Matthews International Corp Files 10-Q for Fiscal Q2 2024

TL;DR

<b>Matthews International Corp filed its 10-Q for the second quarter of fiscal 2024, ending March 31, 2024.</b>

AI Summary

MATTHEWS INTERNATIONAL CORP (MATW) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. Filing is a 10-Q for the second quarter of fiscal year 2024. The reporting period concluded on March 31, 2024. The company's fiscal year ends on September 30. Matthews International Corp is incorporated in Pennsylvania. The company's SIC code is 3360 (Nonferrous Foundries).

Why It Matters

For investors and stakeholders tracking MATTHEWS INTERNATIONAL CORP, this filing contains several important signals. This filing provides investors with the latest financial performance and operational details for Matthews International Corp. Understanding the Q2 2024 results is crucial for assessing the company's current financial health and future prospects.

Risk Assessment

Risk Level: low — MATTHEWS INTERNATIONAL CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain unusual or high-risk disclosures.

Analyst Insight

Review the detailed financial statements and management discussion within the 10-Q to understand the company's performance drivers and outlook.

Key Numbers

• 20240331 — Reporting Period End Date (CONFORMED PERIOD OF REPORT)
• 20240503 — Filing Date (FILED AS OF DATE)
• 20240331 — Period End Date (20240331)
• 20230930 — Previous Fiscal Year End (2023-09-30)
• 2024-01-01 — Q2 2024 Start Date (2024-01-01)
• 2024-03-31 — Q2 2024 End Date (2024-03-31)
• 2023-01-01 — Q2 2023 Start Date (2023-01-01)
• 2023-03-31 — Q2 2023 End Date (2023-03-31)

Key Players & Entities

• MATTHEWS INTERNATIONAL CORP (company) — FILER
• 0000063296 (company) — CENTRAL INDEX KEY
• 3360 (company) — STANDARD INDUSTRIAL CLASSIFICATION
• PA (company) — STATE OF INCORPORATION
• 0930 (company) — FISCAL YEAR END
• MATTHEWS JAMES H & CO (company) — FORMER COMPANY
• 19780823 (company) — DATE OF NAME CHANGE
• PITTSBURGH (company) — BUSINESS ADDRESS CITY

FAQ

Key Dates

• 2024-03-31: End of Fiscal Q2 2024 — Marks the end of the reporting period for this 10-Q filing.
• 2024-05-03: Filing Date of 10-Q — Indicates when the company submitted its quarterly report to the SEC.

Key Financial Figures

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

Filing Documents

• matw-20240331.htm (10-Q) — 1650KB
• matw-33124xex311.htm (EX-31.1) — 7KB
• matw-33124xex312.htm (EX-31.2) — 7KB
• matw-33124xex321.htm (EX-32.1) — 5KB
• matw-33124xex322.htm (EX-32.2) — 4KB
• 0000063296-24-000045.txt (&nbsp;) — 9001KB
• matw-20240331.xsd (EX-101.SCH) — 47KB
• matw-20240331_cal.xml (EX-101.CAL) — 73KB
• matw-20240331_def.xml (EX-101.DEF) — 290KB
• matw-20240331_lab.xml (EX-101.LAB) — 691KB
• matw-20240331_pre.xml (EX-101.PRE) — 484KB
• matw-20240331_htm.xml (XML) — 1654KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollar amounts in thousands) March 31, 2024 September 30, 2023 ASSETS Current assets: Cash and cash equivalents $ 45,497 $ 42,101 Accounts receivable, net 192,735 207,526 Inventories, net 253,301 260,409 Contract assets 90,835 74,646 Other current assets 71,681 63,575 Total current assets 654,049 648,257 Investments 26,780 24,988 Property, plant and equipment, net 277,903 270,326 Operating lease right-of-use assets 65,779 71,629 Deferred income taxes 2,316 2,269 Goodwill 707,881 698,109 Other intangible assets, net 143,884 160,478 Other assets 11,885 11,325 Total assets $ 1,890,477 $ 1,887,381 LIABILITIES Current liabilities: Long-term debt, current maturities $ 5,419 $ 3,696 Current portion of operating lease liabilities 23,442 23,983 Trade accounts payable 107,147 114,316 Accrued compensation 44,525 58,872 Accrued income taxes 4,035 12,561 Contract liabilities 35,613 36,935 Other current liabilities 138,571 144,237 Total current liabilities 358,752 394,600 Long-term debt 837,357 786,484 Operating lease liabilities 44,658 50,189 Deferred income taxes 69,672 71,255 Other liabilities 70,691 59,572 Total liabilities 1,381,130 1,362,100 SHAREHOLDERS' EQUITY Shareholders' equity-Matthews: Common stock $ 36,334 $ 36,334 Additional paid-in capital 150,344 168,211 Retained earnings 705,113 714,727 Accumulated other comprehensive loss ( 172,504 ) ( 174,404 ) Treasury stock, at cost ( 209,987 ) ( 219,200 ) Total shareholders' equity-Matthews 509,300 525,668 Noncontrolling interests 47 ( 387 ) Total shareholders' equity 509,347 525,281 Total liabilities and shareholders' equity $ 1,890,477 $ 1,887,381 The accompanying notes are an integral part of these consolidated financial statements. 2 MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollar

