What changed in this filing

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Item 1. Business

2020-11-20 compared with 2019-11-22 · 61 added, 19 removed, 76 unchanged (51% of the section changed)

BUSINESS, (continued)

Architectural products include cast bronze and aluminum plaques, etchings and letters that are used to recognize, commemorate and identify people, places, events and accomplishments.

The Company's plaques are frequently used to identify the name of a building or the names of companies or individuals located within a building.

Such products are also used to commemorate events or accomplishments, such as military service or financial donations.

The principal markets for the segment's architectural products are corporations, fraternal organizations, contractors, churches, hospitals, schools and government agencies.

These products are sold to and distributed through a network of independent dealers including sign suppliers, awards and recognition companies, and trophy dealers.

Raw materials used by the Memorialization segment to manufacture memorials consist principally of bronze and aluminum ingot, granite, sheet metal, coating materials, photopolymers and construction materials and are generally available in adequate supply.

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The Memorialization segment works to provide a total solution to customers that own and operate businesses in both the cemetery and funeral home markets.

The Company's memorial and casket products serve the relatively stable casketed and in-ground burial death market, while its memorial products and cremation equipment also serve the growing cremation market.

The Company's memorial and casket products serve the relatively stable casketed and in-ground burial death market, while its memorial products and cremation and incineration equipment also serve the growing cremation market.

Industrial Technologies:

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These technologies apply product information required for identification and traceability, as well as to facilitate inventory and quality control, regulatory compliance and brand name communication.

Warehouse automation systems complement the tracking and distribution of a customer's products with automated order fulfillment technologies, autonomous mobile robotics, and controls for material handling systems.

Warehouse automation systems complement the tracking and distribution of a customer's products with automated order fulfillment technologies, and controls for material handling systems.

Material handling customers include some of the largest retail, eCommerce, and automated assembly companies in the United States.

The Company also engineers innovative, custom solutions to address specific customer requirements in a variety of industries, including oil field services and security scanning.

BUSINESS, (continued)

A significant portion of the revenue of the Industrial Technologies segment is attributable to the sale of consumables and replacement parts required by the marking, coding and tracking products sold by Matthews.

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The Company also serves a wide variety of industrial markets, including metal fabricators, manufacturers of woven and non-woven fabrics, plastic, rubber and automotive products.

BUSINESS, (continued)

A portion of this segment's sales are outside the United States, with distribution sourced through the Company's subsidiaries in Sweden, Germany and China in addition to other international distributors.

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However, the Company believes the loss of any individual or a significant number of patents or trademarks would not have a material impact on consolidated operations or revenues.

Because the nature of the Company's SGK Brand Solutions, Memorialization and Industrial Technologies businesses are primarily custom products made to order and services with short lead times, backlogs are not generally material except for rotogravure engineering projects in the SGK Brand Solutions segment, mausoleums and cremation equipment in the Memorialization segment and industrial automation and order fulfillment systems in the Industrial Technologies segment.

Backlogs vary in a range of approximately six to twelve months of sales for rotogravure engineering projects and mausoleums.

Cremation equipment sales backlogs vary in a range of eight to ten months of sales.

Backlogs for Industrial Technologies segment sales generally vary in a range of up to four weeks for standard products and eighteen weeks for custom systems.

The Company's current backlog is expected to be substantially filled in fiscal 2020 .

HUMAN CAPITAL RESOURCES:

At October 31, 2020, the Company and its majority-owned subsidiaries employed approximately 11,000 people globally.

The Company's diverse team of talented employees possess a vast array of skills including creative design, photography, engineering, manufacturing, research and development, plant operations, production, logistics and administrative support, such as information technology, human resources and finance.

Certain of the Company's employees have highly specialized skills and subject-matter expertise in their respective fields, which helps enable the Company to deliver industry leading products and services to its customers throughout the world.

The Company attracts and maintains talent by offering market rate competitive salaries for the locations in which it operates, and by engaging employees with rewarding opportunities to contribute to the success of the Company.

The Company is committed to supporting and developing its employees through global learning and development programs.

These programs are designed to build and strengthen employees’ skills, including leadership and professional competencies.

Leadership development programs include intensive learning programs for emerging leaders, as well as mid-level and senior leaders.

The Company also strategically partners with educational institutions and nonprofit organizations to help provide current and future workers with the knowledge and skills they need to succeed.

Such efforts also include routine and consistent compliance training, covering a wide-range of relevant subjects.

The Company has consistently re-invested in necessary resources to effectively staff and efficiently support its three business segments.

Employee health and safety in the workplace is one of the Company’s core values.

Safety efforts are led by the Global Health and Safety team and supported by individuals at the local site level.

Hazards in the workplace are timely identified and management actively tracks incidents so remedial actions may be implemented to improve workplace safety.

In response to the COVID-19 pandemic, the Company has taken actions aligned with the World Health Organization and the Centers for Disease Control and Prevention to protect its workforce so they can more safely and effectively perform their work.

In so doing, the Company has prioritized the initiation of comprehensive health and safety protocols, further ensuring strict adherence to responsive measures for mitigating the spread of COVID-19.

BUSINESS, (continued)

The Company is committed to efforts to increase diversity and foster an inclusive work environment that supports the Company’s large global workforce.

The Company has taken actions to enhance diversity, including the formation of a Diversity and Inclusion (“D&I”) council, comprised of a diverse group of talented individuals across the Company’s various businesses and geographic locations.

