3 unchanged sentences
(Dollar amounts in thousands)
−Removed: March 31, 2022 September 30, 2021
+Added: June 30, 2022 September 30, 2021
Current assets:
45 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
6 unchanged sentences
Operating profit 10,963 9,272 29,108 34,617
−Removed: Investment (loss) income ( 327 ) 969 676 2,046
+Added: Investment income 59 959 735 3,005
Interest expense ( 6,659 ) ( 6,748 ) ( 19,426 ) ( 21,709 )
2 unchanged sentences
Income tax (provision) benefit ( 1,040 ) 2,325 2,311 ( 2,627 )
−Removed: Net (loss) income ( 1,936 ) 5,152 ( 21,746 ) 3,160
+Added: Net income (loss) 2,875 3,366 ( 18,871 ) 6,526
Net loss (income) attributable to noncontrolling interests 18 ( 11 ) 56 60
−Removed: Net (loss) income attributable to Matthews shareholders $ ( 1,905 ) $ 4,989 $ ( 21,708 ) $ 3,231
−Removed: (Loss) earnings per share attributable to Matthews shareholders:
+Added: Net income (loss) attributable to Matthews shareholders $ 2,893 $ 3,355 $ ( 18,815 ) $ 6,586
+Added: Earnings (loss) per share attributable to Matthews shareholders:
Basic $ 0.09 $ 0.11 $ ( 0.60 ) $ 0.21
4 unchanged sentences
(Dollar amounts in thousands)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
Matthews Noncontrolling Interest Total
2022 2021 2022 2021 2022 2021
−Removed: Net (loss) income:
+Added: Net income (loss):
$ 2,893 $ 3,355 $ ( 18 ) $ 11 $ 2,875 $ 3,366
2 unchanged sentences
Pension plans and other postretirement benefits 17 3,328 — — 17 3,328
−Removed: Unrecognized gain on derivatives:
+Added: Unrecognized gain (loss) on derivatives:
Net change from periodic revaluation 1,223 ( 654 ) — — 1,223 ( 654 )
Net amount reclassified to earnings 353 596 — — 353 596
−Removed: Net change in unrecognized gain on derivatives 4,092 2,655 — — 4,092 2,655
+Added: Net change in unrecognized gain (loss) on derivatives 1,576 ( 58 ) — — 1,576 ( 58 )
OCI, net of tax ( 17,700 ) 6,174 15 — ( 17,685 ) 6,174
Comprehensive (loss) income $ ( 14,807 ) $ 9,529 $ ( 3 ) $ 11 $ ( 14,810 ) $ 9,540
−Removed: Six Months Ended March 31,
+Added: Nine Months Ended June 30,
Matthews Noncontrolling Interest Total
10 unchanged sentences
OCI, net of tax 13,809 22,400 23 ( 2 ) 13,832 22,398
−Removed: Comprehensive income (loss) $ 9,801 $ 19,457 $ ( 30 ) $ ( 73 ) $ 9,771 $ 19,384
+Added: Comprehensive (loss) income $ ( 5,006 ) $ 28,986 $ ( 33 ) $ ( 62 ) $ ( 5,039 ) $ 28,924
The accompanying notes are an integral part of these consolidated financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
−Removed: for the three and six months ended March 31, 2022 and 2021 (Unaudited)
+Added: for the three and nine months ended June 30, 2022 and 2021 (Unaudited)
(Dollar amounts in thousands, except per share data)
37 unchanged sentences
March 31, 2022 $ 36,334 $ 151,891 $ 798,548 $ ( 161,230 ) $ ( 196,353 ) $ ( 175 ) $ 629,015
+Added: Net income (loss) — — 2,893 — — ( 18 ) 2,875
+Added: Minimum pension liability — — — 17 — — 17
+Added: Translation adjustment — — — ( 19,293 ) — 15 ( 19,278 )
+Added: Fair value of derivatives — — — 1,576 — — 1,576
+Added: Total comprehensive loss ( 14,810 )
+Added: Stock-based compensation — 5,197 — — — — 5,197
+Added: Purchase of 704,531 shares of treasury stock
+Added: — — — — ( 21,848 ) — ( 21,848 )
+Added: Issuance of 3,830 shares of treasury stock
+Added: — ( 146 ) — — 146 — —
+Added: Dividends, $ 0.22 per share
+Added: — — ( 6,860 ) — — — ( 6,860 )
+Added: Divestiture — — — — — ( 91 ) ( 91 )
+Added: June 30, 2022 $ 36,334 $ 156,942 $ 794,581 $ ( 178,930 ) $ ( 218,055 ) $ ( 269 ) $ 590,603
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued
−Removed: for the three and six months ended March 31, 2022 and 2021 (Unaudited)
+Added: for the three and nine months ended June 30, 2022 and 2021 (Unaudited)
(Dollar amounts in thousands, except per share data)
35 unchanged sentences
March 31, 2021 $ 36,334 $ 143,324 $ 848,254 $ ( 224,493 ) $ ( 184,373 ) $ 553 $ 619,599
+Added: Net income — — 3,355 — — 11 3,366
+Added: Minimum pension liability — — — 3,328 — — 3,328
+Added: Translation adjustment — — — 2,904 — — 2,904
+Added: Fair value of derivatives — — — ( 58 ) — — ( 58 )
+Added: Total comprehensive income 9,540
+Added: Stock-based compensation — 5,713 — — — — 5,713
+Added: Purchase of 45,584 shares of treasury stock
+Added: — — — — ( 1,663 ) — ( 1,663 )
+Added: Issuance of 2,045 shares of treasury stock
+Added: — ( 78 ) — — 78 — —
+Added: Dividends, $ 0.215 per share
+Added: — — ( 6,877 ) — — — ( 6,877 )
+Added: June 30, 2021 $ 36,334 $ 148,959 $ 844,732 $ ( 218,319 ) $ ( 185,958 ) $ 564 $ 626,312
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
(Dollar amounts in thousands)
−Removed: Six Months Ended
+Added: Nine Months Ended
Cash flows from operating activities:
10 unchanged sentences
Decrease in other assets 14,923 2,632
−Removed: (Decrease) increase in other liabilities ( 41,971 ) 12,962
+Added: Decrease in other liabilities ( 44,837 ) ( 6,064 )
Other operating activities, net 9,394 1,407
5 unchanged sentences
Proceeds from sale of investments 3,127 15,000
−Removed: Investments and advances ( 130 ) —
+Added: Purchases of investments ( 2,198 ) —
+Added: Other investing activities 344 —
Net cash used in investing activities ( 38,929 ) ( 22,907 )
14 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
−Removed: March 31, 2022
+Added: June 30, 2022
(Dollar amounts in thousands, except per share data)
Nature of Operations
−Removed: Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of brand solutions, memorialization products and industrial technologies.
+Added: Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of memorialization products, industrial technologies and brand solutions.
The Company manages its businesses under three segments:
−Removed: SGK Brand Solutions, Memorialization and Industrial Technologies.
+Added: Memorialization, Industrial Technologies and SGK Brand Solutions.
Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment.
1 unchanged sentence
Prior periods were revised to reflect retrospective application of this segment realignment.
−Removed: Brand solutions consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries.
Industrial technologies includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.
+Added: Brand solutions consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
The Company has facilities in North America, Europe, Asia, Australia, and Central and South America.
4 unchanged sentences
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.
−Removed: Operating results for the six months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022.
+Added: Operating results for the nine months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022.
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, 2021.
3 unchanged sentences
All intercompany accounts and transactions have been eliminated.
+Added: The Company applies highly inflationary accounting for subsidiaries when the cumulative inflation rate for a three-year period meets or exceeds 100 percent.
+Added: Effective April 1, 2022, the Company applies highly inflationary accounting to its Turkish subsidiaries.
+Added: Under highly inflationary accounting, the financial statements of these subsidiaries are remeasured into the Company's reporting currency (U.S.
+Added: dollar) and exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than accumulated other comprehensive loss on the Consolidated Balance Sheets , until such time as the applicable economy is no longer considered highly inflationary.
