ended March 31, 2025, was $91.4 million, down from $102.3 million for the same period in 2024, reflecting lower sales and higher material costs[114] - Gross profit for the six months ended March 31, 2025, was $269.8 million, with a gross profit margin of 32.5%, compared to $280.5 million and 30.5% in the prior year[112] - Selling and administrative expenses increased to $245.3 million for the six months ended March 31, 2025, from $231.0 million in fiscal 2024, with expenses as a percentage of sales rising to 29.6%[113] - The unfavorable impact of foreign currency exchange rates on consolidated sales was estimated at $5.7 million for fiscal 2025 compared to the prior year[110] Segment Performance - Adjusted EBITDA for the Memorialization segment was $81.7 million for the first six months of fiscal 2025, down from $83.3 million in the previous year, due to lower unit sales and higher costs[114] - Adjusted EBITDA for the Industrial Technologies segment decreased to $7.9 million for the six months ended March 31, 2025, compared to $19.7 million in the same period of 2024, primarily due to lower sales and margins[114] Cash Flow and Investments - Net cash used in operating activities was $18.7 million for the first six months of fiscal 2025, compared to net cash provided of $29.8 million for the same period in fiscal 2024[124] - Cash used in investing activities was $3.9 million for the six months ended March 31, 2025, down from $29.8 million for the same period in fiscal 2024[125] - Cash provided by financing activities for the six months ended March 31, 2025 was $33.6 million, compared to $3.0 million for the same period in fiscal 2024[127] Debt and Financing - The company has a $750.0 million senior secured revolving credit facility, maturing in January 2029, with a leverage ratio defined as total indebtedness divided by EBITDA[128] - Outstanding U.S. dollar denominated borrowings on the revolving credit facility were $495.0 million as of March 31, 2025, compared to $410.5 million at September 30, 2024, reflecting an increase of 20.6%[129] - The Company has $300.0 million of 8.625% senior secured second lien notes due October 1, 2027, with unamortized costs of $4.8 million as of March 31, 2025[130] - The weighted-average interest rate on outstanding borrowings for the domestic credit facility decreased to 4.29% at March 31, 2025, from 4.89% at the same time in 2024[129] Legal and Regulatory Matters - The Company incurred $10.6 million in costs related to the pending sale of the SGK Brand Solutions business for the three months ended March 31, 2025[121] - Legal costs related to an ongoing dispute with Tesla totaled $8.6 million for the six months ended March 31, 2025[121] - The Company is pursuing counterclaims against Tesla in response to ongoing legal proceedings, which are not expected to materially affect financial conditions[163] Strategic Initiatives - The Company expects to complete the divestiture of its interest in the SGK Brand Solutions business in the third quarter of fiscal 2025[150] - The Company initiated cost reduction programs during Q4 of fiscal 2024, focusing on engineering and tooling operations in Europe, expected to be completed by fiscal 2026[151] - Organic growth strategies include new product development and market expansion, influenced by economic conditions and trends in electric vehicles and e-commerce[150] Compliance and Governance - The Company filed a Contribution Agreement on January 7, 2025, with Matthews International Corporation, Logo Holdings II Corporation, and Peninsula Parent LLC[174] - The Company has an Amended and Restated By-laws filed for the fiscal year ended September 30, 2023[174] - An Equity Distribution Agreement was executed on March 11, 2025, between Matthews International Corporation and Truist Securities, Inc.[174] - The Company has filed certifications for both the Principal Executive Officer and Principal Financial Officer[174] - The XBRL Instance Document and related taxonomy extension files have been filed, indicating compliance with interactive data requirements[174] - The Company is committed to furnishing any omitted schedules or exhibits to the SEC upon request[174] - The report was signed by Joseph C. Bartolacci, President and CEO, and Steven F. Nicola, CFO, on April 30, 2025[178] Market Conditions - The U.S. government announced a 10% tariff on product imports, which could adversely impact the Company's financial performance[165] - The Company is currently performing environmental assessments and remediation at certain sites to comply with regulatory obligations[147]