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) March 31, 2024 (Dollar amounts in thousands, except per share data) Note 1. Nature of Operations Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of memorialization products, industrial technologies and brand solutions. The Company manages its businesses under three segments: Memorialization, Industrial Technologies and SGK 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 distribution of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, 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. SGK 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. The Company has facilities in North America, Europe, Asia, Australia, and Central and South America. Note 2. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information for commercial and industrial companies and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consol

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued (Dollar amounts in thousands, except per share data) Note 2. Basis of Presentation (continued) New Accounting Pronouncements: Issued In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740) which enhances the transparency and decision usefulness of income tax disclosures including rate reconciliations and income taxes paid among other tax disclosures. The ASU is effective for annual periods for the Company beginning in fiscal year 2026. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities, including enhanced disclosures about significant segment expenses. The ASU is effective for annual periods for the Company beginning in fiscal year 2025, and interim periods beginning in fiscal year 2026. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements. In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements. The amendments in this update affect the presentation and disclosure of a variety of topics in the Codification, and align them with the Securities and Exchange Commission ("SEC") regulations. The effective date of the amendments of this ASU will be determined for each individual disclosure based on the effective date of the SEC's removal of the related disclosure from Regulation S-X or Regulation S-K. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, then this ASU will not become effective. The adoption of this ASU is not expected to have a material impact on the Company's c

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued (Dollar amounts in thousands, except per share data) Note 3. Revenue Recognition The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregated sales by segment and region for the three and six months ended March 31, 2024 and 2023 were as follows: Memorialization Industrial Technologies SGK Brand Solutions Consolidated Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, 2024 2023 2024 2023 2024 2023 2024 2023 North America $ 212,053 $ 211,878 $ 32,817 $ 41,835 $ 63,152 $ 62,324 $ 308,022 $ 316,037 Central and South America — — — — 1,308 995 1,308 995 Europe 7,907 8,462 81,579 81,970 52,731 52,941 142,217 143,373 Australia 2,196 2,549 — — 2,153 2,216 4,349 4,765 Asia — — 1,740 1,709 13,587 12,701 15,327 14,410 Total Sales $ 222,156 $ 222,889 $ 116,136 $ 125,514 $ 132,931 $ 131,177 $ 471,223 $ 479,580 Memorialization Industrial Technologies SGK Brand Solutions Consolidated Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 2024 2023 2024 2023 North America $ 409,218 $ 407,077 $ 65,956 $ 77,975 $ 125,872 $ 129,904 $ 601,046 $ 614,956 Central and South America — — — — 2,562 2,332 2,562 2,332 Europe 15,878 16,825 158,355 153,271 102,863 101,458 277,096 271,554 Australia 5,131 5,489 — — 4,324 4,515 9,455 10,004 Asia — — 3,199 3,411 27,851 26,563 31,050 29,974 Total Sales $ 430,227 $ 429,391 $ 227,510 $ 234,657 $ 263,472 $ 264,772 $ 921,209 $ 928,820 Revenue from products or services provided to customers over time accounted for approximately 18 % and 13 % of revenue for the three months ended March 31, 2024 and 2023, respectively and 19 % and 13 % of revenue for t

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued (Dollar amounts in thousands, except per share data) Note 4. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level fair value hierarchy is used to prioritize the inputs used in valuations, as defined below: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows: March 31, 2024 September 30, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 1,889 $ — $ 1,889 $ — $ 4,006 $ — $ 4,006 Equity and fixed income mutual funds — 1,466 — 1,466 — 699 — 699 Life insurance policies — 4,825 — 4,825 — 4,926 — 4,926 Total assets at fair value $ — $ 8,180 $ — $ 8,180 $ — $ 9,631 $ — $ 9,631 Liabilities: Derivatives (1) $ — $ 5,198 $ — $ 5,198 $ — $ 2,766 $ — $ 2,766 Total liabilities at fair value $ — $ 5,198 $ — $ 5,198 $ — $ 2,766 $ — $ 2,766 (1) Interest rate swaps and cross currency swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy. The carrying values for other financial assets and liabilities approximated fair value at March 31, 2024 and September 30, 2023. Note 5. Inventories Inventories consisted of the following: March 31, 2024 September 30, 2023 Raw materials $ 71,068 $ 70,451 Work in process 103,060 108,400 Finished goods 79,173 81,558 $ 253,301 $ 260,409 Note 6. Investments Non-current investments consisted of the fo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued (Dollar amounts in thousands, except per share data) Note 7. Debt and Financing Arrangements Long-term debt at March 31, 2024 and September 30, 2023 consisted of the following: March 31, 2024 September 30, 2023 Revolving credit facilities $ 511,057 $ 463,168 2025 Senior Notes 298,362 298,500 Other borrowings 17,200 19,241 Finance lease obligations 16,157 9,271 Total debt 842,776 790,180 Less current maturities ( 5,419 ) ( 3,696 ) Long-term debt $ 837,357 $ 786,484 The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in January 2024. The amended and restated loan agreement includes a $ 750,000 senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility. A portion of the revolving credit facility (not to exceed $ 350,000 ) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 1.00 % to 2.00 % ( 1.50 % at March 31, 2024) based on the Company's leverage ratio. The leverage ratio is defined as total indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15 % to 0.30 % (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred new debt issuance costs of $ 4,704 in connection with the amended and restated agreement, which were deferred and are being amortized over the term of the facility. Unamortized costs were $ 5,363 and $ 949 at March 31, 2024 and September 30, 2023, respectively. The domestic credit facility requires the Company to maintain certain levera

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