+Added: As of June 30, 2022, the Company had net monetary assets related to its Turkish subsidiaries of $ 6,829 .
+Added: For the three and nine months ended June 30, 2022, exchange losses related to highly inflationary accounting totaled $ 1,245 and were included in the Consolidated Statements of Income within other income (deductions), net.
The preparation of financial statements in conformity with GAAP 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.
Actual results could differ from those estimates.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
Revenue Recognition
The Company delivers a variety of products and services through its business segments.
−Removed: The SGK Brand Solutions segment delivers brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
The Memorialization segment produces and delivers bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries.
The Industrial Technologies segment designs, manufactures, services and distributes high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Revenue Recognition (continued)
+Added: The SGK Brand Solutions segment delivers brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
−Removed: Disaggregated sales by segment and region for the three and six months ended March 31, 2022 and 2021 were as follows:
−Removed: SGK Brand Solutions Memorialization Industrial Technologies Consolidated
+Added: Disaggregated sales by segment and region for the three and nine months ended June 30, 2022 and 2021 were as follows:
+Added: Memorialization Industrial Technologies SGK Brand Solutions Consolidated
Three Months Ended
−Removed: March 31, Three Months Ended
−Removed: March 31, Three Months Ended
−Removed: March 31, Three Months Ended
+Added: June 30, Three Months Ended
+Added: June 30, Three Months Ended
+Added: June 30, Three Months Ended
2022 2021 2022 2021 2022 2021 2022 2021
5 unchanged sentences
Total Sales $ 203,158 $ 184,337 $ 78,443 $ 81,832 $ 140,118 $ 162,211 $ 421,719 $ 428,380
−Removed: SGK Brand Solutions Memorialization Industrial Technologies Consolidated
−Removed: Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31,
+Added: Memorialization Industrial Technologies SGK Brand Solutions Consolidated
+Added: Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30,
2022 2021 2022 2021 2022 2021 2022 2021
5 unchanged sentences
Total Sales $ 633,868 $ 573,068 $ 230,928 $ 200,538 $ 440,480 $ 458,585 $ 1,305,276 $ 1,232,191
−Removed: Revenue from products or services provided to customers over time accounted for approximately 9 % of revenue for both the three months ended March 31, 2022 and 2021, and 11 % and 8 % of revenue for the six months ended March 31, 2022 and 2021, respectively.
−Removed: As of March 31, 2022 and September 30, 2021, the Company had contract assets of $ 22,896 and $ 23,998 , respectively, that were recorded in other current assets within the Consolidated Balance Sheets.
−Removed: As of March 31, 2022 and September 30, 2021, the Company had contract liabilities of $ 12,701 and $ 19,752 , respectively, that were recorded in other current liabilities within the Consolidated Balance Sheets.
+Added: Revenue from products or services provided to customers over time accounted for approximately 13 % of revenue for both the three months ended June 30, 2022 and 2021, and 11 % and 10 % of revenue for the nine months ended June 30, 2022 and 2021, respectively.
+Added: As of June 30, 2022 and September 30, 2021, the Company had contract assets of $ 25,059 and $ 23,998 , respectively, that were recorded in other current assets within the Consolidated Balance Sheets.
+Added: As of June 30, 2022 and September 30, 2021, the Company had contract liabilities of $ 13,025 and $ 19,752 , respectively, that were recorded in other current liabilities within the Consolidated Balance Sheets.
+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: March 31, 2022 September 30, 2021
+Added: June 30, 2022 September 30, 2021
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
8 unchanged sentences
(1) Interest rate swaps and cross currency swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.
−Removed: The carrying values for other financial assets and liabilities approximated fair value at March 31, 2022 and September 30, 2021.
+Added: The carrying values for other financial assets and liabilities approximated fair value at June 30, 2022 and September 30, 2021.
Inventories consisted of the following:
−Removed: March 31, 2022 September 30, 2021
+Added: June 30, 2022 September 30, 2021
Raw materials $ 48,945 $ 37,673
3 unchanged sentences
Non-current investments consisted of the following:
−Removed: March 31, 2022 September 30, 2021
+Added: June 30, 2022 September 30, 2021
Equity and fixed income mutual funds $ — $ 6,936
6 unchanged sentences
Debt and Financing Arrangements
−Removed: Long-term debt at March 31, 2022 and September 30, 2021 consisted of the following:
−Removed: March 31, 2022 September 30, 2021
+Added: Long-term debt at June 30, 2022 and September 30, 2021 consisted of the following:
+Added: June 30, 2022 September 30, 2021
Revolving credit facilities $ 447,223 $ 350,597
8 unchanged sentences
A portion of the revolving credit facility (not to exceed $ 350,000 ) can be drawn in foreign currencies.
−Removed: Borrowings under the revolving credit facility bear interest at LIBOR plus a factor ranging from 0.75 % to 2.00 % ( 1.00 % at March 31, 2022) based on the Company's secured leverage ratio.
+Added: Borrowings under the revolving credit facility bear interest at LIBOR plus a factor ranging from 0.75 % to 2.00 % ( 1.00 % at June 30, 2022) 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.
1 unchanged sentence
The Company incurred debt issuance costs in connection with the domestic credit facility.
−Removed: Unamortized costs were $ 1,826 and $ 2,182 at March 31, 2022 and September 30, 2021, respectively.
+Added: Unamortized costs were $ 1,674 and $ 2,182 at June 30, 2022 and September 30, 2021, 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 March 31, 2022 and September 30, 2021 were $ 380,540 and $ 349,780 , respectively.
−Removed: The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at March 31, 2022 and 2021 was 1.89 % and 2.17 %, respectively.
+Added: dollar denominated borrowings on the revolving credit facility at June 30, 2022 and September 30, 2021 were $ 436,254 and $ 349,780 , respectively.
+Added: The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2022 and 2021 was 1.92 % and 1.94 %, 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 $ 1,935 and $ 2,204 at March 31, 2022 and September 30, 2021, respectively.
+Added: Unamortized costs were $ 1,800 and $ 2,204 at June 30, 2022 and September 30, 2021, respectively.
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.
6 unchanged sentences
Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers.
−Removed: Gross receivables sold and cash collections reinvested under the RPA program were $ 121,616 and $ 46,615 for the six months ended March 31, 2022, respectively.
+Added: Gross receivables sold and cash collections reinvested under the RPA program were $ 247,221 and $ 147,220 for the nine months ended June 30, 2022, respectively.
The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded.
−Removed: As of March 31, 2022, the amount sold to the Purchasers was $ 75,001 , which was derecognized from the Consolidated Balance Sheets.
−Removed: As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $ 29,288 as of March 31, 2022.
+Added: As of June 30, 2022, the amount sold to the Purchasers was $ 100,001 , which was derecognized from the Consolidated Balance Sheets.
+Added: As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $ 39,707 as of June 30, 2022.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
6 unchanged sentences
Outstanding borrowings under the Securitization Facility at September 30, 2021 totaled $ 95,990 .
−Removed: At March 31, 2021, the interest rate on borrowings under this facility was 0.86 %.
+Added: At June 30, 2021, the interest rate on borrowings under this facility was 0.85 %.
The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:
−Removed: March 31, 2022 September 30, 2021
+Added: June 30, 2022 September 30, 2021
Pay fixed swaps - notional amount $ 125,000 $ 250,000
6 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 gain net of unrealized losses of $ 5,318 ($ 4,015 after tax) at March 31, 2022 and an unrealized loss net of unrealized gains of $ 2,062 ($ 1,558 after tax) at September 30, 2021, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").
−Removed: Assuming market rates remain constant with the rates at March 31, 2022, a gain (net of tax) of approximately $ 839 included in AOCI is expected to be recognized in earnings over the next twelve months.
−Removed: At March 31, 2022 and September 30, 2021, the interest rate swap contracts were reflected on a gross-basis in the Consolidated Balance Sheets as follows:
−Removed: Derivatives March 31, 2022 September 30, 2021
+Added: The fair value of the interest rate swaps reflected an unrealized gain net of unrealized losses of $ 7,407 ($ 5,591 after tax) at June 30, 2022 and an unrealized loss net of unrealized gains of $ 2,062 ($ 1,558 after tax) at September 30, 2021, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").
