What changed in this filing

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Item 1. Financial Statements

2023-07-28 compared with 2023-04-28 · 176 added, 154 removed, 723 unchanged (31% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands)

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Current assets:

44 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

9 unchanged sentences

Income (loss) before income taxes 8,113 3,915 25,579 ( 21,182 )

Income tax (provision) benefit ( 3,382 ) ( 3,277 ) ( 4,694 ) 3,351

Income tax benefit (provision) 558 ( 1,040 ) ( 4,136 ) 2,311

Net income (loss) 8,671 2,875 21,443 ( 18,871 )

8 unchanged sentences

(Dollar amounts in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Matthews Noncontrolling Interest Total

5 unchanged sentences

Pension plans and other postretirement benefits ( 210 ) 17 — — ( 210 ) 17

Unrecognized (loss) gain on cash flow hedges:

Unrecognized gain (loss) on cash flow hedges:

Net change from periodic revaluation 2,745 1,223 — — 2,745 1,223

Net amount reclassified to earnings ( 238 ) 353 — — ( 238 ) 353

Net change in unrecognized (loss) gain on cash flow hedges ( 2,242 ) 4,092 — — ( 2,242 ) 4,092

Net change in unrecognized gain on cash flow hedges 2,507 1,576 — — 2,507 1,576

OCI, net of tax 3,220 ( 17,700 ) ( 31 ) 15 3,189 ( 17,685 )

Comprehensive income (loss) $ 11,958 $ ( 14,807 ) $ ( 98 ) $ ( 3 ) $ 11,860 $ ( 14,810 )

Six Months Ended March 31,

Nine Months Ended June 30,

Matthews Noncontrolling Interest Total

5 unchanged sentences

Pension plans and other postretirement benefits 559 34,123 — — 559 34,123

Unrecognized (loss) gain on cash flow hedges:

Unrecognized gain (loss) on cash flow hedges:

Net change from periodic revaluation 1,367 5,636 — — 1,367 5,636

6 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

for the three and six months ended March 31, 2023 and 2022 (Unaudited)

for the three and nine months ended June 30, 2023 and 2022 (Unaudited)

(Dollar amounts in thousands, except per share data)

34 unchanged sentences

March 31, 2023 $ 36,334 $ 159,948 $ 703,102 $ ( 167,076 ) $ ( 219,615 ) $ ( 302 ) $ 512,391

Net income (loss) — — 8,738 — — ( 67 ) 8,671

Minimum pension liability — — — ( 210 ) — — ( 210 )

Translation adjustment — — — 923 — ( 31 ) 892

Fair value of cash flow hedges — — — 2,507 — — 2,507

Total comprehensive income 11,860

Stock-based compensation — 5,023 — — — — 5,023

Purchase of 2,068 shares of treasury stock

— — — — ( 79 ) — ( 79 )

Issuance of 11,562 shares of treasury stock

— ( 331 ) — — 431 — 100

Dividends — — ( 7,474 ) — — — ( 7,474 )

June 30, 2023 $ 36,334 $ 164,640 $ 704,366 $ ( 163,856 ) $ ( 219,263 ) $ ( 400 ) $ 521,821

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued

for the three and six months ended March 31, 2023 and 2022 (Unaudited)

for the three and nine months ended June 30, 2023 and 2022 (Unaudited)

(Dollar amounts in thousands, except per share data)

35 unchanged sentences

March 31, 2022 $ 36,334 $ 151,891 $ 798,548 $ ( 161,230 ) $ ( 196,353 ) $ ( 175 ) $ 629,015

Net income (loss) — — 2,893 — — ( 18 ) 2,875

Minimum pension liability — — — 17 — — 17

Translation adjustment — — — ( 19,293 ) — 15 ( 19,278 )

Fair value of cash flow hedges — — — 1,576 — — 1,576

Total comprehensive loss ( 14,810 )

Stock-based compensation — 5,197 — — — — 5,197

Purchase of 704,531 shares of treasury stock

— — — — ( 21,848 ) — ( 21,848 )

Issuance of 3,830 shares of treasury stock

— ( 146 ) — — 146 — —

Dividends — — ( 6,860 ) — — — ( 6,860 )

Divestiture — — — — — ( 91 ) ( 91 )

June 30, 2022 $ 36,334 $ 156,942 $ 794,581 $ ( 178,930 ) $ ( 218,055 ) $ ( 269 ) $ 590,603

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(Dollar amounts in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

4 unchanged sentences

Deferred tax provision (benefit) 680 ( 2,712 )

Loss (gain) on sale of assets, net 594 ( 514 )

Asset write-downs — 10,017

11 unchanged sentences

Proceeds from sale of investments — 3,127

Purchases of investments ( 1,536 ) ( 2,198 )

Other investing activities, net 267 739

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2023

June 30, 2023

(Dollar amounts in thousands, except per share data)

12 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included.

Operating results for the six months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023.

Operating results for the nine months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2022.

7 unchanged sentences

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.

As of March 31, 2023 and September 30, 2022, the Company had net monetary assets related to its Turkish subsidiaries of $ 6,600 and $ 5,022 , respectively.

For the three and six months ended March 31, 2023, exchange losses related to highly inflationary accounting totaled $ 160 and $ 1,248 , respectively, and were included in the Consolidated Statements of Income within other income (deductions), net.

As of June 30, 2023 and September 30, 2022, the Company had net monetary assets related to its Turkish subsidiaries of $ 5,387 and $ 5,022 , respectively.

