Matthews International Reports Fiscal Second-Quarter Results

On May 2, Matthews International reported financial results for its second quarter of fiscal 2024.

Quarterly highlights included:

Outstanding debt reduced by $19.6 million; net debt lower by $27.2 million.
GAAP earnings per share of 29 cents consistent with a year ago.
Non-GAAP EPS increased to 69 cents compared to 65 cents 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.

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 2^nd 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.”