3 unchanged sentences
(Dollar amounts in thousands)
−Removed: December 31, 2020 September 30, 2020
+Added: March 31, 2021 September 30, 2020
Current assets:
43 unchanged sentences
Three Months Ended
+Added: March 31, Six Months Ended
+Added: 2021 2020 2021 2020
Sales $ 417,154 $ 374,800 $ 803,811 $ 739,744
4 unchanged sentences
Intangible amortization ( 22,930 ) ( 17,872 ) ( 38,151 ) ( 35,814 )
+Added: Goodwill write-down — ( 90,408 ) — ( 90,408 )
Operating profit (loss) 14,972 ( 85,097 ) 25,345 ( 90,040 )
−Removed: Investment income 1,077 1,299
+Added: Investment income (loss) 969 ( 1,108 ) 2,046 191
Interest expense ( 7,233 ) ( 9,613 ) ( 14,961 ) ( 18,853 )
2 unchanged sentences
Income tax (provision) benefit ( 972 ) 11,066 ( 4,952 ) 16,463
−Removed: Net loss ( 1,992 ) ( 10,306 )
−Removed: Net loss (income) attributable to noncontrolling interests 234 ( 160 )
−Removed: Net loss attributable to Matthews shareholders $ ( 1,758 ) $ ( 10,466 )
−Removed: Loss per share attributable to Matthews shareholders:
+Added: Net income (loss) 5,152 ( 86,595 ) 3,160 ( 96,901 )
+Added: Net (income) loss attributable to noncontrolling interests ( 163 ) 231 71 71
+Added: Net income (loss) attributable to Matthews shareholders $ 4,989 $ ( 86,364 ) $ 3,231 $ ( 96,830 )
+Added: Earnings (loss) per share attributable to Matthews shareholders:
Basic $ 0.16 $ ( 2.77 ) $ 0.10 $ ( 3.11 )
4 unchanged sentences
(Dollar amounts in thousands)
−Removed: Three Months Ended December 31,
+Added: Three Months Ended March 31,
Matthews Noncontrolling Interest Total
2021 2020 2021 2020 2021 2020
−Removed: Net (loss) income:
+Added: Net income (loss):
$ 4,989 $ ( 86,364 ) $ 163 $ ( 231 ) $ 5,152 $ ( 86,595 )
8 unchanged sentences
Comprehensive income (loss) $ 1,001 $ ( 119,627 ) $ 164 $ ( 230 ) $ 1,165 $ ( 119,857 )
+Added: Six Months Ended March 31,
+Added: Matthews Noncontrolling Interest Total
+Added: 2021 2020 2021 2020 2021 2020
+Added: Net income (loss):
+Added: $ 3,231 $ ( 96,830 ) $ ( 71 ) $ ( 71 ) $ 3,160 $ ( 96,901 )
+Added: OCI, net of tax:
+Added: Foreign currency translation adjustment 8,157 ( 19,537 ) ( 2 ) ( 4 ) 8,155 ( 19,541 )
+Added: Pension plans and other postretirement benefits 4,379 3,554 — — 4,379 3,554
+Added: Unrecognized gain (loss) on derivatives:
+Added: Net change from periodic revaluation 2,441 ( 3,739 ) — — 2,441 ( 3,739 )
+Added: Net amount reclassified to earnings 1,249 ( 412 ) — — 1,249 ( 412 )
+Added: Net change in unrecognized gain (loss) on derivatives 3,690 ( 4,151 ) — — 3,690 ( 4,151 )
+Added: OCI, net of tax 16,226 ( 20,134 ) ( 2 ) ( 4 ) 16,224 ( 20,138 )
+Added: Comprehensive income (loss) $ 19,457 $ ( 116,964 ) $ ( 73 ) $ ( 75 ) $ 19,384 $ ( 117,039 )
The accompanying notes are an integral part of these consolidated financial statements.
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
+Added: CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
+Added: for the three and six months ended March 31, 2021 and 2020 (Unaudited)
(Dollar amounts in thousands, except per share data)
22 unchanged sentences
December 31, 2020 $ 36,334 $ 140,008 $ 850,436 $ ( 220,505 ) $ ( 184,809 ) $ 389 $ 621,853
+Added: Net income — — 4,989 — — 163 5,152
+Added: Minimum pension liability — — — 2,255 — — 2,255
+Added: Translation adjustment — — — ( 8,898 ) — 1 ( 8,897 )
+Added: Fair value of derivatives — — — 2,655 — — 2,655
+Added: Total comprehensive income 1,165
+Added: Stock-based compensation — 4,001 — — — — 4,001
+Added: Purchase of 6,000 shares of treasury stock
+Added: — — — — ( 249 ) — ( 249 )
+Added: Issuance of 17,357 shares of treasury stock
+Added: — ( 685 ) — — 685 — —
+Added: Dividends, $ 0.215 per share
+Added: — — ( 7,171 ) — — — ( 7,171 )
+Added: March 31, 2021 $ 36,334 $ 143,324 $ 848,254 $ ( 224,493 ) $ ( 184,373 ) $ 553 $ 619,599
Shareholders' Equity
21 unchanged sentences
December 31, 2019 $ 36,334 $ 140,526 $ 955,593 $ ( 215,232 ) $ ( 202,801 ) $ 1,285 $ 715,705
+Added: Net loss — — ( 86,364 ) — — ( 231 ) ( 86,595 )
+Added: Minimum pension liability — — — 1,827 — — 1,827
+Added: Translation adjustment — — — ( 30,648 ) — 1 ( 30,647 )
+Added: Fair value of derivatives — — — ( 4,442 ) — — ( 4,442 )
+Added: Total comprehensive loss ( 119,857 )
+Added: Stock-based compensation — 2,508 — — — — 2,508
+Added: Purchase of 20,750 shares of treasury stock
+Added: — — — — ( 506 ) — ( 506 )
+Added: Dividends, $ 0.21 per share
+Added: — — ( 6,648 ) — — — ( 6,648 )
+Added: March 31, 2020 $ 36,334 $ 143,034 $ 862,581 $ ( 248,495 ) $ ( 203,307 ) $ 1,055 $ 591,202
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
(Dollar amounts in thousands)
−Removed: Three Months Ended
+Added: Six Months Ended
Cash flows from operating activities:
−Removed: Net loss $ ( 1,992 ) $ ( 10,306 )
−Removed: Adjustments to reconcile net loss to net cash provided by operating activities:
+Added: Net income (loss) $ 3,160 $ ( 96,901 )
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 62,530 58,250
Stock-based compensation expense 7,247 4,539
−Removed: Deferred tax provision 707 2,392
−Removed: Gain on sale of assets, net ( 569 ) —
−Removed: Unrealized gain on investments ( 654 ) ( 1,048 )
