What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-11-17 compared with 2022-11-18 · 259 added, 343 removed, 1116 unchanged (35% of the section changed)

15 unchanged sentences

To the Shareholders and the Board of Directors of

Matthews International Corporation and Subsidiaries

Matthews International Corporation

Management's Report on Financial Statements

10 unchanged sentences

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, 2023.

4 unchanged sentences

To the Shareholders and the Board of Directors of

Matthews International Corporation and Subsidiaries

Matthews International Corporation

Opinion on Internal Control Over Financial Reporting

1 unchanged sentence

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, 2023, 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, 2023 and 2022, 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, 2023, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 and our report dated November 17, 2023 expressed an unqualified opinion thereon.

20 unchanged sentences

To the Shareholders and the Board of Directors of

Matthews International Corporation and Subsidiaries

Matthews International Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Matthews International Corporation and Subsidiaries (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 (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Matthews International Corporation and Subsidiaries (the Company) as of September 30, 2023 and 2022, 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, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023, in conformity with U.S.

12 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

2 unchanged sentences

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.

Description of the Matter As more fully described in Note 22 to the consolidated financial statements, during 2023, the Company performed its annual goodwill impairment test as of January 1, 2023 and determined that the estimated fair value of the SGK Brand Solutions reporting unit, within the SGK Brand Solutions segment, exceeded the carrying value (expressed as a percentage of carrying value) by approximately 9%.

Because of the limited excess fair value over carrying value and further declines experienced by the SGK Brand Solutions reporting unit, the Company determined that a triggering event occurred during the fourth quarter of fiscal 2023, resulting in an interim assessment of goodwill for the reporting unit as of September 1, 2023.

The results of this review indicated that the estimated fair value of the Company's SGK Brand Solutions reporting unit exceeded the carrying value (expressed as a percentage of carrying value) by approximately 4%.

The Company utilized a combination of the income approach using the estimated discounted cash flows and a market-based valuation methodology.

Significant assumptions used in the Company’s fair value estimate included estimates of revenue growth, EBITDA contribution and the discount rates.

Auditing the annual and interim goodwill impairment analyses 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.

4 unchanged sentences

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.

15 unchanged sentences

Restricted cash, current — 2,398

Contract assets 74,646 48,210

Other current assets 63,575 62,537

Total current assets 648,257 628,616

Restricted cash, non-current — 19,167

Investments 24,988 25,976

18 unchanged sentences

Accrued income taxes 12,561 9,277

Contract liabilities 36,935 31,871

Other current liabilities 144,237 164,450

2 unchanged sentences

Operating lease liabilities 50,189 51,445

Accrued pension 12,437 84,803

Postretirement benefits 11,983 17,958

Deferred income taxes 71,255 92,589

29 unchanged sentences

Goodwill write-downs — ( 82,454 ) —

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

Investment income 1,036 2,645 1,962

Operating profit (loss) 88,117 ( 43,937 ) 42,034

Interest expense ( 44,648 ) ( 27,725 ) ( 28,684 )

Other income (deductions), net ( 2,559 ) ( 32,557 ) ( 4,117 )

(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 )

Income (loss) before income taxes 40,910 ( 104,219 ) 9,233

Income tax (provision) benefit ( 1,774 ) 4,391 ( 6,375 )

Net income (loss) 39,136 ( 99,828 ) 2,858

Net loss attributable to noncontrolling interests 155 54 52

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

(Loss) earnings per share attributable to Matthews shareholders:

Net income (loss) attributable to Matthews shareholders $ 39,291 $ ( 99,774 ) $ 2,910

Earnings (loss) per share attributable to Matthews shareholders:

Basic $ 1.28 $ ( 3.18 ) $ 0.09

7 unchanged sentences

Matthews Noncontrolling Interest Total

Net income (loss) $ 39,291 $ ( 155 ) $ 39,136

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 13,114 11 13,125

Pension plans and other postretirement benefits 1,578 — 1,578

Unrecognized gain (loss) on cash flow hedges:

Net change from periodic revaluation 3,056 — 3,056

Net amount reclassified to earnings ( 1,961 ) — ( 1,961 )

Net change in unrecognized gain on cash flow hedges 1,095 — 1,095

Other comprehensive income, net of tax 15,787 11 15,798

Comprehensive income (loss) $ 55,078 $ ( 144 ) $ 54,934

Year Ended September 30, 2022

Matthews Noncontrolling Interest Total

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

11 unchanged sentences

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

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 3,370 ) ( 127 ) ( 3,497 )

6 unchanged sentences

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

Year Ended September 30, 2020

Matthews Noncontrolling Interest Total

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

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) 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 cash flow hedges ( 5,480 ) — ( 5,480 )

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

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

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

11 unchanged sentences

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

2 unchanged sentences

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

Total comprehensive loss ( 100,017 )

Total comprehensive income 50,711

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

9 unchanged sentences

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

2 unchanged sentences

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

Total comprehensive income 50,711

Total comprehensive loss ( 97,266 )

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

9 unchanged sentences

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

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

Net income (loss) — — 39,291 — — ( 155 ) 39,136

Pension plans and other

2 unchanged sentences

Fair value of cash flow hedges — — — 1,095 — — 1,095

Total comprehensive loss ( 97,266 )

