10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

____________________________________________________________

FORM 10‑Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2018

or   

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from _____ to _____

Commission File No. 0‑09115

____________________________________________________________

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)
(412) 442-8200
(Registrant's telephone number, including area code)

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes ☐ No ☒

As of June 30, 2018, shares of common stock outstanding were: Class A Common Stock 32,097,422 shares

PART I ‑ FINANCIAL INFORMATION

Item 1.   Financial Statements

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollar amounts in thousands)

	June 30, 2018					September 30, 2017
ASSETS
Current assets:
Cash and cash equivalents				$	53,715				$	57,515
Accounts receivable, net				327,684					319,566
Inventories, net				184,814					171,445
Other current assets				63,728					46,533
Total current assets				629,941					595,059
Investments				50,236					37,667
Property, plant and equipment: Cost	$	606,257				$	570,879
Less accumulated depreciation	(351,317		)			(335,346		)
				254,940					235,533
Deferred income taxes				3,504					2,456
Other assets				68,208					51,758
Goodwill				953,264					897,794
Other intangible assets, net				452,848					424,382
Total assets				$	2,412,941				$	2,244,649
LIABILITIES
Current liabilities:
Long-term debt, current maturities				$	27,567				$	29,528
Trade accounts payable				66,457					66,607
Accrued compensation				53,017					62,210
Accrued income taxes				22,871					21,386
Other current liabilities				136,710					105,401
Total current liabilities				306,622					285,132
Long-term debt				998,852					881,602
Accrued pension				97,028					103,273
Postretirement benefits				19,037					19,273
Deferred income taxes				99,340					139,430
Other liabilities				58,882					25,680
Total liabilities				1,579,761					1,454,390
SHAREHOLDERS' EQUITY
Shareholders' equity-Matthews:
Common stock	$	36,334				$	36,334
Additional paid-in capital	126,273					123,432
Retained earnings	1,016,892					948,830
Accumulated other comprehensive loss	(174,575		)			(154,115		)
Treasury stock, at cost	(172,175		)			(164,774		)
Total shareholders' equity-Matthews				832,749					789,707
Noncontrolling interests				431					552
Total shareholders' equity				833,180					790,259
Total liabilities and shareholders' equity				$	2,412,941				$	2,244,649

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

2

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share data)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2018			2017			2018			2017
Sales	$	411,621		$	389,630		$	1,195,136		$	1,119,544
Cost of sales	(259,720		)	(245,536		)	(762,570		)	(709,761		)
Gross profit	151,901			144,094			432,566			409,783
Selling expense	(36,226		)	(36,058		)	(110,786		)	(107,688		)
Administrative expense	(69,446		)	(64,886		)	(212,906		)	(202,479		)
Intangible amortization	(8,334		)	(6,364		)	(23,264		)	(16,939		)
Operating profit	37,895			36,786			85,610			82,677
Investment income	538			431			931			1,548
Interest expense	(9,719		)	(6,988		)	(26,782		)	(19,750		)
Other income (deductions), net	(57		)	7,935			(887		)	7,227
Income before income taxes	28,657			38,164			58,872			71,702
Income tax (provision) benefit	(4,312		)	(8,856		)	18,703			(17,318		)
Net income	24,345			29,308			77,575			54,384
Net loss attributable to noncontrolling interests	69			177			201			343
Net income attributable to Matthews shareholders	$	24,414		$	29,485		$	77,776		$	54,727
Earnings per share attributable to Matthews shareholders:
Basic	$	0.77		$	0.91		$	2.45		$	1.70
Diluted	$	0.77		$	0.91		$	2.44		$	1.68

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

3

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollar amounts in thousands)

	Three Months Ended June 30,
	Matthews						Noncontrolling Interest						Total
	2018			2017			2018			2017			2018			2017
Net income (loss):	$	24,414		$	29,485		$	(69	)	$	(177	)	$	24,345		$	29,308
Other comprehensive (loss) income ("OCI"), net of tax:
Foreign currency translation adjustment	(38,669		)	32,261			(23		)	121			(38,692		)	32,382
Pension plans and other postretirement benefits	1,256			1,422			—			—			1,256			1,422
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	393			(353		)	—			—			393			(353		)
Net amount reclassified to earnings	(399		)	(187		)	—			—			(399		)	(187		)
Net change in unrecognized gain (loss) on derivatives	(6		)	(540		)	—			—			(6		)	(540		)
OCI, net of tax	(37,419		)	33,143			(23		)	121			(37,442		)	33,264
Comprehensive (loss) income	$	(13,005	)	$	62,628		$	(92	)	$	(56	)	$	(13,097	)	$	62,572

	Nine Months Ended June 30,
	Matthews						Noncontrolling Interest						Total
	2018			2017			2018			2017			2018			2017
Net income (loss):	$	77,776		$	54,727		$	(201	)	$	(343	)	$	77,575		$	54,384
OCI, net of tax:
Foreign currency translation adjustment	(19,658		)	5,027			80			189			(19,578		)	5,216
Pension plans and other postretirement benefits	3,296			4,420			—			—			3,296			4,420
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	5,286			6,712			—			—			5,286			6,712
Net amount reclassified to earnings	(570		)	(986		)	—			—			(570		)	(986		)
Net change in unrecognized gain (loss) on derivatives	4,716			5,726			—			—			4,716			5,726
OCI, net of tax	(11,646		)	15,173			80			189			(11,566		)	15,362
Comprehensive income (loss)	$	66,130		$	69,900		$	(121	)	$	(154	)	$	66,009		$	69,746

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 nine months ended June 30, 2018 and 2017 (Unaudited)

(Dollar amounts in thousands, except per share data)

	Shareholders' Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Non- controlling interests			Total
Balance, September 30, 2017	$	36,334	$	123,432		$	948,830		$	(154,115	)	$	(164,774	)	$	552		$	790,259
Net income (loss)	—		—			77,776			—			—			(201		)	77,575
Minimum pension liability	—		—			—			3,296			—			—			3,296
Translation adjustment	—		—			—			(19,658		)	—			80			(19,578		)
Fair value of derivatives	—		—			—			4,716			—			—			4,716
Total comprehensive income																		66,009
Stock-based compensation	—		10,531			—			—			—			—			10,531
Purchase of 372,120 shares of treasury stock	—		—			—			—			(20,091		)	—			(20,091		)
Issuance of 326,827 shares of treasury stock	—		(8,039		)	—			—			13,039			—			5,000
Cancellations of 5,864 shares of treasury stock	—		349			—			—			(349		)	—			—
Dividends, $0.57 per share	—		—			(18,528		)	—			—			—			(18,528		)
Reclassification of accumulated other comprehensive (loss) income ("AOCI") tax effects	—		—			8,814			(8,814		)	—			—			—
Balance, June 30, 2018	$	36,334	$	126,273		$	1,016,892		$	(174,575	)	$	(172,175	)	$	431		$	833,180

	Shareholders' Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Non- controlling interests			Total
Balance, September 30, 2016	$	36,334	$	117,088		$	896,224		$	(181,868	)	$	(159,113	)	$	669		$	709,334
Net income (loss)	—		—			54,727			—			—			(343		)	54,384
Minimum pension liability	—		—			—			4,420			—			—			4,420
Translation adjustment	—		—			—			5,027			—			189			5,216
Fair value of derivatives	—		—			—			5,726			—			—			5,726
Total comprehensive loss																		69,746
Stock-based compensation	—		11,854			—			—			—			—			11,854
Purchase of 174,032 shares of treasury stock	—		—			—			—			(11,651		)	—			(11,651		)
Issuance of 221,958 shares of treasury stock	—		(8,397		)	—			—			8,543			—			146
Cancellations of 2,640 shares of treasury stock	—		179			—			—			(179		)	—			—
Dividends, $0.51 per share	—		—			(16,193		)	—			—			—			(16,193		)
Balance, June 30, 2017	$	36,334	$	120,724		$	934,758		$	(166,695	)	$	(162,400	)	$	515		$	763,236

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)

	Nine Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net income	$	77,575		$	54,384
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57,052			50,810
Stock-based compensation expense	10,531			11,854
Deferred tax benefit	(43,272		)	(4,836		)
Gain on sale of assets	(925		)	(332		)
Unrealized gain on investments	(771		)	(1,953		)
Changes in working capital items	(5,897		)	(2,908		)
Increase in other assets	(11,932		)	(11,227		)
Increase (decrease) in other liabilities	10,405			(5,012		)
(Decrease) increase in pension and postretirement benefits	(1,473		)	6,115
Other operating activities, net	(8,487		)	(1,133		)
Net cash provided by operating activities	82,806			95,762
Cash flows from investing activities:
Capital expenditures	(32,150		)	(32,215		)
Acquisitions, net of cash acquired	(119,953		)	(96,320		)
Proceeds from sale of assets	3,358			1,515
Purchases of investments	(11,871		)	—
Other investing activities, net	—			(681		)
Net cash used in investing activities	(160,616		)	(127,701		)
Cash flows from financing activities:
Proceeds from long-term debt	681,297			372,768
Payments on long-term debt	(566,891		)	(311,718		)
Proceeds from the exercise of stock options	—			14
Purchases of treasury stock	(20,091		)	(11,651		)
Dividends	(18,528		)	(16,193		)
Net cash provided by financing activities	75,787			33,220
Effect of exchange rate changes on cash	(1,777		)	(240		)
Net change in cash and cash equivalents	$	(3,800	)	$	1,041
Non-cash investing and financing activities:
Acquisition of long-term asset under financing arrangement	$	14,544		$	—

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

6

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2018

(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 global provider of brand solutions, memorialization products and industrial technologies. Brand solutions include brand development, deployment and delivery (consisting of brand management, pre-media services, printing plates and cylinders, and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment primarily for the cemetery and funeral home industries. Industrial technologies include marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

The Company has facilities in North America, Europe, Asia, Australia, and Central and South America.

Note 2.   Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") 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 GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the nine months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2018. 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, 2017.  The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control.  Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP 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.

New Accounting Pronouncements:

Issued

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging (Topic 815), which provides new guidance intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. This ASU is effective for the Company beginning in fiscal year 2020. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), which provides new guidance intended to clarify and reduce complexities in applying stock compensation guidance to a change to the terms or conditions of share-based payment awards. This ASU is effective for the Company beginning in fiscal year 2019. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 2.   Basis of Presentation (continued)

In February 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which provides new guidance intended to improve the disclosure requirements related to the service cost component of net benefit cost.  This ASU is effective for the Company beginning in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides new guidance intended to make the definition of a business more operable and allow for more consistency in application.  This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), which provides new guidance intended to clarify the presentation of certain cash flow items including debt prepayments, debt extinguishment costs, contingent considerations payments, and insurance proceeds, among other things. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019, and early adoption is permitted.  The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which provides new guidance on how an entity should account for leases and recognize associated lease assets and liabilities. This ASU requires lessees to recognize assets and liabilities that arise from financing and operating leases on the Consolidated Balance Sheet. The implementation of this standard will require application of the new guidance at the beginning of the earliest comparative period presented, once adopted. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2020, and does allow for early adoption.  The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides new guidance intended to improve the recognition, measurement, presentation and disclosure of financial instruments. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements

to Financial Instruments—Overall (Subtopic 825-10), that provides guidance related to implementation issues and corrects or improves certain aspects of the financial instruments guidance. The adoption of these ASUs are not expected to have a material impact on the Company's consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This ASU replaces nearly all existing U.S. GAAP guidance on revenue recognition. The standard prescribes a five-step model for recognizing revenue, the application of which will require significant judgment. The FASB issued ASU 2015-14 in August 2015 which resulted in a deferral of the original effective date of ASU 2014-09. During 2016 and 2017, the FASB issued six ASUs that address implementation issues and correct or improve certain aspects of the new revenue recognition guidance, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) and ASU 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). These ASUs do not change the core principles in the revenue recognition guidance outlined above. ASU No. 2014-09 and the related ASUs referenced above are effective for Matthews beginning October 1, 2018. The Company has completed its detailed assessment of all global revenue arrangements and related impact of the new standard compared to historical accounting policies on a representative sample of contracts and it does not expect the adoption of these ASUs will have a material impact on its consolidated financial statements. The Company is continuing to assess the ultimate impact that the adoption of this standard will have on its consolidated financial statement disclosures. In addition, the Company is evaluating the changes that will be required in its internal controls as a result of the adoption of this new standard. The Company is planning to adopt the provisions of these ASUs using the modified retrospective method for existing transactions on October 1, 2018.

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 2.   Basis of Presentation (continued)

Adopted

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220), which provides new guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. The amount of reclassification is the difference between the Company's historical U.S. income tax rate and the newly enacted 21% corporate income tax rate. The Company has early adopted this ASU in the third quarter ended June 30, 2018. The adoption of this ASU resulted in a decrease to AOCI and corresponding increase to retained earnings of $8,814.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which provides new guidance intended to simplify the subsequent measurement of goodwill and removing Step 2 from the goodwill impairment process.  The Company has early adopted this ASU in the first quarter ended December 31, 2017. The adoption of this ASU had no impact on the Company's consolidated financial statements, but modifies the methodology to assess and measure goodwill impairment prospectively.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company early adopted this ASU in the fourth quarter of fiscal 2017, which resulted in a reduction to income tax expense of $1,234, and a corresponding favorable impact on diluted earnings per share of $0.04, both of which have been retroactively included in the first quarter results for fiscal 2017.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which provides new guidance to simplify the measurement of inventory valuation at the lower of cost or net realizable value.  Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The adoption of this ASU in the first quarter ended December 31, 2017 had no impact on the Company's consolidated financial statements.

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.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 3.   Fair Value Measurements (continued)

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

	June 30, 2018								September 30, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Derivatives (1)	$	—	$	10,863	$	—	$	10,863	$	—	$	3,990	$	—	$	3,990
Equity and fixed income mutual funds	—		22,257		—		22,257		—		21,649		—		21,649
Other investments	—		5,870		—		5,870		—		5,810		—		5,810
Total assets at fair value	$	—	$	38,990	$	—	$	38,990	$	—	$	31,449	$	—	$	31,449
Liabilities:
Derivatives (1)	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
Total liabilities at fair value	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

Note 4.   Inventories

Inventories consisted of the following:

	June 30, 2018		September 30, 2017
Raw materials	$	34,509	$	29,396
Work in process	71,628		61,917
Finished goods	78,677		80,132
	$	184,814	$	171,445

Note 5.   Debt

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $900,000 senior secured revolving credit facility and a $250,000 senior secured amortizing term loan. The term loan requires scheduled principal payments of 5.0% of the outstanding principal in year one, 7.5% in year two, and 10.0% in years three through five, payable in quarterly installments.  The balance of the revolving credit facility and the term loan are due on the maturity date of April 26, 2021. Borrowings under both the revolving credit facility and the term loan bear interest at LIBOR plus a factor ranging from 0.75% to 2.00% (1.25% at June 30, 2018) based on the Company's secured leverage ratio.  The secured leverage ratio is defined as net secured indebtedness divided by adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from 0.15% to 0.25% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the revolving credit facility at June 30, 2018 and September 30, 2017 were $359,000 and $525,000, respectively. Outstanding borrowings on the term loan at June 30, 2018 and September 30, 2017 were $218,296 and $232,479, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at June 30, 2018 and June 30, 2017 was 2.82% and 2.89%, respectively.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.   Debt (continued)

In December 2017, the Company issued $300,000 aggregate principal amount of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year beginning on June 1, 2018. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The proceeds from the 2025 Senior Notes were used primarily to reduce indebtedness under the Company's domestic credit facility. The Company incurred direct financing fees and costs in connection with 2025 Senior Notes of $4,127, which are being deferred and amortized over the term of the 2025 Senior Notes.

The Company has a $115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions. The Securitization Facility was amended in April 2018 to extend the maturity date until April 11, 2020. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC in turn assigns a collateral interest in these receivables to certain financial institutions, and then may borrow funds under the Securitization Facility. The Securitization Facility does not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations remain on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility bear interest at LIBOR plus 0.75%. The Company is required to pay an annual commitment fee ranging from 0.25% to 0.35% of the unused portion of the Securitization Facility. Outstanding borrowings under the Securitization Facility at June 30, 2018 and September 30, 2017 were $102,500 and $95,825, respectively. At June 30, 2018, the interest rate on borrowings under this facility was 2.84%.

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:

	June 30, 2018			September 30, 2017
Pay fixed swaps - notional amount	$	350,000		$	414,063
Net unrealized gain	$	10,863		$	3,959
Weighted-average maturity period (years)	2.9			3.3
Weighted-average received rate	2.09		%	1.23		%
Weighted-average pay rate	1.36		%	1.34		%

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 future variable interest payments, 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 gain of $10,863 ($8,202 after tax) at June 30, 2018 and an unrealized gain, net of unrealized losses, of $3,959 ($2,415 after tax) at September 30, 2017. The net unrealized gain is included in shareholders' equity as part of AOCI.  Assuming market rates remain constant with the rates at June 30, 2018, a gain (net of tax) of approximately $2,634 included in AOCI is expected to be recognized in earnings over the next twelve months.

