3 unchanged sentences
(Dollar amounts in thousands)
−Removed: March 31, 2020 September 30, 2019
+Added: June 30, 2020 September 30, 2019
Current assets:
40 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2020 2019 2020 2019
6 unchanged sentences
Goodwill write-down — — ( 90,408 ) —
−Removed: Operating (loss) profit ( 85,097 ) 24,264 ( 90,040 ) 40,430
−Removed: Investment (loss) income ( 1,108 ) 2,091 191 739
+Added: Operating profit (loss) 5,246 29,691 ( 84,794 ) 70,121
+Added: Investment income 1,252 655 1,443 1,394
Interest expense ( 8,082 ) ( 10,508 ) ( 26,935 ) ( 31,068 )
2 unchanged sentences
Income tax benefit (provision) 6,209 ( 3,989 ) 22,672 ( 4,429 )
−Removed: Net (loss) income ( 86,595 ) 15,194 ( 96,901 ) 18,178
+Added: Net income (loss) 1,849 14,424 ( 95,052 ) 32,602
Net losses attributable to noncontrolling interests 420 205 491 541
−Removed: Net (loss) income attributable to Matthews shareholders $ ( 86,364 ) $ 15,417 $ ( 96,830 ) $ 18,514
−Removed: (Loss) earnings per share attributable to Matthews shareholders:
+Added: Net income (loss) attributable to Matthews shareholders $ 2,269 $ 14,629 $ ( 94,561 ) $ 33,143
+Added: Earnings (loss) per share attributable to Matthews shareholders:
Basic $ 0.07 $ 0.47 $ ( 3.04 ) $ 1.05
4 unchanged sentences
(Dollar amounts in thousands)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
Matthews Noncontrolling Interest Total
2020 2019 2020 2019 2020 2019
−Removed: Net (loss) income:
+Added: Net income (loss):
$ 2,269 $ 14,629 $ ( 420 ) $ ( 205 ) $ 1,849 $ 14,424
7 unchanged sentences
OCI, net of tax 12,804 312 — ( 5 ) 12,804 307
−Removed: Comprehensive (loss) income $ ( 119,627 ) $ 14,265 $ ( 230 ) $ ( 204 ) $ ( 119,857 ) $ 14,061
−Removed: Six Months Ended March 31,
+Added: Comprehensive income (loss) $ 15,073 $ 14,941 $ ( 420 ) $ ( 210 ) $ 14,653 $ 14,731
+Added: Nine Months Ended June 30,
Matthews Noncontrolling Interest Total
14 unchanged sentences
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
−Removed: for the three and six months ended March 31, 2020 and 2019 (Unaudited)
−Removed: (Dollar amounts in thousands, except per share data)
+Added: (Dollar amounts in thousands, except per share data) (Unaudited)
Shareholders' Equity
32 unchanged sentences
March 31, 2020 $ 36,334 $ 143,034 $ 862,581 $ ( 248,495 ) $ ( 203,307 ) $ 1,055 $ 591,202
+Added: Net income (loss) — — 2,269 — — ( 420 ) 1,849
+Added: Minimum pension liability — — — 1,743 — — 1,743
+Added: Translation adjustment — — — 11,240 — — 11,240
+Added: Fair value of derivatives — — — ( 179 ) — — ( 179 )
+Added: Total comprehensive income 14,653
+Added: Stock-based compensation — 2,539 — — — — 2,539
+Added: Purchase of 722 shares of treasury stock
+Added: — — — — ( 22 ) — ( 22 )
+Added: Issuance of 900 shares of treasury stock
+Added: — ( 36 ) — — 36 — —
+Added: Cancellations of 4,616 shares of treasury stock
+Added: — 277 — — ( 277 ) — —
+Added: Dividends, $ 0.21 per share
+Added: — — ( 6,630 ) — — — ( 6,630 )
+Added: June 30, 2020 $ 36,334 $ 145,814 $ 858,220 $ ( 235,691 ) $ ( 203,570 ) $ 635 $ 601,742
Shareholders' Equity
36 unchanged sentences
March 31, 2019 $ 36,334 $ 135,055 $ 1,041,856 $ ( 180,186 ) $ ( 187,391 ) $ 1,793 $ 847,461
+Added: Net income (loss) — — 14,629 — — ( 205 ) 14,424
+Added: Minimum pension liability — — — 705 — — 705
+Added: Translation adjustment — — — 2,639 — ( 5 ) 2,634
+Added: Fair value of derivatives — — — ( 3,032 ) — — ( 3,032 )
+Added: Total comprehensive income 14,731
+Added: Stock-based compensation — 1,156 — — — — 1,156
+Added: Purchase of 240,155 shares of treasury stock
+Added: — — — — ( 8,529 ) — ( 8,529 )
+Added: Dividends, $ 0.20 per share
+Added: — — ( 6,394 ) — — — ( 6,394 )
+Added: June 30, 2019 $ 36,334 $ 136,211 $ 1,050,091 $ ( 179,874 ) $ ( 195,920 ) $ 1,583 $ 848,425
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
(Dollar amounts in thousands)
−Removed: Six Months Ended
+Added: Nine Months Ended
Cash flows from operating activities:
4 unchanged sentences
Deferred tax benefit ( 11,986 ) ( 4,031 )
−Removed: Loss (gain) on sale of assets, net 27 ( 128 )
−Removed: Loss on divestiture — 4,465
−Removed: Unrealized loss on investments in mutual funds
+Added: Gain on sale of assets, net ( 229 ) ( 210 )
+Added: (Gain) loss on sale of ownership interests in a subsidiary ( 11,208 ) 4,465
+Added: Unrealized gain on investments in mutual funds
+Added: ( 1,161 ) ( 406 )
Loss from equity-method investments 3,542 1,086
2 unchanged sentences
Decrease (increase) in other assets 5,076 ( 379 )
−Removed: (Decrease) increase in other liabilities ( 1,107 ) 937
+Added: Increase in other liabilities 2,960 3,042
Other operating activities, net 4,036 860
4 unchanged sentences
Proceeds from sale of assets 398 1,508
−Removed: Proceeds from divestiture — 8,254
+Added: Proceeds from sale of ownership interests in a subsidiary 42,210 8,254
Investments and advances ( 9,723 ) ( 33,073 )
−Removed: Net cash used in investing activities ( 28,538 ) ( 33,467 )
+Added: Net cash provided by (used in) investing activities 7,399 ( 66,799 )
Cash flows from financing activities:
5 unchanged sentences
Other financing activities ( 4,156 ) ( 2,139 )
−Removed: Net cash provided by (used in) financing activities 585 ( 15,365 )
+Added: Net cash used in financing activities ( 123,090 ) ( 30,163 )
Effect of exchange rate changes on cash ( 315 ) ( 421 )
5 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
−Removed: March 31, 2020
+Added: June 30, 2020
(Dollar amounts in thousands, except per share data)
10 unchanged sentences
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.
