What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 188 added, 144 removed, 719 unchanged (32% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands)

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Current assets:

43 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

8 unchanged sentences

Other income (deductions), net ( 974 ) ( 2,487 ) ( 2,732 ) ( 3,038 )

Income before income taxes 7,905 12,507 4,876 17,466

(Loss) income before income taxes ( 7,052 ) 8,113 ( 2,176 ) 25,579

Income tax benefit (provision) 8,829 558 10,677 ( 4,136 )

9 unchanged sentences

(Dollar amounts in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Matthews Noncontrolling Interest Total

8 unchanged sentences

Net amount reclassified to earnings ( 506 ) ( 238 ) — — ( 506 ) ( 238 )

Net change in unrecognized gain (loss) on cash flow hedges 1,484 ( 2,242 ) — — 1,484 ( 2,242 )

Net change in unrecognized (loss) gain on cash flow hedges ( 401 ) 2,507 — — ( 401 ) 2,507

OCI, net of tax ( 1,605 ) 3,220 — ( 31 ) ( 1,605 ) 3,189

Comprehensive income (loss) $ 172 $ 11,958 $ — $ ( 98 ) $ 172 $ 11,860

Six Months Ended March 31,

Nine Months Ended June 30,

Matthews Noncontrolling Interest Total

5 unchanged sentences

Pension plans and other postretirement benefits ( 596 ) 559 — — ( 596 ) 559

Unrecognized loss on cash flow hedges:

Unrecognized (loss) gain on cash flow hedges:

Net change from periodic revaluation ( 2,301 ) 1,367 — — ( 2,301 ) 1,367

6 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

for the three and six months ended March 31, 2024 and 2023 (Unaudited)

for the three and nine months ended June 30, 2024 and 2023 (Unaudited)

(Dollar amounts in thousands, except per share data)

32 unchanged sentences

March 31, 2024 $ 36,334 $ 150,344 $ 705,113 $ ( 172,504 ) $ ( 209,987 ) $ 47 $ 509,347

Net income — — 1,777 — — — 1,777

Minimum pension liability — — — ( 234 ) — — ( 234 )

Translation adjustment — — — ( 970 ) — — ( 970 )

Fair value of cash flow hedges — — — ( 401 ) — — ( 401 )

Total comprehensive income 172

Stock-based compensation — 5,331 — — — — 5,331

Purchase of 114,666 shares of treasury stock

— — — — ( 3,305 ) — ( 3,305 )

Issuance of 2,431 shares of treasury stock

— ( 91 ) — — 91 — —

Dividends — — ( 7,853 ) — — — ( 7,853 )

June 30, 2024 $ 36,334 $ 155,584 $ 699,037 $ ( 174,109 ) $ ( 213,201 ) $ 47 $ 503,692

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued

for the three and six months ended March 31, 2024 and 2023 (Unaudited)

for the three and nine months ended June 30, 2024 and 2023 (Unaudited)

(Dollar amounts in thousands, except per share data)

34 unchanged sentences

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

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

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

Translation adjustment — — — 923 — ( 31 ) 892

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

Total comprehensive income 11,860

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

Purchase of 2,068 shares of treasury stock

— — — — ( 79 ) — ( 79 )

Issuance of 11,562 shares of treasury stock

— ( 331 ) — — 431 — 100

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

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

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

2 unchanged sentences

(Dollar amounts in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

3 unchanged sentences

Stock-based compensation expense 14,309 13,635

Deferred tax provision 29 268

Gain on sale of assets, net ( 316 ) —

Deferred tax (benefit) provision ( 24,269 ) 680

(Gain) loss on sale of assets, net ( 453 ) 594

Defined benefit plan settlement losses — 1,271

9 unchanged sentences

Acquisitions, net of cash acquired ( 5,825 ) ( 15,341 )

Purchases of investments ( 825 ) ( 1,536 )

Other investing activities, net 1,199 267

6 unchanged sentences

Payments of debt issuance costs ( 4,704 ) —

Proceeds from net investment hedge 17,416 —

Other financing activities — ( 913 )

Net cash provided by (used in) financing activities 3,018 ( 44,899 )

Net cash used in financing activities ( 4,096 ) ( 56,357 )

Effect of exchange rate changes on cash 35 1,049

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2024

June 30, 2024

(Dollar amounts in thousands, except per share data)

14 unchanged sentences

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

Operating results for the three and six months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024.

Operating results for the three and nine months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2023.

7 unchanged sentences

dollar) and exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings, rather than accumulated other comprehensive loss on the Consolidated Balance Sheets , until such time as the applicable economy is no longer considered highly inflationary.

As of March 31, 2024 and September 30, 2023, the Company had net monetary assets related to its Turkish subsidiaries of $ 4,612 and $ 4,271 , respectively.

Exchange losses related to highly inflationary accounting totaled $ 390 and $ 710 for the three and six months ended March 31, 2024, respectively, and $ 160 and $ 1,248 for the three and six months ended March 31, 2023, respectively.