+Added: Deferred tax provision (benefit) 930 ( 6,155 )
+Added: (Gain) loss on sale of assets, net ( 511 ) 27
+Added: Unrealized (gain) loss on investments ( 844 ) 70
Loss from equity-method investments — 1,345
+Added: Goodwill write-down — 90,408
Changes in working capital items 2,730 19,384
−Removed: Decrease (increase) in other assets 1,515 ( 1,495 )
+Added: Decrease in other assets 2,556 5,587
Increase (decrease) in other liabilities 12,962 ( 1,107 )
3 unchanged sentences
Capital expenditures ( 15,819 ) ( 19,082 )
+Added: Acquisitions, net of cash acquired ( 13,100 ) —
Proceeds from sale of assets 2,065 181
+Added: Proceeds from sale of investments 15,000 —
Investments and advances — ( 9,637 )
15 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
−Removed: December 31, 2020
+Added: March 31, 2021
(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 three months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021.
+Added: Operating results for the six months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021.
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, 2020.
18 unchanged sentences
Basis of Presentation (continued)
−Removed: The following table summarizes the activity for the accounts receivable allowance for doubtful accounts for the three months ended December 31, 2020:
+Added: The following table summarizes the activity for the accounts receivable allowance for doubtful accounts for the six months ended March 31, 2021:
Accounts Receivable Allowance for Doubtful Accounts
2 unchanged sentences
Translation and other adjustments (1)
−Removed: Balance at December 31, 2020
+Added: Balance at March 31, 2021
(1) Includes the impact of foreign currency fluctuations and amounts determined not to be collectible (including direct write-offs), net of recoveries.
5 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 months ended December 31, 2020 and 2019 were as follows:
+Added: Disaggregated sales by segment and region for the three and six months ended March 31, 2021 and 2020 were as follows:
SGK Brand Solutions Memorialization Industrial Technologies Consolidated
−Removed: Three Months Ended December 31, Three Months Ended December 31, Three Months Ended December 31, Three Months Ended December 31,
+Added: Three Months Ended
+Added: March 31, Three Months Ended
+Added: March 31, Three Months Ended
+Added: March 31, Three Months Ended
2021 2020 2021 2020 2021 2020 2021 2020
5 unchanged sentences
Total Sales $ 171,024 $ 172,855 $ 205,457 $ 161,819 $ 40,673 $ 40,126 $ 417,154 $ 374,800
+Added: SGK Brand Solutions Memorialization Industrial Technologies Consolidated
+Added: Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31,
+Added: 2021 2020 2021 2020 2021 2020 2021 2020
+Added: North America $ 136,684 $ 151,678 $ 360,577 $ 296,298 $ 59,895 $ 60,679 $ 557,156 $ 508,655
+Added: Central and South America 2,694 3,196 — — — — 2,694 3,196
+Added: Europe 170,999 165,428 23,102 15,466 13,004 14,379 207,105 195,273
+Added: Australia 6,937 5,939 5,052 4,460 — — 11,989 10,399
+Added: Asia 21,850 21,494 — — 3,017 727 24,867 22,221
+Added: Total Sales $ 339,164 $ 347,735 $ 388,731 $ 316,224 $ 75,916 $ 75,785 $ 803,811 $ 739,744
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
Fair Value Measurements
4 unchanged sentences
Unobservable inputs for the asset or liability.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Fair Value Measurements (continued)
The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:
−Removed: December 31, 2020 September 30, 2020
+Added: March 31, 2021 September 30, 2020
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
+Added: Derivatives (1)
+Added: $ — $ 471 $ — $ 471 $ — $ — $ — $ —
Equity and fixed income mutual funds — 25,455 — 25,455 — 24,610 — 24,610
6 unchanged sentences
Inventories consisted of the following:
−Removed: December 31, 2020 September 30, 2020
+Added: March 31, 2021 September 30, 2020
Raw materials $ 38,112 $ 36,157
3 unchanged sentences
Non-current investments consisted of the following:
−Removed: December 31, 2020 September 30, 2020
+Added: March 31, 2021 September 30, 2020
Equity and fixed income mutual funds $ 25,455 $ 24,610
2 unchanged sentences
$ 49,048 $ 63,250
+Added: During the second quarter of fiscal 2021, the Company received $ 15,000 for the full redemption of its senior preferred shares investment in a memorialization business.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
−Removed: Long-term debt at December 31, 2020 and September 30, 2020 consisted of the following:
−Removed: December 31, 2020 September 30, 2020
+Added: Long-term debt at March 31, 2021 and September 30, 2020 consisted of the following:
+Added: March 31, 2021 September 30, 2020
Revolving credit facilities $ 367,352 $ 416,793
7 unchanged sentences
$ 778,209 $ 807,710
−Removed: The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in March 2020.
−Removed: The amended and restated loan agreement includes a $ 750,000 senior secured revolving credit facility, which matures in March 2025, and a $ 35,000 senior secured amortizing term loan, which matures in July 2021.
