10-Q

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For The Quarterly Period Ended March 31, 2013

Commission File No. 0-9115

MATTHEWS INTERNATIONAL CORPORATION

(Exact Name of registrant as specified in its charter)

PENNSYLVANIA	25-0644320
(State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization)	Identification No.)

TWO NORTHSHORE CENTER, PITTSBURGH, PA	15212-5851
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code	(412) 442-8200

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    

Yes o No x

As of April 30, 2013, shares of common stock outstanding were:

  Class A Common Stock 27,609,284 shares

PART I - FINANCIAL INFORMATION

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollar amounts in thousands)

	March 31, 2013					September 30, 2012
ASSETS
Current assets:
Cash and cash equivalents				$	51,528				$	58,259
Accounts receivable, net					185,235					174,632
Inventories					137,440					130,690
Deferred income taxes					1,669					1,694
Other current assets					21,850					19,950
Total current assets					397,722					385,225
Investments					19,242					18,842
Property, plant and equipment: Cost	$	385,844				$	350,521
Less accumulated depreciation		(216,291	)				(206,472	)
					169,553					144,049
Deferred income taxes					32,978					32,647
Other assets					12,511					12,083
Goodwill					530,869					476,181
Other intangible assets, net					54,828					59,015
Total assets				$	1,217,703				$	1,128,042
LIABILITIES
Current liabilities:
Long-term debt, current maturities				$	18,746				$	21,566
Accounts payable					46,197					44,294
Accrued compensation					31,503					30,222
Accrued income taxes					7,896					7,632
Customer prepayments					16,193					15,883
Contingent consideration					11,873					13,298
Other current liabilities					47,841					47,978
Total current liabilities					180,249					180,873
Long-term debt					377,069					298,148
Accrued pension					85,656					78,563
Postretirement benefits					28,364					27,725
Deferred income taxes					19,160					18,624
Other liabilities					29,891					33,194
Total liabilities					720,389					637,127
Arrangement with noncontrolling interest					-					10,481
SHAREHOLDERS’ EQUITY
Shareholders' equity-Matthews:
Common stock	$	36,334				$	36,334
Additional paid-in capital		44,391					47,893
Retained earnings		749,040					727,176
Accumulated other comprehensive loss		(67,135	)				(65,083	)
Treasury stock, at cost		(268,975	)				(268,499	)
Total shareholders’ equity-Matthews					493,655					477,821
Noncontrolling interests					3,659					2,613
Total shareholders’ equity					497,314					480,434
Total liabilities and shareholders' equity				$	1,217,703				$	1,128,042

The accompanying notes are an integral part of these consolidated financial statements.

2

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share data)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2013			2012			2013			2012
Sales	$	256,390		$	225,545		$	481,999		$	442,758
Cost of sales		(161,524	)		(140,838	)		(307,159	)		(280,056	)
Gross profit		94,866			84,707			174,840			162,702
Selling and administrative expenses		(69,796	)		(59,420	)		(133,271	)		(118,490	)
Operating profit		25,070			25,287			41,569			44,212
Investment income		607			1,243			840			2,844
Interest expense		(3,051	)		(2,727	)		(6,298	)		(5,284	)
Other income (deductions), net		(1,067	)		(638	)		(2,172	)		(1,153	)
Income before income taxes		21,559			23,165			33,939			40,619
Income taxes		(7,504	)		(7,973	)		(11,881	)		(14,007	)
Net income		14,055			15,192			22,058			26,612
Net (income) loss attributable to  noncontrolling interests		137			66			389			(69	)
Net income attributable to  Matthews shareholders	$	14,192		$	15,258		$	22,447		$	26,543
Earnings per share attributable to Matthews shareholders:
Basic		$0.51			$0.54			$0.81			$0.93
Diluted		$0.51			$0.54			$0.81			$0.93

The accompanying notes are an integral part of these consolidated financial statements.

3

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollar amounts in thousands)

	Three Months Ended March 31,
	Matthews						Noncontrolling Interest						Total
	2013			2012			2013			2012			2013			2012
Net income (loss):	$	14,192		$	15,258		$	(137	)	$	(66	)	$	14,055		$	15,192
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		(13,543	)		8,566			356			(101	)		(13,187	)		8,465
Pension plans and other postretirement benefits		1,074			1,022			-			-			1,074			1,022
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation		486			(341	)		-			-			486			(341	)
Net amount reclassified to earnings		626			447			-			-			626			447
Net change in unrecognized gain (loss)
on derivatives		1,112			106			-			-			1,112			106
Other comprehensive income (loss), net of tax		(11,357	)		9,694			356			(101	)		(11,001	)		9,593
Comprehensive income (loss)	$	2,835		$	24,952		$	219		$	(167	)	$	3,054		$	24,785

	Six Months Ended March 31,
	Matthews						Noncontrolling Interest						Total
	2013			2012			2013			2012			2013			2012
Net income (loss):	$	22,447		$	26,543		$	(389	)	$	69		$	22,058		$	26,612
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		(5,934	)		3,202			55			(68	)		(5,879	)		3,134
Pension plans and other postretirement benefits		2,147			2,045			-			-			2,147			2,045
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation		497			(661	)		-			-			497			(661	)
Net amount reclassified to earnings		1,238			866			-			-			1,238			866
Net change in unrecognized gain (loss)
on derivatives		1,735			205			-			-			1,735			205
Other comprehensive income (loss), net of tax		(2,052	)		5,452			55			(68	)		(1,997	)		5,384
Comprehensive income (loss)	$	20,395		$	31,995		$	(334	)	$	1		$	20,061		$	31,996

The accompanying notes are an integral part of these consolidated financial statements.

4

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

for the six months ended March 31, 2013 and 2012 (Unaudited)

(Dollar amounts in thousands, except per share data)

	Shareholders’ Equity
									Accumulated
			Additional						Other						Non-
	Common		Paid-in			Retained			Comprehensive			Treasury			controlling
	Stock		Capital			Earnings			Income (Loss)			Stock			interests			Total
Balance,    September 30, 2011	$	36,334	$	48,554		$	681,658		$	(58,658	)	$	(243,246	)	$	3,451		$	468,093
Net income		-		-			26,543			-			-			69			26,612
Minimum pension liability		-		-			-			2,045			-			-			2,045
Translation adjustment		-		-			-			3,202			-			(68	)		3,134
Fair value of derivatives		-		-			-			205			-			-			205
Total comprehensive income																			31,996
Stock-based compensation		-		2,731			-			-			-			-			2,731
Purchase of 354,040 shares of treasury stock		-		-			-			-			(11,298	)		-			(11,298	)
Issuance of 183,765 shares of treasury stock		-		(5,421	)		-			-			5,674			-			253
Dividends, $.18 per share		-		-			(5,093	)		-			-			-			(5,093	)
Distributions to    noncontrolling interests		-		-			-			-			-			(170	)		(170	)
Balance, March 31, 2012	$	36,334	$	45,864		$	703,108		$	(53,206	)	$	(248,870	)	$	3,282		$	486,512

	Shareholders’ Equity
									Accumulated
			Additional						Other						Non-
	Common		Paid-in			Retained			Comprehensive			Treasury			controlling
	Stock		Capital			Earnings			Income (Loss)			Stock			interests			Total
Balance,    September 30, 2012	$	36,334	$	47,893		$	727,176		$	(65,083	)	$	(268,499	)	$	2,613		$	480,434
Net income		-		-			22,447			-			-			(389	)		22,058
Minimum pension liability		-		-			-			2,147			-			-			2,147
Translation adjustment		-		-			-			(5,934	)		-			55			(5,879	)
Fair value of derivatives		-		-			-			1,735			-			-			1,735
Total comprehensive income																			20,061
Stock-based compensation		-		2,757			-			-			-			-			2,757
Purchase of 237,132 shares of treasury stock		-		-			-			-			(7,259	)		-			(7,259	)
Issuance of 213,648 shares of treasury stock		-		(6,259	)		-			-			6,783			-			524
Dividends, $.20 per share		-		-			(5,563	)		-			-			-			(5,563	)
Arrangement with noncontrolling interests							4,980			-			-			1,653			6,633
Distributions to    noncontrolling interests		-		-			-			-			-			(273	)		(273	)
Balance, March 31, 2013	$	36,334	$	44,391		$	749,040		$	(67,135	)	$	(268,975	)	$	3,659		$	497,314

The accompanying notes are an integral part of these consolidated financial statements.

5

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollar amounts in thousands, except per share data)

	Six Months Ended
	March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	22,058		$	26,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,314			14,532
Stock-based compensation expense		2,757			2,731
Gain on sale of assets		(1,110	)		(4,511	)
Change in deferred taxes		(787	)		(1,349	)
Changes in working capital items		(10,554	)		(17,305	)
(Increase) decrease in other assets		(95	)		1,528
Decrease in other liabilities		(2,785	)		(2,318	)
Increase in pension and postretirement benefits		6,642			6,266
Net cash provided by operating activities		33,440			26,186
Cash flows from investing activities:
Capital expenditures		(10,947	)		(15,921	)
Proceeds from sale of assets		221			357
Acquisitions, net of cash acquired		(63,769	)		(1,388	)
Purchases of investments		-			(950	)
Net cash used in investing activities		(74,495	)		(17,902	)
Cash flows from financing activities:
Proceeds from long-term debt		113,569			7,984
Payments on long-term debt		(54,055	)		(7,667	)
Payments of contingent consideration		(9,542	)		-
Proceeds from the sale of treasury stock		524			268
Purchases of treasury stock		(7,259	)		(11,298	)
Dividends		(5,563	)		(5,093	)
Distributions to noncontrolling interests		(273	)		(170	)
Net cash provided by (used in) financing activities		37,401			(15,976	)
Effect of exchange rate changes on cash		(3,077	)		701
Net change in cash and cash equivalents	$	(6,731	)	$	(6,991	)
Non-cash investing and financing activities:
Acquisition of equipment under capital lease	$	-		$	420

The accompanying notes are an integral part of these consolidated financial statements.

6

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2013

(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 designer, manufacturer and marketer principally of memorialization products and brand solutions.  Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment for the cemetery and funeral home industries.  Brand solutions include graphics imaging products and services, marking and fulfillment systems and merchandising solutions.  The Company's products and operations are comprised of six business segments:  Cemetery Products, Funeral Home Products, Cremation, Graphics Imaging, Marking and Fulfillment Systems and Merchandising Solutions.  The Cemetery Products segment is a leading manufacturer of cast bronze and granite memorials and other memorialization products, cast and etched architectural products and is a leading builder of mausoleums in the United States.  The Funeral Home Products segment is a leading casket manufacturer and distributor in North America and produces a wide variety of wood, metal and cremation caskets.  The Cremation segment is a leading designer and manufacturer of cremation equipment in North America and Europe. The Graphics Imaging segment manufactures and provides brand management, printing plates, gravure cylinders, pre-press services and imaging services for the primary packaging and corrugated industries.  The Marking and Fulfillment Systems segment designs, manufactures and distributes a wide range of marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.  The Merchandising Solutions segment designs and manufactures merchandising displays and systems and provides creative merchandising and marketing solutions services.

The Company has manufacturing and marketing facilities in the United States, Mexico, Canada, Europe, Australia and Asia.

Note 2.   Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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 not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the six months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2012.  The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control.  All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 3.   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:

	March 31, 2013								September 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Trading   securities	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Total assets at   fair value	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Liabilities:
Derivatives (1)		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
Total liabilities   at fair value		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
(1)Interest rate swaps are valued based on observable market swap rates.

Note 4.   Inventories

Inventories consisted of the following:

	March 31, 2013		September 30, 2012
Raw Materials	$	43,550	$	41,003
Work in process		27,408		22,772
Finished goods		66,482		66,915
	$	137,440	$	130,690

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.   Debt

The Company has a domestic Revolving Credit Facility with a syndicate of financial institutions.  The maximum amount of borrowings available under the facility is $400,000 and borrowings under the facility bear interest at LIBOR plus a factor ranging from 1.00% to 1.50% based on the Company’s leverage ratio.  The facility’s maturity is March 2017.  The leverage ratio is defined as net indebtedness divided by EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from .20% to .30% (based on the Company’s leverage ratio) of the unused portion of the facility.

The Revolving Credit Facility requires the Company to maintain certain leverage and interest coverage ratios.  A portion of the facility (not to exceed $25,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the Revolving Credit Facility at March 31, 2013 and September 30, 2012 were $325,000 and $281,323, respectively.  The weighted-average interest rate on outstanding borrowings on this facility at March 31, 2013 and 2012 was 2.98% and 2.89%, respectively.

The Company has entered into the following interest rate swaps:

Effective Date	Amount	Fixed Interest Rate	Interest Rate Spread at March 31, 2013	Maturity Date
May 2011	$25,000	1.37%	1.50%	May 2014
October 2011	25,000	1.67%	1.50%	October 2015
November 2011	25,000	2.13%	1.50%	November 2014
March 2012	25,000	2.44%	1.50%	March 2015
June 2012	40,000	1.88%	1.50%	June 2022
August 2012	35,000	1.74%	1.50%	June 2022
September 2012	25,000	3.03%	1.50%	December 2015
September 2012	25,000	1.24%	1.50%	March 2017
November 2012	25,000	1.33%	1.50%	November 2015

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility, which are considered probable of occurring.  Based on the Company’s assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized loss of $6,289 ($3,837 after tax) and $6,825 ($4,163 after tax) at March 31, 2013 and 2012, respectively, that is included in shareholders’ equity as part of accumulated other comprehensive loss (“AOCL”).  Assuming market rates remain constant with the rates at March 31, 2013, approximately $1,664 of the $3,837 loss included in AOCL is expected to be recognized in earnings as an adjustment to interest expense over the next twelve months.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.  Debt (continued)

At March 31, 2013 and September 30, 2012, the interest rate swap contracts were reflected as a liability on the balance sheets.  The following derivatives are designated as hedging instruments:

Liability Derivatives
Balance Sheet Location:	March 31, 2013		September 30, 2012
Current liabilities:
Other current liabilities	$	2,727	$	2,851
Long-term liabilities
Other liabilities		3,562		6,282
Total derivatives	$	6,289	$	9,133

The loss recognized on derivatives was as follows:

	Location of
Derivatives in	Loss	Amount of				Amount of
Cash Flow	Recognized in	Loss Recognized				Loss Recognized
Hedging	Income on	in Income				in Income
Relationships	Derivative	on Derivatives				on Derivatives
		Three Months ended March 31,				Six Months ended March 31,
		2013		2012		2013		2012
Interest rate swaps	Interest expense		$(1,026)		$(733)		$(2,029)		$(1,420)

The Company recognized the following losses in AOCL:

					Location of
					Gain or
					(Loss)	Amount of Loss
					Reclassified	Reclassified from
	Amount of				From	AOCL into
Derivatives in	Gain or (Loss) Recognized in				AOCL into	Income
Cash Flow	AOCL on Derivatives				Income	(Effective Portion*)
Hedging Relationships	March 31, 2013		March 31, 2012		(Effective Portion*)	March 31, 2013		March 31, 2012
Interest rate swaps		$497		$(661)	Interest expense		$(1,238)		$(866)
*There is no ineffective portion or amount excluded from effectiveness testing.

In March 2013, the Company, through certain of its European subsidiaries, entered into a credit facility with a European bank.  The maximum amount of borrowing available under this facility was 25.0 million Euros ($32,000).  Outstanding borrowings under the credit facility totaled 25.0 million Euros ($32,000) at March 31, 2013. The weighted-average interest rate on outstanding borrowings under this facility at March 31, 2013 was 1.37%.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.  Debt (continued)

The Company, through its German subsidiary, Saueressig GmbH & Co. KG (“Saueressig”), has several loans with various European banks.  Outstanding borrowings under these loans totaled 2.9 million Euros ($3,719) and 8.2 million Euros ($10,514) at March 31, 2013 and September 30, 2012, respectively. The weighted-average interest rate on outstanding borrowings of Saueressig at March 31, 2013 and 2012 was 3.89% and 6.10%, respectively.

