What changed in this filing

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Item 1. Financial Statements

2025-02-07 compared with 2024-08-02 · 243 added, 396 removed, 511 unchanged (56% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands)

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Current assets:

17 unchanged sentences

Trade accounts payable 101,927 108,362

Accrued rebates 23,422 23,766

Accrued compensation 59,663 88,781

24 unchanged sentences

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

Sales $ 401,842 $ 449,986

7 unchanged sentences

Other income (deductions), net 4,178 ( 880 )

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

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

Net income 1,777 8,671 8,501 21,443

Loss before income taxes ( 5,830 ) ( 3,029 )

Income tax benefit 2,358 726

Net loss ( 3,472 ) ( 2,303 )

Net loss attributable to noncontrolling interests — —

Net income attributable to Matthews shareholders $ 1,777 $ 8,738 $ 8,501 $ 21,568

Earnings per share attributable to Matthews shareholders:

Net loss attributable to Matthews shareholders $ ( 3,472 ) $ ( 2,303 )

Loss per share attributable to Matthews shareholders:

Basic $ ( 0.11 ) $ ( 0.07 )

4 unchanged sentences

(Dollar amounts in thousands)

Three Months Ended June 30,

Three Months Ended December 31,

Matthews Noncontrolling Interest Total

2024 2023 2024 2023 2024 2023

Net income (loss):

$ ( 3,472 ) $ ( 2,303 ) $ — $ — $ ( 3,472 ) $ ( 2,303 )

Other comprehensive (loss) income ("OCI"), net of tax:

Other Comprehensive Income ("OCI"), net of tax:

Foreign currency translation adjustment ( 14,611 ) 11,685 — 22 ( 14,611 ) 11,707

3 unchanged sentences

Net amount reclassified to earnings ( 350 ) ( 492 ) — — ( 350 ) ( 492 )

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

Nine Months Ended June 30,

Matthews Noncontrolling Interest Total

2024 2023 2024 2023 2024 2023

Net income (loss):

$ 8,501 $ 21,568 $ — $ ( 125 ) $ 8,501 $ 21,443

OCI, net of tax:

Foreign currency translation adjustment 4,689 25,915 22 ( 32 ) 4,711 25,883

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

Unrecognized (loss) gain on cash flow hedges:

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

Net amount reclassified to earnings ( 1,497 ) ( 1,506 ) — — ( 1,497 ) ( 1,506 )

Net change in unrecognized loss on cash flow hedges 2,215 ( 4,881 ) — — 2,215 ( 4,881 )

OCI, net of tax ( 12,749 ) 6,724 — 22 ( 12,749 ) 6,746

Comprehensive income (loss) $ 8,796 $ 47,903 $ 22 $ ( 157 ) $ 8,818 $ 47,746

Comprehensive (loss) income $ ( 16,221 ) $ 4,421 $ — $ 22 $ ( 16,221 ) $ 4,443

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

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

(Dollar amounts in thousands, except per share data)

11 unchanged sentences

Fair value of cash flow hedges — — — 2,215 — — 2,215

Total comprehensive income 4,443

Total comprehensive loss ( 16,221 )

Stock-based compensation — 4,979 — — — — 4,979

4 unchanged sentences

Dividends — — ( 8,233 ) — — — ( 8,233 )

Transactions with non-controlling interest — ( 412 ) — — — 412 —

December 31, 2024 $ 36,334 $ 144,588 $ 611,358 $ ( 181,491 ) $ ( 197,381 ) $ 48 $ 413,456

Net income — — 9,027 — — — 9,027

Minimum pension liability — — — ( 282 ) — — ( 282 )

Translation adjustment — — — ( 6,026 ) — — ( 6,026 )

Fair value of cash flow hedges — — — 1,484 — — 1,484

Total comprehensive income 4,203

Stock-based compensation — 4,327 — — — — 4,327

Purchase of 1,029 shares of treasury stock

— — — — ( 35 ) — ( 35 )

Issuance of 28,878 shares of treasury stock

— ( 1,077 ) — — 1,077 — —

Dividends — — ( 7,957 ) — — — ( 7,957 )

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

(Dollar amounts in thousands, except per share data)

Shareholders' Equity

6 unchanged sentences

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

Net income (loss) — — 3,703 — — ( 56 ) 3,647

Net loss — — ( 2,303 ) — — — ( 2,303 )

Minimum pension liability — — — ( 80 ) — — ( 80 )

7 unchanged sentences

— ( 25,356 ) — — 25,356 — —

Cancellations of 34,327 shares of treasury stock

— 1,958 — — ( 1,958 ) — —

Dividends — — ( 8,381 ) — — — ( 8,381 )