As of June 30, 2024 and September 30, 2023, the Company had net monetary assets related to its Turkish subsidiaries of $ 6,701 and $ 4,271 , respectively.

Exchange losses related to highly inflationary accounting totaled $ 185 and $ 895 for the three and nine months ended June 30, 2024, respectively, and $ 1,826 and $ 3,074 for the three and nine months ended June 30, 2023, respectively.

Such amounts were included in the Consolidated Statements of Income within other income (deductions), net.

15 unchanged sentences

2023-06, Disclosure Improvements.

The amendments in this update affect the presentation and disclosure of a variety of topics in the Codification, and align them with the Securities and Exchange Commission ("SEC") regulations.

The amendments in this update affect the presentation and disclosure of a variety of topics in the Accounting Standards Codification, and align them with the Securities and Exchange Commission ("SEC") regulations.

The effective date of the amendments of this ASU will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure from Regulation S-X or Regulation S-K.

10 unchanged sentences

The Company accounts for all payments made under the Program as a reduction to operating cash flows in changes in working capital within the Consolidated Statements of Cash Flows.

The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $ 4,670 and $ 3,027 at March 31, 2024 and September 30, 2023, respectively.

The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $ 3,868 and $ 3,027 at June 30, 2024 and September 30, 2023, respectively.

In October 2021, the FASB issued ASU No.

5 unchanged sentences

The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregated sales by segment and region for the three and six months ended March 31, 2024 and 2023 were as follows:

Disaggregated sales by segment and region for the three and nine months ended June 30, 2024 and 2023 were as follows:

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,

Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30,

2024 2023 2024 2023 2024 2023 2024 2023

6 unchanged sentences

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

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

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

2024 2023 2024 2023 2024 2023 2024 2023

5 unchanged sentences

Total Sales $ 632,891 $ 638,119 $ 319,241 $ 365,190 $ 396,910 $ 397,419 $ 1,349,042 $ 1,400,728

Revenue from products or services provided to customers over time accounted for approximately 18 % and 13 % of revenue for the three months ended March 31, 2024 and 2023, respectively and 19 % and 13 % of revenue for the six months ended March 31, 2024 and 2023, respectively.

Revenue from products or services provided to customers over time accounted for approximately 13 % and 17 % of revenue for the three months ended June 30, 2024 and 2023, respectively and 17 % and 14 % of revenue for the nine months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and September 30, 2023, the Company had net contract assets for projects recognized using the over time method totaling $ 63,874 and $ 37,711 , respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings.

Net contract assets at June 30, 2024 predominantly related to ongoing projects with the Company's largest energy storage customer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

7 unchanged sentences

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

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

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

8 unchanged sentences

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

The carrying values for other financial assets and liabilities approximated fair value at March 31, 2024 and September 30, 2023.

The carrying values for other financial assets and liabilities approximated fair value at June 30, 2024 and September 30, 2023.

Inventories consisted of the following:

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Raw materials $ 68,833 $ 70,451

3 unchanged sentences

Non-current investments consisted of the following:

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Equity and fixed income mutual funds $ 1,484 $ 699

6 unchanged sentences

Debt and Financing Arrangements

Long-term debt at March 31, 2024 and September 30, 2023 consisted of the following:

March 31, 2024 September 30, 2023

Long-term debt at June 30, 2024 and September 30, 2023 consisted of the following:

June 30, 2024 September 30, 2023

Revolving credit facilities $ 498,668 $ 463,168

8 unchanged sentences

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 the Secured Overnight Financing Rate ("SOFR"), plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 1.00 % to 2.00 % ( 1.50 % at March 31, 2024) based on the Company's leverage ratio.

Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10 % per annum rate spread adjustment, plus a factor ranging from 1.00 % to 2.00 % ( 1.50 % at June 30, 2024) based on the Company's leverage ratio.

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

1 unchanged sentence

The Company incurred new debt issuance costs of $ 4,704 in connection with the amended and restated agreement, which were deferred and are being amortized over the term of the facility.

Unamortized costs were $ 5,363 and $ 949 at March 31, 2024 and September 30, 2023, respectively.

Unamortized costs were $ 5,063 and $ 949 at June 30, 2024 and September 30, 2023, respectively.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios.

1 unchanged sentence

Outstanding U.S.

dollar denominated borrowings on the revolving credit facility at March 31, 2024 and September 30, 2023 were $ 447,949 and $ 405,000 , respectively.

Outstanding Euro denominated borrowings on the revolving credit facility at March 31, 2024 and September 30, 2023 were € 55.0 million ($ 59,370 ) and € 55.0 million ($ 58,168 ), respectively.

The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at March 31, 2024 and 2023 was 4.89 % and 5.17 %, respectively.

dollar denominated borrowings on the revolving credit facility at June 30, 2024 and September 30, 2023 were $ 436,632 and $ 405,000 , respectively.