−Removed: Operating results for the six months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2020.
+Added: Operating results for the nine months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2020.
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, 2019.
56 unchanged sentences
The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
−Removed: Disaggregated sales by segment and region for the three and six months ended March 31, 2020 and 2019 were as follows:
+Added: Disaggregated sales by segment and region for the three and nine months ended June 30, 2020 and 2019 were as follows:
SGK Brand Solutions Memorialization Industrial Technologies Consolidated
Three Months Ended
−Removed: March 31, Three Months Ended
−Removed: March 31, Three Months Ended
−Removed: March 31, Three Months Ended
+Added: June 30, Three Months Ended
+Added: June 30, Three Months Ended
+Added: June 30, Three Months Ended
2020 2019 2020 2019 2020 2019 2020 2019
6 unchanged sentences
SGK Brand Solutions Memorialization Industrial Technologies Consolidated
−Removed: Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31,
+Added: Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30,
2020 2019 2020 2019 2020 2019 2020 2019
15 unchanged sentences
The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:
−Removed: March 31, 2020 September 30, 2019
+Added: June 30, 2020 September 30, 2019
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
9 unchanged sentences
Inventories consisted of the following:
−Removed: March 31, 2020 September 30, 2019
+Added: June 30, 2020 September 30, 2019
Raw materials $ 38,076 $ 35,616
3 unchanged sentences
Non-current investments consisted of the following:
−Removed: March 31, 2020 September 30, 2019
+Added: June 30, 2020 September 30, 2019
Equity and fixed income mutual funds $ 24,119 $ 22,986
1 unchanged sentence
Equity-method investments 386 39,761
−Removed: Cost-method investments 18,372 18,724
+Added: Other investments 33,463 18,724
$ 62,068 $ 85,501
−Removed: During fiscal 2020, the Company made additional investments in a non-consolidated subsidiary totaling $ 9,482 and continued to account for this non-controlling interest as an equity-method investment.
+Added: During the first six months of fiscal 2020, the Company made $ 9,482 of additional investments in a non-consolidated subsidiary that was being accounted for as an equity-method investment.
+Added: During the third quarter of fiscal 2020, the Company sold its ownership interest in this subsidiary for $ 42,210 of cash and $ 15,000 of senior preferred shares.
+Added: The senior preferred shares earn a yield based on an escalating rate ranging from 6 % to 14 % and are expected to be redeemed before the end of calendar year 2022.
+Added: In connection with this sale transaction, the Company recognized a pre-tax gain of $ 11,208 which has been recorded as a component of administrative expenses.
+Added: The senior preferred shares are included within other investments in the table above along with ownership interests in various entities of less than 20%, which are recorded under the cost-method of accounting.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
4 unchanged sentences
The term loan requires scheduled quarterly principal payments through its maturity date.
−Removed: Borrowings under both the revolving credit facility and the term loan bear interest at LIBOR (Euro LIBOR for balances drawn in Euros) plus a factor ranging from 0.75 % to 2.00 % ( 1.50 % at March 31, 2020) based on the Company's secured leverage ratio.
+Added: Borrowings under both the revolving credit facility and the term loan bear interest at LIBOR (Euro LIBOR for balances drawn in Euros) plus a factor ranging from 0.75 % to 2.00 % ( 1.50 % at June 30, 2020) based on the Company's secured leverage ratio.
The secured leverage ratio is defined as net secured indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement.
The Company is required to pay an annual commitment fee ranging from 0.15 % to 0.30 % (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.
−Removed: The Company incurred debt issuance costs of approximately $ 2,000 in connection with the amended and restated agreement, which will be deferred and amortized over the term of the facility.
+Added: The Company incurred debt issuance costs of approximately $ 2,000 in connection with the amended and restated agreement, which was deferred and is being amortized over the term of the facility.
The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios.
1 unchanged sentence
Outstanding U.S.
−Removed: dollar denominated borrowings on the revolving credit facility at March 31, 2020 and September 30, 2019 were $ 372,500 and $ 325,638 , respectively.
−Removed: Outstanding Euro denominated borrowings on the revolving credit facility at March 31, 2020 and September 30, 2019 were € 125.0 million ($ 137,519 ) and € 125.0 million ($ 136,470 ), respectively.
−Removed: Outstanding borrowings on the term loan at March 31, 2020 and September 30, 2019 were $ 34,766 and $ 53,497 , respectively.
−Removed: The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at March 31, 2020 and March 31, 2019 was 2.40 % and 3.25 %, respectively.
+Added: dollar denominated borrowings on the revolving credit facility at June 30, 2020 and September 30, 2019 were $ 275,000 and $ 325,638 , respectively.
+Added: Outstanding Euro denominated borrowings on the revolving credit facility at June 30, 2020 and September 30, 2019 were € 125.0 million ($ 140,371 ) and € 125.0 million ($ 136,470 ), respectively.
+Added: Outstanding borrowings on the term loan at June 30, 2020 and September 30, 2019 were $ 28,563 and $ 53,497 , respectively.
+Added: The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2020 and June 30, 2019 was 2.44 % and 2.75 %, respectively.
The Company has $ 300,000 of 5.25 % senior unsecured notes due December 1, 2025 (the "2025 Senior Notes").
3 unchanged sentences
The Company incurred direct financing fees and costs in connection with the 2025 Senior Notes.
−Removed: Unamortized costs were $ 3,014 and $ 3,284 at March 31, 2020 and September 30, 2019, respectively.
+Added: Unamortized costs were $ 2,879 and $ 3,284 at June 30, 2020 and September 30, 2019, respectively.
The Company has a $ 115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions.
6 unchanged sentences
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.
−Removed: Outstanding borrowings under the Securitization Facility at March 31, 2020 and September 30, 2019 were $ 103,190 and $ 93,950 , respectively.
−Removed: At March 31, 2020 and 2019, the interest rate on borrowings under this facility was 1.74 % and 3.24 %, respectively.
+Added: Outstanding borrowings under the Securitization Facility at June 30, 2020 and September 30, 2019 were $ 85,270 and $ 93,950 , respectively.
+Added: At June 30, 2020 and 2019, the interest rate on borrowings under this facility was 0.91 % and 3.15 %, respectively.
The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:
−Removed: March 31, 2020 September 30, 2019
+Added: June 30, 2020 September 30, 2019
Pay fixed swaps - notional amount $ 343,750 $ 293,750
10 unchanged sentences
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.
−Removed: The fair value of the interest rate swaps reflected an unrealized loss, net of unrealized gains, of $ 6,032 ($ 4,554 after tax) at March 31, 2020 and an unrealized loss, net of unrealized gains, of $ 534 ($ 403 after tax) at September 30, 2019, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").