Transactions with non-controlling interest — ( 412 ) — — — 412 —

December 31, 2023 $ 36,334 $ 147,094 $ 704,043 $ ( 167,680 ) $ ( 211,029 ) $ 47 $ 508,809

Net income (loss) — — 9,127 — — ( 2 ) 9,125

Minimum pension liability — — — ( 176 ) — — ( 176 )

Translation adjustment — — — 4,432 — ( 5 ) 4,427

Fair value of cash flow hedges — — — ( 2,242 ) — — ( 2,242 )

Total comprehensive income 11,134

Stock-based compensation — 4,278 — — — — 4,278

Purchase of 7,606 shares of treasury stock

— — — — ( 288 ) — ( 288 )

Issuance of 46,069 shares of treasury stock

— ( 1,723 ) — — 1,723 — —

Dividends — — ( 7,683 ) — — — ( 7,683 )

Transactions with noncontrolling interests — — — — — 33 33

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)

Nine Months Ended

Three Months Ended

Cash flows from operating activities:

Net income $ 8,501 $ 21,443

Adjustments to reconcile net income to net cash flows from operating activities:

Net loss $ ( 3,472 ) $ ( 2,303 )

Adjustments to reconcile net loss to net cash flows from operating activities:

Depreciation and amortization 22,504 23,523

Stock-based compensation expense 4,979 4,651

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

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

Defined benefit plan settlement losses — 1,271

Defined benefit plan settlement payments — ( 24,242 )

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

Deferred tax benefit — ( 1 )

Gain on sale of assets, net ( 9,572 ) ( 87 )

Changes in working capital items ( 39,170 ) ( 51,640 )

2 unchanged sentences

Other operating activities, net 1,540 ( 3,229 )

Net cash provided by operating activities 43,336 76,906

Net cash used in operating activities ( 25,009 ) ( 27,266 )

Cash flows from investing activities:

1 unchanged sentence

Acquisitions, net of cash acquired ( 2,218 ) —

Purchases of investments ( 825 ) ( 1,536 )

Proceeds from sale of assets 13,249 124

Other investing activities, net ( 63 ) ( 237 )

Net cash used in investing activities ( 38,631 ) ( 53,717 )

Net cash provided by (used in) investing activities 1,436 ( 14,186 )

Cash flows from financing activities:

3 unchanged sentences

Dividends ( 9,237 ) ( 9,280 )

Payments of debt issuance costs ( 4,704 ) —

Proceeds from net investment hedge 17,416 —

Other financing activities — ( 913 )

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

Net cash provided by financing activities 18,437 36,114

Effect of exchange rate changes on cash ( 2,167 ) 1,158

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2024

December 31, 2024

(Dollar amounts in thousands, except per share data)

4 unchanged sentences

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;

Industrial Technologies includes the design, manufacturing, service and sales 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;

1 unchanged sentence

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.

See Note 17, "Subsequent Event" for a description of proposed transactions with respect to the SGK Brand Solutions business.

The Company has facilities in North America, Europe, Asia, Australia, and Central and South America.

4 unchanged sentences

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

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.

Operating results for the three months ended December 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

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 fiscal year ended September 30, 2024.

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

6 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 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.

As of December 31, 2024 and September 30, 2024, the Company had net monetary assets related to its Turkish subsidiaries of $ 5,621 and $ 5,327 , respectively.

Exchange losses related to highly inflationary accounting totaled $ 191 and $ 320 for the three months ended December 31, 2024 and December 31, 2023, respectively.

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

5 unchanged sentences

New Accounting Pronouncements:

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

In November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which improves financial reporting by requiring disclosure of specified information about certain costs and expenses on an annual and interim basis for all public entities, including enhanced disaggregation disclosures.

The ASU is effective for annual periods for the Company beginning in fiscal year 2028, and interim periods beginning in fiscal year 2029.

The Company is in the process of assessing the impact this ASU will have on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) which enhances the transparency and decision usefulness of income tax disclosures including rate reconciliations and income taxes paid among other tax disclosures.

3 unchanged sentences

2023-07, Segment Reporting (Topic 280) which improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities, including enhanced disclosures about significant segment expenses.

The amendments in this ASU do not affect the recognition, measurement, or financial statement presentation of expenses, but will require increased disclosures in annual and interim financial statements.

The ASU is effective for annual periods for the Company beginning in fiscal year 2025, and interim periods beginning in fiscal year 2026.

6 unchanged sentences

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

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 adoption of this ASU in the first quarter of fiscal 2024 had no material impact on the Company's consolidated financial statements.

The Company facilitates a voluntary supply chain finance program (the "Program") to provide certain suppliers with the opportunity to sell receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions.

The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier's decision to sell a receivable.

The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the Program.