Outstanding Euro denominated borrowings on the revolving credit facility at June 30, 2024 and September 30, 2023 were € 55.0 million ($ 58,947 ) and € 55.0 million ($ 58,168 ), respectively.

The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2024 and 2023 was 4.61 % and 5.59 %, respectively.

The Company has $ 299,217 of 5.25 % senior unsecured notes due December 1, 2025 (the "2025 Senior Notes").

3 unchanged sentences

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

Unamortized costs were $ 855 and $ 1,125 at March 31, 2024 and September 30, 2023, respectively.

Unamortized costs were $ 720 and $ 1,125 at June 30, 2024 and September 30, 2023, respectively.

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

11 unchanged sentences

The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded.

As of March 31, 2024 and September 30, 2023, the amount sold to the Purchasers was $ 109,900 and $ 101,800 , 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 $ 51,819 and $ 57,897 as of March 31, 2024 and September 30, 2023, respectively.

As of June 30, 2024 and September 30, 2023, the amount sold to the Purchasers was $ 105,100 and $ 101,800 , 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 $ 52,464 and $ 57,897 as of June 30, 2024 and September 30, 2023, respectively.

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

Six Months Ended

March 31, 2024 Six Months Ended

March 31, 2023

Nine Months Ended

June 30, 2024 Nine Months Ended

June 30, 2023

Gross receivables sold

8 unchanged sentences

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

The principal amount of receivables sold under this arrangement was $ 34,993 and $ 16,950 during the six months ended March 31, 2024 and 2023, respectively.

The principal amount of receivables sold under this arrangement was $ 53,087 and $ 36,045 during the nine months ended June 30, 2024 and 2023, respectively.

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 March 31, 2024 and September 30, 2023, the amount of factored receivables that remained outstanding was $ 15,411 and $ 18,045 , respectively.

As of June 30, 2024 and September 30, 2023, the amount of factored receivables that remained outstanding was $ 16,424 and $ 18,045 , respectively.

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

2 unchanged sentences

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

Outstanding borrowings under the credit facility totaled € 3.5 million ($ 3,738 ) at March 31, 2024.

Outstanding borrowings under the credit facility totaled € 2.9 million ($ 3,088 ) at June 30, 2024.

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

The weighted-average interest rate on outstanding borrowings under this facility was 6.11 % and 5.17 % at March 31, 2024 and 2023, respectively.

Other borrowings totaled $ 17,200 and $ 19,241 at March 31, 2024 and September 30, 2023, respectively.

The weighted-average interest rate on all other borrowings was 2.55 % and 3.01 % at March 31, 2024 and 2023, respectively.

As of March 31, 2024 and September 30, 2023, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.

The Company was in compliance with all of its debt covenants as of March 31, 2024.

The weighted-average interest rate on outstanding borrowings under this facility was 5.88 % and 5.65 % at June 30, 2024 and 2023, respectively.

Other borrowings totaled $ 16,744 and $ 19,241 at June 30, 2024 and September 30, 2023, respectively.

The weighted-average interest rate on all other borrowings was 2.61 % and 2.44 % at June 30, 2024 and 2023, respectively.

As of June 30, 2024 and September 30, 2023, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets.

The Company was in compliance with all of its debt covenants as of June 30, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2 unchanged sentences

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

At March 31, 2024 and September 30, 2023, derivative instruments were reflected on a gross-basis in the consolidated balance sheets as follows:

March 31, 2024 September 30, 2023

At June 30, 2024 and September 30, 2023, derivative instruments were reflected on a gross-basis in the consolidated balance sheets as follows:

June 30, 2024 September 30, 2023

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

9 unchanged sentences

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

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Notional amount $ 175,000 $ 175,000

5 unchanged sentences

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

The fair value of the interest rate swaps reflected a net unrealized gain of $ 1,767 ($ 1,319 after tax) at March 31, 2024 and $ 4,006 ($ 2,991 after tax) at September 30, 2023, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").

Unrecognized gains of $ 5,775 ($ 4,316 after tax) and $ 8,084 ($ 6,041 after tax) related to previously terminated LIBOR-based swaps were also included in AOCI as of March 31, 2024 and September 30, 2023, respectively.

Assuming market rates remain constant with the rates at March 31, 2024, a gain (net of tax) of approximately $ 2,896 included in AOCI is expected to be recognized in earnings over the next twelve months.

The fair value of the interest rate swaps reflected a net unrealized gain of $ 2,257 ($ 1,685 after tax) at June 30, 2024 and $ 4,006 ($ 2,991 after tax) at September 30, 2023, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").

Unrecognized gains of $ 4,751 ($ 3,549 after tax) and $ 8,084 ($ 6,041 after tax) related to previously terminated LIBOR-based swaps were also included in AOCI as of June 30, 2024 and September 30, 2023, respectively.

Assuming market rates remain constant with the rates at June 30, 2024, a gain (net of tax) of approximately $ 2,580 included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company has a U.S.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 , as of March 31, 2024 and September 30, 2023, which has been designated as a net investment hedge of foreign operations.

