(State or other jurisdiction of | (Commission | (I.R.S. Employer | ||||||
Incorporation or organization) | File Number) | Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Exhibit Number | Description | |||||||
Press Release, dated April 27, 2023, issued by Matthews International Corporation | ||||||||
Matthews International Corporation earnings teleconference presentation for the second fiscal quarter of 2023 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
MATTHEWS INTERNATIONAL CORPORATION | |||||||||||
(Registrant) | |||||||||||
By: | /s/ Steven F. Nicola | ||||||||||
Steven F. Nicola | |||||||||||
Chief Financial Officer and Secretary |
NEWS RELEASE |
April 27, 2023 | Contact: | Steven F. Nicola | William D. Wilson | ||||||||
Chief Financial Officer and Secretary | Senior Director, Corporate Development | ||||||||||
Fiscal 2023 2nd Quarter Financial Highlights: |
($ in millions, except per share data) | Q2 FY2023 | Q2 FY2022 | Change | % Change | |||||||||||||||||||
Sales | $ | 479.6 | $ | 445.0 | $ | 34.6 | 7.8 | % | |||||||||||||||
Net income (loss) attributable to Matthews | $ | 9.1 | $ | (1.9) | $ | 11.0 | NM | ||||||||||||||||
Diluted earnings (loss) per share | $ | 0.29 | $ | (0.06) | $ | 0.35 | NM | ||||||||||||||||
Non-GAAP adjusted net income | $ | 20.3 | $ | 23.5 | $ | (3.2) | (13.6) | % | |||||||||||||||
Non-GAAP adjusted EPS | $ | 0.65 | $ | 0.74 | $ | (0.09) | (12.2) | % | |||||||||||||||
Adjusted EBITDA | $ | 58.4 | $ | 55.2 | $ | 3.2 | 5.8 | % | |||||||||||||||
Note: See the attached tables for additional important disclosures regarding Matthews’ use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures. | |||||||||||||||||||||||
NM: Not meaningful |
($ in millions, except per share data) | YTD FY2023 | YTD FY2022 | Change | % Change | |||||||||||||||||||
Sales | $ | 928.8 | $ | 883.6 | $ | 45.2 | 5.1 | % | |||||||||||||||
Net income (loss) attributable to Matthews | $ | 12.8 | $ | (21.7) | $ | 34.5 | 159.1 | % | |||||||||||||||
Diluted earnings (loss) per share | $ | 0.41 | $ | (0.68) | $ | 1.09 | 160.3 | % | |||||||||||||||
Non-GAAP adjusted net income | $ | 36.8 | $ | 47.1 | $ | (10.3) | (21.9) | % | |||||||||||||||
Non-GAAP adjusted EPS | $ | 1.18 | $ | 1.48 | $ | (0.30) | (20.3) | % | |||||||||||||||
Adjusted EBITDA | $ | 107.7 | $ | 108.5 | $ | (0.8) | (0.7) | % | |||||||||||||||
Note: See the attached tables for additional important disclosures regarding Matthews’ use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures. |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||||||||||||||
Sales | $ | 479,580 | $ | 444,978 | 7.8 | % | $ | 928,820 | $ | 883,557 | 5.1 | % | |||||||||||||||||||||||
Cost of sales | (329,957) | (320,459) | 3.0 | % | (640,267) | (627,401) | 2.1 | % | |||||||||||||||||||||||||||
Gross profit | 149,623 | 124,519 | 20.2 | % | 288,553 | 256,156 | 12.6 | % | |||||||||||||||||||||||||||
Gross margin | 31.2 | % | 28.0 | % | 31.1 | % | 29.0 | % | |||||||||||||||||||||||||||
Selling and administrative expenses | (116,055) | (105,200) | 10.3 | % | (227,415) | (204,512) | 11.2 | % | |||||||||||||||||||||||||||
Amortization of intangible assets | (10,517) | (11,953) | (12.0) | % | (20,859) | (33,499) | (37.7) | % | |||||||||||||||||||||||||||
