What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-18 compared with 2021-11-19 · 319 added, 333 removed, 1140 unchanged (36% of the section changed)

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Management's Report to Shareholders 37

Report of Independent Registered Public Accounting Firm 36

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm 40

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OLBRICH GmbH (“OLBRICH”) and R+S Automotive GmbH (“R+S Automotive”) have been excluded from management's assessment of internal control over financial reporting as of September 30, 2022, because they were acquired by the Company in a purchase business combination in August 2022.

Total assets and total sales for these subsidiaries represent approximately 5% and 1%, respectively, of the related consolidated financial statement amounts of the Company as of and for the year ended September 30, 2022.

Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's internal control over financial reporting based on criteria in Internal Control – Integrated Framework (2013) issued by the COSO, and has concluded that the Company maintained effective internal control over financial reporting as of September 30, 2022.

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In our opinion, Matthews International Corporation and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2022, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting as of September 30, 2022 did not include the internal controls of OLBRICH GmbH (“OLBRICH”) and R+S Automotive GmbH (“R+S Automotive”), which are included in the 2022 consolidated financial statements of the Company and constituted 5% of total assets as of September 30, 2022 and 1% of total sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of OLBRICH and R+S Automotive.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2022 and 2021, the related consolidated statements of income (loss), comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended September 30, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 and our report dated November 18, 2022 expressed an unqualified opinion thereon.

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Graphics Imaging Reporting Unit Goodwill

Description of the Matter As more fully described in Note 21 to the consolidated financial statements, during 2021, the Company performed its annual goodwill impairment test as of January 1, 2021 and determined that the estimated fair value of the Graphics Imaging (Graphics) reporting unit, within the SGK Brand Solutions segment, exceeded the carrying value (expressed as a percentage of carrying value) by approximately 5%.

Significant assumptions used in the Company’s fair value estimate included revenue growth, operating profit margin, market participant assumptions, and the discount rate.

Auditing the annual goodwill impairment analysis was complex, as it included estimating the fair value of the reporting unit.

Valuation of SGK Brand Solutions Reporting Unit Goodwill

Description of the Matter As more fully described in Note 22 to the consolidated financial statements, during 2022, the Company recorded an $82.5 million impairment charge attributable to its SGK Brand Solutions reporting unit within the SGK Brand Solutions segment.

Weakened economic conditions (particularly in Europe), unfavorable changes in foreign exchange rates, and recent increases in the cost of certain materials, labor, and other inflation-related pressures unfavorably impacted the financial results for this reporting unit.

Because of these challenging market conditions, as of September 1, 2022, the Company evaluated the goodwill attributable to this reporting unit, determining that the reporting unit’s carrying value exceeded its estimated fair value and, therefore, goodwill was impaired.

Significant assumptions used in the Company’s fair value estimate included revenue growth, EBITDA contribution, market participant assumptions, and the discount rate.

Auditing the goodwill impairment charge was complex, as it included estimating the fair value of the reporting unit.

In particular, the fair value estimates are sensitive to the significant assumptions named above, which are affected by expected future market or economic conditions.

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We also assessed the historical accuracy of management’s estimates.

We performed sensitivity analyses of significant assumptions to evaluate the sensitivity of the fair value of the reporting unit resulting from changes in key assumptions.

We reviewed the reconciliation of the fair value of the reporting units to the market capitalization of the Company and assessed the resulting control premium.

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Inventories 225,440 189,088

Restricted cash, current 2,398 —

Other current assets 110,747 76,083

Total current assets 628,616 624,165

Restricted cash 19,167 —

Restricted cash, non-current — 19,167

Investments 25,976 30,438

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Goodwill write-downs ( 82,454 ) — ( 90,408 )

Operating profit (loss) 42,034 ( 64,193 ) 10,303

Operating (loss) profit ( 43,937 ) 42,034 ( 64,193 )

Investment income 1,036 2,645 1,962

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Other income (deductions), net ( 33,593 ) ( 6,762 ) ( 9,221 )

Income (loss) before income taxes 9,233 ( 106,337 ) ( 38,083 )

Income tax (provision) benefit ( 6,375 ) 18,685 ( 806 )

Net income (loss) 2,858 ( 87,652 ) ( 38,889 )

(Loss) income before income taxes ( 104,219 ) 9,233 ( 106,337 )

Income tax benefit (provision) 4,391 ( 6,375 ) 18,685

Net (loss) income ( 99,828 ) 2,858 ( 87,652 )

Net loss attributable to noncontrolling interests 54 52 497

Net income (loss) attributable to Matthews shareholders $ 2,910 $ ( 87,155 ) $ ( 37,988 )

Earnings (loss) per share attributable to Matthews shareholders:

Net (loss) income attributable to Matthews shareholders $ ( 99,774 ) $ 2,910 $ ( 87,155 )

(Loss) earnings per share attributable to Matthews shareholders:

Basic $ ( 3.18 ) $ 0.09 $ ( 2.79 )

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Matthews Noncontrolling Interest Total

Net income (loss) $ 2,910 $ ( 52 ) $ 2,858

Other comprehensive income (loss), net of tax:

Net loss $ ( 99,774 ) $ ( 54 ) $ ( 99,828 )

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 48,059 ) 14 ( 48,045 )

Pension plans and other postretirement benefits 41,112 — 41,112

Unrecognized gain on derivatives:

Unrecognized gain on cash flow hedges:

Net change from periodic revaluation 8,148 — 8,148

Net amount reclassified to earnings 1,347 — 1,347

Net change in unrecognized gain on derivatives 4,326 — 4,326

Other comprehensive income (loss), net of tax 47,980 ( 127 ) 47,853

Comprehensive income (loss) $ 50,890 $ ( 179 ) $ 50,711

Net change in unrecognized gain on cash flow hedges 9,495 — 9,495

Other comprehensive income, net of tax 2,548 14 2,562

Comprehensive loss $ ( 97,226 ) $ ( 40 ) $ ( 97,266 )

Year Ended September 30, 2021

Matthews Noncontrolling Interest Total

Net loss $ ( 87,155 ) $ ( 497 ) $ ( 87,652 )

Net income (loss) $ 2,910 $ ( 52 ) $ 2,858

Other comprehensive income (loss), net of tax:

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Pension plans and other postretirement benefits 47,024 — 47,024

Unrecognized (loss) gain on derivatives:

Unrecognized gain on cash flow hedges:

Net change from periodic revaluation 1,873 — 1,873

Net amount reclassified to earnings 2,453 — 2,453

Net change in unrecognized loss on derivatives ( 5,480 ) — ( 5,480 )

Other comprehensive loss, net of tax ( 12,358 ) ( 7 ) ( 12,365 )

Comprehensive loss $ ( 99,513 ) $ ( 504 ) $ ( 100,017 )

Net change in unrecognized gain on cash flow hedges 4,326 — 4,326

Other comprehensive income (loss), net of tax 47,980 ( 127 ) 47,853

Comprehensive income (loss) $ 50,890 $ ( 179 ) $ 50,711

Year Ended September 30, 2020

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Net loss $ ( 87,155 ) $ ( 497 ) $ ( 87,652 )

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 4,333 ( 7 ) 4,326

Pension plans and other postretirement benefits ( 11,211 ) — ( 11,211 )

Unrecognized loss on derivatives:

Unrecognized (loss) gain on cash flow hedges:

Net change from periodic revaluation ( 6,130 ) — ( 6,130 )

Net amount reclassified to earnings 650 — 650

Net change in unrecognized loss on derivatives ( 8,942 ) — ( 8,942 )

Net change in unrecognized loss on cash flow hedges ( 5,480 ) — ( 5,480 )

Other comprehensive loss, net of tax ( 12,358 ) ( 7 ) ( 12,365 )

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Translation adjustment — — — 4,333 — ( 7 ) 4,326

Fair value of derivatives — — — ( 8,942 ) — — ( 8,942 )

Fair value of cash flow hedges — — — ( 5,480 ) — — ( 5,480 )

Total comprehensive loss ( 100,017 )

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Dividends — — ( 26,437 ) — — — ( 26,437 )

Acquisitions — — — — — 1,760 1,760

Cumulative tax adjustment for

intra-entity transfers — — ( 4,176 ) — — — ( 4,176 )

Pension contribution of 668,000

shares of treasury stock

— ( 11,724 ) — — 26,707 — 14,983

Balance, September 30, 2020 $ 36,334 $ 135,187 $ 859,002 $ ( 240,719 ) $ ( 178,997 ) $ 626 $ 611,433

Net loss — — ( 87,155 ) — — ( 497 ) ( 87,652 )

Net income (loss) — — 2,910 — — ( 52 ) 2,858

Pension plans and other

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Translation adjustment — — — ( 3,370 ) — ( 127 ) ( 3,497 )

Fair value of derivatives — — — ( 5,480 ) — — ( 5,480 )

Total comprehensive loss ( 100,017 )

Fair value of cash flow hedges — — — 4,326 — — 4,326

Total comprehensive income 50,711

Stock-based compensation — 15,581 — — — — 15,581

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Dividends — — ( 27,704 ) — — — ( 27,704 )

Pension contribution of 668,000

shares of treasury stock

— ( 11,724 ) — — 26,707 — 14,983

Transactions with noncontrolling

interests — ( 1,168 ) — — — ( 592 ) ( 1,760 )

Balance, September 30, 2021 $ 36,334 $ 149,484 $ 834,208 $ ( 192,739 ) $ ( 190,739 ) $ ( 145 ) $ 636,403

Net income (loss) — — 2,910 — — ( 52 ) 2,858

Net loss — — ( 99,774 ) — — ( 54 ) ( 99,828 )