The Company, through its German subsidiary, Wetzel GmbH (“Wetzel”), acquired in November 2012, has several loans with various European banks.  Outstanding borrowings under these loans totaled 8.3 million Euros ($10,701) at March 31, 2013.  The weighted-average interest rate on outstanding borrowings of Wetzel at March 31, 2013 was 7.17%.

The Company, through its wholly-owned subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled 5.3 million Euros ($6,767) and 6.3 million Euros ($8,080) at March 31, 2013 and September 30, 2012, respectively.  Matthews International S.p.A. also has four lines of credit totaling 11.4 million Euros ($14,574) with the same Italian banks.  Outstanding borrowings on these lines were 5.2 million Euros ($6,714) and 3.4 million Euros ($4,322) at March 31, 2013 and September 30, 2012, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at March 31, 2013 and 2012 was 3.16% and 3.15%, respectively.

As of March 31, 2013 and September 30, 2012 the fair value of the Company’s long-term debt, including current maturities, approximated the carrying value included in the Condensed Consolidated Balance Sheet.

Note 6.   Share-Based Payments

The Company maintains an equity incentive plan (the “2007 Equity Incentive Plan”) that provides for the grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  The Company also maintains a stock incentive plan (the “1992 Incentive Stock Plan”) that previously provided for grants of stock options, restricted shares and certain other types of stock-based awards.  In February 2013, the Company’s shareholders approved the adoption of a new plan, the 2012 Equity Incentive Plan (“the 2012 Plan”), that provides for the grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  Under the 2012 Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of 2,500,000.  There will be no further grants under the 2007 Equity Incentive Plan or the 1992 Incentive Stock Plan.  At March 31, 2013, there were 2,500,000 shares reserved for future issuance under the 2012 Equity Incentive Plan. All plans are administered by the Compensation Committee of the Board of Directors.

The option price for each stock option granted under either plan may not be less than the fair market value of the Company's common stock on the date of grant.  Outstanding stock options are generally exercisable in one-third increments upon the attainment of pre-defined levels of appreciation in the market value of the Company’s Class A Common Stock.  In addition, options generally vest in one-third increments after three, four and five years, respectively, from the grant date (but, in any event, not until the attainment of the market value thresholds).  The options expire on the earlier of ten years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company generally settles employee stock option exercises with treasury shares.  With respect to outstanding restricted share grants, for grants made prior to fiscal 2013, generally one-half of the shares vest on the third anniversary of the grant, with the remaining one-half of the shares vesting in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company’s Class A Common Stock.  For grants made in fiscal 2013, generally one-half of the shares vest on the third anniversary of the grant, one-quarter of the shares vest in one-third increments upon the attainment of pre-defined levels of adjusted earnings per share, and the remaining one-quarter of the shares vest in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company’s Class A Common Stock.  Additionally, restricted shares cannot vest until the first anniversary of the grant date.  Unvested restricted shares generally expire on the earlier of five years from the 

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 6.   Share-Based Payments (continued)

date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company issues restricted shares from treasury shares.

For the three-month periods ended March 31, 2013 and 2012, total stock-based compensation cost totaled $1,378 and $1,319, respectively.  For the six-month periods ended March 31, 2013 and 2012, total stock-based compensation cost totaled $2,757 and $2,731, respectively.  The associated future income tax benefit recognized was $537 and $514 for the three-month periods ended March 31, 2013 and 2012, respectively, and $1,075 and $1,065 for the six-month periods ended March 31, 2013 and 2012, respectively.

For the three-month periods ended March 31, 2013 and 2012, the amount of cash received from the exercise of stock options was $48 and $237, respectively. For the six-month periods ended March 31, 2013 and 2012, the amount of cash received from the exercise of stock options was $523 and $265, respectively. In connection with these exercises, the tax benefits realized by the Company were $3 and $19 for the three-month periods ended March 31, 2013 and 2012, respectively, and $66 and $22 for the six-month periods ended March 31, 2013 and 2012, respectively.

The transactions for restricted stock for the six months ended March 31, 2013 were as follows:

				Weighted-
				average
				grant-date
	Shares			fair value
Non-vested at September 30, 2012		551,389		$	32.56
Granted		236,500			25.22
Vested		(73,710	)		37.31
Expired or forfeited		(42,956	)		30.82
Non-vested at March 31, 2013		671,223			29.57

As of March 31, 2013, the total unrecognized compensation cost related to unvested restricted stock was $6,484 and is expected to be recognized over a weighted average period of 1.8 years.

The transactions for shares under options for the six months ended March 31, 2013 were as follows:

						Weighted-
				Weighted-		average		Aggregate
				average		remaining		intrinsic
	Shares			exercise price		contractual term		value
Outstanding, September 30, 2012		840,282			$37.15
Granted		-			-
Exercised		(23,141	)		22.59
Expired or forfeited		(47,683	)		37.09
Outstanding, March 31, 2013		769,458			37.60		2.6		$  -
Exercisable, March 31, 2013		433,220			36.69		2.4		$  -

No shares were earned during the three-month and six-month periods ended March 31, 2013 and 2012, respectively.  The intrinsic value of options (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) exercised during the six-month periods ended March 31, 2013 and 2012 was $190 and $57, respectively.

12

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 6.   Share-Based Payments (continued)

The transactions for non-vested options for the six months ended March 31, 2013 were as follows:

				Weighted-average
				grant-date
Non-vested shares	Shares			fair value
Non-vested at September 30, 2012		355,872			$11.35
Granted		-			-
Vested		-			-
Expired or forfeited		(19,634	)		12.16
Non-vested at March 31, 2013		336,238			11.30

The fair value of each restricted stock grant is estimated on the date of grant using a binomial lattice valuation model.  The following table indicates the assumptions used in estimating fair value of restricted stock for the periods ended March 31, 2013 and 2012.

	Six Months Ended March 31,
	2013			2012
Expected volatility		29.5	%		30.4	%
Dividend yield		1.2	%		1.0	%
Average risk free interest rate		0.6	%		0.9	%
Average expected term (years)		2.0			2.0

The risk free interest rate is based on United States Treasury yields at the date of grant. The dividend yield is based on the most recent dividend payment and average stock price over the 12 months prior to the grant date.  Expected volatilities are based on the historical volatility of the Company’s stock price.  The expected term represents an estimate of the average period of time for restricted shares to vest.  The option characteristics for each grant are considered separately for valuation purposes.

Under the Company’s Director Fee Plan, directors (except for the Chairman of the Board) who are not also officers of the Company each receive, as an annual retainer fee, either cash or shares of the Company's Class A Common Stock equivalent to $60.  The equivalent amount paid to a non-employee Chairman of the Board is $130. Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board.  The value of deferred shares is recorded in other liabilities.  A total of 17,005 shares had been deferred under the Director Fee Plan at March 31, 2013.  Additionally, directors who are not also officers of the Company each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares) with a value of $100.  A total of 22,300 stock options have been granted under the plan.  At March 31, 2013, 11,800 options were outstanding and vested. Additionally, 103,150 shares of restricted stock have been granted under the plan, 38,227 of which were unvested at March 31, 2013.  A total of 300,000 shares have been authorized to be issued under the Director Fee Plan.

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 7.   Earnings Per Share Attributable to Matthews’ Shareholders

The information used to compute earnings per share attributable to Matthews’ common shareholders was as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Net income attributable to Matthews shareholders	$	14,192	$	15,258	$	22,447	$	26,543
Less: dividends and undistributed earnings allocated to participating securities		145		224		251		436
Net income available to Matthews shareholders	$	14,047	$	15,034	$	22,196	$	26,107
Weighted-average shares outstanding (in thousands):
Basic shares		27,369		27,926		27,312		27,933
Effect of dilutive securities		143		42		99		80
Diluted shares		27,512		27,968		27,411		28,013

Options to purchase 730,642 and 749,667 shares of common stock were not included in the computation of diluted earnings per share for the three months and six months ended March 31, 2013, respectively, because the inclusion of these options would be anti-dilutive.  Options to purchase 786,292 and 786,667 shares of common stock were not included in the computation of diluted earnings per share for the three months and six months ended March 31, 2012, respectively, because the inclusion of these options would be anti-dilutive.

Note 8.   Pension and Other Postretirement Benefit Plans

The Company provides defined benefit pension and other postretirement plans to certain employees. Net periodic pension and other postretirement benefit cost for the plans included the following:

	Three months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	1,685		$	1,424		$	199		$	182
Interest cost		1,913			1,950			282			321
Expected return on plan assets		(2,243	)		(1,953	)		-			-
Amortization:
Prior service cost		(52	)		(11	)		(68	)		(113	)
Net actuarial loss		1,806			1,680			110			134
Net benefit cost	$	3,109		$	3,090		$	523		$	524

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 8.   Pension and Other Postretirement Benefit Plans (continued)

	Six months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	3,370		$	2,848		$	398		$	364
Interest cost		3,826			3,900			564			642
Expected return on plan assets		(4,486	)		(3,906	)		-			-
Amortization:
Prior service cost		(104	)		(22	)		(136	)		(226	)
Net actuarial loss		3,612			3,360			220			268
Net benefit cost	$	6,218		$	6,180		$	1,046		$	1,048

Benefit payments under the Company’s principal retirement plan are made from plan assets, while benefit payments under the postretirement benefit plan are made from the Company’s operating funds.  Under IRS regulations, the Company is not required to make any significant contributions to its principal retirement plan in fiscal year 2013.

Contributions made and anticipated for fiscal year 2013 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the six months ended March 31, 2013:
Supplemental retirement plan	$	362	$	-
Other postretirement plan		-		441
Additional contributions expected in fiscal 2013:
Supplemental retirement plan		358		-
Other postretirement plan		-		665

Note 9.   Income Taxes

Income tax provisions for the Company’s interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's effective tax rate for the six months ended March 31, 2013 was 35.0%, compared to 34.5% for the first half of fiscal 2012. The difference between the Company's effective tax rate and the Federal statutory rate of 35.0% primarily reflected the impact of state taxes, offset by lower foreign income taxes.

The Company had unrecognized tax benefits (excluding penalties and interest) of $3,074 and $2,708 on March 31, 2013 and September 30, 2012, respectively, all of which, if recorded, would impact the 2013 annual effective tax rate.  It is reasonably possible that $36 of the unrecognized tax benefits could be recognized in the next 12 months primarily due to tax examinations and the expiration of statutes related to specific tax positions.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. The Company included $187 in interest and penalties in the provision for income taxes for the first six months of fiscal 2013. Total penalties and interest accrued were $2,058 and $1,871 at March 31, 2013 and September 30, 2012, respectively.  These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 9.   Income Taxes (continued)

The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions.  As of March 31, 2013, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2010 and forward
United States – State	2009 and forward
Canada	2008 and forward
Europe	2004 and forward
United Kingdom	2010 and forward
Australia	2009 and forward
Asia	2005 and forward

Note 10.   Segment Information

The Company's products and operations consist of two principal businesses that are comprised of three operating segments each, as described under Nature of Operations (Note 1):  Memorialization (Cemetery Products, Funeral Home Products, Cremation) and Brand Solutions (Graphics Imaging, Marking and Fulfillment Systems, Merchandising Solutions).  Management evaluates segment performance based on operating profit (before income taxes) and does not allocate non-operating items such as investment income, interest expense, other income (deductions), net and minority interests.

Information about the Company's segments follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Sales to external customers:
Memorialization:
Cemetery Products	$	55,690	$	53,575	$	108,514	$	98,725
Funeral Home Products		67,996		61,767		128,753		120,338
Cremation		12,320		11,098		23,422		20,532
		136,006		126,440		260,689		239,595
Brand Solutions:
Graphics Imaging		78,519		64,839		140,954		135,282
Marking and Fulfillment Systems		22,350		17,756		40,265		34,139
Merchandising Solutions		19,515		16,510		40,091		33,742
		120,384		99,105		221,310		203,163
	$	256,390	$	225,545	$	481,999	$	442,758

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 10.   Segment Information (continued)

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Operating profit:
Memorialization:
Cemetery Products	$	5,851	$	10,165	$	12,223	$	14,700
Funeral Home Products		9,751		7,327		17,444		13,815
Cremation		997		1,232		1,472		1,989
		16,599		18,724		31,139		30,504
Brand Solutions:
Graphics Imaging		5,510		3,731		5,802		8,712
Marking and Fulfillment Systems		2,407		2,045		2,783		3,413
Merchandising Solutions		554		787		1,845		1,583
		8,471		6,563		10,430		13,708
	$	25,070	$	25,287	$	41,569	$	44,212

Note 11.   Acquisitions

In March 2013, the Company completed the purchase of the remaining 38.5% interest in Kroma Pre-Press Preparation Systems Industry & Trade, Inc. (“Kroma”), completing the option arrangement in connection with the July 2011 acquisition of a 61.5% interest in Kroma.

In March 2013, the Company completed the purchase of the remaining 20% interest in Furnace Construction Cremators Limited (“FCC”).  The Company had acquired an 80% interest in FCC in March 2010.

In December 2012, the Company acquired Pyramid Controls, Inc. and its affiliate, Pyramid Control Systems (collectively, “Pyramid”).  Pyramid is a provider of warehouse control systems and conveyor control solutions for distribution centers.  The acquisition is designed to expand Matthews' fulfillment products and services in the warehouse management market.   The initial purchase price for the transaction was $24,532, plus potential additional consideration up to $3,700 based on future operating results. 

In November 2012, the Company completed the acquisition of Wetzel Holding AG, Wetzel GmbH and certain related affiliates (collectively “Wetzel”).  Wetzel is a leading European provider of pre-press services and gravure printing forms, with manufacturing operations in Germany and Poland.  Wetzel’s products and services are sold primary within Europe, and the acquisition is designed to expand Matthews' products and services in the global graphics imaging market.  The purchase price for Wetzel was 42.6 million Euros ($54,748) on a cash-free, debt-free basis.

The allocation of purchase price for the Wetzel and Pyramid acquisitions are preliminary.  The Company has allocated the additional purchase price to goodwill.  Adjustments are expected to other intangibles and property, plant and equipment once the valuations are finalized.

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 12.   Goodwill and Other Intangible Assets

Goodwill related to business combinations is not amortized but is subject to annual review for impairment. In general, when the carrying value of a reporting unit exceeds its implied fair value, an impairment loss must be recognized. For purposes of testing for impairment, the Company uses a discounted cash flow technique.  Intangible assets are amortized over their estimated useful lives unless such lives are considered to be indefinite. A significant decline in cash flows generated from these assets may result in a write-down of the carrying values of the related assets.  The Company performed its annual impairment review in the second fiscal quarter.

A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:

	Cemetery			Funeral Home					Graphics			Marking and Fulfillment		Merchandising
	Products			Products		Cremation			Imaging			Products		Solutions		Consolidated
Goodwill	$	97,783		$	162,876	$	17,558		$	167,262		$	30,816	$	9,138	$	485,433
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at September 30, 2012		97,371			162,876		12,558			163,422			30,816		9,138		476,181
Additions during period		914			199		269			30,303			24,961		-		56,646
Translation and other  adjustments		(97	)		-		(242	)		(1,675	)		56		-		(1,958	)
Goodwill		98,600			163,075		17,585			195,890			55,833		9,138		540,121
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at March 31, 2013	$	98,188		$	163,075	$	12,585		$	192,050		$	55,833	$	9,138	$	530,869

The addition to Graphics Imaging goodwill reflects the acquisition of Wetzel; the addition to Marking and Fulfillment Systems goodwill reflects the acquisition of Pyramid; the addition to Cemetery Products goodwill reflects the acquisition of a small bronze manufacturer in Europe; the addition to Cremation goodwill reflects the acquisition of the remaining 20% interest in FCC; and the addition to Funeral Home Products primarily represents the effect of an adjustment to the purchase price for a small casket distributor.

