MATTHEWS INTERNATIONAL CORP 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued Gross profit for the three months ended December 31, 2020 was $125.5 million, compared to $115.7 million for the same period a year ago. Consolidated gross profit as a percent of sales was 32.5% and 31.7% for the first three months of fiscal 2021 and fiscal 2020, respectively. The increase in gross profit primarily reflected higher sales, and benefits from the realization of productivity improvements and cost-reduction initiatives. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $8.0 million and $1.1 million for the three months ended December 31, 2020 and 2019, respectively. Selling and administrative expenses for the three months ended December 31, 2020 were $99.9 million, compared to $102.7 million for the first three months of fiscal 2020. Consolidated selling and administrative expenses, as a percent of sales, were 25.8% for the three months ended December 31, 2020, compared to 28.1% for the same period last year. The decrease in selling and administrative expenses reflected benefits from ongoing cost-reduction initiatives, and reduced travel and entertainment ("T&E") costs resulting from the COVID-19 pandemic, partially offset by increased performance-based compensation compared to fiscal 2020. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with cost-reduction initiatives totaling $4.4 million in fiscal 2021, compared to $11.7 million in fiscal 2020. Intangible amortization for the three months ended December 31, 2020 was $15.2 million, compared to $17.9 million for the three months ended December 31, 2019. Intangible amortization included accelerated amortization resulting from the fiscal 2019 reduction in useful lives for certain trade names that are being discontinued. Amortization for these trade names totaled $7.0 million and $9.4 million for the three months ended December 31, 2020 and December 31, 2019, respectively. Adjusted EBITDA was $54.8 million for the three months ended December 31, 2020 and $40.2 million for the three months ended December 31, 2019. Adjusted EBITDA for the SGK Brand Solutions segment was $21.3 million for the first three months of fiscal 2021 compared to $18.7 million for the same period a year ago. The increase in segment adjusted EBITDA primarily reflected benefits from cost-reduction initiatives and reduced T&E costs resulting from COVID-19. These increases were partially offset by the impact of lower sales and increased performance-based compensation compared to fiscal 2020. Memorialization segment adjusted EBITDA was $44.1 million for the first three months of fiscal 2021 compared to $30.1 million for the first three months of fiscal 2020. The increase in segment adjusted EBITDA primarily reflected the impact of higher sales, benefits from productivity initiatives and lower T&E costs, partially offset by increased performance-based compensation compared to fiscal 2020. Adjusted EBITDA for the Industrial Technologies segment for the three months ended December 31, 2020 was $3.5 million, compared to $4.3 million for the same period a year ago. Industrial Technologies segment adjusted EBITDA primarily reflected the impact of lower sales and increased performance-based compensation, partially offset by benefits from cost-reduction initiatives and reduced T&E costs. Investment income was $1.1 million for the three months ended December 31, 2020 and $1.3 million for the three months ended December 31, 2019. Investment income for both periods primarily reflected changes in the value of investments (primarily marketable securities) held in trust for certain of the Company's benefit plans. Interest expense for the first three months of fiscal 2021 was $7.7 million, compared to $9.2 million for the same period last year. The decrease in interest expense reflected a decrease in average borrowing levels and lower average interest rates in the current fiscal year. Other income (deductions), net, for the three months ended December 31, 2020 represented a decrease in pre-tax income of $1.7 million, compared to a decrease in pre-tax income of $2.8 million for the same period last year. Other income (deductions), net includes the non-service components of pension and postretirement expense, which totaled $1.9 million and $2.2 million for the three months ended December 31, 2020 and 2019, respectively. Other income (deductions), net also includes banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances. Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the three months ended December 31, 2020 were an expense of $4.0 million, compared to a benefit of $5.4 million for the first three months of fiscal 2020. The differences between the Company’s consolidated income taxes for the first three months of fiscal 2021 versus the same period for fiscal 2020 primarily resulted from the fiscal 2021 first quarter having consolidated pre-tax income while the first quarter of fiscal 2020 had a pre-tax loss. Additionally, fiscal 2021 included discrete tax expenses related to foreign operating losses while fiscal 2020 included discrete tax benefits resulting from the closure of several tax audits. The Company’s fiscal 2021 three-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to discrete tax expenses recognized in the quarter. The Company’s fiscal 2020 three-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, foreign statutory rate differentials, tax credits, and discrete tax benefits recognized in the quarter. Net losses attributable to noncontrolling interests were $234,000 for the three months ended December 31, 2020, compared to net income of $160,000 for the same period a year ago. The net losses (income) attributable to noncontrolling interests primarily reflected losses (income) in less than wholly-owned businesses. 23 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued NON-GAAP FINANCIAL MEASURES: Included in this report are measures of financial performance that are not defined by GAAP. The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition costs, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures. The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business. Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition costs, ERP integration costs, and strategic initiatives and other charges. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and ERP integration costs, and items that do not reflect the ordinary earnings of the Company’s operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies. 24 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued The reconciliation of net income to adjusted EBITDA is as follows: Three Months Ended December 31, 2020 2019 (Dollar amounts in thousands) Net loss $ (1,992) $ (10,306) Income tax provision (benefit) 3,980 (5,397) Income (loss) before income taxes 1,988 (15,703) Net loss (income) attributable to noncontrolling interests 234 (160) Interest expense 7,728 9,240 Depreciation and amortization * 27,351 28,933 Acquisition costs (1)** 342 1,479 ERP integration costs (2)** 143 665 Strategic initiatives and other charges: (3)** Workforce reductions and related costs 7,026 2,262 Other cost reduction initiatives 3,681 8,458 Non-recurring / incremental COVID-19 costs (4) 1,124 — Joint Venture depreciation, amortization, interest expense and other charges (5) — 797 Stock-based compensation 3,246 2,031 Non-service pension and postretirement expense (6) 1,900 2,228 Total Adjusted EBITDA $ 54,763 $ 40,230 (1) Includes certain non-recurring costs associated with recent acquisition activities. (2) Represents costs associated with global ERP system integration efforts. (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. (4) 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. This amount does not include the impact of any lost sales or underutilization due to COVID-19. (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. (6) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. 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. * Depreciation and amortization was $19.1 million and $21.7 million for the SGK Brand Solutions segment, $5.5 million and $4.6 million for the Memorialization segment, $1.4 million and $1.4 million for the Industrial Technologies segment, and $1.3 million and $1.2 million for Corporate and Non-Operating, for the three months ended December 31, 2020 and 2019, respectively. ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $7.4 million and $3.4 million for the SGK Brand Solutions segment, $1.1 million and $328,000 for the Memorialization segment, and $2.7 million and $9.1 million for Corporate and Non-Operating, for the three months ended December 31, 2020 and 2019, respectively. 25 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued LIQUIDITY AND CAPITAL RESOURCES: Net cash provided by operating activities was $35.3 million for the first three months of fiscal 2021, compared to $5.4 million for the first three months of fiscal 2020. The increase reflected improved earnings for the current quarter and improved working capital management compared to a year ago. Operating cash flow for both periods principally included net loss adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, net gains related to investments, non-cash pension expense, other non-cash adjustments, and changes in working capital items. Net changes in working capital items reduced operating cash flow by $3.7 million and $13.2 million in fiscal 2021 and fiscal 2020, respectively. Cash used in investing activities was $5.8 million for the three months ended December 31, 2020, compared to cash used in investing activities of $14.2 million for the three months ended December 31, 2019. Investing activities for the first three months of fiscal 2021 reflected capital expenditures of $7.5 million and proceeds from the sale of assets of $1.7 million. Investing activities for the first three months of fiscal 2020 primarily reflected capital expenditures of $9.7 million and cash investments made in non-consolidated subsidiaries of $4.6 million. Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, and facilities designed to improve product quality, increase manufacturing efficiency, lower production costs and meet regulatory requirements. Capital expenditures for the last three fiscal years were primarily financed through operating cash. Capital spending for property, plant and equipment has averaged $38.6 million for the last three fiscal years. Capital spending for fiscal 2021 is currently estimated to be approximately $40 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects. Cash used in financing activities for the three months ended December 31, 2020 was $31.4 million, primarily reflecting repayments, net of proceeds, on long-term debt of $18.0 million, treasury stock purchases of $4.2 million, dividends of $6.8 million to the Company's shareholders, and $1.6 million of holdback and deferred payments related to acquisitions from prior years. Cash provided by financing activities for the three months ended December 31, 2019 was $11.9 million, primarily reflecting proceeds, net of repayments, on long-term debt of $21.6 million, treasury stock purchases of $1.8 million, and dividends of $6.5 million to the Company's shareholders. The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in March 2020. The amended and restated loan agreement includes a $750.0 million senior secured revolving credit facility, which matures in March 2025, and a $35.0 million senior secured amortizing term loan, which matures in July 2021. A portion of the revolving credit facility (not to exceed $350.0 million) can be drawn in foreign currencies. The term loan requires scheduled quarterly principal payments through its maturity date. 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% (1.25% at December 31, 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. The Company incurred debt issuance costs in connection with the amended and restated agreement. Unamortized costs were $2.6 million and $2.7 million at December 31, 2020 and September 30, 2020, respectively. The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35.0 million) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at December 31, 2020 and September 30, 2020 were $262.9 million and $257.4 million, respectively. Outstanding Euro denominated borrowings on the revolving credit facility at December 31, 2020 and September 30, 2020 were €117.0 million ($143.5 million) and €117.0 million ($137.2 million), respectively. Outstanding borrowings on the term loan at December 31, 2020 and September 30, 2020 were $22.4 million and $22.4 million, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at December 31, 2020 and 2019 was 2.07% and 2.60%, respectively. 