Pension plans and other

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Translation adjustment — — — ( 48,059 ) — 14 ( 48,045 )

Fair value of derivatives — — — 4,326 — — 4,326

Total comprehensive income 50,711

Fair value of cash flow hedges — — — 9,495 — — 9,495

Total comprehensive loss ( 97,266 )

Stock-based compensation — 17,432 — — — — 17,432

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Dividends — — ( 27,685 ) — — — ( 27,685 )

Transactions with noncontrolling

interests — ( 1,168 ) — — — ( 592 ) ( 1,760 )

Divestiture — — — — — ( 91 ) ( 91 )

Balance, September 30, 2022 $ 36,334 $ 160,255 $ 706,749 $ ( 190,191 ) $ ( 225,795 ) $ ( 276 ) $ 487,076

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Cash flows from operating activities:

Net income (loss) $ 2,858 $ ( 87,652 ) $ ( 38,889 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net (loss) income $ ( 99,828 ) $ 2,858 $ ( 87,652 )

Adjustments to reconcile net (loss) income to net cash flows from operating activities:

Depreciation and amortization 104,056 133,512 119,058

Stock-based compensation expense 17,432 15,581 8,096

Deferred tax provision (benefit) 4,158 ( 16,607 ) ( 6,783 )

Deferred tax (benefit) provision ( 32,962 ) 4,158 ( 16,607 )

Gain on sale of assets, net ( 3,194 ) ( 412 ) ( 348 )

(Gain) loss on sale of ownership interests in subsidiaries — ( 11,208 ) 6,469

Gain on sale of ownership interests in subsidiaries ( 196 ) — ( 11,208 )

Losses from equity-method investments — — 3,498

Realized loss on cost-method investments — — 4,731

Other investment gains ( 1,364 ) ( 2,066 ) ( 305 )

Other investment losses (gains) 14 ( 1,364 ) ( 2,066 )

Pension settlement loss 30,856 — —

Asset write-downs 10,050 — —

Goodwill write-downs 82,454 — 90,408

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Acquisitions, net of cash acquired ( 44,469 ) ( 15,623 ) ( 1,000 )

Purchases of investments ( 2,198 ) — ( 9,703 )

Proceeds from sale of assets 4,955 2,776 624

Proceeds from sale of investments 34,167 — —

Proceeds from sale of ownership interests in subsidiaries 344 — 42,210

Investments and advances — ( 9,703 ) ( 33,074 )

Proceeds from sale of investments 8,771 34,167 —

Proceeds from the settlement of net investment hedges 13,066 — —

Net cash used in investing activities ( 80,852 ) ( 12,993 ) ( 2,718 )

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NATURE OF OPERATIONS:

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.

Brand solutions consists of brand management, pre-media services, printing plates and cylinders, engineered products (including energy solutions), 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 include marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

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:

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.

This business segment change is consistent with internal management structure and reporting changes effective for fiscal 2022.

Prior periods were revised to reflect retrospective application of this segment realignment.

Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, 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 solutions, product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

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.

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Principles of Consolidation:

The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control.

The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating control and any variable interest entities for which the Company is the primary beneficiary.

Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments.

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thus trade receivables do not bear interest, although a finance charge may be applied to such receivables that are more than 30 days past due.

The allowance for doubtful accounts is based on an evaluation of historical collection experience, the aging of accounts receivable, and economic trends and forecasts, and also reflects adjustments for specific customer accounts for which available facts and circumstances indicate collectability may be uncertain.

The allowance for doubtful accounts is based on an evaluation of historical collection experience, the aging of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

accounts receivable, and economic trends and forecasts, and also reflects adjustments for specific customer accounts for which available facts and circumstances indicate collectability may be uncertain.

Inventories are stated at the lower of cost or net realizable value with cost generally determined under the average cost method.

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An impairment loss would be recognized when the carrying amount of the assets exceeds the fair value, which is based on a discounted cash flow analysis.

No such charges were recognized during the years presented.

No such charges were recognized during the years presented, except as disclosed in Note 23, “Asset Write-Downs."

A lease exists at contract inception if the contract conveys the right to control an identified asset for a period of time in exchange for consideration.

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Derivatives and Hedging:

Derivatives are held as part of a formal documented hedging program.

Derivatives are generally held as part of a formal documented hedging program.

All derivatives are held for purposes other than trading.

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Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) ("OCI"), net of tax, and are reclassified to earnings in a manner consistent with the underlying hedged item.

The cash flows from derivative activities are recognized in the statement of cash flows in a manner consistent with the underlying hedged item.

The cash flows from hedging activities are recognized in the statement of cash flows in a manner consistent with the underlying hedged item.

Foreign Currency:

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Realized gains and losses from foreign currency transactions are presented in the Statement of Income in a consistent manner with the underlying transaction based upon the provisions of Accounting Standards Codification ("ASC") 830 "Foreign Currency Matters."

Comprehensive Income (Loss):

Comprehensive income (loss) consists of net income adjusted for changes, net of any related income tax effect, in cumulative foreign currency translation, the fair value of derivatives, unrealized investment gains and losses and remeasurement of pension and other postretirement liabilities.

The Company applies highly inflationary accounting for subsidiaries when the cumulative inflation rate for a three-year period meets or exceeds 100 percent.

Under highly inflationary accounting, the financial statements of these subsidiaries are remeasured into the Company's reporting currency (U.S.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

Effective April 1, 2022, the Company applies highly inflationary accounting to its Turkish subsidiaries.

As of September 30, 2022, the Company had net monetary assets related to its Turkish subsidiaries of $ 5,022 .

Exchange losses related to highly inflationary accounting totaled $ 1,473 in fiscal 2022 and were included in the Consolidated Statements of Income within other income (deductions), net.

Comprehensive Income (Loss):

Comprehensive income (loss) consists of net income adjusted for changes, net of any related income tax effect, in cumulative foreign currency translation, the fair value of cash flow hedges, unrealized investment gains and losses and remeasurement of pension and other postretirement liabilities.

Treasury Stock:

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For substantially all transactions, control passes in accordance with agreed upon delivery terms, including in certain circumstances, customer acceptance.

This approach is consistent with the Company’s historical revenue recognition methodology.

In limited instances revenue is recognized over time as critical milestones are met and as services are provided.

Transaction price, for revenue recognition, is allocated to each performance obligation consisting of the stand alone selling price for goods and services, as well as warranties.

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Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer.

Certain revenue related to mausoleum construction and significant engineering projects, including purpose-built engineered products (primarily in support of the electric vehicle and energy storage industries), cremation and incineration projects, and marking and industrial automation projects, are recognized over time using the input method measuring progress toward completion of such projects.

Amounts recognized using the over time method were approximately 10 % of the Company's consolidated revenue for the year ended September 30, 2021, and less than 5 % of the Company's consolidated revenue for the years ended September 30, 2020 and 2019.

Certain revenue related to mausoleum construction and significant engineering projects, including purpose-built engineered products (primarily in support of the electric vehicle and energy storage solutions industries), cremation and incineration projects, and product identification and warehouse automation projects, are recognized over time using the input method measuring progress toward completion of such projects.

The Company is entitled to collection of the sales price under normal credit terms in the regions in which it operates.

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Deferred income taxes have not been provided on undistributed earnings of foreign subsidiaries since they have either been previously taxed, or are exempt from tax, and such earnings are considered to be reinvested indefinitely in foreign operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

Earnings Per Share:

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Diluted earnings per share is computed using the treasury stock method, which assumes the issuance of common stock for all dilutive securities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

ACCOUNTING PRONOUNCEMENTS:

In December 2019, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

In October 2021, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

2021-08, Business Combinations (Topic 805) which improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract asset/liability, and payment terms and their effect on subsequent revenue recognized by the acquirer.

This ASU is effective for the Company beginning in interim periods starting in fiscal 2024.

While the impact of this ASU is dependent on the nature of any future transactions, the Company currently does not expect this ASU to have a significant impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740) which simplifies the accounting for income taxes.

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The adoption of these ASUs in the first quarter ended December 31, 2020 had no material impact on the Company's consolidated financial statements.

The following table summarizes the activity for the accounts receivable allowance for doubtful accounts for the year ended September 30, 2021:

Accounts Receivable Allowance for Doubtful Accounts

Balance at October 1, 2020 $ 9,618

Current period expense 2,182

Deductions (1)

Balance at September 30, 2021 $ 10,654

(1) Amounts determined not to be collectible (including direct write-offs), net of recoveries.

In February 2016, the FASB issued ASU No.

2016-02 , Leases (Topic 842) , which provides new guidance on how an entity should account for leases and recognize associated lease assets and liabilities.

This ASU requires lessees to recognize assets and liabilities that arise from financing and operating leases on the Consolidated Balance Sheet.

Subsequently, the FASB issued several ASUs that address implementation issues and correct or improve certain aspects of the new lease guidance, including ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient for Transition to Topic 842 , ASU 2018-10, Codification Improvements to Topic 842, Leases , ASU 2018-11, Leases (Topic 842):

Targeted Improvements, ASU 2018-20, Leases (Topic 842):

Narrow-Scope Improvements for Lessors, and ASU 2019-01, Leases (Topic 842):

Codification Improvements .

These ASUs do not change the core principles in the lease guidance outlined above.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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ACCOUNTING PRONOUNCEMENTS, (continued)

2018-11 provides an additional transition method to adopt ASU No.

Under the transition method, an entity initially applies the new leases standard at the adoption date versus at the beginning of the earliest period presented and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The Company adopted the standard using the transition method as of October 1, 2019.

Under this approach, the Company recognized and recorded ROU assets and related lease liabilities on the Consolidated Balance Sheet of approximately $ 80,000 with no impact to retained earnings.

