Core Viewpoint - Barington Capital Group is urging Matthews International Corporation shareholders to elect its director nominees to improve governance and drive value creation, citing recent actions by Matthews as desperate attempts to placate shareholders rather than genuine efforts for long-term improvement [1][3][4]. Group 1: Governance Concerns - Barington highlights poor governance and troubling board culture at Matthews, suggesting that the company's recent governance improvements and the sale of the SGK Brand Solutions division are reactions to Barington's influence [1][3]. - The company believes that shareholders are at risk without Barington's nominees on the board, emphasizing the need for independent directors who advocate for shareholder interests [4][6]. Group 2: Nominees and Their Impact - Barington has nominated three individuals—Ana B. Amicarella, Chan W. Galbato, and James Mitarotonda—who are described as highly qualified and capable of driving meaningful change within Matthews [1][4]. - The firm asserts that its nominees possess proven board effectiveness and relevant skills that will enhance governance and restore credibility in the marketplace, ultimately maximizing long-term shareholder value [4][6]. Group 3: Call to Action - Barington is actively soliciting votes from Matthews shareholders to elect all of its nominees, framing this as a critical step to protect the value of their investments [5][7]. - The firm has filed a definitive proxy statement with the SEC to facilitate this solicitation, urging shareholders to read the materials for important information regarding the election [7][8].

Core Points - Matthews International Corporation has appointed Thomas Gebhardt to its Board of Directors, effective immediately, following the resignation of Gregory S. Babe [2][3][4] - Mr. Gebhardt brings over 30 years of experience in the battery and electric vehicle (EV) technology sectors, having previously served as Chairman and CEO of Panasonic's North American business, where he significantly expanded revenue in the automotive and battery sectors [4][5] - The company aims to leverage Mr. Gebhardt's expertise to enhance its Dry Battery Electrode (DBE) solutions business, which is expected to benefit shareholders [5] Company Overview - Matthews International Corporation operates in three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions, providing a range of products and services including memorials, energy storage solutions, and packaging solutions [6] - The company employs over 11,000 people across more than 30 countries, focusing on delivering high-quality products and services [6]

Core Viewpoint - Matthews International Corporation has successfully defended its right to sell its proprietary dry battery electrode technology (DBE) against Tesla's legal challenges, with a U.S. District Court ruling in its favor [1][2][3]. Legal Developments - A U.S. District Court Judge denied Tesla's request for a temporary restraining order to block Matthews from selling its DBE solutions [2]. - Following the court ruling, Tesla filed additional lawsuits against Matthews, which the company views as meritless and a bullying tactic [3]. Technology Background - Matthews has been developing its DBE technology for over 25 years, predating Tesla's existence, and holds U.S. Patent No. 12,136,727 for this technology [4]. - The DBE solutions are designed to streamline lithium-ion battery production and significantly reduce electric vehicle production costs [4]. 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 [6].

Core Viewpoint - Barington Capital Group criticizes Matthews International Corporation's recent governance changes as insufficient and a reaction to Barington's push for reform, urging shareholders to support Barington's nominees in the upcoming election [1][2][4]. Group 1: Governance Changes - Matthews International's recent governance changes are viewed as a desperate attempt to maintain the status quo, with Barington asserting that these changes are too late to address ongoing issues [2]. - Barington highlights that one of the insiders, Greg Babe, remains on the board despite his dual responsibilities, which raises concerns about governance effectiveness [2]. - The announcement of a potential sale of SGK Brand Solutions is seen as a further indication of Matthews' desperation ahead of the annual meeting [3]. Group 2: Shareholder Recommendations - Barington urges shareholders to vote for all of its nominees using the GOLD proxy card, emphasizing that this will enhance accountability and oversight in the boardroom [4]. - The firm believes that electing its independent nominees will lead to improved corporate governance and increased shareholder value [4]. Group 3: Proxy Solicitation - Barington has filed a definitive proxy statement with the SEC to solicit votes for its director nominees at the upcoming annual meeting [7]. - Shareholders are encouraged to review the proxy materials for important information regarding the election [7].

