On August 1, 2024, Matthews International Corp (MATW, Financial) released its 8-K filing detailing the financial results for the third quarter of fiscal 2024. The company, a provider of brand solution services, memorialization products, and industrial products, reported a challenging quarter with earnings and revenue falling short of analyst estimates.
Company Overview
Matthews International Corp is a personal services company that primarily provides brand solution services, memorialization products, and industrial products in the United States and Europe. The majority of Matthews' revenue is derived from its SGK Brand Solutions business, which provides brand development services, printing equipment, creative design services, and embossing tools to the consumer packaged goods and packaging industries. The company's Memorialization segment, which sells bronze and granite memorials, caskets, and cremation equipment to the cemetery and funeral home industries, also contributes a significant amount. Most of Matthews' revenue is generated from sales made in the U.S., while European customers also contribute a sizable percentage.
Performance and Challenges
For the third quarter ended June 30, 2024, Matthews International Corp reported consolidated sales of $427.8 million, a 9.3% decrease from $471.9 million in the same quarter last year. The decline was attributed to lower sales in the Industrial Technologies segment, impacted by customer delays in energy storage shipments and slow conditions in the warehouse automation market.
Net income attributable to Matthews for the quarter was $1.8 million, or $0.06 per share, compared to $8.7 million, or $0.28 per share, in the prior year. On a non-GAAP adjusted basis, earnings were $0.56 per share, down from $0.74 per share a year ago. The decrease was primarily due to lower consolidated adjusted EBITDA and higher interest expenses.
Financial Achievements
Despite the challenges, Matthews International Corp managed to reduce its outstanding debt by $12.6 million during the quarter. The company also announced cost reduction initiatives targeting annual savings of up to $50 million, with significant contributions expected from its engineering and tooling operations in Europe.
Income Statement Highlights
| Metric | Q3 FY2024 | Q3 FY2023 | Change | % Change |
|---|---|---|---|---|
| Sales | $427.8 million | $471.9 million | $(44.1) million | (9.3)% |
| Net Income | $1.8 million | $8.7 million | $(6.9) million | (79.3)% |
| Diluted EPS | $0.06 | $0.28 | $(0.22) | (78.6)% |
| Non-GAAP Adjusted EPS | $0.56 | $0.74 | $(0.18) | (24.3)% |
| Adjusted EBITDA | $44.7 million | $56.2 million | $(11.5) million | (20.5)% |
Analysis
The third quarter results reflect the ongoing challenges faced by Matthews International Corp, particularly in its Industrial Technologies segment. The decline in sales and net income underscores the impact of customer delays and market conditions. However, the company's efforts to reduce debt and implement cost-saving measures are positive steps towards improving financial stability.
Looking ahead, Matthews International Corp's focus on cost reduction and strategic initiatives, along with anticipated improvements in energy storage shipments and warehouse automation orders, could help mitigate some of the current challenges. Investors will be closely watching the company's ability to navigate these headwinds and capitalize on future growth opportunities.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Matthews International Corp for further details.
