Matthews International Sales Plunge 17% Post-SGK Divestiture

TL;DR

**MATW's massive revenue drop is a strategic gamble on a joint venture; watch Propelis's performance closely, or this stock is dead money.**

AI Summary

Matthews International Corp (MATW) reported consolidated sales of $1.498 billion for the fiscal year ended September 30, 2025, a significant decrease from $1.796 billion in 2024 and $1.881 billion in 2023. This 16.7% year-over-year decline was primarily driven by the deconsolidation of the SGK Business from its Brand Solutions segment on May 1, 2025, which was contributed to a newly formed entity, Propelis, in exchange for a 40% ownership interest. Sales in the Industrial Technologies segment also saw a substantial drop, from $433.156 million in 2024 to $342.229 million in 2025, a 21% decrease. The Memorialization segment experienced a more modest decline, with sales falling from $829.731 million in 2024 to $809.514 million in 2025, a 2.4% reduction. Key risks include changes in domestic or international economic conditions, foreign currency exchange rates, and the ability to achieve anticipated benefits from the Propelis joint venture. The strategic outlook involves focusing on its remaining Brand Solutions cylinders business and its equity-method investment in Propelis, alongside its Memorialization and Industrial Technologies segments.

Why It Matters

Matthews International's strategic divestiture of its SGK Business into the Propelis joint venture significantly reshapes its revenue profile and competitive landscape. Investors need to assess whether the 40% ownership in Propelis will generate sufficient equity income to offset the immediate revenue loss and if the remaining segments can drive growth. This move could streamline operations and allow MATW to focus on its core Memorialization and Industrial Technologies segments, but it also introduces new risks related to the performance of the unconsolidated Propelis entity. Competitors in the brand solutions space will see a new, potentially stronger player in Propelis, while MATW's direct competition in memorialization and industrial tech remains intense.

Risk Assessment

Risk Level: high — The risk level is high due to the significant 16.7% consolidated sales decline to $1.498 billion in fiscal 2025, largely driven by the deconsolidation of the SGK Business. The success of the new Propelis joint venture, in which MATW holds only a 40% ownership interest, is a major unknown, and the company explicitly lists 'risks to our ability to achieve the anticipated benefits of the joint venture transaction with Propelis' as a key factor that could cause results to differ materially.

Analyst Insight

Investors should closely monitor the performance and financial contributions from the Propelis joint venture, as well as the stability of the Memorialization and Industrial Technologies segments. Consider holding off on new investments until there's clearer evidence of the joint venture's success and its positive impact on MATW's bottom line, given the substantial revenue reduction.

Financial Highlights

revenue

$1,497,689,000

revenue Growth

-16.7%

Revenue Breakdown

Key Numbers

• $1.498B — Consolidated Sales (Decreased 16.7% from $1.796B in FY2024 due to SGK divestiture.)
• 40% — Propelis Ownership (Matthews' equity interest in the new Brand Solutions joint venture.)
• $809.5M — Memorialization Sales (Slight decrease from $829.7M in FY2024.)
• $342.2M — Industrial Technologies Sales (Significant 21% decline from $433.2M in FY2024.)
• $345.9M — Brand Solutions Sales (Sharp drop from $532.8M in FY2024, reflecting SGK deconsolidation.)
• 71% — North America Sales (Primary revenue source for the company in fiscal 2025.)
• 24% — Europe Sales (Second largest revenue source for the company in fiscal 2025.)
• 2025-09-30 — Fiscal Year End (Reporting period for the analyzed 10-K filing.)