For the three and nine months ended June 30, 2023, exchange losses related to highly inflationary accounting totaled $ 1,826 and $ 3,074 , respectively, and were included in the Consolidated Statements of Income within other income (deductions), net.

For the three and nine months ended June 30, 2022, exchange losses related to highly inflationary accounting totaled $ 1,245 and were included in the Consolidated Statements of Income within other income (deductions), net.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

14 unchanged sentences

Revenue Recognition

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

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.

Disaggregated sales by segment and region for the three and six months ended March 31, 2023 and 2022 were as follows:

Disaggregated sales by segment and region for the three and nine months ended June 30, 2023 and 2022 were as follows:

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

Three Months Ended

March 31, Three Months Ended

June 30, Three Months Ended

2023 2022 2023 2022 2023 2022 2023 2022

9 unchanged sentences

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31,

Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022 2023 2022 2023 2022

5 unchanged sentences

Total Sales $ 638,119 $ 633,868 $ 365,190 $ 230,928 $ 397,419 $ 440,480 $ 1,400,728 $ 1,305,276

Revenue from products or services provided to customers over time accounted for approximately 13 % and 9 % of revenue for the three months ended March 31, 2023 and 2022, respectively, and 13 % and 11 % of revenue for the six months ended March 31, 2023 and 2022, respectively.

Revenue from products or services provided to customers over time accounted for approximately 17 % and 13 % of revenue for the three months ended June 30, 2023 and 2022, respectively, and 14 % and 11 % of revenue for the nine months ended June 30, 2023 and 2022, respectively.

Fair Value Measurements

5 unchanged sentences

The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

1 unchanged sentence

$ — $ 1,734 $ — $ 1,734 $ — $ 14,421 $ — $ 14,421

Equity and fixed income mutual funds — 693 — 693 — — — —

Life insurance policies — 5,234 — 5,234 — 4,439 — 4,439

4 unchanged sentences

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

The carrying values for other financial assets and liabilities approximated fair value at March 31, 2023 and September 30, 2022.

The carrying values for other financial assets and liabilities approximated fair value at June 30, 2023 and September 30, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1 unchanged sentence

Inventories consisted of the following:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Raw materials $ 69,674 $ 52,586

3 unchanged sentences

Non-current investments consisted of the following:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Equity and fixed income mutual funds $ 693 $ —

Life insurance policies 5,234 4,439

5 unchanged sentences

Debt and Financing Arrangements

Long-term debt at March 31, 2023 and September 30, 2022 consisted of the following:

March 31, 2023 September 30, 2022

Long-term debt at June 30, 2023 and September 30, 2022 consisted of the following:

June 30, 2023 September 30, 2022

Revolving credit facilities $ 452,691 $ 480,107

9 unchanged sentences

The Company accounted for the change in reference rate as a non-substantial modification.

Borrowings under the revolving credit facility now bear interest at SOFR, plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 0.75 % to 2.00 % ( 1.25 % at March 31, 2023) based on the Company's secured leverage ratio.

Borrowings under the revolving credit facility now bear interest at SOFR, plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 0.75 % to 2.00 % ( 1.25 % at June 30, 2023) based on the Company's secured leverage ratio.

Previously, borrowings under the revolving credit facility bore interest at LIBOR plus a factor ranging from 0.75 % to 2.00 % based on the Company's secured leverage ratio.

2 unchanged sentences

The Company incurred debt issuance costs in connection with the domestic credit facility.

Unamortized costs were $ 1,218 and $ 1,522 at March 31, 2023 and September 30, 2022, respectively.

Unamortized costs were $ 1,065 and $ 1,522 at June 30, 2023 and September 30, 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

4 unchanged sentences

Outstanding U.S.

dollar denominated borrowings on the revolving credit facility at March 31, 2023 and September 30, 2022 were $ 451,501 and $ 472,057 , respectively.

The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at March 31, 2023 and 2022 was 5.17 % and 1.89 %, respectively.

dollar denominated borrowings on the revolving credit facility at June 30, 2023 and September 30, 2022 were $ 450,329 and $ 472,057 , respectively.

The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at June 30, 2023 and 2022 was 5.59 % and 1.92 %, respectively.

The Company has $ 299,625 of 5.25 % senior unsecured notes due December 1, 2025 (the "2025 Senior Notes").

3 unchanged sentences

The Company incurred direct financing fees and costs in connection with the 2025 Senior Notes.

Unamortized costs were $ 1,394 and $ 1,664 at March 31, 2023 and September 30, 2022, respectively.

Unamortized costs were $ 1,260 and $ 1,664 at June 30, 2023 and September 30, 2022, respectively.

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

7 unchanged sentences

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 March 31, 2023 and September 30, 2022, the amount sold to the Purchasers was $ 108,600 and $ 96,590 , respectively, which was derecognized from the Consolidated Balance Sheets.

As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $ 41,830 and $ 44,262 as of March 31, 2023 and September 30, 2022, respectively.

As of June 30, 2023 and September 30, 2022, the amount sold to the Purchasers was $ 113,200 and $ 96,590 , respectively, which was derecognized from the Consolidated Balance Sheets.

As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $ 48,501 and $ 44,262 as of June 30, 2023 and September 30, 2022, respectively.

