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]

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 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 i ...

Sales Performance - Consolidated sales for the three months ended December 31, 2024, were $401.8 million, a decrease from $450.0 million in the same period of 2023, primarily due to lower sales in the Industrial Technologies and Memorialization segments[96]. - Memorialization segment sales decreased to $190.5 million in Q1 2025 from $208.1 million in Q1 2024, attributed to lower unit sales of caskets and cremation equipment due to a decline in U.S. death rates[97]. - Industrial Technologies segment sales fell to $80.5 million in Q1 2025 from $111.4 million in Q1 2024, impacted by lower sales of energy storage solutions and warehouse automation technologies[97]. - SGK Brand Solutions segment sales increased slightly to $130.8 million in Q1 2025 from $130.5 million in Q1 2024, driven by higher cylinder product sales in Europe and improved price realization[97]. Financial Metrics - Adjusted EBITDA for the three months ended December 31, 2024, was $40.0 million, down from $45.5 million in the same period of 2023, reflecting lower sales and higher labor costs[100]. - Memorialization segment adjusted EBITDA was $36.6 million in Q1 2025, compared to $36.7 million in Q1 2024, with the decrease due to lower unit sales and higher labor costs[100]. - Industrial Technologies segment adjusted EBITDA dropped to $1.8 million in Q1 2025 from $9.6 million in Q1 2024, primarily due to lower sales and margins[100]. - Selling and administrative expenses for Q1 2025 were $111.4 million, slightly down from $113.1 million in Q1 2024, with expenses as a percentage of sales increasing to 27.7% from 25.1%[99]. - Gross profit for the three months ended December 31, 2024, was $125.7 million, compared to $132.4 million in the same period a year ago, with gross profit margin improving to 31.3% from 29.4%[98]. - Interest expense for Q1 2025 increased to $15.7 million from $11.6 million in the same period last year, reflecting higher average interest rates[101]. - The Company reported a net loss of $3.472 million for the three months ended December 31, 2024, compared to a net loss of $2.303 million for the same period in 2023[107]. - Adjusted EBITDA for the three months ended December 31, 2024, was $40.023 million, down from $45.482 million in 2023, reflecting a decrease of approximately 12.8%[107]. Cash Flow and Capital Expenditures - Net cash used in operating activities was $25.0 million for the first three months of fiscal 2025, an improvement from $27.3 million in the same period of fiscal 2024[111]. - Cash provided by investing activities was $1.4 million for the three months ended December 31, 2024, compared to cash used of $14.2 million in the same period of 2023[112]. - Capital expenditures for fiscal 2025 are estimated to be in the range of approximately $50 million to $60 million, with an average of $52.4 million spent over the last three fiscal years[113]. - The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects[113]. Debt and Borrowings - The Company has a $750.0 million senior secured revolving credit facility, maturing in January 2029, with outstanding borrowings of $481.0 million as of December 31, 2024[115]. - Outstanding U.S. dollar denominated borrowings on the revolving credit facility had a weighted-average interest rate of 5.17% as of December 31, 2024[116]. - The Company had outstanding borrowings under a European credit facility totaling €3.0 million ($3.1 million) at December 31, 2024, with a weighted-average interest rate of 5.10%[122]. - Other borrowings decreased to $7.9 million at December 31, 2024, down from $15.6 million at September 30, 2024, with a weighted-average interest rate of 2.33%[123]. Working Capital and Obligations - Consolidated working capital increased to $227.6 million at December 31, 2024, compared to $197.8 million at September 30, 2024[129]. - Total contractual cash obligations amounted to $1,058.9 million as of December 31, 2024, with significant payments due in fiscal year 2025[131]. Legal and Regulatory Matters - The Company incurred legal costs related to an ongoing dispute with Tesla, totaling $6.9 million for the three months ended December 31, 2024[107]. - The Company is pursuing counterclaims against Tesla in arbitration related to trade secret misappropriation[148]. - The Company maintains that the claims made by Tesla are without merit and intends to vigorously defend itself[148]. - The interim award from the arbitrator affirmed the Company's right to sell its dry battery electrode solutions to customers other than Tesla[148]. - The Company does not expect any ongoing legal proceedings to have a material adverse effect on its financial condition or results of operations[146]. Cost Management and Market Conditions - The Company initiated cost reduction programs focused on engineering and tooling operations in Europe during the fourth quarter of fiscal 2024[135]. - Sales growth in the Industrial Technologies segment is influenced by economic conditions, new product development, and trends in electric vehicles and e-commerce[136]. - The Company expects currency fluctuations to significantly impact reported results due to its global operations, particularly in the Industrial Technologies and SGK Brand Solutions segments[136]. Stock Repurchase Program - The Company has a stock repurchase program with 440,220 shares available for repurchase as of December 31, 2024[128]. - A total of 171,101 shares were repurchased in the first quarter of fiscal 2025 at a weighted average price of $24.98 per share[151]. - As of December 31, 2024, the Company has 440,220 shares remaining available for repurchase under its stock repurchase program[150]. Disclosure and Risk Management - The Company evaluated its disclosure controls and procedures and concluded they were effective as of December 31, 2024[143]. - There have been no material changes in the Company's market risk during the three months ended December 31, 2024[141]. - The estimated fair value of the Company's SGK Brand Solutions reporting unit exceeded its carrying value by approximately 7%[139]. - Sales related to dry battery electrode solutions accounted for approximately 6% of the Company's total sales for fiscal 2024[148].