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 12.   Goodwill and Other Intangible Assets (continued)

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2013 and September 30, 2012, respectively.

	Carrying		Accumulated			Impairment
	Amount		Amortization			Loss			Net
March 31, 2013:
Trade names	$	24,119	$	-	*	$	(1,520	)	$	22,599
Trade names		2,174		(1,775	)		-			399
Customer relationships		47,499		(16,893	)		-			30,606
Copyrights/patents/other		9,772		(8,548	)		-			1,224
	$	83,564	$	(27,216	)	$	(1,520	)	$	54,828
September 30, 2012:
Trade names	$	24,488	$	-	*	$	-		$	24,488
Trade names		2,182		(1,571	)		-			611
Customer relationships		47,654		(15,689	)		-			31,965
Copyrights/patents/other		9,920		(7,969	)		-			1,951
	$	84,244	$	(25,229	)	$	-		$	59,015
* Not subject to amortization

The net change in intangible assets during the six months ended March 31, 2013 included the impact of an impairment loss in the Graphic Imaging segment, foreign currency fluctuations during the period, and additional amortization.

Amortization expense on intangible assets was $943 and $1,004 for the three-month periods ended March 31, 2013 and 2012, respectively.  For the six-month periods ended March 31, 2013 and 2012, amortization expense was $1,886 and $2,009, respectively. Amortization expense is estimated to be $1,805 for the remainder of 2013, $3,316 in 2014, $3,058 in 2015, $2,768 in 2016 and $2,568 in 2017.

19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement:

The following discussion should be read in conjunction with the consolidated financial statements of Matthews International Corporation (“Matthews” or the “Company”) and related notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the year ended September 30, 2012.  Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  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.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, 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 the cost of materials used in the manufacture of the Company’s products, changes in death rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, changes in product demand or pricing as a result of domestic or international competitive pressures, unknown risks in connection with the Company's acquisitions, and technological factors beyond the Company's control.  In addition, although the Company does not have any customers that would be considered individually significant to consolidated sales, changes in the distribution of the Company’s products or the potential loss of one or more of the Company’s larger customers are also considered risk factors.

Results of Operations:

The following table sets forth sales and operating profit for the Company’s Memorialization and Brand Solutions businesses for the periods indicated.

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Sales:
Memorialization	$	136,006	$	126,440	$	260,689	$	239,595
Brand Solutions		120,384		99,105		221,310		203,163
	$	256,390	$	225,545	$	481,999	$	442,758
Operating Profit:
Memorialization	$	16,599	$	18,724	$	31,139	$	30,504
Brand Solutions		8,471		6,563		10,430		13,708
	$	25,070	$	25,287	$	41,569	$	44,212

Sales for the six months ended March 31, 2013 were $482.0 million, compared to $442.8 million for the six months ended March 31, 2012.  Higher sales were reported in each of the Company’s segments, reflecting volume growth in several of the Company’s segments and the impact of recent acquisitions.

In the Memorialization businesses, Cemetery Products segment sales for the first six months of fiscal 2013 were $108.5 million compared to $98.7 million for the first six months of fiscal 2012.  The increase resulted primarily from the acquisition of Everlasting Granite in May 2012. Sales for the Funeral Home Products segment were $128.8 million for the first six months of fiscal 2013 compared to $120.3 million for the same period in fiscal 2012.  The increase resulted principally from higher unit volume to funeral homes and an improvement in price realization. Sales for the Cremation segment were $23.4 million for the first half of fiscal 2013 compared to $20.5 million for the same period a year ago. The increase principally reflected higher equipment sales in all of the segment’s principal markets and the benefit of a small acquisition completed in fiscal 2012.

20

In the Brand Solutions businesses, sales for the Graphics Imaging segment in the first six months of fiscal 2013 were $141.0 million, compared to $135.3 million for the same period a year ago.  The increase resulted principally from the acquisition of Wetzel Holding AG and certain of its subsidiaries (collectively “Wetzel”) in late November 2012, partially offset by lower sales volume in the segment’s principal markets, particularly Europe, and the unfavorable impact of changes in foreign currency values against the U.S. dollar.  Marking and Fulfillment Systems segment sales for the six months ended March 31, 2013 were $40.3 million, compared to $34.1 million for the first six months of fiscal 2012.  The increase resulted principally from the acquisition of Pyramid Controls, Inc. (“Pyramid”) in December 2012 and higher sales in the U.S. market.  Sales for the Merchandising Solutions segment were $40.1 million for the first half of fiscal 2013, compared to $33.7 million for the same period a year ago.  The increase principally reflected higher sales volume.

Consolidated gross profit for the six months ended March 31, 2013 was $174.8 million, compared to $162.7 million for the six months ended March 31, 2012.  Consolidated gross profit as a percent of sales for the first half of fiscal 2013 decreased to 36.3% from 36.7% for the first half of fiscal 2012.  The increase in consolidated gross profit primarily reflected higher sales.  The decrease in consolidated gross profit as a percentage of sales primarily reflected lower margins in the Cemetery Products and Graphics Imaging segments.

Selling and administrative expenses for the six months ended March 31, 2013 were $133.3 million, compared to $118.5 million for the first half of fiscal 2012.  Consolidated selling and administrative expenses as a percent of sales were 27.6% for the six months ended March 31, 2013, compared to 26.8% for the same period last year.  The increase in selling and administrative expenses was primarily attributable to higher sales and the impact of unusual charges in fiscal 2013, compared to fiscal 2012.

Operating profit for the six months ended March 31, 2013 was $41.6 million, compared to $44.2 million for the six months ended March 31, 2012.  Unusual charges were a significant factor in the decrease in fiscal 2013 operating profit compared to fiscal 2012.  Unusual items totaled $5.7 million for the current period, primarily reflecting the cost of the Company’s strategic initiatives, acquisition-related activities and an impairment of a trade name.  Unusual charges last year primarily reflected ERP implementation and acquisition costs.  Cemetery Products segment operating profit for the six months ended March 31, 2013 was $12.2 million, compared to $14.7 million for the first half of fiscal 2012.  The decrease primarily reflected unusual charges of approximately $3.0 million associated with the Company’s strategic initiatives, including the segment’s ERP implementation.  In addition, fiscal 2012 included a favorable settlement on a claim related to the Company’s granite business.  Funeral Home Products segment operating profit was $17.4 million for the first six months of fiscal 2013, compared to $13.8 million for the same period in fiscal 2012.  The increase primarily reflected the impact of higher sales and the benefit of improved production and distribution efficiencies.  Cremation segment operating profit for the first half of fiscal 2013 was $1.5 million, compared to $2.0 million for the same period in the prior year.  The decrease principally reflected lower margins on several European-based projects, higher material costs in the U.K., compliance costs in connection with new regulations in Italy and charges in connection with strategic reduction initiatives.  Graphics Imaging segment operating profit for the six months ended March 31, 2013 was $5.8 million, compared to $8.7 million for the same period in fiscal 2012.  The decrease resulted mainly from lower sales (excluding the Wetzel acquisition) and the unfavorable impact of unusual items of approximately $1.2 million.   The segment’s unusual items included charges related to acquisition activities and strategic initiatives, and an impairment charge related to the carrying value of an intangible asset.  These charges were partially offset by a gain on the final settlement of the purchase of the remaining ownership interest in one of the Company’s subsidiaries.  Operating profit for the Marking and Fulfillment Systems segment for the first half of fiscal 2013 was $2.8 million, compared to $3.4 million for the same period a year ago.  The decrease primarily resulted from an unfavorable change in product mix and charges related to strategic initiatives.  Merchandising Solutions segment operating profit was $1.8 million for the first six months of fiscal 2013, compared to $1.6 million for the same period in fiscal 2012, primarily reflecting higher sales.

Investment income was $840,000 for the six months ended March 31, 2013, compared to $2.8 million for the six months ended March 31, 2012.  The decrease reflected lower rates of return on investments held in trust for certain of the Company’s benefit plans.  Interest expense was approximately $6.3 million for the first six months of fiscal 2013, compared to $5.3 million for the first six months of fiscal 2012. The increase primarily reflected higher debt levels compared to a year ago.  Other income (deductions), net for the six months ended March 31, 2013 represented a decrease in pre-tax income of $2.2 million, compared to $1.2 million for the same period last year.  Other income and deductions generally include banking-related fees and the impact of currency gains and losses on certain intercompany debt.

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The Company's effective tax rate for the six months ended March 31, 2013 was 35.0%, compared to 34.5% for the first half of fiscal 2012 and 34.2% for the fiscal 2012 full year.  The fiscal 2012 full year effective tax rate included the favorable impact of adjustments totaling $528,000 in income tax expense, primarily related to changes in the estimated tax accruals for open tax periods.  Excluding those adjustments, the Company’s effective tax rate for fiscal 2012 was 34.8%.  The increase in the effective tax rate for the first six months of fiscal 2013 primarily reflected the impact of a higher level of earnings generated in the U.S.  The difference between the Company's effective tax rate and the Federal statutory rate of 35.0% primarily reflected the impact of state taxes, offset by lower foreign income taxes.

Net earnings attributable to noncontrolling interests was a loss of $389,000 in the first half of fiscal 2013, compared to net income of $69,000 for the same period a year ago.  The decrease related principally to net losses recorded by the Company’s Italian cremation operation and Turkish graphics business in fiscal 2013.

Goodwill and Other Intangible Assets:

Goodwill related to business combinations is not amortized, but is subject to annual review for impairment.  In general, when the carrying value of a reporting unit exceeds its implied fair value, an impairment loss must be recognized.  For purposes of testing for impairment, the Company uses a discounted cash flow technique.  The Company performed its annual impairment review in the second quarter of fiscal 2013 and determined that no additional adjustments to the carrying values of goodwill were necessary at March 31, 2013.  As discussed under “Results of Operations”, recent economic conditions in Europe have unfavorably impacted the operating results of the Graphics Imaging segment.  Consequently, the Graphics Imaging reporting unit’s implied fair value is approaching the unit’s carrying value.  If the segment’s operating results deteriorate further, an impairment charge could be required in future periods.

The Company also performed its annual impairment review of other intangible assets in the second quarter of fiscal 2013.  Based on this assessment, the Company recorded an impairment charge of approximately $1.6 million related to the carrying value of a trade name of one of its European Graphics businesses.  The impairment was determined based upon a comparison of the carrying value of the trade name to its implied fair market value.

Liquidity and Capital Resources:

Net cash provided by operating activities was $33.4 million for the six months ended March 31, 2013, compared to $26.2 million for the first six months of fiscal 2012. Operating cash flow for both periods reflected net income adjusted for depreciation, amortization, stock-based compensation expense and pension expense, partially offset by decreases in deferred taxes.   The increase in operating cash flows primarily reflected cash management related to the payment of current liabilities.

Cash used in investing activities was $74.5 million for the six months ended March 31, 2013, compared to $17.9 million for the six months ended March 31, 2012.  Investing activities for the first half of fiscal 2013 primarily reflected capital expenditures of $10.9 million and payments (net of cash acquired) of $63.8 million for acquisitions (primarily Wetzel and Pyramid).  Investing activities for the first half of fiscal 2012 primarily reflected capital expenditures of $15.9 million, payments (net of cash acquired) of $1.4 million for acquisitions, net purchases of investments of $950,000 and proceeds from sale of assets of $357,000.

Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new manufacturing machinery, equipment and facilities designed to improve product quality, increase manufacturing efficiency, lower production costs and meet regulatory requirements.  Capital expenditures for the last three fiscal years were primarily financed through operating cash.  Capital spending for property, plant and equipment has averaged $25.7 million for the last three fiscal years.  Capital spending for fiscal 2013 is currently expected to be approximately $30.0 million.  The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

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Cash provided by financing activities for the six months ended March 31, 2013 was $37.4 million, primarily reflecting long-term debt proceeds, net of repayments, of $59.5 million, contingent consideration payments of $9.5 million in connection with acquisitions, treasury stock purchases of $7.3 million and dividends of $5.6 million to the Company's shareholders.  Cash used in financing activities for the first half of 2012 was $16.0 million, primarily reflecting treasury stock purchases of $11.3 million and dividends of $5.1 million to the Company’s shareholders.

The Company has a domestic Revolving Credit Facility with a syndicate of financial institutions.  The maximum amount of borrowings available under the facility is $400.0 million and borrowings under the facility bear interest at LIBOR plus a factor ranging from 1.00% to 1.50% based on the Company’s leverage ratio.  The facility’s maturity is March 2017.  The leverage ratio is defined as net indebtedness divided by EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from .20% to .30% (based on the Company’s leverage ratio) of the unused portion of the facility.  The Revolving Credit Facility requires the Company to maintain certain leverage and interest coverage ratios.  A portion of the facility (not to exceed $25.0 million) is available for the issuance of commercial and standby letters of credit.  Outstanding borrowings on the Revolving Credit Facility as of March 31, 2013 and September 30, 2012 were $325.0 million and $281.3 million, respectively.  The weighted-average interest rate on outstanding borrowings under this facility was 2.98% and 2.89% at March 31, 2013 and 2012, respectively.

The Company has entered into the following interest rate swaps:

Effective Date	Amount	Fixed Interest Rate	Interest Rate Spread at March 31, 2012	Maturity Date
May 2011	$25 million	1.37%	1.50%	May 2014
October 2011	25 million	1.67%	1.50%	October 2015
November 2011	25 million	2.13%	1.50%	November 2014
March 2012	25 million	2.44%	1.50%	March 2015
June 2012	40 million	1.88%	1.50%	June 2022
August 2012	35 million	1.74%	1.50%	June 2022
September 2012	25 million	3.03%	1.50%	December 2015
September 2012	25 million	1.24%	1.50%	March 2017
November 2012	25 million	1.33%	1.50%	November 2015

The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility which are considered probable of occurring.  Based on the Company’s assessment, all the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized loss of $6.3 million ($3.8 million after tax) at March 31, 2013 that is included in shareholders’ equity as part of accumulated other comprehensive loss (“AOCL”).  Assuming market rates remain constant with the rates at March 31, 2013, approximately $1.7 million of the $3.8 million loss included in AOCL is expected to be recognized in earnings as an adjustment to interest expense over the next twelve months.

In March 2013, the Company, through certain of its European subsidiaries, entered into a credit facility with a European bank.  The maximum amount of borrowings available under this facility was 25.0 million Euros ($32.0 million).  Outstanding borrowings under the credit facility totaled 25.0 million Euros ($32.0 million) at March 31, 2013.  The weighted-average interest rate on outstanding borrowings under this facility at March 31, 2013 was 1.37%.

The Company, through its German subsidiary, Saueressig GmbH & Co. KG (“Saueressig”), has several loans with various European banks.  Outstanding borrowings under these loans totaled 2.9 million Euros ($3.7 million) and 8.2 million Euros ($10.5 million) at March 31, 2013 and September 30, 2012, respectively. The weighted-average interest rate on outstanding borrowings of Saueressig at March 31, 2013 and 2012 was 3.89% and 6.10%, respectively.

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The Company, through its German subsidiary, Wetzel, has several loans with various European banks.  Outstanding borrowings under these loans totaled 8.3 million Euros ($10.7 million) at March 31, 2013.  The weighted-average interest rate on outstanding borrowings of Wetzel at March 31, 2013 was 7.17%.

The Company, through its wholly-owned subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled 5.3 million Euros ($6.8 million) and 6.3 million Euros ($8.1 million) at March 31, 2013 and September 30, 2012, respectively.  Matthews International S.p.A. also has four lines of credit totaling 11.4 million Euros ($14.6 million) with the same Italian banks.  Outstanding borrowings on these lines were 5.2 million Euros ($6.7 million) and 3.4 million Euros ($4.3 million) at March 31, 2013 and September 30, 2012, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at March 31, 2013 and 2012 was 3.16% and 3.15%, respectively.