+Added: Assuming market rates remain constant with the rates at June 30, 2022, a gain (net of tax) of approximately $ 1,638 included in AOCI is expected to be recognized in earnings over the next twelve months.
+Added: At June 30, 2022 and September 30, 2021, the interest rate swap contracts were reflected on a gross-basis in the Consolidated Balance Sheets as follows:
+Added: Derivatives June 30, 2022 September 30, 2021
Current assets:
10 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
9 unchanged sentences
(Effective Portion*)
−Removed: March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
+Added: June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Interest rate swaps $ 5,636 $ 1,787 Interest expense $ ( 1,513 ) $ ( 1,845 )
3 unchanged sentences
In the first quarter of fiscal 2022, the Company extended this facility to a current maturity of December 2022 and the Company intends to continue to extend this facility.
−Removed: Outstanding borrowings under the credit facility totaled € 7.8 million ($ 8,676 ) and € 0.7 million ($ 817 ) at March 31, 2022 and September 30, 2021, respectively.
−Removed: The weighted-average interest rate on outstanding borrowings under this facility was 2.25 % at March 31, 2022 and 2021.
−Removed: Other borrowings totaled $ 58,522 and $ 10,150 at March 31, 2022 and September 30, 2021, respectively.
−Removed: Other borrowings at March 31, 2022 included $ 37,789 of collateralized borrowings in connection with the RPA arrangement discussed above.
−Removed: The weighted-average interest rate on all other borrowings was 1.92 % and 2.18 % at March 31, 2022 and 2021, respectively.
+Added: Outstanding borrowings under the credit facility totaled € 10.5 million ($ 10,969 ) and € 0.7 million ($ 817 ) at June 30, 2022 and September 30, 2021, respectively.
+Added: The weighted-average interest rate on outstanding borrowings under this facility was 2.25 % at June 30, 2022 and 2021.
+Added: Other borrowings totaled $ 24,394 and $ 10,150 at June 30, 2022 and September 30, 2021, respectively.
+Added: Other borrowings at June 30, 2022 included $ 3,389 of collateralized borrowings in connection with the RPA arrangement discussed above.
+Added: The weighted-average interest rate on all other borrowings was 1.90 % and 2.19 % at June 30, 2022 and 2021, respectively.
The Company has a U.S.
−Removed: Dollar/Euro cross currency swap with a notional amount of $ 94,464 as of March 31, 2022, which has been designated as a net investment hedge of foreign operations.
+Added: Dollar/Euro cross currency swap with a notional amount of $ 94,464 as of June 30, 2022, which has been designated as a net investment hedge of foreign operations.
The swap contract matures in September 2028.
The Company assesses hedge effectiveness for this contract based on changes in fair value attributable to changes in spot prices.
−Removed: A gain of $ 2,893 (net of income taxes of $ 939 ) and a gain of $ 29 (net of income taxes of $ 10 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2022 and September 30, 2021, respectively.
−Removed: Income of $ 420 and $ 785 , which represented the recognized portion of the fair value excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended March 31, 2022, respectively.
−Removed: At March 31, 2022 and September 30, 2021, the swap, which is included in other assets in the Consolidated Balance Sheets, totaled $ 3,832 and $ 39 , respectively.
−Removed: As of March 31, 2022 and September 30, 2021, 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 March 31, 2022.
+Added: A gain of $ 8,708 (net of income taxes of $ 2,826 ) and a gain of $ 29 (net of income taxes of $ 10 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at June 30, 2022 and September 30, 2021, respectively.
+Added: Income of $ 428 and $ 1,213 , which represented the recognized portion of the fair value excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and nine months ended June 30, 2022, respectively.
+Added: At June 30, 2022 and September 30, 2021, the swap, which is included in other assets in the Consolidated Balance Sheets, totaled $ 11,534 and $ 39 , respectively.
+Added: The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting but which have the economic impact of largely mitigating foreign currency exposure.
+Added: Changes in the fair value of these economic hedges are recorded in current period earnings as a component of other income (deductions), net.
+Added: During the third quarter of fiscal 2022, the Company entered into a three-year U.S.
+Added: Dollar/Euro cross currency swap with a notional amount of $ 52,765 , which did not meet the criteria for hedge accounting.
+Added: An unrealized gain of $ 495 related to this swap was included in other assets in the Consolidated Balance Sheet at June 30, 2022.
+Added: As of June 30, 2022 and September 30, 2021, 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 June 30, 2022.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
Share-Based Payments
−Removed: The Company maintains an equity incentive plan (as amended, the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, restricted share units, stock-based performance units and certain other types of stock-based awards.
−Removed: 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 3,450,000 , following the amendment and restatement of the 2017 Equity Incentive Plan at the Company's 2022 Annual Shareholder Meeting.
−Removed: At March 31, 2022, 211,788 shares have been issued under the 2017 Equity Incentive Plan.
+Added: The Company maintains an equity incentive plan (as amended and restated, the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, restricted share units, stock-based performance units and certain other types of stock-based awards.
+Added: Under the 2017 Equity Incentive Plan, which has a ten-year term from the date the Company's Board of Directors approved of the 2017 Equity Incentive Plan, the maximum number of shares available for grants or awards is an aggregate of 3,450,000 (subject to adjustment upon certain events such as stock dividends or stock splits), following the amendment and restatement of the 2017 Equity Incentive Plan at the Company's 2022 Annual Shareholder Meeting.
+Added: At June 30, 2022, 215,618 shares have been issued under the 2017 Equity Incentive Plan.
789,015 time-based restricted share units, 946,212 performance-based restricted share units, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan.
−Removed: 1,477,525 of these share-based awards are outstanding as of March 31, 2022.
+Added: 1,503,012 of these share-based awards are outstanding as of June 30, 2022.
The 2017 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors.
The number of shares issued under performance-based restricted share units may be up to 200 % of the number of performance-based restricted share units, based on the satisfaction of specific criteria established by the plan administrator.
−Removed: For the three-month periods ended March 31, 2022 and 2021, stock-based compensation cost totaled $ 5,222 and $ 4,001 , respectively.
−Removed: For the six-month periods ended March 31, 2022 and 2021, stock-based compensation cost totaled $ 8,931 and $ 7,247 , respectively.
−Removed: The associated future income tax benefit recognized for stock-based compensation was $ 1,278 and $ 738 for the three-month periods ended March 31, 2022 and 2021, respectively, and $ 1,688 and $ 976 for the six-month periods ended March 31, 2022 and 2021, respectively.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Share-Based Payments (continued)
+Added: For the three-month periods ended June 30, 2022 and 2021, stock-based compensation cost totaled $ 5,197 and $ 5,713 , respectively.
+Added: For the nine-month periods ended June 30, 2022 and 2021, stock-based compensation cost totaled $ 14,128 and $ 12,960 , respectively.
+Added: The associated future income tax benefit recognized for stock-based compensation was $ 1,282 and $ 1,467 for the three-month periods ended June 30, 2022 and 2021, respectively, and $ 2,970 and $ 2,443 for the nine-month periods ended June 30, 2022 and 2021, respectively.
With respect to the restricted share grants, generally one-half of the shares vest on the third anniversary of the grant, one-quarter of the shares vest in one-third increments upon the attainment of pre-defined levels of adjusted earnings per share, and the remaining one-quarter of the shares vest in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.
7 unchanged sentences
The Company issues common stock from treasury shares once vested.
−Removed: The transactions for restricted shares and restricted share units for the six months ended March 31, 2022 were as follows:
+Added: The transactions for restricted shares and restricted share units for the nine months ended June 30, 2022 were as follows:
Shares /Units Weighted-
3 unchanged sentences
Expired or forfeited ( 122,448 ) 47.72
−Removed: Non-vested at March 31, 2022 1,438,716 $ 33.82
+Added: Non-vested at June 30, 2022 1,464,203 $ 33.80
During the third quarter of fiscal 2021, 75,000 stock options were granted under the 2017 Equity Incentive Plan.
3 unchanged sentences
The Company generally settles employee stock option exercises with treasury shares.