Total comprehensive income 54,934

Stock-based compensation — 17,308 — — — — 17,308

9 unchanged sentences

Dividends — — ( 31,313 ) — — — ( 31,313 )

Divestiture — — — — — ( 91 ) ( 91 )

Transactions with noncontrolling

interests — — — — — 33 33

Balance, September 30, 2023 $ 36,334 $ 168,211 $ 714,727 $ ( 174,404 ) $ ( 219,200 ) $ ( 387 ) $ 525,281

6 unchanged sentences

Cash flows from operating activities:

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

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

Net income (loss) $ 39,136 $ ( 99,828 ) $ 2,858

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

Depreciation and amortization 96,530 104,056 133,512

1 unchanged sentence

Deferred tax (benefit) provision ( 21,626 ) ( 32,962 ) 4,158

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

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

Losses from equity-method investments — — 3,498

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

Pension settlement loss 30,856 — —

Gain on divestitures and sale of assets, net ( 2,980 ) ( 3,390 ) ( 412 )

Asset write-downs — 10,050 —

Goodwill write-downs — 82,454 —

Defined benefit plan settlement losses 1,271 30,856 —

Defined benefit plan settlement payments ( 24,242 ) ( 35,706 ) —

Proceeds from the settlement of cash flow hedges 10,474 — —

Changes in working capital items ( 35,503 ) 29,590 12,982

Decrease in other assets 9,339 20,093 15,115

(Decrease) increase in other liabilities ( 45,405 ) ( 16,346 ) 4,886

Decrease in other liabilities ( 8,863 ) ( 9,699 ) ( 16,346 )

Other operating activities, net ( 1,320 ) 13,914 ( 4,637 )

5 unchanged sentences

Proceeds from sale of assets 2,120 4,955 2,776

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

Proceeds from divestitures 6,700 344 —

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

17 unchanged sentences

Income taxes 18,014 13,647 9,166

Non-cash investing and financing activities:

Contribution of treasury stock to the Company's principal defined benefit retirement plan ("DB Plan") $ — $ — $ 14,983

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

6 unchanged sentences

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.

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;

and coating and converting lines for the packaging, pharma, foil, décor and tissue industries.

SGK 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.

8 unchanged sentences

Actual results could differ from those estimates.

Reclassifications:

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.

These reclassifications are not material to the prior year presentation.

Cash, Cash Equivalents and Restricted Cash:

6 unchanged sentences

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

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 unchanged sentence

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.

43 unchanged sentences

Pension and Other Postretirement Plans:

Pension assets and liabilities are determined on an actuarial basis and are affected by the market value of plan assets, estimates of the expected return on plan assets and the discount rate used to determine the present value of benefit obligations.

Actual changes in the fair market value of plan assets and differences between the actual return on plan assets, the expected return on plan assets and changes in the selected discount rate will affect the amount of pension cost.

Differences between actual and expected results or changes in the value of the obligations and plan assets are initially recognized through other comprehensive income and subsequently amortized to the Consolidated Statement of Income.

Pension liabilities are determined on an actuarial basis and are affected by the discount rate used to determine the present value of benefit obligations which will affect the amount of pension cost.

Differences between actual and expected results or changes in the value of the obligations are initially recognized through other comprehensive income and subsequently amortized to the Consolidated Statement of Income.

Environmental:

25 unchanged sentences

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.

As of September 30, 2023 and 2022, the Company had net monetary assets related to its Turkish subsidiaries of $ 4,271 and $ 5,022 , respectively.

Exchange losses related to highly inflationary accounting totaled $ 1,360 and $ 1,473 in fiscal 2023 and 2022, respectively, and were included in the Consolidated Statements of Income within other income (deductions), net.

Comprehensive Income (Loss):

10 unchanged sentences

Estimates are made for Variable Consideration based on contract terms and historical experience of actual results and are applied to the performance obligations as they are satisfied.

The Company elected to apply the practical expedient under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers which exempts the adjustment of the consideration for the existence of a significant financing component when the period between the transfer of the services and the payment for such services is one year or less.

Each product or service delivered to a third-party customer is considered to satisfy a performance obligation.

1 unchanged sentence

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.

Contract assets include unbilled amounts resulting from sales under contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract.

Contract liabilities include customer deposits that are made prior to the satisfaction of performance obligations for a contract.

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

7 unchanged sentences

Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee requisite service period.

Income Taxes:

Deferred tax assets and liabilities are provided for the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

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)

1 unchanged sentence

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

Income Taxes:

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

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, or such earnings are considered to be reinvested indefinitely in foreign operations.

Earnings Per Share:

6 unchanged sentences

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.

The amendments in this update remove certain exceptions to the general principles in Topic 740 and also simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The amendments in this ASU will be applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

The Company early adopted this ASU in the quarter ended March 31, 2020.

The adoption of this ASU had no significant impact on the Company's consolidated financial statements, but modifies the methodology to assess certain tax principles in Topic 740 prospectively.

In September 2022, the FASB issued ASU No.

2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) which enhances the transparency of supplier finance programs by addressing disclosure requirements.

Specifically, the amendment requires disclosure of key program terms, amounts outstanding, balance sheet presentation, and a rollforward of amounts outstanding during the annual period.

