Matthews International Reports Fiscal-Year Fourth-Quarter Earnings

Matthews International reported adjusted earnings per share of 50 cents for its fiscal fourth quarter versus 55 cents in the year-ago period. Revenue was $318.8 million versus $446.7 million a year ago.

In its Nov. 20 news release announcing results, President and CEO Joseph Bartolacci said, “I am pleased to report that we had a strong finish to fiscal 2025 as our consolidated results were ahead of our initial expectations for the fiscal 2025 fourth quarter. Sales for the Memorialization segment and warehouse automation business outperformed their levels from the same quarter a year ago, and we continued to lower our corporate and other non-operating costs. Please note that the divestiture of the SGK business was a significant factor in the year-over-year comparability of the company’s financial results.

“The Memorialization segment reported higher sales for the current quarter compared to a year ago, primarily reflecting the benefit of its recent acquisition of The Dodge Company. Higher sales volumes for bronze memorials and inflationary price realization also contributed to the sales increase for the quarter.

“Sales for the Industrial Technologies segment for the fiscal 2025 fourth quarter were lower than a year ago reflecting challenges in our engineering business related to the ongoing litigation with Tesla. However, interest from other customers in our dry battery electrode solutions remains very strong, which we anticipate will start to convert to orders in fiscal 2026. Market conditions for the warehouse automation business continued its recovery and, as a result, our warehouse automation sales for the current quarter increased from a year ago.

“Since closing of the SGK divestiture in May 2025, Propelis (the joint venture formed as a result of the SGK transaction) has performed very well. As you recall, the annual adjusted EBITDA level of the combined entities at the closing date approximated $100 million and Propelis is on track to perform at a rate well above this level.

“Additionally, the company’s consolidated net debt level declined modestly during the fiscal 2025 fourth quarter. As we recently announced, our debt levels and related leverage ratio will improve with the closing of the pending sale of our warehouse automation business. We intend to apply the net proceeds from this transaction primarily to debt reduction, which is expected to result in a net leverage ratio below 3.0x as we work toward our long-term target of 2.5x.

“I am extremely proud of our company’s accomplishments during the fiscal year considering the challenges we encountered. During fiscal 2025, these accomplishments included: divestiture of the SGK business at an accretive valuation while maintaining a significant interest in this business through our 40% ownership of Propelis; favorable rulings in the Tesla litigation; multiple asset sales; reduction in outstanding debt; annual increase in dividends to our shareholders; further reduction in the company’s corporate costs; commercial launch of the new printhead solution; and announcement of the pending sales of the warehouse automation and European packaging businesses, also at accretive valuations. I want to take this opportunity to express my sincere appreciation to our employees for their efforts and dedication.

“I am excited about the new foundation we are establishing and the future of Matthews. As a result of our thoughtful strategic alternatives process, we are reducing the complexity of our diversified business portfolio and significantly strengthening our balance sheet – addressing important concerns expressed by our shareholders. We now enter the new fiscal year with a strong focus on sustaining our momentum in Memorialization, capitalizing on the opportunities in the high growth Industrial Technologies segment in which we have significant competitive technologies, and taking further cost reduction actions. Our strategic alternatives review to enhance shareholder value creation remains ongoing.

“For fiscal 2026, we expect continued growth in the Memorialization segment, particularly with the full year contribution from the acquisition of The Dodge Company. Additionally, while we expect conditions for the engineering business to remain challenged as a result of the ongoing litigation, we are currently planning further cost reduction actions designed to mitigate further declines while we work toward the future realization of the significant opportunities we have created. Lastly, following the closing of the pending transactions, we expect further reductions in our corporate and non-operating costs. In consideration of these factors, we are currently targeting adjusted EBITDA (including our 40% share of Propelis) to be at least $180 million for fiscal 2026.”

Divestiture of the SGK Business

As previously reported, on May 1, 2025, the company contributed the SGK business to a newly-formed entity, Propelis, in exchange for 40% of the common equity of Propelis, a $50 million preferred equity investment in Propelis, retention of trade accounts receivable of $50 million, and cash proceeds of $250 million ($228 million net of divested cash). The consolidated financial information presented in this release reflects the financial results of the SGK business through the closing date. As a result of the integration process of Propelis and transition to its stand-alone reporting systems, our 40% portion of the financial results of Propelis is being reported on a one-quarter lag. Accordingly, the consolidated financial information presented in this release includes our 40% interest in the financial results of Propelis for May and June 2025.

Based on preliminary financial projections provided by Propelis, their current estimate of adjusted EBITDA for the period July 1, 2025 through September 30, 2025 was $32.2 million. Please note that these projections are unaudited and subject to review and, as a result, may change. Matthews’ 40% portion of this amount would be $12.9 million. Accordingly, with the addition of our 40% interest in Propelis for the period July 1, 2025, through September 30, 2025, the company’s consolidated adjusted EBITDA for the fiscal year ended September 30, 2025, would be approximately $200 million.