The Company has a stock repurchase program.  Under the current authorization, the Company’s Board of Directors has authorized the repurchase of a total of 2,500,000 shares of Matthews’ common stock under the program, of which 1,577,519 shares remain available for repurchase as of March 31, 2013.  The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its common stock, and add to earnings per share.  Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions of the Company’s Restated Articles of Incorporation.

Consolidated working capital of the Company was $217.5 million at March 31, 2013, compared to $204.4 million at September 30, 2012.  Cash and cash equivalents were $51.5 million at March 31, 2013, compared to $58.3 million at September 30, 2012. The Company's current ratio was 2.2 and 2.1 at March 31, 2013 and September 30, 2012, respectively.

Environmental Matters:

The Company's operations are subject to various federal, state and local laws and regulations relating to the protection of the environment.  These laws and regulations impose limitations on the discharge of materials into the environment and require the Company to obtain and operate in compliance with conditions of permits and other government authorizations.  As such, the Company has developed environmental, health, and safety policies and procedures that include the proper handling, storage and disposal of hazardous materials.

The Company is party to various environmental matters.  These include obligations to investigate and mitigate the effects on the environment of the disposal of certain materials at various operating and non-operating sites.  The Company is currently performing environmental assessments and remediation at these sites, as appropriate.  In addition, prior to its acquisition, The York Group, Inc. (“York”), a wholly-owned subsidiary of the Company, was identified, along with others, by the Environmental Protection Agency as a potentially responsible party for remediation of a landfill site in York, Pennsylvania.  At this time, the Company has not been joined in any lawsuit or administrative order related to the site or its clean-up.

At March 31, 2013, an accrual of approximately $5.9 million had been recorded for environmental remediation (of which $1.3 million was classified in other current liabilities), representing management's best estimate of the probable and reasonably estimable costs of the Company's known remediation obligations.  The accrual, which reflects previously established reserves assumed with the acquisition of York and additional reserves recorded as a purchase accounting adjustment, does not consider the effects of inflation and anticipated expenditures are not discounted to their present value.  Changes in the accrued environmental remediation obligation from the prior fiscal year reflect payments charged against the accrual.

While final resolution of these contingencies could result in costs different than current accruals, management believes the ultimate outcome will not have a significant effect on the Company's consolidated results of operations or financial position.

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Acquisitions:

In March 2013, the Company completed the purchase of the remaining 38.5% interest in Kroma Pre-Press Preparation Systems Industry & Trade, Inc. (“Kroma”), completing the option arrangement in connection with the July 2011 acquisition of a 61.5% interest in Kroma.

In March 2013, the Company completed the purchase of the remaining 20% interest in Furnace Construction Cremators Limited (“FCC”).  The Company had acquired an 80% interest in FCC in March 2010.

In December 2012, the Company acquired Pyramid, a provider of warehouse control systems and conveyor control solutions for distribution centers.  The acquisition is designed to expand Matthews' fulfillment products and services in the warehouse management market.   The initial purchase price for the transaction was $24.5 million, plus potential additional consideration up to $3.7 million based on future operating results. 

In November 2012, the Company completed the acquisition of Wetzel, a leading European provider of pre-press services and gravure printing forms, with manufacturing operations in Germany and Poland.  Wetzel’s products and services are sold primary within Europe, and the acquisition is designed to expand Matthews' products and services in the global graphics imaging market.  The purchase price for Wetzel was 42.6 million Euros ($54.7 million) on a cash-free, debt-free basis.

Forward-Looking Information:

Matthews has a three-pronged strategy to attain annual growth in earnings per share. This strategy consists of the following:  internal growth (which includes organic growth, cost structure and productivity improvements, new product development and the expansion into new markets with existing products), acquisitions and share repurchases under the Company’s stock repurchase program (see "Liquidity and Capital Resources").

The Company’s results for the first six months of fiscal 2013 were impacted by several significant factors, including:

·   Funeral Home Products segment reported higher sales for the quarter due mainly to increased unit volume of caskets, and generated improved operating margins;

·   Merchandising Solutions business continued to grow;

·   recent acquisitions contributed to the Company’s growth for the second quarter;

·   market conditions in Europe continued to unfavorably impact several of our businesses, particularly the Graphics Imaging segment;

·   the Company accelerated initiatives to resolve the remaining ERP implementation issues in the Cemetery Products segment;

·   strategic initiatives are being implemented which are affecting all of the Company’s businesses (these initiatives are ongoing and will result in additional unusual charges); and

·   several non-operating items (such as investment income and interest expense) affected the comparability of the Company’s year-over-year earnings per share.

Based on the Company’s year-to-date operating results and current forecasts, excluding unusual costs, the Company is projecting growth in fiscal 2013 earnings per share over fiscal 2012.

Critical Accounting Policies:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Therefore, the determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, economic conditions, and in some cases, actuarial techniques.  Actual results may differ from those estimates.  A discussion of market risks affecting the Company can be found in "Quantitative and Qualitative Disclosures about Market Risk" in this Quarterly Report on Form 10-Q.

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A summary of the Company's significant accounting policies are included in the Notes to Consolidated Financial Statements and in the critical accounting policies in Management’s Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended September 30, 2012.  Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the company's operating results and financial condition.

LONG-TERM CONTRACTUAL OBLIGATIONS AND COMMITMENTS:

The following table summarizes the Company’s contractual obligations at March 31, 2013, and the effect such obligations are expected to have on its liquidity and cash flows in future periods.

	Payments due in fiscal year:
			2013						After
	Total		Remainder		2014 to 2015		2016 to 2017		2017
Contractual Cash Obligations:	(Dollar amounts in thousands)
Revolving credit facilities	$	357,045	$	-	$	32,045	$	325,000	$	-
Notes payable to banks		23,759		7,988		11,035		4,295		441
Short-term borrowings		6,714		6,714		-		-		-
Capital lease obligations		9,740		1,074		2,783		1,345		4,538
Non-cancelable operating leases		22,019		5,656		11,335		3,638		1,390
Total contractual cash obligations	$	419,277	$	21,432	$	57,198	$	334,278	$	6,369

A significant portion of the loans included in the table above bear interest at variable rates.  At March 31, 2013, the weighted-average interest rate was 2.98% on the Company’s domestic Revolving Credit Facility, 1.37% on the credit facility through the Company’s European subsidiaries 3.89% on bank loans to its wholly-owned subsidiary, Saueressig, and 3.16% on bank loans to the Company’s wholly-owned subsidiary, Matthews International S.p.A.

Benefit payments under the Company’s principal retirement plan are made from plan assets, while benefit payments under the supplemental retirement plan and postretirement benefit plan are funded from the Company’s operating cash.  The Company is not required to make any significant contributions to its principal retirement plan in fiscal 2013.  During the six months ended March 31, 2013, contributions of $362,000 and $441,000 were made under the supplemental retirement plan and postretirement plan, respectively.  The Company currently anticipates contributing an additional $358,000 and $665,000 under the supplemental retirement plan and postretirement plan, respectively, for the remainder of fiscal 2013.

Unrecognized tax benefits are positions taken, or expected to be taken, on an income tax return that may result in additional payments to tax authorities.  If a tax authority agrees with the tax position taken, or expected to be taken, or the applicable statute of limitations expires, then additional payments will not be necessary.  As of March 31, 2013, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $3.1 million.  The timing of potential future payments related to the unrecognized tax benefits is not presently determinable. The Company believes that its current liquidity sources, combined with its operating cash flow and borrowing capacity, will be sufficient to meet its capital needs for the foreseeable future.

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Item 3.   Quantitative and Qualitative Disclosures about Market Risk

The following discussion about the Company's market risk involves forward-looking statements.  Actual results could differ materially from those projected in the forward-looking statements.  The Company has market risk related to changes in interest rates, commodity prices and foreign currency exchange rates.  The Company does not generally use derivative financial instruments in connection with these market risks, except as noted below.

Interest Rates - The Company’s most significant long-term debt instrument is the domestic Revolving Credit Facility which bears interest at variable rates based on LIBOR.

The Company has entered into interest rate swaps as listed under “Liquidity and Capital Resources”.

The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility which are considered probable of occurring.  Based on the Company’s assessment, all the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized loss of $6.3 million ($3.8 million after tax) at March 31, 2013 that is included in equity as part of accumulated other comprehensive loss.  A decrease of 10% in market interest rates (e.g. a decrease from 5.0% to 4.5%) would result in an increase of approximately $703,000 in the fair value liability of the interest rate swaps.

Commodity Price Risks - In the normal course of business, the Company is exposed to commodity price fluctuations related to the purchases of certain materials and supplies (such as bronze ingot, steel, fuel and wood) used in its manufacturing operations. The Company obtains competitive prices for materials and supplies when available. In addition, based on competitive market conditions and to the extent that the Company has established pricing terms with customers through contracts or similar arrangements, the Company’s ability to immediately increase the price of its products to offset the increased costs may be limited.

Foreign Currency Exchange Rates - The Company is subject to changes in various foreign currency exchange rates, including the Euro, British Pound, Canadian Dollar, Australian Dollar, Swedish Krona, Chinese Yuan, Hong Kong Dollar, Polish Zloty, Turkish Lira, Brazilian Real and Vietnamese Dong in the conversion from local currencies to the U.S. dollar of the reported financial position and operating results of its non-U.S. based subsidiaries.  A strengthening of the U. S. dollar of 10% would have resulted in a decrease in reported sales of $15.5 million and a decrease in reported operating income of $1.5 million for the six months ended March 31, 2013.

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Actuarial Assumptions – The most significant actuarial assumptions affecting pension expense and pension obligations include the valuation of retirement plan assets, the discount rate and the estimated return on plan assets.  The estimated return on plan assets is currently based upon projections provided by the Company’s independent investment advisor, considering the investment policy of the plan and the plan’s asset allocation.  The fair value of plan assets and discount rate are “point-in-time” measures, and the recent volatility of the debt and equity markets makes estimating future changes in fair value of plan assets and discount rates more challenging.  The following table summarizes the impact on the September 30, 2012 actuarial valuations of changes in the primary assumptions affecting the Company’s principal retirement plan and supplemental retirement plan.

	Impact of Changes in Actuarial Assumptions
	Change in Discount Rate			Change in Expected Return			Change in Market Value of Assets
		+1%	-1%		+1%	-1%		+5%	-5%
	(Dollar amounts in thousands)
Increase (decrease) in net benefit cost		$  (2,747)	$   3,339		$ (1,056)	$ 1,056		$   (965)	$    965
Increase (decrease) in projected benefit obligation		(24,551)	30,652		-	-		-	-
Increase (decrease) in funded status		24,551	(30,652)		-	-		5,438	(5,438)

Item 4.  Controls and Procedures:

The Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to provide reasonable assurance that information required to be disclosed in our reports filed under that Act (the “Exchange Act”), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. These disclosure controls and procedures also are designed to provide reasonable assurance that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management, under the supervision and with the participation of our Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures in effect as of March 31, 2013. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2013, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that material information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, and that such information is recorded, summarized and properly reported within the appropriate time period, relating to the Company and its consolidated subsidiaries, required to be included in the Exchange Act reports, including this Quarterly Report on Form 10-Q.

There have been no changes in the Company’s internal controls over financial reporting that occurred during the fiscal quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1.                      Legal Proceedings

Matthews is subject to various legal proceedings and claims arising in the ordinary course of business.  Management does not expect that the results of any of these legal proceedings will have a material adverse effect on Matthews’ financial condition, results of operations or cash flows.

Item 2.                      Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Stock Repurchase Plan

The Company has a stock repurchase program.  The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its common stock, and add to earnings per share.  Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions of the Company’s Restated Articles of Incorporation.  Under the current authorization, the Company's Board of Directors had authorized the repurchase of a total of 2,500,000 shares of Matthews’ common stock under the program, of which 1,577,519 shares remain available for repurchase as of March 31, 2013.

The following table shows the monthly fiscal 2013 stock repurchase activity:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of a publicly announced plan		Maximum number of shares that may yet be purchased under the plan
October 2012		123,000		$29.12		123,000		1,691,651
November 2012		31,732		28.91		31,732		1,659,919
December 2012		1,000		30.72		1,000		1,658,919
January 2013		-		-		-		1,658,919
February 2013		41,200		32.67		41,200		1,617,719
March 2013		40,200		34.41		40,200		1,577,519
Total		237,132		$30.61		237,132

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Item 6.  Exhibits and Reports on Form 8-K

(a)	Exhibits
	Exhibit
	No.	Description
	31.1	Certification of Principal Executive Officer for Joseph C. Bartolacci
	31.2	Certification of Principal Financial Officer for Steven F. Nicola
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Joseph C. Bartolacci
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Steven F. Nicola
(b)	Reports on Form 8-K
	On January 17, 2013, Matthews filed a Current Report on Form 8-K under Item 2.02 in connection with a press release announcing its earnings for the first fiscal quarter of 2013. On February 26, 2013, Matthews filed a Current Report on Form 8-K under Item 5.07 reporting the results of the matters voted on at the Company’s Annual Meeting of Shareholders held on February 21, 2013.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MATTHEWS INTERNATIONAL CORPORATION
	(Registrant)
Date:  May 3, 2013	/s/ Joseph C. Bartolacci
	Joseph C. Bartolacci, President
	and Chief Executive Officer
Date:  May 3, 2013	/s/ Steven F. Nicola
	Steven F. Nicola, Chief Financial Officer,
	Secretary and Treasurer

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EX-31.1

                                                                   Exhibit 31.1

                               CERTIFICATION

                          PRINCIPAL EXECUTIVE OFFICER

I, Joseph C. Bartolacci, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Matthews International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 3, 2013

/s/Joseph C. Bartolacci

-------------------------

Joseph C. Bartolacci

President and

Chief Executive Officer

EX-31.2

                                                            Exhibit 31.2

                               CERTIFICATION

                          PRINCIPAL FINANCIAL OFFICER

I, Steven F. Nicola, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Matthews International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 3, 2013

/s/Steven F. Nicola

-------------------------

Steven F. Nicola

Chief Financial Officer,

Secretary and Treasurer

EX-32.1

                                                                  Exhibit 32.1

              Certification Pursuant to 18 U.S.C. Section 1350,

                            As Adopted Pursuant to

                Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Matthews International Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph C. Bartolacci, Chief Executive Officer, certify, to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Joseph C. Bartolacci

-------------------------------------

Joseph C. Bartolacci,

President and Chief Executive Officer

May 3, 2013

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Matthews International Corporation and will be retained by Matthews International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

                                                                   Exhibit 32.2

              Certification Pursuant to 18 U.S.C. Section 1350,

                            As Adopted Pursuant to

                Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Matthews International Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven F. Nicola, Chief Financial Officer, certify, to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Steven F. Nicola