−Removed: As of March 31, 2022, the total unrecognized compensation cost related to all unvested stock-based awards was $ 25,764 and is expected to be recognized over a weighted average period of 2.6 years.
+Added: As of June 30, 2022, the total unrecognized compensation cost related to all unvested stock-based awards was $ 21,698 and is expected to be recognized over a weighted average period of 2.4 years.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
+Added: Share-Based Payments (continued)
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 44,943 shares and share units had been deferred under the Director Fee Plans as of March 31, 2022.
+Added: A total of 45,191 shares and share units had been deferred under the Director Fee Plans as of June 30, 2022.
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 $ 140 for fiscal 2022.
−Removed: As of March 31, 2022, 305,911 restricted shares and restricted share units have been granted under the Director Fee Plans and are outstanding as of March 31, 2022, 132,682 of which were issued under the 2019 Director Fee Plan.
−Removed: 58,008 restricted shares and restricted share units are unvested at March 31, 2022.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
+Added: As of June 30, 2022, 305,911 restricted shares and restricted share units have been granted under the Director Fee Plans and are outstanding as of June 30, 2022, 132,682 of which were issued under the 2019 Director Fee Plan.
+Added: 58,008 restricted shares and restricted share units are unvested at June 30, 2022.
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: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
−Removed: Net (loss) income attributable to Matthews shareholders $ ( 1,905 ) $ 4,989 $ ( 21,708 ) $ 3,231
+Added: Net income (loss) attributable to Matthews shareholders $ 2,893 $ 3,355 $ ( 18,815 ) $ 6,586
Weighted-average shares outstanding (in thousands):
2 unchanged sentences
Diluted shares 31,552 32,193 31,531 32,118
−Removed: Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and six months ended March 31, 2022.
+Added: Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and nine months ended June 30, 2022.
During periods in which the Company incurs a net loss, diluted weighted-average shares outstanding are equal to basic weighted-average shares outstanding because the effect of all equity awards is anti-dilutive.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
+Added: (Dollar amounts in thousands, except per share data)
Pension and Other Postretirement Benefit Plans
1 unchanged sentence
Net periodic pension and other postretirement benefit cost for the plans included the following:
−Removed: Three months ended March 31,
+Added: Three months ended June 30,
Pension Other Postretirement
6 unchanged sentences
Net actuarial loss * 88 2,730 — —
+Added: Curtailment gain * — ( 220 ) — —
+Added: Prior service cost write-off * — 526 — —
Net benefit cost $ 74 $ 3,809 $ 53 $ 53
−Removed: Six months ended March 31,
+Added: Nine months ended June 30,
Pension Other Postretirement
7 unchanged sentences
Settlement loss * 30,856 — — —
+Added: Curtailment gain * — ( 220 ) — —
+Added: Prior service cost write-off * — 526 — —
Net benefit cost $ 31,584 $ 11,560 $ 159 $ 159
* Non-service components of pension and postretirement expense are included in other income (deductions), net.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
−Removed: Pension and Other Postretirement Benefit Plans (continued)
Benefit payments under the Company's principal defined benefit retirement plan ("DB Plan") were made from plan assets, while benefit payments under the supplemental retirement plan and postretirement benefit plan are made from the Company's operating funds.
1 unchanged sentence
Also during the first quarter of fiscal 2022, lump sum distributions of $ 185,958 were made from the DB Plan to plan participants, and non-participating annuity contracts totaling $ 56,274 were purchased by the DB Plan for plan participants, resulting in the full settlement of the DB Plan obligations.
−Removed: The settlement of the DB Plan obligations resulted in the recognition of a non-cash charge of $ 30,856 , which has been presented as a component of other income (deductions), net for the six months ended March 31, 2022.
+Added: The settlement of the DB Plan obligations resulted in the recognition of a non-cash charge of $ 30,856 , which has been presented as a component of other income (deductions), net for the nine months ended June 30, 2022.
This amount represents the immediate recognition of the remaining portion of the deferred AOCI balances related to the DB Plan.
+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 2022 are as follows:
Contributions Pension Other Postretirement
−Removed: Contributions during the six months ended March 31, 2022:
+Added: Contributions during the nine months ended June 30, 2022:
Principal defined benefit retirement plan $ 35,706 $ —
4 unchanged sentences
Other postretirement plan — 412
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
−Removed: (Dollar amounts in thousands, except per share data)
Accumulated Other Comprehensive Income
−Removed: The changes in AOCI by component, net of tax, for the three-month periods ended March 31, 2022 and 2021 were as follows:
+Added: The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2022 and 2021 were as follows:
Post-retirement benefit plans Currency translation adjustment Derivatives Total
Attributable to Matthews:
−Removed: Balance, December 31, 2021 $ ( 1,797 ) $ ( 157,240 ) $ ( 77 ) $ ( 159,114 )
+Added: Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )
OCI before reclassification 69 ( 19,293 ) 1,223 ( 18,001 )
2 unchanged sentences
1,576 ( 17,700 )
−Removed: Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )
+Added: Balance, June 30, 2022 $ ( 1,807 ) $ ( 182,714 ) $ 5,591 $ ( 178,930 )
Attributable to noncontrolling interest:
−Removed: Balance, December 31, 2021 $ — $ 245 $ — $ 245
+Added: Balance, March 31, 2022 $ — $ 249 $ — $ 249
OCI before reclassification — 15 — 15
Net current-period OCI — 15 — 15
−Removed: Balance, March 31, 2022 $ — $ 249 $ — $ 249
+Added: Balance, June 30, 2022 $ — $ 264 $ — $ 264
Post-retirement benefit plans Currency translation adjustment Derivatives Total
Attributable to Matthews:
−Removed: Balance, December 31, 2020 $ ( 80,830 ) $ ( 134,826 ) $ ( 4,849 ) $ ( 220,505 )
+Added: Balance, March 31, 2021 $ ( 78,575 ) $ ( 143,724 ) $ ( 2,194 ) $ ( 224,493 )
OCI before reclassification 970 2,904 ( 654 ) 3,220
1 unchanged sentence
Net current-period OCI 3,328 2,904 ( 58 ) 6,174
−Removed: Balance, March 31, 2021 $ ( 78,575 ) $ ( 143,724 ) $ ( 2,194 ) $ ( 224,493 )
+Added: Balance, June 30, 2021 $ ( 75,247 ) $ ( 140,820 ) $ ( 2,252 ) $ ( 218,319 )
Attributable to noncontrolling interest:
−Removed: Balance, December 31, 2020 $ — $ 365 $ — $ 365
+Added: Balance, March 31, 2021 $ — $ 366 $ — $ 366
OCI before reclassification — —
Net current-period OCI — — — —
−Removed: Balance, March 31, 2021 $ — $ 366
+Added: Balance, June 30, 2021 $ — $ 366
(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: The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2022 and 2021 were as follows:
+Added: The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2022 and 2021 were as follows:
Post-retirement benefit plans Currency translation adjustment Derivatives Total
5 unchanged sentences
( 27,463 ) 7,149 13,809
−Removed: Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )
+Added: Balance, June 30, 2022 $ ( 1,807 ) $ ( 182,714 ) $ 5,591 $ ( 178,930 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — 23 — 23
−Removed: Balance, March 31, 2022 $ — $ 249 $ — $ 249
+Added: Balance, June 30, 2022 $ — $ 264 $ — $ 264
Post-retirement benefit plans Currency translation adjustment Derivatives Total
4 unchanged sentences
Net current-period OCI 7,707 11,061 3,632 22,400
−Removed: Balance, March 31, 2021 $ ( 78,575 ) $ ( 143,724 ) $ ( 2,194 ) $ ( 224,493 )
+Added: Balance, June 30, 2021 $ ( 75,247 ) $ ( 140,820 ) $ ( 2,252 ) $ ( 218,319 )
Attributable to noncontrolling interest:
2 unchanged sentences
Net current-period OCI — ( 2 ) — ( 2 )
−Removed: Balance, March 31, 2021 $ — $ 366
+Added: Balance, June 30, 2021 $ — $ 366
(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 and six-month periods ended March 31, 2022 and 2021 were as follows:
+Added: Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2022 and 2021 were as follows:
Amount reclassified from AOCI
−Removed: Details about AOCI Components Three Months Ended March 31, 2022 Six Months Ended March 31, 2022 Affected line item in the Statement of income
+Added: Details about AOCI Components Three Months Ended June 30, 2022 Nine Months Ended June 30, 2022 Affected line item in the Statement of income
Postretirement benefit plans
11 unchanged sentences
Details about AOCI Components Three Months Ended
−Removed: March 31, 2021 Six Months Ended
−Removed: March 31, 2021 Affected line item in the Statement of income
+Added: June 30, 2021 Nine Months Ended
+Added: June 30, 2021 Affected line item in the Statement of income
Postretirement benefit plans
1 unchanged sentence
Actuarial losses ( 2,730 ) ( 8,774 ) Other income (deductions), net
+Added: Prior service cost write-off ( 526 ) ( 526 ) Other income (deductions), net
( 3,119 ) ( 8,923 ) Income before income tax (b)
12 unchanged sentences
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 first six months of fiscal 2022 were a benefit of $ 3,351 , compared to an expense of $ 4,952 for the first six months of fiscal 2021.