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.   Debt (continued)

At June 30, 2018 and September 30, 2017, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:

Derivatives	June 30, 2018		September 30, 2017
Current assets:
Other current assets	$	3,489	$	1,098
Long-term assets:
Other assets	7,374		2,892
Current liabilities:
Other current liabilities	—		(7		)
Long-term liabilities:
Other liabilities	—		(24		)
Total derivatives	$	10,863	$	3,959

The gains recognized on derivatives were as follows:

Derivatives in Cash Flow Hedging Relationships	Location of Gain Recognized in Income on Derivative	Amount of Gain Recognized in Income on Derivatives				Amount of Gain Recognized in Income on Derivatives
		Three Months Ended June 30,				Nine Months Ended June 30,
		2018		2017		2018		2017
Interest rate swaps	Interest expense	$	490	$	306	$	755	$	1,616

The Company recognized the following gains in AOCI:

Derivatives in Cash Flow Hedging Relationships	Amount of Gain Recognized in AOCI on Derivatives				Location of Gain Reclassified From AOCI into Income (Effective Portion*)	Amount of Gain Reclassified from AOCI into Income (Effective Portion*)
	June 30, 2018		June 30, 2017			June 30, 2018		June 30, 2017
Interest rate swaps	$	5,286	$	6,712	Interest expense	$	570	$	986
*There is no ineffective portion or amount excluded from effectiveness testing.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews.  The maximum amount of borrowing available under this facility is €35.0 million ($40,903).  The credit facility matures in December 2018 and the Company intends to extend this facility. Outstanding borrowings under the credit facility totaled€22.7 million ($26,529) and €22.1 million ($26,126) at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on outstanding borrowings under this facility at June 30, 2018 and 2017 was 1.75%.

The Company’s German subsidiary, Matthews Europe GmbH & Co. KG, has €15.0 million ($17,530) of senior unsecured notes with European banks.  The notes are guaranteed by Matthews and mature in November 2019.  A portion of the notes (€5.0 million) have a fixed interest rate of 1.40%, and the remainder bear interest at Euro LIBOR plus 1.40%.  The weighted-average interest rate on the notes at June 30, 2018 and 2017 was 1.40%.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 5.   Debt (continued)

The Company, through its Italian subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled €500,000 ($584) and €2.6 million ($3,079) at June 30, 2018 and September 30, 2017, respectively. These loans mature in November 2019.  Matthews International S.p.A. also has multiple on-demand lines of credit totaling €700,000 ($818) as of June 30, 2018 with the same Italian banks.  Outstanding borrowings on these lines were €198,000 ($231) and €4.0 million ($4,735) at June 30, 2018 and September 30, 2017, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at June 30, 2018 and 2017 was2.62% and 2.55%, respectively.

Other debt totaled $892 and $1,032 at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on these outstanding borrowings was 3.03% and 2.25% at June 30, 2018 and 2017, respectively.

In September 2014, a claim was filed seeking to draw upon a letter of credit issued by the Company of £8,570,000 ($11,333 at June 30, 2018) with respect to a performance guarantee on an environmental solutions project in Saudi Arabia. Management assessed the customer's demand to be without merit and initiated an action with the court in the United Kingdom (the "Court"). Pursuant to this action, an order was issued by the Court in January 2015 requiring that, upon receipt by the customer, the funds were to be remitted by the customer to the Court pending resolution of the dispute between the parties. As a result, the Company made payment on the draw to the financial institution for the letter of credit and the funds were ultimately received by the customer. The customer did not remit the funds to the Court as ordered. On June 14, 2016, the Court ruled completely in favor of Matthews following a trial on the merits. However, as the customer has neither yet remitted the funds nor complied with the final, un-appealed orders of the Court, it is possible the resolution of this matter could have an unfavorable financial impact on Matthews’ results of operations. The Company has determined that resolution of this matter may take an extended period of time and therefore has classified the funded letter of credit within other assets on the Consolidated Balance Sheets as of June 30, 2018 and September 30, 2017. The Company will continue to assess collectability related to this matter as facts and circumstances evolve.

As of June 30, 2018 and September 30, 2017, the fair value of the Company's long-term debt, including current maturities, approximated the carrying value included in the Consolidated Balance Sheets. The Company was in compliance with all of its debt covenants as of June 30, 2018.

Note 6.   Share-Based Payments

The Company maintains an equity incentive plan (the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  The Company also maintains an equity incentive plan (the "2012 Equity Incentive Plan") that previously provided for grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards. Under the 2017 Equity Incentive Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of 1,700,000.  There will be no further grants under the 2012 Equity Incentive Plan. At June 30, 2018, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.  All Plans are administered by the Compensation Committee of the Board of Directors.

With respect to outstanding restricted share grants, 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 three or 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 June 30, 2018 and 2017, stock-based compensation cost totaled $2,399 and $2,837, respectively. For the nine-month periods ended June 30, 2018 and 2017, stock-based compensation cost totaled $10,531 and $11,854, respectively.  The nine-month periods ended June 30, 2018 and 2017 included $2,850 and $3,337 of stock-based compensation cost, respectively, that was recognized at the time of grant for retirement-eligible employees. The associated future income tax benefit recognized for stock-based compensation was $588 and $1,106 for the three-month periods ended June 30, 2018 and 2017, respectively, and $2,108 and $4,623 for the nine-month periods ended June 30, 2018 and 2017, respectively.

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 6.   Share-Based Payments (continued)

There were no stock options exercised during the three month period ended June 30, 2017. For the nine-month period ended June 30, 2017, the amount of cash received from the exercise of stock options was $14. In connection with these exercises, the tax benefits realized by the Company was $3 for the nine-month period ended June 30, 2017. 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 nine-month period ended June 30, 2017 and was $9.

The transactions for restricted stock for the nine months ended June 30, 2018 were as follows:

	Shares		Weighted- average Grant-date Fair Value
Non-vested at September 30, 2017	501,184		$	53.65
Granted	234,100		57.05
Vested	(174,120	)	51.41
Expired or forfeited	(5,864	)	59.75
Non-vested at June 30, 2018	555,300		$	55.72

As of June 30, 2018, the total unrecognized compensation cost related to unvested restricted stock was $8,510 and is expected to be recognized over a weighted average period of 1.5 years.

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 the fair value of restricted stock granted during the nine-month periods ended June 30, 2018 and 2017.

	Nine Months Ended June 30,
	2018		2017
Expected volatility	20.5	%	20.2	%
Dividend yield	1.0	%	1.1	%
Average risk-free interest rate	2.0	%	1.7	%
Average expected term (years)	2.1		2.1

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 for grants in the years ended September 30, 2018, 2017 and 2016 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.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 6.   Share-Based Payments (continued)

The Company maintains the 1994 Director Fee Plan and the Amended and Restated 2014 Director Fee Plan (collectively, the "Director Fee Plans").  There will be no further fees or share-based awards granted under the 1994 Director Fee Plan.  Under the Amended and Restated 2014 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2018, either cash or shares of the Company's Class A Common Stock with a value equal to $85.  The annual retainer fee for fiscal 2018 paid to a non-employee Chairman of the Board is $185.  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 of22,698 shares had been deferred under the Director Fee Plans as of June 30, 2018.  Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares) with a value of $125 for fiscal 2018.  A total of 22,300 stock options have been granted under the Director Fee Plans.  At June 30, 2018, there were no options outstanding. Additionally, 173,229 shares of restricted stock have been granted under the Director Fee Plans, 70,079 of which were issued under the Amended and Restated 2014 Director Fee Plan.  20,940 share of restricted stock are unvested at June 30, 2018.  A total of 150,000 shares have been authorized to be issued under the Amended and Restated 2014 Director Fee Plan.

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 June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net income attributable to Matthews shareholders	$	24,414	$	29,485	$	77,776	$	54,727
Weighted-average shares outstanding (in thousands):
Basic shares	31,631		32,255		31,693		32,248
Effect of dilutive securities	150		317		132		348
Diluted shares	31,781		32,572		31,825		32,596

Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and nine months ended June 30, 2018 and 2017.

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

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 June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	2,039		$	2,138		$	84		$	98
Interest cost	2,049			1,841			158			157
Expected return on plan assets	(2,534		)	(2,312		)	—			—
Amortization:
Prior service cost	(35		)	(45		)	(49		)	(49		)
Net actuarial loss	1,753			2,509			—			—
Net benefit cost	$	3,272		$	4,131		$	193		$	206

	Nine months ended June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	6,117		$	6,414		$	252		$	294
Interest cost	6,147			5,523			474			471
Expected return on plan assets	(7,602		)	(6,936		)	—			—
Amortization:
Prior service cost	(105		)	(135		)	(147		)	(147		)
Net actuarial loss	5,257			7,527			—			—
Net benefit cost	$	9,814		$	12,393		$	579		$	618

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 2018.

Contributions made and anticipated for fiscal year 2018 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the nine months ended June 30, 2018:
Principal retirement plan	$	10,000	$	—
Supplemental retirement plan	575		—
Other postretirement plan	—		1,281
Additional contributions expected in fiscal 2018:
Supplemental retirement plan	$	191	$	—

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 9.   Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2018		$	(41,583	)	$	(93,896	)		$	7,137		$	(128,342	)
OCI before reclassification		—			(38,669		)		393			(38,276		)
Amounts reclassified from AOCI	(a)	1,256			—			(b)	(399		)	857
Net current-period OCI		1,256			(38,669		)		(6		)	(37,419		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, March 31, 2018		—			$	499			—			$	499
OCI before reclassification		—			(23		)		—			(23		)
Net current-period OCI		—			(23		)		—			(23		)
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2017		$	(53,052	)	$	(149,493	)		$	2,707		$	(199,838	)
OCI before reclassification		—			32,261				(353		)	31,908
Amounts reclassified from AOCI	(a)	1,422			—			(b)	(187		)	1,235
Net current-period OCI		1,422			32,261				(540		)	33,143
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, March 31, 2017		—			$	345			—			$	345
OCI before reclassification		—			121				—			121
Net current-period OCI		—			121				—			121
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 9.   Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2017		$	(43,623	)	$	(112,907	)		$	2,415		$	(154,115	)
OCI before reclassification		—			(19,658		)		5,286			(14,372		)
Amounts reclassified from AOCI	(a)	3,296			—			(b)	(570		)	2,726
Net current-period OCI		3,296			(19,658		)		4,716			(11,646		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, September 30, 2017		—			$	396			—			$	396
OCI before reclassification		—			80				—			80
Net current-period OCI		—			80				—			80
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2016		$	(56,050	)	$	(122,259	)		$	(3,559	)	$	(181,868	)
OCI before reclassification		—			5,027				6,712			11,739
Amounts reclassified from AOCI	(a)	4,420			—			(b)	(986		)	3,434
Net current-period OCI		4,420			5,027				5,726			15,173
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, September 30, 2016		—			$	277			—			$	277
OCI before reclassification		—			189				—			189
Net current-period OCI		—			189				—			189
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 9.   Accumulated Other Comprehensive Income (continued)

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2018 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2018				Nine Months Ended June 30, 2018			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	84		(a)	$	252
Actuarial losses	(1,753		)	(a)	(5,257		)
	(1,669		)	(b)	(5,005		)	Income before income tax
	(413		)		(1,709		)	Income taxes
	$	(1,256	)		$	(3,296	)	Net income
Derivatives
Interest rate swap contracts	$	490			$	755		Interest expense
	490			(b)	755			Income before income tax
	91				185			Income taxes
	$	399			$	570		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2017 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2017				Nine Months Ended June 30, 2017			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	94		(a)	$	282
Actuarial losses	(2,509		)	(a)	(7,527		)
	(2,415		)	(b)	(7,245		)	Income before income tax
	(993		)		(2,825		)	Income taxes
	$	(1,422	)		$	(4,420	)	Net income
Derivatives
Interest rate swap contracts	$	306			$	1,616		Interest expense
	306			(b)	1,616			Income before income tax
	119				630			Income taxes
	$	187			$	986		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 10.   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 consolidated income taxes for the nine months ended June 30, 2018 were a benefit of $18,703, compared to income tax expense of $17,318 for the first nine months of fiscal 2017. The differences between the Company's fiscal 2018 nine month effective tax rate and the fiscal 2017 nine month effective tax rate, as well as the Company’s fiscal 2018 blended U.S. federal statutory rate of 24.5% primarily resulted from the impacts of the U.S. tax reform enactment discussed below.

The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018, which results in a blended U.S. statutory tax rate of 24.5% for the Company in fiscal 2018. The Act also requires a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred, and creates new taxes on certain foreign-sourced earnings. At June 30, 2018, the Company has not finalized its accounting for the tax effects of the Act; however, as described below, management has made a reasonable estimate of the effects on existing deferred tax balances and has recorded an estimated amount for its one-time transition tax. For the items for which the Company was able to determine a reasonable estimate, a provisional net tax benefit of $29,921 was recognized, which is included entirely as a component of income tax benefit (provision) for the nine months ended June 30, 2018. The two main components of this provisional amount are discussed below. The Company continues to await additional guidance on certain aspects of the Act which could have a significant effect upon its current year income tax expense.

Provisional amounts

Deferred tax assets and liabilities: The Company remeasured certain deferred tax assets and liabilities based on the rates at which these deferred tax amounts are expected to reverse in the future, which is generally 21.0% or 24.5%. This remeasurement resulted in a tax benefit of $38,010 being recognized during the nine months ended June 30, 2018. The Company is still analyzing certain aspects of the Act, estimating the timing of reversals, and refining its calculations, which could potentially affect the measurement of these balances, or potentially generate new deferred tax amounts.

Foreign tax effects: The Company recorded a provisional amount for its one-time transition tax for all of its foreign subsidiaries, resulting in an increase in income tax expense of $8,089 for the nine months ended June 30, 2018. The one-time transition tax was calculated using an estimate of the Company’s total post-1986 earnings and profits (“E&P”) that were previously deferred from U.S. income taxes. The Company has not yet finalized its determination of the total post-1986 E&P and tax pools for its foreign subsidiaries and has not fully analyzed the state income tax effects. The calculation of the one-time transition tax is also impacted by the amount of foreign E&P held in cash and other specified assets. The tax amount may change when the Company finalizes its calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and upon finalization of the calculation of cash and other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

The Company had unrecognized tax benefits (excluding penalties and interest) of $15,292 and $7,968 on June 30, 2018 and September 30, 2017, respectively, of which $11,183 and $7,968 would impact the annual effective rate. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $3,525 in the next 12 months primarily due to the completion of an audit and the expiration of the statute of limitations.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $2,338 and $1,779 at June 30, 2018 and September 30, 2017, respectively.  These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 10.   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 June 30, 2018, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2015 and forward
United States – State	2013 and forward
Canada	2014 and forward
Germany	2015 and forward
United Kingdom	2016 and forward
Australia	2014 and forward
Singapore	2013 and forward

Note 11.   Segment Information

The Company manages its businesses under three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment includes brand development, deployment and delivery (consisting of brand management, pre-media services, printing plates and cylinders and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services).  The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.  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 noncontrolling interest amongst the segments.

Information about the Company's segments is as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Sales:
SGK Brand Solutions	$	202,976	$	200,606	$	601,794	$	566,527
Memorialization	161,979		155,837		475,557		463,567
Industrial Technologies	46,666		33,187		117,785		89,450
	$	411,621	$	389,630	$	1,195,136	$	1,119,544

Operating profit:
SGK Brand Solutions	$	8,308	$	11,390	$	16,550	$	19,941
Memorialization	24,930		23,454		63,294		60,759
Industrial Technologies	4,657		1,942		5,766		1,977
	$	37,895	$	36,786	$	85,610	$	82,677

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 12.   Acquisitions

Fiscal 2018:

On February 1, 2018, the Company acquired certain net assets of Star Granite and Bronze International, Inc. ("Star Granite") for a total purchase price of $34,713, consisting of cash of $29,713 (net of cash acquired and holdback amounts, subject to a working capital adjustment) and shares of Matthews common stock valued at $5,000. Star Granite manufactures and distributes granite and other memorialization products to cemetery and other customers across the United States and is included in the Company's Memorialization segment. Annual sales for this business were approximately $31,000 prior to the acquisition. The preliminary purchase price allocation related to the Star Granite acquisition is not finalized as of June 30, 2018, and is subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

On November 28, 2017, the Company acquired Compass Engineering Group, Inc. ("Compass") for $50,794 (net of cash acquired, subject to a working capital adjustment). Compass provides high-quality material handling control solutions and is included in the Company's Industrial Technologies segment. Annual sales for this business were approximately $24,000 prior to the acquisition. The preliminary purchase price allocation related to the Compass acquisition is not finalized as of June 30, 2018, and is subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

During the first nine months of fiscal 2018, the Company completed several additional smaller acquisitions for an aggregate purchase price of $39,446 (net of cash acquired and holdback amounts, subject to working capital adjustments). These additional acquisitions strengthen the Company's operations across the SGK Brand Solutions and Memorialization segments. The preliminary purchase price allocations for the acquisitions are not finalized as of June 30, 2018 and are subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

Fiscal 2017:

On March 1, 2017, the Company acquired GJ Creative Limited ("Equator") for £30.5 million ($37,596) (net of cash acquired). Equator provides design expertise capable of taking brands from creation to shelf under one roof, and is included in the Company's SGK Brand Solutions segment. Annual sales for this business were approximately $30,000 prior to the acquisition. The Company finalized the allocation of purchase price related to the Equator acquisition in the second quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On February 28, 2017, the Company acquired certain net assets of RAF Technology, Inc. ("RAF") for $8,717 (net of cash acquired). RAF is a global leader in pattern and optical character recognition software, and is included in the Company's Industrial Technologies segment. The Company finalized the allocation of purchase price related to the RAF acquisition in the fourth quarter of fiscal 2017, resulting in an immaterial adjustment to certain working capital accounts.