-------------------------------------

Steven F. Nicola,

Chief Financial Officer

May  3, 2013

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Matthews International Corporation and will be retained by Matthews International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended															6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012	Mar. 31, 2013 Trade Names Not Subject to Amortization [Member]		Sep. 30, 2012 Trade Names Not Subject to Amortization [Member]		Mar. 31, 2013 Trade Names [Member]	Sep. 30, 2012 Trade Names [Member]	Mar. 31, 2013 Customer Relationships [Member]	Sep. 30, 2012 Customer Relationships [Member]	Mar. 31, 2013 Copyrights/Patents/Other [Member]	Sep. 30, 2012 Copyrights/Patents/Other [Member]	Mar. 31, 2013 Furnace Construction Cremators Limited [Member]	Mar. 31, 2010 Furnace Construction Cremators Limited [Member]	Mar. 31, 2013 Cemetery Products [Member]	Mar. 31, 2013 Funeral Home Products [Member]	Mar. 31, 2013 Cremation [Member]	Mar. 31, 2013 Graphics Imaging [Member]	Mar. 31, 2013 Marking and Fulfillment Systems [Member]	Mar. 31, 2013 Merchandising Solutions [Member]
Goodwill [Roll Forward]
Goodwill, gross			$ 485,433															$ 97,783	$ 162,876	$ 17,558	$ 167,262	$ 30,816	$ 9,138
Accumulated impairment losses			(9,252)															(412)	0	(5,000)	(3,840)	0	0
Goodwill			476,181															97,371	162,876	12,558	163,422	30,816	9,138
Additions during period			56,646															914	199	269	30,303	24,961	0
Translation and other adjustments			(1,958)															(97)	0	(242)	(1,675)	56	0
Goodwill, gross	540,121		540,121															98,600	163,075	17,585	195,890	55,833	9,138
Accumulated impairment losses	(9,252)		(9,252)															(412)	0	(5,000)	(3,840)	0	0
Goodwill	530,869		530,869															98,188	163,075	12,585	192,050	55,833	9,138
Business Acquisition [Line Items]
Remaining ownership interest acquired (in hundredths)																20.00%	80.00%
Other Intangible Assets [Abstract]
Carrying Amount	83,564		83,564		84,244	24,119		24,488		2,174	2,182	47,499	47,654	9,772	9,920
Accumulated Amortization	(27,216)		(27,216)		(25,229)	0	[1]	0	[1]	(1,775)	(1,571)	(16,893)	(15,689)	(8,548)	(7,969)
Impairment Loss	(1,520)		(1,520)		0	(1,520)		0		0	0	0	0	0	0
Net	54,828		54,828		59,015	22,599		24,488		399	611	30,606	31,965	1,224	1,951
Amortization expense on intangible assets	943	1,004	1,886	2,009
Future amortization expense [Abstract]
Future amortization expense 2013	1,805		1,805
Future amortization expense 2014	3,316		3,316
Future amortization expense 2015	3,058		3,058
Future amortization expense 2016	2,768		2,768
Future amortization expense 2017	$ 2,568		$ 2,568

[1] Not subject to amortization

XML

Share Based Payments (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Share-based compensation, aggregate disclosures [Abstract]
Total stock-based compensation cost	$ 1,378	$ 1,319	$ 2,757	$ 2,731
Future income tax benefit from compensation expense recognized	537	514	1,075	1,065
Cash received from stock options exercised	48	237	523	265
Tax benefit realized from options exercised	3	19	66	22
2007 Equity Incentive Plan [Member]
Share-based compensation, aggregate disclosures [Abstract]
Term of plan (in years)			10 years
Maximum number of shares available for grants or awards (in shares)	2,500,000		2,500,000
Shares reserved for future issuance under award plan (in shares)	2,500,000		2,500,000
Restricted Stock [Member]
Share-based compensation, aggregate disclosures [Abstract]
Vesting rights			With respect to outstanding restricted share grants, for grants made prior to fiscal 2013, generally one-half of the shares vest on the third anniversary of the grant, with the remaining one-half of the shares vesting in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.
Award expiration			Unvested restricted shares generally expire on the earlier of five years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death. The Company issues restricted shares from treasury shares.
Restricted stock activity [Roll Forward]
Non-vested at beginning of period (in shares)			551,389
Granted (in shares)			236,500
Vested (in shares)			(73,710)
Expired or forfeited (in shares)			(42,956)
Non-vested at end of period (in shares)	671,223		671,223
Non-vested weighted-average grant-date fair value, beginning of period (in dollars per share)			$ 32.56
Granted, weighted-average grant-date fair value (in dollars per share)			$ 25.22
Vested, weighted-average grant-date fair value (in dollars per share)			$ 37.31
Expired or forfeited, weighted-average grant-date fair value (in dollars per share)			$ 30.82
Non-vested weighted-average grant-date fair value, end of period (in dollars per share)	$ 29.57		$ 29.57
Non-vested options activity [Roll Forward]
Expired or forfeited (in shares)			(42,956)
Unrecognized compensation cost [Abstract]
Unrecognized compensation cost on non-vested awards	6,484		6,484
Weighted average period of recognition of unrecognized compensation cost on non-vested awards (in years)			1 year 9 months 18 days
Fair value assumptions [Abstract]
Expected volatility (in hundredths)			29.50%	30.40%
Dividend yield (in hundredths)			1.20%	1.00%
Average risk free interest rate (in hundredths)			0.60%	0.90%
Average expected term (in years)			2 years	2 years
Stock Options [Member]
Share-based compensation, aggregate disclosures [Abstract]
Exercisable rights			Outstanding stock options are generally exercisable in one-third increments upon the attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.
Vesting rights			options generally vest in one-third increments after three, four and five years, respectively, from the grant date (but, in any event, not until the attainment of the market value thresholds).
Award expiration			The options expire on the earlier of ten years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death. The Company generally settles employee stock option exercises with treasury shares.
Restricted stock activity [Roll Forward]
Expired or forfeited (in shares)			(19,634)
Stock option activity [Roll Forward]
Outstanding, beginning of period (in shares)			840,282
Granted (in shares)			0
Exercised (in shares)			(23,141)
Expired or forfeited (in shares)			(47,683)
Outstanding, end of period (in shares)	769,458		769,458
Exercisable (in shares)	433,220		433,220
Outstanding, weighted-average exercise price, beginning of period (in dollars per share)			$ 37.15
Granted, weighted-average exercise price (in dollars per share)			$ 0
Exercised, weighted-average exercise price (in dollars per share)			$ 22.59
Expired or forfeited, weighted-average exercise price (in dollars per share)			$ 37.09
Outstanding, weighted-average exercise price, end of period (in dollars per share)	$ 37.60		$ 37.60
Exercisable, weighted-average exercise price (in dollars per share)	$ 36.69		$ 36.69
Outstanding, weighted-average remaining contractual term (in years)			2 years 7 months 6 days
Outstanding, aggregate intrinsic value	0		0
Exercisable, weighted-average remaining contractual term (in years)			2 years 4 months 24 days
Exercisable, aggregate intrinsic value	0		0
Intrinsic value of options exercised			190	57
Non-vested options activity [Roll Forward]
Non-vested at beginning of period (in shares)			355,872
Granted (in shares)			0
Vested (in shares)			0
Expired or forfeited (in shares)			(19,634)
Non-vested at end of period (in shares)	336,238		336,238
Non-vested, weighted-average grant-date fair value, beginning of period (in dollars per share)			$ 11.35
Granted, weighted-average grant-date fair value (in dollars per share)			$ 0
Vested, weighted-average grant-date fair value (in dollars per share)			$ 0
Expired or forfeited, weighted-average grant-date fair value (in dollars per share)			$ 12.16
Non-vested, weighted-average grant-date fair value, end of period (in dollars per share)	$ 11.30		$ 11.30
Director Fee Plan [Member]
Share-based compensation, aggregate disclosures [Abstract]
Shares reserved for future issuance under award plan (in shares)	300,000		300,000
Director Fee Plan, aggregate disclosures [Abstract]
Annual retainer fee paid to non-employee directors			60
Annual retainer fee paid to non-employee Chairman of the Board			130
Shares deferred under the Director Fee Plan (in shares)	17,005		17,005
Value of annual stock based grant			$ 100
Total stock options granted to date (in shares)	22,300		22,300
Option awards outstanding and vested (in shares)	11,800		11,800
Total restricted stock awards granted to date (in shares)	103,150		103,150
Restricted stock awards unvested (in shares)	38,227		38,227

XML

Pension and Other Postretirement Benefit Plans (Tables)

6 Months Ended

Mar. 31, 2013

Pension and Other Postretirement Benefit Plans [Abstract]

Net periodic pension and other postretirement benefit cost

The Company provides defined benefit pension and other postretirement plans to certain employees. Net periodic pension and other postretirement benefit cost for the plans included the following:

	Three months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	1,685		$	1,424		$	199		$	182
Interest cost		1,913			1,950			282			321
Expected return on plan assets		(2,243	)		(1,953	)		-			-
Amortization:
Prior service cost		(52	)		(11	)		(68	)		(113	)
Net actuarial loss		1,806			1,680			110			134
Net benefit cost	$	3,109		$	3,090		$	523		$	524

	Six months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	3,370		$	2,848		$	398		$	364
Interest cost		3,826			3,900			564			642
Expected return on plan assets		(4,486	)		(3,906	)		-			-
Amortization:
Prior service cost		(104	)		(22	)		(136	)		(226	)
Net actuarial loss		3,612			3,360			220			268
Net benefit cost	$	6,218		$	6,180		$	1,046		$	1,048

Contributions made and anticipated for the current fiscal year

Contributions made and anticipated for fiscal year 2013 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the six months ended March 31, 2013:
Supplemental retirement plan		$362		$     -
Other postretirement plan		-		441
Additional contributions expected in fiscal 2013:
Supplemental retirement plan		358		-
Other postretirement plan		-		665

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 PrincipalBusiness Segment	Mar. 31, 2012
Segment Information [Abstract]
Number of principal businesses			2
Number of operating segments			3
Segment Reporting Information [Line Items]
Sales to external customers	$ 256,390	$ 225,545	$ 481,999	$ 442,758
Operating profit	25,070	25,287	41,569	44,212
Memorialization [Member]
Segment Reporting Information [Line Items]
Sales to external customers	136,006	126,440	260,689	239,595
Operating profit	16,599	18,724	31,139	30,504
Cemetery Products [Member]
Segment Reporting Information [Line Items]
Sales to external customers	55,690	53,575	108,514	98,725
Operating profit	5,851	10,165	12,223	14,700
Funeral Home Products [Member]
Segment Reporting Information [Line Items]
Sales to external customers	67,996	61,767	128,753	120,338
Operating profit	9,751	7,327	17,444	13,815
Cremation [Member]
Segment Reporting Information [Line Items]
Sales to external customers	12,320	11,098	23,422	20,532
Operating profit	997	1,232	1,472	1,989
Brand Solutions [Member]
Segment Reporting Information [Line Items]
Sales to external customers	120,384	99,105	221,310	203,163
Operating profit	8,471	6,563	10,430	13,708
Graphics Imaging [Member]
Segment Reporting Information [Line Items]
Sales to external customers	78,519	64,839	140,954	135,282
Operating profit	5,510	3,731	5,802	8,712
Marking and Fulfillment Systems [Member]
Segment Reporting Information [Line Items]
Sales to external customers	22,350	17,756	40,265	34,139
Operating profit	2,407	2,045	2,783	3,413
Merchandising Solutions [Member]
Segment Reporting Information [Line Items]
Sales to external customers	19,515	16,510	40,091	33,742
Operating profit	$ 554	$ 787	$ 1,845	$ 1,583

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Basis of Presentation

6 Months Ended

Mar. 31, 2013

Basis of Presentation [Abstract]

Basis of Presentation

Note 2.   Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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 not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the six months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2012.  The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control.  All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

XML

Nature of Operations (Details)	6 Months Ended
	Mar. 31, 2013 Segment
Nature of Operations [Abstract]
Number of business segments	6

XML

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Mar. 31, 2013

Goodwill and Other Intangible Assets [Abstract]

Goodwill attributable to each segment

A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:

	Cemetery			Funeral Home					Graphics			Marking and Fulfillment		Merchandising
	Products			Products		Cremation			Imaging			Products		Solutions		Consolidated
Goodwill	$	97,783		$	162,876	$	17,558		$	167,262		$	30,816	$	9,138	$	485,433
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at September 30, 2012		97,371			162,876		12,558			163,422			30,816		9,138		476,181
Additions during period		914			199		269			30,303			24,961		-		56,646
Translation and other  adjustments		(97	)		-		(242	)		(1,675	)		56		-		(1,958	)
Goodwill		98,600			163,075		17,585			195,890			55,833		9,138		540,121
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at March 31, 2013	$	98,188		$	163,075	$	12,585		$	192,050		$	55,833	$	9,138	$	530,869

Other intangible assets

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2013 and September 30, 2012, respectively.

	Carrying		Accumulated			Impairment
	Amount		Amortization			Loss			Net
March 31, 2013:
Trade names	$	24,119	$	-	*	$	(1,520	)	$	22,599
Trade names		2,174		(1,775	)		-			399
Customer relationships		47,499		(16,893	)		-			30,606
Copyrights/patents/other		9,772		(8,548	)		-			1,224
	$	83,564	$	(27,216	)	$	(1,520	)	$	54,828
September 30, 2012:
Trade names	$	24,488	$	-	*	$	-		$	24,488
Trade names		2,182		(1,571	)		-			611
Customer relationships		47,654		(15,689	)		-			31,965
Copyrights/patents/other		9,920		(7,969	)		-			1,951
	$	84,244	$	(25,229	)	$	-		$	59,015
* Not subject to amortization

XML

Fair Value Measurements (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Sep. 30, 2012
Assets [Abstract]
Trading securities	$ 16,715		$ 16,265
Total assets at fair value	16,715		16,265
Liabilities [Abstract]
Derivatives	6,289	[1]	9,133	[1]
Total liabilities at fair value	6,289		9,133
Level 1 [Member]
Assets [Abstract]
Trading securities	16,715		16,265
Total assets at fair value	16,715		16,265
Liabilities [Abstract]
Derivatives	0	[1]	0	[1]
Total liabilities at fair value	0		0
Level 2 [Member]
Assets [Abstract]
Trading securities	0		0
Total assets at fair value	0		0
Liabilities [Abstract]
Derivatives	6,289	[1]	9,133	[1]
Total liabilities at fair value	6,289		9,133
Level 3 [Member]
Assets [Abstract]
Trading securities	0		0
Total assets at fair value	0		0
Liabilities [Abstract]
Derivatives	0	[1]	0	[1]
Total liabilities at fair value	$ 0		$ 0

[1] Interest rate swaps are valued based on observable market swap rates.

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Inventory, net [Abstract]
Raw Materials	$ 43,550	$ 41,003
Work in process	27,408	22,772
Finished goods	66,482	66,915
Inventories	$ 137,440	$ 130,690

XML

Nature of Operations

6 Months Ended

Mar. 31, 2013

Nature of Operations [Abstract]

Nature of Operations

Note 1.   Nature of Operations

Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a designer, manufacturer and marketer principally of memorialization products and brand solutions.  Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment for the cemetery and funeral home industries.  Brand solutions include graphics imaging products and services, marking and fulfillment systems and merchandising solutions.  The Company's products and operations are comprised of six business segments:  Cemetery Products, Funeral Home Products, Cremation, Graphics Imaging, Marking and Fulfillment Systems and Merchandising Solutions.  The Cemetery Products segment is a leading manufacturer of cast bronze and granite memorials and other memorialization products, cast and etched architectural products and is a leading builder of mausoleums in the United States.  The Funeral Home Products segment is a leading casket manufacturer and distributor in North America and produces a wide variety of wood, metal and cremation caskets.  The Cremation segment is a leading designer and manufacturer of cremation equipment in North America and Europe. The Graphics Imaging segment manufactures and provides brand management, printing plates, gravure cylinders, pre-press services and imaging services for the primary packaging and corrugated industries.  The Marking and Fulfillment Systems segment designs, manufactures and distributes a wide range of marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.  The Merchandising Solutions segment designs and manufactures merchandising displays and systems and provides creative merchandising and marketing solutions services.

The Company has manufacturing and marketing facilities in the United States, Mexico, Canada, Europe, Australia and Asia.