All outstanding payments owed under the Program are recorded within trade accounts payable in the Consolidated Balance Sheets.

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 $ 3,868 and $ 3,027 at June 30, 2024 and September 30, 2023, respectively.

In October 2021, the FASB issued ASU No.

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

The adoption of this ASU in the first quarter of fiscal 2024 had no material impact on the Company's consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Revenue Recognition

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 nine months ended June 30, 2024 and 2023 were as follows:

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

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

North America $ 192,575 $ 197,309 $ 33,526 $ 43,924 $ 62,960 $ 63,000 $ 289,061 $ 304,233

Central and South America — — — — 1,641 1,342 1,641 1,342

Europe 7,496 8,468 56,558 84,577 50,671 51,532 114,725 144,577

Australia 2,593 2,951 — — 2,235 2,020 4,828 4,971

Asia — — 1,647 2,032 15,931 14,753 17,578 16,785

Total Sales $ 202,664 $ 208,728 $ 91,731 $ 130,533 $ 133,438 $ 132,647 $ 427,833 $ 471,908

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

Memorialization Industrial Technologies SGK Brand Solutions Consolidated

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

Three Months Ended December 31, Three Months Ended December 31, Three Months Ended December 31, Three Months Ended December 31,

2024 2023 2024 2023 2024 2023 2024 2023

5 unchanged sentences

Total Sales $ 190,486 $ 208,071 $ 80,533 $ 111,374 $ 130,823 $ 130,541 $ 401,842 $ 449,986

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

(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 % and 19 % of revenue for the three months ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and September 30, 2024, the Company had net contract assets for projects recognized using the over time method totaling $ 60,229 and $ 64,246 , respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings.

Net contract assets at December 31, 2024 and September 30, 2024 predominantly related to ongoing projects with the Company's largest energy storage customer.

Fair Value Measurements

5 unchanged sentences

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

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

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 June 30, 2024 and September 30, 2023.

(2) Derivative amounts at December 31, 2024 and September 30, 2024 reflect $ 58,432 of partial advance payments received from the counterparties to certain cross-currency swaps.

See Note 8, "Derivatives and Hedging Activities" for further details.

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

Inventories consisted of the following:

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Raw materials $ 62,048 $ 61,333

2 unchanged sentences

$ 241,585 $ 237,888

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Non-current investments consisted of the following:

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Equity and fixed income mutual funds $ 843 $ 839

3 unchanged sentences

$ 22,615 $ 23,076

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

During the first quarter of fiscal 2025, the Company completed the disposal of its investment in Liquid X Printed Metals Inc.

(“Liquid X”), a private company specializing in ink technologies.

The Company's investment in Liquid X was previously written-down in fiscal 2024, and had a net carrying value of zero at the time of the disposal transaction.

One of the Company's Executive Officers and member of Matthews' Board of Directors serves as President and CEO of Liquid X.

Debt and Financing Arrangements

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

June 30, 2024 September 30, 2023

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

December 31, 2024 September 30, 2024

Revolving credit facilities $ 484,083 $ 444,011

2025 Senior Notes 298,497 298,500

2027 Senior Secured Notes 294,799 294,751

Other borrowings 7,869 15,602

3 unchanged sentences

Long-term debt $ 801,951 $ 769,614

The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in January 2024.

The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 2024.

The amended and restated loan agreement includes a $ 750,000 senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility.

The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

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 June 30, 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 December 31, 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.

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

The Company incurred debt issuance costs in connection with the amended and restated agreement.

Unamortized costs were $ 4,713 and $ 4,961 at December 31, 2024 and September 30, 2024, 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 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").

The 2025 Senior Notes bear interest at a rate of 5.25 % per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year.

The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned subsidiaries.

The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes.

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

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

dollar denominated borrowings on the revolving credit facility at December 31, 2024 and September 30, 2024 were $ 480,969 and $ 410,527 , respectively.

There were no outstanding Euro denominated borrowings on the revolving credit facility at December 31, 2024.

Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 were € 30.0 million ($ 33,485 ).

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 December 31, 2024 and 2023 was 5.17 % and 5.32 %, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Debt and Financing Arrangements (continued)

The Company has $ 300,000 aggregate principal amount of 8.625 % senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes").

The 2027 Senior Secured Notes bear interest at a rate of 8.625 % per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year beginning on April 1, 2025.

The Company's obligations under the 2027 Senior Secured Notes are secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries.

The Company is subject to certain covenants and other restrictions in connection with the 2027 Senior Secured Notes.

The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes.

Unamortized costs related to the Company’s notes were $ 5,201 and $ 5,249 at December 31, 2024 and September 30, 2024, 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.

