Matthews International Reports Results for Fiscal 2025 Third Quarter
Fiscal 2025 Third Quarter Financial Highlights:
GAAP Earnings per share of $0.49 vs. $0.06 a year ago
Memorialization and Industrial Technologies report higher adjusted EBITDA
Outstanding debt reduced by $120 million
Company realizing benefits of cost reduction actions
Strategic alternatives evaluation progressing well
Company maintains outlook for fiscal 2025
Webcast: Wednesday, August 6, 2025, 9:00 a.m., (201) 689-8471
PITTSBURGH, Aug. 05, 2025 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) today announced financial results for its third quarter of fiscal 2025.
In discussing the results for the Company's fiscal 2025 third quarter, Joseph C. Bartolacci, President and Chief Executive Officer, stated:
"We were pleased with our operating results for the fiscal 2025 third quarter. The Company reported earnings per share on a GAAP basis of $0.49 per share for the current quarter compared to $0.06 a year ago. We realized a gain on the divestiture of the SGK business. Additionally, the Memorialization and Industrial Technologies segments each reported higher adjusted EBITDA compared to a year ago while we continued to lower our corporate and other non-operating costs. Non-GAAP adjusted earnings per share was $0.28 for the current quarter.
"We are realizing the benefits of the cost reduction actions that we initiated last year. These initiatives were a key contributor to our year-over-year improvement in the Industrial Technologies segment, particularly in our engineering business which continues to be challenged by the impact of the meritless litigation with Tesla. These initiatives were also a key driver to the reduction in corporate and non-operating costs. Year-to-date, we have reduced corporate and other non-operating costs by 11.4%, or $4.9 million, compared to a year ago, and expect further reductions into next fiscal year as a result of the SGK divestiture.
"Sales for the Memorialization segment for the fiscal 2025 third quarter were higher than a year ago primarily reflecting the recent acquisition of The Dodge Company. We expect this acquisition to be nicely accretive to earnings as we leverage the benefits of our Memorialization commercial platform and we have already begun to realize synergies from integration. Sales volumes for caskets and cemetery memorials were modestly lower for the quarter primarily reflecting lower U.S. casketed deaths and the prior year sales benefit of granite backlog reductions. However, the earnings impact of these declines were offset by inflationary price realization and benefits from the segment's ongoing productivity initiatives, which were significant factors in the segment's improved operating margins.
"The Industrial Technologies segment reported a modest decline in sales for the fiscal 2025 third quarter. The decrease mainly resulted from lower engineering sales primarily reflecting the unfavorable consequences of the ongoing Tesla dispute, which impacted customer order rates and willingness to do business with us. However, since the favorable ruling in February 2025, outstanding quotes are now over $150 million and continuing to grow. The quotes are beginning to convert to orders at a modest level and expected to further increase by the end of this calendar year. Sales for the segment's warehouse automation business were higher for the current quarter as order rates and backlog continued to improve, reflecting the ongoing recovery in this market.
"During the fiscal 2025 third quarter, we reduced consolidated outstanding debt by $120 million. The reduction primarily reflected the proceeds from the SGK divestiture, offset partly by the acquisition of The Dodge Company, settlement of currency hedges in connection with SGK-related assets, and SGK transaction-related costs. Based on our current operating cash flow projections and the potential sale of our European packaging business, we expect further debt reduction in the fiscal 2025 fourth quarter.
"Regarding the integration of the SGK business with SGS, the new company, Propelis Group ("Propelis"), has indicated solid operating results since the May 1, 2025 closing date and has recently increased its projected cost synergy estimates to approximately $60 million.
"Our strategic alternatives evaluation is progressing well. The Board, with the support of J.P. Morgan, has identified several alternatives for further evaluation and consideration toward improving shareholder value and better alignment with the underlying value of the organization. We expect to complete this evaluation over the next several months and will provide an update to our shareholders at that time.
"Lastly, based on our results through June 30, 2025 and our fourth quarter projections, we are maintaining our previous earnings guidance of adjusted EBITDA of at least $190 million (which includes our estimated 40% share of Propelis adjusted EBITDA from May 1, 2025 through September 30, 2025) for fiscal 2025."