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Debt (Details) In Thousands, unless otherwise specified	6 Months Ended								3 Months Ended		6 Months Ended								6 Months Ended
	Mar. 31, 2013 USD ($)	Mar. 31, 2012 USD ($)	Mar. 31, 2013 Cash Flow Hedging [Member] Interest Expense [Member] USD ($)		Mar. 31, 2012 Cash Flow Hedging [Member] Interest Expense [Member] USD ($)		Mar. 31, 2013 Interest Rate Swaps [Member] Cash Flow Hedging [Member] USD ($)	Mar. 31, 2012 Interest Rate Swaps [Member] Cash Flow Hedging [Member] USD ($)	Mar. 31, 2013 Interest Rate Swaps [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Mar. 31, 2012 Interest Rate Swaps [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Mar. 31, 2013 Interest Rate Swaps [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Mar. 31, 2012 Interest Rate Swaps [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Mar. 31, 2013 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] USD ($)	Sep. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] USD ($)	Mar. 31, 2013 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] Current Liabilities: Other Current Liabilities [Member] USD ($)	Sep. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] Current Liabilities: Other Current Liabilities [Member] USD ($)	Mar. 31, 2013 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] Long-Term Liabilities: Other Liabilities [Member] USD ($)	Sep. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swaps [Member] Long-Term Liabilities: Other Liabilities [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 1 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 2 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 3 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 4 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 5 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 6 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 7 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 8 [Member] USD ($)	Mar. 31, 2013 Interest Rate Swap 9 [Member] USD ($)	Mar. 31, 2013 Domestic Revolving Credit Facility [Member] USD ($)	Sep. 30, 2012 Domestic Revolving Credit Facility [Member] USD ($)	Mar. 31, 2013 Credit Facility With European Bank [Member] USD ($)	Mar. 31, 2013 Credit Facility With European Bank [Member] EUR (€)	Mar. 31, 2013 Lines of Credit with Italian Banks [Member] USD ($)	Mar. 31, 2013 Lines of Credit with Italian Banks [Member] EUR (€)	Sep. 30, 2012 Lines of Credit with Italian Banks [Member] USD ($)	Sep. 30, 2012 Lines of Credit with Italian Banks [Member] EUR (€)	Mar. 31, 2013 Matthews International S.p.A [Member]	Mar. 31, 2012 Matthews International S.p.A [Member]	Mar. 31, 2013 Matthews International S.p.A [Member] Lines of Credit with Italian Banks [Member] USD ($)	Mar. 31, 2013 Matthews International S.p.A [Member] Lines of Credit with Italian Banks [Member] EUR (€)	Sep. 30, 2012 Matthews International S.p.A [Member] Lines of Credit with Italian Banks [Member] USD ($)	Sep. 30, 2012 Matthews International S.p.A [Member] Lines of Credit with Italian Banks [Member] EUR (€)	Mar. 31, 2013 Saueressig [Member] Credit Facility With European Bank [Member] USD ($)	Mar. 31, 2013 Saueressig [Member] Credit Facility With European Bank [Member] EUR (€)	Sep. 30, 2012 Saueressig [Member] Credit Facility With European Bank [Member] USD ($)	Sep. 30, 2012 Saueressig [Member] Credit Facility With European Bank [Member] EUR (€)	Mar. 31, 2013 Wetzel GmbH [Member] Credit Facility With European Bank [Member] USD ($)	Mar. 31, 2013 Wetzel GmbH [Member] Credit Facility With European Bank [Member] EUR (€)
Line of Credit Facility [Line Items]
Maximum amount of borrowings available																												$ 400,000		$ 32,000	€ 25,000							$ 14,574	€ 11,400
Interest rate on borrowings, based on leverage ratio																												LIBOR plus a factor ranging from 1.00% to 1.50% based on the Company's leverage ratio
Maturity date																												Mar. 31, 2017
Annual commitment fee range on unused portion																												.20% to .30% (based on the Company's leverage ratio)
Maximum available for issuance of trade and standby letters of credit																												25,000
Outstanding borrowings																												325,000	281,323	32,000	25,000	6,714	5,200	4,322	3,400			6,767	5,300	8,080	6,300	3,719	2,900	10,514	8,200	10,701	8,300
Weighted-average interest rate on outstanding borrowings (in hundredths)																												2.98%	2.89%	1.37%	1.37%					3.16%	3.15%					3.89%	3.89%	6.10%	6.10%	7.17%	7.17%
Number of lines of credit																																						4	4
Derivative [Line Items]
Effective Date																			May 2011	October 2011	November 2011	March 2012	June 2012	August 2012	September 2012	September 2012	November 2012
Amount																			25,000	25,000	25,000	25,000	40,000	35,000	25,000	25,000	25,000
Fixed Interest Rate (in hundredths)																			1.37%	1.67%	2.13%	2.44%	1.88%	1.74%	3.03%	1.24%	1.33%
Interest Rate Spread (in hundredths)																			1.50%	1.50%	1.50%	1.50%	1.50%	1.50%	1.50%	1.50%	1.50%
Maturity Date																			May 2014	October 2015	November 2014	March 2015	June 2022	June 2022	December 2015	March 2017	November 2015
Interest rate cash flow hedges [Abstract]
Unrealized gain (loss) on fair value of interest rate swaps	6,289	6,825
Unrealized gain (loss) on fair value of interest rate swaps, after tax	3,837	4,163
Unrealized gain (loss) expected to be recognized over the next 12 months	1,664	3,837
Derivatives, Fair Value [Line Items]
Liability derivatives													6,289	9,133	2,727	2,851	3,562	6,282
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income (loss) on derivatives									(1,026)	(733)	(2,029)	(1,420)
Amount of gain or (loss) recognized in AOCL on derivatives							497	(661)
Amount of gain or (loss) reclassified from AOCL into income (effective portion)			$ (1,238)	[1]	$ (866)	[1]

[1] There is no ineffective portion or amount excluded from effectiveness testing.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Current assets:
Cash and cash equivalents	$ 51,528	$ 58,259
Accounts receivable, net	185,235	174,632
Inventories	137,440	130,690
Deferred income taxes	1,669	1,694
Other current assets	21,850	19,950
Total current assets	397,722	385,225
Investments	19,242	18,842
Property, plant and equipment: Cost	385,844	350,521
Less accumulated depreciation	(216,291)	(206,472)
Property, plant, and equipment, Net	169,553	144,049
Deferred income taxes	32,978	32,647
Other assets	12,511	12,083
Goodwill	530,869	476,181
Other intangible assets, net	54,828	59,015
Total assets	1,217,703	1,128,042
Current liabilities:
Long-term debt, current maturities	18,746	21,566
Accounts payable	46,197	44,294
Accrued compensation	31,503	30,222
Accrued income taxes	7,896	7,632
Customer prepayments	16,193	15,883
Contingent consideration	11,873	13,298
Other current liabilities	47,841	47,978
Total current liabilities	180,249	180,873
Long-term debt	377,069	298,148
Accrued pension	85,656	78,563
Postretirement benefits	28,364	27,725
Deferred income taxes	19,160	18,624
Other liabilities	29,891	33,194
Total liabilities	720,389	637,127
Arrangement with noncontrolling interest	0	10,481
Shareholders' equity-Matthews:
Common stock	36,334	36,334
Additional paid-in capital	44,391	47,893
Retained earnings	749,040	727,176
Accumulated other comprehensive loss	(67,135)	(65,083)
Treasury stock, at cost	(268,975)	(268,499)
Total shareholders' equity-Matthews	493,655	477,821
Noncontrolling interests	3,659	2,613
Total shareholders' equity	497,314	480,434
Total liabilities and shareholders' equity	$ 1,217,703	$ 1,128,042

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) (USD $)	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) [Abstract]
Purchase of treasury stock, shares (in shares)	237,132	354,040
Issuance of treasury stock, shares (in shares)	213,648	183,765
Dividends, per share (in dollars per share)	$ 0.2	$ 0.18

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Pension and Other Postretirement Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Pension [Member]
Net periodic benefit cost [Abstract]
Service cost	$ 1,685	$ 1,424	$ 3,370	$ 2,848
Interest cost	1,913	1,950	3,826	3,900
Expected return on plan assets	(2,243)	(1,953)	(4,486)	(3,906)
Amortization [Abstract]
Prior service cost	(52)	(11)	(104)	(22)
Net actuarial loss	1,806	1,680	3,612	3,360
Net benefit cost	3,109	3,090	6,218	6,180
Other Postretirement [Member]
Net periodic benefit cost [Abstract]
Service cost	199	182	398	364
Interest cost	282	321	564	642
Expected return on plan assets	0	0	0	0
Amortization [Abstract]
Prior service cost	(68)	(113)	(136)	(226)
Net actuarial loss	110	134	220	268
Net benefit cost	523	524	1,046	1,048
Benefit plan contributions [Abstract]
Other postretirement plan			441
Additional contributions expected in fiscal 2013	665		665
Supplemental Retirement Plan [Member]
Benefit plan contributions [Abstract]
Supplemental retirement plan			362
Additional contributions expected in fiscal 2013	$ 358		$ 358

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Debt (Tables)

6 Months Ended

Mar. 31, 2013

Debt [Abstract]

Interest rate swaps

The Company has entered into the following interest rate swaps:

Effective Date	Amount	Fixed Interest Rate	Interest Rate Spread at March 31, 2013	Maturity Date
May 2011	$25,000	1.37%	1.50%	May 2014
October 2011	25,000	1.67%	1.50%	October 2015
November 2011	25,000	2.13%	1.50%	November 2014
March 2012	25,000	2.44%	1.50%	March 2015
June 2012	40,000	1.88%	1.50%	June 2022
August 2012	35,000	1.74%	1.50%	June 2022
September 2012	25,000	3.03%	1.50%	December 2015
September 2012	25,000	1.24%	1.50%	March 2017
November 2012	25,000	1.33%	1.50%	November 2015

Derivatives designated as hedging instruments

At March 31, 2013 and September 30, 2012, the interest rate swap contracts were reflected as a liability on the balance sheets.  The following derivatives are designated as hedging instruments:

Liability Derivatives
Balance Sheet Location:	March 31, 2013		September 30, 2012
Current liabilities:
Other current liabilities	$	2,727	$	2,851
Long-term liabilities
Other liabilities		3,562		6,282
Total derivatives	$	6,289	$	9,133

Gain (loss) recognized on derivatives

The loss recognized on derivatives was as follows:

	Location of
Derivatives in	Loss	Amount of				Amount of
Cash Flow	Recognized in	Loss Recognized				Loss Recognized
Hedging	Income on	in Income				in Income
Relationships	Derivative	on Derivatives				on Derivatives
		Three Months ended March 31,				Six Months ended March 31,
		2013		2012		2013		2012
Interest rate swaps	Interest expense		$(1,026)		$(733)		$(2,029)		$(1,420)

The Company recognized the following losses in AOCL:

					Location of
					Gain or
					(Loss)	Amount of Loss
					Reclassified	Reclassified from
	Amount of				From	AOCL into
Derivatives in	Gain or (Loss) Recognized in				AOCL into	Income
Cash Flow	AOCL on Derivatives				Income	(Effective Portion*)
Hedging Relationships	March 31, 2013		March 31, 2012		(Effective Portion*)	March 31, 2013		March 31, 2012
Interest rate swaps		$497		$(661)	Interest expense		$(1,238)		$(866)
*There is no ineffective portion or amount excluded from effectiveness testing.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012
Income Taxes [Abstract]
Effective tax rate (in hundredths)	35.00%	34.50%
Federal statutory rate (in hundredths)	35.00%
Unrecognized tax benefits that would impact effective tax rate	$ 3,074		$ 2,708
Unrecognized tax benefits that could be recognized in the next 12 months	36
Interest and penalties on tax uncertainties	187
Total penalties and interest accrued	$ 2,058		$ 1,871
United States - Federal [Member]
Income Tax Contingency [Line Items]
Years under examination	2010 and forward
United States - State [Member]
Income Tax Contingency [Line Items]
Years under examination	2009 and forward
Canada [Member]
Income Tax Contingency [Line Items]
Years under examination	2008 and forward
Europe [Member]
Income Tax Contingency [Line Items]
Years under examination	2004 and forward
United Kingdom [Member]
Income Tax Contingency [Line Items]
Years under examination	2010 and forward
Australia [Member]
Income Tax Contingency [Line Items]
Years under examination	2009 and forward
Asia [Member]
Income Tax Contingency [Line Items]
Years under examination	2005 and forward

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Earnings Per Share Attributable to Matthews' Shareholders (Tables)

6 Months Ended

Mar. 31, 2013

Earnings Per Share Attributable to Matthews' Shareholders [Abstract]

Information used to compute earnings per share attributable to Matthews' common shareholders

The information used to compute earnings per share attributable to Matthews' common shareholders was as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Net income attributable to Matthews shareholders	$	14,192	$	15,258	$	22,447	$	26,543
Less: dividends and undistributed earnings allocated to participating securities		145		224		251		436
Net income available to Matthews shareholders	$	14,047	$	15,034	$	22,196	$	26,107
Weighted-average shares outstanding (in thousands):
Basic shares		27,369		27,926		27,312		27,933
Effect of dilutive securities		143		42		99		80
Diluted shares		27,512		27,968		27,411		28,013

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 22,058	$ 26,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,314	14,532
Stock-based compensation expense	2,757	2,731
Gain on sale of assets	(1,110)	(4,511)
Change in deferred taxes	(787)	(1,349)
Changes in working capital items	(10,554)	(17,305)
(Increase) decrease in other assets	(95)	1,528
Decrease in other liabilities	(2,785)	(2,318)
Increase in pension and postretirement benefits	6,642	6,266
Net cash provided by operating activities	33,440	26,186
Cash flows from investing activities:
Capital expenditures	(10,947)	(15,921)
Proceeds from sale of assets	221	357
Acquisitions, net of cash acquired	(63,769)	(1,388)
Purchases of investments	0	(950)
Net cash used in investing activities	(74,495)	(17,902)
Cash flows from financing activities:
Proceeds from long-term debt	113,569	7,984
Payments on long-term debt	(54,055)	(7,667)
Payments of contingent consideration	(9,542)	0
Proceeds from the sale of treasury stock	524	268
Purchases of treasury stock	(7,259)	(11,298)
Dividends	(5,563)	(5,093)
Distributions to noncontrolling interests	(273)	(170)
Net cash provided by (used in) financing activities	37,401	(15,976)
Effect of exchange rate changes on cash	(3,077)	701
Net change in cash and cash equivalents	(6,731)	(6,991)
Non-cash investing and financing activities:
Acquisition of equipment under capital lease	$ 0	$ 420

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) [Abstract]
Sales	$ 256,390	$ 225,545	$ 481,999	$ 442,758
Cost of sales	(161,524)	(140,838)	(307,159)	(280,056)
Gross profit	94,866	84,707	174,840	162,702
Selling and administrative expenses	(69,796)	(59,420)	(133,271)	(118,490)
Operating profit	25,070	25,287	41,569	44,212
Investment income	607	1,243	840	2,844
Interest expense	(3,051)	(2,727)	(6,298)	(5,284)
Other income (deductions), net	(1,067)	(638)	(2,172)	(1,153)
Income before income taxes	21,559	23,165	33,939	40,619
Income taxes	(7,504)	(7,973)	(11,881)	(14,007)
Net income	14,055	15,192	22,058	26,612
Net (income) loss attributable to noncontrolling interests	137	66	389	(69)
Net income attributable to Matthews shareholders	$ 14,192	$ 15,258	$ 22,447	$ 26,543
Earnings per share attributable to Matthews' shareholders:
Basic (in dollars per share)	$ 0.51	$ 0.54	$ 0.81	$ 0.93
Diluted (in dollars per share)	$ 0.51	$ 0.54	$ 0.81	$ 0.93

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Segment Information

6 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Segment Information

Note 10.   Segment Information

The Company's products and operations consist of two principal businesses that are comprised of three operating segments each, as described under Nature of Operations (Note 1):  Memorialization (Cemetery Products, Funeral Home Products, Cremation) and Brand Solutions (Graphics Imaging, Marking and Fulfillment Systems, Merchandising Solutions).  Management evaluates segment performance based on operating profit (before income taxes) and does not allocate non-operating items such as investment income, interest expense, other income (deductions), net and minority interests.