−Removed: Assuming market rates remain constant with the rates at March 31, 2020, a loss (net of tax) of approximately $ 2,129 included in AOCI is expected to be recognized in earnings over the next twelve months.
−Removed: At March 31, 2020 and September 30, 2019, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:
−Removed: Derivatives March 31, 2020 September 30, 2019
+Added: The fair value of the interest rate swaps reflected an unrealized loss, net of unrealized gains, of $ 6,269 ($ 4,733 after tax) at June 30, 2020 and an unrealized loss, net of unrealized gains, of $ 534 ($ 403 after tax) at September 30, 2019, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").
+Added: Assuming market rates remain constant with the rates at June 30, 2020, a loss (net of tax) of approximately $ 2,234 included in AOCI is expected to be recognized in earnings over the next twelve months.
+Added: At June 30, 2020 and September 30, 2019, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:
+Added: Derivatives June 30, 2020 September 30, 2019
Current assets:
7 unchanged sentences
Total derivatives $ ( 6,269 ) $ ( 534 )
−Removed: The gains recognized on derivatives were as follows:
−Removed: 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
+Added: The (losses) gains recognized on derivatives were as follows:
+Added: Derivatives in Cash Flow Hedging Relationships Location of (Loss) Gain Recognized in Income on Derivative Amount of (Loss) Gain Recognized in Income on Derivatives Amount of Gain Recognized in Income on Derivatives
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2020 2019 2020 2019
Interest rate swaps Interest expense $ ( 438 ) $ 874 $ 108 $ 2,489
−Removed: The Company recognized the following gains (losses) in AOCI:
+Added: The Company recognized the following (losses) gains in AOCI:
Derivatives in Cash Flow Hedging Relationships Amount of Loss
−Removed: Recognized in AOCI on Derivatives
−Removed: Location of Gain Reclassified From AOCI into Income (Effective Portion*) Amount of Gain
+Added: Recognized in AOCI on Derivatives Location of Gain Reclassified From AOCI into Income (Effective Portion*) Amount of Gain
Reclassified from
1 unchanged sentence
(Effective Portion*)
−Removed: March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019
+Added: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Interest rate swaps $ ( 4,248 ) $ ( 6,074 ) Interest expense $ 82 $ 1,879
3 unchanged sentences
The credit facility matures in December 2020 and the Company intends to continue to extend this facility.
−Removed: Outstanding borrowings under the credit facility totaled € 14.2 million ($ 15,622 ) and € 12.8 million ($ 14,024 ) at March 31, 2020 and September 30, 2019, respectively.
−Removed: The weighted-average interest rate on outstanding borrowings under this facility at March 31, 2020 and 2019 was 1.25 %.
+Added: Outstanding borrowings under the credit facility totaled € 12.1 million ($ 13,617 ) and € 12.8 million ($ 14,024 ) at June 30, 2020 and September 30, 2019, respectively.
+Added: The weighted-average interest rate on outstanding borrowings under this facility at June 30, 2020 and 2019 was 1.25 %.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3 unchanged sentences
The notes matured in November 2019 at which point they were paid.
−Removed: The weighted-average interest rate on the notes at March 31, 2019 was 1.40 %.
−Removed: Finance lease liabilities included as a component of debt totaled $ 5,248 and $ 3,631 at March 31, 2020 and September 30, 2019, respectively.
+Added: The weighted-average interest rate on the notes at June 30, 2019 was 1.40 %.
+Added: Finance lease liabilities included as a component of debt totaled $ 10,235 and $ 3,631 at June 30, 2020 and September 30, 2019, respectively.
See Note 8, "Leases" for further discussion on the Company's lease obligations.
−Removed: Other debt totaled $ 395 at September 30, 2019.
−Removed: The weighted-average interest rate on other debt was 5.50 % at March 31, 2019.
+Added: Other debt totaled $ 10,707 and $ 395 at June 30, 2020 and September 30, 2019 respectively.
+Added: The weighted-average interest rate on other debt was 2.14 % and 5.81 % at June 30, 2020 and June 30, 2019, respectively.
The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations.
−Removed: Currency losses of $ 2,528 (net of income taxes of $ 820 ) and $ 3,320 (net of income taxes of $ 1,077 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2020 and September 30, 2019, respectively.
−Removed: In September 2014, a claim was filed by a customer seeking to draw upon a letter of credit issued by the Company of £ 8,570,000 ($ 10,607 at March 31, 2020) with respect to a performance guarantee on an environmental solutions project in Saudi Arabia.
+Added: Currency losses of $ 374 (net of income taxes of $ 121 ) and $ 3,320 (net of income taxes of $ 1,077 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at June 30, 2020 and September 30, 2019, respectively.
+Added: In September 2014, a claim was filed by a customer seeking to draw upon a letter of credit issued by the Company of £ 8,570,000 ($ 10,566 at June 30, 2020) with respect to a performance guarantee on an incineration equipment 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 "U.K.
5 unchanged sentences
Court as ordered.
−Removed: On June 14, 2016, the U.K Court ruled completely in favor of Matthews following a trial on the merits.
+Added: On June 14, 2016, the U.K.
+Added: Court ruled completely in favor of Matthews following a trial on the merits.
However, the ongoing dispute involves litigation in multiple foreign jurisdictions because the contract between the parties includes a venue clause requiring the venue for any litigation to be in the United Kingdom, while the enforcement of any final judgment is required to be executed in Saudi Arabia.
−Removed: The Company continues to pursue a trial on the merits in Saudi Arabia which is now scheduled to conclude in calendar year 2020.
−Removed: It is necessary to obtain an equivalent favorable ruling in the courts of Saudi Arabia to effectively enforce the judgment and commence collection efforts.
−Removed: The Company remains confident regarding the pending trial on the merits in Saudi Arabia and expects to be in a position to enforce the judgment and initiate collection efforts following completion of that trial.
−Removed: However, as the customer has neither yet remitted the funds nor complied with the final, un-appealed orders of the U.K.
−Removed: Court, it is possible the resolution of this matter could have an unfavorable financial impact on Matthews’ results of operations.
−Removed: The Company’s level of success in recovering funds from the customer will depend upon a number of factors including a successful completion of the pending trial on the merits in Saudi Arabia, the availability of recoverable funds, and the subsequent level of cooperation from the Saudi Arabian government to enforce a potential judgment against the customer.
−Removed: 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 March 31, 2020 and September 30, 2019.
+Added: The Company continues to pursue a trial on the merits in Saudi Arabia;
+Added: however, given the recent coronavirus disease 2019 ("COVID-19") pandemic, the trial is now not likely to conclude until calendar year 2021.
+Added: As the Company has successfully completed the project and subsequently operated the equipment, the Company remains confident regarding the pending trial on the merits in Saudi Arabia and expects to be in a position to enforce the judgment and initiate collection efforts following completion of that trial.