−Removed: The difference between the Company’s consolidated income taxes for the first six months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 compared to pre-tax income in fiscal 2021.
+Added: The Company's consolidated income taxes for the first nine months of fiscal 2022 were a benefit of $ 2,311 , compared to an expense of $ 2,627 for the first nine months of fiscal 2021.
+Added: The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 (related to the DB Plan settlement) compared to pre-tax income in fiscal 2021.
Additionally, fiscal 2022 included discrete tax expenses related to non-tax deductible asset write-downs in Russia, due to the full valuation allowance for the Russian entity.
+Added: Fiscal 2022 discrete tax expenses were partially offset by discrete tax benefits related to the resolution of uncertain tax liabilities.
Fiscal 2021 included discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a net operating loss (“NOL”) carryback to tax years where the U.S.
federal statutory rate was 35%, and additional foreign tax credits.
−Removed: The Company’s fiscal 2022 six month effective tax rate varied from the U.S.
+Added: The Company’s fiscal 2022 nine month effective tax rate varied from the U.S.
statutory tax rate of 21.0% primarily due to the non-deductible asset write-downs in Russia, state taxes, foreign statutory rate differentials, and tax credits.
−Removed: The Company’s fiscal 2021 six month effective tax rate varied from the U.S.
+Added: The Company’s fiscal 2021 nine month effective tax rate varied from the U.S.
statutory tax rate of 21.0% primarily due to discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a NOL carryback to tax years where the U.S.
federal statutory rate was 35%, and additional foreign tax credits.
−Removed: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 3,231 and $ 2,807 on March 31, 2022 and September 30, 2021, respectively, which would impact the annual effective rate at March 31, 2022 and September 30, 2021, respectively.
+Added: The Company had unrecognized tax benefits (excluding penalties and interest) of $ 3,046 and $ 2,807 on June 30, 2022 and September 30, 2021, respectively, which would impact the annual effective rate at June 30, 2022 and September 30, 2021, respectively.
It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 191 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 $ 775 and $ 691 at March 31, 2022 and September 30, 2021, respectively.
+Added: Total penalties and interest accrued were $ 701 and $ 691 at June 30, 2022 and September 30, 2021, respectively.
These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions.
−Removed: As of March 31, 2022, the tax years that remain subject to examination by major jurisdictions generally are:
+Added: As of June 30, 2022, the tax years that remain subject to examination by major jurisdictions generally are:
United States – Federal 2018 and forward
7 unchanged sentences
The Company manages its businesses under three segments:
−Removed: SGK Brand Solutions, Memorialization and Industrial Technologies.
+Added: Memorialization, Industrial Technologies and SGK Brand Solutions.
Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment.
1 unchanged sentence
Prior periods were revised to reflect retrospective application of this segment realignment.
−Removed: The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries.
The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.
+Added: The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
13 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
−Removed: SGK Brand Solutions $ 146,820 $ 146,415 $ 300,362 $ 296,374
Memorialization $ 203,158 $ 184,337 $ 633,868 $ 573,068
Industrial Technologies 78,443 81,832 230,928 200,538
+Added: SGK Brand Solutions 140,118 162,211 440,480 458,585
Consolidated Sales $ 421,719 $ 428,380 $ 1,305,276 $ 1,232,191
Adjusted EBITDA:
−Removed: SGK Brand Solutions $ 13,462 $ 18,364 $ 28,876 $ 40,197
Memorialization $ 32,090 $ 36,402 $ 118,404 $ 132,080
Industrial Technologies 11,809 12,173 33,377 23,446
+Added: SGK Brand Solutions 14,546 27,025 43,422 67,222
Corporate and Non-Operating ( 12,421 ) ( 15,585 ) ( 40,656 ) ( 47,030 )
6 unchanged sentences
63 — ( 284 ) —
−Removed: Asset write-downs (4)
+Added: Asset write-downs, net (4)
469 — ( 10,017 ) —
8 unchanged sentences
Income tax (provision) benefit ( 1,040 ) 2,325 2,311 ( 2,627 )
−Removed: Net loss $ ( 1,936 ) $ 5,152 $ ( 21,746 ) $ 3,160
+Added: Net income (loss) $ 2,875 $ 3,366 $ ( 18,871 ) $ 6,526
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued
1 unchanged sentence
Segment Information (continued)
−Removed: (1) Includes certain non-recurring items associated with recent acquisition activities, costs associated with global ERP system integration efforts, and certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
+Added: (1) Includes certain non-recurring items associated with recent acquisition activities, costs associated with global ERP system integration efforts, certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels, and exchange losses associated with highly inflationary accounting (see Note 2, "Basis of Presentation").
(2) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19.
1 unchanged sentence
(3) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.
−Removed: (4) Represents asset write-downs within the SGK Brand Solutions segment (see Note 15, "Asset Write-Downs").
+Added: (4) Represents asset write-downs, net of recoveries within the SGK Brand Solutions segment (see Note 15, "Asset Write-Downs").
(5) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses.
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 $ 14,060 and $ 25,261 for the SGK Brand Solutions segment, $ 5,803 and $ 5,709 for the Memorialization segment, $ 2,531 and $ 2,880 for the Industrial Technologies segment, and $ 1,330 and $ 1,329 for Corporate and Non-Operating, for the three months ended March 31, 2022 and 2021, respectively.
−Removed: Depreciation and amortization was $ 37,785 and $ 43,109 for the SGK Brand Solutions segment, $ 11,613 and $ 11,178 for the Memorialization segment, $ 5,184 and $ 5,620 for the Industrial Technologies segment, and $ 2,643 and $ 2,623 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.
−Removed: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 4,475 and $ 2,865 for the SGK Brand Solutions segment, charges of $ 516 and income of $ 335 for the Memorialization segment, charges of $ 161 and $ 126 for the Industrial Technologies segment, and $ 1,598 and $ 2,437 for Corporate and Non-Operating, for the three months ended March 31, 2022 and 2021, respectively.
−Removed: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 5,703 and $ 7,561 for the SGK Brand Solutions segment, $ 1,188 and $ 795 for the Memorialization segment, $ 193 and $ 2,785 for the Industrial Technologies segment, and $ 3,489 and $ 5,144 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.
−Removed: *** Non-recurring/incremental COVID-19 costs were $ 170 and $ 297 for the SGK Brand Solutions segment, $ 579 and $ 1,240 for the Memorialization segment, $ 1 and $ 12 for the Industrial Technologies segment, and $ 463 and $ 23 for Corporate and Non-Operating, for the three months ended March 31, 2022 and 2021, respectively.
−Removed: Non-recurring/incremental COVID-19 costs were $ 390 and $ 706 for the SGK Brand Solutions segment, $ 1,043 and $ 1,890 for the Memorialization segment, $ 5 and $ 30 for the Industrial Technologies segment, and $ 465 and $ 70 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.