Key Players & Entities

• MATTHEWS INTERNATIONAL CORP (company) — registrant
• Propelis Group (company) — joint venture partner and new entity for SGK Business
• Peninsula Parent LLC (company) — parent company of Propelis Group
• $1.497 billion (dollar_amount) — consolidated sales for fiscal year 2025
• $1.795 billion (dollar_amount) — consolidated sales for fiscal year 2024
• 40% (percentage) — ownership interest in Propelis
• May 1, 2025 (date) — date of SGK Business contribution to Propelis
• $657.7 million (dollar_amount) — aggregate market value of Class A Common Stock held by non-affiliates on March 31, 2025
• 30,795,844 (dollar_amount) — shares of Class A Common Stock outstanding as of October 31, 2025
• Nasdaq Global Select Market (regulator) — exchange where Class A Common Stock is registered

FAQ

Risk Factors

• Economic Conditions [high — market]: Changes in domestic or international economic conditions can negatively impact sales across all segments, particularly for Industrial Technologies and Brand Solutions, which are sensitive to manufacturing and consumer spending. For example, Industrial Technologies sales dropped 21% in FY2025.
• Foreign Currency Exchange Rates [medium — financial]: As a global company with significant sales in Europe (24% of total sales) and Asia (3%), fluctuations in foreign currency exchange rates can adversely affect reported revenues and profitability. This risk is present across all segments.
• Propelis Joint Venture Performance [high — operational]: The company's strategic outlook relies on achieving anticipated benefits from the Propelis joint venture, in which it holds a 40% ownership interest. The success of this venture is critical for the future of the Brand Solutions segment, which saw its sales decline significantly after the SGK Business deconsolidation.
• Competition [medium — market]: Competition in the Memorialization segment is based on reputation, quality, delivery, price, and design. In Industrial Technologies, competition exists from other manufacturers of marking and automation systems. The Brand Solutions segment also faces competition in pre-media services and display systems.
• Supply Chain and Raw Material Availability [low — operational]: The Memorialization segment relies on the availability of raw materials like bronze, granite, and steel. While generally available, disruptions or price increases could impact production costs and delivery. Industrial Technologies also depends on various components for its systems.

Industry Context

Matthews International operates in diverse industries including memorialization products for funeral homes, industrial technologies like product identification and warehouse automation, and brand solutions for consumer goods. The memorialization market is mature, focusing on quality and service. Industrial technologies are driven by automation trends and demand for energy storage solutions, particularly for electric vehicles. The brand solutions space involves pre-media services and display systems, impacted by consumer goods and retail trends.

Regulatory Implications

While the 10-K does not detail specific regulatory hurdles, the Industrial Technologies segment's focus on product identification and traceability may be subject to evolving industry standards for compliance and supply chain visibility. Furthermore, the energy storage solutions business could face regulations related to battery safety and environmental impact.

What Investors Should Do

1. Monitor the performance and strategic contributions of the Propelis joint venture closely, as it is now a key component of the Brand Solutions segment and a driver of future growth.
2. Analyze the recovery trajectory of the Industrial Technologies segment, paying attention to market demand for automation and energy storage solutions, and the impact of economic conditions.
3. Assess the resilience of the Memorialization segment in the face of modest sales declines and ongoing competition, considering its stable cash flow generation potential.
4. Evaluate the company's ability to integrate and leverage its remaining Brand Solutions cylinders business and its equity stake in Propelis to offset the loss of the SGK Business.

Key Dates

• 2025-05-01: Deconsolidation of SGK Business — Matthews contributed the majority of its Brand Solutions segment (SGK Business) to a new entity, Propelis, in exchange for a 40% ownership interest. This significantly reduced reported Brand Solutions revenue and consolidated sales.
• 2025-09-30: Fiscal Year End — End of the reporting period for the 10-K filing, showing a substantial decrease in consolidated sales compared to the prior year.

Glossary

Deconsolidation

The process of removing a subsidiary or business unit from a parent company's consolidated financial statements, typically when control is lost or significantly reduced. (Crucial for understanding the sharp decline in Brand Solutions revenue and overall consolidated sales in FY2025 due to the SGK Business transaction.)

Equity-method investment

An accounting method where an investment in another company is recorded at cost and adjusted for the investor's share of the investee's net income or loss. (Applies to Matthews' 40% ownership in Propelis, meaning its financial performance will be reflected in MATW's results, but not consolidated line-by-line.)

