Fiscal 2024 Second Quarter Financial Highlights: Outstanding debt reduced by $19.6 million; net debt lower by $27.2 million GAAP earnings per share of $0.29, consistent with a year ago Non-GAAP EPS increased to $0.69, compared to $0.65 a year ago SGK reports current quarter sales and adjusted EBITDA higher than a year ago Energy storage sales also higher than last year; reflects orders from multiple customers PITTSBURGH, May 02, 2024 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) today announced financial results for its second quarter of fiscal 2024. In discussing the results for the Company's fiscal 2024 second quarter, Joseph C. Bartolacci, President and Chief Executive Officer, stated: "We were generally pleased with our operating results for the fiscal 2024 second quarter. Consolidated sales and adjusted EBITDA were relatively consistent with a year ago, despite challenging conditions in several of our businesses, including customer delays on significant energy storage solutions orders that are currently in process. "Sales for the Memorialization segment for the fiscal 2024 second quarter were relatively consistent with a year ago despite lower U.S. death rates. The benefits of recent acquisitions and improved price realization substantially offset post-COVID unit volume declines for the quarter. The segment continues to perform well post-COVID, with current sales and adjusted EBITDA run-rates well ahead of pre-COVID levels. "Operating results for the SGK Brand Solutions business continued to improve during the fiscal 2024 2nd quarter. The segment reported sales growth compared to a year ago, primarily reflecting increases in its U.S. brand packaging, European packaging, and private label markets. Additionally, the segment's adjusted EBITDA increased from a year ago reflecting the benefits of sales growth, improved pricing, and recent cost-reduction efforts. "In the Industrial Technologies segment, our energy storage solutions business reported another quarter of sales growth. The improvement reflected the benefit of orders from multiple customers. Total sales for the Industrial Technologies segment were lower for the current quarter compared to a year ago primarily reflecting slower market conditions for the warehouse automation business as we referenced over the last few quarters. However, recent quote activity may be indicative of coming improvements in this market. "During the fiscal 2024 second quarter, we reduced our outstanding debt by $19.6 million and net debt (outstanding debt less cash) by $27.2 million. Based on our current cash flow forecasts, we project further reductions in our outstanding debt and leverage ratio by the end of the fiscal year. During the recent quarter, we renewed our $750 million U.S. revolving credit facility as well as our U.S. securitization facilities. We are now working toward the refinancing of our bonds, which mature in December 2025. We fully expect this refinancing to be completed before the end of this fiscal year. "With respect to the remainder of the fiscal year, we currently project adjusted EBITDA for fiscal 2024 to approximate $220 million. Customer delays outside of our control within our energy storage business have significantly impacted our initial projections. While we currently expect to start delivery of some of the equipment soon, these shipments are now expected to extend into mid-fiscal 2025. Results for our Memorialization and SGK Brand Solutions businesses have mitigated some of this impact. "We remain very confident in our long-term strategies and outlook. Our Memorialization business continues to be very well positioned with its strong, stable base of cemetery memorial and casket sales, plus its growing portfolio of cremation-related products and services. The SGK Brand Solutions segment should continue to benefit from improving market conditions and to capture new market share in digital as the business evolves. Additionally, we remain on track for the commercial launch of our new product identification printhead in early calendar 2025 following the recent successful transition to a new chip provider. Lastly, interest in our energy storage solutions remains very strong with multiple customers in the late stages of order development." Second Quarter Fiscal 2024 Consolidated Results (Unaudited) ($ in millions, except per share data) Q2 FY2024   Q2 FY2023   Change   % Change Sales $ 471.2   $ 479.6   $ (8.4 )   (1.7 )% Net income attributable to Matthews $ 9.0   $ 9.1   $ (0.1 )   (1.1 )% Diluted earnings per share $ 0.29   $ 0.29   $ 0.00     0.0 % Non-GAAP adjusted net income $ 21.8   $ 20.3   $ 1.5     7.3 % Non-GAAP adjusted EPS $ 0.69   $ 0.65   $ 0.04     6.2 % Adjusted EBITDA $ 56.8   $ 58.4   $ (1.6 )   (2.8 )% Note: See the attached tables for additional important disclosures regarding Matthews' use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures.   