Core Points - Matthews International Corporation announced a Board refreshment plan and corporate governance enhancements aimed at enhancing long-term shareholder value [1] - The current Board Chair, Alvaro Garcia-Tunon, will retire at the 2026 Annual Meeting, with a new independent Board Chair to be appointed [2][3] - The Board is in the process of appointing a new independent director with significant experience in battery and EV technology solutions [4] - The Board has added five new independent directors since 2020, with four added in the past two years [5] - The Company plans to declassify the Board and implement other governance changes to improve transparency and shareholder value [6][8] Governance Changes - The Company will propose amendments to its Articles of Incorporation and Bylaws at the 2026 Annual Meeting, including declassifying the Board for annual director elections [8] - The voting standard for uncontested elections will change to a majority voting standard, replacing the current plurality standard [8] - Supermajority voting requirements for certain amendments will be eliminated [8] Strategic Initiatives - Matthews has strategically diversified its business and built a global platform to enhance its market position [7] - The Company is in the process of selling SGK Brand Solutions for $350 million and a 40% equity stake in a new joint venture [7] - An arbitrator affirmed the Company's right to sell its Dry Battery Electrode technology to customers other than Tesla, allowing for resumed marketing in the electric vehicle market [10] - Matthews has entered into a letter of intent for the sale of remaining operating businesses within the SGK Brand Solutions segment for $50 million [18]

When Combined with Previously Announced Transaction, Total Upfront Consideration for Divestiture of the SGK Segment to be $400 Million, Implying Total Value in Excess of $600 million Proceeds to be Used for Continued Debt Repayment PITTSBURGH, Feb. 14, 2025 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) (“Matthews” or the “Company”) today announced that it has entered into a letter of intent (“LOI”) for the sale of the remaining operating businesses within the SGK Brand Solutions ...

GAMCO Asset Management, Top 5 and Long-Term Shareholder, Endorses Matthews’ Director Nominees Urges Shareholders to Vote “FOR” All Three of Matthews’ Director Nominees on the WHITE Proxy Card and “WITHHOLD” on Barington’s Director Nominees PITTSBURGH, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Matthews International Corporation (Nasdaq GSM: MATW) (“Matthews” or the “Company”) today commented on the significant support it has received from its sell-side analysts following its recent fiscal 2025 first quarter earnings ...

Core Viewpoint - Glass Lewis has determined that Matthews International Corporation has "persistently deteriorated and consistently underperformed" during the tenure of CEO Mr. Bartolacci, indicating a need for change in leadership and governance [5][10] - Barington Capital has been endorsed by Glass Lewis, ISS, and Egan-Jones, recommending shareholders vote "FOR" all of Barington's director nominees to improve the company's performance [2][4] Group 1: Performance and Governance Issues - Matthews has shown significant underperformance across various measurement periods, particularly under the leadership of Mr. Bartolacci [5][10] - The current Board is described as not well-positioned to pursue necessary initiatives for improvement, with a long-tenured governance structure that has not effectively addressed shareholder interests [5][10] - Glass Lewis highlights a lack of a favorable narrative regarding Matthews' valuation, indicating continuous erosion in its relative positioning during Mr. Bartolacci's tenure [5][10] Group 2: Barington's Proposal and Support - Barington Capital, owning approximately 2.1% of Matthews' outstanding shares, has proposed a slate of director nominees that are considered highly qualified [1][4] - The unanimous support from leading proxy advisory firms reinforces Barington's belief that electing its nominees is essential for unlocking Matthews' full value potential [4][10] - Barington's track record of value creation and its consulting efforts are noted as having catalyzed some of Matthews' initiatives, suggesting that Barington can effectively drive change [10]