On January 13, 2017, the Company acquired VCG (Holdings) Limited ("VCG") for £8.8 million ($10,695) (net of cash acquired). VCG is a leading graphics, plate-making, and creative design company and is included in the Company's SGK Brand Solutions segment. The Company finalized the allocation of purchase price related to the VCG acquisition in the first quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On January 3, 2017, the Company acquired A. + E. Ungricht GmbH + Co KG ("Ungricht") for €24.0 million ($25,185) (net of cash acquired). Ungricht is a leading European provider of pre-press services and gravure printing forms, located in Germany, and is included in the Company's SGK Brand Solutions segment. Annual sales for this business were approximately $35,000 prior to the acquisition. The Company finalized the allocation of purchase price related to the Ungricht acquisition in the first quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On November 30, 2016, the Company acquired Guidance Automation Limited ("Guidance") for £8.0 million ($9,974) (net of cash acquired). Guidance provides technological solutions for autonomous warehouse vehicles and is included in the Company's Industrial Technologies segment.  The Company finalized the allocation of purchase price related to the Guidance acquisition in the fourth quarter of fiscal 2017, resulting in an immaterial adjustment to certain working capital and intangible asset accounts.

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 13.   Goodwill and Other Intangible Assets

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

	SGK Brand Solutions			Memorialization			Industrial Technologies		Consolidated
Goodwill	$	491,895		$	347,507		$	69,144	$	908,546
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at September 30, 2017	486,143			342,507			69,144		897,794
Additions during period	8,743			30,058			22,877		61,678
Translation and other adjustments	(6,460		)	(34		)	286		(6,208		)
Goodwill	$	494,178		$	377,531		$	92,307	$	964,016
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at June 30, 2018	$	488,426		$	372,531		$	92,307	$	953,264

The Company performed its annual impairment review in the second quarter of fiscal 2018 and determined that estimated fair value for all reporting units exceeded carrying value, therefore no adjustments to the carrying value of goodwill were necessary.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2018 and September 30, 2017, respectively.

	Carrying Amount		Accumulated Amortization				Net
June 30, 2018:
Trade names	$	126,047	$	—		*	$	126,047
Trade names	53,561		(4,380		)		49,181
Customer relationships	373,194		(104,035		)		269,159
Copyrights/patents/other	20,926		(12,465		)		8,461
	$	573,728	$	(120,880	)		$	452,848
September 30, 2017:
Trade names	$	168,467	$	—		*	$	168,467
Trade names	5,522		(2,030		)		3,492
Customer relationships	333,632		(84,560		)		249,072
Copyrights/patents/other	14,787		(11,436		)		3,351
*Not subject to amortization	$	522,408	$	(98,026	)		$	424,382

The net change in intangible assets during the nine months ended June 30, 2018 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to the fiscal 2018 acquisitions. During the second quarter of fiscal 2018, the Company also converted certain of its trade names from indefinite-lived to definite-lived, and accordingly, these intangible assets are now subject to amortization.

Amortization expense on intangible assets was $8,334 and $6,364 for the three-month periods ended June 30, 2018 and 2017, respectively.  For the nine-month periods ended June 30, 2018 and 2017, amortization expense was $23,264 and $16,939, respectively. Amortization expense is estimated to be $8,494 for the remainder of fiscal 2018, $32,265 in 2019, $30,425 in 2020, $29,007 in 2021 and $27,516 in 2022.

23

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

Item 2.   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 fiscal year ended September 30, 2017.  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 mortality and cremation 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, cybersecurity concerns, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, and other factors described in Item 1A - "Risk Factors" in this Form 10-Q and Item 1A - "Risk Factors" in the Company's Form 10-K for the fiscal year ended September 30, 2017.  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 the sales and operating profit for the Company's three reporting segments for the three and nine-month periods ended June 30, 2018 and 2017.

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Sales:	(Dollar amounts in thousands)
SGK Brand Solutions	$	202,976	$	200,606	$	601,794	$	566,527
Memorialization	161,979		155,837		475,557		463,567
Industrial Technologies	46,666		33,187		117,785		89,450
	$	411,621	$	389,630	$	1,195,136	$	1,119,544

Operating profit:
SGK Brand Solutions	$	8,308	$	11,390	$	16,550	$	19,941
Memorialization	24,930		23,454		63,294		60,759
Industrial Technologies	4,657		1,942		5,766		1,977
	$	37,895	$	36,786	$	85,610	$	82,677

Sales for the nine months ended June 30, 2018 were $1.2 billion, compared to $1.1 billion for the nine months ended June 30, 2017.  The increase in fiscal 2018 sales principally reflected higher sales of marking products, fulfillment systems and OEM solutions (Industrial Technologies) and cremation equipment (Memorialization), benefits from recently completed acquisitions (see "Acquisitions" below) and the favorable impact of changes in foreign currencies against the U.S. dollar. Changes in foreign currency rates were estimated to have a favorable impact of $30.3 million on fiscal 2018 consolidated sales compared to a year ago. These increases were partially offset by slower market conditions in North America early in the fiscal year for the SGK Brand Solutions segment, and lower unit sales of memorials and caskets. Comparability was also impacted by a significant merchandising display project in fiscal 2017 in the SGK Brand Solutions segment.

24

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

In the SGK Brand Solutions segment, sales for the first nine months of fiscal 2018 were $601.8 million, compared to $566.5 million for the first nine months of fiscal 2017.  The increase in sales reflected sales growth in the U.K., Europe and Asia Pacific markets, and benefits from recently completed acquisitions. Changes in foreign currency exchange rates also had a favorable impact of $25.4 million on the segment's sales compared to the prior year. These increases were partially offset by slower brand market conditions in the U.S., lower sales of merchandising displays, and the divestiture of a small business in the U.K. Memorialization segment sales for the first nine months of fiscal 2018 were $475.6 million, compared to $463.6 million for the first nine months of fiscal 2017.  The sales increase reflected higher sales of cremation equipment and the benefits of recently completed acquisitions, partially offset by lower unit sales of memorials and caskets. Changes in foreign currency exchange rates also had a favorable impact of $3.1 million on the segment's sales compared to the prior year. Industrial Technologies segment sales were $117.8 million for the first nine months of fiscal 2018, compared to $89.5 million for the first nine months of fiscal 2017. The increase reflected higher sales of marking products, fulfillment systems, and OEM solutions, and benefits from recently completed acquisitions. Changes in foreign currency exchange rates also had a favorable impact of $1.7 million on the segment's sales compared to the prior year.

Gross profit for the nine months ended June 30, 2018 was $432.6 million, compared to $409.8 million for the same period a year ago.  Consolidated gross profit as a percent of sales was 36.2% and 36.6% for the first nine months of fiscal 2018 and fiscal 2017, respectively.   The increase in gross profit primarily reflected the impact of higher sales, including recent acquisitions, the benefits of productivity initiatives, and realization of acquisition synergies. These increases were partially offset by higher material costs, particularly bronze and steel, and lower U.S. sales (excluding acquisitions) in the SGK Brand Solutions and Memorialization segments. Fiscal 2018 gross profit also included acquisition integration costs and other charges totaling $1.3 million. Fiscal 2017 gross profit included an expense of $1.9 million for the write-off of inventory step-up value related to fiscal 2017 acquisitions.

Selling and administrative expenses (including intangible amortization) for the nine months ended June 30, 2018 were $347.0 million, compared to $327.1 million for the first nine months of fiscal 2017.  Consolidated selling and administrative expenses, as a percent of sales, were 29.0% for the nine months ended June 30, 2018, compared to 29.2% for the same period last year.  The increase in selling and administrative expenses reflected the impact of recently completed acquisitions, including $5.4 million of incremental intangible asset amortization recognized in fiscal 2018, partially offset by the benefits from cost reduction initiatives, including acquisition-integration synergies. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with cost reduction initiatives totaling $19.2 million in fiscal 2018, compared to $22.7 million in fiscal 2017.

Operating profit for the nine months ended June 30, 2018 was $85.6 million, compared to $82.7 million for the nine months ended June 30, 2017.  The SGK Brand Solutions segment operating profit for the first nine months of fiscal 2018 was $16.6 million, compared to $19.9 million for the same period a year ago.  The decrease in segment operating profit reflected lower sales (excluding acquisitions) in North America, and an increase of $2.6 million in intangible asset amortization related to recently completed acquisitions, partially offset by the favorable impact of changes in foreign currencies against the U.S. dollar of approximately $1.7 million. Additionally, fiscal 2018 operating profit for the SGK Brand Solutions segment included acquisition integration costs and other charges totaling $15.8 million, compared to $17.9 million in fiscal 2017. Memorialization segment operating profit for the first nine months of fiscal 2018 was $63.3 million, compared to $60.8 million for the first nine months of fiscal 2017.  The increase in segment operating profit reflected higher cremation equipment sales, the benefits from recently completed acquisitions, and the favorable impact of acquisition synergies and other productivity initiatives. These increases were partially offset by higher material costs, $1.0 million of incremental intangible asset amortization from recent acquisitions, and the impact of lower memorial and casket sales volume. Fiscal 2018 operating profit for the Memorialization segment also included acquisition integration costs and other charges totaling $3.9 million, compared to $7.0 million in fiscal 2017. Operating profit for the Industrial Technologies segment for the nine months ended June 30, 2018 was $5.8 million, compared to $2.0 million for the same period a year ago. The increase in segment operating profit reflected higher sales of marking products, fulfillment systems, and OEM solutions, and the benefits from recently completed acquisitions. These increases were partially offset by higher investments in the segment's product development, and $1.8 million of incremental intangible asset amortization related to recently completed acquisitions.

25

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

Investment income was $931,000 for the nine months ended June 30, 2018, compared to $1.5 million for the nine months ended June 30, 2017. The decrease reflected lower rates of return on investments held in trust for certain of the Company's benefit plans.  Interest expense for the first nine months of fiscal 2018 was $26.8 million, compared to $19.8 million for the same period last year.  The increase in interest expense reflected an increase in average borrowing levels, primarily related to acquisitions, higher average interest rates in the current fiscal year, and incremental financing costs associated with the 5.25% Senior Notes (see "Liquidity and Capital Resources" below).  Other income and deductions, net, for the nine months ended June 30, 2018 represented a decrease in pre-tax income of $887,000, compared to an increase in pre-tax income of $7.2 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 and foreign denominated cash balances.  Fiscal 2017 other income and deductions also included loss recoveries of $10.0 million related to the previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

The Company's consolidated income taxes for the nine months ended June 30, 2018 were a benefit of $18.7 million, compared to income tax expense of $17.3 million for the first nine months of fiscal 2017. The differences between the Company's fiscal 2018 effective tax rate and the fiscal 2017 effective tax rate, as well as the Company’s fiscal 2018 blended U.S. federal statutory rate of 24.5%, primarily resulted from the impacts of the U.S. Tax Cuts and Jobs Act (the “Act”) which was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018, which results in a blended U.S. statutory tax rate of 24.5% for the Company in fiscal 2018. The Act also requires a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred, and creates new taxes on certain foreign-sourced earnings. At June 30, 2018, the Company has not finalized its accounting for the tax effects of the Act; however, management has made a reasonable estimate of the effects on existing deferred tax balances and has recorded an estimated amount for its one-time transition tax. For the items for which the Company was able to determine a reasonable estimate, a provisional net tax benefit of $29.9 million was recognized, which is included entirely as a component of income tax benefit (provision) for the nine months ended June 30, 2018. The Company continues to await additional guidance on certain aspects of the Act which could have a significant effect upon its current year income tax expense. Refer to Note 10, “Income Taxes” in Item 1 - “Financial Statements” for further details regarding income taxes.

Net losses attributable to noncontrolling interests were $201,000 for the nine months ended June 30, 2018, compared to $343,000 for the same period a year ago.  The net losses attributable to noncontrolling interests primarily reflected losses in less than wholly-owned Memorialization and Industrial Technologies businesses.

LIQUIDITY AND CAPITAL RESOURCES:

Net cash provided by operating activities was $82.8 million for the first nine months of fiscal 2018, compared to $95.8 million for the first nine months of fiscal 2017.  Operating cash flow for both periods reflected net income adjusted for deferred taxes, depreciation, amortization, stock-based compensation expense and non-cash pension expense.  Fiscal 2017 operating cash flow also included cash proceeds from loss recoveries of $10.0 million as discussed above. Net changes in working capital items, which reflected increases in inventory, decreases in accounts payable, and changes in other accounts, resulted in a use of working capital of approximately $5.9 million in fiscal 2018. Net changes in working capital items, which reflected increases in inventory and changes in other accounts, resulted in a use of working capital of approximately $2.9 million in fiscal 2017.

Cash used in investing activities was $160.6 million for the nine months ended June 30, 2018, compared to $127.7 million for the nine months ended June 30, 2017.  Investing activities for the first nine months of fiscal 2018 primarily reflected capital expenditures of $32.2 million, acquisition payments (net of cash acquired or received from sellers) totaling $120.0 million and the purchase of an investment for $11.9 million.  Investing activities for the first nine months of fiscal 2017 primarily reflected capital expenditures of $32.2 million, and acquisition payments (net of cash acquired or received from sellers) of $96.3 million.

Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, 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 $45.0 million for the last three fiscal years.  Capital spending for fiscal 2018 is currently expected to be in the range of $45.0 million to $50.0 million.  The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

26

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

Cash provided by financing activities for the nine months ended June 30, 2018 was $75.8 million, primarily reflecting proceeds, net of repayments, on long-term debt of $114.4 million, treasury stock purchases of$20.1 million, and dividends of $18.5 million to the Company's shareholders.  Cash provided by financing activities for the nine months ended June 30, 2017 was $33.2 million, primarily reflecting proceeds, net of repayments, on long-term debt of $61.1 million, treasury stock purchases of $11.7 million, and dividends of $16.2 million to the Company's shareholders.

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $900.0 million senior secured revolving credit facility and a $250.0 million senior secured amortizing term loan. The term loan requires scheduled principal payments of 5.0% of the outstanding principal in year one, 7.5% in year two, and 10.0% in years three through five, payable in quarterly installments.  The balance of the revolving credit facility and the term loan are due on the maturity date of April 26, 2021. Borrowings under both the revolving credit facility and the term loan bear interest at LIBOR plus a factor ranging from 0.75% to 2.00% (1.25% at June 30, 2018) based on the Company's secured leverage ratio.  The secured leverage ratio is defined as net secured indebtedness divided by adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from 0.15% to 0.25% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35.0 million) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the revolving credit facility at June 30, 2018 and September 30, 2017 were $359.0 million and $525.0 million, respectively. Outstanding borrowings on the term loan at June 30, 2018 and September 30, 2017 were $218.3 million and $232.5 million, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at June 30, 2018 and June 30, 2017 was 2.82% and 2.89%, respectively.

In December 2017, the Company issued $300.0 million aggregate principal amount of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year beginning on June 1, 2018. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The proceeds from the 2025 Senior Notes were used primarily to reduce indebtedness under the Company's domestic credit facility. The Company incurred direct financing fees and costs in connection with 2025 Senior Notes of $4.1 million, which are being deferred and amortized over the term of the 2025 Senior Notes.

The Company has a $115.0 million accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions. The Securitization Facility was amended in April 2018 to extend the maturity date until April 11, 2020. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC in turn assigns a collateral interest in these receivables to certain financial institutions, and then may borrow funds under the Securitization Facility. The Securitization Facility does not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations remain on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility bear interest at LIBOR plus 0.75%. The Company is required to pay an annual commitment fee ranging from 0.25% to 0.35% of the unused portion of the Securitization Facility. Outstanding borrowings under the Securitization Facility at June 30, 2018 and September 30, 2017 were $102.5 million and $95.8 million, respectively. At June 30, 2018, the interest rate on borrowings under this facility was 2.84%.

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges (dollar amounts in thousands):

	June 30, 2018			September 30, 2017
Pay fixed swaps - notional amount	$	350,000		$	414,063
Net unrealized gain	$	10,863		$	3,959
Weighted-average maturity period (years)	2.9			3.3
Weighted-average received rate	2.09		%	1.23		%
Weighted-average pay rate	1.36		%	1.34		%

27

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

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 future variable interest payments, 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 gain of $10.9 million ($8.2 million after tax) at June 30, 2018 and an unrealized gain, net of unrealized losses, of $4.0 million ($2.4 million after tax) at September 30, 2017. The net unrealized gain is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").  Assuming market rates remain constant with the rates at June 30, 2018, a gain (net of tax) of approximately $2.6 million included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews.  The maximum amount of borrowing available under this facility is €35.0 million ($40.9 million).  The credit facility matures in December 2018 and the Company intends to extend this facility. Outstanding borrowings under the credit facility totaled €22.7 million ($26.5 million) and €22.1 million ($26.1 million) at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on outstanding borrowings under this facility at June 30, 2018 and 2017 was 1.75%.