Consolidated sales for the quarter ended March 31, 2024 were $471.2 million, compared to $479.6 million for the same quarter a year ago, representing a decrease of $8.4 million, or 1.7%. Changes in foreign currency exchange rates were estimated to have an unfavorable impact of $0.3 million on fiscal 2024 second quarter sales compared to the prior year. Net income attributable to the Company for the quarter ended March 31, 2024 was $9.0 million, or $0.29 per share, compared to $9.1 million, or $0.29 per share in the prior year. On a non-GAAP adjusted basis, earnings for the fiscal 2024 second quarter were $0.69 per share, compared to $0.65 per share a year ago. Income tax benefits generally offset the impacts of slightly lower adjusted EBITDA and higher interest expense for the current quarter. Adjusted EBITDA for the fiscal 2024 second quarter was $56.8 million, compared to $58.4 million a year ago, reflecting lower adjusted EBITDA in the Memorialization and Industrial Technologies segments, partially offset by higher adjusted EBITDA in the SGK Brand Solutions segment and lower corporate and non-operating costs. Fiscal 2024 Year-to-Date Consolidated Results (Unaudited) ($ in millions, except per share data) YTD FY2024   YTD FY2023   Change   % Change   Sales $ 921.2   $ 928.8   $ (7.6 )   (0.8 )% Net income attributable to Matthews $ 6.7   $ 12.8   $ (6.1 )   (47.6 )% Diluted earnings per share $ 0.22   $ 0.41   $ (0.19 )   (46.3 )% Non-GAAP adjusted net income $ 33.2   $ 36.8   $ (3.6 )   (9.8 )% Non-GAAP adjusted EPS $ 1.06   $ 1.18   $ (0.12 )   (10.2 )% Adjusted EBITDA $ 102.3   $ 107.7   $ (5.4 )   (5.0 )% Note: See the attached tables for additional important disclosures regarding Matthews' use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures.       Consolidated sales for the six months ended March 31, 2024 were $921.2 million, compared to $928.8 million a year ago, representing an decrease of $7.6 million, or 0.8%. Changes in foreign currency rates were estimated to have a favorable impact of $4.8 million on fiscal 2024 consolidated sales compared to a year ago. Net income attributable to the Company for the first six months of fiscal 2024 was $6.7 million, or $0.22 per share, compared to $12.8 million, or $0.41 per share in the prior year. On a non-GAAP adjusted basis, earnings for the first six months of fiscal 2024 were $1.06 per share, compared to $1.18 per share a year ago. The decrease was primarily attributable to lower consolidated adjusted EBITDA and higher interest expense for the current period compared to a year ago. Adjusted EBITDA for the first six months of fiscal 2024 was $102.3 million, compared to $107.7 million a year ago, reflecting lower adjusted EBITDA in the Memorialization and Industrial Technologies segments, partially offset by higher adjusted EBITDA in the SGK Brand Solutions segment and lower corporate and non-operating costs. Webcast The Company will host a conference call and webcast on Friday, May 3, 2024 at 9:00 a.m. Eastern Time to review its financial and operating results and discuss its corporate strategies and outlook. A question-and-answer session will follow. The conference call can be accessed by dialing (201) 689-8471. The audio webcast can be monitored at www.matw.com. As soon as available after the call, a transcript of the call will be posted on the Investor Relations section of the Company's website at www.matw.com. About Matthews International Corporation Matthews International Corporation is a global provider of memorialization products, industrial technologies, and brand solutions. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets, cremation-related products, and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The Industrial Technologies segment 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, décor and tissue industries. The SGK Brand Solutions segment is a leading provider of packaging solutions and brand experiences, helping companies simplify their marketing, amplify their brands and provide value. The Company has approximately 12,000 employees in more than 30 countries on six continents that are committed to delivering the highest quality products and services. Forward-looking Information Any forward-looking statements contained in this release are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, and may be identified by the use of words such as "expects," "believes," "intends," "projects," "anticipates," "estimates," "plans," "seeks," "forecasts," "predicts," "objective," "targets," "potential," "outlook," "may," "will," "could" or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company's operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, and other factors described in the Company's Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)(In thousands, except per share data)     Three Months EndedMarch 31,       Six Months EndedMarch 31,         2024       2023     % Change     2024       2023     % Change Sales $ 471,223     $ 479,580     (1.7 )%   $ 921,209     $ 928,820     (0.8 )% Cost of sales   (323,041 )     (329,957 )   (2.1 )%     (640,674 )     (640,267 )   0.1 % Gross profit   148,182       149,623     (1.0 )%     280,535       288,553     (2.8 )% Gross margin   31.4 %     31.2 %         30.5 %     31.1 %                             Selling and administrative expenses   (117,895 )     (116,055 )   1.6 %     (231,026 )     (227,415 )   1.6 % Amortization of intangible assets   (8,959 )     (10,517 )   (14.8 )%     (18,754 )     (20,859 )   (10.1 )% Operating profit   21,328       23,051     (7.5 )%     30,755       40,279     (23.6 )% Operating margin   4.5 %     4.8 %         3.3 %     4.3 %                             Interest and other deductions, net   (13,423 )     (10,544 )   27.3 %     (25,879 )     (22,813 )   13.4 % Income before income taxes   7,905       12,507     (36.8 )%     4,876       17,466     (72.1 )% Income taxes   1,122       (3,382 )   (133.2 )%     1,848       (4,694 )   (139.4  )% Net income   9,027       9,125     (1.1 )%     6,724       12,772     (47.4 )% Non-controlling interests   —       2     (100.0 )%     —       58     (100.0  )% Net income attributable to Matthews $ 9,027     $ 9,127     (1.1 )%   $ 6,724     $ 12,830     (47.6 )%                         Earnings per share -- diluted $ 0.29     $ 0.29     — %   $ 0.22     $ 0.41     (46.3 )%