The ASU will be effective beginning in the first quarter of fiscal 2024, except for the rollforward requirement, which is effective in fiscal year 2025.

The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In July 2023, the FASB issued ASU No.

2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock (SEC Update) which enhances the transparency of stock based compensation and material nonpublic information at the time of a grant.

The adoption of this ASU in the fourth quarter of fiscal 2023 had no material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU No.

1 unchanged sentence

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

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements including the consideration of costs and benefits.

The adoption of this ASU in the first quarter ended December 31, 2019 had no impact on the Company's consolidated financial statements.

In August 2017, the FASB issued ASU No.

2017-12, Derivatives and Hedging (Topic 815) , which provides new guidance intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements.

The adoption of this ASU in the first quarter ended December 31, 2019 had no impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No.

8 unchanged sentences

The following table summarizes the activity for the accounts receivable allowance for doubtful accounts for the years ended September 30, 2023, 2022 and 2021.

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

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

End of Period

3 unchanged sentences

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 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.

17 unchanged sentences

2021 1,141,396 5,036 446,274 23,568 54,756 1,671,030

Revenue from products or services provided to customers over time accounted for approximately 15 %, 12 %, and 11 % of revenue for the years ended September 30, 2023, 2022, and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(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:

12 unchanged sentences

Total assets at fair value $ — $ 9,631 $ — $ 9,631

Derivatives (1)

$ — $ 2,766 $ — $ 2,766

Total liabilities at fair value $ — $ 2,766 $ — $ 2,766

September 30, 2022

5 unchanged sentences

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.

The carrying values for other financial assets and liabilities approximated fair value for the years ended September 30, 2023 and 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

Inventories at September 30, 2023 and 2022 consisted of the following:

3 unchanged sentences

$ 260,409 $ 225,440

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

At September 30, 2023 and 2022, non-current investments were as follows:

4 unchanged sentences

$ 24,988 $ 25,976

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 2023, the Company purchased the remaining ownership interest in a small Industrial Technologies business, which was previously held as an equity-method investment.

See Note 21, "Acquisitions and Divestitures."

PROPERTY, PLANT AND EQUIPMENT:

9 unchanged sentences

Depreciation expense, including amortization of assets under finance lease, was $ 54,462 , $ 46,972 and $ 49,279 for each of the three years ended September 30, 2023, 2022 and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DEBT AND FINANCING ARRANGEMENTS:

1 unchanged sentence

Revolving credit facilities $ 463,168 $ 480,107

Securitization facility — 95,990

2025 Senior Notes 298,500 297,961

297,961 297,796

Other borrowings 19,241 13,434

3 unchanged sentences

Long-term debt $ 786,484 $ 795,291

(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.

Borrowings under the revolving credit facility bear interest at LIBOR (Euro LIBOR for balances drawn in Euros) plus a factor ranging from 0.75 % to 2.00 % ( 1.25 % at September 30, 2022) based on the Company's secured leverage ratio.

In March 2023, an amendment to the domestic credit facility implemented SOFR as the replacement of LIBOR as the benchmark interest rate under the facility.

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 September 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.

The secured leverage ratio is defined as net secured indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement.

The Company is required to pay an annual commitment fee ranging from 0.15 % to 0.30 % (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.

The Company is required to pay an annual commitment fee ranging from 0.15 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DEBT AND FINANCING ARRANGEMENTS, (continued)

to 0.30 % (based on the Company's leverage ratio) of the unused portion of the revolving credit facility.

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

4 unchanged sentences

dollar denominated borrowings on the revolving credit facility at September 30, 2023 and 2022 were $ 405,000 and $ 427,960 , respectively.

Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2023 and 2022 were € 55.0 million ($ 58,168 ) and € 45.0 million ($ 44,097 ), respectively.

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, 2023 and 2022 was 5.95 % and 3.13 %, respectively.

13 unchanged sentences

Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers.

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.

As of September 30, 2023 and 2022, the amount sold to the Purchasers was $ 101,800 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 $ 57,897 and $ 44,262 as of September 30, 2023 and 2022, respectively.

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

For the Year Ended September 30,

Gross receivables sold

$ 393,493 $ 424,789

Cash collections reinvested

( 388,283 ) ( 328,199 )

Net cash proceeds received $ 5,210 $ 96,590

In March 2023, the Company, through its U.K.

subsidiary, entered into a non-recourse factoring arrangement.

In connection with this arrangement, the Company periodically sells trade receivables to a third-party purchaser in exchange for cash.

These transfers of financial assets are recorded at the time the Company surrenders control of the assets.

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 $ 55,159 during the fiscal year ended September 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 September 30, 2023, the amount of factored receivables that remained outstanding was $ 18,045 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 unchanged sentence

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.

The maximum amount of borrowings available under this facility is € 25.0 million ($ 24,499 ), which includes € 8.0 million ($ 7,840 ) for bank guarantees.

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

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.

The maximum amount of borrowings available under this facility is € 10.0 million ($ 10,576 ).

The facility also provides € 18.5 million ($ 19,566 ) for bank guarantees.

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

There were no outstanding borrowings under the credit facility at September 30, 2023.