+Added: The Company has a domestic credit facility with a syndicate of financial institutions that includes a $ 750,000 senior secured revolving credit facility, which matures in March 2025, and a $ 35,000 senior secured amortizing term loan.
+Added: The senior secured amortizing term loan was paid in full in March 2021.
A portion of the revolving credit facility (not to exceed $ 350,000 ) can be drawn in foreign currencies.
−Removed: 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 % ( 1.25 % at December 31, 2020) based on the Company's secured leverage ratio.
+Added: Borrowings under the revolving credit facility bear interest at LIBOR (Euro LIBOR for balances drawn in Euros) plus a factor ranging from 0.75 % to 2.00 % ( 1.25 % at March 31, 2021) 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 in connection with the amended and restated agreement.
−Removed: Unamortized costs were $ 2,565 and $ 2,734 at December 31, 2020 and September 30, 2020, respectively.
+Added: The Company incurred debt issuance costs in connection with the domestic credit facility.
+Added: Unamortized costs were $ 2,481 and $ 2,734 at March 31, 2021 and September 30, 2020, respectively.
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 December 31, 2020 and September 30, 2020 were $ 262,923 and $ 257,439 , respectively.
−Removed: Outstanding Euro denominated borrowings on the revolving credit facility at December 31, 2020 and September 30, 2020 were € 117.0 million ($ 143,507 ) and € 117.0 million ($ 137,188 ), respectively.
−Removed: Outstanding borrowings on the term loan at December 31, 2020 and September 30, 2020 were $ 22,406 and $ 22,359 , 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 December 31, 2020 and December 31, 2019 was 2.07 % and 2.60 %, respectively.
+Added: dollar denominated borrowings on the revolving credit facility at March 31, 2021 and September 30, 2020 were $ 250,000 and $ 257,439 , respectively.
+Added: Outstanding Euro denominated borrowings on the revolving credit facility at March 31, 2021 and September 30, 2020 were € 97.0 million ($ 113,764 ) and € 117.0 million ($ 137,188 ), respectively.
+Added: There were no outstanding borrowings on the term loan as of March 31, 2021.
+Added: Outstanding borrowings on the term loan at September 30, 2020 were $ 22,359 .
+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 March 31, 2021 and March 31, 2020 was 2.17 % and 2.40 %, 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 $ 2,609 and $ 2,744 at December 31, 2020 and September 30, 2020, respectively.
+Added: Unamortized costs were $ 2,474 and $ 2,744 at March 31, 2021 and September 30, 2020, respectively.
The Company has a $ 115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions which matures in March 2022.
5 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 December 31, 2020 and September 30, 2020 were $ 64,300 and $ 67,700 , respectively.
−Removed: At December 31, 2020 and 2019, the interest rate on borrowings under this facility was 0.89 % and 2.51 %, respectively.
+Added: Outstanding borrowings under the Securitization Facility at March 31, 2021 and September 30, 2020 were $ 97,590 and $ 67,700 , respectively.
+Added: At March 31, 2021 and 2020, the interest rate on borrowings under this facility was 0.86 % and 1.74 %, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
2 unchanged sentences
The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:
−Removed: December 31, 2020 September 30, 2020
+Added: March 31, 2021 September 30, 2020
Pay fixed swaps - notional amount $ 250,000 $ 312,500
7 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 of $ 6,422 ($ 4,849 after tax) at December 31, 2020 and an unrealized loss of $ 7,792 ($ 5,884 after tax) at September 30, 2020, 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 December 31, 2020, a loss (net of tax) of approximately $ 2,181 included in AOCI is expected to be recognized in earnings over the next twelve months.
−Removed: At December 31, 2020 and September 30, 2020, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:
−Removed: Derivatives December 31, 2020 September 30, 2020
+Added: The fair value of the interest rate swaps reflected an unrealized loss, net of unrealized gains, of $ 2,905 ($ 2,194 after tax) at March 31, 2021 and an unrealized loss of $ 7,792 ($ 5,884 after tax) at September 30, 2020, 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 March 31, 2021, a loss (net of tax) of approximately $ 1,772 included in AOCI is expected to be recognized in earnings over the next twelve months.
+Added: At March 31, 2021 and September 30, 2020, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:
+Added: Derivatives March 31, 2021 September 30, 2020
+Added: Current assets:
+Added: Other current assets $ 78 $ —
+Added: Long-term assets:
+Added: Other assets 393 —
Current liabilities:
5 unchanged sentences
Derivatives in Cash Flow Hedging Relationships Location of (Loss) Gain Recognized in Income on Derivative Amount of (Loss) Gain Recognized in Income on Derivatives
+Added: Amount of (Loss) Gain Recognized in Income on Derivatives
Three Months Ended
+Added: March 31, Six Months Ended
+Added: 2021 2020 2021 2020
Interest rate swaps Interest expense $ ( 751 ) $ 182 $ ( 1,654 ) $ 546
−Removed: The Company recognized the following (losses) gains in AOCI:
−Removed: Derivatives in Cash Flow Hedging Relationships Amount of Gain
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
+Added: Debt (continued)
+Added: The Company recognized the following gains (losses) in AOCI:
+Added: Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss)
Recognized in AOCI on Derivatives Location of (Loss) Gain Reclassified From AOCI into Income (Effective Portion*) Amount of (Loss) Gain
2 unchanged sentences
(Effective Portion*)
−Removed: December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019
+Added: March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
Interest rate swaps $ 2,441 $ ( 3,739 ) Interest expense $ ( 1,249 ) $ 412
*There is no ineffective portion or amount excluded from effectiveness testing.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Debt (continued)
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 ($ 29,321 ), which includes € 8.0 million ($ 9,383 ) for bank guarantees.
−Removed: 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.