+Added: However, the Company’s level of success in recovering funds from the customer will depend upon several factors including a successful completion of the pending trial on the merits in Saudi Arabia, the availability of recoverable funds, and the subsequent level of support of the Saudi Arabian government to enforce a potential judgment against the customer.
+Added: During the third quarter of fiscal 2020, the Saudi Arabian government implemented restrictions on travel to Mecca due to the COVID-19 pandemic.
+Added: As a result, the Company will not be able to support the operation of the incineration equipment for the local agency responsible for its operation during the current year Hajj Pilgrimage.
+Added: Consequently, the Company is now concerned regarding the level of anticipated support from the government in its collection efforts.
+Added: Therefore, when considered collectively with the extended delay in the trial date and other collectability risks, the Company established a reserve for the full value of the funded letter of credit as of June 30, 2020.
+Added: The funded letter of credit was previously classified within other assets on the Consolidated Balance Sheet as of September 30, 2019.
The Company will continue to assess the accounting and collectability related to this matter as facts and circumstances evolve.
−Removed: As of March 31, 2020, the market value of the Company's 2025 Senior Notes was approximately 10% less than the carrying value.
+Added: As of June 30, 2020, the market value of the Company's 2025 Senior Notes was approximately 10% less than the carrying value.
The fair value of the Company's remaining long-term debt, including current maturities, approximated the carrying value included in the Consolidated Balance Sheets.
As of September 30, 2019, the fair value of the Company's long-term debt, including current maturities, approximated the carrying value included in the Consolidated Balance Sheets.
−Removed: The Company was in compliance with all of its debt covenants as of March 31, 2020.
+Added: The Company was in compliance with all of its debt covenants as of June 30, 2020.
The Company’s lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment.
2 unchanged sentences
If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments, and a corresponding right-of-use asset.
−Removed: As a majority of the Company’s leases do not provide an implicit interest rate within the lease, an incremental borrowing rate is used to determine the ROU asset and lease liability which is based on information available at the commencement date.
−Removed: Options to purchase, extend or terminate a lease are included in the ROU asset and lease liability when it is reasonably certain an option will be exercised.
−Removed: Renewal options are most prevalent in the Company’s real estate leases.
−Removed: In general, the Company has not included renewal options for leases in the ROU asset and lease liability because
+Added: As a majority of the Company’s leases do not provide an implicit interest rate within the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Leases (continued)
−Removed: the likelihood of renewal was not determined to be reasonably certain.
+Added: lease, an incremental borrowing rate is used to determine the ROU asset and lease liability which is based on information available at the commencement date.
+Added: Options to purchase, extend or terminate a lease are included in the ROU asset and lease liability when it is reasonably certain an option will be exercised.
+Added: Renewal options are most prevalent in the Company’s real estate leases.
+Added: In general, the Company has not included renewal options for leases in the ROU asset and lease liability because the likelihood of renewal was not determined to be reasonably certain.
In addition, leases may include variable lease payments, for items such as maintenance and utilities, which are expensed as incurred as variable lease expense.
9 unchanged sentences
The following table presents the balance sheet and lease classification for the Company's lease portfolio:
−Removed: Balance Sheet Classification Lease Classification March 31, 2020
+Added: Balance Sheet Classification Lease Classification June 30, 2020
Non-current assets:
13 unchanged sentences
The following table presents the components of lease cost:
−Removed: Three months ended March 31, 2020 Six months ended March 31, 2020
+Added: Three months ended June 30, 2020 Nine months ended June 30, 2020
Finance lease cost:
9 unchanged sentences
Supplemental information regarding the Company's leases follows:
−Removed: Six months ended March 31, 2020
+Added: Nine months ended June 30, 2020
Cash paid for finance and operating lease liabilities:
4 unchanged sentences
ROU assets obtained in exchange for new operating lease liabilities $ 11,297
−Removed: March 31, 2020
+Added: June 30, 2020
Weighted-average remaining lease term - finance leases (years) 4.68
4 unchanged sentences
In addition, the Company elected the practical expedient to utilize a portfolio approach for certain equipment asset classes, primarily information technology, as the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases within the portfolio.
−Removed: Maturities of lease obligations by fiscal year were as follows as of March 31, 2020:
+Added: Maturities of lease obligations by fiscal year were as follows as of June 30, 2020:
Operating Leases Finance Leases
12 unchanged sentences
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 .
−Removed: At March 31, 2020, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.
−Removed: 558,200 restricted share units have been granted under the 2017 Equity Incentive Plan and are outstanding as of March 31, 2020.
+Added: At June 30, 2020, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.
+Added: 558,200 restricted share units have been granted under the 2017 Equity Incentive Plan and are outstanding as of June 30, 2020.
The 2017 Equity Incentive plan is administered by the Compensation Committee of the Board of Directors.
8 unchanged sentences
The number of units that vest depend on certain time and performance thresholds.
−Removed: Approximately thirty-eight percent of the shares vest based on time, while the remaining vest based on pre-defined performance thresholds.
+Added: Approximately 38 % of the shares vest based on time, while the remaining vest based on pre-defined performance thresholds.
The Company issues common stock from treasury shares once vested.
−Removed: For the three-month periods ended March 31, 2020 and 2019, stock-based compensation cost totaled $ 2,508 and $ 1,366 , respectively.
−Removed: For the six-month periods ended March 31, 2020 and 2019, stock-based compensation cost totaled and $ 4,539 and $ 5,013 , respectively.
−Removed: The stock-based compensation cost that was recognized for retirement-eligible employees was $ 625 for the three-month period ended March 31, 2020, and $ 938 and $ 1,849 for the six-month periods ended March 31, 2020 and 2019, respectively.
−Removed: The associated future income tax benefit recognized for stock-based compensation was $ 614 and $ 335 for the three-month periods ended March 31, 2020 and 2019, respectively, and $ 793 and $ 870 for the six-month periods ended March 31, 2020 and 2019, respectively.
−Removed: The transactions for restricted shares and restricted share units for the six months ended March 31, 2020 were as follows:
+Added: For the three-month periods ended June 30, 2020 and 2019, stock-based compensation cost totaled $ 2,539 and $ 1,156 , respectively.
+Added: For the nine-month periods ended June 30, 2020 and 2019, stock-based compensation cost totaled $ 7,078 and $ 6,169 , respectively.
+Added: The stock-based compensation cost that was recognized for retirement-eligible employees was $ 625 for the three-month period ended June 30, 2020, and $ 1,564 and $ 1,849 for the nine-month periods ended June 30, 2020 and 2019, respectively.
+Added: The associated future income tax benefit recognized for stock-based compensation was $ 622 and $ 283 for the three-month periods ended June 30, 2020 and 2019, respectively, and $ 1,415 and $ 1,153 for the nine-month periods ended June 30, 2020 and 2019, respectively.