The Company’s German subsidiary, Matthews Europe GmbH & Co. KG, has €15.0 million ($17.5 million) of senior unsecured notes with European banks.  The notes are guaranteed by Matthews and mature in November 2019.  A portion of the notes (€5.0 million) have a fixed interest rate of 1.40%, and the remainder bear interest at Euro LIBOR plus 1.40%.  The weighted-average interest rate on the notes at June 30, 2018 and 2017 was 1.40%.

The Company, through its Italian subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled €500,000($584,000) and €2.6 million ($3.1 million) at June 30, 2018 and September 30, 2017, respectively.  The maturity dates for these loans range from November 2018 through November 2019. Matthews International S.p.A. also has multiple on-demand lines of credit totaling €700,000 ($818,000) as of June 30, 2018 with the same Italian banks.  Outstanding borrowings on these lines were€198,000 ($231,000) and €4.0 million ($4.7 million) at June 30, 2018 and September 30, 2017, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at June 30, 2018 and 2017 was 2.62% and 2.55%, respectively.

Other debt totaled $892,000 and $1.0 million at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on these outstanding borrowings was 3.03% and 2.25% at June 30, 2018 and 2017, respectively. The Company was in compliance with all of its debt covenants as of June 30, 2018.

In September 2014, a claim was filed seeking to draw upon a letter of credit issued by the Company of £8.6 million ($11.3 million at June 30, 2018) with respect to a performance guarantee on an environmental solutions project in Saudi Arabia. Management assessed the customer's demand to be without merit and initiated an action with the court in the United Kingdom (the "Court"). Pursuant to this action, an order was issued by the Court in January 2015 requiring that, upon receipt by the customer, the funds were to be remitted by the customer to the Court pending resolution of the dispute between the parties. As a result, the Company made payment on the draw to the financial institution for the letter of credit and the funds were ultimately received by the customer. The customer did not remit the funds to the Court as ordered. On June 14, 2016, the Court ruled completely in favor of Matthews following a trial on the merits. However, as the customer has neither yet remitted the funds nor complied with the final, un-appealed orders of the Court, it is possible the resolution of this matter could have an unfavorable financial impact on Matthews’ results of operations. The Company has determined that resolution of this matter may take an extended period of time and therefore has classified the funded letter of credit within other assets on the Consolidated Balance Sheets as of June 30, 2018 and September 30, 2017. The Company will continue to assess collectability related to this matter as facts and circumstances evolve.

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 5,000,000 shares of Matthews' common stock under the program, of which 1,444,026 shares remain available for repurchase as of June 30, 2018. 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 set forth in the Company's Restated Articles of Incorporation.

Consolidated working capital of the Company was $323.3 million at June 30, 2018, compared to $309.9 million at September 30, 2017.  Cash and cash equivalents were $53.7 million at June 30, 2018, compared to $57.5 million at September 30, 2017.  The Company's current ratio was 2.1 at June 30, 2018 and September 30, 2017.

28

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

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.

At June 30, 2018, an accrual of approximately $2.5 million had been recorded for environmental remediation (of which $750,000 was classified in other current liabilities), representing management's best estimate of the probable and reasonably estimable costs of known remediation obligations for one of the Company's subsidiaries.  The accrual 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.

ACQUISITIONS:

Refer to Note 12, "Acquisitions" in Item 1 - "Financial Statements" for further details on the Company's acquisitions.

FORWARD-LOOKING INFORMATION:

The Company's current strategy to attain annual growth in earnings per share primarily 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 integration activities to achieve synergy benefits.

With respect to the remainder of fiscal 2018, the Company expects to continue to devote a significant level of effort to the integrations of recent acquisitions, including systems integration.  Due to the size of these acquisitions and the projected synergy benefits from integration, these efforts are anticipated to continue for an extended period of time.  The costs associated with these integrations will impact the Company's operating results for fiscal 2018.  Consistent with its practice, the Company plans to identify these costs on a quarterly basis as incurred.

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 Item 7A - "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2017.

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, 2017.  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.

29

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

LONG-TERM CONTRACTUAL OBLIGATIONS AND COMMITMENTS:

The following table summarizes the Company's contractual obligations at June 30, 2018, and the effect such obligations are expected to have on its liquidity and cash flows in future periods.

	Payments due in fiscal year:
	Total		2018 Remainder		2019 to 2020		2021 to 2022		After 2022
Contractual Cash Obligations:	(Dollar amounts in thousands)
Revolving credit facilities	$	385,529	$	—	$	26,529	$	359,000	$	—
Securitization Facility	102,500		—		102,500		—		—
Senior secured term loan	218,296		6,250		50,000		162,046		—
2025 Senior Notes	422,042		7,875		31,500		31,500		351,167
Notes payable to banks	19,006		600		18,406		—		—
Short-term borrowings	232		232		—		—		—
Capital lease obligations	6,147		328		1,757		1,237		2,825
Non-cancelable operating leases	76,332		6,064		36,744		19,475		14,049
Other	14,608		2,922		5,843		5,843		—
Total contractual cash obligations	$	1,244,692	$	24,271	$	273,279	$	579,101	$	368,041

A significant portion of the loans included in the table above bear interest at variable rates.  At June 30, 2018, the weighted-average interest rate was 2.82% on the Company's domestic credit facility, 2.84% on the Company's Securitization Facility, 1.75% on the credit facility through the Company's European subsidiaries, 1.40%on notes issued by the Company's wholly-owned subsidiary, Matthews Europe GmbH & Co. KG, 2.62% on bank loans to the Company's wholly-owned subsidiary, Matthews International S.p.A, and 3.03% on other outstanding debt.

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 2018.  During the nine months ended June 30, 2018 contributions of $10.0 million, $575,000 and $1.3 million were made under the principal retirement plan, supplemental retirement plan and postretirement plan, respectively. The Company currently anticipates contributing an additional $191,000 under the supplemental retirement plan for the remainder of fiscal 2018.

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 June 30, 2018, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $15.3 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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Refer to Note 2, "Basis of Presentation" in Item 1 - "Financial Statements," for further details on recently issued accounting pronouncements.

30

Item 3.   Quantitative and Qualitative Disclosures About Market Risk:

There have been no material changes in the Company’s market risk during the three and nine months ended June 30, 2018. For additional information see Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017.

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 June 30, 2018. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2018, 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 June 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

31

PART II ‑ OTHER INFORMATION

Item 1. Legal Proceedings

The Company 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 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item IA to our Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The risk factors disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2017, in addition to the other information set forth in this report, could adversely affect the Company's operating performance and financial condition. Additional risks not currently known or deemed immaterial may also result in adverse effects on the Company.

Item 2. Unrecognized Sales of Equity Securities and Use of Proceeds

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 5,000,000 shares of Matthews' common stock under the program, of which 1,444,026 shares remain available for repurchase as of June 30, 2018.

The following table shows the monthly fiscal 2018 stock repurchase activity:

Period	Total number of shares purchased	Weighted-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 2017	—	$	—	—	1,816,146
November 2017	75,078	58.27		75,078	1,741,068
December 2017	687	58.64		687	1,740,381
January 2018	61,406	56.29		61,406	1,678,975
February 2018	130,000	52.97		130,000	1,548,975
March 2018	69,215	51.25		69,215	1,479,760
April 2018	25,000	48.61		25,000	1,454,760
May 2018	10,452	53.30		10,452	1,444,308
June 2018	282	48.78		282	1,444,026
Total	372,120	$	53.99	372,120

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Not Applicable.

32

Item 6. Exhibits and Reports on Form 8‑K

(a)	Exhibits
	Exhibit No.	Description	Method of Filing
	31.1	Certification of Principal Executive Officer for Joseph C. Bartolacci	Filed herewith
	31.2	Certification of Principal Financial Officer for Steven F. Nicola	Filed herewith
	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	Furnished herewith
	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	Furnished herewith
	101.INS	XBRL Instance Document	Filed herewith
	101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
	101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
	101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith

33

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:	July 31, 2018	By: /s/ Joseph C. Bartolacci
		Joseph C. Bartolacci, President
		and Chief Executive Officer
Date:	July 31, 2018	By: /s/ Steven F. Nicola
		Steven F. Nicola, Chief Financial Officer
		and Secretary

34

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: July 31, 2018

/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: July 31, 2018

/s/Steven F. Nicola

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

Steven F. Nicola

Chief Financial Officer

and Secretary

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 June 30, 2018 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

July 31, 2018

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 June 30, 2018 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 and Secretary

July 31, 2018

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

Document and Entity Information	9 Months Ended
	Jun. 30, 2018 shares
Document and Entity Information [Abstract]
Entity Registrant Name	MATTHEWS INTERNATIONAL CORP
Entity Central Index Key	0000063296
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	32,097,422

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Current assets:
Cash and cash equivalents	$ 53,715	$ 57,515
Accounts receivable, net	327,684	319,566
Inventories, net	184,814	171,445
Other current assets	63,728	46,533
Total current assets	629,941	595,059
Investments	50,236	37,667
Property, plant and equipment: Cost	606,257	570,879
Less accumulated depreciation	(351,317)	(335,346)
Property, plant, and equipment, net	254,940	235,533
Deferred income taxes	3,504	2,456
Other assets	68,208	51,758
Goodwill	953,264	897,794
Other intangible assets, net	452,848	424,382
Total assets	2,412,941	2,244,649
Current liabilities:
Long-term debt, current maturities	27,567	29,528
Trade accounts payable	66,457	66,607
Accrued compensation	53,017	62,210
Accrued income taxes	22,871	21,386
Other current liabilities	136,710	105,401
Total current liabilities	306,622	285,132
Long-term debt	998,852	881,602
Accrued pension	97,028	103,273
Postretirement benefits	19,037	19,273
Deferred income taxes	99,340	139,430
Other liabilities	58,882	25,680
Total liabilities	1,579,761	1,454,390
Shareholders' equity-Matthews:
Common stock	36,334	36,334
Additional paid-in capital	126,273	123,432
Retained earnings	1,016,892	948,830
Accumulated other comprehensive loss	(174,575)	(154,115)
Treasury stock, at cost	(172,175)	(164,774)
Total shareholders' equity-Matthews	832,749	789,707
Noncontrolling interests	431	552
Total shareholders' equity	833,180	790,259
Total liabilities and shareholders' equity	$ 2,412,941	$ 2,244,649

XML

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Sales	$ 411,621	$ 389,630	$ 1,195,136	$ 1,119,544
Cost of sales	(259,720)	(245,536)	(762,570)	(709,761)
Gross profit	151,901	144,094	432,566	409,783
Selling expense	(36,226)	(36,058)	(110,786)	(107,688)
Administrative expense	(69,446)	(64,886)	(212,906)	(202,479)
Intangible amortization	(8,334)	(6,364)	(23,264)	(16,939)
Operating profit	37,895	36,786	85,610	82,677
Investment income	538	431	931	1,548
Interest expense	(9,719)	(6,988)	(26,782)	(19,750)
Other income (deductions), net	(57)	7,935	(887)	7,227
Income before income taxes	28,657	38,164	58,872	71,702
Income tax (provision) benefit	(4,312)	(8,856)	18,703	(17,318)
Net income	24,345	29,308	77,575	54,384
Net loss attributable to noncontrolling interests	69	177	201	343
Net income attributable to Matthews shareholders	$ 24,414	$ 29,485	$ 77,776	$ 54,727
Earnings per share attributable to Matthews shareholders:
Basic (in dollars per share)	$ 0.77	$ 0.91	$ 2.45	$ 1.70
Diluted (in dollars per share)	$ 0.77	$ 0.91	$ 2.44	$ 1.68

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net income (loss):	$ 24,345	$ 29,308	$ 77,575	$ 54,384
Other comprehensive (loss) income (OCI), net of tax:
Foreign currency translation adjustment	(38,692)	32,382	(19,578)	5,216
Pension plans and other postretirement benefits	1,256	1,422	3,296	4,420
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	393	(353)	5,286	6,712
Net amount reclassified to earnings	(399)	(187)	(570)	(986)
Net change in unrecognized gain (loss) on derivatives	(6)	(540)	4,716	5,726
OCI, net of tax	(37,442)	33,264	(11,566)	15,362
Comprehensive income (loss)	(13,097)	62,572	66,009	69,746
Noncontrolling Interest
Net income (loss):	(69)	(177)	(201)	(343)
Other comprehensive (loss) income (OCI), net of tax:
Foreign currency translation adjustment	(23)	121	80	189
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
OCI, net of tax	(23)	121	80	189
Comprehensive income (loss)	(92)	(56)	(121)	(154)
Matthews
Net income (loss):	24,414	29,485	77,776	54,727
Other comprehensive (loss) income (OCI), net of tax:
Foreign currency translation adjustment	(38,669)	32,261	(19,658)	5,027
Pension plans and other postretirement benefits	1,256	1,422	3,296	4,420
Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation	393	(353)	5,286	6,712
Net amount reclassified to earnings	(399)	(187)	(570)	(986)
Net change in unrecognized gain (loss) on derivatives	(6)	(540)	4,716	5,726
OCI, net of tax	(37,419)	33,143	(11,646)	15,173
Comprehensive income (loss)	$ (13,005)	$ 62,628	$ 66,130	$ 69,900

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Non- controlling interests
Beginning balance at Sep. 30, 2016	$ 709,334	$ 36,334	$ 117,088	$ 896,224	$ (181,868)	$ (159,113)	$ 669
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	54,384			54,727			(343)
Minimum pension liability	4,420				4,420
Translation adjustment	5,216				5,027		189
Fair value of derivatives	5,726				5,726		0
Comprehensive income (loss)	69,746						(154)
Stock-based compensation	11,854		11,854
Purchase of treasury stock	(11,651)					(11,651)
Issuance of treasury stock	146		(8,397)			8,543
Cancellations of treasury stock	0		179			(179)
Dividends	(16,193)			(16,193)
Ending balance at Jun. 30, 2017	763,236	36,334	120,724	934,758	(166,695)	(162,400)	515
Beginning balance at Mar. 31, 2017					(199,838)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	29,308						(177)
Translation adjustment	32,382						121
Fair value of derivatives	(540)						0
Comprehensive income (loss)	62,572						(56)
Ending balance at Jun. 30, 2017	763,236	36,334	120,724	934,758	(166,695)	(162,400)	515
Beginning balance at Sep. 30, 2017	790,259	36,334	123,432	948,830	(154,115)	(164,774)	552
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	77,575			77,776			(201)
Minimum pension liability	3,296				3,296
Translation adjustment	(19,578)				(19,658)		80
Fair value of derivatives	4,716				4,716		0
Comprehensive income (loss)	66,009						(121)
Stock-based compensation	10,531		10,531
Purchase of treasury stock	(20,091)					(20,091)
Issuance of treasury stock	5,000		(8,039)			13,039
Cancellations of treasury stock	0		349			(349)
Dividends	(18,528)			(18,528)
Ending balance at Jun. 30, 2018	833,180	36,334	126,273	1,016,892	(174,575)	(172,175)	431
Beginning balance at Mar. 31, 2018					(128,342)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	24,345						(69)
Translation adjustment	(38,692)						(23)
Fair value of derivatives	(6)						0
Comprehensive income (loss)	(13,097)						(92)
Ending balance at Jun. 30, 2018	833,180	$ 36,334	$ 126,273	$ 1,016,892	$ (174,575)	$ (172,175)	$ 431
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification of accumulated other comprehensive (loss) income (AOCI) tax effects	$ 0

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Statement of Stockholders' Equity [Abstract]
Purchase of treasury stock (in shares)	372,120	174,032
Issuance of treasury stock (in shares)	326,827	221,958
Cancellations of treasury stock (in shares)	5,864	2,640
Dividends, per share (in dollars per share)	$ 0.57	$ 0.51

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 77,575	$ 54,384
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57,052	50,810
Stock-based compensation expense	10,531	11,854
Deferred tax benefit	(43,272)	(4,836)
Gain on sale of assets	(925)	(332)
Unrealized gain on investments	(771)	(1,953)
Changes in working capital items	(5,897)	(2,908)
Increase in other assets	(11,932)	(11,227)
Increase (decrease) in other liabilities	10,405	(5,012)
(Decrease) increase in pension and postretirement benefits	(1,473)	6,115
Other operating activities, net	(8,487)	(1,133)
Net cash provided by operating activities	82,806	95,762
Cash flows from investing activities:
Capital expenditures	(32,150)	(32,215)
Acquisitions, net of cash acquired	(119,953)	(96,320)
Proceeds from sale of assets	3,358	1,515
Purchases of investments	(11,871)	0
Other investing activities, net	0	(681)
Net cash used in investing activities	(160,616)	(127,701)
Cash flows from financing activities:
Proceeds from long-term debt	681,297	372,768
Payments on long-term debt	(566,891)	(311,718)
Proceeds from the exercise of stock options	0	14
Purchases of treasury stock	(20,091)	(11,651)
Dividends	(18,528)	(16,193)
Net cash provided by financing activities	75,787	33,220
Effect of exchange rate changes on cash	(1,777)	(240)
Net change in cash and cash equivalents	(3,800)	1,041
Non-cash investing and financing activities:
Acquisition of long-term asset under financing arrangement	$ 14,544	$ 0

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Nature of Operations

9 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of brand solutions, memorialization products and industrial technologies. Brand solutions include brand development, deployment and delivery (consisting of brand management, pre-media services, printing plates and cylinders, and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment primarily for the cemetery and funeral home industries. Industrial technologies include marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

The Company has facilities in North America, Europe, Asia, Australia, and Central and South America.