As part of the adoption, the Company elected the package of practical expedients permitted under the transition guidance which includes the ability to carry forward historical lease classification.

The following table summarizes the activity for the accounts receivable allowance for doubtful accounts for the years ended September 30, 2022 and 2021.

Description Balance at Beginning of Period Charged to Expense Deductions (1)

End of Period

Allowance for Doubtful Accounts:

Fiscal Year Ended:

September 30, 2022 $ 10,654 $ 1,368 $ ( 1,884 ) $ 10,138

September 30, 2021 9,618 2,182 ( 1,146 ) 10,654

(1) Amounts determined not to be collectible (including direct write-offs), net of recoveries.

REVENUE RECOGNITION:

The Company delivers a variety of products and services through its business segments.

The SGK Brand Solutions segment delivers brand management, pre-media services, printing plates and cylinders, engineered products (including energy solutions), 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 delivers marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products for the warehousing and industrial industries.

The Memorialization segment produces and delivers bronze and granite memorials and other memorialization products, caskets, cremation-related products, 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 solutions, product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

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.

1 unchanged sentence

North America Central and South America Europe Australia Asia Consolidated

SGK Brand Solutions:

Memorialization:

2022 $ 788,791 $ — $ 41,184 $ 10,149 $ — $ 840,124

1 unchanged sentence

2020 611,496 — 35,557 8,982 — 656,035

Memorialization:

Industrial Technologies:

2022 $ 155,977 $ — $ 172,985 $ — $ 6,561 $ 335,523

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2020 120,682 — 104,773 — 2,998 228,453

Industrial Technologies:

SGK Brand Solutions:

2022 $ 285,499 $ 4,729 $ 230,437 $ 11,057 $ 55,034 $ 586,756

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(Dollar amounts in thousands, except per share data)

REVENUE RECOGNITION, (continued):

Revenue from products or services provided to customers over time accounted for approximately 12 %, 11 %, and less than 5 % of revenue for the years ended September 30, 2022, 2021, and 2020, respectively.

As of September 30, 2022 and 2021, the Company had contract assets of $ 48,210 and $ 23,998 , respectively, that were recorded in other current assets within the Consolidated Balance Sheets.

As of September 30, 2022 and 2021, the Company had contract liabilities of $ 31,871 and $ 19,752 , respectively, that were recorded in other current liabilities within the Consolidated Balance Sheets.

The increase in contract assets and contract liabilities in fiscal 2022 reflects the acquisition of OLBRICH and R+S Automotive.

FAIR VALUE MEASUREMENTS:

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Total assets at fair value $ — $ 18,860 $ — $ 18,860

Derivatives (1)

$ — $ 2,232 $ — $ 2,232

Total liabilities at fair value $ — $ 2,232 $ — $ 2,232

(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.

September 30, 2021

Level 1 Level 2 Level 3 Total

Derivatives (1)

$ — $ 209 $ — $ 209

Equity and fixed income mutual funds — 6,936 — 6,936

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Total liabilities at fair value $ — $ 2,232 $ — $ 2,232

(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

(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.

The carrying values for other financial assets and liabilities approximated fair value for the years ended September 30, 2022 and 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

Inventories at September 30, 2022 and 2021 consisted of the following:

3 unchanged sentences

$ 225,440 $ 189,088

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

At September 30, 2022 and 2021, non-current investments were as follows:

4 unchanged sentences

$ 25,976 $ 30,438

Equity and fixed income mutual funds primarily represent investments held in trust for the Company's non-qualified Supplemental Retirement Plan ("SERP") and are classified as trading securities and recorded at fair value.

The market value of these investments exceeded cost by $ 138 at September 30, 2020.

During fiscal 2021, the Company sold certain investments held in trust for its SERP.

Such amounts totaled $ 19,167 and were reported as restricted cash as of September 30, 2021.

Equity and fixed income mutual funds at September 30, 2021 represented investments held in trust for the Company's non-qualified Supplemental Retirement Plan ("SERP") and were classified as trading securities and recorded at fair value.

During fiscal 2022, the Company sold these investments in anticipation of the planned settlement of the SERP obligations in fiscal 2023.

Realized and unrealized gains and losses are recorded in investment income.

During fiscal 2020, the Company made investments of $ 9,482 in a non-consolidated Memorialization subsidiary.

The Company subsequently sold its ownership interest in this subsidiary in fiscal 2020 for $ 42,210 of cash and $ 15,000 of senior preferred shares.

In connection with this sale transaction, the Company recognized a pre-tax gain of $ 11,208 which was recorded as a component of administrative expenses for the year ended September 30, 2020.

During fiscal 2021, the Company received $ 15,000 for the full redemption of the senior preferred shares.

The senior preferred shares were included within other investments in the table above for the year ended September 30, 2020.

PROPERTY, PLANT AND EQUIPMENT:

11 unchanged sentences

(Dollar amounts in thousands, except per share data)

LONG-TERM DEBT:

DEBT AND FINANCING ARRANGEMENTS:

Long-term debt at September 30, 2022 and 2021 consisted of the following:

1 unchanged sentence

Securitization facility — 95,990

Senior secured term loan — 22,359

2025 Senior Notes (1)

297,961 297,796

Other borrowings 13,434 10,150

3 unchanged sentences

Long-term debt $ 795,291 $ 759,086

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $ 750,000 senior secured revolving credit facility, which matures in March 2025, and a $ 35,000 senior secured amortizing term loan.

The senior secured amortizing term loan was paid in full in March 2021.

(1) During fiscal 2022, the Company extinguished a small portion of the 2025 Senior Notes.

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $ 750,000 senior secured revolving credit facility, which matures in March 2025.

A portion of the revolving credit facility (not to exceed $ 350,000 ) can be drawn in foreign currencies.

8 unchanged sentences

dollar denominated borrowings on the revolving credit facility at September 30, 2022 and 2021 were $ 472,057 and $ 349,780 , respectively.

There were no outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2021.

Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2020 were € 117.0 million ($ 137,188 ).

There were no outstanding borrowings on the term loan as of September 30, 2021.

Outstanding borrowings on the term loan at September 30, 2020 were $ 22,359 .

The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at September 30, 2022 and 2021 was 3.13 % and 2.03 %, respectively.

5 unchanged sentences

Unamortized costs were $ 1,664 and $ 2,204 at September 30, 2022 and 2021, respectively.

The Company has a $ 115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions, which matures in March 2022 and the Company intends to extend this facility.

Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company.

Matthews RFC in turn assigns a collateral interest in these receivables to certain financial institutions, and then may borrow funds under the Securitization Facility.

The Securitization Facility does not qualify for sale treatment.

Accordingly, the trade receivables and related debt obligations remain on the Company's Consolidated Balance Sheet.

Borrowings under the Securitization Facility bear interest at LIBOR plus 0.75 %.

The Company is required to pay an annual commitment fee ranging from 0.25 % to 0.35 % of the unused portion of the Securitization Facility.

Outstanding borrowings under the Securitization Facility at September 30, 2021 and 2020 were $ 95,990 and $ 67,700 , respectively.

The interest rate on borrowings under this facility at September 30, 2021 and 2020 was 0.83 % and 0.90 %, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

LONG-TERM DEBT, (continued)

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:

September 30, 2021 September 30, 2020

Pay fixed swaps - notional amount $ 250,000 $ 312,500

Net unrealized loss $ ( 2,062 ) $ ( 7,792 )

Weighted-average maturity period (years) 2.2 2.6

Weighted-average received rate 0.08 % 0.15 %

Weighted-average pay rate 1.34 % 1.34 %

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate.

The interest rate swaps have been designated as cash flow hedges of future variable interest payments which are considered probable of occurring.

Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized loss net of unrealized gains of $ 2,062 ($ 1,558 after tax) and an unrealized loss of $ 7,792 ($ 5,884 after tax) at September 30, 2021 and 2020, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").

Assuming market rates remain constant with the rates at September 30, 2021, a loss (net of tax) of approximately $ 1,428 included in AOCI is expected to be recognized in earnings over the next twelve months.

At September 30, 2021 and 2020, the interest rate swap contracts were reflected on a gross-basis in the consolidated balance sheets as follows:

Current assets:

Other current assets $ 31 $ —

Long-term assets:

Other assets 139 —

Current liabilities:

Other current liabilities ( 1,922 ) ( 3,164 )

Long-term liabilities:

Other liabilities ( 310 ) ( 4,628 )

Total derivatives $ ( 2,062 ) $ ( 7,792 )

The (losses) gains recognized on derivatives was as follows:

Derivatives in Cash Flow Hedging Relationships Location of (Loss) Gain Recognized in Income on Derivatives Amount of (Loss) Gain Recognized in Income on Derivatives

2021 2020 2019

Interest rate swaps Interest expense $( 3,249 ) $( 861 ) $ 3,181

The Company recognized the following (losses) gains in AOCI:

Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives Location of (Loss) Gain Reclassified from AOCI into Income Amount of (Loss) Gain Reclassified from AOCI into Income (Effective Portion*)

2021 2020 2019 (Effective Portion*) 2021 2020 2019

Interest rate swaps $ 1,873 $( 6,130 ) $( 6,540 ) Interest expense $( 2,453 ) $( 650 ) $ 2,402

* There is no ineffective portion or amount excluded from effectiveness testing.

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.

In March 2022, Matthews RFC entered into a receivables purchase agreement (“RPA”) to sell up to $ 125,000 of receivables to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred.

The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables.

Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers.

Under the RPA, which matures in March 2024, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin.

The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables.

The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows.

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.

Gross receivables sold and cash collections reinvested under the RPA program were $ 424,789 and $ 328,199 for the year ended September 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.