Operating profit | 23,051 | 7,366 | NM | 40,279 | 18,145 | 122.0 | % | ||||||||||||||||||||||||||||
Operating margin | 4.8 | % | 1.7 | % | 4.3 | % | 2.1 | % | |||||||||||||||||||||||||||
Interest and other deductions, net | (10,544) | (6,025) | 75.0 | % | (22,813) | (43,242) | (47.2) | % | |||||||||||||||||||||||||||
Income (loss) before income taxes | 12,507 | 1,341 | NM | 17,466 | (25,097) | 169.6 | % | ||||||||||||||||||||||||||||
Income taxes | (3,382) | (3,277) | 3.2 | % | (4,694) | 3,351 | NM | ||||||||||||||||||||||||||||
Net income (loss) | 9,125 | (1,936) | NM | 12,772 | (21,746) | 158.7 | % | ||||||||||||||||||||||||||||
Non-controlling interests | 2 | 31 | (93.5) | % | 58 | 38 | NM | ||||||||||||||||||||||||||||
Net income (loss) attributable to Matthews | $ | 9,127 | $ | (1,905) | NM | $ | 12,830 | $ | (21,708) | 159.1 | % | ||||||||||||||||||||||||
Earnings (loss) per share -- diluted | $ | 0.29 | $ | (0.06) | NM | $ | 0.41 | $ | (0.68) | 160.3 | % | ||||||||||||||||||||||||
Earnings per share -- non-GAAP (1) | $ | 0.65 | $ | 0.74 | (12.2) | % | $ | 1.18 | $ | 1.48 | (20.3) | % | |||||||||||||||||||||||
Dividends declared per share | $ | 0.23 | $ | 0.22 | 4.5 | % | $ | 0.46 | $ | 0.44 | 4.5 | % | |||||||||||||||||||||||
Diluted Shares | 31,179 | 31,692 | 31,071 | 31,695 | |||||||||||||||||||||||||||||||
(1) See reconciliation of non-GAAP financial information provided in tables at the end of this release | |||||||||||||||||||||||||||||||||||
NM: Not meaningful |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Sales: | |||||||||||||||||||||||
Memorialization | $ | 222,889 | $ | 220,004 | $ | 429,391 | $ | 430,710 | |||||||||||||||
Industrial Technologies | 125,514 | 78,154 | 234,657 | 152,485 | |||||||||||||||||||
SGK Brand Solutions | 131,177 | 146,820 | 264,772 | 300,362 | |||||||||||||||||||
$ | 479,580 | $ | 444,978 | $ | 928,820 | $ | 883,557 |
Adjusted EBITDA: | |||||||||||||||||||||||
Memorialization | $ | 48,030 | $ | 42,944 | $ | 87,167 | $ | 86,314 | |||||||||||||||
Industrial Technologies | 15,565 | 14,385 | 27,767 | 21,568 | |||||||||||||||||||
SGK Brand Solutions | 11,020 | 13,462 | 23,252 | 28,876 | |||||||||||||||||||
Corporate and Non-Operating | (16,168) | (15,601) | (30,448) | (28,235) | |||||||||||||||||||
Total Adjusted EBITDA (1) | $ | 58,447 | $ | 55,190 | $ | 107,738 | $ | 108,523 | |||||||||||||||
(1) See reconciliation of non-GAAP financial information provided in tables at the end of this release |
March 31, 2023 | September 30, 2022 | |||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 41,916 | $ | 69,016 | ||||||||||||||||
Accounts receivable, net | 216,140 | 221,015 | ||||||||||||||||||
Inventories, net | 254,557 | 225,440 | ||||||||||||||||||
Other current assets | 105,626 | 113,145 | ||||||||||||||||||
Total current assets | 618,239 | 628,616 | ||||||||||||||||||
Property, plant and equipment, net | 268,247 | 256,065 | ||||||||||||||||||
Goodwill | 708,767 | 675,421 | ||||||||||||||||||
Other intangible assets, net | 190,387 | 202,154 | ||||||||||||||||||
Other long-term assets | 111,633 | 120,515 | ||||||||||||||||||