Dollar/Euro cross currency swap with a notional amount of $ 81,392 , as of June 30, 2024 and September 30, 2023, 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 $ 3,790 (net of income taxes of $ 1,286 ) and a loss of $ 2,065 (net of income taxes of $ 701 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2024 and September 30, 2023, respectively.

Income of $ 327 and $ 586 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended March 31, 2024, respectively.

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

At March 31, 2024 and September 30, 2023, the swap totaled $ 5,076 and $ 2,766 , respectively, and was included in other accrued liabilities in the Consolidated Balance Sheets.

A loss of $ 2,884 (net of income taxes of $ 979 ) and a loss of $ 2,065 (net of income taxes of $ 701 ), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at June 30, 2024 and September 30, 2023, respectively.

Income of $ 306 and $ 891 , which represented the recognized portion of the fair value of cross currency swaps excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and nine months ended June 30, 2024, respectively.

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

At June 30, 2024 and September 30, 2023, the swap totaled $ 3,863 and $ 2,766 , respectively, and was included in other accrued liabilities in the Consolidated Balance Sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1 unchanged sentence

Derivatives and Hedging Activities (continued)

The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of € 55.0 million ($ 59,370 ) as of March 31, 2024.

Currency losses of $ 1,991 (net of income taxes of $ 675 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at March 31, 2024.

During the third quarter of fiscal 2024, the Company entered into a U.S.

Dollar/SEK cross currency swap with a notional amount of SEK 212.7 million ($ 20,000 ), which was designated as a net investment hedge of foreign operations.

The swap contract matures in June 2025.

In connection with this transaction, the Company received $ 17,416 from the counterparty, representing partial advance payment of amounts due under the U.S.

Dollar leg of the swap.

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

At June 30, 2024, the swap totaled $ 17,416 and was included in other current liabilities in the Consolidated Balance Sheet.

The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of € 55.0 million ($ 58,947 ) as of June 30, 2024.

Currency losses of $ 1,693 (net of income taxes of $ 574 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at June 30, 2024.

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

2 unchanged sentences

Under the 2017 Equity Incentive Plan, which has a ten-year term from the date the Company's Board of Directors approved of the amendment and restatement of the 2017 Equity Incentive Plan, the maximum number of shares available for grants or awards is an aggregate of 3,450,000 (subject to adjustment upon certain events such as stock dividends or stock splits), following the amendment and restatement of the 2017 Equity Incentive Plan at the Company's 2022 Annual Shareholder Meeting.

At March 31, 2024, 1,178,558 shares have been issued under the 2017 Equity Incentive Plan.

At June 30, 2024, 1,180,989 shares have been issued under the 2017 Equity Incentive Plan.

1,233,583 time-based RSUs, 1,579,514 performance-based RSUs, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan.

1,720,892 of these share-based awards are outstanding as of March 31, 2024.

1,717,761 of these share-based awards are outstanding as of June 30, 2024.

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

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

For the three-month periods ended March 31, 2024 and 2023, stock-based compensation cost totaled $ 4,327 and $ 4,278 , respectively.

For the six-month periods ended March 31, 2024 and 2023, stock-based compensation totaled $ 8,978 and $ 8,612 , respectively.

The associated future income tax benefit recognized for stock-based compensation was $ 1,093 and $ 1,057 for the three-month periods ended March 31, 2024 and 2023, respectively, and $ 1,778 and $ 1,608 for the six-month periods ended March 31, 2024 and 2023, respectively.

For the three-month periods ended June 30, 2024 and 2023, stock-based compensation cost totaled $ 5,331 and $ 5,023 , respectively.

For the nine-month periods ended June 30, 2024 and 2023, stock-based compensation totaled $ 14,309 and $ 13,635 , respectively.

The associated future income tax benefit recognized for stock-based compensation was $ 1,351 and $ 1,249 for the three-month periods ended June 30, 2024 and 2023, respectively, and $ 3,128 and $ 2,856 for the nine-month periods ended June 30, 2024 and 2023, respectively.

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 the units become vested.

The transactions for RSUs for the six months ended March 31, 2024 were as follows:

The transactions for RSUs for the nine months ended June 30, 2024 were as follows:

RSUs Weighted-

3 unchanged sentences

Expired or forfeited ( 17,050 ) 35.44

Non-vested at March 31, 2024 1,720,892 $ 33.60

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

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

During the second quarter of fiscal 2024, all of these stock options were forfeited in connection with an employee retirement.

Non-vested at June 30, 2024 1,717,761 $ 33.60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

1 unchanged sentence

Share-Based Payments (continued)

As of March 31, 2024, the total unrecognized compensation cost related to all unvested stock-based awards was $ 28,205 and is expected to be recognized over a weighted average period of 2.2 years.

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

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

During the second quarter of fiscal 2024, all of these stock options were forfeited in connection with an employee retirement.