As of September 30, 2022, the amount sold to the Purchasers was $ 96,590 , which was derecognized from the Consolidated Balance Sheets.

As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $ 44,262 as of September 30, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

LONG-TERM DEBT, (continued)

DEBT AND FINANCING ARRANGEMENTS, (continued)

Previously, the Company had a $ 115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions which matured in March 2022.

The Securitization Facility did not qualify for sale treatment.

Accordingly, the trade receivables and related debt obligations remained on the Company's Consolidated Balance Sheet.

Borrowings under the Securitization Facility were based on LIBOR plus 0.75 % and the Company was required to pay an annual commitment fee ranging from 0.25 % to 0.35 % of the unused portion of the Securitization Facility.

Outstanding borrowings under the Securitization Facility at September 30, 2021 totaled 95,990 .

At September 30, 2021, the interest rate on borrowings under this facility was 0.83 %.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews.

1 unchanged sentence

The credit facility matures in December 2022 and the Company intends to continue to extend this facility.

Outstanding borrowings under the credit facility totaled € 704,000 ($ 817 ) and € 18.9 million ($ 22,166 ) at September 30, 2021 and 2020, respectively.

The weighted-average interest rate on outstanding borrowings under this facility was 2.25 % and 1.25 % at September 30, 2021 and 2020, respectively.

Outstanding borrowings under the credit facility totaled € 8.2 million ($ 8,050 ) and € 0.7 million ($ 817 ) at September 30, 2022 and 2021, respectively.

The weighted-average interest rate on outstanding borrowings under this facility was 2.25 % at September 30, 2022 and 2021.

Other borrowings totaled $ 13,434 and $ 10,150 at September 30, 2022 and 2021, respectively.

The weighted-average interest rate on these borrowings was 1.85 % and 2.19 % at September 30, 2022 and 2021, respectively.

During fiscal 2021, the Company entered into a U.S.

Dollar/Euro cross currency swap with a notional amount of $ 94,464 as of September 30, 2021, which was designated as a net investment hedge of foreign operations.

The swap contract matures in seven years .

The Company assesses hedge effectiveness for this contract based on changes in fair value attributable to changes in spot prices.

A gain of $ 22 (net of income taxes of $ 7 ) which represented an effective hedge of net investments, was reported as a component of AOCI within currency translation adjustment for fiscal 2021.

Income of $ 63 , 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 fiscal 2021.

The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations.

Currency losses of $ 5,370 (net of income taxes of $ 1,743 ) and currency losses of $ 4,377 (net of income taxes of $ 1,420 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment for fiscal 2021 and 2020, respectively.

In September 2014, a claim was filed by a customer seeking to draw upon a letter of credit issued by the Company of £ 8,570,000 ($ 9,544 at September 30, 2022) with respect to a performance guarantee on an incineration equipment project in Saudi Arabia.

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The Company is assessing options to enforce and collect upon the judgment and its level of success in recovering funds from the customer will depend upon several factors, including the availability of recoverable funds, and the level of support of the Saudi Arabian government to enforce the judgment against the customer.

During fiscal 2020 and fiscal 2021, the Saudi Arabian government enforced restrictions on travel to Mecca due to the COVID-19 pandemic.

During fiscal 2020 and fiscal 2021, the Saudi Arabian government enforced restrictions on travel to Mecca due to the coronavirus disease 2019 ("COVID-19") pandemic.

As a result, the Company was not able to support the operation of the incineration equipment for the local agency responsible for its operation during the prior two (2) Hajj Pilgrimages.

6 unchanged sentences

(Dollar amounts in thousands, except per share data)

LONG-TERM DEBT, (continued)

DEBT AND FINANCING ARRANGEMENTS, (continued)

Aggregate maturities by fiscal year of long-term debt, including other borrowings, is as follows:

2 unchanged sentences

Finance lease obligations 7,066 (b)

(a) The Company maintains certain debt facilities with current maturity dates in fiscal 2022 that it intends and has the ability to extend beyond fiscal 2022 totaling $ 96,807 .

(a) The Company maintains certain debt facilities with current maturity dates of twelve months or less that it intends and has the ability to extend beyond twelve months totaling $ 8,050 .

These balances have been classified as non-current on the Company's Consolidated Balance Sheet.

15 unchanged sentences

The following table presents the components of lease cost for the years ended September 30, 2022, 2021 and 2020, respectively:

2022 2021 2020

Finance lease cost:

1 unchanged sentence

Interest on lease liabilities 205 248 206

Operating lease cost (a)

21,716 23,735

Variable lease cost (a)

Operating lease cost 21,675 21,716 23,735

Variable lease cost 10,486 6,752 5,298

Sublease income ( 279 ) ( 83 ) ( 732 )

Total lease cost $ 35,903 $ 32,649 $ 30,619

(a) Annual lease cost under operating leases were $ 28,468 , $ 29,033 and $ 38,015 in fiscal 2021, 2020 and 2019, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3 unchanged sentences

For the Year Ended September 30,

2022 2021 2020

Cash paid for finance and operating lease liabilities:

4 unchanged sentences

ROU assets obtained in exchange for new operating lease liabilities 10,365 16,341 12,442

September 30, 2021 September 30, 2020

September 30,

2022 2021 2020

Weighted-average remaining lease term - finance leases (years) 4.28 3.85 4.39

14 unchanged sentences

$ 74,314 $ 7,066

DERIVATIVES AND HEDGING ACTIVITIES:

The Company operates internationally and utilizes certain derivative financial instruments to manage its foreign currency, debt and interest rate exposures.

At September 30, 2022 and 2021, derivative instruments were reflected on a gross-basis in the consolidated balance sheets as follows:

September 30, 2022 September 30, 2021

Interest Rate Swaps Cross-Currency Swaps Interest Rate Swaps Cross-Currency Swaps

Current assets:

Other current assets $ 3,358 $ — $ 31 $ —

Long-term assets:

Other assets 7,341 3,722 139 39

Current liabilities:

Other current liabilities — — ( 1,922 ) —

Long-term liabilities:

Other liabilities — — ( 310 ) —

Total derivatives $ 10,699 $ 3,722 $ ( 2,062 ) $ 39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DERIVATIVES AND HEDGING ACTIVITIES, (continued)

The following table presents information related to interest rate swaps entered into by the Company and designated as cash flow hedges:

September 30, 2022 September 30, 2021

Notional amount $ 125,000 $ 250,000

Weighted-average maturity period (years) 3.1 2.2

Weighted-average received rate 3.14 % 0.08 %

Weighted-average pay rate 1.04 % 1.34 %

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate.

The interest rate swaps have been designated as cash flow hedges of future variable interest payments which are considered probable of occurring.

The fair value of the interest rate swaps reflected a net unrealized gain of $ 10,699 ($ 7,937 after tax) and a net unrealized loss of $ 2,062 ($ 1,558 after tax) at September 30, 2022 and 2021, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").

Assuming market rates remain constant with the rates at September 30, 2022, a gain (net of tax) of approximately $ 2,510 included in AOCI is expected to be recognized in earnings over the next twelve months.

During fiscal 2021, the Company entered into a U.S.

Dollar/Euro cross currency swap with a notional amount of $ 94,464 , which was designated as a net investment hedge of foreign operations.

The swap was settled during fiscal 2022, resulting in cash proceeds of $ 13,066 .

Concurrently, the Company entered into a new U.S.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 , which was also designated as a net investment hedge of foreign operations.

The new swap contract matures in September 2027.

The Company assesses hedge effectiveness for the swap contracts based on changes in fair value attributable to changes in spot prices.

A gain of $ 2,782 (net of income taxes of $ 940 ) 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 September 30, 2022 and September 30, 2021, respectively.

Income of $ 1,645 and $ 63 , 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 fiscal 2022 and fiscal 2021, respectively.

At September 30, 2022 and September 30, 2021, the swaps totaled $ 3,722 and $ 39 , respectively, and were included in other assets in the Consolidated Balance Sheets.

The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations.

Currency losses of $ 5,370 (net of income taxes of $ 1,743 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2021.

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.

Changes in the fair value of these economic hedges are recorded in current period earnings as a component of other income (deductions), net.

During fiscal 2022, net gains from economic hedges (which largely offset losses from underlying foreign currency exposures) totaled $ 4,677 .

No such economic hedge contracts were outstanding as of September 30, 2022 or 2021.

Refer to Note 16, "Accumulated Other Comprehensive Income" for further details regarding amounts recorded in AOCI and the Consolidated Statements of Income (Loss) related to derivatives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

SHAREHOLDERS' EQUITY:

3 unchanged sentences

Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation.

On July 28, 2021, the Company's Board of Directors approved the continuation of the stock repurchase program and increased the authorization for stock repurchases by an additional 2,500,000 shares.

Under the current authorization, 1,294,842 shares remain available for repurchase as of September 30, 2022.

SHARE-BASED PAYMENTS:

The Company maintains an equity incentive plan (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.

Under the 2017 Equity Incentive Plan, which has a ten -year term, the maximum number of shares available for grants or awards is an aggregate of 1,700,000 .

In November 2021, the Board of Directors approved the Amended and Restated 2017 Equity Incentive Plan (the "Amended 2017 Plan"), which increases the maximum number of shares available for grants or awards to an aggregate of 3,450,000 .

The Amended 2017 Plan is subject to shareholder approval at the February 2022 Annual Shareholder Meeting.

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.

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.

At September 30, 2022, 215,618 shares have been issued under the 2017 Equity Incentive Plan.

2 unchanged sentences

The 2017 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors (the "Committee").

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.

For the years ended September 30, 2022, 2021 and 2020, stock-based compensation cost totaled $ 17,432 , $ 15,581 and $ 8,096 , respectively.