−Removed: Outstanding borrowings under the credit facility totaled € 5.8 million ($ 7,053 ) and € 18.9 million ($ 22,166 ) at December 31, 2020 and September 30, 2020, respectively.
−Removed: The weighted-average interest rate on outstanding borrowings under this facility at December 31, 2020 and 2019 was 2.25 % and 1.25 %, respectively.
+Added: The credit facility matures in December 2021 and the Company intends to continue to extend this facility.
+Added: Outstanding borrowings under the credit facility totaled € 3.1 million ($ 3,587 ) and € 18.9 million ($ 22,166 ) at March 31, 2021 and September 30, 2020, respectively.
+Added: The weighted-average interest rate on outstanding borrowings under this facility at March 31, 2021 and 2020 was 2.25 % and 1.25 %, respectively.
The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations.
−Removed: Currency losses of $ 9,148 (net of income taxes of $ 2,968 ) and currency losses of $ 4,377 (net of income taxes of $ 1,420 ), 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.
−Removed: As of December 31, 2020 and September 30, 2020, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.
−Removed: The Company was in compliance with all of its debt covenants as of December 31, 2020.
+Added: Currency losses of $ 4,852 (net of income taxes of $ 1,575 ) and currency losses of $ 4,377 (net of income taxes of $ 1,420 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2021 and September 30, 2020, respectively.
+Added: As of March 31, 2021 and September 30, 2020, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.
+Added: The Company was in compliance with all of its debt covenants as of March 31, 2021.
Share-Based Payments
1 unchanged sentence
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 December 31, 2020, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.
−Removed: 1,064,910 restricted share units have been granted under the 2017 Equity Incentive Plan and are outstanding as of December 31, 2020.
+Added: At March 31, 2021, there were 1,700,000 shares reserved for future issuance under the 2017 Equity Incentive Plan.
+Added: 1,064,910 restricted share units have been granted under the 2017 Equity Incentive Plan and are outstanding as of March 31, 2021.
The 2017 Equity Incentive plan is administered by the Compensation Committee of the Board of Directors.
8 unchanged sentences
The Company issues common stock from treasury shares once vested.
−Removed: For the three-month periods ended December 31, 2020 and 2019, stock-based compensation cost totaled $ 3,246 and $ 2,031 , respectively.
−Removed: The stock-based compensation cost that was recognized for retirement-eligible employees was $ 883 and $ 313 for the three-month periods ended December 31, 2020 and 2019, respectively.
−Removed: The associated future income tax benefit recognized for stock-based compensation was $ 239 and $ 179 for the three-month periods ended December 31, 2020 and 2019, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Share-Based Payments (continued)
−Removed: The transactions for restricted shares and restricted share units for the three months ended December 31, 2020 were as follows:
+Added: For the three-month periods ended March 31, 2021 and 2020, stock-based compensation cost totaled $ 4,001 and $ 2,508 , respectively.
+Added: For the six-month periods ended March 31, 2021 and 2020, stock-based compensation cost totaled $ 7,247 and $ 4,539 , respectively.
+Added: The associated future income tax benefit recognized for stock-based compensation was $ 738 and $ 614 for the three-month periods ended March 31, 2021 and 2020, respectively, and $ 976 and $ 793 for the six-month periods ended March 31, 2021 and 2020, respectively.
+Added: The transactions for restricted shares and restricted share units for the six months ended March 31, 2021 were as follows:
Shares /Units Weighted-
3 unchanged sentences
Expired or forfeited ( 36,667 ) 57.05
−Removed: Non-vested at December 31, 2020 1,107,810 $ 34.03
−Removed: As of December 31, 2020, the total unrecognized compensation cost related to unvested restricted stock was $ 22,827 and is expected to be recognized over a weighted average period of 2.5 years.
+Added: Non-vested at March 31, 2021 1,107,810 $ 34.03
+Added: As of March 31, 2021, the total unrecognized compensation cost related to unvested restricted stock was $ 17,602 and is expected to be recognized over a weighted average period of 2.2 years.
The fair value of certain restricted share units that are subject to performance conditions are estimated on the date of grant using a binomial lattice valuation model.
−Removed: The following table indicates the assumptions used in estimating the fair value of certain restricted share units granted during the three-month period ended December 31, 2020.
−Removed: Three Months Ended
−Removed: December 31, 2020
+Added: The following table indicates the assumptions used in estimating the fair value of certain restricted share units granted during the six-month period ended March 31, 2021.
+Added: Six Months Ended
+Added: March 31, 2021
Expected volatility 42.9 %
5 unchanged sentences
Expected volatilities are based on the historical volatility of the Company's stock price.
−Removed: The expected term for grants in the three months ended December 31, 2020 represents an estimate of the average period of time for restricted share units to vest.
+Added: The expected term for grants in the six months ended March 31, 2021 represents an estimate of the average period of time for restricted share units to vest.
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 30,925 shares and share units had been deferred under the Director Fee Plans as of December 31, 2020.
+Added: A total of 38,327 shares and share units had been deferred under the Director Fee Plans as of March 31, 2021.
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 2021.
271,807 restricted shares and restricted share units have been granted under the Director Fee Plans, 98,578 of which were issued under the 2019 Director Fee Plan.
−Removed: 71,686 restricted shares and restricted share units are unvested at December 31, 2020.
+Added: 74,639 restricted shares and restricted share units are unvested at March 31, 2021.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Earnings Per Share Attributable to Matthews' Shareholders
−Removed: The information used to compute loss 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: Net loss attributable to Matthews shareholders $ ( 1,758 ) $ ( 10,466 )
+Added: March 31, Six Months Ended
+Added: 2021 2020 2021 2020
+Added: Net income (loss) attributable to Matthews shareholders $ 4,989 $ ( 86,364 ) $ 3,231 $ ( 96,830 )
Weighted-average shares outstanding (in thousands):
2 unchanged sentences
Diluted shares 32,083 31,150 32,034 31,141
+Added: Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and six months ended March 31, 2021.