Total assets | $ | 1,897,273 | $ | 1,882,771 | ||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Long-term debt, current maturities | $ | 2,825 | $ | 3,277 | ||||||||||||||||
Other current liabilities | 391,616 | 408,098 | ||||||||||||||||||
Total current liabilities | 394,441 | 411,375 | ||||||||||||||||||
Long-term debt | 775,202 | 795,291 | ||||||||||||||||||
Other long-term liabilities | 215,239 | 189,029 | ||||||||||||||||||
Total liabilities | 1,384,882 | 1,395,695 | ||||||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Total shareholders' equity | 512,391 | 487,076 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,897,273 | $ | 1,882,771 |
Six Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 12,772 | $ | (21,746) | |||||||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 47,877 | 57,225 | |||||||||
Changes in working capital items | (10,885) | 18,842 | |||||||||
Other operating activities | (5,053) | 18,402 | |||||||||
Net cash provided by operating activities | 44,711 | 72,723 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (23,772) | (28,096) | |||||||||
Acquisitions, net of cash acquired | (7,586) | — | |||||||||
Other investing activities | 155 | 3,357 | |||||||||
Net cash used in investing activities | (31,203) | (24,739) | |||||||||
Cash flows from financing activities: | |||||||||||
Net payments from long-term debt | (27,120) | (10,538) | |||||||||
Purchases of treasury stock | (2,739) | (12,138) | |||||||||
Dividends | (14,126) | (13,952) | |||||||||
Other financing activities | (914) | (2,047) | |||||||||
Net cash used in financing activities | (44,899) | (38,675) | |||||||||
Effect of exchange rate changes on cash | 1,893 | (1,580) | |||||||||
Net change in cash, cash equivalents and restricted cash | $ | (29,498) | $ | 7,729 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income (loss) | $ | 9,125 | $ | (1,936) | $ | 12,772 | $ | (21,746) | |||||||||||||||
Income tax provision (benefit) | 3,382 | 3,277 | 4,694 | (3,351) | |||||||||||||||||||
Income (loss) before income taxes | $ | 12,507 | $ | 1,341 | $ | 17,466 | $ | (25,097) | |||||||||||||||
Net loss attributable to noncontrolling interests | 2 | 31 | 58 | 38 | |||||||||||||||||||
Interest expense | 12,047 | 6,260 | 22,262 | 12,767 | |||||||||||||||||||
Depreciation and amortization * | 24,148 | 23,724 | 47,877 | 57,225 | |||||||||||||||||||
RPA and factoring financing fees (1) | 1,090 | — | 1,546 | — | |||||||||||||||||||
Acquisition and divestiture costs (2)** | 2,852 | — | 4,137 | — | |||||||||||||||||||
Strategic initiatives and other charges (3)** | 1,280 | 6,750 | 3,040 | 10,573 | |||||||||||||||||||
Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (4)*** | — | 1,213 | — | 1,903 | |||||||||||||||||||
Exchange losses related to highly inflationary accounting (5) | 160 | — | 1,248 | — | |||||||||||||||||||
Defined benefit plan termination related items (6) | — | (79) | 21 | 347 | |||||||||||||||||||
Asset write-downs (7) | — | 10,486 | — | 10,486 | |||||||||||||||||||
Stock-based compensation | 4,278 | 5,222 | 8,612 | 8,931 | |||||||||||||||||||
Non-service pension and postretirement expense (8) | 83 | 242 | 1,471 | 31,350 | |||||||||||||||||||