Core Insights - The company's fiscal 2025 second quarter results were generally in line with expectations, with consolidated sales impacted by challenges in the engineering business, particularly energy storage solutions, although demand is recovering with customer quotes exceeding $100 million since early February 2025 [1][2][8] Financial Performance - Consolidated sales for Q2 FY2025 were $427.6 million, a decrease of 9.3% from $471.2 million in Q2 FY2024 [7][10] - Net loss attributable to the company was $8.9 million, or $0.29 per share, compared to a net income of $9.0 million, or $0.29 per share in the prior year, marking a significant decline [11][27] - Adjusted EBITDA for the quarter was $51.4 million, down 9.5% from $56.8 million a year ago, primarily due to lower performance in the Industrial Technologies and Memorialization segments [9][11][22] Cost Management and Strategic Initiatives - The company has successfully implemented cost reduction initiatives, projected to exceed initial estimates of $50 million in savings [2][8] - The SGK transaction is expected to close in early May 2025, with an upfront consideration of $350 million, including $250 million in cash primarily for debt reduction and $50 million in preferred equity [3][5] Segment Performance - Sales in the Memorialization segment decreased to $205.6 million from $222.2 million year-over-year, while the Industrial Technologies segment saw a drop from $116.1 million to $80.8 million [10][22] - The SGK Brand Solutions segment reported an increase in sales from $132.9 million to $141.2 million, reflecting growth in brand experience sales [10][22] Year-to-Date Results - For the six months ended March 31, 2025, consolidated sales were $829.5 million, down 10.0% from $921.2 million in the same period last year [12][13] - The year-to-date net loss attributable to the company was $12.4 million, or $0.40 per share, compared to a net income of $6.7 million, or $0.22 per share in the prior year [14][27]

Core Viewpoint - Matthews International Corporation has announced the clearance of all remaining foreign anti-trust and competition authority regulatory requirements for the proposed sale of its interest in SGK Brand Solutions to SGS & Co, anticipating the transaction to close before the end of the current fiscal quarter [1][2]. Group 1: Transaction Details - The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired in February 2025, allowing the transaction to proceed [1]. - The company plans to use the cash proceeds from the transaction primarily for debt reduction, with a portion also allocated for stock repurchases due to the recent value of its common stock [2]. Group 2: Company Overview - Matthews International Corporation operates in three main segments: Memorialization, Industrial Technologies, and SGK Brand Solutions, employing over 11,000 people across more than 30 countries [3]. - The Memorialization segment provides products such as memorials, caskets, and cremation-related equipment, primarily serving cemetery and funeral home customers [3]. - The Industrial Technologies segment focuses on high-tech custom energy storage solutions and warehouse automation technologies [3]. - The SGK Brand Solutions segment specializes in packaging solutions and brand experiences, aiding companies in marketing and brand amplification [3].

Core Viewpoint - Matthews International Corporation is set to release its second quarter fiscal year 2025 earnings results on April 30, 2025, and will host a conference call on May 1, 2025, to discuss the results and outlook [1][2]. Company Overview - Matthews International Corporation is a global provider of industrial technologies, memorialization products, and brand solutions, with over 11,000 employees across more than 30 countries [3]. - The company operates in three segments: - **Industrial Technologies**: Focuses on high-tech custom energy storage solutions, product identification, warehouse automation technologies, and coating and converting lines for various industries [3]. - **Memorialization**: Provides memorial products, caskets, cremation-related products, and equipment primarily for cemetery and funeral home customers [3]. - **SGK Brand Solutions**: Offers packaging solutions and brand experiences to help companies enhance their marketing and brand value [3].

Core Insights - Matthews International Corporation announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act regarding the sale of its interest in SGK Brand Solutions to a new entity formed by affiliates of SGS & Co, with a closing anticipated next quarter, pending regulatory approvals and customary closing conditions [1] Company Overview - Matthews International Corporation is a global provider of memorialization products, industrial technologies, and brand solutions, employing over 11,000 people across more than 30 countries [2] - The Memorialization segment offers products such as memorials, caskets, and cremation-related equipment primarily to cemetery and funeral home customers [2] - The Industrial Technologies segment focuses on high-tech custom energy storage solutions, product identification, warehouse automation technologies, and coating and converting lines for various industries [2] - The SGK Brand Solutions segment provides packaging solutions and brand experiences, assisting companies in marketing and brand amplification [2]

Core Points - Matthews International Corporation announced the preliminary results of its 2025 Annual Meeting of Shareholders, where shareholders voted to elect all three director nominees to the Board of Directors [1] - The Chair of the Board, Alvaro Garcia-Tunon, expressed appreciation for shareholder feedback and indicated that the vote outcome validates the company's strategy and leadership [2] - The final results of the shareholder vote will be certified by an independent Inspector of Elections and reported in a Form 8-K with the U.S. Securities and Exchange Commission [2] Company Overview - Matthews International Corporation is a global provider of memorialization products, industrial technologies, and brand solutions, with over 11,000 employees across more than 30 countries [4] - The Memorialization segment offers products such as memorials, caskets, and cremation-related equipment primarily to cemetery and funeral home customers [4] - The Industrial Technologies segment focuses on high-tech custom energy storage solutions and warehouse automation technologies [4] - The SGK Brand Solutions segment provides packaging solutions and brand experiences to help companies enhance their marketing and brand value [4]