Information about the Company's segments follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Sales to external customers:
Memorialization:
Cemetery Products	$	55,690	$	53,575	$	108,514	$	98,725
Funeral Home Products		67,996		61,767		128,753		120,338
Cremation		12,320		11,098		23,422		20,532
		136,006		126,440		260,689		239,595
Brand Solutions:
Graphics Imaging		78,519		64,839		140,954		135,282
Marking and Fulfillment Systems		22,350		17,756		40,265		34,139
Merchandising Solutions		19,515		16,510		40,091		33,742
		120,384		99,105		221,310		203,163
	$	256,390	$	225,545	$	481,999	$	442,758

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Operating profit:
Memorialization:
Cemetery Products	$	5,851	$	10,165	$	12,223	$	14,700
Funeral Home Products		9,751		7,327		17,444		13,815
Cremation		997		1,232		1,472		1,989
		16,599		18,724		31,139		30,504
Brand Solutions:
Graphics Imaging		5,510		3,731		5,802		8,712
Marking and Fulfillment Systems		2,407		2,045		2,783		3,413
Merchandising Solutions		554		787		1,845		1,583
		8,471		6,563		10,430		13,708
	$	25,070	$	25,287	$	41,569	$	44,212

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Document and Entity Information	6 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	MATTHEWS INTERNATIONAL CORP
Entity Central Index Key	0000063296
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		27,609,284
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013

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Acquisitions

6 Months Ended

Mar. 31, 2013

Acquisitions [Abstract]

Acquisitions

Note 11.   Acquisitions

In March 2013, the Company completed the purchase of the remaining 38.5% interest in Kroma Pre-Press Preparation Systems Industry & Trade, Inc. ("Kroma"), completing the option arrangement in connection with the July 2011 acquisition of a 61.5% interest in Kroma.

In March 2013, the Company completed the purchase of the remaining 20% interest in Furnace Construction Cremators Limited ("FCC").  The Company had acquired an 80% interest in FCC in March 2010.

In December 2012, the Company acquired Pyramid Controls, Inc. and its affiliate, Pyramid Control Systems (collectively, "Pyramid").  Pyramid is a provider of warehouse control systems and conveyor control solutions for distribution centers.  The acquisition is designed to expand Matthews' fulfillment products and services in the warehouse management market.   The initial purchase price for the transaction was $24,532, plus potential additional consideration up to $3,700 based on future operating results. 

In November 2012, the Company completed the acquisition of Wetzel Holding AG, Wetzel GmbH and certain related affiliates (collectively "Wetzel").  Wetzel is a leading European provider of pre-press services and gravure printing forms, with manufacturing operations in Germany and Poland.  Wetzel's products and services are sold primary within Europe, and the acquisition is designed to expand Matthews' products and services in the global graphics imaging market.  The purchase price for Wetzel was 42.6 million Euros ($54,748) on a cash-free, debt-free basis.

The allocation of purchase price for the Wetzel and Pyramid acquisitions are preliminary.  The Company has allocated the additional purchase price to goodwill.  Adjustments are expected to other intangibles and property, plant and equipment once the valuations are finalized.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Net income (loss):	$ 14,055	$ 15,192	$ 22,058	$ 26,612
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(13,187)	8,465	(5,879)	3,134
Pension plans and other postretirement benefits	1,074	1,022	2,147	2,045
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	486	(341)	497	(661)
Net amount reclassified to earnings	626	447	1,238	866
Net change in unrecognized gain (loss) on derivatives	1,112	106	1,735	205
Other comprehensive income (loss), net of tax	(11,001)	9,593	(1,997)	5,384
Comprehensive income (loss)	3,054	24,785	20,061	31,996
Matthews [Member]
Net income (loss):	14,192	15,258	22,447	26,543
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(13,543)	8,566	(5,934)	3,202
Pension plans and other postretirement benefits	1,074	1,022	2,147	2,045
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	486	(341)	497	(661)
Net amount reclassified to earnings	626	447	1,238	866
Net change in unrecognized gain (loss) on derivatives	1,112	106	1,735	205
Other comprehensive income (loss), net of tax	(11,357)	9,694	(2,052)	5,452
Comprehensive income (loss)	2,835	24,952	20,395	31,995
Noncontrolling Interest [Member]
Net income (loss):	(137)	(66)	(389)	69
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	356	(101)	55	(68)
Pension plans and other postretirement benefits	0	0	0	0
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	0	0	0	0
Net amount reclassified to earnings	0	0	0	0
Net change in unrecognized gain (loss) on derivatives	0	0	0	0
Other comprehensive income (loss), net of tax	356	(101)	55	(68)
Comprehensive income (loss)	$ 219	$ (167)	$ (334)	$ 1

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Debt

6 Months Ended

Mar. 31, 2013

Debt [Abstract]

Debt

Note 5.   Debt

The Company has a domestic Revolving Credit Facility with a syndicate of financial institutions.  The maximum amount of borrowings available under the facility is $400,000 and borrowings under the facility bear interest at LIBOR plus a factor ranging from 1.00% to 1.50% based on the Company's leverage ratio.  The facility's maturity is March 2017.  The leverage ratio is defined as net indebtedness divided by EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from .20% to .30% (based on the Company's leverage ratio) of the unused portion of the facility.

The Revolving Credit Facility requires the Company to maintain certain leverage and interest coverage ratios.  A portion of the facility (not to exceed $25,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the Revolving Credit Facility at March 31, 2013 and September 30, 2012 were $325,000 and $281,323, respectively.  The weighted-average interest rate on outstanding borrowings on this facility at March 31, 2013 and 2012 was 2.98% and 2.89%, respectively.

The Company has entered into the following interest rate swaps:

Effective Date	Amount	Fixed Interest Rate	Interest Rate Spread at March 31, 2013	Maturity Date
May 2011	$25,000	1.37%	1.50%	May 2014
October 2011	25,000	1.67%	1.50%	October 2015
November 2011	25,000	2.13%	1.50%	November 2014
March 2012	25,000	2.44%	1.50%	March 2015
June 2012	40,000	1.88%	1.50%	June 2022
August 2012	35,000	1.74%	1.50%	June 2022
September 2012	25,000	3.03%	1.50%	December 2015
September 2012	25,000	1.24%	1.50%	March 2017
November 2012	25,000	1.33%	1.50%	November 2015

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility, which are considered probable of occurring.  Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized loss of $6,289 ($3,837 after tax) and $6,825 ($4,163 after tax) at March 31, 2013 and 2012, respectively, that is included in shareholders' equity as part of accumulated other comprehensive loss ("AOCL").  Assuming market rates remain constant with the rates at March 31, 2013, approximately $1,664 of the $3,837 loss included in AOCL is expected to be recognized in earnings as an adjustment to interest expense over the next twelve months.

At March 31, 2013 and September 30, 2012, the interest rate swap contracts were reflected as a liability on the balance sheets.  The following derivatives are designated as hedging instruments:

Liability Derivatives
Balance Sheet Location:	March 31, 2013		September 30, 2012
Current liabilities:
Other current liabilities	$	2,727	$	2,851
Long-term liabilities
Other liabilities		3,562		6,282
Total derivatives	$	6,289	$	9,133

The loss recognized on derivatives was as follows:

	Location of
Derivatives in	Loss	Amount of				Amount of
Cash Flow	Recognized in	Loss Recognized				Loss Recognized
Hedging	Income on	in Income				in Income
Relationships	Derivative	on Derivatives				on Derivatives
		Three Months ended March 31,				Six Months ended March 31,
		2013		2012		2013		2012
Interest rate swaps	Interest expense		$(1,026)		$(733)		$(2,029)		$(1,420)

The Company recognized the following losses in AOCL:

					Location of
					Gain or
					(Loss)	Amount of Loss
					Reclassified	Reclassified from
	Amount of				From	AOCL into
Derivatives in	Gain or (Loss) Recognized in				AOCL into	Income
Cash Flow	AOCL on Derivatives				Income	(Effective Portion*)
Hedging Relationships	March 31, 2013		March 31, 2012		(Effective Portion*)	March 31, 2013		March 31, 2012
Interest rate swaps		$497		$(661)	Interest expense		$(1,238)		$(866)
*There is no ineffective portion or amount excluded from effectiveness testing.

In March 2013, the Company, through certain of its European subsidiaries, entered into a credit facility with a European bank.  The maximum amount of borrowing available under this facility was 25.0 million Euros ($32,000).  Outstanding borrowings under the credit facility totaled 25.0 million Euros ($32,000) at March 31, 2013. The weighted-average interest rate on outstanding borrowings under this facility at March 31, 2013 was 1.37%.

The Company, through its German subsidiary, Saueressig GmbH & Co. KG ("Saueressig"), has several loans with various European banks.  Outstanding borrowings under these loans totaled 2.9 million Euros ($3,719) and 8.2 million Euros ($10,514) at March 31, 2013 and September 30, 2012, respectively. The weighted-average interest rate on outstanding borrowings of Saueressig at March 31, 2013 and 2012 was 3.89% and 6.10%, respectively.

The Company, through its German subsidiary, Wetzel GmbH ("Wetzel"), acquired in November 2012, has several loans with various European banks.  Outstanding borrowings under these loans totaled 8.3 million Euros ($10,701) at March 31, 2013.  The weighted-average interest rate on outstanding borrowings of Wetzel at March 31, 2013 was 7.17%.

The Company, through its wholly-owned subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled 5.3 million Euros ($6,767) and 6.3 million Euros ($8,080) at March 31, 2013 and September 30, 2012, respectively.  Matthews International S.p.A. also has four lines of credit totaling 11.4 million Euros ($14,574) with the same Italian banks.  Outstanding borrowings on these lines were 5.2 million Euros ($6,714) and 3.4 million Euros ($4,322) at March 31, 2013 and September 30, 2012, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at March 31, 2013 and 2012 was 3.16% and 3.15%, respectively.

As of March 31, 2013 and September 30, 2012 the fair value of the Company's long-term debt, including current maturities, approximated the carrying value included in the Condensed Consolidated Balance Sheet.

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Inventories

6 Months Ended

Mar. 31, 2013

Inventories [Abstract]

Inventories

Note 4.   Inventories

Inventories consisted of the following:

	March 31, 2013		September 30, 2012
Raw Materials	$	43,550	$	41,003
Work in process		27,408		22,772
Finished goods		66,482		66,915
	$	137,440	$	130,690

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Share Based Payments (Tables)

6 Months Ended

Mar. 31, 2013

Share-Based Payments [Abstract]

Restricted stock activity

The transactions for restricted stock for the six months ended March 31, 2013 were as follows:

				Weighted-
				average
				grant-date
	Shares			fair value
Non-vested at September 30, 2012		551,389		$	32.56
Granted		236,500			25.22
Vested		(73,710	)		37.31
Expired or forfeited		(42,956	)		30.82
Non-vested at March 31, 2013		671,223			29.57

Stock option activity

The transactions for shares under options for the six months ended March 31, 2013 were as follows:

						Weighted-
				Weighted-		average		Aggregate
				average		remaining		intrinsic
	Shares			exercise price		contractual term		value
Outstanding, September 30, 2012		840,282		$	37.15
Granted		-			-
Exercised		(23,141	)		22.59
Expired or forfeited		(47,683	)		37.09
Outstanding, March 31, 2013		769,458			37.60		2.6	$	-
Exercisable, March 31, 2013		433,220			36.69		2.4	$	-

Non-vested options activity

The transactions for non-vested options for the six months ended March 31, 2013 were as follows:

				Weighted-average
				grant-date
Non-vested shares	Shares			fair value
Non-vested at September 30, 2012		355,872		$	11.35
Granted		-			-
Vested		-			-
Expired or forfeited		(19,634	)		12.16
Non-vested at March 31, 2013		336,238			11.30

Assumptions used in estimating fair value

The fair value of each restricted stock grant is estimated on the date of grant using a binomial lattice valuation model.  The following table indicates the assumptions used in estimating fair value of restricted stock for the periods ended March 31, 2013 and 2012.

	Six Months Ended March 31,
	2013			2012
Expected volatility		29.5	%		30.4	%
Dividend yield		1.2	%		1.0	%
Average risk free interest rate		0.6	%		0.9	%
Average expected term (years)		2.0			2.0

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Goodwill and Other Intangible Assets

6 Months Ended

Mar. 31, 2013

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 12.   Goodwill and Other Intangible Assets

Goodwill related to business combinations is not amortized but is subject to annual review for impairment. In general, when the carrying value of a reporting unit exceeds its implied fair value, an impairment loss must be recognized. For purposes of testing for impairment, the Company uses a discounted cash flow technique.  Intangible assets are amortized over their estimated useful lives unless such lives are considered to be indefinite. A significant decline in cash flows generated from these assets may result in a write-down of the carrying values of the related assets.  The Company performed its annual impairment review in the second fiscal quarter.

A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:

	Cemetery			Funeral Home					Graphics			Marking and Fulfillment		Merchandising
	Products			Products		Cremation			Imaging			Products		Solutions		Consolidated
Goodwill	$	97,783		$	162,876	$	17,558		$	167,262		$	30,816	$	9,138	$	485,433
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at September 30, 2012		97,371			162,876		12,558			163,422			30,816		9,138		476,181
Additions during period		914			199		269			30,303			24,961		-		56,646
Translation and other  adjustments		(97	)		-		(242	)		(1,675	)		56		-		(1,958	)
Goodwill		98,600			163,075		17,585			195,890			55,833		9,138		540,121
Accumulated impairment losses		(412	)		-		(5,000	)		(3,840	)		-		-		(9,252	)
Balance at March 31, 2013	$	98,188		$	163,075	$	12,585		$	192,050		$	55,833	$	9,138	$	530,869

The addition to Graphics Imaging goodwill reflects the acquisition of Wetzel; the addition to Marking and Fulfillment Systems goodwill reflects the acquisition of Pyramid; the addition to Cemetery Products goodwill reflects the acquisition of a small bronze manufacturer in Europe; the addition to Cremation goodwill reflects the acquisition of the remaining 20% interest in FCC; and the addition to Funeral Home Products primarily represents the effect of an adjustment to the purchase price for a small casket distributor.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2013 and September 30, 2012, respectively.

	Carrying		Accumulated			Impairment
	Amount		Amortization			Loss			Net
March 31, 2013:
Trade names	$	24,119	$	-	*	$	(1,520	)	$	22,599
Trade names		2,174		(1,775	)		-			399
Customer relationships		47,499		(16,893	)		-			30,606
Copyrights/patents/other		9,772		(8,548	)		-			1,224
	$	83,564	$	(27,216	)	$	(1,520	)	$	54,828
September 30, 2012:
Trade names	$	24,488	$	-	*	$	-		$	24,488
Trade names		2,182		(1,571	)		-			611
Customer relationships		47,654		(15,689	)		-			31,965
Copyrights/patents/other		9,920		(7,969	)		-			1,951
	$	84,244	$	(25,229	)	$	-		$	59,015
* Not subject to amortization

The net change in intangible assets during the six months ended March 31, 2013 included the impact of an impairment loss in the Graphic Imaging segment, foreign currency fluctuations during the period, and additional amortization.

Amortization expense on intangible assets was $943 and $1,004 for the three-month periods ended March 31, 2013 and 2012, respectively.  For the six-month periods ended March 31, 2013 and 2012, amortization expense was $1,886 and $2,009, respectively. Amortization expense is estimated to be $1,805 for the remainder of 2013, $3,316 in 2014, $3,058 in 2015, $2,768 in 2016 and $2,568 in 2017.