26 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued The Company has $300.0 million of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The Company incurred direct financing fees and costs in connection with the 2025 Senior Notes. Unamortized costs were $2.6 million and $2.7 million at December 31, 2020 and September 30, 2020, respectively. The Company has a $115.0 million accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions which matures in March 2022. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC in turn assigns a collateral interest in these receivables to certain financial institutions, and then may borrow funds under the Securitization Facility. The Securitization Facility does not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations remain on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility bear interest at LIBOR plus 0.75%. 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. Outstanding borrowings under the Securitization Facility at December 31, 2020 and September 30, 2020 were $64.3 million and $67.7 million, respectively. At December 31, 2020 and 2019, the interest rate on borrowings under this facility was 0.89% and 2.51% respectively. The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges ( dollar amounts in thousands ): December 31, 2020 September 30, 2020 Pay fixed swaps - notional amount $ 262,500 $ 312,500 Net unrealized loss $ (6,422) $ (7,792) Weighted-average maturity period (years) 2.8 2.6 Weighted-average received rate 0.14 % 0.15 % Weighted-average pay rate 1.31 % 1.34 % The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments, which are considered probable of occurring. 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. The fair value of the interest rate swaps reflected an unrealized loss of $6.4 million ($4.8 million after tax) at December 31, 2020 and an unrealized loss of $7.8 million ($5.9 million after tax) at September 30, 2020 that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Assuming market rates remain constant with the rates at December 31, 2020, a loss (net of tax) of approximately $2.2 million included in AOCI is expected to be recognized in earnings over the next twelve months. The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €25.0 million ($30.7 million), which includes €8.0 million ($9.8 million) for bank guarantees. In the first quarter of fiscal 2021, the Company extended this facility to a current maturity of December 2021 and the Company intends to continue to extend this facility. Outstanding borrowings under the credit facility totaled €5.8 million ($7.1 million) and €18.9 million ($22.2 million) at December 31, 2020 and September 30, 2020, respectively. The weighted-average interest rate on outstanding borrowings under this facility at December 31, 2020 and 2019 was 2.25% and 1.25%, respectively . The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations. Currency losses of $9.1 million (net of income taxes of $3.0 million) and currency losses of $4.4 million (net of income taxes of $1.4 million), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at December 31, 2020 and September 30, 2020, respectively. The Company has a stock repurchase program. Under the current authorization, the Company's Board of Directors has authorized the repurchase of a total of 5,000,000 shares of Matthews' common stock under the program, of which 376,445 shares remain available for repurchase as of December 31, 2020. The buy-back program is designed to increase shareholder 27 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued value, enlarge the Company's holdings of its common stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. Consolidated working capital of the Company was $258.8 million at December 31, 2020, compared to $258.7 million at September 30, 2020. Cash and cash equivalents were $41.2 million at December 31, 2020, compared to $41.3 million at September 30, 2020. The Company's current ratio was 1.8 at December 31, 2020 and September 30, 2020. REGULATORY MATTERS: 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. SUBSEQUENT EVENTS: In January 2021, subsequent to the date of the balance sheet, the Company received $15.5 million for the full redemption of its senior preferred shares investment in a memorialization business. Additionally, in a separate transaction completed in January 2021, the Company acquired a memorialization business that produces and distributes cemetery products for a purchase price of $13.1 million, subject to customary post-closing adjustments. FORWARD-LOOKING INFORMATION: The Company's current strategy to attain annual operating growth primarily consists of the following: internal growth - which includes organic growth, cost structure and productivity improvements, new product development and the expansion into new markets with existing products - and acquisitions and related integration activities to achieve synergy benefits. The significant factors (excluding acquisitions) influencing sales growth in the SGK Brand Solutions segment are global economic conditions, brand innovation, the level of marketing spending by the Company's clients, and government regulation. Due to the global footprint of this segment, currency fluctuations can also be a significant factor. For the Memorialization segment, North America death rates, the cremation trend, and price realization impact sales growth for the Company's bronze and granite memorials, caskets and cremation and incineration-related products. For the Industrial Technologies segment, sales growth drivers include economic/industrial market conditions, new product development, and the e-commerce trend. During fiscal 2019, the Company initiated a strategic evaluation to improve profitability and reduce the Company's cost structure. These actions leveraged the benefit of the Company's new global ERP platform, primarily targeted at the SGK Brand Solutions segment, both operational and commercial structure, and the Company's shared financial services and other administrative functions. This evaluation identified opportunities for significant cost structure improvements, which the Company expects to achieve through fiscal 2022. The Company's recent strategic review has also resulted in improvements to the commercial structure within the SGK Brand Solutions segment, including the consolidation of several of the segment's trade names. As a result, the accelerated amortization of these intangible assets will continue through at least fiscal 2022. 