The following table sets forth a summary of receivables sold as part of the RPA:

Six Months Ended

March 31, 2023 Six Months Ended

March 31, 2022

Nine Months Ended

June 30, 2023 Nine Months Ended

June 30, 2022

Gross receivables sold

8 unchanged sentences

As these transfers qualify as true sales under the applicable accounting guidance, the receivables are de-recognized from the Company's Consolidated Balance Sheets upon transfer.

The principal amount of receivables sold under this arrangement was $ 16,950 during the six months ended March 31, 2023.

The principal amount of receivables sold under this arrangement was $ 36,045 during the nine months ended June 30, 2023.

The discounts on the trade receivables sold are included within administrative expense in the Consolidated Statements of Income.

The proceeds from the sale of receivables are classified as operating activities in the Company's Consolidated Statements of Cash Flows.

As of June 30, 2023, the amount of factored receivables that remained outstanding was $ 15,714 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5 unchanged sentences

This facility has no stated maturity date and is available until terminated.

Outstanding borrowings under the credit facility totaled € 0.9 million ($ 970 ) and € 8.2 million ($ 8,050 ) at March 31, 2023 and September 30, 2022, respectively.

The weighted-average interest rate on outstanding borrowings under this facility was 5.17 % and 2.25 % at March 31, 2023 and 2022, respectively.

Other borrowings totaled $ 21,057 and $ 13,434 at March 31, 2023 and September 30, 2022, respectively.

The weighted-average interest rate on all other borrowings was 3.01 % and 1.92 % at March 31, 2023 and 2022, respectively.

As of March 31, 2023 and September 30, 2022, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.

The Company was in compliance with all of its debt covenants as of March 31, 2023.

Outstanding borrowings under the credit facility totaled € 2.2 million ($ 2,362 ) and € 8.2 million ($ 8,050 ) at June 30, 2023 and September 30, 2022, respectively.

The weighted-average interest rate on outstanding borrowings under this facility was 5.65 % and 2.25 % at June 30, 2023 and 2022, respectively.

Other borrowings totaled $ 17,345 and $ 13,434 at June 30, 2023 and September 30, 2022, respectively.

The weighted-average interest rate on all other borrowings was 2.44 % and 1.90 % at June 30, 2023 and 2022, respectively.

As of June 30, 2023 and September 30, 2022, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.

The Company was in compliance with all of its debt covenants as of June 30, 2023.

Derivatives and Hedging Instruments

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

At March 31, 2023 and September 30, 2022, derivative instruments were reflected on a gross-basis in the consolidated balance sheets as follows:

March 31, 2023 September 30, 2022

At June 30, 2023 and September 30, 2022, derivative instruments were reflected on a gross-basis in the consolidated balance sheets as follows:

June 30, 2023 September 30, 2022

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

9 unchanged sentences

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

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Notional amount $ 175,000 $ 125,000

10 unchanged sentences

Derivatives and Hedging Instruments (continued)

The fair value of the interest rate swaps reflected a net unrealized loss of $ 3,394 ($ 2,537 after tax) at March 31, 2023 and an unrealized gain of $ 10,699 ($ 7,937 after tax) at September 30, 2022, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").

Unrecognized gains of $ 10,474 ($ 7,829 after tax) related to the terminated LIBOR-based swaps were also included in AOCI as of March 31, 2023.

Assuming market rates remain constant with the rates at March 31, 2023, a gain (net of tax) of approximately $ 2,952 included in AOCI is expected to be recognized in earnings over the next twelve months.

The fair value of the interest rate swaps reflected a net unrealized gain of $ 1,171 ($ 876 after tax) at June 30, 2023 and an unrealized gain of $ 10,699 ($ 7,937 after tax) at September 30, 2022, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").

Unrecognized gains of $ 9,263 ($ 6,922 after tax) related to the terminated LIBOR-based swaps were also included in AOCI as of June 30, 2023.

Assuming market rates remain constant with the rates at June 30, 2023, a gain (net of tax) of approximately $ 3,550 included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company has a U.S.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 , as of March 31, 2023 and September 30, 2022, which has been designated as a net investment hedge of foreign operations.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 , as of June 30, 2023 and September 30, 2022, which has been designated as a net investment hedge of foreign operations.

The swap contract matures in September 2027.

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

A loss of $ 2,323 (net of income taxes of $ 784 ) and a gain of $ 2,782 (net of income taxes of $ 940 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2023 and September 30, 2022, respectively.

Income of $ 309 and $ 581 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended March 31, 2023, respectively.

Income of $ 420 and $ 785 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended March 31, 2022, respectively.

At March 31, 2023 and September 30, 2022, the swaps totaled $ 3,107 and $ 3,722 , respectively, and was included in other accrued liabilities and other assets in the Consolidated Balance Sheets, respectively.

A loss of $ 3,265 (net of income taxes of $ 1,103 ) and a gain of $ 2,782 (net of income taxes of $ 940 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at June 30, 2023 and September 30, 2022, respectively.

Income of $ 284 and $ 866 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and nine months ended June 30, 2023, respectively.

Income of $ 428 and $ 1,213 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and nine months ended June 30, 2022, respectively.

At June 30, 2023 and September 30, 2022, the swaps totaled $ 4,368 and $ 3,722 , respectively, and was included in other accrued liabilities and other assets in the Consolidated Balance Sheets, respectively.

Refer to Note 12, "Accumulated Other Comprehensive Income" for further details regarding amounts recorded in AOCI and the Consolidated Statements of Income (Loss) related to derivatives.