Core Viewpoint - Matthews International Corporation strongly disagrees with the recommendation from Institutional Shareholder Services (ISS) regarding Barington's positions, arguing that ISS fails to provide substantive analysis of Barington's plans and nominees [1][2]. Company Actions and Strategies - The company emphasizes that Barington's "four-step plan" lacks new ideas beneficial to shareholders, as most initiatives have already been initiated by Matthews [2]. - Matthews highlights the lack of relevant skills and understanding of its business among Barington's nominees, criticizing their track records and preparedness [3]. - The current Board has taken significant actions to enhance shareholder value, including support from GAMCO Asset Management, which holds approximately 4.38% of Matthews' shares [4]. - The Board has developed the Memorialization segment into a leading cash-generating business, allowing for substantial capital returns and reinvestment into high-growth areas like Dry Battery Electrode (DBE) technology [5]. - Following a favorable arbitration outcome against Tesla, Matthews plans to resume marketing its DBE solutions to the electric vehicle market [5]. - The strategic disposition of the SGK business is expected to provide $350 million in upfront consideration, reflecting the company's strategic investments and cost-saving initiatives [5]. - Matthews is engaging J.P. Morgan to evaluate strategic alternatives for its businesses and anticipates announcing several initiatives to drive shareholder value in the 2025 fiscal year [5]. - The Board has welcomed three new independent directors since 2020 and plans to continue refreshing its membership, demonstrating a commitment to governance [5]. Voting and Shareholder Engagement - The company urges shareholders to vote "FOR" its nominees using the WHITE proxy card and to withhold votes for Barington's nominees [6][8]. - Matthews emphasizes the importance of shareholder votes and provides instructions for voting [9].

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $40 million, down from $45.5 million a year ago, primarily due to a decline in the industrial technology segment [9] - Adjusted EBITDA for the memorialization and brand solution segments remained relatively steady compared to last year [10] - Cash flow utilized in operating activities for Q1 2025 was $25 million, compared to $27.3 million a year ago [20] - Outstanding debt increased to $809 million at the end of Q1 2025, up from $776 million at the end of September [21] Business Line Data and Key Metrics Changes - Memorialization segment sales decreased to $190.5 million from $208.1 million year-over-year, primarily due to lower Granite Memorial sales and casket unit volumes [11] - Industrial technology segment sales fell to $80.5 million from $111.4 million, significantly impacted by a slowdown in the Tesla project and litigation effects [14] - SGK Brand Solutions segment reported sales of $130.8 million, a slight increase from $130.5 million a year ago, driven by improved pricing and higher sales in private label and European cylinder businesses [17] Market Data and Key Metrics Changes - The decline in memorialization sales was affected by the disposal of unprofitable European cremation operations [12] - The industrial technology segment's decline was primarily due to the energy business, with modest contributions from warehouse automation and product identification businesses [52] Company Strategy and Development Direction - The company is focused on debt reduction, with plans to apply proceeds from the SGK transaction to reduce debt significantly [22] - Cost reduction programs are expected to yield annual savings of up to $50 million, with significant portions coming from engineering and tooling operations in Europe [24] - The recent arbitration ruling against Tesla has clarified the company's rights to market and sell its advanced dry battery electrode technology, potentially opening new opportunities [7] Management's Comments on Operating Environment and Future Outlook - Management expects cash flow and net leverage ratio to improve over the remainder of the fiscal year, with a target net leverage ratio of three or less [22][117] - The company anticipates a slow ramp-up in sales growth for its DBE technology due to the nature of automotive EV production development [35] - Management expressed optimism about the recovery in warehouse automation and product identification businesses, expecting a strong year ahead [76] Other Important Information - The board declared a quarterly dividend of $0.25 per share, payable on February 24, 2025 [25] - The company purchased approximately 171,000 shares under its stock repurchase program, primarily related to withholding tax on equity compensation vesting [22] Q&A Session Summary Question: Can you provide insight on reestablishing momentum in DBE technology sales post-lawsuit? - Management indicated that the marketing efforts were significantly slowed due to the ongoing dispute, but they expect to ramp up sales as they expand their customer portfolio [35][38] Question: What was the impact of exiting the European cremation business on Granite sales? - The decline in revenues was more weighted towards granite volume, with the exit from the European business being a significant contributor [48][50] Question: How much of the decline in industrial technology sales relates to energy storage? - The majority of the decline was attributed to the energy business, with expectations for recovery in warehouse automation [52][54] Question: What are the next steps following the arbitration ruling against Tesla? - Management stated they have a definitive ruling in their favor, allowing them to market their proprietary solutions, but the next steps from Tesla are uncertain [57][60] Question: What is the expected timeline for achieving the $50 million cost savings? - Management expects to reach a run rate of $25 million to $30 million by the end of the current fiscal year, with the remainder achieved by the end of the next fiscal year [62] Question: How will the SGK transaction proceeds be used? - The expectation is to apply a substantial portion of the proceeds to reduce revolver debt, with a focus on improving the capital structure [108][111]