Third Quarter Fiscal 2025 Consolidated Results (Unaudited)
($ in millions, except per share data)
Q3 FY2025
Q3 FY2024
Change
% Change
Sales
$
349.4
$
427.8
$
(78.4
)
(18.3
)%
Net income attributable to Matthews
$
15.4
$
1.8
$
13.6
NM
Diluted earnings per share
$
0.49
$
0.06
$
0.43
NM
Non-GAAP adjusted net income
$
9.2
$
17.3
$
(8.1
)
(46.9
)%
Non-GAAP adjusted EPS
$
0.28
$
0.56
$
(0.28
)
(50.0
)%
Adjusted EBITDA
$
44.6
$
44.7
$
(0.2
)
(0.4
)%
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.
Consolidated sales for the quarter ended June 30, 2025 were $349.4 million, compared to $427.8 million for the same quarter a year ago. The decrease primarily reflected the divestiture of SGK on May 1, 2025. The consolidated sales impact of the SGK divestiture was $80.2 million for the current quarter. Sales for the Industrial Technologies segment were lower for the quarter, offset partially by higher sales for the Memorialization segment. SGK also reported sales growth for the current quarter prior to its divestiture.
Net income attributable to the Company for the quarter ended June 30, 2025 was $15.4 million, or $0.49 per share, compared to $1.8 million, or $0.06 per share in the prior year. The gain on the divestiture of SGK (net of transaction-related costs) was the most significant factor in the increase. On a non-GAAP adjusted basis, earnings for the fiscal 2025 third quarter were $0.28 per share, compared to $0.56 per share a year ago. These results do not reflect our 40% interest in the results of Propelis (see "Divestiture of the SGK Business" below). Although adjusted EBITDA was relatively consistent with the same quarter a year ago, interest expense increased primarily reflecting the higher rate on the new bonds compared to the previous bonds. Also, the third quarter last year benefited from significant discrete tax benefits which did not repeat in the current quarter.
Divestiture of the SGK Business
On May 1, 2025, the Company contributed the SGK business to a newly-formed entity, Propelis, in exchange for 40% of the common equity of Propelis, a $50 million preferred equity investment in Propelis, and cash proceeds of $250 million ($228 million net of divested cash).
The consolidated financial information presented in this release reflects the financial results of the SGK business through the closing date. Please note that, as a result of the integration process of Propelis and transition to its stand-alone reporting systems, our 40% portion of the financial results of Propelis will be reported on a one-quarter lag. As a result, the consolidated financial information presented in this release does not include our 40% interest in the financial results of Propelis for May and June 2025.
Based on preliminary financial projections provided by Propelis, their current estimate of adjusted EBITDA for May and June 2025 was $16.8 million. Please note that these projections are unaudited and subject to review and, as a result, may change. Our 40% portion of this amount would be $6.7 million. Accordingly, with the addition of our 40% interest in Propelis, the Company's consolidated adjusted EBITDA for the fiscal 2025 third quarter would be $51.3 million, compared to $44.7 million a year ago, representing an increase of 14.6%.
Fiscal 2025 Year-to-Date Consolidated Results (Unaudited)
($ in millions, except per share data)
YTD FY2025
YTD FY2024
Change
% Change
Sales
$
1,178.8
$
1,349.0
$
(170.2
)
(12.6
)%
Net income attributable to Matthews
$
3.0
$
8.5
$
(5.5
)
(64.7
)%
Diluted earnings per share
$
0.10
$
0.27
$
(0.17
)
(63.0
)%
Non-GAAP adjusted net income
$
24.0
$
50.5
$
(26.5
)
(52.5
)%
Non-GAAP adjusted EPS
$
0.76
$
1.62
$
(0.86
)
(53.1
)%
Adjusted EBITDA
$
136.0
$
147.0
$
(11.0
)
(7.5
)%
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.
Consolidated sales for the nine months ended June 30, 2025 were $1.18 billion, compared to $1.35 billion a year ago, representing a decrease of $170.2 million, or 12.6%. The decrease primarily reflected the divestiture of SGK on May 1, 2025 and lower sales for the Industrial Technologies segment. Memorialization segment sales were also lower for the year, which was offset partially by higher sales for SGK pre-divestiture. The consolidated sales impact of the SGK divestiture was $80.2 million for the current year.