+Added: * Depreciation and amortization was $ 5,835 and $ 5,838 for the Memorialization segment, $ 2,459 and $ 2,829 for the Industrial Technologies segment, $ 13,334 and $ 25,383 for the SGK Brand Solutions segment, and $ 1,310 and $ 1,339 for Corporate and Non-Operating, for the three months ended June 30, 2022 and 2021, respectively.
+Added: Depreciation and amortization was $ 17,448 and $ 17,016 for the Memorialization segment, $ 7,643 and $ 8,449 for the Industrial Technologies segment, $ 51,119 and $ 68,492 for the SGK Brand Solutions segment, and $ 3,953 and $ 3,962 for Corporate and Non-Operating, for the nine months ended June 30, 2022 and 2021, respectively.
+Added: ** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 902 and $ 484 for the Memorialization segment, $ 1,183 and $ 881 for the Industrial Technologies segment, $ 1,970 and $ 2,909 for the SGK Brand Solutions segment, and $ 3,235 and $ 2,939 for Corporate and Non-Operating, for the three months ended June 30, 2022 and 2021, respectively.
+Added: Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 2,090 and $ 1,279 for the Memorialization segment, $ 1,376 and $ 3,666 for the Industrial Technologies segment, $ 7,673 and $ 10,470 for the SGK Brand Solutions segment, and $ 6,724 and $ 8,083 for Corporate and Non-Operating, for the nine months ended June 30, 2022 and 2021, respectively.
+Added: *** Non-recurring/incremental COVID-19 costs were $ 225 and $ 1,333 for the Memorialization segment, $ 1 and $ 6 for the Industrial Technologies segment, $ 74 and $ 638 for the SGK Brand Solutions segment, and $ 1 and $ 16 for Corporate and Non-Operating, for the three months ended June 30, 2022 and 2021, respectively.
+Added: Non-recurring/incremental COVID-19 costs were $ 1,268 and $ 3,223 for the Memorialization segment, $ 6 and $ 36 for the Industrial Technologies segment, $ 464 and $ 1,344 for the SGK Brand Solutions segment, and $ 466 and $ 86 for Corporate and Non-Operating, for the nine months ended June 30, 2022 and 2021, respectively.
Goodwill and Other Intangible Assets
A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:
−Removed: Solutions Memorialization Industrial Technologies Consolidated
+Added: Memorialization Industrial Technologies SGK Brand
+Added: Solutions Consolidated
Net goodwill at September 30, 2021
1 unchanged sentence
Translation and other adjustments ( 2,818 ) ( 1,050 ) ( 15,270 ) ( 19,138 )
−Removed: Net goodwill at March 31, 2022
+Added: Net goodwill at June 30, 2022
$ 363,542 $ 91,527 $ 299,580 $ 754,649
−Removed: The net goodwill balances at March 31, 2022 and September 30, 2021 included $ 178,732 of accumulated impairment losses.
−Removed: Accumulated impairment losses at March 31, 2022 and September 30, 2021 were $ 149,786 , $ 5,000 , and $ 23,946 for the SGK Brand Solutions, Memorialization, and Industrial Technologies segments, respectively.
+Added: The net goodwill balances at June 30, 2022 and September 30, 2021 included $ 178,732 of accumulated impairment losses.
+Added: Accumulated impairment losses at June 30, 2022 and September 30, 2021 were $ 5,000 , $ 23,946 and $ 149,786 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.
The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2022 (January 1, 2022) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, therefore no impairment charges were necessary.
−Removed: 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 10 %.
−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, goodwill write-downs may be necessary in future periods.
+Added: The estimated fair value of the Company's SGK Brand Solutions reporting unit (formerly the Graphics Imaging reporting unit) exceeded the carrying value (expressed as a percentage of carrying value) by approximately 10 %.
+Added: The SGK Brand Solutions reporting unit has experienced recent declines, primarily resulting from weakened economic conditions (particularly in Europe) and unfavorable changes in foreign exchange rates.
+Added: Additionally, recent increases in the cost of certain materials, labor, and other inflationary pressures have had an unfavorable impact on the reporting unit's results of operations.
+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 challenges) significantly change, goodwill write-downs may be necessary in future periods.
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 March 31, 2022 and September 30, 2021, respectively.
+Added: The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2022 and September 30, 2021, respectively.
Amount Accumulated
Amortization Net
−Removed: March 31, 2022:
+Added: June 30, 2022:
Indefinite-lived trade names $ 30,540 $ — $ 30,540
9 unchanged sentences
$ 591,690 $ ( 330,148 ) $ 261,542
−Removed: The net change in intangible assets during the six months ended March 31, 2022 included the impact of foreign currency fluctuations during the period and additional amortization.
−Removed: Amortization expense on intangible assets was $ 11,953 and $ 22,930 for the three-month periods ended March 31, 2022 and 2021, respectively.
−Removed: For the six month period ended March 31, 2022 and 2021, amortization expense was $ 33,499 and $ 38,151 , respectively.
+Added: The net change in intangible assets during the nine months ended June 30, 2022 included the impact of foreign currency fluctuations during the period and additional amortization.
+Added: Amortization expense on intangible assets was $ 11,804 and $ 23,039 for the three-month periods ended June 30, 2022 and 2021, respectively.
+Added: For the nine month period ended June 30, 2022 and 2021, amortization expense was $ 45,303 and $ 61,190 , respectively.
Amortization expense is estimated to be $ 11,993 for the remainder of fiscal 2022, $ 41,064 in 2023, $ 35,505 in 2024, $ 18,880 in 2025 and $ 14,686 in 2026.
2 unchanged sentences
In light of the current war between Russia and Ukraine, and the resulting regional instability and evolving political and economic conditions within the region, the Company evaluated certain of its assets for recoverability and impairment.
−Removed: As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $ 10,486 during the second quarter of fiscal 2022 to reduce the carrying value of these assets to zero.
−Removed: Asset write-downs (primarily related to property, plant and equipment) totaling $ 9,686 and $ 800 were reported within cost of sales and administrative expense, respectively, for the three and six months ended March 31, 2022.
+Added: As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $ 10,017 (net of recoveries) during fiscal 2022 to reduce the carrying value of these assets to zero.
+Added: Asset write-downs (primarily related to property, plant and equipment) totaling $ 9,686 and $ 331 were reported within cost of sales and administrative expense, respectively, for the nine months ended June 30, 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations
14 unchanged sentences
The Company manages its businesses under three segments:
−Removed: SGK Brand Solutions, Memorialization and Industrial Technologies.
+Added: Memorialization, Industrial Technologies and SGK Brand Solutions.
Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment.
1 unchanged sentence
Prior periods were revised to reflect retrospective application of this segment realignment.
−Removed: The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries.
The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.
+Added: The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.
Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
9 unchanged sentences
Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.
−Removed: The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and six-month periods ended March 31, 2022 and 2021.
+Added: The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2022 and 2021.
Refer to Note 13, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
(Dollar amounts in thousands)
−Removed: SGK Brand Solutions $ 146,820 $ 146,415 $ 300,362 $ 296,374
Memorialization $ 203,158 $ 184,337 $ 633,868 $ 573,068
Industrial Technologies 78,443 81,832 230,928 200,538
+Added: SGK Brand Solutions 140,118 162,211 440,480 458,585
Consolidated Sales $ 421,719 $ 428,380 $ 1,305,276 $ 1,232,191
Adjusted EBITDA:
−Removed: SGK Brand Solutions $ 13,462 $ 18,364 $ 28,876 $ 40,197
Memorialization $ 32,090 $ 36,402 $ 118,404 $ 132,080
Industrial Technologies 11,809 12,173 33,377 23,446
+Added: SGK Brand Solutions 14,546 27,025 43,422 67,222
Corporate and Non-Operating (12,421) (15,585) (40,656) (47,030)
3 unchanged sentences
See the "Non-GAAP Financial Measures" section below.
−Removed: Sales for the six months ended March 31, 2022 were $883.6 million, compared to $803.8 million for the six months ended March 31, 2021, representing an increase of $79.7 million.
−Removed: The increase in fiscal 2022 sales reflected higher sales in all of the Company's segments.