As of June 30, 2024, the total unrecognized compensation cost related to all unvested stock-based awards was $ 22,341 and is expected to be recognized over a weighted average period of 1.9 years.

The fair value of certain stock-based awards that are subject to performance conditions are estimated on the date of grant using a binomial lattice valuation model.

The following table indicates the assumptions used in estimating the fair value of certain stock-based awards granted during the six-month period ended March 31, 2024.

Six Months Ended

March 31, 2024

The following table indicates the assumptions used in estimating the fair value of certain stock-based awards granted during the nine-month period ended June 30, 2024.

Nine Months Ended

June 30, 2024

Expected volatility 31.8 %

5 unchanged sentences

Expected volatilities are based on the historical volatility of the Company's stock price.

The expected term for grants in the six months ended March 31, 2024 represents an estimate of the average period of time for RSUs to vest.

The expected term for grants in the nine months ended June 30, 2024 represents an estimate of the average period of time for RSUs to vest.

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

5 unchanged sentences

The value of deferred shares is recorded in other liabilities.

A total of 50,355 shares and share units had been deferred under the Director Fee Plans as of March 31, 2024.

A total of 50,725 shares and share units had been deferred under the Director Fee Plans as of June 30, 2024.

Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares or units) with a value of $ 140 for fiscal 2024.

As of March 31, 2024, 373,471 restricted shares and RSUs have been granted under the Director Fee Plans, 200,242 of which were issued under the 2019 Director Fee Plan.

67,560 RSUs are unvested at March 31, 2024 under the Director Fee Plans.

As of June 30, 2024, 377,460 restricted shares and RSUs have been granted under the Director Fee Plans, 204,231 of which were issued under the 2019 Director Fee Plan.

71,549 RSUs are unvested at June 30, 2024 under the Director Fee Plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Earnings Per Share Attributable to Matthews' Shareholders

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

5 unchanged sentences

Dividends declared per common share $ 0.24 $ 0.23 $ 0.72 $ 0.69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Pension and Other Postretirement Benefit Plans

1 unchanged sentence

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

Three months ended March 31,

Three months ended June 30,

Pension Other Postretirement

6 unchanged sentences

Net benefit cost $ 147 $ 132 $ ( 86 ) $ ( 89 )

Six months ended March 31,

Nine months ended June 30,

Pension Other Postretirement

9 unchanged sentences

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

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

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

2 unchanged sentences

Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the three-month periods ended March 31, 2024 and 2023 were as follows:

The changes in AOCI by component, net of tax, for the three-month periods ended June 30, 2024 and 2023 were as follows:

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

Attributable to Matthews:

Balance, December 31, 2023 $ 6,680 $ ( 178,511 ) $ 4,151 $ ( 167,680 )

Balance, March 31, 2024 $ 6,398 $ ( 184,537 ) $ 5,635 $ ( 172,504 )

OCI before reclassification ( 22 ) ( 738 ) 105 ( 655 )

3 unchanged sentences

( 401 ) ( 1,605 )

Balance, March 31, 2024 $ 6,398 $ ( 184,537 ) $ 5,635 $ ( 172,504 )

Balance, June 30, 2024 $ 6,164 $ ( 185,507 ) $ 5,234 $ ( 174,109 )

Attributable to noncontrolling interest:

Balance, December 31, 2023 $ — $ 288 $ — $ 288

Balance, March 31, 2024 $ — $ 288 $ — $ 288

OCI before reclassification — — — —

Net current-period OCI — — — —

Balance, March 31, 2024 $ — $ 288 $ — $ 288

Balance, June 30, 2024 $ — $ 288 $ — $ 288

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

Attributable to Matthews:

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

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

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

2 unchanged sentences

Net current-period OCI ( 210 ) 923 2,507 3,220

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

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

Attributable to noncontrolling interest:

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

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

OCI before reclassification — ( 31 )

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

Balance, March 31, 2023 $ — $ 254

Balance, June 30, 2023 $ — $ 223

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

3 unchanged sentences

Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2024 and 2023 were as follows:

The changes in AOCI by component, net of tax, for the nine-month periods ended June 30, 2024 and 2023 were as follows:

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

6 unchanged sentences

4,689 ( 3,798 ) 295

Balance, March 31, 2024 $ 6,398 $ ( 184,537 ) $ 5,635 $ ( 172,504 )

Balance, June 30, 2024 $ 6,164 $ ( 185,507 ) $ 5,234 $ ( 174,109 )

Attributable to noncontrolling interest:

2 unchanged sentences

Net current-period OCI — 22 — 22

Balance, March 31, 2024 $ — $ 288 $ — $ 288

Balance, June 30, 2024 $ — $ 288 $ — $ 288

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

5 unchanged sentences

Net current-period OCI 559 25,915 ( 139 ) 26,335

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

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

Attributable to noncontrolling interest:

2 unchanged sentences

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

Balance, March 31, 2023 $ — $ 254

Balance, June 30, 2023 $ — $ 223

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

3 unchanged sentences

Accumulated Other Comprehensive Income (continued)

