# Matthews International Corp: Form 10-Q for the period ended Dec 31, 2023

- Company: [Matthews International Corp](/companies/matw.md) (CIK 63296)
- Form: 10-Q
- Filed: 2024-02-02
- Accepted by EDGAR: Feb 2, 2024, 12:00 ET
- Period: 2023-12-31
- Accession: 0000063296-24-000008
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/63296/000006329624000008/matw-20231231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/63296/000006329624000008/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-10-01 to 2023-12-31 | $450.0m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2023-10-01 to 2023-12-31 | $317.6m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-10-01 to 2023-12-31 | $132.4m | us-gaap:GrossProfit |
| Operating income | 3 months, 2023-10-01 to 2023-12-31 | $9.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-10-01 to 2023-12-31 | $11.6m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-10-01 to 2023-12-31 | −$726.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-10-01 to 2023-12-31 | −$2.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-10-01 to 2023-12-31 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-10-01 to 2023-12-31 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-10-01 to 2023-12-31 | 30,915,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2023-10-01 to 2023-12-31 | −$27.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2023-10-01 to 2023-12-31 | $14.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2023-10-01 to 2023-12-31 | $9.3m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2023-10-01 to 2023-12-31 | $17.2m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-12-31 | $37.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-12-31 | $658.1m | us-gaap:AssetsCurrent |
| Total assets | at 2023-12-31 | $1.90bn | us-gaap:Assets |
| Current liabilities | at 2023-12-31 | $349.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-12-31 | $1.39bn | us-gaap:Liabilities |
| Long-term debt | at 2023-12-31 | $857.4m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-12-31 | $4.9m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-12-31 | $508.8m | us-gaap:StockholdersEquity |
| Shares outstanding | at 2023-12-31 | 30,682,010 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 6,222 characters.

2023\. The decrease in sales primarily reflected lower retail-based sales, partially offset by improved price realization. Changes in foreign currency exchange rates had a favorable impact of $1.0 million on the segment's sales compared to the prior year.

Gross profit for the three months ended December 31, 2023 was $132.4 million, compared to $138.9 million for the same period a year ago. Consolidated gross profit as a percent of sales was 29.4% and 30.9% for the first three months of fiscal 2024 and fiscal 2023, respectively. The decrease in gross profit primarily reflected the impact of unfavorable changes in sales mix in Memorialization (lower sales of caskets and higher sales of granite memorial products), lower margins on engineered products and cremation products, and higher material and labor costs. These decreases were partially offset by improved margins on cylinder (packaging) products and benefits from the realization of productivity improvements and other cost-reduction initiatives. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $3.9 million and $855,000 for the three months ended December 31, 2023 and 2022, respectively.

Selling and administrative expenses for the three months ended December 31, 2023 were $113.1 million, compared to $111.4 million for the first three months of fiscal 2023. Consolidated selling and administrative expenses, as a percent of sales, were 25.1% for the three months ended December 31, 2023, compared to 24.8% for the same period last year. Fiscal 2024 selling and administrative expenses reflected the impact of higher compensation, partially offset by benefits from ongoing cost-reduction initiatives. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with certain commercial, operational and cost-reduction initiatives totaling $4.6 million in fiscal 2024, compared to $2.7 million in fiscal 2023. Intangible amortization for the three months ended December 31, 2023 was $9.8 million, compared to $10.3 million for the three months ended December 31, 2022.

Adjusted EBITDA was $45.5 million for the three months ended December 31, 2023 and $49.3 million for the three months ended December 31, 2022. Memorialization segment adjusted EBITDA was $36.7 million for the first three months of fiscal 2024 compared to $39.1 million for the first three months of fiscal 2023. The decrease in segment adjusted EBITDA reflected the impact of higher material and labor costs, lower margins on cremation products, and unfavorable changes in sales mix. These decreases were partially offset by the impact of benefits from productivity initiatives and lower performance-based compensation compared to fiscal 2023. Adjusted EBITDA for the Industrial Technologies segment was $9.6 million for the three months ended December 31, 2023 compared to $12.2 million for the three months ended December 31, 2022. The decrease in segment adjusted EBITDA primarily reflected the impact of higher labor costs and lower margins on engineered products. Adjusted EBITDA for the SGK Brand Solutions segment was $12.9 million for the first three months of fiscal 2024 compared to $12.2 million for the same period a year ago. The increase in segment adjusted EBITDA primarily reflected the impact of benefits from cost-reduction initiatives and improved margins on cylinder (packaging) products, partially offset by the impact of lower sales and higher labor costs.

Interest expense for the first three months of fiscal 2024 was $11.6 million, compared to $10.2 million for the same period last year. The increase in interest expense primarily reflected higher average interest rates in the current fiscal year. Other income (deductions), net, for the three months ended December 31, 2023 represented a decrease in pre-tax income of $880,000, compared to a decrease in pre-tax income of $2.1 million for the same period last year. Other income (deductions), net includes the non-service components of pension and postretirement expense, which totaled $109,000 and $1.4 million for the three months ended December 31, 2023 and 2022, respectively. Fiscal 2023 non-service pension expense included a $1.3 million non-cash charge resulting from the settlement of the Company's supplemental retirement plan ("SERP") and defined benefit portion of the officers retirement restoration plan ("ORRP") obligations. Refer to Note 11, "Pension and Other Postretirement Benefit Plans" in Item 1 - "Financial Statements" for further details. Other income (deductions), net also includes investment income, banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances. Other income (deductions), net included $320,000 and $1.1 million of currency losses associated with highly inflationary accounting for the Company's subsidiaries in Turkey for the three months ended December 31, 2023 and 2022, respectively (see Note 2, "Basis of Presentation" in Item 1 - "Financial Statements").

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 first three months of fiscal 2024 were a benefit of $726,000, compared to an expense of $1.3 million for the first three months of fiscal 2023. The difference between the Company’s consolidated income taxes for the first three months of fiscal 2024 compared to the same period for fiscal 2023 resulted from a consolidated pre-tax loss in fiscal 2024 compared to pre-tax income in fiscal 2023 as well as a net tax benefit from discrete items. The Company’s fiscal 2024 three-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, foreign statutory rate differentials, tax credits, and a net discrete tax benefit. The Company’s fiscal 2023 three-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, foreign statutory rate differentials, and tax credits.

## Market risk

As filed, 305 characters.

There have been no material changes in the Company’s market risk during the three months ended December 31, 2023. 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, 2023.

## Controls and procedures

As filed, 1,904 characters.

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 December 31, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, 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 December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

## Risk factors

As filed, 557 characters.

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The risk factors disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, 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.

Filed Feb 2, 2024.
Source: SEC EDGAR, the filing index for accession 0000063296-24-000008. Last ingested by Listed: Oct 30, 2026, 12:41 ET. No prices; not investment advice.