−Removed: Fiscal 2022 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.
−Removed: Recent impacts have included higher sales volumes for memorialization products and services.
−Removed: Additionally, recent increases in the cost of certain raw materials and other inflationary pressures have had an unfavorable impact on the Company's results of operations.
+Added: Sales for the nine months ended June 30, 2022 were $1.31 billion, compared to $1.23 billion for the nine months ended June 30, 2021, representing an increase of $73.1 million.
+Added: The increase in fiscal 2022 sales reflected higher sales in the Memorialization and Industrial Technologies segments, partially offset by lower sales in the SGK Brand Solutions segment.
On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $32.8 million on fiscal 2022 sales compared to the prior year.
−Removed: In the SGK Brand Solutions segment, sales for the first six months of fiscal 2022 were $300.4 million, compared to $296.4 million for the first six months of fiscal 2021.
−Removed: The increase primarily resulted from higher retail-based sales (principally merchandising solutions), higher brand sales in the Asia-Pacific market, and increased sales volume for cylinder (primarily packaging) products.
−Removed: These increases were partially offset by lower brand sales in the U.S.
−Removed: Changes in foreign currency exchange rates had an unfavorable impact of $9.4 million on the segment's sales compared to the prior year.
−Removed: Memorialization segment sales for the first six months of fiscal 2022 were $430.7 million, compared to $388.7 million for the first six months of fiscal 2021.
−Removed: The increase in sales predominantly resulted from increased unit sales of caskets and bronze and granite memorial products, primarily due to COVID-19.
−Removed: The segment also reported higher sales of mausoleums and cremation and incineration equipment.
−Removed: The increase in sales also reflected improved price realization and benefits from the fiscal 2021 acquisition of a
−Removed: Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
−Removed: small cemetery products business.
+Added: Memorialization segment sales for the first nine months of fiscal 2022 were $633.9 million, compared to $573.1 million for the first nine months of fiscal 2021.
+Added: The increase in sales predominantly resulted from improved price realization, increased unit sales of caskets and bronze and granite memorial products, and higher sales of mausoleums and cremation and incineration equipment.
+Added: The increase in sales also reflected benefits from the fiscal 2021 acquisition of a small cemetery products business.
Changes in foreign currency exchange rates had an unfavorable impact of $2.8 million on the segment's sales compared to the prior year.
−Removed: Industrial Technologies segment sales were $152.5 million for the first six months of fiscal 2022, compared to $118.7 million for the first six months of fiscal 2021.
+Added: Industrial Technologies segment sales were $230.9 million for the first nine months of fiscal 2022, compared to $200.5 million for the first nine months of fiscal 2021.
The sales increase primarily reflected higher sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market), increased sales of warehouse automation solutions, and higher product identification sales.
1 unchanged sentence
Changes in foreign currency exchange rates had an unfavorable impact of $9.7 million on the segment's sales compared to the prior year.
−Removed: Gross profit for the six months ended March 31, 2022 was $256.2 million, compared to $266.5 million for the same period a year ago.
−Removed: Consolidated gross profit as a percent of sales was 29.0% and 33.2% for the first six months of fiscal 2022 and fiscal 2021, respectively.
−Removed: The decrease in gross profit primarily reflected the impact of higher material (steel, lumber and bronze ingot), labor and transportation costs, particularly in the Memorialization segment, production inefficiencies related to onsite/remote-work transitions and unfavorable changes in sales mix within the SGK Brand Solutions segment.
+Added: In the SGK Brand Solutions segment, sales for the first nine months of fiscal 2022 were $440.5 million, compared to $458.6 million for the first nine months of fiscal 2021.
+Added: The decrease primarily resulted from unfavorable
+Added: Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
+Added: changes in foreign currency exchange rates, which had an unfavorable impact of $20.3 million on the segment's sales compared to the prior year.
+Added: The change in sales also reflected higher retail-based sales (principally merchandising solutions), higher brand sales in the Asia-Pacific market, and increased sales volume for cylinder (primarily packaging) products, partially offset by lower brand sales in the U.S.
+Added: The sales decline in Europe primarily resulted from weakened economic conditions.
+Added: Gross profit for the nine months ended June 30, 2022 was $377.0 million, compared to $403.8 million for the same period a year ago.
+Added: Consolidated gross profit as a percent of sales was 28.9% and 32.8% for the first nine months of fiscal 2022 and fiscal 2021, respectively.
+Added: The decrease in gross profit primarily reflected the impact of higher material (steel, lumber and bronze ingot), labor and transportation costs, particularly in the Memorialization segment, production inefficiencies related to onsite/remote-work transitions and unfavorable changes in sales mix within the SGK Brand Solutions segment, and lower margins on U.K.
+Added: based cremation and incineration projects.
Fiscal 2022 gross profit also included $9.7 million of asset write-downs related to the current war between Russia and Ukraine (see below for further details).
These decreases in gross profit were partially offset by the impact of higher sales, benefits from the realization of productivity improvements and other cost-reduction initiatives, and improved margins for surfaces and engineered products within the Industrial Technologies segment.
−Removed: Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $6.4 million and $10.7 million for the six months ended March 31, 2022 and 2021, respectively.
−Removed: Selling and administrative expenses for the six months ended March 31, 2022 were $204.5 million, compared to $203.0 million for the first six months of fiscal 2021.
−Removed: Consolidated selling and administrative expenses, as a percent of sales, were 23.1% for the six months ended March 31, 2022, compared to 25.3% for the same period last year.
−Removed: Fiscal 2022 selling and administrative expenses reflected lower performance-based compensation compared to fiscal 2021 and benefits from ongoing cost-reduction initiatives, which were offset by the impacts of higher salaries and wage rates and higher travel and entertainment ("T&E") costs.
−Removed: Fiscal 2022 selling and administrative expenses included $800,000 of asset write-downs related to the current war between Russia and Ukraine (see below).
+Added: Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $8.3 million and $15.5 million for the nine months ended June 30, 2022 and 2021, respectively.
+Added: Selling and administrative expenses for the nine months ended June 30, 2022 were $302.6 million, compared to $308.0 million for the first nine months of fiscal 2021.
+Added: Consolidated selling and administrative expenses, as a percent of sales, were 23.2% for the nine months ended June 30, 2022, compared to 25.0% for the same period last year.
+Added: Fiscal 2022 selling and administrative expenses reflected lower performance-based compensation compared to fiscal 2021 and benefits from ongoing cost-reduction initiatives, which were partially offset by the impacts of higher salaries and wage rates and higher travel and entertainment ("T&E") costs.
+Added: Fiscal 2022 selling and administrative expenses included $331,000 of asset write-downs (net of recoveries) related to the current war between Russia and Ukraine (see below).
Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with cost-reduction initiatives totaling $11.0 million in fiscal 2022, compared to $13.0 million in fiscal 2021.
−Removed: Intangible amortization for the six months ended March 31, 2022 was $33.5 million, compared to $38.2 million for the six months ended March 31, 2021.
+Added: Intangible amortization for the nine months ended June 30, 2022 was $45.3 million, compared to $61.2 million for the nine months ended June 30, 2021.
Fiscal 2022 intangible amortization included $4.0 million of incremental amortization resulting from the fiscal 2021 reduction in useful lives for certain customer relationships.
Intangible amortization also included accelerated amortization related to certain trade names that have been discontinued.
−Removed: Amortization for these trade names totaled $9.5 million and $16.5 million for the six months ended March 31, 2022 and March 31, 2021, respectively.
−Removed: Adjusted EBITDA was $108.5 million for the six months ended March 31, 2022 and $115.7 million for the six months ended March 31, 2021.
−Removed: Adjusted EBITDA for the SGK Brand Solutions segment was $28.9 million for the first six months of fiscal 2022 compared to $40.2 million for the same period a year ago.
−Removed: The decrease in segment adjusted EBITDA primarily reflected the impact of production inefficiencies related to onsite/remote-work transitions, unfavorable changes in sales mix, and higher T&E costs.
−Removed: These decreases were partially offset by the impact of higher sales, and benefits from cost-reduction initiatives.
