On Feb. 3, Matthews International Corp. announced financial results for its first quarter of fiscal 2026.
Some highlights included:
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- Memorialization reports higher sales and adjusted EBITDA
- Commercialization of MPERIA Axian Inkjet (XIJ) systems progressing well
- Proceeds from divestitures drive $174 million reduction in outstanding debt
- Redemption of $300 million of 8.625% Notes due 2027
- Company maintains outlook for fiscal 2026
In discussing the results for the company’s fiscal 2026 first quarter, Joseph C. Bartolacci, president and chief executive officer, stated:
“We are very pleased with our operating results for the fiscal 2026 first quarter. The company reported earnings per share on a GAAP basis of $1.39 for the current quarter compared to a loss of $0.11 a year ago. We executed the previously announced sale of the warehouse automation business, receiving $225.4 million in cash proceeds and generating a gain on the divestiture. We also finalized the sale of the European packaging business, marking the full disposition of any controlling interests in the Brand Solutions segment. Additionally, the Memorialization segment reported higher sales and adjusted EBITDA compared to a year ago.
“Sales for the Memorialization segment for the fiscal 2026 first quarter were higher than a year ago primarily reflecting the recent acquisition of The Dodge Company. We expect this acquisition to be nicely accretive to earnings as we leverage the benefits of our Memorialization commercial platform and have already begun to realize cost synergies from integration. Inflationary price realization and higher sales volumes for caskets and cemetery memorials also contributed to sales growth in the quarter. The earnings impact of these sales increases and benefits from the segment’s ongoing productivity initiatives were significant factors in the segment’s improved operating margins.
“The Industrial Technologies segment reported a decline in sales for the fiscal 2026 first quarter. The decrease mainly resulted from challenges in our engineering business, including the impacts of the ongoing Tesla dispute. However, interest from other customers in our dry battery electrode solutions remains very strong, which we anticipate will start to convert to orders in the second half of fiscal 2026. Initial beta installations of the MPERIA Axian Inkjet (XIJ) systems are performing well and we’ve received significant customer interest in the new product.
“During the fiscal 2026 first quarter, we reduced consolidated outstanding debt by $174 million. The reduction primarily reflected the proceeds from the warehouse automation and European packaging divestitures, offset partly by unfavorable impacts from typical first quarter reductions in working capital, seasonally lower earnings and funding of expenditures associated with divestitures, strategic initiatives and other items. In January, we redeemed $300 million aggregate principal of 8.625% Senior Secured Second Lien Notes due 2027, which is expected to significantly reduce interest expense and improve future cash flow.
“Regarding the integration of the SGK business with SGS, the new company, Propelis Group (“Propelis”), has reported solid operating results since formation of the joint venture in May of 2025. The new management team has made good progress towards achieving its projected cost synergy estimate of approximately $60 million, much of which is expected to be realized in calendar 2026.
“The board, with the support of J.P. Morgan, identified several alternatives for evaluation and consideration toward improving shareholder value and better alignment with the underlying value of the organization. The divestitures of SGK in 2025, and the warehouse automation and European packaging businesses this quarter are all outcomes of this effort to simplify Matthews’ business structure and enhance shareholder value. The Company’s strategic alternatives review remains ongoing.
“Lastly based on our results through December 31, 2025, and projections for the remainder of fiscal 2026. we are maintaining our previous earnings guidance of adjusted EBITDA of at least $180 million (which includes our estimated 40% share of Propelis adjusted EBITDA) for fiscal 2026.”
Read more in the full news release.