Reclassifications out of AOCI for the three and six-month periods ended March 31, 2024 and 2023 were as follows:

Reclassifications out of AOCI for the three and nine-month periods ended June 30, 2024 and 2023 were as follows:

Amount reclassified from AOCI

Details about AOCI Components Three Months Ended March 31, 2024 Six Months Ended March 31, 2024 Affected line item in the Statement of income

Details about AOCI Components Three Months Ended June 30, 2024 Nine Months Ended June 30, 2024 Affected line item in the Statement of income

Postretirement benefit plans

11 unchanged sentences

Details about AOCI Components Three Months Ended

March 31, 2023 Six Months Ended

March 31, 2023 Affected line item in the Statement of income

June 30, 2023 Nine Months Ended

June 30, 2023 Affected line item in the Statement of income

Postretirement benefit plans

17 unchanged sentences

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

The Company's consolidated income taxes for the first six months of fiscal 2024 were a benefit of $ 1,848 , compared to an expense of $ 4,694 for the first six months of fiscal 2023.

The difference between the Company’s consolidated income taxes for the first six months of fiscal 2024 compared to the same period for fiscal 2023 resulted from a decrease in consolidated pre-tax income in fiscal 2024 compared to fiscal 2023 as well as a net tax benefit from discrete items.

The Company’s fiscal 2024 six month effective tax rate varied from the U.S.

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

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

The Company's consolidated income taxes for the first nine months of fiscal 2024 represented a benefit of $ 10,677 , compared to an expense of $ 4,136 for the first nine months of fiscal 2023.

The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2024 compared to the same period for fiscal 2023 resulted from a consolidated pre-tax loss in fiscal 2024 compared to pre-tax income in fiscal 2023, as well as a net tax benefit from discrete items in fiscal 2024.

The Company’s fiscal 2024 nine month effective tax rate varied from the U.S.

statutory tax rate of 21.0% primarily due to tax credits, jurisdictional tax rate netting, recognition of certain previously unrecognized deferred tax assets and other net discrete tax benefits.

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

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

The Company had unrecognized tax benefits (excluding penalties and interest) of $ 4,549 and $ 3,779 on March 31, 2024 and September 30, 2023, respectively, which would impact the annual effective rate at March 31, 2024 and September 30, 2023, respectively.

The Company had unrecognized tax benefits (excluding penalties and interest) of $ 4,536 and $ 3,779 on June 30, 2024 and September 30, 2023, respectively, which would impact the annual effective rate at June 30, 2024 and September 30, 2023, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 2,725 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.

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

Total penalties and interest accrued were $ 862 and $ 730 at March 31, 2024 and September 30, 2023, respectively.

Total penalties and interest accrued were $ 702 and $ 730 at June 30, 2024 and September 30, 2023, respectively.

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

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

As of March 31, 2024, the tax years that remain subject to examination by major jurisdictions generally are:

As of June 30, 2024, the tax years that remain subject to examination by major jurisdictions generally are:

United States – Federal 2020 and forward

30 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

23 unchanged sentences

Net loss attributable to noncontrolling interests — ( 67 ) — ( 125 )

Income before income taxes 7,905 12,507 4,876 17,466

(Loss) income before income taxes ( 7,052 ) 8,113 ( 2,176 ) 25,579

Income tax benefit (provision) 8,829 558 10,677 ( 4,136 )

2 unchanged sentences

(2) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts.

Fiscal 2024 also includes costs related to an ongoing contractual dispute which totaled $ 4,972 for the six months ended March 31, 2024.

Fiscal 2023 includes loss recoveries totaling $ 2,154 for the six months ended March 31, 2023, which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Fiscal 2024 also includes legal costs related to an ongoing dispute with Tesla, Inc.

("Tesla"), which totaled $ 3,166 and $ 8,138 for the three and nine months ended June 30, 2024, respectively (see Note 17, "Legal Matter").

Fiscal 2023 includes loss recoveries totaling $ 2,154 for the nine months ended June 30, 2023, which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

(3) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation").

4 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.

(5) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ 1,238 and $ 1,090 for the three months ended March 31, 2024 and 2023, respectively, and $ 2,413 and $ 1,546 for the six months ended March 31, 2024 and 2023, respectively.

* Depreciation and amortization was $ 6,914 and $ 5,711 for the Memorialization segment, $ 5,571 and $ 5,916 for the Industrial Technologies segment, $ 9,669 and $ 11,319 for the SGK Brand Solutions segment, and $ 1,107 and $ 1,202 for Corporate and Non-Operating, for the three months ended March 31, 2024 and 2023, respectively.