+Added: Amortization for these trade names totaled $9.5 million and $26.0 million for the nine months ended June 30, 2022 and June 30, 2021, respectively.
+Added: Adjusted EBITDA was $154.5 million for the nine months ended June 30, 2022 and $175.7 million for the nine months ended June 30, 2021.
+Added: Memorialization segment adjusted EBITDA was $118.4 million for the first nine months of fiscal 2022 compared to $132.1 million for the first nine months of fiscal 2021.
+Added: Fiscal 2022 segment adjusted EBITDA reflected the benefits of higher sales and productivity initiatives, which were offset by the impact of higher material, labor, transportation and T&E costs.
+Added: Adjusted EBITDA for the Industrial Technologies segment was $33.4 million for the nine months ended June 30, 2022 compared to $23.4 million for the nine months ended June 30, 2021.
+Added: Industrial Technologies segment adjusted EBITDA primarily reflected the impact of higher sales, improved margins for surfaces and engineered products and benefits from cost-reduction initiatives, which were partially offset by the impact of higher T&E costs and increased performance-based compensation compared to fiscal 2021.
Changes in foreign currency exchange rates had an unfavorable impact of $2.0 million on the segment's adjusted EBITDA compared to the prior year.
−Removed: Memorialization segment adjusted EBITDA was $86.3 million for the first six months of fiscal 2022 compared to $95.7 million for the first six months of fiscal 2021.
−Removed: Fiscal 2022 segment adjusted EBITDA reflected the benefits of higher sales and productivity initiatives, which were offset by the impact of higher material, labor and transportation costs.
−Removed: Adjusted EBITDA for the Industrial Technologies segment was $21.6 million for the six months ended March 31, 2022 compared to $11.3 million for the six months ended March 31, 2021.
−Removed: Industrial Technologies segment adjusted EBITDA primarily reflected the impact of higher sales, improved margins for surfaces and engineered products and benefits from cost-reduction initiatives, which were partially offset by the impact of higher T&E costs.
+Added: Adjusted EBITDA for the SGK Brand Solutions segment was $43.4 million for the first nine months of fiscal 2022 compared to $67.2 million for the same period a year ago.
+Added: The decrease in segment adjusted EBITDA primarily reflected the impact of lower sales, production inefficiencies related to onsite/remote-work transitions, unfavorable changes in sales mix, and higher material, labor and T&E costs.
+Added: These decreases were partially offset by the impact of lower performance-based compensation compared to fiscal 2021 and benefits from cost-reduction initiatives.
Changes in foreign currency exchange rates had an unfavorable impact of $3.5 million on the segment's adjusted EBITDA compared to the prior year.
−Removed: Investment income was $676,000 for the six months ended March 31, 2022 and $2.0 million for the six months ended March 31, 2021.
+Added: Investment income was $735,000 for the nine months ended June 30, 2022 and $3.0 million for the nine months ended June 30, 2021.
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.
−Removed: Interest expense for the first six months of fiscal 2022 was $12.8 million, compared to $15.0 million for the same period last year.
+Added: Interest expense for the first nine months of fiscal 2022 was $19.4 million, compared to $21.7 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.
−Removed: Other income (deductions), net, for the six months ended March 31, 2022 represented a decrease in pre-tax income of $31.2 million, compared to a decrease in pre-tax income of $4.3 million for the same period last year.
−Removed: Other income (deductions), net includes the non-service components of pension and postretirement expense, which totaled $31.4 million and $3.8 million for the six months ended
+Added: Other income (deductions), net, for the nine months ended June 30, 2022 represented a decrease in pre-tax income of $31.6 million, compared to a decrease in pre-tax income of $6.8 million for the same period last year.
+Added: Other income (deductions), net includes the non-service components of pension and postretirement expense, which totaled $31.6 million and $5.7 million for the nine months ended June 30, 2022 and
Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
−Removed: March 31, 2022 and 2021, respectively.
+Added: 2021, respectively.
Fiscal 2022 non-service pension expense included a $30.9 million non-cash charge resulting from the full settlement of the Company's principal defined benefit retirement plan ("DB Plan") obligations.
1 unchanged sentence
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.
+Added: Fiscal 2022 other income (deductions), net included $1.2 million of currency losses associated with highly inflationary accounting for the Company's subsidiaries in Turkey (see Note 2, "Basis of Presentation" in Item 1 - "Financial Statements").
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 first six months of fiscal 2022 were a benefit of $3.4 million, compared to an expense of $5.0 million for the first six months of fiscal 2021.
−Removed: The difference between the Company’s consolidated income taxes for the first six months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 compared to pre-tax income in fiscal 2021.
+Added: The Company's consolidated income taxes for the first nine months of fiscal 2022 were a benefit of $2.3 million, compared to an expense of $2.6 million for the first nine months of fiscal 2021.
+Added: The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 (related to the DB Plan settlement) compared to pre-tax income in fiscal 2021.
Additionally, fiscal 2022 included discrete tax expenses related to non-tax deductible asset write-downs in Russia, due to the full valuation allowance for the Russian entity.
+Added: Fiscal 2022 discrete tax expenses were partially offset by discrete tax benefits related to the resolution of uncertain tax liabilities.
Fiscal 2021 included discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a net operating loss (“NOL”) carryback to tax years where the U.S.
federal statutory rate was 35%, and additional foreign tax credits.
−Removed: The Company’s fiscal 2022 six-month effective tax rate varied from the U.S.
+Added: The Company’s fiscal 2022 nine month effective tax rate varied from the U.S.
statutory tax rate of 21.0% primarily due to the non-deductible asset write-downs in Russia, state taxes, foreign statutory rate differentials, and tax credits.
−Removed: The Company’s fiscal 2021 six-month effective tax rate varied from the U.S.
+Added: The Company’s fiscal 2021 nine month effective tax rate varied from the U.S.
statutory tax rate of 21.0% primarily due to discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a NOL carryback to tax years where the U.S.
federal statutory rate was 35%, and additional foreign tax credits.
−Removed: Net losses attributable to noncontrolling interests were $38,000 for the six months ended March 31, 2022 and $71,000 for the six months ended March 31, 2021.
+Added: Net losses attributable to noncontrolling interests were $56,000 for the nine months ended June 30, 2022 and $60,000 for the nine months ended June 30, 2021.
The net losses attributable to noncontrolling interests primarily reflected losses in less than wholly-owned businesses.
2 unchanged sentences
In light of the current war between Russia and Ukraine, and the resulting regional instability and evolving political and economic conditions within the region, the Company evaluated certain of its assets for recoverability and impairment.
−Removed: As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $10.5 million during the second quarter of fiscal 2022 to reduce the carrying value of these assets to zero.
−Removed: Asset write-downs (primarily related to property, plant and equipment) totaling $9.7 million and $800,000 were reported within cost of sales and administrative expense, respectively, for the three and six months ended March 31, 2022.
−Removed: Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
+Added: As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $10.0 million (net of recoveries) during fiscal 2022 to reduce the carrying value of these assets to zero.
+Added: Asset write-downs (primarily related to property, plant and equipment) totaling $9.7 million and $331,000 were reported within cost of sales and administrative expense, respectively, for the nine months ended June 30, 2022.
NON-GAAP FINANCIAL MEASURES:
3 unchanged sentences
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.
+Added: Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued
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.
8 unchanged sentences
Three Months Ended
−Removed: March 31, Six Months Ended
+Added: June 30, Nine Months Ended
2022 2021 2022 2021
(Dollar amounts in thousands)
−Removed: Net (loss) income $ (1,936) $ 5,152 $ (21,746) $ 3,160
+Added: Net income (loss) $ 2,875 $ 3,366 $ (18,871) $ 6,526
Income tax provision (benefit) 1,040 (2,325) (2,311) 2,627
6 unchanged sentences
7,290 7,213 17,863 23,498
−Removed: Non-recurring / incremental COVID-19 costs (2)***
+Added: Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (2)***
301 1,993 2,204 4,689
Defined benefit plan termination related items (3)
−Removed: Asset write-downs (4)
+Added: Asset write-downs, net (4)
(469) — 10,017 —
4 unchanged sentences
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.