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Pension and Other Postretirement Benefit Plans

6 Months Ended

Mar. 31, 2013

Pension and Other Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefit Plans

Note 8.   Pension and Other Postretirement Benefit Plans

The Company provides defined benefit pension and other postretirement plans to certain employees. Net periodic pension and other postretirement benefit cost for the plans included the following:

	Three months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	1,685		$	1,424		$	199		$	182
Interest cost		1,913			1,950			282			321
Expected return on plan assets		(2,243	)		(1,953	)		-			-
Amortization:
Prior service cost		(52	)		(11	)		(68	)		(113	)
Net actuarial loss		1,806			1,680			110			134
Net benefit cost	$	3,109		$	3,090		$	523		$	524

	Six months ended March 31,
	Pension						Other Postretirement
	2013			2012			2013			2012
Service cost	$	3,370		$	2,848		$	398		$	364
Interest cost		3,826			3,900			564			642
Expected return on plan assets		(4,486	)		(3,906	)		-			-
Amortization:
Prior service cost		(104	)		(22	)		(136	)		(226	)
Net actuarial loss		3,612			3,360			220			268
Net benefit cost	$	6,218		$	6,180		$	1,046		$	1,048

Benefit payments under the Company's principal retirement plan are made from plan assets, while benefit payments under the postretirement benefit plan are made from the Company's operating funds.  Under IRS regulations, the Company is not required to make any significant contributions to its principal retirement plan in fiscal year 2013.

Contributions made and anticipated for fiscal year 2013 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the six months ended March 31, 2013:
Supplemental retirement plan		$362		$     -
Other postretirement plan		-		441
Additional contributions expected in fiscal 2013:
Supplemental retirement plan		358		-
Other postretirement plan		-		665

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Share Based Payments

6 Months Ended

Mar. 31, 2013

Share-Based Payments [Abstract]

Share-Based Payments

Note 6.   Share-Based Payments

The Company maintains an equity incentive plan (the "2007 Equity Incentive Plan") that provides for the grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  The Company also maintains a stock incentive plan (the "1992 Incentive Stock Plan") that previously provided for grants of stock options, restricted shares and certain other types of stock-based awards.  In February 2013, the Company's shareholders approved the adoption of a new plan, the 2012 Equity Incentive Plan ("the 2012 Plan"), that provides for the grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  Under the 2012 Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of 2,500,000.  There will be no further grants under the 2007 Equity Incentive Plan or the 1992 Incentive Stock Plan.  At March 31, 2013, there were 2,500,000 shares reserved for future issuance under the 2012 Equity Incentive Plan. All plans are administered by the Compensation Committee of the Board of Directors.

The option price for each stock option granted under either plan may not be less than the fair market value of the Company's common stock on the date of grant.  Outstanding stock options are generally exercisable in one-third increments upon the attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.  In addition, options generally vest in one-third increments after three, four and five years, respectively, from the grant date (but, in any event, not until the attainment of the market value thresholds).  The options expire on the earlier of ten years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company generally settles employee stock option exercises with treasury shares.  With respect to outstanding restricted share grants, for grants made prior to fiscal 2013, generally one-half of the shares vest on the third anniversary of the grant, with the remaining one-half of the shares vesting in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.  For grants made in fiscal 2013, generally one-half of the shares vest on the third anniversary of the grant, one-quarter of the shares vest in one-third increments upon the attainment of pre-defined levels of adjusted earnings per share, and the remaining one-quarter of the shares vest in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.  Additionally, restricted shares cannot vest until the first anniversary of the grant date.  Unvested restricted shares generally expire on the earlier of five years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company issues restricted shares from treasury shares.

For the three-month periods ended March 31, 2013 and 2012, total stock-based compensation cost totaled $1,378 and $1,319, respectively.  For the six-month periods ended March 31, 2013 and 2012, total stock-based compensation cost totaled $2,757 and $2,731, respectively.  The associated future income tax benefit recognized was $537 and $514 for the three-month periods ended March 31, 2013 and 2012, respectively, and $1,075 and $1,065 for the six-month periods ended March 31, 2013 and 2012, respectively.

For the three-month periods ended March 31, 2013 and 2012, the amount of cash received from the exercise of stock options was $48 and $237, respectively. For the six-month periods ended March 31, 2013 and 2012, the amount of cash received from the exercise of stock options was $523 and $265, respectively. In connection with these exercises, the tax benefits realized by the Company were $3 and $19 for the three-month periods ended March 31, 2013 and 2012, respectively, and $66 and $22 for the six-month periods ended March 31, 2013 and 2012, respectively.

The transactions for restricted stock for the six months ended March 31, 2013 were as follows:

				Weighted-
				average
				grant-date
	Shares			fair value
Non-vested at September 30, 2012		551,389		$	32.56
Granted		236,500			25.22
Vested		(73,710	)		37.31
Expired or forfeited		(42,956	)		30.82
Non-vested at March 31, 2013		671,223			29.57

As of March 31, 2013, the total unrecognized compensation cost related to unvested restricted stock was $6,484 and is expected to be recognized over a weighted average period of 1.8 years.

The transactions for shares under options for the six months ended March 31, 2013 were as follows:

						Weighted-
				Weighted-		average		Aggregate
				average		remaining		intrinsic
	Shares			exercise price		contractual term		value
Outstanding, September 30, 2012		840,282		$	37.15
Granted		-			-
Exercised		(23,141	)		22.59
Expired or forfeited		(47,683	)		37.09
Outstanding, March 31, 2013		769,458			37.60		2.6	$	-
Exercisable, March 31, 2013		433,220			36.69		2.4	$	-

No shares were earned during the three-month and six-month periods ended March 31, 2013 and 2012, respectively.  The intrinsic value of options (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) exercised during the six-month periods ended March 31, 2013 and 2012 was $190 and $57, respectively.

The transactions for non-vested options for the six months ended March 31, 2013 were as follows:

				Weighted-average
				grant-date
Non-vested shares	Shares			fair value
Non-vested at September 30, 2012		355,872		$	11.35
Granted		-			-
Vested		-			-
Expired or forfeited		(19,634	)		12.16
Non-vested at March 31, 2013		336,238			11.30

The fair value of each restricted stock grant is estimated on the date of grant using a binomial lattice valuation model.  The following table indicates the assumptions used in estimating fair value of restricted stock for the periods ended March 31, 2013 and 2012.

	Six Months Ended March 31,
	2013			2012
Expected volatility		29.5	%		30.4	%
Dividend yield		1.2	%		1.0	%
Average risk free interest rate		0.6	%		0.9	%
Average expected term (years)		2.0			2.0

The risk free interest rate is based on United States Treasury yields at the date of grant. The dividend yield is based on the most recent dividend payment and average stock price over the 12 months prior to the grant date.  Expected volatilities are based on the historical volatility of the Company's stock price.  The expected term represents an estimate of the average period of time for restricted shares to vest.  The option characteristics for each grant are considered separately for valuation purposes.

Under the Company's Director Fee Plan, directors (except for the Chairman of the Board) who are not also officers of the Company each receive, as an annual retainer fee, either cash or shares of the Company's Class A Common Stock equivalent to $60.  The equivalent amount paid to a non-employee Chairman of the Board is $130. Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board.  The value of deferred shares is recorded in other liabilities.  A total of 17,005 shares had been deferred under the Director Fee Plan at March 31, 2013.  Additionally, directors who are not also officers of the Company each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares) with a value of $100.  A total of 22,300 stock options have been granted under the plan.  At March 31, 2013, 11,800 options were outstanding and vested. Additionally, 103,150 shares of restricted stock have been granted under the plan, 38,227 of which were unvested at March 31, 2013.  A total of 300,000 shares have been authorized to be issued under the Director Fee Plan.

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Earnings Per Share Attributable to Matthews' Shareholders

6 Months Ended

Mar. 31, 2013

Earnings Per Share Attributable to Matthews' Shareholders [Abstract]

Earnings Per Share Attributable to Matthews' Shareholders

Note 7.   Earnings Per Share Attributable to Matthews' Shareholders

The information used to compute earnings per share attributable to Matthews' common shareholders was as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Net income attributable to Matthews shareholders	$	14,192	$	15,258	$	22,447	$	26,543
Less: dividends and undistributed earnings allocated to participating securities		145		224		251		436
Net income available to Matthews shareholders	$	14,047	$	15,034	$	22,196	$	26,107
Weighted-average shares outstanding (in thousands):
Basic shares		27,369		27,926		27,312		27,933
Effect of dilutive securities		143		42		99		80
Diluted shares		27,512		27,968		27,411		28,013

Options to purchase 730,642 and 749,667 shares of common stock were not included in the computation of diluted earnings per share for the three months and six months ended March 31, 2013, respectively, because the inclusion of these options would be anti-dilutive.  Options to purchase 786,292 and 786,667 shares of common stock were not included in the computation of diluted earnings per share for the three months and six months ended March 31, 2012, respectively, because the inclusion of these options would be anti-dilutive.

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Income Taxes

6 Months Ended

Mar. 31, 2013

Income Taxes [Abstract]

Income Taxes

Note 9.   Income Taxes

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's effective tax rate for the six months ended March 31, 2013 was 35.0%, compared to 34.5% for the first half of fiscal 2012. The difference between the Company's effective tax rate and the Federal statutory rate of 35.0% primarily reflected the impact of state taxes, offset by lower foreign income taxes.

The Company had unrecognized tax benefits (excluding penalties and interest) of $3,074 and $2,708 on March 31, 2013 and September 30, 2012, respectively, all of which, if recorded, would impact the 2013 annual effective tax rate.  It is reasonably possible that $36 of the unrecognized tax benefits could be recognized in the next 12 months primarily due to tax examinations and the expiration of statutes related to specific tax positions.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. The Company included $187 in interest and penalties in the provision for income taxes for the first six months of fiscal 2013. Total penalties and interest accrued were $2,058 and $1,871 at March 31, 2013 and September 30, 2012, respectively.  These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions.  As of March 31, 2013, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2010 and forward
United States – State	2009 and forward
Canada	2008 and forward
Europe	2004 and forward
United Kingdom	2010 and forward
Australia	2009 and forward
Asia	2005 and forward

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Earnings Per Share Attributable to Matthews' Shareholders (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share Attributable to Matthews' Shareholders [Abstract]
Net income attributable to Matthews shareholders	$ 14,192	$ 15,258	$ 22,447	$ 26,543
Less: dividends and undistributed earnings allocated to participating securities	145	224	251	436
Net income available to Matthews shareholders	$ 14,047	$ 15,034	$ 22,196	$ 26,107
Weighted-average shares outstanding [Abstract]
Basic shares (in shares)	27,369,000	27,926,000	27,312,000	27,933,000
Effect of dilutive securities (in shares)	143,000	42,000	99,000	80,000
Diluted shares (in shares)	27,512,000	27,968,000	27,411,000	28,013,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share (in shares)	730,642	786,292	749,667	786,667

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Inventories (Tables)

6 Months Ended

Mar. 31, 2013

Inventories [Abstract]

Inventory

Inventories consisted of the following:

	March 31, 2013		September 30, 2012
Raw Materials	$	43,550	$	41,003
Work in process		27,408		22,772
Finished goods		66,482		66,915
	$	137,440	$	130,690

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Income Taxes (Tables)

6 Months Ended

Mar. 31, 2013

Income Taxes [Abstract]

Tax years subject to examination

The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions.  As of March 31, 2013, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2010 and forward
United States – State	2009 and forward
Canada	2008 and forward
Europe	2004 and forward
United Kingdom	2010 and forward
Australia	2009 and forward
Asia	2005 and forward

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Non-controlling Interest [Member]	Total
Balance at Sep. 30, 2011	$ 36,334	$ 48,554	$ 681,658	$ (58,658)	$ (243,246)	$ 3,451	$ 468,093
Net income	0	0	26,543	0	0	69	26,612
Minimum pension liability	0	0	0	2,045	0	0	2,045
Translation adjustment	0	0	0	3,202	0	(68)	3,134
Fair value of derivatives	0	0	0	205	0	0	205
Comprehensive income (loss)							31,996
Stock-based compensation	0	2,731	0	0	0	0	2,731
Purchase of treasury stock	0	0	0	0	(11,298)	0	(11,298)
Issuance of treasury stock	0	(5,421)	0	0	5,674	0	253
Dividends	0	0	(5,093)	0	0	0	(5,093)
Distribution to noncontrolling interests	0	0	0	0	0	(170)	(170)
Balance at Mar. 31, 2012	36,334	45,864	703,108	(53,206)	(248,870)	3,282	486,512
Balance at Sep. 30, 2012	36,334	47,893	727,176	(65,083)	(268,499)	2,613	480,434
Net income	0	0	22,447	0	0	(389)	22,058
Minimum pension liability	0	0	0	2,147	0	0	2,147
Translation adjustment	0	0	0	(5,934)	0	55	(5,879)
Fair value of derivatives	0	0	0	1,735	0	0	1,735
Comprehensive income (loss)							20,061
Stock-based compensation	0	2,757	0	0	0	0	2,757
Purchase of treasury stock	0	0	0	0	(7,259)	0	(7,259)
Issuance of treasury stock	0	(6,259)	0	0	6,783	0	524
Dividends	0	0	(5,563)	0	0	0	(5,563)
Arrangement with noncontrolling interests			4,980	0	0	1,653	6,633
Distribution to noncontrolling interests	0	0	0	0	0	(273)	(273)
Balance at Mar. 31, 2013	$ 36,334	$ 44,391	$ 749,040	$ (67,135)	$ (268,975)	$ 3,659	$ 497,314

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Fair Value Measurements

6 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 3.   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:

	March 31, 2013								September 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Trading   securities	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Total assets at   fair value	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Liabilities:
Derivatives (1)		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
Total liabilities   at fair value		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
(1)Interest rate swaps are valued based on observable market swap rates.

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Segment Information (Tables)

6 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Information about the segments

Information about the Company's segments follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Sales to external customers:
Memorialization:
Cemetery Products	$	55,690	$	53,575	$	108,514	$	98,725
Funeral Home Products		67,996		61,767		128,753		120,338
Cremation		12,320		11,098		23,422		20,532
		136,006		126,440		260,689		239,595
Brand Solutions:
Graphics Imaging		78,519		64,839		140,954		135,282
Marking and Fulfillment Systems		22,350		17,756		40,265		34,139
Merchandising Solutions		19,515		16,510		40,091		33,742
		120,384		99,105		221,310		203,163
	$	256,390	$	225,545	$	481,999	$	442,758

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2013		2012		2013		2012
Operating profit:
Memorialization:
Cemetery Products	$	5,851	$	10,165	$	12,223	$	14,700
Funeral Home Products		9,751		7,327		17,444		13,815
Cremation		997		1,232		1,472		1,989
		16,599		18,724		31,139		30,504
Brand Solutions:
Graphics Imaging		5,510		3,731		5,802		8,712
Marking and Fulfillment Systems		2,407		2,045		2,783		3,413
Merchandising Solutions		554		787		1,845		1,583
		8,471		6,563		10,430		13,708
	$	25,070	$	25,287	$	41,569	$	44,212

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Acquisitions (Details) In Thousands, unless otherwise specified	Mar. 31, 2013 Kroma Pre-Press Preparation Systems Industry & Trade, Inc. ("Kroma") [Member]	Jul. 31, 2011 Kroma Pre-Press Preparation Systems Industry & Trade, Inc. ("Kroma") [Member]	Mar. 31, 2013 Furnace Construction Cremators Limited ("FCC") [Member]	Mar. 31, 2010 Furnace Construction Cremators Limited ("FCC") [Member]	Dec. 31, 2012 Pyramid Control Systems [Member] USD ($)	Nov. 30, 2012 Wetzel Holding AG [Member] USD ($)	Nov. 30, 2012 Wetzel Holding AG [Member] EUR (€)
Business Acquisition [Line Items]
Interest acquired (in hundredths)	38.50%	61.50%	20.00%	80.00%
Purchase price of acquisition					$ 24,532	$ 54,748	€ 42,600
Additional purchase price of acquisition					$ 3,700

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Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair value of assets and liabilities measured on a recurring basis

The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:

	March 31, 2013								September 30, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Trading   securities	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Total assets at   fair value	$	16,715		-		-	$	16,715	$	16,265		-		-	$	16,265
Liabilities:
Derivatives (1)		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
Total liabilities   at fair value		-	$	6,289		-	$	6,289		-	$	9,133		-	$	9,133
(1)Interest rate swaps are valued based on observable market swap rates.