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Basis of Presentation

9 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") 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 GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the nine months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2018. 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, 2017.  The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control.  Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP 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.

New Accounting Pronouncements:

Issued

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging (Topic 815), which provides new guidance intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. This ASU is effective for the Company beginning in fiscal year 2020. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), which provides new guidance intended to clarify and reduce complexities in applying stock compensation guidance to a change to the terms or conditions of share-based payment awards. This ASU is effective for the Company beginning in fiscal year 2019. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

Note 2.   Basis of Presentation (continued)

In February 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which provides new guidance intended to improve the disclosure requirements related to the service cost component of net benefit cost.  This ASU is effective for the Company beginning in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides new guidance intended to make the definition of a business more operable and allow for more consistency in application.  This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), which provides new guidance intended to clarify the presentation of certain cash flow items including debt prepayments, debt extinguishment costs, contingent considerations payments, and insurance proceeds, among other things. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019, and early adoption is permitted.  The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which provides new guidance on how an entity should account for leases and recognize associated lease assets and liabilities. This ASU requires lessees to recognize assets and liabilities that arise from financing and operating leases on the Consolidated Balance Sheet. The implementation of this standard will require application of the new guidance at the beginning of the earliest comparative period presented, once adopted. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2020, and does allow for early adoption.  The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides new guidance intended to improve the recognition, measurement, presentation and disclosure of financial instruments. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements

to Financial Instruments—Overall (Subtopic 825-10), that provides guidance related to implementation issues and corrects or improves certain aspects of the financial instruments guidance. The adoption of these ASUs are not expected to have a material impact on the Company's consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This ASU replaces nearly all existing U.S. GAAP guidance on revenue recognition. The standard prescribes a five-step model for recognizing revenue, the application of which will require significant judgment. The FASB issued ASU 2015-14 in August 2015 which resulted in a deferral of the original effective date of ASU 2014-09. During 2016 and 2017, the FASB issued six ASUs that address implementation issues and correct or improve certain aspects of the new revenue recognition guidance, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) and ASU 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). These ASUs do not change the core principles in the revenue recognition guidance outlined above. ASU No. 2014-09 and the related ASUs referenced above are effective for Matthews beginning October 1, 2018. The Company has completed its detailed assessment of all global revenue arrangements and related impact of the new standard compared to historical accounting policies on a representative sample of contracts and it does not expect the adoption of these ASUs will have a material impact on its consolidated financial statements. The Company is continuing to assess the ultimate impact that the adoption of this standard will have on its consolidated financial statement disclosures. In addition, the Company is evaluating the changes that will be required in its internal controls as a result of the adoption of this new standard. The Company is planning to adopt the provisions of these ASUs using the modified retrospective method for existing transactions on October 1, 2018.

Note 2.   Basis of Presentation (continued)

Adopted

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220), which provides new guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. The amount of reclassification is the difference between the Company's historical U.S. income tax rate and the newly enacted 21% corporate income tax rate. The Company has early adopted this ASU in the third quarter ended June 30, 2018. The adoption of this ASU resulted in a decrease to AOCI and corresponding increase to retained earnings of $8,814.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which provides new guidance intended to simplify the subsequent measurement of goodwill and removing Step 2 from the goodwill impairment process.  The Company has early adopted this ASU in the first quarter ended December 31, 2017. The adoption of this ASU had no impact on the Company's consolidated financial statements, but modifies the methodology to assess and measure goodwill impairment prospectively.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company early adopted this ASU in the fourth quarter of fiscal 2017, which resulted in a reduction to income tax expense of $1,234, and a corresponding favorable impact on diluted earnings per share of $0.04, both of which have been retroactively included in the first quarter results for fiscal 2017.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which provides new guidance to simplify the measurement of inventory valuation at the lower of cost or net realizable value.  Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The adoption of this ASU in the first quarter ended December 31, 2017 had no impact on the Company's consolidated financial statements.

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Fair Value Measurements

9 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

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.

Note 3.   Fair Value Measurements (continued)

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

	June 30, 2018								September 30, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Derivatives (1)	$	—	$	10,863	$	—	$	10,863	$	—	$	3,990	$	—	$	3,990
Equity and fixed income mutual funds	—		22,257		—		22,257		—		21,649		—		21,649
Other investments	—		5,870		—		5,870		—		5,810		—		5,810
Total assets at fair value	$	—	$	38,990	$	—	$	38,990	$	—	$	31,449	$	—	$	31,449
Liabilities:
Derivatives (1)	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
Total liabilities at fair value	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

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Inventories

9 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following:

	June 30, 2018		September 30, 2017
Raw materials	$	34,509	$	29,396
Work in process	71,628		61,917
Finished goods	78,677		80,132
	$	184,814	$	171,445

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Debt

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $900,000 senior secured revolving credit facility and a $250,000 senior secured amortizing term loan. The term loan requires scheduled principal payments of 5.0% of the outstanding principal in year one, 7.5% in year two, and 10.0% in years three through five, payable in quarterly installments.  The balance of the revolving credit facility and the term loan are due on the maturity date of April 26, 2021. Borrowings under both the revolving credit facility and the term loan bear interest at LIBOR plus a factor ranging from 0.75% to 2.00% (1.25% at June 30, 2018) based on the Company's secured leverage ratio.  The secured leverage ratio is defined as net secured indebtedness divided by adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company is required to pay an annual commitment fee ranging from 0.15% to 0.25% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the revolving credit facility at June 30, 2018 and September 30, 2017 were $359,000 and $525,000, respectively. Outstanding borrowings on the term loan at June 30, 2018 and September 30, 2017 were $218,296 and $232,479, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at June 30, 2018 and June 30, 2017 was 2.82% and 2.89%, respectively.

Note 5.   Debt (continued)

In December 2017, the Company issued $300,000 aggregate principal amount of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year beginning on June 1, 2018. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The proceeds from the 2025 Senior Notes were used primarily to reduce indebtedness under the Company's domestic credit facility. The Company incurred direct financing fees and costs in connection with 2025 Senior Notes of $4,127, which are being deferred and amortized over the term of the 2025 Senior Notes.

The Company has a $115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions. The Securitization Facility was amended in April 2018 to extend the maturity date until April 11, 2020. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC in turn assigns a collateral interest in these receivables to certain financial institutions, and then may borrow funds under the Securitization Facility. The Securitization Facility does not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations remain on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility bear interest at LIBOR plus 0.75%. The Company is required to pay an annual commitment fee ranging from 0.25% to 0.35% of the unused portion of the Securitization Facility. Outstanding borrowings under the Securitization Facility at June 30, 2018 and September 30, 2017 were $102,500 and $95,825, respectively. At June 30, 2018, the interest rate on borrowings under this facility was 2.84%.

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:

	June 30, 2018			September 30, 2017
Pay fixed swaps - notional amount	$	350,000		$	414,063
Net unrealized gain	$	10,863		$	3,959
Weighted-average maturity period (years)	2.9			3.3
Weighted-average received rate	2.09		%	1.23		%
Weighted-average pay rate	1.36		%	1.34		%

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 future variable interest payments, 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 gain of $10,863 ($8,202 after tax) at June 30, 2018 and an unrealized gain, net of unrealized losses, of $3,959 ($2,415 after tax) at September 30, 2017. The net unrealized gain is included in shareholders' equity as part of AOCI.  Assuming market rates remain constant with the rates at June 30, 2018, a gain (net of tax) of approximately $2,634 included in AOCI is expected to be recognized in earnings over the next twelve months.

Note 5.   Debt (continued)

At June 30, 2018 and September 30, 2017, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:

Derivatives	June 30, 2018		September 30, 2017
Current assets:
Other current assets	$	3,489	$	1,098
Long-term assets:
Other assets	7,374		2,892
Current liabilities:
Other current liabilities	—		(7		)
Long-term liabilities:
Other liabilities	—		(24		)
Total derivatives	$	10,863	$	3,959

The gains recognized on derivatives were as follows:

Derivatives in Cash Flow Hedging Relationships	Location of Gain Recognized in Income on Derivative	Amount of Gain Recognized in Income on Derivatives				Amount of Gain Recognized in Income on Derivatives
		Three Months Ended June 30,				Nine Months Ended June 30,
		2018		2017		2018		2017
Interest rate swaps	Interest expense	$	490	$	306	$	755	$	1,616

The Company recognized the following gains in AOCI:

Derivatives in Cash Flow Hedging Relationships	Amount of Gain Recognized in AOCI on Derivatives				Location of Gain Reclassified From AOCI into Income (Effective Portion*)	Amount of Gain Reclassified from AOCI into Income (Effective Portion*)
	June 30, 2018		June 30, 2017			June 30, 2018		June 30, 2017
Interest rate swaps	$	5,286	$	6,712	Interest expense	$	570	$	986
*There is no ineffective portion or amount excluded from effectiveness testing.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews.  The maximum amount of borrowing available under this facility is €35.0 million ($40,903).  The credit facility matures in December 2018 and the Company intends to extend this facility. Outstanding borrowings under the credit facility totaled€22.7 million ($26,529) and €22.1 million ($26,126) at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on outstanding borrowings under this facility at June 30, 2018 and 2017 was 1.75%.

The Company’s German subsidiary, Matthews Europe GmbH & Co. KG, has €15.0 million ($17,530) of senior unsecured notes with European banks.  The notes are guaranteed by Matthews and mature in November 2019.  A portion of the notes (€5.0 million) have a fixed interest rate of 1.40%, and the remainder bear interest at Euro LIBOR plus 1.40%.  The weighted-average interest rate on the notes at June 30, 2018 and 2017 was 1.40%.

Note 5.   Debt (continued)

The Company, through its Italian subsidiary, Matthews International S.p.A., has several loans with various Italian banks.  Outstanding borrowings on these loans totaled €500,000 ($584) and €2.6 million ($3,079) at June 30, 2018 and September 30, 2017, respectively. These loans mature in November 2019.  Matthews International S.p.A. also has multiple on-demand lines of credit totaling €700,000 ($818) as of June 30, 2018 with the same Italian banks.  Outstanding borrowings on these lines were €198,000 ($231) and €4.0 million ($4,735) at June 30, 2018 and September 30, 2017, respectively.  The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at June 30, 2018 and 2017 was2.62% and 2.55%, respectively.

Other debt totaled $892 and $1,032 at June 30, 2018 and September 30, 2017, respectively. The weighted-average interest rate on these outstanding borrowings was 3.03% and 2.25% at June 30, 2018 and 2017, respectively.

In September 2014, a claim was filed seeking to draw upon a letter of credit issued by the Company of £8,570,000 ($11,333 at June 30, 2018) with respect to a performance guarantee on an environmental solutions project in Saudi Arabia. Management assessed the customer's demand to be without merit and initiated an action with the court in the United Kingdom (the "Court"). Pursuant to this action, an order was issued by the Court in January 2015 requiring that, upon receipt by the customer, the funds were to be remitted by the customer to the Court pending resolution of the dispute between the parties. As a result, the Company made payment on the draw to the financial institution for the letter of credit and the funds were ultimately received by the customer. The customer did not remit the funds to the Court as ordered. On June 14, 2016, the Court ruled completely in favor of Matthews following a trial on the merits. However, as the customer has neither yet remitted the funds nor complied with the final, un-appealed orders of the Court, it is possible the resolution of this matter could have an unfavorable financial impact on Matthews’ results of operations. The Company has determined that resolution of this matter may take an extended period of time and therefore has classified the funded letter of credit within other assets on the Consolidated Balance Sheets as of June 30, 2018 and September 30, 2017. The Company will continue to assess collectability related to this matter as facts and circumstances evolve.

As of June 30, 2018 and September 30, 2017, the fair value of the Company's long-term debt, including current maturities, approximated the carrying value included in the Consolidated Balance Sheets. The Company was in compliance with all of its debt covenants as of June 30, 2018.

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Share-Based Payments

9 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

Share-Based Payments

The Company maintains an equity incentive plan (the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards.  The Company also maintains an equity incentive plan (the "2012 Equity Incentive Plan") that previously provided for grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards. Under the 2017 Equity Incentive Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of 1,700,000.  There will be no further grants under the 2012 Equity Incentive Plan. At June 30, 2018, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.  All Plans are administered by the Compensation Committee of the Board of Directors.

With respect to outstanding restricted share grants, 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 three or 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 June 30, 2018 and 2017, stock-based compensation cost totaled $2,399 and $2,837, respectively. For the nine-month periods ended June 30, 2018 and 2017, stock-based compensation cost totaled $10,531 and $11,854, respectively.  The nine-month periods ended June 30, 2018 and 2017 included $2,850 and $3,337 of stock-based compensation cost, respectively, that was recognized at the time of grant for retirement-eligible employees. The associated future income tax benefit recognized for stock-based compensation was $588 and $1,106 for the three-month periods ended June 30, 2018 and 2017, respectively, and $2,108 and $4,623 for the nine-month periods ended June 30, 2018 and 2017, respectively.

Note 6.   Share-Based Payments (continued)

There were no stock options exercised during the three month period ended June 30, 2017. For the nine-month period ended June 30, 2017, the amount of cash received from the exercise of stock options was $14. In connection with these exercises, the tax benefits realized by the Company was $3 for the nine-month period ended June 30, 2017. 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 nine-month period ended June 30, 2017 and was $9.

The transactions for restricted stock for the nine months ended June 30, 2018 were as follows:

	Shares		Weighted- average Grant-date Fair Value
Non-vested at September 30, 2017	501,184		$	53.65
Granted	234,100		57.05
Vested	(174,120	)	51.41
Expired or forfeited	(5,864	)	59.75
Non-vested at June 30, 2018	555,300		$	55.72

As of June 30, 2018, the total unrecognized compensation cost related to unvested restricted stock was $8,510 and is expected to be recognized over a weighted average period of 1.5 years.

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 the fair value of restricted stock granted during the nine-month periods ended June 30, 2018 and 2017.

	Nine Months Ended June 30,
	2018		2017
Expected volatility	20.5	%	20.2	%
Dividend yield	1.0	%	1.1	%
Average risk-free interest rate	2.0	%	1.7	%
Average expected term (years)	2.1		2.1

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 for grants in the years ended September 30, 2018, 2017 and 2016 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.

Note 6.   Share-Based Payments (continued)

The Company maintains the 1994 Director Fee Plan and the Amended and Restated 2014 Director Fee Plan (collectively, the "Director Fee Plans").  There will be no further fees or share-based awards granted under the 1994 Director Fee Plan.  Under the Amended and Restated 2014 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2018, either cash or shares of the Company's Class A Common Stock with a value equal to $85.  The annual retainer fee for fiscal 2018 paid to a non-employee Chairman of the Board is $185.  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 of22,698 shares had been deferred under the Director Fee Plans as of June 30, 2018.  Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares) with a value of $125 for fiscal 2018.  A total of 22,300 stock options have been granted under the Director Fee Plans.  At June 30, 2018, there were no options outstanding. Additionally, 173,229 shares of restricted stock have been granted under the Director Fee Plans, 70,079 of which were issued under the Amended and Restated 2014 Director Fee Plan.  20,940 share of restricted stock are unvested at June 30, 2018.  A total of 150,000 shares have been authorized to be issued under the Amended and Restated 2014 Director Fee Plan.

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Earnings Per Share Attributable to Matthews' Shareholders

9 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share Attributable to Matthews' Shareholders

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 June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net income attributable to Matthews shareholders	$	24,414	$	29,485	$	77,776	$	54,727
Weighted-average shares outstanding (in thousands):
Basic shares	31,631		32,255		31,693		32,248
Effect of dilutive securities	150		317		132		348
Diluted shares	31,781		32,572		31,825		32,596

Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and nine months ended June 30, 2018 and 2017.

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Pension and Other Postretirement Benefit Plans

9 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefit Plans

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 June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	2,039		$	2,138		$	84		$	98
Interest cost	2,049			1,841			158			157
Expected return on plan assets	(2,534		)	(2,312		)	—			—
Amortization:
Prior service cost	(35		)	(45		)	(49		)	(49		)
Net actuarial loss	1,753			2,509			—			—
Net benefit cost	$	3,272		$	4,131		$	193		$	206

	Nine months ended June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	6,117		$	6,414		$	252		$	294
Interest cost	6,147			5,523			474			471
Expected return on plan assets	(7,602		)	(6,936		)	—			—
Amortization:
Prior service cost	(105		)	(135		)	(147		)	(147		)
Net actuarial loss	5,257			7,527			—			—
Net benefit cost	$	9,814		$	12,393		$	579		$	618

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 2018.