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

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

Other borrowings totaled $ 19,241 and $ 13,434 at September 30, 2023 and 2022, respectively.

The weighted-average interest rate on these borrowings was 2.95 % and 1.85 % at September 30, 2023 and 2022, 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.

Management assessed the customer's demand to be without merit and initiated an action with the court in the United Kingdom (the "U.K.

Pursuant to this action, an order was issued by the U.K.

Court in January 2015 requiring that, upon receipt by the customer, the funds were to be remitted by the customer to the U.K.

Court pending resolution of the dispute between the parties.

As a result, the Company made payment on the draw to the financial institution for the letter of credit and the funds were ultimately received by the customer.

The customer did not remit the funds to the U.K.

Court as ordered.

On June 14, 2016, the U.K.

Court ruled completely in favor of Matthews following a trial on the merits.

However, the dispute involved litigation in multiple foreign jurisdictions because the contract between the parties included a venue clause requiring the venue for any litigation to be in the United Kingdom, while the enforcement of any final judgment was required to be executed in Saudi Arabia.

Thus, the Company pursued a trial on the merits in Saudi Arabia.

On November 9, 2020, the judge in the Commercial Court of Saudi Arabia issued a final judgment against the customer in the amount of £ 10,450,000 (representing the full claim amount plus interest) in favor of Matthews and the customer did not appeal the ruling by the Commercial Court.

As result, the judgment is now final and enforceable in Saudi Arabia.

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 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.

Consequently, the Company continues to have concerns regarding the level of anticipated support from the government in its collection efforts.

As a result of these concerns and other collectability risks, the Company established a reserve for the full value of the funded letter of credit as of June 30, 2020, and has made no adjustments to the reserve since that time.

The Company will continue to assess the accounting and collectability related to this matter as facts and circumstances evolve.

As of September 30, 2023 and 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 September 30, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DEBT AND FINANCING ARRANGEMENTS, (continued)

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

2023 $ 9,043 (a)

Thereafter 65,626

Finance lease obligations 7,066 (b)

(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.

(b) Aggregate maturities of finance lease obligations can be found in Note 10, "Leases."

Finance lease obligations 9,271 (a)

(a) Aggregate maturities of finance lease obligations can be found in Note 10, "Leases."

The Company’s lease portfolio includes various contracts for real estate, vehicles, information technology and other equipment.

3 unchanged sentences

Property, plant and equipment, net Finance $ 10,804 $ 10,727

Other assets Operating 71,974 80,262

Operating lease right-of-use-assets Operating 71,629 71,974

Total lease assets $ 82,433 $ 82,701

4 unchanged sentences

Long-term debt Finance 6,588 4,782

Other liabilities Operating 51,445 57,272

Operating lease liabilities Operating 50,189 51,445

Total lease liabilities $ 83,443 $ 81,380

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

LEASES, (continued)

The following table presents the components of lease cost for the years ended September 30, 2023, 2022 and 2021, respectively:

7 unchanged sentences

Total lease cost $ 35,097 $ 35,903 $ 32,649

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

LEASES, (continued)

Supplemental information regarding the Company's leases follows:

25 unchanged sentences

$ 74,172 $ 9,271

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DERIVATIVES AND HEDGING ACTIVITIES:

7 unchanged sentences

Other assets 3,086 — 7,341 3,722

Current liabilities:

Other current liabilities — — ( 1,922 ) —

Long-term liabilities:

1 unchanged sentence

Total derivatives $ 4,006 $ ( 2,766 ) $ 10,699 $ 3,722

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:

5 unchanged sentences

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

In order to transition the Company's swaps from LIBOR-based to SOFR-based rates, the LIBOR-based swaps were settled during the second quarter of fiscal 2023, resulting in cash proceeds of $ 10,474 .

Concurrently, the Company entered into new interest rate swaps with SOFR-based rates with a notional amount of $ 175,000 .

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 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").

The fair value of the interest rate swaps reflected a net unrealized gain of $ 4,006 ($ 2,991 after tax) and $ 10,699 ($ 7,937 after tax) at September 30, 2023 and 2022, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").

Unrecognized gains of $ 8,084 ($ 6,041 after tax) related to the terminated LIBOR-based swaps were also included in AOCI as of September 30, 2023.

Assuming market rates remain constant with the rates at September 30, 2023, a gain (net of tax) of approximately $ 3,850 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 has a U.S.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 as of September 30, 2023 and 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 $ 2,065 (net of income taxes of $ 701 ) 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 September 30, 2023 and 2022, respectively.

Income of $ 1,159 and $ 1,645 , 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 fiscal 2023 and fiscal 2022, respectively.

At September 30, 2023 and 2022, the swap totaled $ 2,766 and $ 3,722 , respectively, and was included in other accrued liabilities and other assets in the Consolidated Balance Sheets, respectively.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

DERIVATIVES AND HEDGING ACTIVITIES, (continued)

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.

3 unchanged sentences

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:

6 unchanged sentences

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.

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 September 30, 2023, 496,508 shares have been issued under the 2017 Equity Incentive Plan.

5 unchanged sentences

The associated future income tax benefit recognized was $ 3,821 , $ 3,821 and $ 3,247 for the years ended September 30, 2023, 2022 and 2021, respectively.