Pre-need basis

A sales arrangement where customers purchase memorialization products or services in advance of their actual need, often for funeral planning. (Describes a specific sales model within the Memorialization segment, indicating a portion of revenue is secured in advance.)

Warehouse Execution System (WES)

Software that manages and optimizes warehouse operations, including inventory, order fulfillment, and material handling. (A key component of the Industrial Technologies segment's warehouse automation solutions, serving large retail and e-commerce clients.)

Warehouse Control System (WCS)

Software that directs and monitors automated equipment within a warehouse, such as conveyors and sorters. (Works in conjunction with WES in the Industrial Technologies segment to automate material handling tasks.)

Year-Over-Year Comparison

Consolidated sales for fiscal year 2025 decreased by 16.7% to $1.498 billion, down from $1.796 billion in 2024. This decline was primarily driven by the deconsolidation of the SGK Business from the Brand Solutions segment. The Industrial Technologies segment also experienced a significant 21% drop in sales. While the Memorialization segment saw a smaller decline of 2.4%, the overall revenue picture reflects a challenging year marked by strategic divestitures and market pressures.

Key Financial Figures

• $1.00 — which registered Class A Common Stock, $1.00 par value MATW Nasdaq Global Select Mar

Filing Documents

• matw-20250930.htm (10-K) — 2721KB
• matw_93025xex21.htm (EX-21) — 63KB
• matw_93025xex231.htm (EX-23.1) — 7KB
• matw_93025xex311.htm (EX-31.1) — 7KB
• matw_93025xex312.htm (EX-31.2) — 7KB
• matw_93025xex321.htm (EX-32.1) — 5KB
• matw_93025xex322.htm (EX-32.2) — 4KB
• matw-20250930_g1.jpg (GRAPHIC) — 123KB
• 0000063296-25-000070.txt ( ) — 16577KB
• matw-20250930.xsd (EX-101.SCH) — 88KB
• matw-20250930_cal.xml (EX-101.CAL) — 154KB
• matw-20250930_def.xml (EX-101.DEF) — 628KB
• matw-20250930_lab.xml (EX-101.LAB) — 1207KB
• matw-20250930_pre.xml (EX-101.PRE) — 937KB
• matw-20250930_htm.xml (XML) — 2880KB

BUSINESS

ITEM 1. BUSINESS. Matthews, founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of memorialization products, industrial technologies and brand solutions. Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. Industrial Technologies includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, 2

BUSINESS, (continued)

ITEM 1. BUSINESS, (continued) including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, dcor and tissue industries. Brand Solutions consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment (the "SGK Business") to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Propelis is a leading global provider of brand solutions. Following the completion of this transaction, the Company's Brand Solutions segment consists of its cylinders business, and its 40% ownership interest in Propelis. Activity prior to May 1, 2025 for the SGK Business is included within the consolidated financial statements of the Company. As of May 1, 2025 the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis. See Notes 8, "Investments" and 23, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data" for further information with respect to the Company's sale of its interest in the SGK Business. The Company manages its business under three reporting segments, Memorialization, Industrial Technologies, and Brand Solutions. The following table sets forth reported sales for the Company's business segments for the past three fiscal years. Detailed financial information relating to business segments and to domestic and international operations is presented in Note 22, "Segment Information" in Item 8 - "Financial Statements and Supplementary Data." Years Ended September 30, 2025 2024 2023 Sales to external custo

BUSINESS, (continued)