2 unchanged sentences

Under the 2017 Equity Incentive Plan, which has a ten-year term from the date the Company's Board of Directors approved of the amendment and restatement 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 March 31, 2023, 486,503 shares have been issued under the 2017 Equity Incentive Plan.

At June 30, 2023, 493,758 shares have been issued under the 2017 Equity Incentive Plan.

1,041,615 time-based restricted share units, 1,313,162 performance-based restricted share units, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan.

1,811,152 of these share-based awards are outstanding as of March 31, 2023.

1,801,197 of these share-based awards are outstanding as of June 30, 2023.

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

The number of shares issued under performance-based restricted share units may be up to 200 % of the number of performance-based restricted share units, based on the satisfaction of specific criteria established by the plan administrator.

For the three-month periods ended March 31, 2023 and 2022, stock-based compensation cost totaled $ 4,278 and $ 5,222 , respectively.

For the six-month periods ended March 31, 2023 and 2022, stock-based compensation cost totaled $ 8,612 and $ 8,931 , respectively.

The associated future income tax benefit recognized for stock-based compensation was $ 1,057 and $ 1,278 for the three-month periods ended March 31, 2023 and 2022, respectively, and $ 1,608 and $ 1,688 for the six-month periods ended March 31, 2023 and 2022, respectively.

For the three-month periods ended June 30, 2023 and 2022, stock-based compensation cost totaled $ 5,023 and $ 5,197 , respectively.

For the nine-month periods ended June 30, 2023 and 2022, stock-based compensation cost totaled $ 13,635 and $ 14,128 , respectively.

The associated future income tax benefit recognized for stock-based compensation was $ 1,249 and $ 1,282 for the three-month periods ended June 30, 2023 and 2022, respectively, and $ 2,856 and $ 2,970 for the nine-month periods ended June 30, 2023 and 2022, respectively.

With respect to the restricted share unit grants, units generally vest on the third anniversary of the grant date.

6 unchanged sentences

Share-Based Payments (continued)

The transactions for restricted shares and restricted share units for the six months ended March 31, 2023 were as follows:

The transactions for restricted shares and restricted share units for the nine months ended June 30, 2023 were as follows:

Shares /Units Weighted-

3 unchanged sentences

Expired or forfeited ( 142,678 ) 40.66

Non-vested at March 31, 2023 1,736,152 $ 30.90

Non-vested at June 30, 2023 1,726,197 $ 30.89

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

3 unchanged sentences

The Company generally settles employee stock option exercises with treasury shares.

As of March 31, 2023, the total unrecognized compensation cost related to all unvested stock-based awards was $ 26,437 and is expected to be recognized over a weighted average period of 2.3 years.

As of June 30, 2023, the total unrecognized compensation cost related to all unvested stock-based awards was $ 21,695 and is expected to be recognized over a weighted average period of 2.1 years.

The Company maintains the Amended and Restated 2019 Director Fee Plan, the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan (collectively, the "Director Fee Plans").

5 unchanged sentences

The value of deferred shares is recorded in other liabilities.

A total of 49,084 shares and share units had been deferred under the Director Fee Plans as of March 31, 2023.

A total of 45,005 shares and share units had been deferred under the Director Fee Plans as of June 30, 2023.

Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares or units) with a value of $ 140 for fiscal 2023.

As of March 31, 2023, 336,127 restricted shares and restricted share units have been granted under the Director Fee Plans, 162,898 of which were issued under the 2019 Director Fee Plan.

60,057 restricted share units are unvested at March 31, 2023.

As of June 30, 2023, 336,127 restricted shares and restricted share units have been granted under the Director Fee Plans, 162,898 of which were issued under the 2019 Director Fee Plan.

60,057 restricted share units are unvested at June 30, 2023 under the Director Fee Plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

5 unchanged sentences

Dividends declared per common share $ 0.23 $ 0.22 $ 0.69 $ 0.66

Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and six months ended March 31, 2023.

Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and nine months ended June 30, 2023, and the three months ended June 30, 2022.

During periods in which the Company incurs a net loss, diluted weighted-average shares outstanding are equal to basic weighted-average shares outstanding because the effect of all equity awards is anti-dilutive.

2 unchanged sentences

Net periodic pension and other postretirement benefit cost for the plans included the following:

Three months ended March 31,

Three months ended June 30,

Pension Other Postretirement

7 unchanged sentences

Net benefit cost $ 132 $ 74 $ ( 89 ) $ 53

Six months ended March 31,

Nine months ended June 30,

Pension Other Postretirement

15 unchanged sentences

In the first quarter of fiscal 2023, the Company made lump sum payments totaling $ 24,242 to fully settle the supplemental retirement plan ("SERP") and defined benefit portion of the officers retirement restoration plan ("ORRP") obligations.

The settlement of these plan obligations resulted in the recognition of a non-cash charge of $ 1,271 , which has been presented as a component of other income (deductions), net for the six months ended March 31, 2023.

This amount represents the immediate recognition of the deferred AOCI balances related to the SERP and ORRP.

3 unchanged sentences

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 six months ended March 31, 2022.