+Added: The transactions for restricted shares and restricted share units for the nine months ended June 30, 2020 were as follows:
Shares /Units Weighted-
3 unchanged sentences
Expired or forfeited ( 36,492 ) 56.55
−Removed: Non-vested at March 31, 2020 765,755 $ 41.22
−Removed: As of March 31, 2020, the total unrecognized compensation cost related to unvested restricted stock was $ 13,105 and is expected to be recognized over a weighted average period of 2.2 years.
+Added: Non-vested at June 30, 2020 746,348 $ 41.09
+Added: As of June 30, 2020, the total unrecognized compensation cost related to unvested restricted stock was $ 10,801 and is expected to be recognized over a weighted average period of 1.9 years.
The Company maintains the 2019 Director Fee Plan, the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan (collectively, the "Director Fee Plans").
5 unchanged sentences
The value of deferred shares is recorded in other liabilities.
−Removed: A total of 30,374 shares had been deferred under the Director Fee Plans as of March 31, 2020.
+Added: A total of 30,574 shares and share units had been deferred under the Director Fee Plans as of June 30, 2020.
Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares or units) with a value of $ 125 for fiscal 2020.
241,378 restricted shares and restricted share units have been granted under the Director Fee Plans, 68,149 of which were issued under the 2019 Director Fee Plan.
−Removed: 68,149 restricted shares and restricted share units are unvested at March 31, 2020.
+Added: 68,149 restricted shares and restricted share units are unvested at June 30, 2020.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Earnings Per Share Attributable to Matthews' Shareholders
−Removed: The information used to compute (loss) earnings per share attributable to Matthews' common shareholders was as follows:
+Added: The information used to compute earnings (loss) per share attributable to Matthews' common shareholders was as follows:
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2020 2019 2020 2019
−Removed: Net (loss) income attributable to Matthews shareholders $ ( 86,364 ) $ 15,417 $ ( 96,830 ) $ 18,514
+Added: Net income (loss) attributable to Matthews shareholders $ 2,269 $ 14,629 $ ( 94,561 ) $ 33,143
Weighted-average shares outstanding (in thousands):
2 unchanged sentences
Diluted shares 31,232 31,494 31,143 31,625
−Removed: Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and six months ended March 31, 2020 and 2019.
+Added: Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and nine months ended June 30, 2020 and 2019.
Pension and Other Postretirement Benefit Plans
1 unchanged sentence
Net periodic pension and other postretirement benefit cost for the plans included the following:
−Removed: Three months ended March 31,
+Added: Three months ended June 30,
Pension Other Postretirement
7 unchanged sentences
Net benefit cost $ 4,210 $ 2,740 $ 181 $ 177
−Removed: Six months ended March 31,
+Added: Nine months ended June 30,
Pension Other Postretirement
9 unchanged sentences
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.
−Removed: In response to coronavirus disease 2019 ("COVID-19"), the federal government passed a modified relief bill, which provides additional funding measures associated with IRS regulations.
+Added: In response to COVID-19, the federal government passed a modified relief bill, which provides additional funding measures associated with IRS regulations.
In accordance with this bill, the Company is no longer required to make contributions for fiscal 2020 to its principal retirement plan.
+Added: The Company currently expects to make a contribution of approximately $ 15,000 to its principal retirement plan during the fourth quarter of fiscal 2020, which may consist of cash and/or shares of Matthews Class A Common Stock.
+Added: The Company is also currently evaluating potential additional cash and/or stock contributions to its principal retirement plan during fiscal 2020.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
3 unchanged sentences
Contributions Pension Other Postretirement
−Removed: Contributions during the six months ended March 31, 2020:
+Added: Contributions during the nine months ended June 30, 2020:
Supplemental retirement plan $ 589 $ —
1 unchanged sentence
Additional contributions expected in fiscal 2020:
+Added: Principal retirement plan * $ 15,000 $ —
Supplemental retirement plan 293 —
Other postretirement plan — 263
+Added: * Amount represents expected contribution of cash and/or stock (see above).
Accumulated Other Comprehensive Income
−Removed: The changes in AOCI by component, net of tax, for the three-month periods ended March 31, 2020 and 2019 were as follows:
+Added: The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2020 and 2019 were as follows:
Post-retirement benefit plans Currency translation adjustment Derivatives Total
Attributable to Matthews:
−Removed: Balance, December 31, 2019 $ ( 70,016 ) $ ( 145,103 ) $ ( 113 ) $ ( 215,232 )
+Added: Balance, March 31, 2020 $ ( 68,189 ) $ ( 175,751 ) $ ( 4,555 ) $ ( 248,495 )
OCI before reclassification — 11,240 ( 509 ) 10,731
Amounts reclassified from AOCI 1,743 (a)
−Removed: — ( 137 ) (b)
Net current-period OCI 1,743
( 179 ) 12,804
−Removed: Balance, March 31, 2020 $ ( 68,189 ) $ ( 175,751 ) $ ( 4,555 ) $ ( 248,495 )
+Added: Balance, June 30, 2020 $ ( 66,446 ) $ ( 164,511 ) $ ( 4,734 ) $ ( 235,691 )
Attributable to noncontrolling interest:
−Removed: Balance, December 31, 2019 $ — $ 370 $ — $ 370
+Added: Balance, March 31, 2020 $ — $ 371 $ — $ 371
OCI before reclassification — — — —
Net current-period OCI — — — —
−Removed: Balance, March 31, 2020 $ — $ 371 $ — $ 371
+Added: Balance, June 30, 2020 $ — $ 371 $ — $ 371
Post-retirement benefit plans Currency translation adjustment Derivatives Total
Attributable to Matthews:
−Removed: Balance, December 31, 2018 $ ( 37,147 ) $ ( 147,524 ) $ 5,637 $ ( 179,034 )
+Added: Balance, March 31, 2019 $ ( 36,413 ) $ ( 147,390 ) $ 3,617 $ ( 180,186 )
OCI before reclassification — 2,639 ( 2,372 ) 267
2 unchanged sentences
Net current-period OCI 705 2,639 ( 3,032 ) 312
−Removed: Balance, March 31, 2019 $ ( 36,413 ) $ ( 147,390 ) $ 3,617 $ ( 180,186 )
+Added: Balance, June 30, 2019 $ ( 35,708 ) $ ( 144,751 ) $ 585 $ ( 179,874 )
Attributable to noncontrolling interest:
−Removed: Balance, December 31, 2018 $ — $ 454 $ — $ 454
+Added: Balance, March 31, 2019 $ — $ 473 $ — $ 473
OCI before reclassification — ( 5 )
Net current-period OCI — ( 5 ) — ( 5 )
−Removed: Balance, March 31, 2019 $ — $ 473
+Added: Balance, June 30, 2019 $ — $ 468
(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).