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 in March 2020. 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. 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. 28 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued Considerable judgment is necessary to assess and predict the potential financial impacts of COVID-19 on the Company’s future operating results. Management expects that each of its business segments will experience some level of sales impacts in the short-term, potentially due to customer business disruptions, facilities shut-downs, weaker global economic conditions, and possible customer project delays. Longer-term financial impacts will depend on global economic conditions eventually resulting from COVID-19. Management expects each of its businesses to experience increased financial volatility in the short-term, but currently anticipates its core businesses will return to a more normalized future state once the COVID-19 pandemic subsides. CRITICAL ACCOUNTING POLICIES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Therefore, the determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, economic conditions, and in some cases, actuarial techniques. Actual results may differ from those estimates. A discussion of market risks affecting the Company can be found in Item 7A - "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2020. A summary of the Company's significant accounting policies are included in the Notes to Consolidated Financial Statements and in the critical accounting policies in Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended September 30, 2020. Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the Company's operating results and financial condition. The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2020 (January 1, 2020) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values. The Company performed an interim assessment of its goodwill reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products) as of March 31, 2020 and recorded a $90.4 million goodwill write-down during the second quarter of fiscal 2020. Subsequent to this write-down, the fair values of the two reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products) approximated their carrying values at March 31, 2020. If current projections are not achieved or specific valuation factors outside the Company’s control (such as discount rates and continued economic and industry impacts of COVID-19) significantly change, additional goodwill write-downs may be necessary in future periods. LONG-TERM CONTRACTUAL OBLIGATIONS AND COMMITMENTS: The following table summarizes the Company's contractual obligations at December 31, 2020, and the effect such obligations are expected to have on its liquidity and cash flows in future periods. Payments due in fiscal year: Total 2021 Remainder 2022 (1) to 2023 2024 to 2025 After 2025 Contractual Cash Obligations: (Dollar amounts in thousands) Revolving credit facilities $ 413,483 $ — $ 7,053 $ 406,430 $ — Securitization Facility 64,300 — 64,300 — — Senior secured term loan 22,406 22,406 — — — 2025 Senior Notes 376,141 7,875 31,500 31,500 305,266 Finance lease obligations (2) 9,711 2,910 4,141 904 1,756 Non-cancelable operating leases (2) 74,494 19,762 34,291 14,922 5,519 Other 37,147 10,522 18,664 2,168 5,793 Total contractual cash obligations $ 997,682 $ 63,475 $ 159,949 $ 455,924 $ 318,334 (1) The Company maintains certain debt facilities with maturity dates of twelve months or less that it intends and has the ability to extend beyond twelve months totaling $7.1 million. These balances have been classified as non-current on the Company's Consolidated Balance Sheet. (2) Lease obligations have not been discounted to their present value. 29 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued A significant portion of the loans included in the table above bear interest at variable rates. At December 31, 2020, the weighted-average interest rate was 2.07% on the Company's domestic credit facility, 0.89% on the Company's Securitization Facility and 2.25% on the credit facility through the Company's European subsidiaries. Benefit payments under the Company's principal retirement plan are made from plan assets, while benefit payments under the supplemental retirement plan and postretirement benefit plan are funded from the Company's operating cash. Under IRS regulations, the Company is required to make contributions of approximately $4.2 million to its principal retirement plan in fiscal 2021. The Company is also currently evaluating potential additional contributions to its principal retirement plan during fiscal 2021. During the three months ended December 31, 2020 contributions of $203,000 and $23,000 were made under the supplemental retirement plan and postretirement plan, respectively. The Company currently anticipates contributing an additional $4.2 million, $702,000 and $808,000 under the principal retirement plan, supplemental retirement plan and postretirement plan, respectively, for the remainder of fiscal 2021. Unrecognized tax benefits are positions taken, or expected to be taken, on an income tax return that may result in additional payments to tax authorities. If a tax authority agrees with the tax position taken, or expected to be taken, or the applicable statute of limitations expires, then additional payments will not be necessary. As of December 31, 2020, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $10.8 million. The timing of potential future payments related to the unrecognized tax benefits is not presently determinable. The Company believes that its current liquidity sources, combined with its operating cash flow and borrowing capacity, will be sufficient to meet its capital needs for the foreseeable future. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: Refer to Note 2, "Basis of Presentation" in Item 1 - "Financial Statements," for further details on recently issued accounting pronouncements. 30 Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the Company’s market risk during the three months ended December 31, 2020. For additional information see Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020.