What changed in this filing

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Item 1. Business

2021-11-19 compared with 2020-11-20 · 84 added, 29 removed, 108 unchanged (51% of the section changed)

BUSINESS, (continued)

Cremation systems include flame-based systems for cremation of humans and pets, as well as equipment for processing the cremated remains and other related equipment (ventilated workstations, loading systems, tables, cooler racks, vacuums).

The principal markets for these products are funeral homes, cemeteries, crematories, pet crematories, animal disposers and veterinarians.

These products primarily are marketed directly by segment personnel.

Human crematory management/operations represent the actual operation and management of client-owned crematories.

Currently the segment provides these services primarily to municipalities and private operators in the United States and Europe.

Cremation service and supplies consist of operator training, preventative maintenance and on-demand service work performed on various makes and models of equipment.

This work can be as simple as replacing defective bulbs or as complex as complete reconstruction and upgrading or retrofitting on site.

Supplies are consumable items and replacement parts associated with normal crematory operations.

Waste incineration systems encompass both batch load and continuous feed, static, stepped-hearth and rotary systems for incineration of all waste types, as well as equipment for in-loading waste, out-loading ash and energy recovery.

The principal markets for these products are animal and medical waste disposal, oil and gas "work camp" wastes, industrial wastes and bio-mass generators, as well as destruction of low-volume, high-value waste types such as contraband and pharmaceutical products.

Environmental and energy systems include emissions filtration units, waste heat recovery equipment, waste gas treatment products, as well as energy recovery.

The segment also provides commissioning, training and user support for customers of incineration systems.

The principal markets are municipalities or public/state agencies, the cremation industry and other industries that utilize incinerators for waste reduction and energy production.

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

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These are generally available in adequate supply from numerous suppliers.

Competition from other manufacturers of memorial products is on the basis of reputation, product quality, delivery, price, and design availability.

Competition from other manufacturers of memorial products is based on reputation, product quality, delivery, price, and design availability.

The Company believes that its superior quality, broad product lines, innovative designs, delivery capability, customer responsiveness, experienced personnel and consumer-oriented merchandising systems are competitive advantages in its markets.

Competition in the mausoleum construction industry includes various construction companies throughout North America and is on the basis of design, quality and price.

Competition in the mausoleum construction industry includes various construction companies throughout North America and is based on design, quality and price.

Competitors in the architectural market are numerous and include companies that manufacture cast and painted signs, plastic materials, sand-blasted wood and other fabricated products.

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Approximately 85% of the segment's casket products are currently sold through Company-owned distribution centers.

The casket business is highly competitive and the Company competes with other manufacturers on the basis of product quality, price, service, design availability and breadth of product line.

The casket business is highly competitive and the Company competes with other manufacturers based on product quality, price, service, design availability and breadth of product line.

The Memorialization segment provides a line of casket products that it believes is as comprehensive as any of its major competitors.

There are a large number of casket industry participants operating in North America and also a few foreign casket manufacturers, primarily from China, participating in the North American market.

The Company competes with several manufacturers in the cremation and accessory equipment market principally on the basis of product design, quality and price.

There are a large number of casket industry participants operating in North America, and a few foreign casket manufacturers, primarily from China, participating in the North American market.

The Company competes with several manufacturers in the cremation and accessory equipment market principally based on product design, quality and price.

The Memorialization segment and its three largest global competitors account for a substantial portion of the United States and European cremation equipment market.

BUSINESS, (continued)

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

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

BUSINESS, (continued)

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

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

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

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

The Company owns a minority interest in distributors in Asia, Australia and Europe.

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The Company holds a number of trademarks and in excess of 100 domestic and foreign patents for its products and related technologies.

In addition, the Company maintains numerous trade secrets that further comprise its portfolio of intellectual property assets.

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

BUSINESS, (continued)

HUMAN CAPITAL RESOURCES:

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

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

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

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

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

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

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

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

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

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

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

Introduction:

The Company’s culture of Inspired Possibilities empowers global teams to think creatively to inspire change that favorably impacts outcomes for the Company's customers, clients, and one another.

Matthews’ human resource strategies align with the business strategies to enable and optimize internal talent to achieve business and financial performance.

At every stage of the employee lifecycle, the Company’s people programs are rooted in a set of organizational competencies and capabilities, aligned with the Company's core values, that collectively build talent, enhance employee engagement, sustain retention, inspire innovation and drive results.

Workforce Composition:

As of October 31, 2021, the Company and its majority-owned subsidiaries employed approximately 11,000 people globally in more than 250 locations, 26 countries and 6 continents around the world.

Its diverse team of talented employees possess a vast array of skills including creative design, photography, engineering, manufacturing, research and development, plant operations, production, logistics and corporate functional services, including legal, information technology, human resources and finance.

Many of Matthews’ employees have highly specialized skills and subject-matter expertise in their respective disciplines, enabling the Company to deliver industry leading products and services to its customers throughout the world.

Diversity, Equity and Inclusion:

Matthews views diversity, equity and inclusion (“DE&I”) as a priority to be valued and promoted in every aspect of its business.

The Company understands and firmly believes in the value that diverse experiences, perspectives, and ideas bring to the workforce and offer to clients.

Matthews knows its employees deserve equal opportunities regardless of race, gender, gender expression, age, disability, religion, sexual orientation and more.

As an organization with a history that spans more than 170 years, Matthews has always believed that mutual respect, valuing the worth of all people, doing what's right and celebrating diversity is essential to how the Company operates and the way it does business.

During 2020, the Company formalized its commitment to DE&I by charting a course for building an even stronger, more diverse and inclusive culture.

