Matthews International(US:MATW)2025-04-30 20:32Financial 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]