Matthews International Reports Q3 Fiscal 2024 Results

TL;DR

MATW Q3 FY24 results are in. Check the 10-Q for segment performance and financial details.

AI Summary

Matthews International Corp. reported its third-quarter fiscal 2024 results, ending June 30, 2024. The company's filing details its financial performance and operational updates for the period. Specific financial figures and segment performance are outlined within the report.

Why It Matters

This 10-Q filing provides investors and analysts with a detailed look at Matthews International's financial health and operational performance during the third quarter of fiscal year 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Players & Entities

• MATTHEWS INTERNATIONAL CORP (company) — Filer
• 20240630 (date) — Fiscal year end
• PITTSBURGH (location) — Company headquarters
• PA (location) — State of incorporation

FAQ

Key Financial Figures

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

Filing Documents

• matw-20240630.htm (10-Q) — 1730KB
• matw-63024xex311.htm (EX-31.1) — 7KB
• matw-63024xex312.htm (EX-31.2) — 7KB
• matw-63024xex321.htm (EX-32.1) — 5KB
• matw-63024xex322.htm (EX-32.2) — 4KB
• 0000063296-24-000063.txt ( ) — 9256KB
• matw-20240630.xsd (EX-101.SCH) — 47KB
• matw-20240630_cal.xml (EX-101.CAL) — 74KB
• matw-20240630_def.xml (EX-101.DEF) — 284KB
• matw-20240630_lab.xml (EX-101.LAB) — 702KB
• matw-20240630_pre.xml (EX-101.PRE) — 489KB
• matw-20240630_htm.xml (XML) — 1673KB

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) June 30, 2024 September 30, 2023 ASSETS Current assets: Cash and cash equivalents $ 42,745 $ 42,101 Accounts receivable, net 192,817 207,526 Inventories, net 248,644 260,409 Contract assets 95,263 74,646 Other current assets 62,610 63,575 Total current assets 642,079 648,257 Investments 26,810 24,988 Property, plant and equipment, net 272,875 270,326 Operating lease right-of-use assets 64,009 71,629 Deferred income taxes 2,075 2,269 Goodwill 706,219 698,109 Other intangible assets, net 134,801 160,478 Other assets 13,009 11,325 Total assets $ 1,861,877 $ 1,887,381 LIABILITIES Current liabilities: Long-term debt, current maturities $ 5,476 $ 3,696 Current portion of operating lease liabilities 23,321 23,983 Trade accounts payable 113,636 114,316 Accrued compensation 47,025 58,872 Accrued income taxes 10,164 12,561 Contract liabilities 31,389 36,935 Other current liabilities 155,141 144,237 Total current liabilities 386,152 394,600 Long-term debt 824,745 786,484 Operating lease liabilities 42,914 50,189 Deferred income taxes 45,164 71,255 Other liabilities 59,210 59,572 Total liabilities 1,358,185 1,362,100 SHAREHOLDERS' EQUITY Shareholders' equity-Matthews: Common stock $ 36,334 $ 36,334 Additional paid-in capital 155,584 168,211 Retained earnings 699,037 714,727 Accumulated other comprehensive loss ( 174,109 ) ( 174,404 ) Treasury stock, at cost ( 213,201 ) ( 219,200 ) Total shareholders' equity-Matthews 503,645 525,668 Noncontrolling interests 47 ( 387 ) Total shareholders' equity 503,692 525,281 Total liabilities and shareholders' equity $ 1,861,877 $ 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) June 30, 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 consoli

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 Accounting Standards 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 impa

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 nine months ended June 30, 2024 and 2023 were as follows: Memorialization Industrial Technologies SGK Brand Solutions Consolidated Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2024 2023 2024 2023 2024 2023 2024 2023 North America $ 192,575 $ 197,309 $ 33,526 $ 43,924 $ 62,960 $ 63,000 $ 289,061 $ 304,233 Central and South America — — — — 1,641 1,342 1,641 1,342 Europe 7,496 8,468 56,558 84,577 50,671 51,532 114,725 144,577 Australia 2,593 2,951 — — 2,235 2,020 4,828 4,971 Asia — — 1,647 2,032 15,931 14,753 17,578 16,785 Total Sales $ 202,664 $ 208,728 $ 91,731 $ 130,533 $ 133,438 $ 132,647 $ 427,833 $ 471,908 Memorialization Industrial Technologies SGK Brand Solutions Consolidated Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 2024 2023 2024 2023 North America $ 601,793 $ 604,386 $ 99,482 $ 121,900 $ 188,832 $ 192,904 $ 890,107 $ 919,190 Central and South America — — — — 4,203 3,674 4,203 3,674 Europe 23,374 25,293 214,913 237,847 153,534 152,990 391,821 416,130 Australia 7,724 8,440 — — 6,559 6,535 14,283 14,975 Asia — — 4,846 5,443 43,782 41,316 48,628 46,759 Total Sales $ 632,891 $ 638,119 $ 319,241 $ 365,190 $ 396,910 $ 397,419 $ 1,349,042 $ 1,400,728 Revenue from products or services provided to customers over time accounted for approximately 13 % and 17 % of revenue for the three months ended June 30, 2024 and 2023, respectively and 17 % and 14 % of revenue f

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: June 30, 2024 September 30, 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 2,257 $ — $ 2,257 $ — $ 4,006 $ — $ 4,006 Equity and fixed income mutual funds — 1,484 — 1,484 — 699 — 699 Life insurance policies — 4,835 — 4,835 — 4,926 — 4,926 Total assets at fair value $ — $ 8,576 $ — $ 8,576 $ — $ 9,631 $ — $ 9,631 Liabilities: Derivatives (1) $ — $ 21,279 $ — $ 21,279 $ — $ 2,766 $ — $ 2,766 Total liabilities at fair value $ — $ 21,279 $ — $ 21,279 $ — $ 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 June 30, 2024 and September 30, 2023. Note 5. Inventories Inventories consisted of the following: June 30, 2024 September 30, 2023 Raw materials $ 68,833 $ 70,451 Work in process 102,741 108,400 Finished goods 77,070 81,558 $ 248,644 $ 260,409 Note 6. Investments Non-current investments consisted of the f

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 June 30, 2024 and September 30, 2023 consisted of the following: June 30, 2024 September 30, 2023 Revolving credit facilities $ 498,668 $ 463,168 2025 Senior Notes 298,497 298,500 Other borrowings 16,744 19,241 Finance lease obligations 16,312 9,271 Total debt 830,221 790,180 Less current maturities ( 5,476 ) ( 3,696 ) Long-term debt $ 824,745 $ 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 June 30, 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 an

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