With respect to the restricted share grants, generally one-half of the shares vest on the third anniversary of the grant, one-quarter of the shares vest in one-third increments upon the attainment of pre-defined levels of adjusted earnings per share, and the remaining one-quarter of the shares vest in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock.

Additionally, restricted shares cannot vest until the first anniversary of the grant date.

Unvested restricted shares generally expire on the earlier of three or five years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.

The Company issues restricted shares from treasury shares.

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

3 unchanged sentences

The Company issues common stock from treasury shares once vested.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

SHARE-BASED PAYMENTS, (continued)

The transactions for restricted shares and restricted share units for the year ended September 30, 2023 were as follows:

5 unchanged sentences

Non-vested at September 30, 2023 1,728,697 $ 30.90

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

SHARE-BASED PAYMENTS, (continued)

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

15 unchanged sentences

The expected term for grants in the year ended September 30, 2021 represents an estimate of the average period of time for restricted share units and stock options to vest.

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

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").

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 .

The annual retainer fee for fiscal 2022 paid to a non-employee Chairman of the Board is $ 210 .

Under the Amended and Restated 2019 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2023, either cash or shares of the Company's Class A Common Stock with a value equal to $ 90 .

The annual retainer fee for fiscal 2023 paid to the non-employee Chairman of the Board is $ 210 .

Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board.

The total number of shares of stock that have been authorized to be issued under the 2019 Director Fee Plan or credited to a deferred stock compensation account for subsequent issuance is 150,000 shares of Common Stock (subject to adjustment upon certain events such as stock dividends or stock splits).

The total number of shares of stock that have been authorized to be issued under the Amended and Restated 2019 Director Fee Plan or credited to a deferred stock compensation account for subsequent issuance is 300,000 shares of Common Stock (subject to adjustment upon certain events such as stock dividends or stock splits), following the amendment and restatement of the 2019 Director Fee Plan at the Company's 2023 Annual Shareholder Meeting.

The value of deferred shares is recorded in other liabilities.

2 unchanged sentences

As of September 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.

58,008 restricted shares and restricted share units are unvested at September 30, 2022.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1 unchanged sentence

EARNINGS PER SHARE:

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

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

2023 2022 2021

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

Net income (loss) attributable to Matthews shareholders $ 39,291 $ ( 99,774 ) $ 2,910

Weighted-average shares outstanding (in thousands):

2 unchanged sentences

Diluted shares 31,289 31,367 31,987

Anti-dilutive securities excluded from the dilutive calculation were insignificant for the fiscal year ended September 30, 2021.

Dividends declared per common share $ 0.92 $ 0.88 $ 0.86

Anti-dilutive securities excluded from the dilutive calculation were insignificant for the fiscal years ended September 30, 2023 and 2021.

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.

1 unchanged sentence

The Company provides defined benefit pension and other postretirement plans to certain employees.

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.

Effective January 1, 2014, the Company's principal defined benefit retirement plan ("DB Plan") was closed to new participants.

As of September 30, 2023 and 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 non-qualified Supplemental Retirement Plan ("SERP") and the defined benefit portion of the Officers Retirement Restoration Plan (“ORRP”), effective April 30, 2021.

In August 2021, the Committee approved the termination of the SERP and the defined benefit portion of the ORRP.

7 unchanged sentences

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

In the first quarter of fiscal 2023, 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 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 year ended September 30, 2023.

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

During fiscal 2023, the remaining funds held in a rabbi trust associated with the SERP were transferred to the Company.

Consequently, these amounts are no longer classified as restricted cash.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

10 unchanged sentences

Actuarial gain ( 512 ) ( 19,978 ) ( 641 ) ( 5,989 )

Curtailment gain — ( 17,324 ) — —

Special termination benefits — 315 — —

Settlement ( 24,242 ) ( 242,232 ) — —

Exchange gain ( 3,093 ) ( 133 ) — —

Exchange loss (gain) 979 ( 3,093 ) — —

Benefit payments ( 598 ) ( 3,362 ) ( 517 ) ( 615 )

9 unchanged sentences

Funded status ( 12,896 ) ( 36,609 ) ( 12,375 ) ( 12,813 )

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

Unrecognized actuarial (gain) loss ( 1,518 ) 5,140 ( 5,906 ) ( 5,973 )

Unrecognized prior service (credit) cost — ( 4,815 ) ( 956 ) ( 1,320 )

3 unchanged sentences

Noncurrent benefit liability ( 12,828 ) ( 12,437 ) ( 11,499 ) ( 11,983 )

Accumulated other comprehensive loss (income) 325 49,236 ( 7,293 ) ( 1,668 )

Accumulated other comprehensive (income) loss ( 1,518 ) 325 ( 6,862 ) ( 7,293 )

Net amount recognized $ ( 14,414 ) $ ( 36,284 ) $ ( 19,237 ) $ ( 20,106 )

Amounts recognized in accumulated

other comprehensive loss (income):

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

other comprehensive (income) loss:

Net actuarial (gain) loss $ ( 1,518 ) $ 5,140 $ ( 5,906 ) $ ( 5,973 )

Prior service (credit) cost — ( 4,815 ) ( 956 ) ( 1,320 )

Net amount recognized $ ( 1,518 ) $ 325 $ ( 6,862 ) $ ( 7,293 )

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

(1) Fiscal 2022 reflects benefit obligations assumed in connection with the acquisition of OLBRICH and R+S Automotive.