Depreciation and amortization was $ 13,327 and $ 11,285 for the Memorialization segment, $ 11,948 and $ 11,769 for the Industrial Technologies segment, $ 19,241 and $ 22,379 for the SGK Brand Solutions segment, and $ 2,268 and $ 2,444 for Corporate and Non-Operating, for the six months ended March 31, 2024 and 2023, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,037 and $ 333 for the Memorialization segment, $ 4,431 and $ 2,437 for the Industrial Technologies segment, $ 358 and $ 2,610 for the SGK Brand Solutions segment, and $ 1,198 and income of $ 1,248 for Corporate and Non-Operating, for the three months ended March 31, 2024 and 2023, respectively.

Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,097 and $ 711 for the Memorialization segment, $ 9,799 and $ 3,374 for the Industrial Technologies segment, $ 1,221 and $ 3,131 for the SGK Brand Solutions segment, and $ 2,064 and income of $ 18 for Corporate and Non-Operating, for the six months ended March 31, 2024 and 2023, respectively.

(5) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ 1,225 and $ 1,212 for the three months ended June 30, 2024 and 2023, respectively, and $ 3,638 and $ 2,758 for the nine months ended June 30, 2024 and 2023, respectively.

* Depreciation and amortization was $ 7,073 and $ 5,807 for the Memorialization segment, $ 5,796 and $ 5,815 for the Industrial Technologies segment, $ 9,702 and $ 11,164 for the SGK Brand Solutions segment, and $ 1,086 and $ 1,150 for Corporate and Non-Operating, for the three months ended June 30, 2024 and 2023, respectively.

Depreciation and amortization was $ 20,400 and $ 17,092 for the Memorialization segment, $ 17,744 and $ 17,584 for the Industrial Technologies segment, $ 28,943 and $ 33,543 for the SGK Brand Solutions segment, and $ 3,354 and $ 3,594 for Corporate and Non-Operating, for the nine months ended June 30, 2024 and 2023, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 1,108 and $ 270 for the Memorialization segment, $ 4,490 and $ 120 for the Industrial Technologies segment, $ 1,473 and $ 3,897 for the SGK Brand Solutions segment, and $ 1,441 and $ 715 for Corporate and Non-Operating, for the three months ended June 30, 2024 and 2023, respectively.

Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $ 2,204 and $ 981 for the Memorialization segment, $ 14,288 and $ 3,494 for the Industrial Technologies segment, $ 2,694 and $ 7,028 for the SGK Brand Solutions segment, and $ 3,507 and $ 697 for Corporate and Non-Operating, for the nine months ended June 30, 2024 and 2023, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

2 unchanged sentences

In January 2024, the Company completed a small acquisition within the Memorialization segment for a purchase price of $ 5,825 (net of holdbacks and other adjustments, including working capital).

The preliminary purchase price allocation was not finalized as of March 31, 2024 and remains subject to change as the Company obtains additional information related to working capital, intangible assets and other liabilities.

The preliminary purchase price allocation was not finalized as of June 30, 2024 and remains subject to change as the Company obtains additional information related to working capital, intangible assets and other liabilities.

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

17 unchanged sentences

Translation and other adjustments 3,272 383 1,904 5,559

Net goodwill at March 31, 2024

Net goodwill at June 30, 2024

$ 371,838 $ 115,456 $ 218,925 $ 706,219

The net goodwill balances at March 31, 2024 and September 30, 2023 included $ 261,186 of accumulated impairment losses.

Accumulated impairment losses at March 31, 2024 and September 30, 2023 were $ 5,000 , $ 23,946 and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

The net goodwill balances at June 30, 2024 and September 30, 2023 included $ 261,186 of accumulated impairment losses.

Accumulated impairment losses at June 30, 2024 and September 30, 2023 were $ 5,000 , $ 23,946 and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

5 unchanged sentences

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.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of March 31, 2024 and September 30, 2023, respectively.

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of June 30, 2024 and September 30, 2023, respectively.

Amount Accumulated

Amortization Net

March 31, 2024:

June 30, 2024:

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

9 unchanged sentences

$ 579,261 $ ( 418,783 ) $ 160,478

The net change in intangible assets during the six months ended March 31, 2024 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to a small acquisition within the Memorialization segment.

Amortization expense on intangible assets was $ 8,959 and $ 10,517 for the three-month periods ended March 31, 2024 and 2023, respectively.

Amortization expense on intangible assets was $ 18,754 and $ 20,859 for the six-month periods ended March 31, 2024 and 2023, respectively.

The net change in intangible assets during the nine months ended June 30, 2024 included the impact of foreign currency fluctuations during the period, additional amortization, and additions related to a small acquisition within the Memorialization segment.

Amortization expense on intangible assets was $ 9,037 and $ 10,640 for the three-month periods ended June 30, 2024 and 2023, respectively.

Amortization expense on intangible assets was $ 27,791 and $ 31,499 for the nine-month periods ended June 30, 2024 and 2023, respectively.

Amortization expense is estimated to be $ 9,126 for the remainder of fiscal 2024, $ 21,195 in 2025, $ 14,116 in 2026, $ 13,023 in 2027 and $ 10,959 in 2028.

On June 14, 2024, Tesla filed a complaint against the Company in the Northern District of California, Civil Action No.