3 unchanged sentences
Accumulated Other Comprehensive Income (continued)
−Removed: The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2020 and 2019 were as follows:
+Added: The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2020 and 2019 were as follows:
Post-retirement benefit plans Currency translation adjustment Derivatives Total
3 unchanged sentences
Amounts reclassified from AOCI 5,297 (a)
−Removed: — ( 412 ) (b)
Net current-period OCI 5,297
( 8,297 ) ( 4,330 ) ( 7,330 )
−Removed: Balance, March 31, 2020 $ ( 68,189 ) $ ( 175,751 ) $ ( 4,555 ) $ ( 248,495 )
+Added: Balance, June 30, 2020 $ ( 66,446 ) $ ( 164,511 ) $ ( 4,734 ) $ ( 235,691 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — ( 4 ) — ( 4 )
−Removed: Balance, March 31, 2020 $ — $ 371 $ — $ 371
+Added: Balance, June 30, 2020 $ — $ 371 $ — $ 371
Post-retirement benefit plans Currency translation adjustment Derivatives Total
5 unchanged sentences
Net current-period OCI 2,168 ( 9,791 ) ( 7,953 ) ( 15,576 )
−Removed: Balance, March 31, 2019 $ ( 36,413 ) $ ( 147,390 ) $ 3,617 $ ( 180,186 )
+Added: Balance, June 30, 2019 $ ( 35,708 ) $ ( 144,751 ) $ 585 $ ( 179,874 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — 1 — 1
−Removed: Balance, March 31, 2019 $ — $ 473
+Added: Balance, June 30, 2019 $ — $ 468
(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).
3 unchanged sentences
Accumulated Other Comprehensive Income (continued)
−Removed: Reclassifications out of AOCI for the three and six-month periods ended March 31, 2020 were as follows:
+Added: Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2020 were as follows:
Amount reclassified from AOCI
−Removed: Details about AOCI Components Three Months Ended March 31, 2020 Six Months Ended March 31, 2020 Affected line item in the Statement of income
+Added: Details about AOCI Components Three Months Ended June 30, 2020 Nine Months Ended June 30, 2020 Affected line item in the Statement of income
Postretirement benefit plans
10 unchanged sentences
$ ( 330 ) $ 82 Net income
−Removed: Reclassifications out of AOCI for the three and six-month periods ended March 31, 2019 were as follows:
+Added: Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2019 were as follows:
Amount reclassified from AOCI
−Removed: Details about AOCI Components Three Months Ended March 31, 2019 Six Months Ended
−Removed: March 31, 2019 Affected line item in the Statement of income
+Added: Details about AOCI Components Three Months Ended June 30, 2019 Nine Months Ended
+Added: June 30, 2019 Affected line item in the Statement of income
Postretirement benefit plans
13 unchanged sentences
(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.
+Added: 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.
+Added: The Company's consolidated income taxes for the nine months ended June 30, 2020 were a benefit of $ 22,672 , compared to an expense of $ 4,429 for the first nine months of fiscal 2019.
+Added: The differences between the Company’s consolidated income taxes for the first nine months of fiscal 2020 versus the same period for fiscal 2019 primarily resulted from
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
−Removed: 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.
−Removed: The Company's consolidated income taxes for the six months ended March 31, 2020 were a benefit of $ 16,463 , compared to an expense of $ 440 for the first six months of fiscal 2019.
−Removed: The differences between the Company’s consolidated income taxes for the first six months of fiscal 2020 versus the same period for fiscal 2019 primarily resulted from the fiscal 2020 consolidated loss before income taxes, which reflected the goodwill write-down recorded during the second quarter of fiscal 2020 which was partially non-deductible.
−Removed: The Company’s fiscal 2020 six month effective tax rate varied from the U.S.
−Removed: statutory tax rate of 21.0 % primarily due to state taxes, foreign statutory rate differentials, tax credits, the goodwill write-down, and discrete tax benefits recognized during the current year.
−Removed: The Company’s fiscal 2019 six month effective tax rate varied from the U.S.
+Added: Income Taxes (continued)
+Added: the fiscal 2020 consolidated loss before income taxes, which reflected the goodwill write-down recorded during the second quarter of fiscal 2020, which was partially non-deductible, as well as a benefit for an expected net operating loss (“NOL”) carryback.
+Added: The NOL will be carried back five years allowing it to offset income that was previously taxed at a federal statutory rate of 35.0%.
+Added: The Company’s fiscal 2020 nine-month effective tax rate varied from the U.S.
+Added: statutory tax rate of 21.0 % primarily due to state taxes, foreign statutory rate differentials, tax credits, the goodwill write-down, the expected NOL carryback, and discrete tax benefits recognized during the current year.
+Added: The Company’s fiscal 2019 nine-month effective tax rate varied from the U.S.
statutory tax rate of 21.0 % primarily due to tax planning completed during the second quarter of fiscal 2019 that resulted in a discrete tax benefit.
−Removed: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 10,581 and $ 15,526 on March 31, 2020 and September 30, 2019, respectively, of which $ 8,662 and $ 11,417 would impact the annual effective rate at March 31, 2020 and September 30, 2019, respectively.
+Added: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 11,834 and $ 15,526 on June 30, 2020 and September 30, 2019, respectively, of which $ 8,620 and $ 11,417 would impact the annual effective rate at June 30, 2020 and September 30, 2019, respectively.
It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 9,034 in the next 12 months primarily due to the completion of audits 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.
−Removed: Total penalties and interest accrued were $ 2,510 and $ 2,880 at March 31, 2020 and September 30, 2019, respectively.
+Added: Total penalties and interest accrued were $ 2,424 and $ 2,880 at June 30, 2020 and September 30, 2019, respectively.
These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
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.
−Removed: As of March 31, 2020, the tax years that remain subject to examination by major jurisdiction generally are:
+Added: As of June 30, 2020, the tax years that remain subject to examination by major jurisdiction generally are:
United States – Federal 2017 and forward
26 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2020 2019 2020 2019
15 unchanged sentences
( 5,570 ) ( 1,037 ) ( 25,040 ) ( 3,149 )
−Removed: Loss on divestiture (4)
+Added: Gain (loss) on sale of ownership interests in a subsidiary (4)
11,208 — 11,208 ( 4,465 )
−Removed: Joint Venture depreciation, amortization, interest expense and other charges (5)
+Added: Legal matter reserve (5)
( 10,566 ) — ( 10,566 ) —
3 unchanged sentences
— — ( 90,408 ) —
+Added: Joint Venture depreciation, amortization, interest expense and other charges (8)
+Added: ( 2,473 ) ( 866 ) ( 4,732 ) ( 866 )
Stock-based compensation ( 2,539 ) ( 1,156 ) ( 7,078 ) ( 6,169 )
7 unchanged sentences
Income tax benefit (provision) 6,209 ( 3,989 ) 22,672 ( 4,429 )
−Removed: Net (loss) income $ ( 86,595 ) $ 15,194 $ ( 96,901 ) $ 18,178
+Added: Net income (loss) $ 1,849 $ 14,424 $ ( 95,052 ) $ 32,602
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
4 unchanged sentences
(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.