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

Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the three-month periods ended March 31, 2023 and 2022 were as follows:

The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2023 and 2022 were as follows:

Post-retirement benefit plans Currency translation adjustment Cash Flow Hedges Total

Attributable to Matthews:

Balance, December 31, 2022 $ 6,127 $ ( 182,750 ) $ 7,533 $ ( 169,090 )

Balance, March 31, 2023 $ 5,951 $ ( 178,318 ) $ 5,291 $ ( 167,076 )

OCI before reclassification ( 5 ) 1,135 2,745 3,875

2 unchanged sentences

Net current-period OCI ( 210 )

( 2,242 ) 2,014

Balance, March 31, 2023 $ 5,951 $ ( 178,318 ) $ 5,291 $ ( 167,076 )

Balance, June 30, 2023 $ 5,741 $ ( 177,395 ) $ 7,798 $ ( 163,856 )

Attributable to noncontrolling interest:

Balance, December 31, 2022 $ — $ 259 $ — $ 259

Balance, March 31, 2023 $ — $ 254 $ — $ 254

OCI before reclassification — ( 31 ) — ( 31 )

Net current-period OCI — ( 31 ) — ( 31 )

Balance, March 31, 2023 $ — $ 254 $ — $ 254

Balance, June 30, 2023 $ — $ 223 $ — $ 223

Post-retirement benefit plans Currency translation adjustment Cash Flow Hedges Total

Attributable to Matthews:

Balance, December 31, 2021 $ ( 1,797 ) $ ( 157,240 ) $ ( 77 ) $ ( 159,114 )

Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )

OCI before reclassification 69 ( 18,970 ) 1,223 ( 17,678 )

2 unchanged sentences

Net current-period OCI 17 ( 19,293 ) 1,576 ( 17,700 )

Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )

Balance, June 30, 2022 $ ( 1,807 ) $ ( 182,714 ) $ 5,591 $ ( 178,930 )

Attributable to noncontrolling interest:

Balance, December 31, 2021 $ — $ 245 $ — $ 245

Balance, March 31, 2022 $ — $ 249 $ — $ 249

OCI before reclassification — 15

Net current-period OCI — 15 — 15

Balance, March 31, 2022 $ — $ 249

Balance, June 30, 2022 $ — $ 264

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).

3 unchanged sentences

Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2023 and 2022 were as follows:

The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2023 and 2022 were as follows:

Post-retirement benefit plans Currency translation adjustment Cash Flow Hedges Total

6 unchanged sentences

25,915 ( 139 ) 26,335

Balance, March 31, 2023 $ 5,951 $ ( 178,318 ) $ 5,291 $ ( 167,076 )

Balance, June 30, 2023 $ 5,741 $ ( 177,395 ) $ 7,798 $ ( 163,856 )

Attributable to noncontrolling interest:

2 unchanged sentences

Net current-period OCI — ( 32 ) — ( 32 )

Balance, March 31, 2023 $ — $ 254 $ — $ 254

Balance, June 30, 2023 $ — $ 223 $ — $ 223

Post-retirement benefit plans Currency translation adjustment Cash Flow Hedges Total

5 unchanged sentences

Net current-period OCI 34,123 ( 27,463 ) 7,149 13,809

Balance, March 31, 2022 $ ( 1,824 ) $ ( 163,421 ) $ 4,015 $ ( 161,230 )

Balance, June 30, 2022 $ ( 1,807 ) $ ( 182,714 ) $ 5,591 $ ( 178,930 )

Attributable to noncontrolling interest:

2 unchanged sentences

Net current-period OCI — 23 — 23

Balance, March 31, 2022 $ — $ 249

Balance, June 30, 2022 $ — $ 264

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).

3 unchanged sentences

Accumulated Other Comprehensive Income (continued)

Reclassifications out of AOCI for the three and six-month periods ended March 31, 2023 and 2022 were as follows:

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2023 and 2022 were as follows:

Amount reclassified from AOCI

Details about AOCI Components Three Months Ended March 31, 2023 Six Months Ended March 31, 2023 Affected line item in the Statement of income

Details about AOCI Components Three Months Ended June 30, 2023 Nine Months Ended June 30, 2023 Affected line item in the Statement of income

Postretirement benefit plans

12 unchanged sentences

Details about AOCI Components Three Months Ended

March 31, 2022 Six Months Ended

March 31, 2022 Affected line item in the Statement of income

June 30, 2022 Nine Months Ended

June 30, 2022 Affected line item in the Statement of income

Postretirement benefit plans

17 unchanged sentences

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year.

The Company's consolidated income taxes for the first six months of fiscal 2023 were an expense of $ 4,694 , compared to a benefit of $ 3,351 for the first six months of fiscal 2022.

The difference between the Company’s consolidated income taxes for the first six months of fiscal 2023 compared to the same period for fiscal 2022 primarily resulted from consolidated pre-tax income in fiscal 2023 compared to a pre-tax loss in fiscal 2022.

The Company’s fiscal 2023 six-month effective tax rate varied from the U.S.

The Company's consolidated income taxes for the first nine months of fiscal 2023 were an expense of $ 4,136 , compared to a benefit of $ 2,311 for the first nine months of fiscal 2022.

The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2023 compared to the same period for fiscal 2022 primarily resulted from consolidated pre-tax income in fiscal 2023 compared to a pre-tax loss in fiscal 2022.

The Company’s fiscal 2023 nine-month effective tax rate varied from the U.S.

statutory tax rate of 21.0% primarily due to state taxes, foreign statutory rate differentials, tax credits, and non-tax benefited foreign losses.

The Company’s fiscal 2022 six-month effective tax rate varied from the U.S.