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 December 31,
+Added: Three months ended March 31,
Pension Other Postretirement
7 unchanged sentences
Net benefit cost $ 3,749 $ 4,210 $ 53 $ 181
+Added: Six months ended March 31,
+Added: Pension Other Postretirement
+Added: 2021 2020 2021 2020
+Added: Service cost $ 4,196 $ 4,340 $ 100 $ 128
+Added: Interest cost * 3,094 3,866 188 280
+Added: Expected return on plan assets * ( 5,525 ) ( 4,464 ) — —
+Added: Amortization:
+Added: Prior service cost ( 58 ) ( 94 ) ( 182 ) ( 46 )
+Added: Net actuarial loss * 6,044 4,773 — —
+Added: Net benefit cost $ 7,751 $ 8,421 $ 106 $ 362
* Non-service components of pension and postretirement expense are included in other income (deductions), net.
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: Under IRS regulations, the Company is required to make contributions of approximately $ 4,191 to its principal retirement plan in fiscal 2021.
−Removed: The Company is also currently evaluating potential additional contributions to its principal retirement plan during fiscal 2021.
+Added: In April 2021, subsequent to the date of the balance sheet, the Company contributed $ 15,000 to its principal retirement plan.
+Added: Under IRS regulations, no further contributions are required to be made to the Company's principal retirement plan during fiscal 2021.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
+Added: Pension and Other Postretirement Benefit Plans (continued)
Contributions made and anticipated for fiscal year 2021 are as follows:
Contributions Pension Other Postretirement
−Removed: Contributions during the three months ended December 31, 2020:
+Added: Contributions during the six months ended March 31, 2021:
Supplemental retirement plan $ 408 $ —
4 unchanged sentences
Other postretirement plan — 603
+Added: * Contribution was made in April 2021 (see above).
+Added: Accumulated Other Comprehensive Income
+Added: The changes in AOCI by component, net of tax, for the three-month periods ended March 31, 2021 and 2020 were as follows:
+Added: Post-retirement benefit plans Currency translation adjustment Derivatives Total
+Added: Attributable to Matthews:
+Added: Balance, December 31, 2020 $ ( 80,830 ) $ ( 134,826 ) $ ( 4,849 ) $ ( 220,505 )
+Added: OCI before reclassification — ( 8,898 ) 2,088 ( 6,810 )
+Added: Amounts reclassified from AOCI 2,255 (a)
+Added: Net current-period OCI 2,255
+Added: 2,655 ( 3,988 )
+Added: Balance, March 31, 2021 $ ( 78,575 ) $ ( 143,724 ) $ ( 2,194 ) $ ( 224,493 )
+Added: Attributable to noncontrolling interest:
+Added: Balance, December 31, 2020 $ — $ 365 $ — $ 365
+Added: OCI before reclassification — 1 — 1
+Added: Net current-period OCI — 1 — 1
+Added: Balance, March 31, 2021 $ — $ 366 $ — $ 366
+Added: Post-retirement benefit plans Currency translation adjustment Derivatives Total
+Added: Attributable to Matthews:
+Added: Balance, December 31, 2019 $ ( 70,016 ) $ ( 145,103 ) $ ( 113 ) $ ( 215,232 )
+Added: OCI before reclassification — ( 30,648 ) ( 4,305 ) ( 34,953 )
+Added: Amounts reclassified from AOCI 1,827 (a)
+Added: — ( 137 ) (b)
+Added: Net current-period OCI 1,827 ( 30,648 ) ( 4,442 ) ( 33,263 )
+Added: Balance, March 31, 2020 $ ( 68,189 ) $ ( 175,751 ) $ ( 4,555 ) $ ( 248,495 )
+Added: Attributable to noncontrolling interest:
+Added: Balance, December 31, 2019 $ — $ 370 $ — $ 370
+Added: OCI before reclassification — 1
+Added: Net current-period OCI — 1 — 1
+Added: Balance, March 31, 2020 $ — $ 371
+Added: (a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 10).
+Added: (b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 7).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
(Dollar amounts in thousands, except per share data)
−Removed: Accumulated Other Comprehensive Income
−Removed: The changes in AOCI by component, net of tax, for the three-month periods ended December 31, 2020 and 2019 were as follows:
+Added: Accumulated Other Comprehensive Income (continued)
+Added: The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2021 and 2020 were as follows:
Post-retirement benefit plans Currency translation adjustment Derivatives Total
4 unchanged sentences
Net current-period OCI 4,379
−Removed: Balance, December 31, 2020 $ ( 80,830 ) $ ( 134,826 ) $ ( 4,849 ) $ ( 220,505 )
+Added: 8,157 3,690 16,226
+Added: Balance, March 31, 2021 $ ( 78,575 ) $ ( 143,724 ) $ ( 2,194 ) $ ( 224,493 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — ( 2 ) — ( 2 )
−Removed: Balance, December 31, 2020 $ — $ 365 $ — $ 365
+Added: Balance, March 31, 2021 $ — $ 366 $ — $ 366
Post-retirement benefit plans Currency translation adjustment Derivatives Total
5 unchanged sentences
Net current-period OCI 3,554 ( 19,537 ) ( 4,151 ) ( 20,134 )
−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 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — ( 4 ) — ( 4 )
−Removed: Balance, December 31, 2019 $ — $ 370
+Added: Balance, March 31, 2020 $ — $ 371
(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 10).