Total Adjusted EBITDA | $ | 58,447 | $ | 55,190 | $ | 107,738 | $ | 108,523 | |||||||||||||||
Adjusted EBITDA margin | 12.2 | % | 12.4 | % | 11.6 | % | 12.3 | % | |||||||||||||||
(1) Represents fees for receivables sold under the RPA and factoring arrangements. | |||||||||||||||||||||||
(2) Includes certain non-recurring costs associated with recent acquisition and divestiture activities. | |||||||||||||||||||||||
(3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. | |||||||||||||||||||||||
(4) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||||||||||
(5) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries. | |||||||||||||||||||||||
(6) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan. | |||||||||||||||||||||||
(7) Represents asset write-downs within the SGK Brand Solutions segment. | |||||||||||||||||||||||
(8) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||
per share | per share | per share | per share | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Matthews | $ | 9,127 | $ | 0.29 | $ | (1,905) | $ | (0.06) | $ | 12,830 | $ | 0.41 | $ | (21,708) | $ | (0.68) | |||||||||||||||||||
Acquisition and divestiture costs (1) | 1,953 | 0.07 | — | — | 3,015 | 0.10 | — | — | |||||||||||||||||||||||||||
Strategic initiatives and other charges (2) | 1,153 | 0.03 | 4,965 | 0.16 | 2,924 | 0.09 | 7,974 | 0.24 | |||||||||||||||||||||||||||
Non-recurring / incremental COVID-19 costs (3) | — | — | 905 | 0.03 | — | — | 1,441 | 0.05 | |||||||||||||||||||||||||||
Exchange losses related to highly inflationary accounting (4) | 160 | — | — | — | 1,248 | 0.04 | — | — | |||||||||||||||||||||||||||
Defined benefit plan termination related items (5) | — | — | 82 | — | 16 | — | 401 | 0.01 | |||||||||||||||||||||||||||
Asset write-downs (6) | — | — | 10,308 | 0.33 | — | — | 10,308 | 0.33 | |||||||||||||||||||||||||||
Non-service pension and postretirement expense (7) | 62 | 0.01 | 181 | — | 1,103 | 0.04 | 23,512 | 0.74 | |||||||||||||||||||||||||||
Amortization | 7,887 | 0.25 | 8,964 | 0.28 | 15,644 | 0.50 | 25,124 | 0.79 | |||||||||||||||||||||||||||
Adjusted net income | $ | 20,342 | $ | 0.65 | $ | 23,500 | $ | 0.74 | $ | 36,780 | $ | 1.18 | $ | 47,052 | $ | 1.48 | |||||||||||||||||||
Note: Adjustments to net income for non-GAAP reconciling items were calculated using an income tax rate of 29.8% and 25.9% for the three and six months ended March 31, 2023, respectively, and 16.9% and 22% for the three and six months ended March 31, 2022, respectively. | |||||||||||||||||||||||||||||||||||
(1) Includes certain non-recurring costs associated with recent acquisition and divestiture activities. | |||||||||||||||||||||||||||||||||||
(2) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. | |||||||||||||||||||||||||||||||||||
(3) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||||||||||||||||||||||
(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries. | |||||||||||||||||||||||||||||||||||
(5) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan. | |||||||||||||||||||||||||||||||||||
(6) Represents asset write-downs within the SGK Brand Solutions segment. | |||||||||||||||||||||||||||||||||||