The Company’s fiscal 2022 nine-month effective tax rate varied from the U.S.

statutory tax rate of 21.0% primarily due to the non-deductible asset write-downs in Russia, state taxes, foreign statutory rate differentials, and tax credits.

The Company had unrecognized tax benefits (excluding penalties and interest) of $ 4,529 and $ 4,123 on March 31, 2023 and September 30, 2022, respectively, which would impact the annual effective rate at March 31, 2023 and September 30, 2022, respectively.

The Company had unrecognized tax benefits (excluding penalties and interest) of $ 4,582 and $ 4,123 on June 30, 2023 and September 30, 2022, respectively, which would impact the annual effective rate at June 30, 2023 and September 30, 2022, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 3,213 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes.

Total penalties and interest accrued were $ 903 and $ 876 at March 31, 2023 and September 30, 2022, respectively.

Total penalties and interest accrued were $ 959 and $ 876 at June 30, 2023 and September 30, 2022, respectively.

These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions.

As of March 31, 2023, the tax years that remain subject to examination by major jurisdictions generally are:

As of June 30, 2023, the tax years that remain subject to examination by major jurisdictions generally are:

United States – Federal 2019 and forward

5 unchanged sentences

Australia 2018 and forward

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Segment Information

9 unchanged sentences

For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Segment Information (continued)

In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis.

3 unchanged sentences

Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Segment Information (continued)

The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income.

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

9 unchanged sentences

Total Adjusted EBITDA $ 56,188 $ 46,024 $ 163,926 $ 154,547

RPA and factoring financing fees (1)

( 1,090 ) — ( 1,546 ) —

Acquisition and divestiture costs (1)**

4 unchanged sentences

— ( 301 ) — ( 2,204 )

Exchange losses related to highly inflationary accounting (5)

Highly inflationary accounting losses (primarily non-cash) (4)

( 1,826 ) — ( 3,074 ) —

8 unchanged sentences

( 23,936 ) ( 22,938 ) ( 71,813 ) ( 80,163 )

Interest expense ( 12,047 ) ( 6,260 ) ( 22,262 ) ( 12,767 )

Interest expense, including RPA and factoring financing fees (8)

( 12,136 ) ( 6,659 ) ( 35,944 ) ( 19,426 )

Net loss attributable to noncontrolling interests ( 67 ) ( 18 ) ( 125 ) ( 56 )

Income (loss) before income taxes 8,113 3,915 25,579 ( 21,182 )

Income tax (provision) benefit ( 3,382 ) ( 3,277 ) ( 4,694 ) 3,351

Income tax benefit (provision) 558 ( 1,040 ) ( 4,136 ) 2,311

Net income (loss) $ 8,671 $ 2,875 $ 21,443 $ ( 18,871 )

2 unchanged sentences

Segment Information (continued)

(1) Represents fees for receivables sold under the RPA and factoring arrangements (see Note 7, "Debt and Financing Arrangements").

(1) Includes certain non-recurring costs associated with recent acquisition and divestiture activities.

(3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

(2) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries of $ 2,154 related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

(3) 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.

8 unchanged sentences

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

* Depreciation and amortization was $ 5,711 and $ 5,803 for the Memorialization segment, $ 5,916 and $ 2,531 for the Industrial Technologies segment, $ 11,319 and $ 14,060 for the SGK Brand Solutions segment, and $ 1,202 and $ 1,330 for Corporate and Non-Operating, for the three months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization was $ 11,285 and $ 11,613 for the Memorialization segment, $ 11,769 and $ 5,184 for the Industrial Technologies segment, $ 22,379 and $ 37,785 for the SGK Brand Solutions segment, and $ 2,444 and $ 2,643 for Corporate and Non-Operating, for the six months ended March 31, 2023 and 2022, respectively.

** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $ 333 and $ 516 for the Memorialization segment, $ 2,437 and $ 161 for the Industrial Technologies segment, $ 2,610 and $ 4,475 for the SGK Brand Solutions segment, and income of $ 1,248 and charges of $ 1,598 for Corporate and Non-Operating, for the three months ended March 31, 2023 and 2022, respectively.

Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $ 711 and $ 1,188 for the Memorialization segment, $ 3,374 and $ 193 for the Industrial Technologies segment, $ 3,131 and $ 5,703 for the SGK Brand Solutions segment, and income of $ 39 and charges of $ 3,489 for Corporate and Non-Operating, for the six months ended March 31, 2023 and 2022, respectively.

*** Non-recurring/incremental COVID-19 costs were $ 579 for the Memorialization segment, $ 1 for the Industrial Technologies segment, $ 170 for the SGK Brand Solutions segment, and $ 463 for Corporate and Non-Operating, for the three months ended March 31, 2022.

Non-recurring/incremental COVID-19 costs were $ 1,043 for the Memorialization segment, $ 5 for the Industrial Technologies segment, $ 390 for the SGK Brand Solutions segment, and $ 465 for Corporate and Non-Operating, for the six months ended March 31, 2022.

(8) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ 1,212 and $ 2,758 for the three and nine months ended June 30, 2023, respectively.

* Depreciation and amortization was $ 5,807 and $ 5,835 for the Memorialization segment, $ 5,815 and $ 2,459 for the Industrial Technologies segment, $ 11,164 and $ 13,334 for the SGK Brand Solutions segment, and $ 1,150 and $ 1,310 for Corporate and Non-Operating, for the three months ended June 30, 2023 and 2022, respectively.