Contributions made and anticipated for fiscal year 2018 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the nine months ended June 30, 2018:
Principal retirement plan	$	10,000	$	—
Supplemental retirement plan	575		—
Other postretirement plan	—		1,281
Additional contributions expected in fiscal 2018:
Supplemental retirement plan	$	191	$	—

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Accumulated Other Comprehensive Income

9 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2018		$	(41,583	)	$	(93,896	)		$	7,137		$	(128,342	)
OCI before reclassification		—			(38,669		)		393			(38,276		)
Amounts reclassified from AOCI	(a)	1,256			—			(b)	(399		)	857
Net current-period OCI		1,256			(38,669		)		(6		)	(37,419		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, March 31, 2018		—			$	499			—			$	499
OCI before reclassification		—			(23		)		—			(23		)
Net current-period OCI		—			(23		)		—			(23		)
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2017		$	(53,052	)	$	(149,493	)		$	2,707		$	(199,838	)
OCI before reclassification		—			32,261				(353		)	31,908
Amounts reclassified from AOCI	(a)	1,422			—			(b)	(187		)	1,235
Net current-period OCI		1,422			32,261				(540		)	33,143
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, March 31, 2017		—			$	345			—			$	345
OCI before reclassification		—			121				—			121
Net current-period OCI		—			121				—			121
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

Note 9.   Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2017		$	(43,623	)	$	(112,907	)		$	2,415		$	(154,115	)
OCI before reclassification		—			(19,658		)		5,286			(14,372		)
Amounts reclassified from AOCI	(a)	3,296			—			(b)	(570		)	2,726
Net current-period OCI		3,296			(19,658		)		4,716			(11,646		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, September 30, 2017		—			$	396			—			$	396
OCI before reclassification		—			80				—			80
Net current-period OCI		—			80				—			80
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2016		$	(56,050	)	$	(122,259	)		$	(3,559	)	$	(181,868	)
OCI before reclassification		—			5,027				6,712			11,739
Amounts reclassified from AOCI	(a)	4,420			—			(b)	(986		)	3,434
Net current-period OCI		4,420			5,027				5,726			15,173
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, September 30, 2016		—			$	277			—			$	277
OCI before reclassification		—			189				—			189
Net current-period OCI		—			189				—			189
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

Note 9.   Accumulated Other Comprehensive Income (continued)

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2018 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2018				Nine Months Ended June 30, 2018			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	84		(a)	$	252
Actuarial losses	(1,753		)	(a)	(5,257		)
	(1,669		)	(b)	(5,005		)	Income before income tax
	(413		)		(1,709		)	Income taxes
	$	(1,256	)		$	(3,296	)	Net income
Derivatives
Interest rate swap contracts	$	490			$	755		Interest expense
	490			(b)	755			Income before income tax
	91				185			Income taxes
	$	399			$	570		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2017 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2017				Nine Months Ended June 30, 2017			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	94		(a)	$	282
Actuarial losses	(2,509		)	(a)	(7,527		)
	(2,415		)	(b)	(7,245		)	Income before income tax
	(993		)		(2,825		)	Income taxes
	$	(1,422	)		$	(4,420	)	Net income
Derivatives
Interest rate swap contracts	$	306			$	1,616		Interest expense
	306			(b)	1,616			Income before income tax
	119				630			Income taxes
	$	187			$	986		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

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Income Taxes

9 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

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 consolidated income taxes for the nine months ended June 30, 2018 were a benefit of $18,703, compared to income tax expense of $17,318 for the first nine months of fiscal 2017. The differences between the Company's fiscal 2018 nine month effective tax rate and the fiscal 2017 nine month effective tax rate, as well as the Company’s fiscal 2018 blended U.S. federal statutory rate of 24.5% primarily resulted from the impacts of the U.S. tax reform enactment discussed below.

The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018, which results in a blended U.S. statutory tax rate of 24.5% for the Company in fiscal 2018. The Act also requires a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred, and creates new taxes on certain foreign-sourced earnings. At June 30, 2018, the Company has not finalized its accounting for the tax effects of the Act; however, as described below, management has made a reasonable estimate of the effects on existing deferred tax balances and has recorded an estimated amount for its one-time transition tax. For the items for which the Company was able to determine a reasonable estimate, a provisional net tax benefit of $29,921 was recognized, which is included entirely as a component of income tax benefit (provision) for the nine months ended June 30, 2018. The two main components of this provisional amount are discussed below. The Company continues to await additional guidance on certain aspects of the Act which could have a significant effect upon its current year income tax expense.

Provisional amounts

Deferred tax assets and liabilities: The Company remeasured certain deferred tax assets and liabilities based on the rates at which these deferred tax amounts are expected to reverse in the future, which is generally 21.0% or 24.5%. This remeasurement resulted in a tax benefit of $38,010 being recognized during the nine months ended June 30, 2018. The Company is still analyzing certain aspects of the Act, estimating the timing of reversals, and refining its calculations, which could potentially affect the measurement of these balances, or potentially generate new deferred tax amounts.

Foreign tax effects: The Company recorded a provisional amount for its one-time transition tax for all of its foreign subsidiaries, resulting in an increase in income tax expense of $8,089 for the nine months ended June 30, 2018. The one-time transition tax was calculated using an estimate of the Company’s total post-1986 earnings and profits (“E&P”) that were previously deferred from U.S. income taxes. The Company has not yet finalized its determination of the total post-1986 E&P and tax pools for its foreign subsidiaries and has not fully analyzed the state income tax effects. The calculation of the one-time transition tax is also impacted by the amount of foreign E&P held in cash and other specified assets. The tax amount may change when the Company finalizes its calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and upon finalization of the calculation of cash and other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.

The Company had unrecognized tax benefits (excluding penalties and interest) of $15,292 and $7,968 on June 30, 2018 and September 30, 2017, respectively, of which $11,183 and $7,968 would impact the annual effective rate. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $3,525 in the next 12 months primarily due to the completion of an audit and the expiration of the statute of limitations.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $2,338 and $1,779 at June 30, 2018 and September 30, 2017, respectively.  These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

Note 10.   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 June 30, 2018, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2015 and forward
United States – State	2013 and forward
Canada	2014 and forward
Germany	2015 and forward
United Kingdom	2016 and forward
Australia	2014 and forward
Singapore	2013 and forward

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Segment Information

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company manages its businesses under three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment includes brand development, deployment and delivery (consisting of brand management, pre-media services, printing plates and cylinders and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services).  The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets and cremation equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.  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 noncontrolling interest amongst the segments.

Information about the Company's segments is as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Sales:
SGK Brand Solutions	$	202,976	$	200,606	$	601,794	$	566,527
Memorialization	161,979		155,837		475,557		463,567
Industrial Technologies	46,666		33,187		117,785		89,450
	$	411,621	$	389,630	$	1,195,136	$	1,119,544

Operating profit:
SGK Brand Solutions	$	8,308	$	11,390	$	16,550	$	19,941
Memorialization	24,930		23,454		63,294		60,759
Industrial Technologies	4,657		1,942		5,766		1,977
	$	37,895	$	36,786	$	85,610	$	82,677

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Acquisitions

9 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Acquisitions

Acquisitions

Fiscal 2018:

On February 1, 2018, the Company acquired certain net assets of Star Granite and Bronze International, Inc. ("Star Granite") for a total purchase price of $34,713, consisting of cash of $29,713 (net of cash acquired and holdback amounts, subject to a working capital adjustment) and shares of Matthews common stock valued at $5,000. Star Granite manufactures and distributes granite and other memorialization products to cemetery and other customers across the United States and is included in the Company's Memorialization segment. Annual sales for this business were approximately $31,000 prior to the acquisition. The preliminary purchase price allocation related to the Star Granite acquisition is not finalized as of June 30, 2018, and is subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

On November 28, 2017, the Company acquired Compass Engineering Group, Inc. ("Compass") for $50,794 (net of cash acquired, subject to a working capital adjustment). Compass provides high-quality material handling control solutions and is included in the Company's Industrial Technologies segment. Annual sales for this business were approximately $24,000 prior to the acquisition. The preliminary purchase price allocation related to the Compass acquisition is not finalized as of June 30, 2018, and is subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

During the first nine months of fiscal 2018, the Company completed several additional smaller acquisitions for an aggregate purchase price of $39,446 (net of cash acquired and holdback amounts, subject to working capital adjustments). These additional acquisitions strengthen the Company's operations across the SGK Brand Solutions and Memorialization segments. The preliminary purchase price allocations for the acquisitions are not finalized as of June 30, 2018 and are subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

Fiscal 2017:

On March 1, 2017, the Company acquired GJ Creative Limited ("Equator") for £30.5 million ($37,596) (net of cash acquired). Equator provides design expertise capable of taking brands from creation to shelf under one roof, and is included in the Company's SGK Brand Solutions segment. Annual sales for this business were approximately $30,000 prior to the acquisition. The Company finalized the allocation of purchase price related to the Equator acquisition in the second quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On February 28, 2017, the Company acquired certain net assets of RAF Technology, Inc. ("RAF") for $8,717 (net of cash acquired). RAF is a global leader in pattern and optical character recognition software, and is included in the Company's Industrial Technologies segment. The Company finalized the allocation of purchase price related to the RAF acquisition in the fourth quarter of fiscal 2017, resulting in an immaterial adjustment to certain working capital accounts.

On January 13, 2017, the Company acquired VCG (Holdings) Limited ("VCG") for £8.8 million ($10,695) (net of cash acquired). VCG is a leading graphics, plate-making, and creative design company and is included in the Company's SGK Brand Solutions segment. The Company finalized the allocation of purchase price related to the VCG acquisition in the first quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On January 3, 2017, the Company acquired A. + E. Ungricht GmbH + Co KG ("Ungricht") for €24.0 million ($25,185) (net of cash acquired). Ungricht is a leading European provider of pre-press services and gravure printing forms, located in Germany, and is included in the Company's SGK Brand Solutions segment. Annual sales for this business were approximately $35,000 prior to the acquisition. The Company finalized the allocation of purchase price related to the Ungricht acquisition in the first quarter of fiscal 2018, resulting in an immaterial adjustment to certain working capital and intangible asset amounts.

On November 30, 2016, the Company acquired Guidance Automation Limited ("Guidance") for £8.0 million ($9,974) (net of cash acquired). Guidance provides technological solutions for autonomous warehouse vehicles and is included in the Company's Industrial Technologies segment.  The Company finalized the allocation of purchase price related to the Guidance acquisition in the fourth quarter of fiscal 2017, resulting in an immaterial adjustment to certain working capital and intangible asset accounts.

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Goodwill and Other Intangible Assets

9 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

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

	SGK Brand Solutions			Memorialization			Industrial Technologies		Consolidated
Goodwill	$	491,895		$	347,507		$	69,144	$	908,546
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at September 30, 2017	486,143			342,507			69,144		897,794
Additions during period	8,743			30,058			22,877		61,678
Translation and other adjustments	(6,460		)	(34		)	286		(6,208		)
Goodwill	$	494,178		$	377,531		$	92,307	$	964,016
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at June 30, 2018	$	488,426		$	372,531		$	92,307	$	953,264

The Company performed its annual impairment review in the second quarter of fiscal 2018 and determined that estimated fair value for all reporting units exceeded carrying value, therefore no adjustments to the carrying value of goodwill were necessary.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2018 and September 30, 2017, respectively.

	Carrying Amount		Accumulated Amortization				Net
June 30, 2018:
Trade names	$	126,047	$	—		*	$	126,047
Trade names	53,561		(4,380		)		49,181
Customer relationships	373,194		(104,035		)		269,159
Copyrights/patents/other	20,926		(12,465		)		8,461
	$	573,728	$	(120,880	)		$	452,848
September 30, 2017:
Trade names	$	168,467	$	—		*	$	168,467
Trade names	5,522		(2,030		)		3,492
Customer relationships	333,632		(84,560		)		249,072
Copyrights/patents/other	14,787		(11,436		)		3,351
*Not subject to amortization	$	522,408	$	(98,026	)		$	424,382

The net change in intangible assets during the nine months ended June 30, 2018 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to the fiscal 2018 acquisitions. During the second quarter of fiscal 2018, the Company also converted certain of its trade names from indefinite-lived to definite-lived, and accordingly, these intangible assets are now subject to amortization.

Amortization expense on intangible assets was $8,334 and $6,364 for the three-month periods ended June 30, 2018 and 2017, respectively.  For the nine-month periods ended June 30, 2018 and 2017, amortization expense was $23,264 and $16,939, respectively. Amortization expense is estimated to be $8,494 for the remainder of fiscal 2018, $32,265 in 2019, $30,425 in 2020, $29,007 in 2021 and $27,516 in 2022.

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Basis of Presentation (Policies)

9 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements:

Issued

In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging (Topic 815), which provides new guidance intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. This ASU is effective for the Company beginning in fiscal year 2020. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), which provides new guidance intended to clarify and reduce complexities in applying stock compensation guidance to a change to the terms or conditions of share-based payment awards. This ASU is effective for the Company beginning in fiscal year 2019. The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

Note 2.   Basis of Presentation (continued)

In February 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which provides new guidance intended to improve the disclosure requirements related to the service cost component of net benefit cost.  This ASU is effective for the Company beginning in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides new guidance intended to make the definition of a business more operable and allow for more consistency in application.  This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force), which provides new guidance intended to clarify the presentation of certain cash flow items including debt prepayments, debt extinguishment costs, contingent considerations payments, and insurance proceeds, among other things. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019, and early adoption is permitted.  The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which provides new guidance on how an entity should account for leases and recognize associated lease assets and liabilities. This ASU requires lessees to recognize assets and liabilities that arise from financing and operating leases on the Consolidated Balance Sheet. The implementation of this standard will require application of the new guidance at the beginning of the earliest comparative period presented, once adopted. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2020, and does allow for early adoption.  The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides new guidance intended to improve the recognition, measurement, presentation and disclosure of financial instruments. This ASU is effective for the Company beginning in interim periods starting in fiscal year 2019. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements

to Financial Instruments—Overall (Subtopic 825-10), that provides guidance related to implementation issues and corrects or improves certain aspects of the financial instruments guidance. The adoption of these ASUs are not expected to have a material impact on the Company's consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606. This ASU replaces nearly all existing U.S. GAAP guidance on revenue recognition. The standard prescribes a five-step model for recognizing revenue, the application of which will require significant judgment. The FASB issued ASU 2015-14 in August 2015 which resulted in a deferral of the original effective date of ASU 2014-09. During 2016 and 2017, the FASB issued six ASUs that address implementation issues and correct or improve certain aspects of the new revenue recognition guidance, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) and ASU 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). These ASUs do not change the core principles in the revenue recognition guidance outlined above. ASU No. 2014-09 and the related ASUs referenced above are effective for Matthews beginning October 1, 2018. The Company has completed its detailed assessment of all global revenue arrangements and related impact of the new standard compared to historical accounting policies on a representative sample of contracts and it does not expect the adoption of these ASUs will have a material impact on its consolidated financial statements. The Company is continuing to assess the ultimate impact that the adoption of this standard will have on its consolidated financial statement disclosures. In addition, the Company is evaluating the changes that will be required in its internal controls as a result of the adoption of this new standard. The Company is planning to adopt the provisions of these ASUs using the modified retrospective method for existing transactions on October 1, 2018.

Note 2.   Basis of Presentation (continued)

Adopted

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220), which provides new guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. The amount of reclassification is the difference between the Company's historical U.S. income tax rate and the newly enacted 21% corporate income tax rate. The Company has early adopted this ASU in the third quarter ended June 30, 2018. The adoption of this ASU resulted in a decrease to AOCI and corresponding increase to retained earnings of $8,814.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which provides new guidance intended to simplify the subsequent measurement of goodwill and removing Step 2 from the goodwill impairment process.  The Company has early adopted this ASU in the first quarter ended December 31, 2017. The adoption of this ASU had no impact on the Company's consolidated financial statements, but modifies the methodology to assess and measure goodwill impairment prospectively.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The Company early adopted this ASU in the fourth quarter of fiscal 2017, which resulted in a reduction to income tax expense of $1,234, and a corresponding favorable impact on diluted earnings per share of $0.04, both of which have been retroactively included in the first quarter results for fiscal 2017.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which provides new guidance to simplify the measurement of inventory valuation at the lower of cost or net realizable value.  Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The adoption of this ASU in the first quarter ended December 31, 2017 had no impact on the Company's consolidated financial statements.