19 unchanged sentences

SHARE-BASED PAYMENTS, (continued)

During the third quarter of fiscal 2021, 75,000 stock options were granted under the 2017 Equity Incentive Plan.

During fiscal 2021, 75,000 stock options were granted under the 2017 Equity Incentive Plan.

The option price for each stock option granted was $ 41.70 , which was equal to the fair market value of the Company's Class A Common Stock on the date of grant.

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There will be no further fees or share-based awards granted under the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan.

In November 2022, the Board of Directors approved the Amended and Restated 2019 Director Fee Plan, which increases the maximum number of shares available for grants or awards to an aggregate of 300,000 .

The Amended and Restated 2019 Director Fee Plan is subject to shareholder approval at the February 2023 Annual Shareholder Meeting.

Under the 2019 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2022, either cash or shares of the Company's Class A Common Stock with a value equal to $ 90 .

4 unchanged sentences

A total of 45,475 shares and share units had been deferred under the Director Fee Plans at September 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 $ 125 for fiscal year 2021.

As of September 30, 2022, 305,911 restricted shares and restricted share units have been granted under the Director Fee Plans, 132,682 of which were issued under the 2019 Director Fee Plan.

3 unchanged sentences

EARNINGS PER SHARE:

The information used to compute earnings (loss) per share attributable to Matthews' common shareholders was as follows:

The information used to compute (loss) earnings per share attributable to Matthews' common shareholders was as follows:

2022 2021 2020

Net income (loss) attributable to Matthews shareholders $ 2,910 $ ( 87,155 ) $ ( 37,988 )

Net (loss) income attributable to Matthews shareholders $ ( 99,774 ) $ 2,910 $ ( 87,155 )

Weighted-average shares outstanding (in thousands):

7 unchanged sentences

Effective January 1, 2014, the Company's DB Plan was closed to new participants.

As of September 30, 2022, all of the Company's defined benefit plans are unfunded.

In April 2021, the Committee approved resolutions to freeze all future benefit accruals for all participants in the Company's SERP and the defined benefit portion of the Officers Retirement Restoration Plan (“ORRP”), effective April 30, 2021.

3 unchanged sentences

At such time, the Company notified all plan participants of the Company's intentions to terminate and fully settle the obligations of the DB Plan early in fiscal 2022.

The freezing of the DB Plan, SERP, and ORRP triggered curtailments, which resulted in the remeasurement of the projected benefit obligations and the immediate recognition of prior service costs in earnings, which were previously included within AOCI.

In the first quarter of fiscal 2022, the Company terminated its DB Plan and made plan contributions totaling $ 35,706 to fully fund the planned settlement of the DB Plan obligations.

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.

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 year ended September 30, 2022.

This amount represents the immediate recognition of the remaining portion of the deferred AOCI balances related to the DB Plan.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6 unchanged sentences

Benefit obligation, beginning of year $ 293,926 $ 318,887 $ 18,841 $ 19,431

Acquisitions (1)

Service cost 392 7,919 165 201

Interest cost 1,127 6,145 411 376

Actuarial (gain) loss ( 8,045 ) 23,827 ( 660 ) ( 1,402 )

Actuarial gain ( 19,978 ) ( 8,045 ) ( 5,989 ) ( 660 )

Curtailment gain — ( 17,324 ) — —

Special termination benefits — 315 — —

Exchange (gain) loss ( 133 ) 799 — —

Settlement ( 242,232 ) — — —

Exchange gain ( 3,093 ) ( 133 ) — —

Benefit payments ( 3,362 ) ( 13,838 ) ( 615 ) ( 507 )

3 unchanged sentences

Fair value, beginning of year 208,344 168,134 — —

168,134 155,313 — —

Actual return 368 37,789 — —

1 unchanged sentence

Employer contributions 36,882 16,259 615 507

Settlement ( 242,232 ) — — —

Fair value, end of year — 208,344 — —

208,344 168,134 — —

Funded status ( 36,609 ) ( 85,582 ) ( 12,813 ) ( 18,841 )

( 85,582 ) ( 150,753 ) ( 18,841 ) ( 19,431 )

Unrecognized actuarial loss 49,545 110,971 16 676

Unrecognized actuarial loss (gain) 5,140 49,545 ( 5,973 ) 16

Unrecognized prior service (credit) cost ( 4,815 ) ( 309 ) ( 1,320 ) ( 1,684 )

7 unchanged sentences

other comprehensive loss (income):

Net actuarial loss $ 49,545 $ 110,971 $ 16 $ 676

Net actuarial loss (gain) $ 5,140 $ 49,545 $ ( 5,973 ) $ 16

Prior service (credit) cost ( 4,815 ) ( 309 ) ( 1,320 ) ( 1,684 )

Net amount recognized $ 325 $ 49,236 $ ( 7,293 ) $ ( 1,668 )

(1) Benefit obligations assumed in connection with the acquisition of OLBRICH and R+S Automotive.

For additional information, see Note 21.

(2) Gains and losses related to changes in assumptions (e.g., discount rate, mortality, etc.), asset, salary and other experience, and curtailments impacted benefit obligations.

(2) The fair value of plan assets and funded status do not include the value of investments and restricted cash held in trust for the Company's non-qualified SERP.

The combined value of these investments and restricted cash totaled $ 26,103 and $ 24,610 as of September 30, 2021 and 2020, respectively.

Refer to Note 7, "Investments" for further details.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14 unchanged sentences

Prior-service cost write-offs * — 261 — — — —

Settlement* 30,856 — — — — —

Net benefit cost $ 31,652 $ 13,253 $ 15,781 $ 212 $ 213 $ 264

1 unchanged sentence

Matthews has elected to utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

Benefit payments under the Company's DB Plan are made from plan assets, while benefit payments under the SERP and postretirement benefit plan are funded from the Company's operating cash.

Benefit payments under the Company's DB Plan were made from plan assets, while benefit payments under the SERP and postretirement benefit plan are made from the Company's operating funds.

Contributions made in fiscal 2022 are as follows:

4 unchanged sentences

Other postretirement plan — 615

In November 2021, subsequent to the date of the balance sheet, the Company contributed $ 20,000 to the DB Plan.

Also in November 2021, lump sum distributions of $ 178,230 from the DB Plan were made to plan participants, resulting in the settlement of a substantial portion of the DB Plan obligations.

This settlement of the DB Plan obligations is expected to result in the recognition of a non-cash charge in excess of $ 30,000 in the first quarter of fiscal 2022.

This amount represents the immediate recognition of a portion of the deferred AOCI balances related to the DB Plan, and is based on current estimates as of September 30, 2021.

In October 2022, subsequent to the date of the balance sheet, the Company made lump sum payments totaling $ 24,242 to fully settle the SERP and defined benefit portion of the ORRP obligations.

The settlement of these plan obligations is expected to result in the recognition of a non-cash charge of approximately $ 1,271 in the first quarter of fiscal 2023.

This amount represents the immediate recognition of the deferred AOCI balances related to the SERP and ORRP, and is based on current estimates as of September 30, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2 unchanged sentences

The weighted-average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed and also the net periodic benefit cost for the following year.

The measurement date of annual actuarial valuations for the Company's DB Plan and other postretirement benefit plans was September 30, for fiscal 2021, 2020 and 2019.

The measurement date of annual actuarial valuations for the Company's pension and other postretirement benefit plans was September 30, for fiscal 2022, 2021 and 2020.

The weighted-average assumptions for those plans were:

7 unchanged sentences

The Company considered the RPEC mortality and mortality improvement tables and performed a review of its own mortality history to assess the appropriateness of the RPEC tables for use in generating financial results.

In fiscal years 2021, 2020 and 2019, the Company elected to value its DB Plan and other postretirement benefit plan liabilities using the base RP 2014 mortality table and a slightly modified fully generational mortality improvement assumption.

In fiscal years 2022, 2021 and 2020, the Company elected to value its pension and other postretirement benefit plan liabilities using the base RP 2014 mortality table and a slightly modified fully generational mortality improvement assumption.

The revised assumption uses the most recent RPEC mortality improvement table for all years where the RPEC tables are based on finalized data, and the most recently published Social Security Administration Intermediate mortality improvement for subsequent years.

1 unchanged sentence

It also provides guidelines enabling plan fiduciaries to fulfill their responsibilities.

The Company's defined benefit pension plans' weighted-average asset allocation at September 30, 2021 and 2020 and weighted-average target allocation were as follows:

Plan Assets at Target

Asset Category 2021 2020 Allocation *

The Company's defined benefit pension plans' weighted-average asset allocation at September 30, 2021 was as follows:

Plan Assets at

Asset Category 2021

Equity securities $ 4,075

1 unchanged sentence

Other investments 14,311

$ 208,344 $ 168,134 100 %

* Target allocation relates to the Company's DB Plan as of September 30, 2021.

During fiscal 2021, the investment policy for the Company's DB Plan was updated to establish modified asset allocation targets.

The updated investment objective is intended to reduce risk assets in favor of fixed income investments as a result of the planned termination and expected settlement of the DB Plan in fiscal 2022.

Based on an analysis of the historical and expected future performance of the plan's assets and information provided by its independent investment advisor, the Company set the long-term rate of return assumption for its DB Plan's assets at 3.10 % in 2021 for purposes of determining pension cost and funded status under current guidance.

The Company's discount rate assumption used in determining the present value of the projected benefit obligation is based upon published indices.

The Company categorizes plan assets within a three level fair value hierarchy (see Note 5, "Fair Value Measurements" for a further discussion of the fair value hierarchy).