For additional information, see Note 21.

12 unchanged sentences

Prior service cost — ( 152 ) ( 127 ) ( 364 ) ( 364 ) ( 364 )

Net actuarial loss * 469 9,769 9,767 — — —

Net actuarial (gain) loss * ( 64 ) 469 9,769 ( 708 ) — —

Curtailment gain * — — ( 220 ) — — —

5 unchanged sentences

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

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

Benefit payments under the Company's postretirement benefit plan are made from the Company's operating funds.

Contributions made in fiscal 2023 are as follows:

Contributions Pension Other Postretirement

Principal defined benefit retirement plan $ 35,706 $ —

Supplemental retirement plan $ 23,469 $ —

1 unchanged sentence

Other postretirement plan — 517

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)

(Dollar amounts in thousands, except per share data)

PENSION AND OTHER POSTRETIREMENT PLANS, (continued)

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.

6 unchanged sentences

Compensation increase — % — % 3.50 % — — —

In October 2014, the Society of Actuaries' Retirement Plans Experience Committee ("RPEC") released new mortality tables known as RP 2014.

Each year, RPEC releases an update to the mortality improvement assumption that was released with the RP 2014 tables.

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 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.

The Company's investment policy, as established by the Company's pension board, specifies the types of investments appropriate for the plans, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance.

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 was as follows:

Plan Assets at

Asset Category 2021

Equity securities $ 4,075

Fixed income, cash and cash equivalents 189,958

Other investments 14,311

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).

The valuation methodologies used to measure the fair value of pension assets, including the level in the fair value hierarchy in which each type of pension plan asset is classified as follows.

Equity securities consist of direct investments in the stocks of publicly traded companies.

Such investments are valued based on the closing price reported in an active market on which the individual securities are traded.

As such, the direct investments are classified as Level 1.

Mutual funds are valued at the closing price of shares held by the Plan at year end.

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

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

government notes and corporate and agency bonds).

Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data.

As such, U.S.

government notes are included in Level 1, and the remainder of the fixed income securities are included in Level 2.

Cash and cash equivalents consist of direct cash holdings and short-term money market mutual funds.

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)

1 unchanged sentence

PENSION AND OTHER POSTRETIREMENT PLANS, (continued)

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

These holdings are valued by investment managers based on the most recent information available.

The valuation information used by investment managers may not be readily observable.

As such, these investments are classified as Level 3.

The Company's defined benefit pension plans' asset categories at September 30, 2021 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.

Changes in the fair value of Level 3 assets at September 30, 2022 and 2021 are summarized as follows:

Asset Category Fair Value, Beginning of Period Acquisitions Dispositions Realized Gains Unrealized Gains (Losses) Fair Value, End of Period

Other investments:

Fiscal Year Ended:

September 30, 2022 $ 14,311 $ — $ ( 14,700 ) $ 139 $ 250 $ —

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

In October 2014, the Society of Actuaries' Retirement Plans Experience Committee ("RPEC") released new mortality tables known as RP-2014.

Each year, RPEC releases an update to the mortality improvement assumption that was released with the RP 2014 tables.

In October 2019, the Society of Actuaries released updated base mortality tables denoted PRI-2012, replacing the RP-2014 base tables.

In fiscal years 2023, 2022 and 2021, the Company elected to value its pension and other postretirement benefit plan liabilities using the base PRI-2012 mortality table and a slightly modified fully generational mortality improvement assumption.

The revised assumption uses the most recent RPEC Scale MP 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.

Benefit payments expected to be paid are as follows:

4 unchanged sentences

$ 6,653 $ 8,755

* 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 7.0 % in the per capita cost of health care benefits was assumed for 2024;

3 unchanged sentences

The expense associated with the contributions made to these plans was $ 13,297 , $ 12,442 , and $ 9,186 for the fiscal years ended September 30, 2023, 2022 and 2021, respectively.

The Company also provides a non-qualified deferred compensation plan for certain executives that permits participants to defer an amount of income into the plan during each calendar year.

The expense associated with the contributions made to this plan was $ 1,385 for the fiscal year ended September 30, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12 unchanged sentences

Amounts reclassified from AOCI 23,261 (a)

( 1,242 ) (b)

Net current-period OCI 41,112 ( 48,059 )

24 unchanged sentences

Fair value of cash flow hedges, net of tax of $ 1,015 and $ 2,762 , respectively

7,937 ( 1,558 )

Minimum pension liabilities, net of tax of $ 1,620 and $ 1,786 , respectively

$ ( 174,404 ) $ ( 190,191 )

$ ( 190,191 ) $ ( 192,739 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7 unchanged sentences

$ 364 $ 516 $ 491

Actuarial losses ( 469 ) ( 9,769 ) ( 9,767 ) Other income (deductions), net

Actuarial gains (losses) 772 ( 469 ) ( 9,769 ) Other income (deductions), net

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

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

Settlement losses ( 1,271 ) ( 30,856 ) — Other income (deductions), net

( 135 ) ( 30,809 ) ( 9,539 ) Income before income tax (b)

10 unchanged sentences

INCOME TAXES:

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

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

2023 2022 2021

22 unchanged sentences

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

Nontaxable income ( 7.5 ) % 0.8 % ( 9.9 ) %

Utilization of foreign losses with valuation allowance ( 5.6 ) % — % — %

( 3.3 ) % ( 8.3 ) % 10.1 %

1 unchanged sentence

* 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 Company's consolidated income taxes for the year ended September 30, 2023 were an expense of $ 1,774 , compared to a benefit of $ 4,391 for fiscal 2022, and an expense of $ 6,375 for fiscal 2021.