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Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2018

Fair Value Disclosures [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:

	June 30, 2018								September 30, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Derivatives (1)	$	—	$	10,863	$	—	$	10,863	$	—	$	3,990	$	—	$	3,990
Equity and fixed income mutual funds	—		22,257		—		22,257		—		21,649		—		21,649
Other investments	—		5,870		—		5,870		—		5,810		—		5,810
Total assets at fair value	$	—	$	38,990	$	—	$	38,990	$	—	$	31,449	$	—	$	31,449
Liabilities:
Derivatives (1)	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
Total liabilities at fair value	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	31
(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

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Inventories (Tables)

9 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:

	June 30, 2018		September 30, 2017
Raw materials	$	34,509	$	29,396
Work in process	71,628		61,917
Finished goods	78,677		80,132
	$	184,814	$	171,445

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Debt (Tables)

9 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Interest Rate Contracts

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:

	June 30, 2018			September 30, 2017
Pay fixed swaps - notional amount	$	350,000		$	414,063
Net unrealized gain	$	10,863		$	3,959
Weighted-average maturity period (years)	2.9			3.3
Weighted-average received rate	2.09		%	1.23		%
Weighted-average pay rate	1.36		%	1.34		%

Interest Rate Swap Contracts as Reflected on Balance Sheet

At June 30, 2018 and September 30, 2017, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:

Derivatives	June 30, 2018		September 30, 2017
Current assets:
Other current assets	$	3,489	$	1,098
Long-term assets:
Other assets	7,374		2,892
Current liabilities:
Other current liabilities	—		(7		)
Long-term liabilities:
Other liabilities	—		(24		)
Total derivatives	$	10,863	$	3,959

Gain (Loss) on Derivatives

The gains recognized on derivatives were as follows:

Derivatives in Cash Flow Hedging Relationships	Location of Gain Recognized in Income on Derivative	Amount of Gain Recognized in Income on Derivatives				Amount of Gain Recognized in Income on Derivatives
		Three Months Ended June 30,				Nine Months Ended June 30,
		2018		2017		2018		2017
Interest rate swaps	Interest expense	$	490	$	306	$	755	$	1,616

The Company recognized the following gains in AOCI:

Derivatives in Cash Flow Hedging Relationships	Amount of Gain Recognized in AOCI on Derivatives				Location of Gain Reclassified From AOCI into Income (Effective Portion*)	Amount of Gain Reclassified from AOCI into Income (Effective Portion*)
	June 30, 2018		June 30, 2017			June 30, 2018		June 30, 2017
Interest rate swaps	$	5,286	$	6,712	Interest expense	$	570	$	986
*There is no ineffective portion or amount excluded from effectiveness testing.

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Share-Based Payments (Tables)

9 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Restricted Stock Activity

The transactions for restricted stock for the nine months ended June 30, 2018 were as follows:

	Shares		Weighted- average Grant-date Fair Value
Non-vested at September 30, 2017	501,184		$	53.65
Granted	234,100		57.05
Vested	(174,120	)	51.41
Expired or forfeited	(5,864	)	59.75
Non-vested at June 30, 2018	555,300		$	55.72

Assumptions used in Estimating Fair Value

The following table indicates the assumptions used in estimating the fair value of restricted stock granted during the nine-month periods ended June 30, 2018 and 2017.

	Nine Months Ended June 30,
	2018		2017
Expected volatility	20.5	%	20.2	%
Dividend yield	1.0	%	1.1	%
Average risk-free interest rate	2.0	%	1.7	%
Average expected term (years)	2.1		2.1

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Earnings Per Share Attributable to Matthews' Shareholders (Tables)

9 Months Ended

Jun. 30, 2018

Earnings Per Share [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 June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Net income attributable to Matthews shareholders	$	24,414	$	29,485	$	77,776	$	54,727
Weighted-average shares outstanding (in thousands):
Basic shares	31,631		32,255		31,693		32,248
Effect of dilutive securities	150		317		132		348
Diluted shares	31,781		32,572		31,825		32,596

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Pension and Other Postretirement Benefit Plans (Tables)

9 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Net Periodic Pension and Other Postretirement Benefit Cost

Net periodic pension and other postretirement benefit cost for the plans included the following:

	Three months ended June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	2,039		$	2,138		$	84		$	98
Interest cost	2,049			1,841			158			157
Expected return on plan assets	(2,534		)	(2,312		)	—			—
Amortization:
Prior service cost	(35		)	(45		)	(49		)	(49		)
Net actuarial loss	1,753			2,509			—			—
Net benefit cost	$	3,272		$	4,131		$	193		$	206

	Nine months ended June 30,
	Pension						Other Postretirement
	2018			2017			2018			2017
Service cost	$	6,117		$	6,414		$	252		$	294
Interest cost	6,147			5,523			474			471
Expected return on plan assets	(7,602		)	(6,936		)	—			—
Amortization:
Prior service cost	(105		)	(135		)	(147		)	(147		)
Net actuarial loss	5,257			7,527			—			—
Net benefit cost	$	9,814		$	12,393		$	579		$	618

Contributions Made and Anticipated for the Current Fiscal Year

Contributions made and anticipated for fiscal year 2018 are as follows:

Contributions	Pension		Other Postretirement
Contributions during the nine months ended June 30, 2018:
Principal retirement plan	$	10,000	$	—
Supplemental retirement plan	575		—
Other postretirement plan	—		1,281
Additional contributions expected in fiscal 2018:
Supplemental retirement plan	$	191	$	—

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Jun. 30, 2018

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Changes in AOCI by Component

The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2018		$	(41,583	)	$	(93,896	)		$	7,137		$	(128,342	)
OCI before reclassification		—			(38,669		)		393			(38,276		)
Amounts reclassified from AOCI	(a)	1,256			—			(b)	(399		)	857
Net current-period OCI		1,256			(38,669		)		(6		)	(37,419		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, March 31, 2018		—			$	499			—			$	499
OCI before reclassification		—			(23		)		—			(23		)
Net current-period OCI		—			(23		)		—			(23		)
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, March 31, 2017		$	(53,052	)	$	(149,493	)		$	2,707		$	(199,838	)
OCI before reclassification		—			32,261				(353		)	31,908
Amounts reclassified from AOCI	(a)	1,422			—			(b)	(187		)	1,235
Net current-period OCI		1,422			32,261				(540		)	33,143
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, March 31, 2017		—			$	345			—			$	345
OCI before reclassification		—			121				—			121
Net current-period OCI		—			121				—			121
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

Note 9.   Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2018 and 2017 were as follows:

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2017		$	(43,623	)	$	(112,907	)		$	2,415		$	(154,115	)
OCI before reclassification		—			(19,658		)		5,286			(14,372		)
Amounts reclassified from AOCI	(a)	3,296			—			(b)	(570		)	2,726
Net current-period OCI		3,296			(19,658		)		4,716			(11,646		)
Reclassification of AOCI tax effects	(c)	(9,884		)	—			(c)	1,070			(8,814		)
Balance, June 30, 2018		$	(50,211	)	$	(132,565	)		$	8,201		$	(174,575	)
Attributable to noncontrolling interest:
Balance, September 30, 2017		—			$	396			—			$	396
OCI before reclassification		—			80				—			80
Net current-period OCI		—			80				—			80
Balance, June 30, 2018		—			476				—			476

		Post-retirement benefit plans			Currency translation adjustment				Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2016		$	(56,050	)	$	(122,259	)		$	(3,559	)	$	(181,868	)
OCI before reclassification		—			5,027				6,712			11,739
Amounts reclassified from AOCI	(a)	4,420			—			(b)	(986		)	3,434
Net current-period OCI		4,420			5,027				5,726			15,173
Balance, June 30, 2017		$	(51,630	)	$	(117,232	)		$	2,167		$	(166,695	)
Attributable to noncontrolling interest:
Balance, September 30, 2016		—			$	277			—			$	277
OCI before reclassification		—			189				—			189
Net current-period OCI		—			189				—			189
Balance, June 30, 2017		—			$	466			—			$	466

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 8).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 5).

(c) Amounts were reclassified from AOCI to retained earnings through adoption of ASU 2018-02 (see Note 2).

Reclassifications out of AOCI

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2018 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2018				Nine Months Ended June 30, 2018			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	84		(a)	$	252
Actuarial losses	(1,753		)	(a)	(5,257		)
	(1,669		)	(b)	(5,005		)	Income before income tax
	(413		)		(1,709		)	Income taxes
	$	(1,256	)		$	(3,296	)	Net income
Derivatives
Interest rate swap contracts	$	490			$	755		Interest expense
	490			(b)	755			Income before income tax
	91				185			Income taxes
	$	399			$	570		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2017 were as follows:

	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended June 30, 2017				Nine Months Ended June 30, 2017			Affected line item in the Statement of income
Postretirement benefit plans
Prior service (cost) credit	$	94		(a)	$	282
Actuarial losses	(2,509		)	(a)	(7,527		)
	(2,415		)	(b)	(7,245		)	Income before income tax
	(993		)		(2,825		)	Income taxes
	$	(1,422	)		$	(4,420	)	Net income
Derivatives
Interest rate swap contracts	$	306			$	1,616		Interest expense
	306			(b)	1,616			Income before income tax
	119				630			Income taxes
	$	187			$	986		Net income

(a) Amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.  For additional information, see Note 8.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

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Income Taxes (Tables)

9 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Tax Years Subject to Examination

As of June 30, 2018, the tax years that remain subject to examination by major jurisdiction generally are:

United States – Federal	2015 and forward
United States – State	2013 and forward
Canada	2014 and forward
Germany	2015 and forward
United Kingdom	2016 and forward
Australia	2014 and forward
Singapore	2013 and forward

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Segment Information (Tables)

9 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Information About the Company's Segments

Information about the Company's segments is as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2017		2018		2017
Sales:
SGK Brand Solutions	$	202,976	$	200,606	$	601,794	$	566,527
Memorialization	161,979		155,837		475,557		463,567
Industrial Technologies	46,666		33,187		117,785		89,450
	$	411,621	$	389,630	$	1,195,136	$	1,119,544

Operating profit:
SGK Brand Solutions	$	8,308	$	11,390	$	16,550	$	19,941
Memorialization	24,930		23,454		63,294		60,759
Industrial Technologies	4,657		1,942		5,766		1,977
	$	37,895	$	36,786	$	85,610	$	82,677

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [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:

	SGK Brand Solutions			Memorialization			Industrial Technologies		Consolidated
Goodwill	$	491,895		$	347,507		$	69,144	$	908,546
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at September 30, 2017	486,143			342,507			69,144		897,794
Additions during period	8,743			30,058			22,877		61,678
Translation and other adjustments	(6,460		)	(34		)	286		(6,208		)
Goodwill	$	494,178		$	377,531		$	92,307	$	964,016
Accumulated impairment losses	(5,752		)	(5,000		)	—		(10,752		)
Balance at June 30, 2018	$	488,426		$	372,531		$	92,307	$	953,264

Other Intangible Assets

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2018 and September 30, 2017, respectively.

	Carrying Amount		Accumulated Amortization				Net
June 30, 2018:
Trade names	$	126,047	$	—		*	$	126,047
Trade names	53,561		(4,380		)		49,181
Customer relationships	373,194		(104,035		)		269,159
Copyrights/patents/other	20,926		(12,465		)		8,461
	$	573,728	$	(120,880	)		$	452,848
September 30, 2017:
Trade names	$	168,467	$	—		*	$	168,467
Trade names	5,522		(2,030		)		3,492
Customer relationships	333,632		(84,560		)		249,072
Copyrights/patents/other	14,787		(11,436		)		3,351
*Not subject to amortization	$	522,408	$	(98,026	)		$	424,382

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Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to accumulated other comprehensive income	$ (174,575)			$ (174,575)		$ (154,115)
Retained earnings	$ (1,016,892)			$ (1,016,892)		$ (948,830)
Reduction to income tax expense			$ 1,234
Diluted (in dollars per share)	$ 0.77	$ 0.91		$ 2.44	$ 1.68
Accounting Standards Update 2018-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to accumulated other comprehensive income	$ 8,814			$ 8,814
Retained earnings	$ 8,814			$ 8,814
Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Diluted (in dollars per share)			$ 0.04

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Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Assets:
Derivatives	$ 10,863	$ 3,990
Equity and fixed income mutual funds	22,257	21,649
Other investments	5,870	5,810
Total assets at fair value	38,990	31,449
Liabilities:
Derivatives	0	31
Total liabilities at fair value	0	31
Level 1
Assets:
Derivatives	0	0
Equity and fixed income mutual funds	0	0
Other investments	0	0
Total assets at fair value	0	0
Liabilities:
Derivatives	0	0
Total liabilities at fair value	0	0
Level 2
Assets:
Derivatives	10,863	3,990
Equity and fixed income mutual funds	22,257	21,649
Other investments	5,870	5,810
Total assets at fair value	38,990	31,449
Liabilities:
Derivatives	0	31
Total liabilities at fair value	0	31
Level 3
Assets:
Derivatives	0	0
Equity and fixed income mutual funds	0	0
Other investments	0	0
Total assets at fair value	0	0
Liabilities:
Derivatives	0	0
Total liabilities at fair value	$ 0	$ 0

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Inventories, net [Abstract]
Raw materials	$ 34,509	$ 29,396
Work in process	71,628	61,917
Finished goods	78,677	80,132
Inventories	$ 184,814	$ 171,445

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Debt - Narrative (Details) £ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2018 EUR (€)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 EUR (€)	Jun. 30, 2017	Sep. 30, 2014 GBP (£)
Line of Credit Facility [Line Items]
Other debt	$ 892,000	$ 1,032,000
Other current assets	$ 63,728,000	46,533,000
Matthews International S.p.A
Line of Credit Facility [Line Items]
Weighted-average interest rate on outstanding borrowings (as a percent)	2.62%		2.62%			2.55%
Designated as Hedging Instrument
Line of Credit Facility [Line Items]
Unrealized gain (loss) on fair value of interest rate swaps, before tax	$ 10,863,000	3,959,000
Unrealized gain (loss) on fair value of interest rate swaps, after tax	8,202,000	2,415,000
Unrealized gain (loss) expected to be recognized over the next 12 months	$ 2,634,000
Senior Notes | Matthews Europe GmbH & Co. KG
Line of Credit Facility [Line Items]
Weighted-average interest rate on outstanding borrowings (as a percent)	1.40%		1.40%			1.40%
Debt issued amount	$ 17,530,000		€ 15,000,000
Fixed interest rate (as a percent)	1.40%		1.40%
Portion of debt subject to fixed interest rate | €			€ 5,000,000
LIBOR | Senior Notes | Matthews Europe GmbH & Co. KG
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	1.40%
Senior Notes 2025 | Senior Notes
Line of Credit Facility [Line Items]
Debt issued amount				$ 300,000,000
Fixed interest rate (as a percent)				5.25%
Financing fees and expenses				$ 4,127,000
Securitization Facility
Line of Credit Facility [Line Items]
Maximum amount of borrowings available	$ 115,000,000
Outstanding borrowings	$ 102,500,000	95,825,000
Interest rate on facility (as a percent)	2.84%		2.84%
Securitization Facility | Minimum
Line of Credit Facility [Line Items]
Commitment fee (as a percent)	0.25%
Securitization Facility | Maximum
Line of Credit Facility [Line Items]
Commitment fee (as a percent)	0.35%
Securitization Facility | LIBOR
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	0.75%
Other Debt
Line of Credit Facility [Line Items]
Weighted-average interest rate on outstanding borrowings (as a percent)	3.03%		3.03%			2.25%
Revolving Credit Facility | LIBOR
Line of Credit Facility [Line Items]
Interest rate during period (as a percent)	1.25%
Revolving Credit Facility | LIBOR | Minimum
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	0.75%
Revolving Credit Facility | LIBOR | Maximum
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	2.00%
Revolving Credit Facility | April 2016 Debt Amendment
Line of Credit Facility [Line Items]
Maximum amount of borrowings available	$ 900,000,000
Maturity date	Apr. 26, 2021
Revolving Credit Facility | April 2016 Debt Amendment | Minimum
Line of Credit Facility [Line Items]
Annual commitment fee range on unused portion (as a percent)	0.15%
Revolving Credit Facility | April 2016 Debt Amendment | Maximum
Line of Credit Facility [Line Items]
Annual commitment fee range on unused portion (as a percent)	0.25%
Term Loan | April 2016 Debt Amendment
Line of Credit Facility [Line Items]
Maximum amount of borrowings available	$ 250,000,000
Long term debt outstanding principal payment in year 1 (as a percent)	5.00%		5.00%
Long term debt outstanding principal payment in year 2 (as a percent)	7.50%		7.50%
Long term debt outstanding principal payment in year 3 (as a percent)	10.00%		10.00%
Long term debt outstanding principal payment in year 4 (as a percent)	10.00%		10.00%
Long term debt outstanding principal payment in year 5 (as a percent)	10.00%		10.00%
Outstanding borrowings	$ 218,296,000	232,479,000
Term Loan | April 2016 Debt Amendment | LIBOR
Line of Credit Facility [Line Items]
Interest rate during period (as a percent)	1.25%
Term Loan | April 2016 Debt Amendment | LIBOR | Minimum
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	0.75%
Term Loan | April 2016 Debt Amendment | LIBOR | Maximum
Line of Credit Facility [Line Items]
Interest rate on borrowings (as a percent)	2.00%
Domestic Revolving Credit Facility | April 2016 Debt Amendment
Line of Credit Facility [Line Items]
Maximum available for issuance of trade and standby letters of credit	$ 35,000,000
Outstanding borrowings	$ 359,000,000	525,000,000
Weighted-average interest rate on outstanding borrowings (as a percent)	2.82%		2.82%			2.89%
Lines of Credit with Italian Banks | Matthews International S.p.A
Line of Credit Facility [Line Items]
Maximum amount of borrowings available	$ 818,000		€ 700,000.0
Outstanding borrowings	231,000	4,735,000	198,000		€ 4,000,000
Long-term Debt	584,000	3,079,000	500,000		2,600,000
Letter of Credit
Line of Credit Facility [Line Items]
Other current assets	11,333,000						£ 8,570
Foreign Line of Credit | Credit Facility With European Bank
Line of Credit Facility [Line Items]
Maximum amount of borrowings available	40,903,000		35,000,000.0
Outstanding borrowings	$ 26,529,000	$ 26,126,000	€ 22,700,000		€ 22,100,000
Weighted-average interest rate on outstanding borrowings (as a percent)	1.75%		1.75%			1.75%