3 unchanged sentences
Accumulated Other Comprehensive Income (continued)
−Removed: Reclassifications out of AOCI for the three-month periods ended December 31, 2020 and 2019 were as follows:
+Added: Reclassifications out of AOCI for the three and six-month periods ended March 31, 2021 and 2020 were as follows:
Amount reclassified from AOCI
−Removed: Details about AOCI Components Three Months Ended
−Removed: December 31, 2020 Three Months Ended
−Removed: December 31, 2019 Affected line item in the Statement of income
+Added: Details about AOCI Components Three Months Ended March 31, 2021 Six Months Ended March 31, 2021 Affected line item in the Statement of income
Postretirement benefit plans
10 unchanged sentences
$ ( 567 ) $ ( 1,249 ) Net income
+Added: Amount reclassified from AOCI
+Added: Details about AOCI Components Three Months Ended March 31, 2020 Six Months Ended
+Added: March 31, 2020 Affected line item in the Statement of income
+Added: Postretirement benefit plans
+Added: Prior service credit (a)
+Added: Actuarial losses (a)
+Added: ( 2,386 ) ( 4,773 )
+Added: ( 2,316 ) ( 4,633 ) Income before income tax (b)
+Added: 1,079 Income taxes
+Added: $ ( 3,554 ) Net income
+Added: Interest rate swap contracts $ 182
+Added: $ 546 Interest expense
+Added: 182 546 Income before income tax (b)
+Added: ( 134 ) Income taxes
+Added: $ 137 $ 412 Net income
(a) Prior service cost amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses.
2 unchanged sentences
(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
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 three months ended December 31, 2020 were an expense of $ 3,980 , compared to a benefit of $ 5,397 for the first three months of fiscal 2020.
−Removed: 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.
−Removed: 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.
−Removed: The Company’s fiscal 2021 three-month effective tax rate varied from the U.S.
−Removed: statutory tax rate of 21.0 % primarily due to discrete tax expenses recognized in the quarter.
−Removed: The Company’s fiscal 2020 three-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, and discrete tax benefits recognized in the quarter.
−Removed: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 10,771 and $ 10,483 on December 31, 2020 and September 30, 2020, respectively, of which $ 7,557 and $ 7,066 would impact the annual effective rate at December 31, 2020 and September 30, 2020, respectively.
+Added: The Company's consolidated income taxes for the six months ended March 31, 2021 were an expense of $ 4,952 , compared to a benefit of $ 16,463 for the first six months of fiscal 2020.
+Added: The difference between the Company’s consolidated income taxes for the first six months of fiscal 2021 versus the same period for fiscal 2020 primarily resulted from fiscal 2021 having consolidated pre-tax income while fiscal 2020 had a pre-tax loss.
+Added: Additionally, fiscal 2021 included discrete tax expenses related to foreign operating losses, discrete tax benefits related to expirations of uncertain tax liabilities, a net operating loss (“NOL”) carryback to tax years where the U.S.
+Added: federal statutory rate was 35 %, and additional foreign tax credits.
+Added: Fiscal 2020 included discrete tax benefits resulting from the closure of several tax audits.
+Added: The Company’s fiscal 2021 six-month effective tax rate varied from the U.S.
+Added: statutory tax rate of 21.0 % primarily due to discrete tax expenses related to foreign operating losses, discrete tax benefits related to expirations of uncertain tax liabilities, a NOL carryback to tax years where the U.S.
+Added: federal statutory rate was 35 %, and additional foreign tax credits.
+Added: Additionally, state taxes, foreign statutory rate differentials, and tax credits all affected the fiscal 2021 effective tax rate.
+Added: The Company’s fiscal 2020 six-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, and discrete tax benefits recognized in fiscal 2020.
+Added: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 10,351 and $ 10,483 on March 31, 2021 and September 30, 2020, respectively, of which $ 7,137 and $ 7,066 would impact the annual effective rate at March 31, 2021 and September 30, 2020, respectively.
It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 7,606 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 $ 2,442 and $ 2,172 at December 31, 2020 and September 30, 2020, respectively.
+Added: Total penalties and interest accrued were $ 2,146 and $ 2,172 at March 31, 2021 and September 30, 2020, respectively.
These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Income Taxes (continued)
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 December 31, 2020, the tax years that remain subject to examination by major jurisdiction generally are:
+Added: As of March 31, 2021, the tax years that remain subject to examination by major jurisdiction generally are:
United States – Federal 2017 and forward
14 unchanged sentences
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.
−Removed: This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business.
+Added: This presentation is
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
+Added: Segment Information (continued)
+Added: consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business.
For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.
4 unchanged sentences
Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Segment Information (continued)
The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income.
Three Months Ended
+Added: March 31, Six Months Ended
+Added: 2021 2020 2021 2020
SGK Brand Solutions $ 171,024 $ 172,855 $ 339,164 $ 347,735
8 unchanged sentences
Total Adjusted EBITDA $ 60,940 $ 49,397 $ 115,703 $ 89,627
−Removed: Acquisition costs (1)**
+Added: Acquisition related items (1)**
702 ( 742 ) 360 ( 2,221 )
5 unchanged sentences
Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (4)
+Added: ( 1,572 ) ( 663 ) ( 2,696 ) ( 663 )
+Added: Goodwill write-down (5)
+Added: — ( 90,408 ) — ( 90,408 )
Joint Venture depreciation, amortization, interest expense and other charges (6)
+Added: — ( 1,462 ) — ( 2,259 )
Stock-based compensation ( 4,001 ) ( 2,508 ) ( 7,247 ) ( 4,539 )
4 unchanged sentences
Interest expense ( 7,233 ) ( 9,613 ) ( 14,961 ) ( 18,853 )
−Removed: Net (loss) income attributable to noncontrolling interests ( 234 ) 160
+Added: Net income (loss) attributable to noncontrolling interests 163 ( 231 ) ( 71 ) ( 71 )
Income (loss) before income taxes 6,124 ( 97,661 ) 8,112 ( 113,364 )
Income tax (provision) benefit ( 972 ) 11,066 ( 4,952 ) 16,463
−Removed: Net loss $ ( 1,992 ) $ ( 10,306 )
+Added: Net income (loss) $ 5,152 $ ( 86,595 ) $ 3,160 $ ( 96,901 )
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Segment Information (continued)
−Removed: (1) Includes certain non-recurring costs associated with recent acquisition activities.