5 unchanged sentences

As such, these mutual fund investments are classified as Level 1.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

PENSION AND OTHER POSTRETIREMENT PLANS, (continued)

Fixed income securities consist of publicly traded fixed interest obligations (primarily U.S.

5 unchanged sentences

These values are valued based on cost, which approximates fair value, and as such, are classified as Level 1.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

PENSION AND OTHER POSTRETIREMENT PLANS, (continued)

Other investments consist primarily of real estate, commodities, private equity holdings and hedge fund investments.

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As such, these investments are classified as Level 3.

The Company's defined benefit pension plans' asset categories at September 30, 2021 and 2020 were as follows:

September 30, 2021

Asset Category Level 1 Level 2 Level 3 Total

Equity securities - stocks (1)

$ 4,075 $ — $ — $ 4,075

Fixed income securities 10,403 101,133 — 111,536

Cash and cash equivalents 78,422 — — 78,422

Other investments — — 14,311 14,311

Total $ 92,900 $ 101,133 $ 14,311 $ 208,344

(1) Includes $ 4,075 of of Matthews Class A Common Stock in Level 1.

The Company's defined benefit pension plans' asset categories at September 30, 2021 were as follows:

September 30, 2021

2 unchanged sentences

$ 4,075 $ — $ — $ 4,075

Equity securities - mutual funds 81,588 — — 81,588

Fixed income securities 10,403 101,133 — 111,536

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September 30, 2021 15,273 236 ( 2,144 ) 272 674 14,311

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

PENSION AND OTHER POSTRETIREMENT PLANS, (continued)

Benefit payments expected to be paid are as follows:

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$ 30,105 $ 8,495

2025 12,673 937

2026 13,057 940

2027-2031 67,218 4,546

$ 153,353 $ 9,137

* Pension benefit amounts do not reflect the planned termination and expected settlement of the DB Plan in fiscal 2022 (see above for further details).

* Pension benefit amounts include the settlement of the SERP and ORRP in fiscal 2023 (see above for further details).

For measurement purposes, a rate of increase of 7.5 % in the per capita cost of health care benefits was assumed for 2023;

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The changes in AOCI by component, net of tax, for the years ended September 30, 2022, 2021, and 2020 were as follows:

Postretirement Benefit Plans Currency Translation Adjustment Derivatives Total

Postretirement Benefit Plans Currency Translation Adjustment Cash Flow Hedges Total

Attributable to Matthews:

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Amounts reclassified from AOCI 6,883 (a)

— ( 2,402 ) (b)

Net current-period OCI ( 11,211 ) 4,333 ( 5,480 )

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OCI before reclassification 17,851

( 3,370 ) 1,873

Amounts reclassified from AOCI 23,261 (a)

( 1,242 ) (b)

Net current-period OCI 41,112

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Cumulative foreign currency translation $ ( 203,310 ) $ ( 155,251 )

Fair value of derivatives, net of tax of $ 504 and $ 1,908 , respectively

Fair value of cash flow hedges, net of tax of $ 2,762 and $ 504 , respectively

7,937 ( 1,558 )

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Prior service cost write-off — ( 261 ) — Other income (deductions), net

Settlement loss ( 30,856 ) — — Other income (deductions), net

( 30,809 ) ( 9,539 ) ( 9,117 ) Income before income tax (b)

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$ ( 23,261 ) $ ( 7,202 ) $ ( 6,883 ) Net income

Interest rate swap contracts $ ( 3,249 ) $ ( 861 ) $ 3,181 Interest expense

Cash flow hedges $ ( 1,786 ) $ ( 3,249 ) $ ( 861 ) Interest expense

Net investment hedges 1,645 63 — Interest expense

( 141 ) ( 3,186 ) ( 861 ) Income before income tax (b)

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INCOME TAXES:

The income tax provision (benefit) consisted of the following:

The income tax (benefit) provision consisted of the following:

2022 2021 2020

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Tax credits 1.2 % ( 26.6 ) % 1.8 %

Tax basis difference — % — % 9.8 %

Sale of SERP-related investments — % 23.8 % — %

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Tax rate differential on net operating loss carryback — % ( 21.4 ) % 4.2 %

Other 0.2 % ( 0.1 ) % 3.6 %

( 7.5 ) % 0.2 % ( 0.1 ) %

Effective tax rate 4.2 % 69.0 % 17.6 %

The Company's consolidated income taxes for the year ended September 30, 2021 were an expense of $ 6,375 , compared to a benefit of $ 18,685 for fiscal 2020, and an expense of $ 806 for fiscal 2019.

The difference between the Company's consolidated income taxes for fiscal 2021 compared to fiscal 2020 primarily resulted from fiscal 2021 having consolidated income before income taxes, compared to fiscal 2020 having a consolidated loss, which reflected the goodwill write-down recorded in the second quarter of fiscal 2020, that was partially non-deductible.

Additionally, the fiscal 2021 tax rate was negatively impacted by the termination of the Company's SERP, which resulted in certain expenses that are nondeductible for tax purposes.

The fiscal 2021 effective tax rate benefited from research and development and foreign tax credits, the reduction of uncertain tax positions due to the expiration of the statute of limitations in certain jurisdictions, and the completion of a state tax audit, and the tax benefit of the NOL carryback.

The Company’s fiscal 2020 effective tax rate was negatively affected by the non-deductible portion of the goodwill write-down along with certain other non-deductible expenses.

* In Fiscal 2022, "Other" primarily consists of foreign net operating losses that had a full valuation allowance.

The Company's consolidated income taxes for the year ended September 30, 2022 were a benefit of $ 4,391 , compared to an expense of $ 6,375 for fiscal 2021, and a benefit of $ 18,685 for fiscal 2020.

The difference between the Company's consolidated income taxes for fiscal 2022 compared to fiscal 2021 partially resulted from fiscal 2022 having a consolidated loss before income taxes compared to fiscal 2021 having consolidated income before incomes taxes.

The fiscal 2022 consolidated loss reflected a goodwill write-down recorded in the fourth quarter of fiscal 2022 that was primarily non-deductible.

The fiscal 2022 effective tax rate benefited from research and development and foreign tax credits.

The fiscal 2022 effective tax rate was negatively impacted by foreign net operating losses that had a full valuation allowance.

The fiscal 2021 effective tax rate also benefited from research and development and foreign tax credits as well as the reduction of uncertain tax positions due to the expiration of the statute of limitations in certain jurisdictions, the completion of a state tax audit, and the tax benefit of the NOL carryback.

The fiscal 2021 tax rate was negatively impacted by the termination of the Company's SERP, which resulted in certain expenses that are nondeductible for tax purposes.

The difference between the Company's consolidated income tax provision for fiscal 2021 compared to fiscal 2020 primarily resulted from fiscal 2021 having consolidated income before income taxes, compared to fiscal 2020 having a consolidated loss, which reflected a goodwill write-down that was partially non-deductible.

The Company’s fiscal 2020 effective tax rate was negatively affected by the non-deductible portion of a goodwill write-down along with certain other non-deductible expenses.

The fiscal 2020 effective tax rate benefited from research and development and foreign tax credits, the reduction of uncertain tax positions due to the completion of a foreign tax audit, and the tax benefit of the NOL carryback.

The difference between the Company's effective tax rate for fiscal 2020 versus fiscal 2019 primarily resulted from partially non-deductible goodwill write downs of differing amounts in both periods, as well as a benefit for an expected net operating loss (“NOL”) carryback in fiscal 2020.

The fiscal 2019 effective tax rate benefited from research and development and foreign tax credits and the elimination, achieved through tax planning, of a taxable basis difference.

The Company's foreign subsidiaries had income before income taxes for the year ended September 30, 2021 of approximately $ 6,685 , loss before income taxes for the year ended September 30, 2020 of approximately $ 68,343 and income before income taxes for the year ended September 30, 2019 of approximately $ 11,042 .

The Company's foreign subsidiaries had loss before income taxes for the year ended September 30, 2022 of approximately $ 47,653 , income before income taxes for the year ended September 30, 2021 of approximately $ 6,685 and loss before income taxes for the year ended September 30, 2020 of approximately $ 68,343 .

Deferred income taxes have not been provided on undistributed earnings of foreign subsidiaries since they have either been previously taxed, or are now exempt from tax, under the U.S.

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Net deferred tax liability $ ( 88,979 ) $ ( 93,927 )

At September 30, 2021, the Company had foreign net operating loss carryforwards of $ 218,691 and foreign capital loss carryforwards of $ 21,037 .

At September 30, 2022, the Company had foreign net operating loss carryforwards of $ 249,216 .

The Company has recorded deferred tax assets of $ 3,312 for state net operating loss carryforwards, which will be available to offset future income tax liabilities.

If not used, state net operating losses will begin to expire in 2022.

Certain of the foreign net operating losses begin to expire in 2022 while the majority of the Company's foreign net operating losses have no expiration period.

The majority of the Company's foreign net operating losses have no expiration period.

Certain of these carryforwards are subject to limitations on use due to tax rules affecting acquired tax attributes, loss sharing between group members, and business continuation.

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The Company manages its businesses under three segments:

SGK Brand Solutions, Memorialization and Industrial Technologies.

The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, engineered products (including energy solutions), 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 marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

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.

This business segment change is consistent with internal management structure and reporting changes effective for fiscal 2022.

Prior periods were revised to reflect retrospective application of this segment realignment.

The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, 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 solutions, product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

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 Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA").

