Matthews International Reports Q1 FY25 Results

TL;DR

MATW Q1 FY25 10-Q filed. Financials for period ending 12/31/24 are in.

AI Summary

Matthews International Corp. reported its first quarter results for fiscal year 2025, ending December 31, 2024. The company's filing covers the period from October 1, 2024, to December 31, 2024. Key financial data and segment information are included in this 10-Q filing.

Why It Matters

This filing provides investors with a quarterly update on the financial performance of Matthews International Corp., detailing their operational and financial standing as of the end of the first quarter of fiscal year 2025.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing (10-Q) and does not inherently present new or elevated risks.

Key Players & Entities

• MATTHEWS INTERNATIONAL CORP (company) — Filer
• 0000063296 (company) — Central Index Key
• PA (company) — State of Incorporation
• 20241231 (date) — Conformed Period of Report
• 20250207 (date) — Filed as of Date

FAQ

Key Financial Figures

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

Filing Documents

• matw-20241231.htm (10-Q) — 1294KB
• ex31restatedarticlesofinco.htm (EX-3.1) — 81KB
• matw-123124xex311.htm (EX-31.1) — 7KB
• matw-123124xex312.htm (EX-31.2) — 7KB
• matw-123124xex321.htm (EX-32.1) — 5KB
• matw-123124xex322.htm (EX-32.2) — 4KB
• 0000063296-25-000006.txt ( ) — 7987KB
• matw-20241231.xsd (EX-101.SCH) — 48KB
• matw-20241231_cal.xml (EX-101.CAL) — 69KB
• matw-20241231_def.xml (EX-101.DEF) — 301KB
• matw-20241231_lab.xml (EX-101.LAB) — 697KB
• matw-20241231_pre.xml (EX-101.PRE) — 498KB
• matw-20241231_htm.xml (XML) — 1194KB

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) December 31, 2024 September 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 33,513 $ 40,816 Accounts receivable, net 199,303 205,984 Inventories, net 241,585 237,888 Contract assets 88,617 92,969 Other current assets 60,181 54,886 Total current assets 623,199 632,543 Investments 22,615 23,076 Property, plant and equipment, net 264,895 279,499 Operating lease right-of-use assets 62,063 60,499 Deferred income taxes 6,120 6,548 Goodwill 685,967 697,123 Other intangible assets, net 116,878 126,026 Other assets 9,982 9,576 Total assets $ 1,791,719 $ 1,834,890 LIABILITIES Current liabilities: Long-term debt, current maturities $ 7,260 $ 6,853 Current portion of operating lease liabilities 22,365 22,617 Trade accounts payable 101,927 108,362 Accrued rebates 23,422 23,766 Accrued compensation 59,663 88,781 Accrued income taxes 7,872 7,522 Contract liabilities 28,388 28,723 Other current liabilities 144,684 148,151 Total current liabilities 395,581 434,775 Long-term debt 801,951 769,614 Operating lease liabilities 41,824 40,073 Deferred income taxes 46,674 45,688 Other liabilities 92,233 107,534 Total liabilities 1,378,263 1,397,684 SHAREHOLDERS' EQUITY Shareholders' equity-Matthews: Common stock $ 36,334 $ 36,334 Additional paid-in capital 144,588 159,497 Retained earnings 611,358 623,063 Accumulated other comprehensive loss ( 181,491 ) ( 168,742 ) Treasury stock, at cost ( 197,381 ) ( 212,994 ) Total shareholders' equity-Matthews 413,408 437,158 Noncontrolling interests 48 48 Total shareholders' equity 413,456 437,206 Total liabilities and shareholders' equity $ 1,791,719 $ 1,834,890 The accompanying notes are an integral part of these consolidated financial statements. 2 MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) December 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 sales 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. See Note 17, "Subsequent Event" for a description of proposed transactions with respect to the SGK Brand Solutions business. 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

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 November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which improves financial reporting by requiring disclosure of specified information about certain costs and expenses on an annual and interim basis for all public entities, including enhanced disaggregation disclosures. The ASU is effective for annual periods for the Company beginning in fiscal year 2028, and interim periods beginning in fiscal year 2029. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements. In December 2023, the FASB issued 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 amendments in this ASU do not affect the recognition, measurement, or financial statement presentation of expenses, but will require increased disclosures in annual and interim financial statements. The ASU is effective for annual periods for the Company beginning in fiscal year 2025, and interim periods beginning in fiscal year 2026. The 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 (continued) Revenue from products or services provided to customers over time accounted for approximately 12 % and 19 % of revenue for the three months ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and September 30, 2024, the Company had net contract assets for projects recognized using the over time method totaling $ 60,229 and $ 64,246 , respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings. Net contract assets at December 31, 2024 and September 30, 2024 predominantly related to ongoing projects with the Company's largest energy storage customer. 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: December 31, 2024 September 30, 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 1,475 $ — $ 1,475 $ — $ — $ — $ — Equity and fixed income mutual funds — 843 — 843 — 839 — 839 Life insurance policies — 5,385 — 5,385 — 5,493 — 5,493 Total assets at fair value $ — $ 7,703 $ — $ 7,703 $ — $ 6,332 $ — $ 6,332 Liabilities: Derivatives (1) (2) $ — $ 55,358 $ —

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued (Dollar amounts in thousands, except per share data) Note 6. Investments Non-current investments consisted of the following: December 31, 2024 September 30, 2024 Equity and fixed income mutual funds $ 843 $ 839 Life insurance policies 5,385 5,493 Equity-method investments — 349 Other (primarily cost-method) investments 16,387 16,395 $ 22,615 $ 23,076 During the first quarter of fiscal 2025, the Company completed the disposal of its investment in Liquid X Printed Metals Inc. ("Liquid X"), a private company specializing in ink technologies. The Company's investment in Liquid X was previously written-down in fiscal 2024, and had a net carrying value of zero at the time of the disposal transaction. One of the Company's Executive Officers and member of Matthews' Board of Directors serves as President and CEO of Liquid X. Note 7. Debt and Financing Arrangements Long-term debt at December 31, 2024 and September 30, 2024 consisted of the following: December 31, 2024 September 30, 2024 Revolving credit facilities $ 484,083 $ 444,011 2027 Senior Secured Notes 294,799 294,751 Other borrowings 7,869 15,602 Finance lease obligations 22,460 22,103 Total debt 809,211 776,467 Less current maturities ( 7,260 ) ( 6,853 ) Long-term debt $ 801,951 $ 769,614 The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 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. The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. A portion of the revolving credit facility (not to exceed $ 350,000 ) can be drawn in foreign currencies. Borrowings under the revolving

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 (continued) The Company has $ 300,000 aggregate principal amount of 8.625 % senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes"). The 2027 Senior Secured Notes bear interest at a rate of 8.625 % per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year beginning on April 1, 2025. The Company's obligations under the 2027 Senior Secured Notes are secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2027 Senior Secured Notes. The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes. Unamortized costs related to the Company's notes were $ 5,201 and $ 5,249 at December 31, 2024 and September 30, 2024, respectively. The Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC ("Matthews RFC"), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC has a receivables purchase agreement ("RPA") to sell up to $ 125,000 of receivables to certain purchasers (the "Purchasers") on a recurring basis in exchange for cash (referred to as "capital" within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, each Purchaser's share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master s

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