+Added: (1) Includes certain non-recurring items associated with recent acquisition activities.
(2) Represents costs associated with global ERP system integration efforts.
2 unchanged sentences
This amount does not include the impact of any lost sales or underutilization due to COVID-19.
+Added: (5) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment.
(6) 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.
3 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 $ 19,147 and $ 21,656 for the SGK Brand Solutions segment, $ 5,469 and $ 4,636 for the Memorialization segment, $ 1,441 and $ 1,442 for the Industrial Technologies segment, and $ 1,294 and $ 1,199 for Corporate and Non-Operating, for the three months ended December 31, 2020 and 2019, respectively.
−Removed: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 7,355 and $ 3,446 for the SGK Brand Solutions segment, $ 1,130 and $ 328 for the Memorialization segment, and $ 2,707 and $ 9,090 for Corporate and Non-Operating, for the three months ended December 31, 2020 and 2019, respectively.
+Added: * Depreciation and amortization was $ 26,740 and $ 21,785 for the SGK Brand Solutions segment, $ 5,709 and $ 4,839 for the Memorialization segment, $ 1,401 and $ 1,428 for the Industrial Technologies segment, and $ 1,329 and $ 1,265 for Corporate and Non-Operating, for the three months ended March 31, 2021 and 2020, respectively.
+Added: Depreciation and amortization was $ 45,887 and $ 43,441 for the SGK Brand Solutions segment, $ 11,178 and $ 9,475 for the Memorialization segment, $ 2,842 and $ 2,870 for the Industrial Technologies segment, and $ 2,623 and $ 2,464 for Corporate and Non-Operating, for the six months ended March 31, 2021 and 2020, respectively.
+Added: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 2,991 and $ 3,818 for the SGK Brand Solutions segment, income of $ 335 and charges of $ 730 for the Memorialization segment, and charges of $ 2,437 and $ 5,813 for Corporate and Non-Operating, for the three months ended March 31, 2021 and 2020, respectively.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 268 for the Industrial Technologies segment, for the three months ended March 31, 2020.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 10,346 and $ 7,264 for the SGK Brand Solutions segment, $ 795 and $ 1,057 for the Memorialization segment, and $ 5,144 and $ 14,904 for Corporate and Non-Operating, for the six months ended March 31, 2021 and 2020, respectively.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 268 for the Industrial Technologies segment, for the six months ended March 31, 2020.
+Added: In January 2021, the Company acquired a memorialization business that produces and distributes cemetery products for a purchase price of $ 13,100 , subject to working capital adjustments.
+Added: The preliminary purchase price allocation is not finalized as of March 31, 2021 and is subject to changes as the Company obtains additional information related to fixed assets and other assets, and liabilities.
Goodwill and Other Intangible Assets
2 unchanged sentences
Net goodwill at September 30, 2020 $ 311,737 $ 361,682 $ 91,969 $ 765,388
+Added: Additions during period — 4,796 — 4,796
Translation and other adjustments 6,526 372 741 7,639
−Removed: Net goodwill at December 31, 2020 $ 322,778 $ 362,990 $ 92,673 $ 778,441
−Removed: The net goodwill balances at December 31, 2020 and September 30, 2020 included $ 178,732 of accumulated impairment losses.
−Removed: Accumulated impairment losses at December 31, 2020 and September 30, 2020 were $ 173,732 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.
−Removed: 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.
−Removed: 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 $ 90,408 goodwill write-down during the second quarter of fiscal 2020.
−Removed: 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.
−Removed: 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.
+Added: Net goodwill at March 31, 2021 $ 318,263 $ 366,850 $ 92,710 $ 777,823
+Added: The net goodwill balances at March 31, 2021 and September 30, 2020 included $ 178,732 of accumulated impairment losses.
+Added: Accumulated impairment losses at March 31, 2021 and September 30, 2020 were $ 173,732 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Goodwill and Other Intangible Assets (continued)
−Removed: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of December 31, 2020 and September 30, 2020, respectively.
+Added: The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2021 (January 1, 2021) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, therefore no impairment charges were necessary.
+Added: The estimated fair value of the Company's Graphics Imaging reporting unit, within the SGK Brand Solutions segment, exceeded the carrying value (expressed as a percentage of carrying value) by approximately 5%.
+Added: 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, goodwill write-downs may be necessary in future periods.
+Added: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2021 and September 30, 2020, respectively.
Amount Accumulated
Amortization Net
−Removed: December 31, 2020:
+Added: March 31, 2021:
Indefinite-lived trade names $ 30,540 $ — $ 30,540
9 unchanged sentences
$ 579,357 $ ( 245,859 ) $ 333,498
−Removed: The net change in intangible assets during the three months ended December 31, 2020 included the impact of foreign currency fluctuations during the period and additional amortization.
−Removed: Amortization expense on intangible assets was $ 15,221 and $ 17,942 for the three-month periods ended December 31, 2020 and 2019, respectively.
+Added: The net change in intangible assets during the six months ended March 31, 2021 included the impact of foreign currency fluctuations during the period, additional amortization and additions related to a memorialization acquisition.
+Added: During the second quarter of fiscal 2021, the Company reassessed the useful lives for certain of its customer relationships.
+Added: As a result of this reassessment, the Company reduced the remaining useful lives for these customer relationships to reflect their estimated remaining duration, utilizing actual historical customer attrition rates.
+Added: Amortization expense on intangible assets was $ 22,930 and $ 17,872 for the three-month periods ended March 31, 2021 and 2020, respectively.
+Added: For the six month period ended March 31, 2021 and 2020, amortization expense was $ 38,151 and $ 35,814 , respectively.