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Information about the Company's segments follows:

SGK Brand Solutions Memorialization Industrial Technologies Corporate and Non-Operating Consolidated

Memorialization Industrial Technologies SGK Brand Solutions Corporate and Non-Operating Consolidated

Sales to external customers:

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Total Adjusted EBITDA $ 210,408 $ 227,750 $ 203,080

Acquisition related items (1)**

( 541 ) ( 3,440 ) ( 10,084 )

ERP integration costs (2)**

RPA financing fees (1)

( 1,046 ) — —

Strategic initiatives and other charges (2)**

Workforce reductions and related costs ( 10,644 ) ( 9,232 ) ( 5,061 )

Other cost-reduction initiatives ( 17,317 ) ( 25,718 ) ( 9,176 )

( 37,431 ) ( 29,539 ) ( 40,686 )

Legal matter reserve (3)

2 unchanged sentences

( 2,985 ) ( 5,312 ) ( 3,908 )

Goodwill write-downs (6)

— ( 90,408 ) ( 77,572 )

Net realized gains (losses) on divestitures and asset dispositions:

Gain (loss) on sale of ownership interests in subsidiaries (7)

Defined benefit plan termination related items (5)

Asset write-downs, net (6)

( 10,050 ) — —

Realized loss on cost-method investments (8)

Goodwill write-downs (7)

( 82,454 ) — ( 90,408 )

Net gains from the sale of buildings and vacant properties (9)

Gain on sale of ownership interests in subsidiaries (8)

Joint Venture depreciation, amortization, interest expense and other charges (9)

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Net loss attributable to noncontrolling interests ( 54 ) ( 52 ) ( 497 )

Income (loss) before income taxes 9,233 ( 106,337 ) ( 38,083 )

Income tax (provision) benefit ( 6,375 ) 18,685 ( 806 )

Net income (loss) $ 2,858 $ ( 87,652 ) $ ( 38,889 )

(1) Includes certain non-recurring items associated with recent acquisition activities.

(2) Represents costs associated with global ERP system integration efforts.

(3) Includes certain non-recurring costs primarily associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.

(4) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment (see Note 9, "Long Term Debt").

(Loss) income before income taxes ( 104,219 ) 9,233 ( 106,337 )

Income tax benefit (provision) 4,391 ( 6,375 ) 18,685

Net (loss) income $ ( 99,828 ) $ 2,858 $ ( 87,652 )

(1) Represents fees for receivables sold under the Company's RPA agreement (see Note 9, "Debt and Financing Arrangements").

(2) 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, "Summary of Significant Accounting Policies").

(3) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment (see Note 9, "Debt and Financing Arrangements").

(4) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19.

This amount does not include the impact of any lost sales or underutilization due to COVID-19.

(5) Represents 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.

(6) Represents asset write-downs, net of recoveries within the SGK Brand Solutions segment (see Note 23, "Asset Write-Downs").

(7) Represents goodwill write-downs within the SGK Brand Solutions segment (see Note 22, "Goodwill and Other Intangible Assets").

(7) Represents the gain (loss) on the sale of ownership interests in subsidiaries within the Memorialization segment.

(8) Includes gains/losses related to cost-method investments, and related assets, within the SGK Brand Solutions and Memorialization segments.

(9) Includes significant building and vacant property transactions resulting in a gain of $ 8,663 within the Industrial Technologies segment and losses of $ 915 and $ 401 within the SGK Brand Solutions and Memorialization segments, respectively.

(8) Represents the gain on the sale of ownership interests in subsidiaries within the Memorialization segment.

(9) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.

(11) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, and curtailment gains and losses.

(10) 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.

These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates.

Curtailment gains and losses are excluded from Adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits.

Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations.

The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits.

Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.

* Depreciation and amortization was $ 99,490 , $ 87,597 , and $ 59,684 for the SGK Brand Solutions segment, $ 23,043 , $ 20,527 , and $ 19,731 for the Memorialization segment, $ 5,602 , $ 5,771 , and $ 6,195 for the Industrial Technologies segment, and $ 5,377 , $ 5,163 , and $ 5,183 for Corporate and Non-Operating, for the fiscal years ended September 30, 2021, 2020, and 2019, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 16,349 , $ 14,737 , and $ 8,903 for the SGK Brand Solutions segment and $ 11,267 , $ 22,985 , and $ 19,853 for Corporate and Non-Operating, for the fiscal years ended September 30, 2021, 2020, and 2019, respectively.

Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,923 and $ 2,696 for the Memorialization segment for the fiscal years ended September 30, 2021, and 2020, respectively.

Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 268 and $ 3,073 for the Industrial Technologies segment for the fiscal years ended September 30, 2020 and 2019, respectively.

* Depreciation and amortization was $ 23,228 , $ 23,043 , and $ 20,527 for the Memorialization segment, $ 11,387 , $ 11,427 , and $ 11,923 for the Industrial Technologies segment, $ 64,173 , $ 93,665 , and $ 81,445 for the SGK Brand Solutions segment, and $ 5,268 , $ 5,377 , and $ 5,163 for Corporate and Non-Operating, for the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 3,517 , $ 1,923 , and $ 2,696 for the Memorialization segment, $ 5,631 , $ 4,026 , and $ 2,517 for the Industrial Technologies segment, $ 19,359 , $ 12,323 , and $ 12,488 for the SGK Brand Solutions segment, and $ 8,924 , $ 11,267 , and $ 22,985 for Corporate and Non-Operating, for the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

*** Non-recurring/incremental COVID-19 costs were $ 1,314 , $ 3,646 , and $ 1,819 for the Memorialization segment, $ 6 , $ 38 , and $ 32 for the Industrial Technologies segment, $ 1,199 , $ 1,539 , and $ 1,442 for the SGK Brand Solutions segment, and $ 466 , $ 89 , and $ 615 for Corporate and Non-Operating, for the fiscal years ended September 30, 2022, 2021, and 2020 respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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SEGMENT INFORMATION, (continued)

*** Non-recurring/incremental COVID-19 costs were $ 1,563 and $ 1,453 for the SGK Brand Solutions segment, $ 3,646 and $ 1,819 for the Memorialization segment, $ 14 and $ 21 for the Industrial Technologies segment, and $ 89 and $ 615 for Corporate and Non-Operating, for the fiscal years ended September 30, 2021 and 2020, respectively.

Information about the Company's operations by geographic area follows:

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ACQUISITIONS AND DIVESTITURES:

In April 2021, the Company completed a small acquisition in the hydrogen fuel cell industry within the SGK Brand Solutions segment for a purchase price of $ 2,523 (net of cash acquired and holdback amounts).

The preliminary purchase price allocation is not finalized as of September 30, 2021 and is subject to changes as the Company finalizes the valuation of acquired intangible assets, and obtains additional information related to other assets and liabilities.

In August 2022, the Company acquired German-based engineering firms OLBRICH and R+S Automotive for a purchase price of approximately € 43,700 ($ 44,469 ) (net of cash acquired) within the Industrial Technologies segment.

OLBRICH is a production and intelligent equipment manufacturer, specializing in purpose-built rotary processing equipment, including equipment used in the manufacturing of dry and wet electrodes for lithium-ion batteries used in electric vehicles and components for hydrogen fuel cells and electrolyzers, with additional strong positions in Specialty & Pharma, Packaging and Home & Décor.

R+S Automotive is a specialty engineering services provider of automation, plant and tooling concepts for automotive manufacturing companies around the world.

Annual sales for these businesses were approximately $ 140,000 prior to the acquisition.

The preliminary purchase price allocation is not finalized as of September 30, 2022 and is subject to changes as the Company obtains additional information related to fixed assets, intangible assets, and other assets and liabilities.

In April 2021, the Company completed a small acquisition in the hydrogen fuel cell industry within the Industrial Technologies segment for a purchase price of $ 2,523 (net of cash acquired and holdback amounts).

The Company finalized the allocation of the purchase price in the first quarter of fiscal 2022, resulting in an immaterial adjustment to certain working capital accounts.

In January 2021, the Company acquired a memorialization business that produces and distributes cemetery products for a purchase price of $ 13,100 .

2 unchanged sentences

The Company finalized the allocation of the purchase price in the fourth quarter of fiscal 2021, resulting in an immaterial adjustment to certain working capital accounts.

On November 1, 2018 the Company acquired 80 % ownership of Frost Converting Systems, Inc.

(“Frost”) for a purchase price of approximately $ 7,162 (net of cash acquired and holdback amounts).

Frost is a leading global supplier of high-performance rotary dies for embossing, creasing and cutting of paperboard packaging and is included in the Company's SGK Brand Solutions segment.

The Company finalized the allocation of the purchase price related to the Frost acquisition in the fourth quarter of fiscal 2019, resulting in an immaterial adjustment to certain working capital accounts.

During fiscal 2019, the Company completed small acquisitions in the Memorialization segment for a combined purchase price of $ 3,094 (net of cash acquired and holdback amounts).

The Company finalized the purchase price allocations related to these acquisitions in the first quarter of fiscal 2020, resulting in an immaterial adjustment to certain working capital accounts.

During fiscal 2020, the Company sold its ownership interest in a non-consolidated Memorialization subsidiary for $ 42,210 of cash and $ 15,000 of senior preferred shares.

In connection with this sale transaction, the Company recognized a pre-tax gain of $ 11,208 , which was recorded as a component of administrative expenses for the year ended September 30, 2020.

Subsequently, the Company received $ 15,000 for the full redemption of the senior preferred shares during fiscal 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

ACQUISITIONS AND DIVESTITURES, (continued)

During fiscal 2019, the Company completed the sale of a 51 % ownership interest in a Memorialization business.

Net proceeds from this sale totaled approximately $ 8,254 , and the transaction resulted in the recognition of a $ 5,587 loss, which is included as a component of administrative expenses for the year ended September 30, 2019.

Immediately following the transaction, the Company retained a non-controlling interest in this business.