Depreciation and amortization was $ 17,092 and $ 17,448 for the Memorialization segment, $ 17,584 and $ 7,643 for the Industrial Technologies segment, $ 33,543 and $ 51,119 for the SGK Brand Solutions segment, and $ 3,594 and $ 3,953 for Corporate and Non-Operating, for the nine months ended June 30, 2023 and 2022, respectively.

** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $ 270 and $ 902 for the Memorialization segment, $ 120 and $ 1,183 for the Industrial Technologies segment, $ 3,897 and $ 1,970 for the SGK Brand Solutions segment, $ 715 and $ 3,235 for Corporate and Non-Operating, for the three months ended June 30, 2023 and 2022, respectively.

Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $ 981 and $ 2,090 for the Memorialization segment, $ 3,494 and $ 1,376 for the Industrial Technologies segment, $ 7,028 and $ 7,673 for the SGK Brand Solutions segment, $ 676 and $ 6,724 for Corporate and Non-Operating, for the nine months ended June 30, 2023 and 2022, respectively.

*** Non-recurring/incremental COVID-19 costs were $ 225 for the Memorialization segment, $ 1 for the Industrial Technologies segment, $ 74 for the SGK Brand Solutions segment, and $ 1 for Corporate and Non-Operating, for the three months ended June 30, 2022.

Non-recurring/incremental COVID-19 costs were $ 1,268 for the Memorialization segment, $ 6 for the Industrial Technologies segment, $ 464 for the SGK Brand Solutions segment, and $ 466 for Corporate and Non-Operating, for the nine months ended June 30, 2022.

In March 2023, the Company purchased the remaining ownership interest in a non-consolidated Industrial Technologies subsidiary for $ 4,759 (net of cash acquired and holdbacks).

The transaction closed on March 31, 2023, but was funded subsequent to the balance sheet date on April 3, 2023.

The Company recorded a liability of $ 7,955 for amounts due to the seller as of March 31, 2023.

The preliminary purchase price allocation was not finalized as of March 31, 2023 and remains subject to change as the Company obtains additional information related to working capital and other assets and liabilities.

The preliminary purchase price allocation was not finalized as of June 30, 2023 and remains subject to change as the Company obtains additional information related to working capital and other assets and liabilities.

In February 2023, the Company acquired Eagle Granite Company ("Eagle") within the Memorialization segment for a total purchase price of $ 18,384 , consisting of cash of $ 8,650 (net of cash acquired) and a deferred purchase price amount of $ 9,734 , which is scheduled to be paid to the seller two years from the acquisition date.

1 unchanged sentence

Eagle serves cemeteries and monument companies with a full complement of granite memorialization products.

During the first fiscal quarter of 2023, the Company completed small acquisitions within the SGK Brand Solutions segment for a combined purchase price of $ 1,932 (net of cash acquired and holdbacks).

The preliminary purchase price allocations were not finalized as of March 31, 2023 and remain subject to change as the Company obtains additional information related to working capital and other assets and liabilities.

The preliminary purchase price allocations were not finalized as of June 30, 2023 and remain subject to change as the Company obtains additional information related to working capital and other assets and liabilities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5 unchanged sentences

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

The preliminary purchase price allocation was not finalized as of March 31, 2023 and remains subject to change as the Company obtains additional information related to other assets and liabilities.

The preliminary purchase price allocation was not finalized as of June 30, 2023 and remains subject to change as the Company obtains additional information related to other assets and liabilities.

Goodwill and Other Intangible Assets

6 unchanged sentences

Translation and other adjustments 2,739 795 12,599 16,133

Net goodwill at March 31, 2023

Net goodwill at June 30, 2023

$ 367,203 $ 114,573 $ 221,140 $ 702,916

The net goodwill balances at March 31, 2023 and September 30, 2022 included $ 261,186 of accumulated impairment losses.

Accumulated impairment losses at March 31, 2023 and September 30, 2022 were $ 5,000 , $ 23,946 and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

The net goodwill balances at June 30, 2023 and September 30, 2022 included $ 261,186 of accumulated impairment losses.

Accumulated impairment losses at June 30, 2023 and September 30, 2022 were $ 5,000 , $ 23,946 and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2023 (January 1, 2023) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, therefore no impairment charges were necessary.

4 unchanged sentences

Goodwill and Other Intangible Assets (continued)

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2023 and September 30, 2022, respectively.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2023 and September 30, 2022, respectively.

Amount Accumulated

Amortization Net

March 31, 2023:

June 30, 2023:

Indefinite-lived trade names $ 30,540 $ — $ 30,540

9 unchanged sentences

$ 582,539 $ ( 380,385 ) $ 202,154

The net change in intangible assets during the six months ended March 31, 2023 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to the Eagle acquisition.

Amortization expense on intangible assets was $ 10,517 and $ 11,953 for the three-month periods ended March 31, 2023 and 2022, respectively.

Amortization expense on intangible assets was $ 20,859 and $ 33,499 for the six-month periods ended March 31, 2023 and 2022, respectively.

The net change in intangible assets during the nine months ended June 30, 2023 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to the Eagle acquisition.

Amortization expense on intangible assets was $ 10,640 and $ 11,804 for the three-month periods ended June 30, 2023 and 2022, respectively.

Amortization expense on intangible assets was $ 31,499 and $ 45,303 for the nine-month periods ended June 30, 2023 and 2022, respectively.