5:24-cv-03615 (N.D.

The complaint alleges trade secret misappropriation under the Defend Trade Secrets Act (the “DTSA”) and California’s Uniform Trade Secrets Act (the “CUTSA”), breach of contract and unfair business practices.

Tesla alleges that the Company improperly incorporated Tesla’s confidential trade secrets into patent filings relating to the Company’s dry battery electrode solutions and that the Company disclosed Tesla’s confidential trade secrets to other companies, including Tesla competitors.

Tesla served the complaint on June 24, 2024.

On June 25, 2024, the Company filed a Motion to Compel Arbitration based on the provisions of the underlying contract governing the relationship between the Company and Tesla, which requires arbitration.

The Company believes the claims stated in the complaint are without merit and intends to vigorously defend itself against the allegations.

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

4 unchanged sentences

Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations, and no assurance can be given that such expectations will prove correct.

Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks or other disruptions to our industries, customers or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, and other factors described in Item 1A - "Risk Factors" in this Form 10-Q and Item 1A - "Risk Factors" in the Company's Form 10-K for the fiscal year ended September 30, 2023.

Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks or other disruptions to our industries, customers or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, the outcome of the Company's dispute with Tesla, Inc.

("Tesla"), and other factors described in Item 1A - "Risk Factors" in this Form 10-Q and Item 1A - "Risk Factors" in the Company's Form 10-K for the fiscal year ended September 30, 2023.

In addition, although the Company does not currently have any customers that would be considered individually significant to consolidated sales, changes in the distribution of the Company's products or the potential loss of one or more of the Company's larger customers are also considered risk factors.

24 unchanged sentences

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

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and six-month periods ended March 31, 2024 and 2023.

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2024 and 2023.

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

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

13 unchanged sentences

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

Sales for the six months ended March 31, 2024 were $921.2 million, compared to $928.8 million for the six months ended March 31, 2023.

The decrease in fiscal 2024 sales reflected higher sales in the Memorialization segment, offset by lower sales in the Industrial Technologies and SGK Brand Solutions segments.

On a consolidated basis, changes in foreign currency exchange rates were estimated to have a favorable impact of $4.8 million on fiscal 2024 sales compared to the prior year.

Memorialization segment sales for the first six months of fiscal 2024 were $430.2 million, compared to $429.4 million for the first six months of fiscal 2023.

The sales increase reflected higher sales of granite memorial products, benefits from recent acquisitions (primarily the fiscal 2023 acquisition of Eagle Granite Company) and improved price realization.

These increases were partially offset by lower unit sales of caskets, bronze memorial products and cremation equipment.

These declines reflected a return to more normalized death rates following the COVID-19 pandemic.

Changes in foreign currency exchange rates had a favorable impact of $403,000 on the segment's sales compared to the prior year.

Industrial Technologies segment sales were $227.5 million for the first six months of fiscal 2024, compared to $234.7 million for the first six months of fiscal 2023.

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

These increases were offset by reduced sales of warehouse automation solutions and automotive engineering solutions, and the sales impact of a fiscal 2023 divestiture (see Acquisitions and Divestitures below).

Sales for the nine months ended June 30, 2024 were $1.35 billion, compared to $1.40 billion for the nine months ended June 30, 2023.

The decrease in fiscal 2024 sales primarily reflected lower sales in the Industrial Technologies segment.

Sales in the Memorialization segment were also lower.

On a consolidated basis, changes in foreign currency exchange rates were estimated to have a favorable impact of $660,000 on fiscal 2024 sales compared to the prior year.

Memorialization segment sales for the first nine months of fiscal 2024 were $632.9 million, compared to $638.1 million for the first nine months of fiscal 2023.

The sales decrease reflected lower unit sales of caskets, cemetery memorial products, and cremation equipment, predominantly resulting from a return to more normalized death rates following the COVID-19 pandemic.

These declines were partially offset by improved price realization, higher mausoleum sales, and benefits from recent acquisitions (primarily the fiscal 2023 acquisition of Eagle Granite Company).

Industrial Technologies segment sales were $319.2 million for the first nine months of fiscal 2024, compared to $365.2 million for the first nine months of fiscal 2023.

The decrease in sales reflected lower sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market) and reduced sales of warehouse automation solutions.

The decrease also reflected lower sales of automotive engineering solutions and the sales impact of a fiscal 2023 divestiture (see Acquisitions and Divestitures below).

Fiscal 2024 sales for the Industrial Technologies segment were impacted by slower market conditions for the warehouse automation business, and customer delays impacting the timing of projects within the energy storage business.

Changes in foreign currency exchange rates had a favorable impact of $3.3 million on the segment's sales compared to the prior year.

In the SGK Brand Solutions segment, sales for the first six months of fiscal 2024 were $263.5 million, compared to $264.8 million for the first six months of fiscal 2023.

In the SGK Brand

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

What changed 10-Q

Item 1. Financial Statements