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a net loss of $3.5 million or $0.11 per share, compared to a net loss of $2.3 million or $0.07 per share a year ago [19] - On a non-GAAP adjusted basis, net income attributable to the company was $4.3 million or $0.14 per share, down from $11.3 million or $0.37 per share last year, primarily due to lower adjusted EBITDA and higher interest expenses [19] - Consolidated sales for Q1 2025 were $401.8 million, down from $450 million a year ago, reflecting lower sales in the Industrial Technology segment and Memorialization segment [20] Business Line Data and Key Metrics Changes - Memorialization segment sales decreased to $190.5 million from $208.1 million, primarily due to lower Granite Memorial sales and casket unit volumes [22] - Industrial Technology segment sales fell to $80.5 million from $111.4 million, significantly impacted by lower engineering sales and the slowdown in the Tesla project [25] - SGK Brand Solutions segment reported sales of $130.8 million, slightly up from $130.5 million, driven by improved pricing and higher sales in private label and European cylinder businesses [27] Market Data and Key Metrics Changes - The U.S. casketed deaths declined, impacting sales in the Memorialization segment [20] - The company noted that the European cremation and incineration equipment operations were unprofitable and contributed to the decline in Memorialization sales [24] Company Strategy and Development Direction - The company plans to focus on higher growth and higher margin businesses following the sale of STK Brand Solutions, which is expected to create significant synergies and simplify the operating structure [9][10] - The recent arbitration ruling against Tesla allows the company to resume marketing its dry battery electrode technology, which is expected to unlock significant value [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the energy business and the potential for growth in the warehouse automation and product identification sectors [15] - The company is maintaining its guidance for adjusted EBITDA in the range of $200 million to $215 million, contingent on the timing of the SGK transaction [18] Other Important Information - The company expects to achieve annual consolidated savings of up to $50 million from ongoing cost reduction programs [33] - A quarterly dividend of $0.25 per share was declared, payable on February 24, 2025 [33] Q&A Session Summary Question: How quickly can momentum in DVE technology be reestablished post-lawsuit? - Management indicated that while there has been a slowdown due to the lawsuit, they expect to ramp up sales as they reinitiate marketing efforts and expand their customer base [37][39] Question: What was the impact of exiting the European cremation business on Memorialization? - The exit from the unprofitable European cremation business significantly contributed to the revenue decline in the Memorialization segment [48][52] Question: What are the next steps following the arbitration ruling against Tesla? - Management stated they have a definitive ruling in their favor and will continue to defend their rights to market and sell their proprietary technology [56][58] Question: What is the expected timeline for achieving cost savings from restructuring? - The company expects to reach a run rate of $25 million to $30 million in cost savings by the end of the fiscal year, with the remainder achieved in the following fiscal year [60] Question: How will the proceeds from the SGK transaction be used? - The company plans to apply a substantial portion of the proceeds to repay revolver debt, aiming to improve their leverage ratio [91][92]