The D&I council is responsible for helping to shape the Company’s D&I objectives, prioritize the Company’s actions and programs in this important area, and support the Company’s efforts in building a more inclusive workplace.

The efforts of the D&I council are further guided by the Company’s Executive leadership team.

Because the nature of the Company's SGK Brand Solutions, Memorialization and Industrial Technologies businesses are primarily custom products made to order and services with short lead times, backlogs are not generally material except for purpose built machinery projects in the SGK Brand Solutions segment, mausoleums and cremation and incineration equipment in the Memorialization segment and industrial automation and order fulfillment systems in the Industrial Technologies segment.

Backlogs vary in a range of approximately six to twelve months of sales for purpose built machinery projects and mausoleums.

Cremation and incineration equipment sales backlogs vary in a range of ten to twelve months of sales.

Backlogs for Industrial Technologies segment sales generally vary in a range of up to four weeks for standard products and twenty-four weeks for custom systems.

The Company's current backlog is expected to be substantially filled in fiscal 2021, absent any disruptions related to COVID-19.

REGULATORY MATTERS:

The Company's operations are subject to various federal, state and local laws and regulations relating to the protection of the environment.

The Company is party to various environmental matters which include obligations to investigate and mitigate the effects on the environment of certain materials at various operating and non-operating sites.

The Company is currently performing environmental assessments and remediation at these sites, as appropriate.

Refer to Note 17, "Environmental Matters" in Item 8 - "Financial Statements and Supplementary Data," for further details.

RISK FACTORS, (continued)

The Company’s operations are subject to various federal, state and local laws and regulations requiring strict compliance, including, but not limited to, the protection of the environment.

The Company has established numerous internal compliance programs to further ensure lawful satisfaction of the applicable regulations.

In addition, the Company is party to specific environmental matters which include obligations to investigate and mitigate the effects on the environment of certain materials at operating and non-operating sites.

The Company is currently performing environmental assessments and remediation at certain sites, as applicable.

AVAILABLE INFORMATION:

The Company's principal executive offices are located at Two NorthShore Center, Pittsburgh, Pennsylvania 15212, its telephone number is (412) 442-8200 and its website is www.matw.com.

The Company files or furnishes all required reports with the Securities and Exchange Commission ("SEC") in accordance with the Exchange Act.

The Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports are available free of charge on the Company's website as soon as reasonably practicable after being filed or furnished to the SEC.

The Company's reports filed or furnished with the SEC, including exhibits attached to such reports, are also available on the SEC's website at www.sec.gov.

RISK FACTORS.

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Additional risks not currently known or deemed immaterial may also result in adverse effects on the Company.

Changes in Economic Conditions.

Generally, changes in domestic and international economic conditions affect the industries in which the Company and its customers and suppliers operate.

These changes include changes in the rate of consumption or use of the Company's products due to economic downturns, volatility in currency exchange rates, and changes in raw material prices resulting from supply and/or demand conditions.

Uncertainty about current global economic conditions poses a risk, as consumers and businesses may continue to postpone or cancel spending.

Other factors that could influence customer spending include energy costs, conditions in the credit markets, consumer confidence and other factors affecting consumer spending behavior.

These and other economic factors could have an effect on demand for the Company's products and services and negatively impact the Company's financial condition and results of operations.

Company-Specific Risk Factors:

Foreign Operations.

5 unchanged sentences

laws and regulations.

RISK FACTORS, (continued)

Changes in Foreign Currency Exchange Rates .

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however, such trends may adversely affect the volume of bronze and granite memorialization products and burial caskets sold in the United States.

Changes in Product Demand or Pricing.

The Company's businesses have and will continue to operate in competitive markets.

Changes in product demand or pricing are affected by domestic and foreign competition and an increase in consolidated purchasing by large customers operating in both domestic and global markets.

The Memorialization businesses generally operate in markets with ample supply capacity and demand which is correlated to death rates.

The SGK Brand Solutions businesses serve global customers that are requiring their suppliers to be global in scope and price-competitive.

Additionally, in recent years the Company has witnessed an increase in products manufactured offshore, primarily in China, and imported into the Company's U.S.

It is expected that these trends will continue and may affect the Company's future results of operations.

Changes in the Distribution of the Company's Products or the Loss of a Large Customer.

Although the Company does not have any customer that is individually significant to consolidated sales, it does have contracts with several large customers in both the Memorialization and SGK Brand Solutions segments.

While these contracts provide important access to large purchasers of the Company's products, they can obligate the Company to sell products at contracted prices for extended periods of time.

Additionally, any significant divestiture of business properties or operations by current customers could result in a loss of business if the Company is not able to maintain the business with the subsequent owners of the businesses.

Pandemics or similar outbreaks may cause unfavorable economic or market conditions which could impact demand patterns and/or disrupt global supply chains and production operations.

Collectively, these outcomes could materially and adversely affect the Company’s business, results of operations and financial condition.

Pandemics or similar outbreaks, such as COVID-19, could adversely affect the economies of developed and emerging markets, potentially resulting in an economic downturn that could affect customers’ demand for the Company’s products and services, as well as the Company's ability to access capital at acceptable interest rates.

The spread of pandemics or similar outbreaks may also disrupt the Company’s manufacturing and production operations, as well as its distribution systems, which include import and export for delivery of the Company’s products to its customers.

These factors could materially and adversely affect the Company’s business, financial condition and results of operations.

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.

What changed 10-K

Item 1. Business