Amortization expense is estimated to be $ 45,840 for the remainder of fiscal 2021, $ 56,923 in 2022, $ 40,484 in 2023, $ 35,062 in 2024 and $ 19,737 in 2025.
−Removed: Subsequent Events
−Removed: In January 2021, subsequent to the date of the balance sheet, the Company received $ 15,497 for the full redemption of its senior preferred shares investment in a memorialization business.
−Removed: 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 $ 13,100 , subject to customary post-closing adjustments.
+Added: The accelerated amortization related to the fiscal 2019 reduction in useful lives for certain discontinued trade names is scheduled to continue through the first quarter of fiscal 2022.
+Added: Subsequent Event
+Added: On April 20, 2021, subsequent to the date of the balance sheet, the Compensation Committee of the Company's Board of Directors approved a resolution to freeze all future benefit accruals for all participants in the Company’s supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan, effective April 30, 2021.
+Added: Consequently, participants in these plans will no longer earn additional benefits after April 30, 2021.
Management's Discussion and Analysis of Financial Condition and Results of Operations
29 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-month periods ended December 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 six-month periods ended March 31, 2021 and 2020.
Refer to Note 13, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.
Three Months Ended
+Added: March 31, Six Months Ended
+Added: 2021 2020 2021 2020
(Dollar amounts in thousands)
12 unchanged sentences
See the "Non-GAAP Financial Measures" section below.
−Removed: Sales for the three months ended December 31, 2020 were $386.7 million, compared to $364.9 million for the three months ended December 31, 2019, representing an increase of $21.7 million.
−Removed: The increase in fiscal 2021 sales reflected higher sales in the Memorialization segment, partially offset by lower sales in the SGK Brand Solutions and Industrial Technologies segments.
−Removed: Changes in foreign currency rates were estimated to have a favorable impact of $4.8 million on fiscal 2021 consolidated sales compared to a year ago.
−Removed: Fiscal 2021 sales were impacted by the global outbreak of coronavirus disease 2019 ("COVID-19"), which has caused some commercial impacts in certain of the Company's segments and geographic locations.
−Removed: These impacts have included customer project delays, temporary business disruptions, and in some cases, higher sales volumes for certain products and services such as memorialization products.
+Added: Sales for the six months ended March 31, 2021 were $803.8 million, compared to $739.7 million for the six months ended March 31, 2020, representing an increase of $64.1 million.
+Added: The increase in fiscal 2021 sales primarily reflected higher sales in the Memorialization segment partially offset by lower sales in the SGK Brand Solutions segment.
+Added: Changes in foreign currency exchange rates were estimated to have a favorable impact of $14.1 million on fiscal 2021 consolidated sales compared to a year ago.
+Added: Fiscal 2021 sales continued to be impacted by the global outbreak of coronavirus disease 2019 ("COVID-19"), which has caused some commercial impacts in certain of the Company's segments and geographic locations.
+Added: These impacts have included higher sales volumes for memorialization products and services, but have also included temporary business disruptions and customer project delays for certain of the Company's businesses.
While substantially all of the Company's operations have remained open during the COVID-19 pandemic, management expects COVID-19 to continue to impact its sales and results of operations in the short-term until the pandemic subsides (see "Forward Looking Information" below).
−Removed: In the SGK Brand Solutions segment, sales for the first three months of fiscal 2021 were $168.1 million, compared to $174.9 million for the first three months of fiscal 2020.
−Removed: The decrease primarily resulted from lower merchandising solutions sales, which were impacted by COVID-19, and reduced sales of cylinders, surfaces and engineered products in Europe.
−Removed: These decreases were partially offset by a modest increase in brand sales in the U.S.
+Added: In the SGK Brand Solutions segment, sales for the first six months of fiscal 2021 were $339.2 million, compared to $347.7 million for the first six months of fiscal 2020.
+Added: The decrease primarily resulted from lower retail-based sales (principally merchandising solutions and private label brand market sales), and reduced sales of cylinders and surfaces products, all of which continued to be unfavorably impacted by COVID-19.
+Added: These decreases were partially offset by higher sales of purpose-built engineered products (primarily in support of the automobile and energy storage industries).
Changes in foreign currency exchange rates had a favorable impact of $10.4 million on the segment's sales compared to the prior year.
−Removed: Memorialization segment sales for the first three months of fiscal 2021 were $183.3 million, compared to $154.4 million for the first three months of fiscal 2020.
−Removed: The increase in sales predominantly resulted from increased unit sales of caskets due to COVID-19, as well as improved price realization and higher sales of cremation and incineration equipment.
−Removed: Changes in foreign currency exchange rates had a favorable impact of $843,000 on the segment's sales compared to the prior year.
−Removed: Industrial Technologies segment sales were $35.2 million for the first three months of fiscal 2021, compared to $35.7 million for the first three months of fiscal 2020.
−Removed: The decrease primarily reflected lower sales of warehouse automation systems.
−Removed: Orders for warehouse automation solutions remained strong, but access to job sites to complete these projects has been restricted due to COVID-19.
−Removed: Changes in foreign currency exchange rates had a favorable impact of $578,000 on the segment's sales compared to the prior year.
+Added: Memorialization segment sales for the first six months of fiscal 2021 were $388.7 million, compared to $316.2 million for the first six months of fiscal 2020.
+Added: The increase in sales predominantly resulted from increased unit sales of caskets due to COVID-19.
+Added: The segment also reported higher sales of bronze and granite memorial products, mausoleums, and cremation equipment.
+Added: The increase in sales also reflected improved price realization and benefits from a recently completed acquisition of a small cemetery products business.
+Added: Changes in foreign currency exchange rates had a favorable impact of $2.3 million on the segment's sales compared to the prior year.
+Added: Industrial Technologies segment sales were $75.9 million for the first six months of fiscal 2021, compared to $75.8 million for the first six months of fiscal 2020.
+Added: The sales increase primarily reflected a $1.4 million favorable impact from
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.