Net income attributable to the Company for the nine months ended June 30, 2025 was $3.0 million, or $0.10 per share, compared to $8.5 million, or $0.27 per share in the prior year. On a non-GAAP adjusted basis, earnings for the nine months ended June 30, 2025 were $0.76 per share, compared to $1.62 per share a year ago. Adjusted EBITDA for the first nine months of fiscal 2025 was $136.0 million, compared to $147.0 million a year ago.
Webcast
The Company will host a conference call and webcast on Wednesday, August 6, 2025 at 9:00 a.m. Eastern Time to review its financial and operating results and discuss its corporate strategies and outlook. A question-and-answer session will follow. The conference call can be accessed by dialing (201) 689-8471. The audio webcast can be monitored at www.matw.com. As soon as available after the call, a transcript of the call will be posted on the Investor Relations section of the Company's website at www.matw.com.
About Matthews International Corporation
Matthews International Corporation is a global provider of memorialization products, industrial Matthews International Corporation operates through two core global businesses, Industrial Technologies and Memorialization. Both are focused on driving operational efficiency and long-term growth through continuous innovation and strategic expansion. The Industrial Technologies segment evolved from our original marking business, which today is a leading global innovator committed to empowering visionaries to transform industries through the application of precision technologies and intelligent processes. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The Company also has a significant investment in Propelis, a brand solutions business formed through the merger of SGK and SGS & Co. Propelis offers integrated solutions including brand creative, packaging, print solutions, branded environments, and content production. The Company has over 5,400 employees in 19 countries on four continents that are committed to delivering the highest quality products and services.
Forward-looking Information
Any forward-looking statements contained in this release are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the proposed joint venture transaction, and may be identified by the use of words such as "expects," "believes," "intends," "projects," "anticipates," "estimates," "plans," "seeks," "forecasts," "predicts," "objective," "targets," "potential," "outlook," "may," "will," "could" or the negative of these terms, other comparable terminology and variations thereof. 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, and 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 our ability to achieve the anticipated benefits of the joint venture transaction that recently closed, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, including changes in costs due to adjustments to tariffs, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company's operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, 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, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, divestitures, and business combinations, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, the Company's plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company's plans and expectations with respect to its Board, and other factors described in the Company's Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)(In thousands, except per share data)
Three Months EndedJune 30,
Nine Months EndedJune 30,
2025
2024
% Change
2025
2024
% Change
Sales
$
349,377
$
427,833
(18.3
)%
$
1,178,848
$
1,349,042
(12.6
)%
Cost of sales
(227,421
)
(295,996
)
(23.2
)%
(787,088
)
(936,670
)
(16.0
)%
Gross profit
121,956
131,837
(7.5
)%
391,760
412,372
(5.0
)%
Gross margin
34.9
%
30.8
%
33.2
%
30.6
%
Selling and administrative expenses
(100,394
)
(116,098
)
(13.5
)%
(345,688
)
(347,124
)
(0.4
)%
Amortization of intangible assets
(3,474
)
(9,037
)
(61.6
)%
(16,362
)
(27,791
)
(41.1
)%
Gain on sale of SGK Business
57,103
—
NM
57,103
—
NM
Operating profit
75,191
6,702
NM
86,813
37,457
131.8
%
Operating margin
21.5
%
1.6
%
7.4
%
2.8
%
Interest and other deductions, net
(16,327
)
(13,754
)
18.7
%
(45,423
)
(39,633
)
14.6
%
Income (loss) before income taxes
58,864
(7,052
)
NM
41,390
(2,176
)
NM
Income taxes
(43,477
)
8,829
NM
(38,391
)
10,677
NM
Net income
15,387
1,777
NM
2,999
8,501
(64.7
)%
Non-controlling interests
—
—
—
%
—
—
—
%
Net income attributable to Matthews
$
15,387
$
1,777
NM
$
2,999
$
8,501
(64.7
)%
Earnings per share -- diluted
$
0.49
$
0.06
NM
$
0.10
$
0.27
(63.0
)%
Earnings per share -- non-GAAP(1)
$
0.28
$
0.56
(50.0
)%
$
0.76
$
1.62
(53.1
)%
