Matthews International(MATW) - 2025 Q1 - Quarterly Results

Financial Performance - Consolidated sales for Q1 FY2025 were $401.8 million, a decrease of 10.7% from $450.0 million in Q1 FY2024[16] - Net loss attributable to Matthews for Q1 FY2025 was $3.5 million, or $0.11 per share, compared to a net loss of $2.3 million, or $0.07 per share in the prior year, representing a 50.8% increase in loss[16] - Adjusted EBITDA for Q1 FY2025 was $40.0 million, down 12.0% from $45.5 million in Q1 FY2024, primarily due to lower performance in the Industrial Technologies segment[16] - The net loss for the three months ended December 31, 2024, was $3,472 thousand, compared to a net loss of $2,303 thousand for the same period in 2023, indicating a worsening of approximately 51%[24] - Adjusted EBITDA for the three months ended December 31, 2024, was $40,023 thousand, down from $45,482 thousand in 2023, reflecting a decrease of about 12%[27] - The adjusted EBITDA margin for the three months ended December 31, 2024, was 10.0%, slightly down from 10.1% in the previous year[27] - Adjusted net income for the three months ended December 31, 2024, was $4,334 thousand, down from $11,347 thousand in 2023, representing a decline of about 62%[30] Segment Performance - The Memorialization segment reported sales of $190.5 million, down from $208.1 million in the prior year, while the SGK Brand Solutions segment saw a slight increase in sales to $130.8 million[22] - The Industrial Technologies segment experienced a significant decline in sales to $80.5 million, down from $111.4 million, largely due to reduced Tesla project work[22] - Reported sales for the three months ended December 31, 2024, totaled $401,842 thousand, with Memorialization at $190,486 thousand, SGK Brand Solutions at $80,533 thousand, and Industrial Technologies at $130,823 thousand[32] - Constant currency sales for the same period were $403,023 thousand, reflecting slight increases across all segments[32] - Reported adjusted EBITDA for the three months ended December 31, 2024, was $40,023 thousand, with a breakdown of $36,612 thousand from Memorialization, $1,832 thousand from SGK Brand Solutions, and $12,292 thousand from Industrial Technologies[32] Cash Flow and Debt - Cash flows from operating activities resulted in a net cash outflow of $25,009 thousand for the three months ended December 31, 2024, compared to an outflow of $27,266 thousand in 2023, showing an improvement of approximately 9.2%[24] - Outstanding debt increased by $32.7 million during Q1 FY2025, reflecting seasonal cash outflows and litigation-related costs[13] - The net debt as of December 31, 2024, was $775,698 thousand, an increase from $735,651 thousand on September 30, 2024[33] - The adjusted EBITDA for the trailing 12 months was $199,698 thousand, resulting in a net debt leverage ratio of 3.9 as of December 31, 2024, compared to 3.6 on September 30, 2024[33] Cost Management and Outlook - The company is maintaining its fiscal 2025 outlook, projecting adjusted EBITDA in the range of $205 million to $215 million[14] - Cost reduction initiatives are on track to achieve at least $50 million in savings, despite initial unfavorable impacts on GAAP results[8] - The company incurred acquisition and divestiture costs of $355 thousand for the three months ended December 31, 2024, compared to $899 thousand in 2023, a reduction of approximately 60%[30] Capital Expenditures and Assets - The company reported capital expenditures of $9,532 thousand for the three months ended December 31, 2024, down from $14,073 thousand in 2023, indicating a reduction of approximately 32%[24] - Total assets decreased from $1,834,890 thousand on September 30, 2024, to $1,791,719 thousand on December 31, 2024, representing a decline of approximately 2.4%[23] - Total shareholders' equity decreased from $437,206 thousand on September 30, 2024, to $413,456 thousand on December 31, 2024, a decline of about 5.4%[23] Strategic Initiatives - The SGK transaction is expected to close by mid-2025, with $350 million in upfront consideration, including $250 million in cash for debt reduction[5] - The company plans to market and sell its Dry Battery Electrode technology following a favorable arbitration ruling affirming its ownership rights[4]