(7) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. |
Memorialization | Industrial Technologies | SGK Brand Solutions | Corporate and Non-Operating | Consolidated | |||||||||||||||||||||||||
Reported sales for the quarter ended March 31, 2023 | $ | 222,889 | $ | 125,514 | $ | 131,177 | $ | — | $ | 479,580 | |||||||||||||||||||
Changes in foreign exchange translation rates | 672 | 3,319 | 5,930 | — | 9,921 | ||||||||||||||||||||||||
Constant currency sales for the quarter ended March 31, 2023 | $ | 223,561 | $ | 128,833 | $ | 137,107 | $ | — | $ | 489,501 | |||||||||||||||||||
Reported sales for the six months ended March 31, 2023 | $ | 429,391 | $ | 234,657 | $ | 264,772 | $ | — | $ | 928,820 | |||||||||||||||||||
Changes in foreign exchange translation rates | 2,153 | 8,140 | 16,659 | — | 26,952 | ||||||||||||||||||||||||
Constant currency sales for the six months ended March 31, 2023 | $ | 431,544 | $ | 242,797 | $ | 281,431 | $ | — | $ | 955,772 |
Reported adjusted EBITDA for the quarter ended March 31, 2023 | $ | 48,030 | $ | 15,565 | $ | 11,020 | $ | (16,168) | $ | 58,447 | |||||||||||||||||||
Changes in foreign exchange translation rates | (46) | 1,178 | 308 | 82 | 1,522 | ||||||||||||||||||||||||
Constant currency adjusted EBITDA for the quarter ended March 31, 2023 | $ | 47,984 | $ | 16,743 | $ | 11,328 | $ | (16,086) | $ | 59,969 | |||||||||||||||||||
Reported adjusted EBITDA for the six months ended March 31, 2023 | $ | 87,167 | $ | 27,767 | $ | 23,252 | $ | (30,448) | $ | 107,738 | |||||||||||||||||||
Changes in foreign exchange translation rates | (184) | 2,289 | 1,291 | (266) | 3,130 | ||||||||||||||||||||||||
Constant currency adjusted EBITDA for the six months ended March 31, 2023 | $ | 86,983 | $ | 30,056 | $ | 24,543 | $ | (30,714) | $ | 110,868 |
March 31, 2023 | September 30, 2022 | |||||||||||||
Long-term debt, current maturities | $ | 2,825 | $ | 3,277 | ||||||||||
Long-term debt | 775,202 | 795,291 | ||||||||||||
Total debt | 778,027 | 798,568 | ||||||||||||
Less: Cash and cash equivalents | (41,916) | (69,016) | ||||||||||||
Net Debt | $ | 736,111 | $ | 729,552 | ||||||||||
Adjusted EBITDA | $ | 209,623 | $ | 210,408 | ||||||||||
Net Debt Leverage Ratio | 3.5 | 3.5 | ||||||||||||
"YY.*ID5) \4>\31>8K+C% !'#' $?^1.T;_KSB_]!%;-=BV/
MA:\5&K)+9-A7G_CKQ_?>%-9@LK:TMYDD@$I:7=D$LPQP?:O0*\1^,?\ R-=I
M_P!>2_\ H;U%5M1NCOR>A3KXI0J*ZLR;_A G"FZ]!6MNCUNBBBN@^5,;Q;_P BAJ__ %Z2?^@FOG2OHOQ;
M_P BAJ__ %Z2?^@FOG2N+%?$CZ?(?X4_7] KMO G@AO$$PO[Y6338VP!T,S#
ML/;U/X?3E]&TY]7UFST]#@SRA"P[#N?P&37TA:6L%C:16MM&(X8E"(H[ 5-"
MDIN[V-LVQTL/!4Z?Q/\ !'/^)_%.G^$--2*.-&N2FVWM4X X!..BC]:\+U/
M4KO5]0EO;V4R3R'))Z#T '8"O (M8U6/R[[4KF:/^XSG;^0XKFHIWB/!ROH:NQ3I*..#Z&CF
M=K7%[*GS>58U^I.*CN)WN;F6>0Y>1R['U).:[/X6:4-1\8).ZYCL
MXS,3_M9 7^>?PK/XY>IZLG'!X3_"OZ_$]+\9>'$NOA^^GP+\UC"KPX']P?U&
M:^?:^L64.A5AE2,$5\R^*-*.B>);^PVX2.4F/_(_0UK7CLSQN'<2Y*=&3U
MW_S-OX8ZJ=-\96\3-B*[4P-]3ROZ@5[OJ%Y'I^G7-Y*<1P1-(WT S7RW;7$E
MI=17$1(DB<.I'8@YKVOXA>(D;X=P2P-\VIA%7'92-S?RQ^-%*=HL6
XV_=$CD@?0=!5..
M1XI$DC=DD0AE93@J1T(--HI-MCC&,5RI:&A-XIUR),_VUJ.>P^U/_C5!O%/B
M$DG^W=3_ NY/\:HW3AY !T48JN:?,^Y'L:?\J^XW[7Q1KDD;1OK>HL?0W+G
MC\ZS;MHR@7:"WKGI5.,LK94XXQFAN!@4-M[E1A&/PJQNZ+KFKZ/"18ZC_()JA11=C<(NVFP5