The difference between the Company's consolidated income taxes for fiscal 2023 compared to fiscal 2022 partially resulted from fiscal 2023 having consolidated income before income taxes compared to fiscal 2022 having a consolidated loss before income taxes.

The fiscal 2023 tax rate was negatively impacted by share-based compensation.

Additionally, the fiscal 2023 tax rate benefited from research and development and foreign tax credits and the utilization of foreign tax net operating losses with a valuation allowance.

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 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 .

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

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

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

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

The Company's foreign subsidiaries had income before income taxes for the year ended September 30, 2023 of approximately $ 43,090 , loss before income taxes for the year ended September 30, 2022 of approximately $ 47,653 and income before income taxes for the year ended September 30, 2021 of approximately $ 6,685 .

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.

Tax Cuts and Jobs Act, and such earnings are considered to be reinvested indefinitely in foreign operations.

Tax Cuts and Jobs Act, or such earnings are considered to be reinvested indefinitely in foreign operations.

At September 30, 2023, undistributed earnings of foreign subsidiaries for which deferred income taxes have not been provided approximated $ 368,306 .

9 unchanged sentences

Stock options 8,007 7,103

Research and development capitalization 11,028 —

Other 3,016 50

6 unchanged sentences

Goodwill and intangible assets ( 97,415 ) ( 98,715 )

Revenue recognized over time ( 21,226 ) ( 10,847 )

Other ( 5,002 ) ( 9,539 )

2 unchanged sentences

At September 30, 2023, the Company had foreign net operating loss carryforwards of $ 292,206 .

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.

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

1 unchanged sentence

Therefore, the Company has established tax-effected valuation allowances against these tax benefits in the amount of $ 22,506 at September 30, 2023.

The Company has recorded deferred tax assets of $ 2,756 for state net operating loss carryforwards, which will be available to offset future income tax liabilities.

Changes in the total amount of gross unrecognized tax benefits (excluding penalties and interest) are as follows:

26 unchanged sentences

Although the ultimate disposition of these proceedings is not presently determinable, management is of the opinion that they should not result in liabilities in an amount which would materially affect the Company's consolidated financial position, results of operations or cash flows.

In the normal course of business, the Company may provide certain customers with performance guarantees, and at times letters of credit or surety bonds.

The terms of these agreements expire at various dates between fiscal 2024 and 2026.

In general, the Company would only be liable for the amounts of these guarantees in the event that non-performance by the Company permits termination of the related contract by the Company's customer.

The Company maintains it is in compliance with its performance obligations under all contracts for which there is a performance guarantee, and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

The Company has employment agreements with certain employees, the terms of which expire at various dates between fiscal 2024 and 2027.

21 unchanged sentences

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 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;

and coating and converting lines for the packaging, pharma, foil, décor and tissue industries.

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.

1 unchanged sentence

Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results.

These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition costs, ERP integration costs, and strategic initiatives and other charges.

These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges.

This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business.

45 unchanged sentences

Total Adjusted EBITDA $ 225,809 $ 210,408 $ 227,750

RPA financing fees (1)

Acquisition and divestiture related items (1)**

( 5,293 ) ( 7,898 ) ( 541 )

1 unchanged sentence

( 13,923 ) ( 28,060 ) ( 28,998 )

Legal matter reserve (3)

— — ( 10,566 )

Non-recurring / incremental COVID-19 costs (3)***

— ( 2,985 ) ( 5,312 )

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

( 1,360 ) ( 1,473 ) —

Defined benefit plan termination related items (5)

3 unchanged sentences

— ( 82,454 ) —

Gain on sale of ownership interests in subsidiaries (8)

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

— — ( 4,732 )

Stock-based compensation ( 17,308 ) ( 17,432 ) ( 15,581 )

3 unchanged sentences

( 96,530 ) ( 104,056 ) ( 133,512 )

Interest expense ( 27,725 ) ( 28,684 ) ( 34,885 )

Interest expense, including RPA and factoring financing fees (9)

( 48,690 ) ( 28,771 ) ( 28,684 )

Net loss attributable to noncontrolling interests ( 155 ) ( 54 ) ( 52 )

(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").

Income (loss) before income taxes 40,910 ( 104,219 ) 9,233

Income tax (provision) benefit ( 1,774 ) 4,391 ( 6,375 )

Net income (loss) $ 39,136 $ ( 99,828 ) $ 2,858

(1) Includes certain non-recurring costs associated with recent acquisition and divestiture activity, and also includes a gain of $ 1,827 in fiscal year 2023 related to the divestiture of a business in the Industrial Technologies segment.