−Removed: (4) Represents a loss on the sale of a controlling interest in a subsidiary within the Memorialization segment.
−Removed: (5) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
+Added: (4) Represents a gain (loss) on the sale of ownership interests in a subsidiary within the Memorialization segment.
+Added: (5) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment (see Note 7, "Debt").
(6) 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.
1 unchanged sentence
(7) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment (see Note 16, "Goodwill and Other Intangible Assets").
+Added: (8) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
(9) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial gains and losses.
2 unchanged sentences
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.
−Removed: * Depreciation and amortization was $ 21,785 and $ 13,165 for the SGK Brand Solutions segment, $ 4,839 and $ 5,039 for the Memorialization segment, $ 1,428 and $ 1,559 for the Industrial Technologies segment, and $ 1,265 and $ 1,287 for Corporate and Non-Operating, for the three months ended March 31, 2020 and 2019, respectively.
−Removed: Depreciation and amortization was $ 43,441 and $ 24,607 for the SGK Brand Solutions segment, $ 9,475 and $ 10,058 for the Memorialization segment, $ 2,870 and $ 3,085 for the Industrial Technologies segment, and $ 2,464 and $ 2,526 for Corporate and Non-Operating, for the six months ended March 31, 2020 and 2019, respectively.
−Removed: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 3,818 and $ 2,808 for the SGK Brand Solutions segment and $ 5,813 and $ 4,483 for Corporate and Non-Operating, for the three months ended March 31, 2020 and 2019, respectively.
−Removed: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 730 for the Memorialization segment and $ 268 for the Industrial Technologies segment, for the three months ended March 31, 2020.
−Removed: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 7,264 and $ 3,409 for the SGK Brand Solutions segment and $ 14,904 and $ 8,091 for Corporate and Non-Operating, for the six months ended March 31, 2020 and 2019, respectively.
−Removed: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,057 for the Memorialization segment and $ 268 for the Industrial Technologies segment, for the six months ended March 31, 2020.
+Added: * Depreciation and amortization was $ 21,833 and $ 12,757 for the SGK Brand Solutions segment, $ 5,549 and $ 4,840 for the Memorialization segment, $ 1,450 and $ 1,545 for the Industrial Technologies segment, and $ 1,336 and $ 1,341 for Corporate and Non-Operating, for the three months ended June 30, 2020 and 2019, respectively.
+Added: Depreciation and amortization was $ 65,274 and $ 37,364 for the SGK Brand Solutions segment, $ 15,024 and $ 14,898 for the Memorialization segment, $ 4,320 and $ 4,630 for the Industrial Technologies segment, and $ 3,800 and $ 3,867 for Corporate and Non-Operating, for the nine months ended June 30, 2020 and 2019, respectively.
+Added: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,794 and $ 449 for the SGK Brand Solutions segment and $ 4,128 and $ 5,923 for Corporate and Non-Operating, for the three months ended June 30, 2020 and 2019, respectively.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 697 for the Memorialization segment for the three months ended June 30, 2020.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 9,058 and $ 3,858 for the SGK Brand Solutions segment and $ 19,032 and $ 14,014 for Corporate and Non-Operating, for the nine months ended June 30, 2020 and 2019, respectively.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,754 for the Memorialization segment and $ 268 for the Industrial Technologies segment, for the nine months ended June 30, 2020.
Acquisitions and Divestitures
6 unchanged sentences
During fiscal 2019, the Company completed the sale of a 51 % ownership interest in a small Memorialization business.
−Removed: Net proceeds from this sale totaled approximately $ 8,254 , and the transaction resulted in the recognition of a $ 4,465 loss for the six months ended March 31, 2019, which is included as a component of administrative expenses.
−Removed: Immediately following the transaction, the Company retained a non-controlling interest in this business, which will be accounted for as an equity-method investment.
+Added: Net proceeds from this sale totaled approximately $ 8,254 , and the transaction resulted in the recognition of a $ 4,465 loss for the nine months ended June 30, 2019, which is included as a component of administrative expenses.
+Added: Immediately following the transaction, the Company retained a non-controlling interest in this business.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
8 unchanged sentences
Goodwill write-down ( 90,408 ) — — ( 90,408 )
−Removed: Net goodwill at March 31, 2020 $ 299,362 $ 359,769 $ 91,447 $ 750,578
−Removed: The net goodwill balances at March 31, 2020 and September 30, 2019 included $ 178,732 and $ 88,324 of accumulated impairment losses, respectively.
−Removed: Accumulated impairment losses at March 31, 2020 were $ 173,732 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.
+Added: Net goodwill at June 30, 2020 $ 304,196 $ 360,425 $ 91,435 $ 756,056
+Added: The net goodwill balances at June 30, 2020 and September 30, 2019 included $ 178,732 and $ 88,324 of accumulated impairment losses, respectively.
+Added: Accumulated impairment losses at June 30, 2020 were $ 173,732 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.
Accumulated impairment losses at September 30, 2019 were $ 83,324 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.
2 unchanged sentences
On January 30, 2020, the World Health Organization declared an outbreak of COVID-19 to be a Public Health Emergency of International Concern, and subsequently recognized COVID-19 as a global pandemic on March 11, 2020.
−Removed: Widespread efforts have been deployed by multiple countries around the world to prevent the virus from spreading, including closures of non-essential businesses, event cancellations, travel restrictions, quarantines, and other disruptive actions.
−Removed: Substantially all of the Company’s operations have remained open during the second quarter of fiscal 2020, as they have been considered “essential” businesses at this time.
+Added: Widespread efforts have been deployed by multiple countries around the world to prevent the virus from spreading, including temporary closures of non-essential businesses, event cancellations, travel restrictions, quarantines, and other disruptive actions.
+Added: Substantially all of the Company’s operations have remained open during the COVID-19 pandemic, as they have been considered “essential” businesses during this time.
However, the Company has experienced some commercial impact and business disruptions in certain segments and geographic locations as a result of COVID-19.
−Removed: In its assessment of the potential impacts of COVID-19 on the estimated future earnings and cash flows for the SGK Brand Solutions segment, and in light of the limited excess fair values for its two reporting units (discussed above), management determined that COVID-19 represents a triggering event, resulting in a re-evaluation of the goodwill for its reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products), as of March 31, 2020.
+Added: In its assessment of the potential impacts of COVID-19 on the estimated future earnings and cash flows for the SGK Brand Solutions segment, and in light of the limited excess fair values for its two reporting units (discussed above), management determined that COVID-19 represented a triggering event, resulting in a re-evaluation of the goodwill for its reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products), as of March 31, 2020.