ITEM 1. BUSINESS, (continued) granite niche units are comprised of numerous compartments used to display cremation urns in mausoleums and churches. The Company also markets turnkey cremation gardens that include design and all related products for a cremation memorial garden. Customers of the Memorialization segment can purchase memorials and vases on a "pre-need" basis. This concept permits families to arrange for these purchases in advance of their actual need. Upon request, the Company will manufacture the memorial to the customer's specifications (e.g., name and birth date) and place it in storage for future delivery. Memorials in storage have been paid in full with title conveyed to each pre-need purchaser. The segment is a leading manufacturer and distributor of caskets and other funeral home products in North America, producing and marketing metal, wood and cremation caskets. Caskets are offered in a variety of colors, interior designs, handles and trim in order to accommodate specific religious, ethnic or other personal preferences and can also be personalized. The segment is the leading supplier of embalming chemicals, supplies, and instruments in North America. Other specialized funeral home products such as urns, jewelry, interior panels, and stationery are also offered. Metal caskets are made from various gauges of cold-rolled steel, stainless steel, copper and bronze. Metal caskets are generally categorized by whether the casket is non-gasketed or gasketed, and by material (i.e., bronze, copper, or steel) and in the case of steel, by the gauge (thickness) of the metal. Wood caskets are primarily manufactured from nine different species of wood. The species of wood used are poplar, pine, ash, oak, pecan, maple, cherry, walnut and mahogany. The Memorialization segment is a leading manufacturer of all-wood constructed caskets, which are manufactured using pegged and dowelled construction, and include no metal parts. Cremation caskets are made prima

BUSINESS, (continued)

ITEM 1. BUSINESS, (continued) products are corporations, fraternal organizations, contractors, churches, hospitals, schools and government agencies. These products are sold to and distributed through a network of independent dealers including sign suppliers, awards and recognition companies, and trophy dealers. Raw materials used by the Memorialization segment to manufacture memorials consist principally of bronze and aluminum ingot, granite, sheet metal, coating materials, photopolymers and construction materials and are generally available in adequate supply. Ingot is obtained from various North American, European and Australian smelters. The primary materials required for casket manufacturing are cold-rolled steel and lumber. The segment also purchases copper, bronze, stainless steel, particleboard, corrugated materials, paper veneer, cloth, ornamental hardware and coating materials. Purchase orders or supply agreements are typically negotiated with steel suppliers that have demonstrated timely delivery, high quality material and competitive prices. Lumber is purchased from a number of sawmills and lumber distributors. Raw materials used to manufacture cremation and incineration products consist principally of structural steel, sheet metal, electrical components, combustion devices and refractory materials. These are generally available in adequate supply from numerous suppliers. Competition from other manufacturers of memorial products is based on reputation, product quality, delivery, price, and design availability. The Company believes that its superior quality, broad product lines, innovative designs, delivery capability, customer responsiveness, experienced personnel and consumer-oriented merchandising systems are competitive advantages in its markets. Competition in the mausoleum construction industry includes various construction companies throughout North America and is based on design, quality and price. Competitors in the architectural market are

BUSINESS, (continued)

ITEM 1. BUSINESS, (continued) The energy storage solutions business has grown over the last few years, primarily reflecting demand for batteries for use in electric vehicles. The segment has over a decade of experience in developing dry electrode battery solutions. Dry electrode technology makes producing lithium-ion batteries less expensive than the wet electrode process, and is also more environmentally sustainable. These factors could contribute to increased utilization of dry electrode batteries in the electric vehicle market, and thus greater demand for this form of battery production in the future. Product identification systems range from stand-alone marking products to complex ink-jet printing systems that integrate into a customer's production process. The Company manufactures and markets products and systems that employ different marking technologies, including laser and ink-jet printing. These technologies apply product information required for identification and traceability, as well as to facilitate inventory and quality control, regulatory compliance and brand name communication. The segment also develops innovative, custom solutions to address specific customer requirements in a variety of industries, including oil field services and security scanning. Warehouse automation systems provide the tracking and distribution of a customer's products with software for warehouse execution systems ("WES") and warehouse control systems ("WCS"), order fulfillment technologies, and controls for material handling systems. The fulfillment technologies automate picking, kitting, sorting, assembly, and other material handling tasks. Customers for this business include some of the largest retail, e-commerce, and third-party logistics companies in the United States. A portion of the revenue of the Industrial Technologies segment is attributable to the sale of consumables and replacement parts required by the marking, coding and tracking products sold by Matthews

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