(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 in fiscal year 2023 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.

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

(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries.

(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.

1 unchanged sentence

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

(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.

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

3 unchanged sentences

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

(9) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ 4,042 and $ 1,046 for the fiscal years ended September 30, 2023 and 2022, respectively.

* Depreciation and amortization was $ 23,738 , $ 23,228 , and $ 23,043 for the Memorialization segment, $ 23,184 , $ 11,387 , and $ 11,427 for the Industrial Technologies segment, $ 44,842 , $ 64,173 , and $ 93,665 for the SGK Brand Solutions segment, and $ 4,766 , $ 5,268 , and $ 5,377 for Corporate and Non-Operating, for the fiscal years ended September 30, 2023, 2022, and 2021, 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.

** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $ 1,002 , $ 3,517 , and $ 1,923 for the Memorialization segment, $ 4,108 , $ 5,631 , and $ 4,026 for the Industrial Technologies segment, $ 10,905 , $ 19,359 , and $ 12,323 for the SGK Brand Solutions segment, and $ 3,201 , $ 7,451 , and $ 11,267 for Corporate and Non-Operating, for the fiscal years ended September 30, 2023, 2022, and 2021, respectively.

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

13 unchanged sentences

ACQUISITIONS AND DIVESTITURES:

In September 2023, the Company completed a small divestiture within the Industrial Technologies segment.

Net proceeds from the divestiture totaled approximately $ 6,700 , and the transaction resulted in a pre-tax gain of $ 1,827 , which was recorded as a component of administrative expenses for the year ended September 30, 2023.

The transaction also included $ 2,250 of contingent consideration, which represents the maximum amount the Company could potentially recognize at the resolution of the two-year contingency period.

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 preliminary purchase price allocation was not finalized as of September 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.

In addition, the Company recorded a liability of approximately $ 1,030 for potential future contingent consideration related to certain earnout provisions, which, if owed, is scheduled to be paid to the seller four years from the acquisition date.

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

The Company finalized the allocation of the purchase price in the fourth quarter of fiscal 2023, resulting in an immaterial adjustment to certain working capital accounts.

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 Company finalized the purchase price allocations in the fourth quarter of fiscal 2023, resulting in an immaterial adjustment to certain tax accounts.

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.

2 unchanged sentences

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.

The Company finalized the allocation of the purchase price in the fourth quarter of fiscal 2023, resulting in an immaterial adjustment to certain working capital, tax, and other accounts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollar amounts in thousands, except per share data)

ACQUISITIONS AND DIVESTITURES, (continued)

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).

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.

During fiscal 2020, the Company completed a small acquisition in the Memorialization segment for a purchase price of $ 1,000 (net of cash acquired and holdback amounts).

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.

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)

GOODWILL AND OTHER INTANGIBLE ASSETS:

4 unchanged sentences

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

Additions during period 2,322 6,757 2,100 11,179

Divestiture during period — ( 2,525 ) — ( 2,525 )

Translation and other adjustments 1,911 3,819 8,304 14,034

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

Net goodwill at September 30, 2023 $ 366,015 $ 115,073 $ 217,021 $ 698,109

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

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

In fiscal 2023, the additions reflect the acquisition of Eagle Granite Company within the Memorialization segment, the purchase of the remaining ownership interest in an Industrial Technologies subsidiary, and small acquisitions within the SGK Brand Solutions segment.

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.

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 estimated fair value of the Company's SGK Brand Solutions reporting unit exceeded the carrying value (expressed as a percentage of carrying value) by approximately 9 % as of January 1, 2023.

In light of the limited excess fair value over carrying value and further declines experienced by the SGK Brand Solutions reporting unit, management determined that a triggering event occurred during the fourth quarter of fiscal 2023, resulting in an interim assessment of goodwill for the reporting unit, as of September 1, 2023.

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)

1 unchanged sentence

GOODWILL AND OTHER INTANGIBLE ASSETS, (continued)

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.

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

In fiscal 2022, in its assessment of the potential impacts of weakened economic conditions (particularly in Europe), increases in the cost of certain materials, labor, and other inflation-related pressures, and unfavorable changes in foreign exchange rates on the estimated future earnings and cash flows for the SGK Brand Solutions reporting unit, and in light of the limited excess fair value over carrying value for this reporting unit, 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 following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of September 30, 2023 and 2022, respectively.

13 unchanged sentences

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

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.

The net change in intangible assets during fiscal 2023 included the impact of foreign currency fluctuations during the period, additional amortization, additions related to the Eagle acquisition, and disposals related to a small divestiture within the Industrial Technologies segment.

Amortization expense on intangible assets was $ 42,068 , $ 57,084 , and $ 84,233 in fiscal 2023, 2022 and 2021, respectively.

2 unchanged sentences

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.

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 $ 10,050 (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 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.

FINANCIAL STATEMENT SCHEDULE

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

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

Deductions (2)

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

Balance at End of Period

5 unchanged sentences

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

(1) Amount comprised principally of acquisitions and purchase accounting adjustments in connection with acquisitions, and amounts reclassified to other accounts.

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

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

Allowance Changes Other Additions (Deductions) (2)

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

Allowance Changes Other (Deductions) Additions (2)

Balance at End of Period

10 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data