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Debt - Interest Rate Contracts (Details) - Cash Flow Hedging - Designated as Hedging Instrument - Interest rate swap contracts - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2018	Sep. 30, 2017
Derivative [Line Items]
Pay fixed swaps - notional amount	$ 350,000,000	$ 414,063,000
Net unrealized gain	$ 10,863,000	$ 3,959,000
Weighted-average maturity period (years)	2 years 10 months 30 days	3 years 3 months 24 days
Weighted-average received rate (as a percent)	2.09%	1.23%
Weighted-average pay rate (as a percent)	1.36%	1.34%

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Debt - Interest Rate Swap Contracts as Reflected on Balance Sheet (Details) - Designated as Hedging Instrument - Interest Rate Swaps - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Derivatives, Fair Value [Line Items]
Total derivatives	$ 10,863	$ 3,959
Current assets: Other Current Assets
Derivatives, Fair Value [Line Items]
Assets derivatives	3,489	1,098
Long-term assets: Other Assets
Derivatives, Fair Value [Line Items]
Assets derivatives	7,374	2,892
Current Liabilities: Other Current Liabilities
Derivatives, Fair Value [Line Items]
Liability derivatives	0	(7)
Long-Term Liabilities: Other Liabilities
Derivatives, Fair Value [Line Items]
Liability derivatives	$ 0	$ (24)

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Debt - Gain (Loss) on Derivatives (Details) - Cash Flow Hedging - Interest Rate Swaps - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Recognized in AOCI on Derivatives			$ 5,286	$ 6,712
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Recognized in Income on Derivatives	$ 490	$ 306	755	1,616
Amount of Gain Reclassified from AOCI into Income (Effective Portion)			$ 570	$ 986

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Share-Based Payments - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from the exercise of stock options			$ 0	$ 14,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards unvested (in shares)	20,940		20,940
2017 Equity Incentive Plan | Stock Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of plan			10 years
Maximum number of shares available for grants or awards (in shares)	1,700,000		1,700,000
Shares reserved for future issuance under award plan (in shares)	1,700,000		1,700,000
All Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation cost	$ 2,399,000	$ 2,837,000	$ 10,531,000	11,854,000
Proceeds from the exercise of stock options		0		14,000
Intrinsic value of options exercised				9,000
All Plans | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost on non-vested awards	8,510,000		$ 8,510,000
Weighted average period of recognition of unrecognized compensation cost on non-vested awards			1 year 6 months
All Plans | Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period			3 years
All Plans | Restricted Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period			5 years
All Plans | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Future income tax benefit from compensation expense recognized				3,000
All Plans | Before Fiscal 2013 | Restricted Stock | After 3 Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting increment			50.00%
All Plans | Before Fiscal 2013 | Restricted Stock | Attainment of Pre-Defined Levels of Appreciation in Market Value
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting increment			16.66%
All Plans | Before Fiscal 2013 | Restricted Stock | Attainment of Pre-Defined Levels of Adjusted Earnings Per Share
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting increment			16.66%
Retirement Eligible Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation cost			$ 2,850,000	3,337,000
Future income tax benefit from compensation expense recognized	$ 588,000	$ 1,106,000	$ 2,108,000	$ 4,623,000
2014 Director Fee Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares available for grants or awards (in shares)	150,000		150,000
Annual retainer fee paid to non-employee directors			$ 85,000
Annual retainer fee paid to non-employee Chairman of the Board			$ 185,000
Director Fee Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	0		0
Shares deferred under stock based compensation plan (in shares)	22,698		22,698
Value of annual stock based grant			$ 125,000
Total stock options granted to date (in shares)	22,300		22,300
Total restricted stock awards granted to date (in shares)	173,229		173,229
Restricted stock awards unvested (in shares)	70,079		70,079

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Share-Based Payments - Restricted Stock Activity (Details) - All Plans - Restricted Stock	9 Months Ended
	Jun. 30, 2018 $ / shares shares
Shares
Non-vested at beginning of period (in shares) | shares	501,184
Granted (in shares) | shares	234,100
Vested (in shares) | shares	(174,120)
Expired or forfeited (in shares) | shares	(5,864)
Non-vested at end of period (in shares) | shares	555,300
Weighted- average Grant-date Fair Value
Non-vested weighted-average grant-date fair value, beginning of period (in dollars per share) | $ / shares	$ 53.65
Granted, weighted-average grant-date fair value (in dollars per share) | $ / shares	57.05
Vested, weighted-average grant-date fair value (in dollars per share) | $ / shares	51.41
Expired or forfeited, weighted-average grant-date fair value (in dollars per share) | $ / shares	59.75
Non-vested weighted-average grant-date fair value, end of period (in dollars per share) | $ / shares	$ 55.72

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Share-Based Payments - Assumptions used in Estimating Fair Value (Details) - All Plans - Restricted Stock	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility (as a percent)	20.50%	20.20%
Dividend yield (as a percent)	1.00%	1.10%
Average risk-free interest rate (as a percent)	2.00%	1.70%
Average expected term (years)	2 years 30 days	2 years 29 days

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Earnings Per Share Attributable to Matthews' Shareholders (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net income attributable to Matthews shareholders	$ 24,414	$ 29,485	$ 77,776	$ 54,727
Weighted-average shares outstanding [Abstract]
Basic shares	31,631	32,255	31,693	32,248
Effect of dilutive securities	150	317	132	348
Diluted shares	31,781	32,572	31,825	32,596
Antidilutive securities excluded from dilution calculation (in shares)	0	0	0	0

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Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Pension
Net periodic benefit cost [Abstract]
Service cost	$ 2,039	$ 2,138	$ 6,117	$ 6,414
Interest cost	2,049	1,841	6,147	5,523
Expected return on plan assets	(2,534)	(2,312)	(7,602)	(6,936)
Amortization:
Prior service cost	(35)	(45)	(105)	(135)
Net actuarial loss	1,753	2,509	5,257	7,527
Net benefit cost	3,272	4,131	9,814	12,393
Defined Benefit Plan, Expected Future Employer Contributions [Abstract]
Pension			10,000
Other Postretirement			0
Other Postretirement
Net periodic benefit cost [Abstract]
Service cost	84	98	252	294
Interest cost	158	157	474	471
Expected return on plan assets	0	0	0	0
Amortization:
Prior service cost	(49)	(49)	(147)	(147)
Net actuarial loss	0	0	0	0
Net benefit cost	193	$ 206	579	$ 618
Defined Benefit Plan, Expected Future Employer Contributions [Abstract]
Other Postretirement			1,281
Supplemental retirement plan
Defined Benefit Plan, Expected Future Employer Contributions [Abstract]
Pension			575
Additional contributions expected in fiscal 2018:	$ 191		$ 191

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Accumulated Other Comprehensive Income - Changes in AOCI by Component (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Attributable to Matthews:
Beginning balance			$ 790,259	$ 709,334
OCI, net of tax	$ (37,442)	$ 33,264	(11,566)	15,362
Ending balance	833,180	763,236	833,180	763,236
Post-retirement benefit plans
Attributable to Matthews:
Beginning balance	(41,583)	(53,052)	(43,623)	(56,050)
OCI before reclassification	0	0	0	0
Amounts reclassified from AOCI	1,256	1,422	3,296	4,420
OCI, net of tax	1,256	1,422	3,296	4,420
Reclassification of AOCI tax effects	(9,884)		(9,884)
Ending balance	(50,211)	(51,630)	(50,211)	(51,630)
Currency translation adjustment
Attributable to Matthews:
Beginning balance	(93,896)	(149,493)	(112,907)	(122,259)
OCI before reclassification	(38,669)	32,261	(19,658)	5,027
Amounts reclassified from AOCI	0	0	0	0
OCI, net of tax	(38,669)	32,261	(19,658)	5,027
Reclassification of AOCI tax effects	0		0
Ending balance	(132,565)	(117,232)	(132,565)	(117,232)
Derivatives
Attributable to Matthews:
Beginning balance	7,137	2,707	2,415	(3,559)
OCI before reclassification	393	(353)	5,286	6,712
Amounts reclassified from AOCI	(399)	(187)	(570)	(986)
OCI, net of tax	(6)	(540)	4,716	5,726
Reclassification of AOCI tax effects	1,070		1,070
Ending balance	8,201	2,167	8,201	2,167
AOCI Attributable to Parent
Attributable to Matthews:
Beginning balance	(128,342)	(199,838)	(154,115)	(181,868)
OCI before reclassification	(38,276)	31,908	(14,372)	11,739
Amounts reclassified from AOCI	857	1,235	2,726	3,434
OCI, net of tax	(37,419)	33,143	(11,646)	15,173
Reclassification of AOCI tax effects	(8,814)		(8,814)
Ending balance	(174,575)	(166,695)	(174,575)	(166,695)
Post-retirement benefit plans
Attributable to Matthews:
Beginning balance	0	0	0	0
OCI before reclassification	0	0	0	0
OCI, net of tax	0	0	0	0
Ending balance	0	0	0	0
Currency translation adjustment
Attributable to Matthews:
Beginning balance	499	345	396	277
OCI before reclassification	(23)	121	80	189
OCI, net of tax	(23)	121	80	189
Ending balance	476	466	476	466
Derivatives
Attributable to Matthews:
Beginning balance	0	0	0	0
OCI before reclassification	0	0	0	0
OCI, net of tax	0	0	0	0
Ending balance	0	0	0	0
AOCI Attributable to Noncontrolling Interest
Attributable to Matthews:
Beginning balance	499	345	396	277
OCI before reclassification	(23)	121	80	189
OCI, net of tax	(23)	121	80	189
Ending balance	$ 476	$ 466	$ 476	$ 466

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Accumulated Other Comprehensive Income - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivatives
Interest expense	$ 9,719	$ 6,988	$ 26,782	$ 19,750
Income before income tax	28,657	38,164	58,872	71,702
Income taxes	4,312	8,856	(18,703)	17,318
Net income attributable to Matthews shareholders	24,414	29,485	77,776	54,727
Prior service (cost) credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income tax	84	94	252	282
Actuarial losses
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income tax	(1,753)	(2,509)	(5,257)	(7,527)
Post-retirement benefit plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income tax	(1,669)	(2,415)	(5,005)	(7,245)
Income taxes	(413)	(993)	(1,709)	(2,825)
Net income	(1,256)	(1,422)	(3,296)	(4,420)
Derivatives
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	399	187	570	986
Derivatives | Reclassification out of Accumulated Other Comprehensive Income
Derivatives
Income before income tax	490	306	755	1,616
Income taxes	91	119	185	630
Net income attributable to Matthews shareholders	399	187	570	986
Derivatives | Interest rate swap contracts | Reclassification out of Accumulated Other Comprehensive Income
Derivatives
Interest expense	$ 490	$ 306	$ 755	$ 1,616

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 4,312	$ 8,856	$ (18,703)	$ 17,318
Blended rate (as a percent)			24.50%
Provisional tax benefit change in tax rate			$ 29,921
Tax benefit change in deferred tax assets			38,010
Tax expense repatriation of foreign earnings			8,089
Unrecognized tax benefits	15,292		15,292		$ 7,968
Unrecognized tax benefits that would impact effective tax rate	11,183		11,183		7,968
Decrease reasonably possible in next 12 months	3,525		3,525
Total penalties and interest accrued	$ 2,338		$ 2,338		$ 1,779

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Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) segment	Jun. 30, 2017 USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment			3
Segment Reporting Information [Line Items]
Sales	$ 411,621	$ 389,630	$ 1,195,136	$ 1,119,544
Operating profit	37,895	36,786	85,610	82,677
SGK Brand Solutions
Segment Reporting Information [Line Items]
Sales	202,976	200,606	601,794	566,527
Operating profit	8,308	11,390	16,550	19,941
Memorialization
Segment Reporting Information [Line Items]
Sales	161,979	155,837	475,557	463,567
Operating profit	24,930	23,454	63,294	60,759
Industrial Technologies
Segment Reporting Information [Line Items]
Sales	46,666	33,187	117,785	89,450
Operating profit	$ 4,657	$ 1,942	$ 5,766	$ 1,977

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Acquisitions (Details) $ in Thousands, € in Millions, £ in Millions												9 Months Ended
	Feb. 01, 2018 USD ($)	Nov. 28, 2017 USD ($)	Mar. 01, 2017 USD ($)	Mar. 01, 2017 GBP (£)	Feb. 28, 2017 USD ($)	Jan. 13, 2017 USD ($)	Jan. 13, 2017 GBP (£)	Jan. 03, 2017 USD ($)	Jan. 03, 2017 EUR (€)	Nov. 30, 2016 USD ($)	Nov. 30, 2016 GBP (£)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired												$ 119,953	$ 96,320
Star Granite Bronze International, Inc
Business Acquisition [Line Items]
Total purchase price	$ 34,713
Payment to acquire business, net of cash acquired	29,713
Common stock issued in acquisition	5,000
Annual sales of acquired entity, last annual period	$ 31,000
Compass Engineering Group, Inc
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired		$ 50,794
Annual sales of acquired entity, last annual period		$ 24,000
Additional Acquisitions
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired												$ 39,446
GJ Creative Limited
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired			$ 37,596	£ 30.5
Annual sales of acquired entity, last annual period			$ 30,000
RAF Technology, Inc.
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired					$ 8,717
VCG (Holdings) Limited
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired						$ 10,695	£ 8.8
Ungricht
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired								$ 25,185	€ 24.0
Annual sales of acquired entity, last annual period								$ 35,000
Guidance Automation Limited
Business Acquisition [Line Items]
Payment to acquire business, net of cash acquired										$ 9,974	£ 8.0

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Goodwill and Other Intangible Assets - Goodwill Attributable to Each Segment (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2018 USD ($)
Goodwill [Roll Forward]
Goodwill	$ 908,546
Accumulated impairment losses	(10,752)
Balance at Beginning of Period	897,794
Additions during period	61,678
Translation and other adjustments	(6,208)
Goodwill	964,016
Accumulated impairment losses	(10,752)
Balance at End of Period	953,264
SGK Brand Solutions
Goodwill [Roll Forward]
Goodwill	491,895
Accumulated impairment losses	(5,752)
Balance at Beginning of Period	486,143
Additions during period	8,743
Translation and other adjustments	(6,460)
Goodwill	494,178
Accumulated impairment losses	(5,752)
Balance at End of Period	488,426
Memorialization
Goodwill [Roll Forward]
Goodwill	347,507
Accumulated impairment losses	(5,000)
Balance at Beginning of Period	342,507
Additions during period	30,058
Translation and other adjustments	(34)
Goodwill	377,531
Accumulated impairment losses	(5,000)
Balance at End of Period	372,531
Industrial Technologies
Goodwill [Roll Forward]
Goodwill	69,144
Accumulated impairment losses	0
Balance at Beginning of Period	69,144
Additions during period	22,877
Translation and other adjustments	286
Goodwill	92,307
Accumulated impairment losses	0
Balance at End of Period	$ 92,307

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Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Other Intangible Assets [Abstract]
Carrying Amount	$ 573,728	$ 522,408
Accumulated Amortization	(120,880)	(98,026)
Net	452,848	424,382
Trade Names Not Subject to Amortization
Other Intangible Assets [Abstract]
Carrying Amount	126,047	168,467
Net	126,047	168,467
Trade names
Other Intangible Assets [Abstract]
Carrying Amount	53,561	5,522
Accumulated Amortization	(4,380)	(2,030)
Net	49,181	3,492
Customer relationships
Other Intangible Assets [Abstract]
Carrying Amount	373,194	333,632
Accumulated Amortization	(104,035)	(84,560)
Net	269,159	249,072
Copyrights/patents/other
Other Intangible Assets [Abstract]
Carrying Amount	20,926	14,787
Accumulated Amortization	(12,465)	(11,436)
Net	$ 8,461	$ 3,351

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Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense on intangible assets	$ 8,334	$ 6,364	$ 23,264	$ 16,939
Future amortization expense [Abstract]
Future amortization expense for the remainder 2018	8,494		8,494
Future amortization expense 2019	32,265		32,265
Future amortization expense 2020	30,425		30,425
Future amortization expense 2021	29,007		29,007
Future amortization expense 2022	$ 27,516		$ 27,516