Matthews’ DE&I strategy focuses on four pillars:

Infrastructure, Talent Acquisition, Employee Engagement and Community Engagement.

A global council representative of a diverse workforce was established to help shape plans and program priorities across these pillars and to champion the work to build a more inclusive culture.

Matthews is a unique organization, diverse in culture, talent and geography.

More recently, in 2021, the Company hired a full time DE&I leader who is actively focused on driving progress in this area.

The Company stands committed to a culture reflecting the people, clients, customers, and communities it serves.

Talent Acquisition and Total Rewards:

To continue to grow and compete in a highly competitive labor market, Matthews works hard to attract and select top talent through a compelling employment value proposition.

The Company’s employment brand highlights its values, commitment to people culture, diversity, equity and inclusion, employee development and the efforts to ensure cultural alignment, and the selection process includes key behavioral questions that help select the right people for the right roles.

Matthews understands the highly competitive market for talent and believes that to attract and retain top talent, it must offer competitive pay and benefit programs.

The Company evaluates roles to ensure pay is at market rate, and offers annual incentive pay and a competitive benefit package.

As a global company, adjustments are made for global and regional market demands.

Talent Development/Management:

From onboarding to leadership development, Matthews believes investing in its people leads to greater success.

The Company’s onboarding program reinforces its values and culture, supports its managers in creating a positive employee experience during the first 90 days and builds early commitment with all new hires.

BUSINESS, (continued)

Matthews knows that when employees have opportunities to learn and grow, see how their goals and objectives lead to something greater and understand their part in the organization’s success, it helps build a place where people want to stay.

Matthews’ competency-based learning center helps employees select learning programs to continue their growth, and the Company facilitates both formal and informal mentoring that reinforces and supports its leaders during key developmental periods and beyond.

The Company’s future success depends upon tomorrow’s leaders.

Matthews has implemented a robust talent review process that identifies critical talent and serves as the basis for succession planning.

Each year, at the conclusion of this review, the executive team selects a cohort of critical talent to participate in a comprehensive leadership program designed to prepare leaders for enterprise roles.

The Company believes this investment, which includes classroom learning, assessments, coaching/mentoring and project application, both prepares and strengthens the organization for the future, while deepening the commitment of its top talent.

Performance Management:

Connecting employees to the strategy ensures individual effort to a larger goal and strengthens commitment to the organization.

The Company supports an annual leadership strategy cascade where each segment, division, group and team identify and align goals and objectives which serve as the basis for individual performance objectives, keeping employees firmly connected to the work and the Company’s collective success.

This process is rooted in ongoing coaching and feedback, and measures not just what was accomplished, but how it was accomplished because Matthews believes staying true to its values and key behaviors serves clients better, strengthens culture and keeps employees engaged.

Change Management:

Matthews is a constantly evolving multi-national company, leveraging new ways of working to improve its quality, service and delivery systems to better help customers and clients succeed.

Building change capability to support employees through changes accelerates new ways of working, minimizes productivity loss, and accelerates improvement measures.

Health and Safety:

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

Safety efforts are led by the global health and safety team and supported by individuals at the local site level.

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

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

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

BUSINESS, (continued)

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

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

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

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

In response to the coronavirus disease 2019 ("COVID-19") pandemic, Matthews has taken actions aligned with the World Health Organization and the Centers for Disease Control and Prevention and local requirements to protect its workforce so employees can more safely and effectively perform their work.

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

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

1 unchanged sentence

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

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

Backlogs for Industrial Technologies segment sales generally vary in a range of up to four weeks for standard products, and are currently in the range of ten to twelve months for custom systems.

The Company's current backlog is expected to be substantially filled in fiscal 2022, absent any disruptions related to COVID-19.

BUSINESS, (continued)

REGULATORY MATTERS:

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laws and regulations.

RISK FACTORS, (continued)

Changes in Foreign Currency Exchange Rates .

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If suppliers increase the price of critical raw materials, alternative sources of supply, or alternative materials, may not exist or be readily available.

In addition, disruptions in the global supply chain may cause prices for raw materials to increase.

See "Disruptions to the global supply chain."

RISK FACTORS, (continued)

The Company has standard selling price structures (i.e., list prices) in certain of its segments, which are reviewed for adjustment generally on an annual basis.

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

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

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

Disruptions to the global supply chain.

The Company purchases components and materials to manufacture its products from a large number of suppliers, some of which may be critical to operations.

The Company’s product offerings are impacted by such suppliers' lead times, volume constraints and increasing costs.

The Company has experienced and may continue to experience extended lead times and product unavailability due to manufacturing disruptions or closures as well as delays and unanticipated costs associated with the sourcing of materials.

Matthews’ supply chain operations span several geographies globally and are heavily dependent upon third party logistics and transportation services to deliver the Company’s products to customers.

Extended lead times and shortages could impair the Company’s ability to meet its customer requirements, require the Company to pay higher prices or incur expedite fees or cause its customers to delay or forgo projects, which would harm Matthews’ business and negatively impact the Company’s gross margin and results of operations.

Pandemics or similar outbreaks.

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

1 unchanged sentence

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

See also "Disruptions to the global supply chain."

Due to the uncertainty relating to a pandemic or similar outbreak, the Company, its customers or its suppliers may be required, or believe that it is advantageous, to take precautionary measures intended to minimize the risk of a virus or disease spreading to employees, customers, and the communities in which they operate, and these measures could negatively impact the Company’s business.

Further, if the scope and severity of an outbreak, such as COVID-19, worsens and the Company’s contingency plans prove ineffective, its global operations could potentially experience disruptions, such as temporary closure of facilities or delays or suspensions in product offerings and services, which may materially and adversely affect the Company’s business, financial condition and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business