Amortization expense is estimated to be $ 10,643 for the remainder of fiscal 2023, $ 39,963 in 2024, $ 16,393 in 2025, $ 14,457 in 2026 and $ 13,386 in 2027.

1 unchanged sentence

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

During the second quarter of fiscal 2022, in light of the 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 $ 10,486 to reduce the carrying value of these assets to zero during the second quarter of fiscal 2022.

Asset write-downs (primarily related to property, plant and equipment) totaling $ 9,686 and $ 800 were reported within cost of sales and administrative expense, respectively, for the three and six months ended March 31, 2022.

During fiscal 2022, in light of the 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 $ 10,017 (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 $ 331 were reported within cost of sales and administrative expense, respectively, for the nine months ended June 30, 2022.

Management's Discussion and Analysis of Financial Condition and Results of Operations

29 unchanged sentences

Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and six-month periods ended March 31, 2023 and 2022.

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2023 and 2022.

Refer to Note 14, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

13 unchanged sentences

See the "Non-GAAP Financial Measures" section below.

Sales for the six months ended March 31, 2023 were $928.8 million, compared to $883.6 million for the six months ended March 31, 2022, representing an increase of $45.3 million.

The increase in fiscal 2023 sales reflected higher sales in the Industrial Technologies segment, partially offset by lower sales in the SGK Brand Solutions segment.

Sales for the nine months ended June 30, 2023 were $1.40 billion, compared to $1.31 billion for the nine months ended June 30, 2022, representing an increase of $95.5 million.

The increase in fiscal 2023 sales reflected higher sales in the Industrial Technologies and Memorialization segments, partially offset by lower sales in the SGK Brand Solutions segment.

On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $28.6 million on fiscal 2023 sales compared to the prior year.

Memorialization segment sales for the first six months of fiscal 2023 were $429.4 million, compared to $430.7 million for the first six months of fiscal 2022.

Lower unit sales of caskets, reflecting a decrease in coronavirus disease 2019 ("COVID-19") related deaths in fiscal 2023, were substantially offset by improved price realization, higher sales of mausoleums and cremation equipment, and benefits from the recent acquisition of Eagle Granite Company (see Acquisitions below).

Memorialization segment sales for the first nine months of fiscal 2023 were $638.1 million, compared to $633.9 million for the first nine months of fiscal 2022.

The sales increase reflected improved price realization, higher sales of granite memorial products, mausoleums and cremation equipment in the U.S., and benefits from the recent acquisition of Eagle Granite Company (see Acquisitions below).

These increases were partially offset by lower unit sales of caskets and bronze memorial products, reflecting a decrease in coronavirus disease 2019 ("COVID-19") related deaths in fiscal 2023.

Changes in foreign currency exchange rates had an unfavorable impact of $2.3 million on the segment's sales compared to the prior year.

Industrial Technologies segment sales were $234.7 million for the first six months of fiscal 2023, compared to $152.5 million for the first six months of fiscal 2022.

The sales increase primarily reflected benefits from the recently completed acquisitions of OLBRICH GmbH ("OLBRICH") and R+S Automotive GmbH ("R+S Automotive") (see Acquisitions below).

The increase in sales also reflected higher sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market) and higher product identification sales.

Industrial Technologies segment sales were $365.2 million for the first nine months of fiscal 2023, compared to $230.9 million for the first nine months of fiscal 2022.

The sales increase primarily reflected the impact of the fiscal 2022 acquisitions of OLBRICH GmbH ("OLBRICH") and R+S Automotive GmbH ("R+S Automotive") (see Acquisitions below).

The increase in sales also reflected higher sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market), higher product identification sales, and increased sales of warehouse automation solutions.

Changes in foreign currency exchange rates had an unfavorable impact of $8.5 million on the segment's sales compared to the prior year.

In the SGK Brand Solutions segment, sales for the first six months of fiscal 2023 were $264.8 million, compared to $300.4 million for the first six months of fiscal 2022.

In the SGK Brand Solutions segment, sales for the first nine months of fiscal 2023 were $397.4 million, compared to $440.5 million for the first nine months of fiscal 2022.

Changes in foreign currency exchange rates had an unfavorable impact of $17.9 million on the segment's sales compared to the prior year.

The decrease in sales also reflected lower brand sales in the U.S.

and Europe, lower retail-based sales (principally merchandising solutions), and lower sales of cylinder (packaging) products, partially offset by improved price realization.

Gross profit for the six months ended March 31, 2023 was $288.6 million, compared to $256.2 million for the same period a year ago.

Consolidated gross profit as a percent of sales was 31.1% and 29.0% for the first six months of fiscal 2023 and fiscal 2022, respectively.

The increase in gross profit primarily reflected the impact of higher sales (including benefits from recent acquisitions), and benefits from the realization of productivity improvements and other cost-reduction initiatives.

These increases in gross profit were partially offset by the impact of higher material, labor and transportation costs, and lower margins

The decrease in sales also reflected lower brand sales in Europe, a decline in sales of cylinder (packaging) products in Europe, and lower U.S.

and European retail-based sales.

These decreases were partially offset by improved price realization.

Gross profit for the nine months ended June 30, 2023 was $426.9 million, compared to $377.0 million for the same period a year ago.

Consolidated gross profit as a percent of sales was 30.5% and 28.9% for the first nine months of fiscal 2023 and fiscal 2022, respectively.

The increase in gross profit primarily reflected the impact of higher sales (including benefits from

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

What changed 10-Q

Item 1. Financial Statements