As a result of this interim assessment, the Company recorded a goodwill write-down totaling $ 90,408 during the fiscal 2020 second quarter.
5 unchanged sentences
Goodwill and Other Intangible Assets (continued)
−Removed: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2020 and September 30, 2019, respectively.
+Added: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2020 and September 30, 2019, respectively.
Amount Accumulated
Amortization Net
−Removed: March 31, 2020:
−Removed: Trade names $ 30,540 $ — * $ 30,540
−Removed: Trade names 148,604 ( 43,474 ) 105,130
+Added: June 30, 2020:
+Added: Indefinite-lived trade names $ 30,540 $ — $ 30,540
+Added: Definite-lived trade names 148,672 ( 53,941 ) 94,731
Customer relationships 374,448 ( 158,819 ) 215,629
2 unchanged sentences
September 30, 2019 :
−Removed: Trade names $ 30,540 $ — * $ 30,540
−Removed: Trade names 148,628 ( 22,653 ) 125,975
+Added: Indefinite-lived trade names $ 30,540 $ — $ 30,540
+Added: Definite-lived trade names 148,628 ( 22,653 ) 125,975
Customer relationships 374,515 ( 137,330 ) 237,185
1 unchanged sentence
$ 574,146 $ ( 173,496 ) $ 400,650
−Removed: * Not subject to amortization
−Removed: The net change in intangible assets during the six months ended March 31, 2020 included the impact of foreign currency fluctuations during the period and additional amortization.
−Removed: Amortization expense on intangible assets was $ 17,872 and $ 9,509 for the three-month periods ended March 31, 2020 and 2019, respectively.
−Removed: For the six-month periods ended March 31, 2020 and 2019, amortization expense was $ 35,814 and $ 17,622 , respectively.
+Added: The net change in intangible assets during the nine months ended June 30, 2020 included the impact of foreign currency fluctuations during the period and additional amortization.
+Added: Amortization expense on intangible assets was $ 17,825 and $ 9,543 for the three-month periods ended June 30, 2020 and 2019, respectively.
+Added: For the nine-month periods ended June 30, 2020 and 2019, amortization expense was $ 53,639 and $ 27,165 , respectively.
Amortization expense is estimated to be $ 17,844 for the remainder of fiscal 2020, $ 60,156 in 2021, $ 46,766 in 2022, $ 27,833 in 2023 and $ 26,214 in 2024.
30 unchanged sentences
Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.
−Removed: The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and six-month periods ended March 31, 2020 and 2019.
+Added: The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2020 and 2019.
Refer to Note 14, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2020 2019 2020 2019
14 unchanged sentences
Beginning in the second quarter of fiscal 2020, sales were unfavorably impacted by the global outbreak of COVID-19, which has caused some commercial impact and business disruptions in certain of the Company's segments and geographic locations.
−Removed: While substantially all of the Company's operations have remained open during the second quarter of fiscal 2020, management expects COVID-19 to unfavorably impact its sales and results of operations in the short-term and for the remainder of fiscal 2020 (see "Forward Looking Information" below).
−Removed: Sales for the six months ended March 31, 2020 were $739.7 million, compared to $765.6 million for the six months ended March 31, 2019, representing a decrease of $25.9 million.
−Removed: The decrease in fiscal 2020 sales primarily reflected lower brand sales and decreased sales of cylinders, surfaces and engineered products in Europe for the SGK Brand Solutions segment.
−Removed: These decreases were partially offset by increased North American casket and memorial revenues and higher sales of cremation and incineration equipment for the Memorialization segment, and increased product identification sales for the Industrial Technologies segment.
+Added: While substantially all of the Company's operations have remained open during the COVID-19 pandemic, management expects COVID-19 to unfavorably impact its sales and results of operations in the short-term and for the remainder of fiscal 2020 (see "Forward Looking Information" below).
+Added: Sales for the nine months ended June 30, 2020 were $1.10 billion, compared to $1.14 billion for the nine months ended June 30, 2019, representing a decrease of $45.7 million.
+Added: The decrease in fiscal 2020 sales reflected lower sales in the SGK Brand Solutions and Industrial Technologies segments, partially offset by increased sales in the Memorialization segment.
Changes in foreign currency rates were estimated to have an unfavorable impact of $10.4 million on fiscal 2020 consolidated sales compared to a year ago.
−Removed: In the SGK Brand Solutions segment, sales for the first six months of fiscal 2020 were $347.7 million, compared to $376.0 million for the first six months of fiscal 2019.
−Removed: The decrease primarily resulted from lower sales in the U.S., reflecting a significant brand client electing to transition their work internally during the fiscal 2019 first quarter, lower brand sales in the U.K., and lower sales of cylinders, surfaces and engineered products in Europe.
−Removed: These decreases were partially offset by sales growth in the Asia-Pacific region and increased sales of merchandising solutions.
+Added: In the SGK Brand Solutions segment, sales for the first nine months of fiscal 2020 were $513.5 million, compared to $557.9 million for the first nine months of fiscal 2019.
+Added: The decrease primarily resulted from lower brand sales in the U.S.
+Added: and the U.K., sales declines in the private label brand market, and lower sales of cylinders, surfaces and engineered products in Europe.
+Added: These decreases were partially offset by sales growth in the Asia-Pacific region and increased sales for the merchandising solutions business.
Changes in foreign currency exchange rates had an unfavorable impact of $8.5 million on the segment's sales compared to the prior year.
−Removed: Memorialization segment sales for the first six months of fiscal 2020 were $316.2 million, compared to $316.1 million for the first six months of fiscal 2019.
−Removed: The change in sales primarily resulted from improved price realization on caskets and memorial products, and higher sales of cremation and incineration equipment, partially offset by lower unit sales of caskets and memorial products.
−Removed: Changes in foreign currency exchange rates had an unfavorable impact of $711,000 on the segment's sales compared to the prior year.
−Removed: Industrial Technologies segment sales were $75.8 million for the first six months of fiscal 2020, compared to $73.6 million for
+Added: Memorialization segment sales for the first nine months of fiscal 2020 were $478.3 million, compared to $474.3 million for the first nine months of fiscal 2019.
+Added: The increase in sales primarily resulted from increased unit sales of caskets and higher sales of cremation and incineration equipment.
+Added: These increases were partially offset by lower unit sales of cemetery memorial products, which were impacted by COVID-19 related stay-at-home orders that limited families' access with cemeteries to arrange for their memorials.
+Added: Changes in foreign currency exchange rates had an unfavorable impact of $1.1 million on the segment's sales compared to the prior year.
+Added: Industrial Technologies segment sales were $107.3 million for the first nine months of fiscal 2020, compared to $112.7 million for the first nine months of fiscal 2019.
+Added: The decrease reflected lower sales of warehouse automation systems and decreased applied technologies sales, partially offset by higher
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.