The Company also divested of a small, fully owned Memorialization business, resulting in the recognition of a $ 882 loss, which is included as a component of administrative expenses for the year ended September 30, 2019.

GOODWILL AND OTHER INTANGIBLE ASSETS:

Changes to goodwill during the years ended September 30, 2022 and 2021, follow.

SGK Brand Solutions Memorialization Industrial Technologies Consolidated

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

Net goodwill at September 30, 2020 $ 361,682 $ 91,969 $ 311,737 $ 765,388

Additions during period 4,775 — — 4,775

Translation and other adjustments ( 97 ) 608 3,113 3,624

Goodwill write-down ( 90,408 ) — — ( 90,408 )

Net goodwill at September 30, 2021 366,360 92,577 314,850 773,787

1 unchanged sentence

Translation and other adjustments ( 4,578 ) ( 2,568 ) ( 25,779 ) ( 32,925 )

Goodwill write-down — — ( 82,454 ) ( 82,454 )

Net goodwill at September 30, 2022 $ 361,782 $ 107,022 $ 206,617 $ 675,421

The net goodwill balances at September 30, 2021 and 2020 included $ 178,732 of accumulated impairment losses.

Accumulated impairment losses at September 30, 2021 and 2020 were $ 173,732 and $ 5,000 for the SGK Brand Solutions and Memorialization segments, respectively.

In fiscal 2021, the additions to SGK Brand Solutions goodwill and Memorialization goodwill reflect acquisitions of small businesses within each segment.

The net goodwill balances at September 30, 2022 and 2021 included $ 261,186 and $ 178,732 of accumulated impairment losses, respectively.

Accumulated impairment losses at September 30, 2022 were $ 5,000 , $ 23,946 , and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

Accumulated impairment losses at September 30, 2021 were $ 5,000 , $ 23,946 , and $ 149,786 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

In fiscal 2022, the additions to Industrial Technologies goodwill reflects the acquisition of OLBRICH and R+S Automotive.

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.

The estimated fair value of the Company's Graphics Imaging reporting unit, within the SGK Brand Solutions segment, exceeded the carrying value (expressed as a percentage of carrying value) by approximately 5 %.

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.

On January 30, 2020, the World Health Organization declared an outbreak of COVID-19 to be a Public Health Emergency of International Concern, and subsequently recognized COVID-19 as a global pandemic in March 2020.

Widespread efforts have been deployed by multiple countries around the world to prevent the virus from spreading, including temporary closures of non-essential businesses, event cancellations, travel restrictions, quarantines, and other disruptive actions.

Substantially all of the Company’s operations have remained open during the COVID-19 pandemic, as they have been considered “essential” businesses during this time.

However, the Company has experienced some commercial impact and business disruptions in certain segments and geographic locations as a result of COVID-19.

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 %.

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.

Additionally, recent increases in the cost of certain materials, labor, and other inflation-related pressures have had an unfavorable impact on the reporting unit's results of operations.

During the fourth quarter of fiscal 2022, in its assessment of these potential impacts, and in light of the limited excess fair value over carrying value for its SGK Brand Solutions reporting unit (discussed above), management determined a triggering event occurred, resulting in a re-evaluation of goodwill for the reporting unit, as of September 1, 2022.

As a result of this interim assessment, the Company recorded a goodwill write-down totaling $ 82,454 during the fiscal 2022 fourth quarter.

Subsequent to this write-down, the fair value of the SGK Brand Solutions reporting unit approximated its carrying value at September 1, 2022.

The fair value for the reporting unit was determined using level 3 inputs (including estimates of revenue growth, EBITDA contribution and the discount rates) and a combination of the income approach using the estimated discounted cash flows and a market-based valuation methodology.

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, additional goodwill write-downs may be necessary in future periods.

In fiscal 2021, the additions to Memorialization goodwill and SGK Brand Solutions goodwill reflect acquisitions of small businesses within each segment.

In fiscal 2020, in its assessment of the potential impacts of COVID-19 on the estimated future earnings and cash flows for the SGK Brand Solutions segment, and in light of the limited excess fair values over carrying values for the segment's two reporting units, management determined that COVID-19 represented a triggering event, resulting in a re-evaluation of the goodwill for the reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products), as of March 31, 2020.

As a result of this interim assessment, the Company recorded a goodwill write-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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GOODWILL AND OTHER INTANGIBLE ASSETS, (continued)

In its assessment of the potential impacts of COVID-19 on the estimated future earnings and cash flows for the SGK Brand Solutions segment, and in light of the limited excess fair values over carrying values for its two reporting units, management determined that COVID-19 represented a triggering event, resulting in a re-evaluation of the goodwill for its reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products), as of March 31, 2020.

As a result of this interim assessment, the Company recorded a goodwill write-down totaling $ 90,408 during the fiscal 2020 second quarter.

down totaling $ 90,408 during the fiscal 2020 second quarter.

Subsequent to this write-down, the fair values of the two reporting units within the SGK Brand Solutions segment (Graphics Imaging and Cylinders, Surfaces and Engineered Products) approximated their carrying values at March 31, 2020.

The fair values for these reporting units were determined using level 3 inputs (including estimates of revenue growth, EBITDA contribution and the discount rates) and a combination of the income approach using the estimated discounted cash flows and a market-based valuation methodology.

During the fourth quarter of fiscal 2019, the Company initiated an in-depth review of the commercial and cost structure of the SGK Brand Solutions segment as a result of continued challenging market conditions affecting the segment.

This review identified certain opportunities to improve the segment’s profitability and reduce its operating cost structure and, as a result, the Company revised its estimates of future earnings and cash flows for the Graphics Imaging reporting unit.

In response to these revised projections, the Company re-evaluated the goodwill for the Graphics Imaging reporting unit, as of September 1, 2019.

As a result of this interim assessment, the Company recorded a goodwill write-down of $ 77,600 during the fiscal 2019 fourth quarter.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of September 30, 2022 and 2021, respectively.

13 unchanged sentences

$ 591,690 $ ( 330,148 ) $ 261,542

The net change in intangible assets during fiscal 2021 included the impact of foreign currency fluctuations during the period, additional amortization and additions related to current year acquisitions.

The net change in intangible assets during fiscal 2022 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to the acquisition of OLBRICH and R+S Automotive.

During the second quarter of fiscal 2021, the Company reassessed the useful lives for certain of its customer relationships.

As a result of this reassessment, the Company reduced the remaining useful lives for these customer relationships to reflect their estimated remaining duration, utilizing actual historical customer attrition rates.

During fiscal 2019, the Company reassessed its trade name strategy for the SGK Brand Solutions segment, in conjunction with an overall assessment and shift of its commercial structure and strategy for this segment, and initiated a plan to reduce its global trade names for its core brand solutions businesses.

As a result of this change, the Company began to discontinue the use of certain trade names within the SGK Brand Solutions segment.

Accordingly, the remaining useful lives of the impacted trade names were reduced to reflect the Company’s brand migration plans and an estimated time period for the discontinued trade names to be classified as defensive assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

GOODWILL AND OTHER INTANGIBLE ASSETS, (continued)

Amortization expense on intangible assets was $ 57,084 , $ 84,233 , and $ 71,514 in fiscal 2022, 2021 and 2020, respectively.

Fiscal year amortization expense is estimated to be approximately $ 41,427 in 2023, $ 35,889 in 2024, $ 18,601 in 2025, $ 14,357 in 2026 and $ 13,364 in 2027.

The accelerated amortization related to the fiscal 2019 reduction in useful lives for certain discontinued trade names is scheduled to continue through the first quarter of fiscal 2022.

ASSET WRITE-DOWNS:

The Company has certain operations in Russia within its SGK Brand Solutions segment.

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.

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 $ 10,050 (net of recoveries) during fiscal 2022 to reduce the carrying value of these assets to zero.

Asset write-downs (primarily related to property, plant and equipment) totaling $ 9,686 and $ 364 were reported within cost of sales and administrative expense, respectively, for the year ended September 30, 2022.

SUBSEQUENT EVENT:

In November 2021, subsequent to the date of the balance sheet, the Company contributed $ 20,000 to the DB Plan.

Also in November 2021, lump sum distributions of $ 178,230 from the DB Plan were made to plan participants, resulting in the settlement of a substantial portion of the DB Plan obligations.

This settlement of the DB Plan obligations is expected to result in the recognition of a non-cash charge in excess of $ 30,000 in the first quarter of fiscal 2022.

This amount represents the immediate recognition of a portion of the deferred AOCI balances related to the DB Plan, and is based on current estimates as of September 30, 2021.

In October 2022, subsequent to the date of the balance sheet, the Company made lump sum payments totaling $ 24,242 to fully settle the SERP and defined benefit portion of the ORRP obligations.

The settlement of these plan obligations is expected to result in the recognition of a non-cash charge of approximately $ 1,271 in the first quarter of fiscal 2023.

This amount represents the immediate recognition of the deferred AOCI balances related to the SERP and ORRP, and is based on current estimates as of September 30, 2022.

See Note 15, "Pension and Other Postretirement Plans" for further discussion.

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(2) Amounts determined not to be collectible (including direct write-offs), net of recoveries.

Description Balance at Beginning of Period Provision Charged To Expense (1)

Description Balance at Beginning of Period Provision Charged (Credited) To Expense (1, 3)

Allowance Changes Other Additions (Deductions) (2)

8 unchanged sentences

(2) Consists principally of adjustments related to foreign exchange.

(3) Fiscal 2022 amount is comprised of a $ 5,004 benefit related to non-survivability of deferred tax assets with full valuation allowance due to entity dissolution and a $ 3,704 expense primarily related to adjustments in net operating loss carryforwards which are precluded from use.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 8. Financial Statements and Supplementary Data