4 unchanged sentences

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

The RPA, which had a maturity date of March 2024, was amended in March 2024 to extend the maturity date to March 2026.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Debt and Financing Arrangements (continued)

The RPA matures in March 2026.

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

1 unchanged sentence

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 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.

As of December 31, 2024 and September 30, 2024, the amount sold to the Purchasers was $ 100,700 and $ 96,300 , 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 $ 66,272 and $ 58,183 as of December 31, 2024 and September 30, 2024, respectively.

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

Nine Months Ended

June 30, 2024 Nine Months Ended

June 30, 2023

Three Months Ended

December 31, 2024 Three Months Ended

December 31, 2023

Gross receivables sold

3 unchanged sentences

Net cash proceeds received $ 4,400 $ 100

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

subsidiary, entered into a non-recourse factoring arrangement.

The Company, through its U.K.

subsidiary, participates in 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.

1 unchanged sentence

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 $ 53,087 and $ 36,045 during the nine months ended June 30, 2024 and 2023, respectively.

The principal amount of receivables sold under this arrangement was $ 21,449 and $ 17,118 during the three months ended December 31, 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 June 30, 2024 and September 30, 2023, the amount of factored receivables that remained outstanding was $ 16,424 and $ 18,045 , respectively.

As of December 31, 2024 and September 30, 2024, the amount of factored receivables that remained outstanding was $ 17,126 and $ 15,665 , respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Debt and Financing Arrangements (continued)

The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier's decision to sell a receivable.

The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the Program.

All outstanding payments owed under the Program are recorded within trade accounts payable in the Consolidated Balance Sheets.

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 $ 3,012 and $ 3,014 at December 31, 2024 and September 30, 2024, respectively.

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

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

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

Outstanding borrowings under the credit facility totaled € 3.0 million ($ 3,114 ) at December 31, 2024.

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

(Dollar amounts in thousands, except per share data)

The weighted-average interest rate on outstanding borrowings under this facility was 5.10 % and 6.11 % at December 31, 2024 and 2023, respectively.

Other borrowings totaled $ 7,869 and $ 15,602 at December 31, 2024 and September 30, 2024, respectively.

The weighted-average interest rate on all other borrowings was 2.33 % and 4.20 % at December 31, 2024 and 2023, respectively.

As of December 31, 2024 and September 30, 2024, 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 December 31, 2024.

Derivatives and Hedging Activities

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

At 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

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

December 31, 2024 September 30, 2024

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

8 unchanged sentences

Total derivatives (1)

$ 1,132 $ ( 55,015 ) $ ( 2,606 ) $ ( 66,967 )

(1) Cross-currency swap amounts at December 31, 2024 and September 30, 2024 reflect $ 58,432 of partial advanced payments received from the counterparties to certain swap contracts (see below).

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

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Notional amount $ 175,000 $ 175,000

2 unchanged sentences

Weighted-average pay rate 3.83 % 3.83 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Derivatives and Hedging Activities (continued)

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

1 unchanged sentence

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 $ 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 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 $ 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.

The fair value of the interest rate swaps reflected a net unrealized gain of $ 1,132 ($ 844 after tax) at December 31, 2024 and a net unrealized loss of $ 2,606 ($ 1,948 after tax) at September 30, 2024, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI").

Unrecognized gains of $ 3,076 ($ 2,297 after tax) and $ 3,848 ($ 2,874 after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of December 31, 2024 and September 30, 2024, respectively.

Assuming market rates remain constant with the rates at December 31, 2024, a gain (net of tax) of approximately $ 1,566 included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company utilizes certain cross currency swaps as net investment hedges of foreign operations and assesses effectiveness for these contracts based on changes in fair value attributable to changes in spot prices.

The following table presents information related to cross currency swaps entered into by the Company and designated as net investment hedges:

Notional Amount Unrealized Gains (Losses)

Recognized in AOCI

Swap Currencies Maturity Date December 31, 2024 September 30, 2024 December 31, 2024 September 30, 2024

USD/EUR September 2027 $ 81,392 $ 81,392 $ ( 1,423 ) $ ( 5,440 )

USD/SEK June 2025 20,000 20,000 1,110 ( 468 )

USD/SGD August 2026 20,000 20,000 988 ( 441 )

USD/EUR August 2026 25,000 25,000 1,879 ( 30 )

$ 146,392 $ 146,392 $ 2,554 (1)

$ ( 6,379 ) (1)

(1) Total unrealized gains (losses) are presented net of tax of $ 863 and $ 2,156 as of December 31, 2024 and September 30, 2024, respectively.

In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S.

dollar leg of the swaps.

Such amounts totaled $ 58,432 , of which $ 17,416 and $ 41,016 were included in other current liabilities and other liabilities, respectively, on the Consolidated Balance Sheets at December 31, 2024 and September 30, 2024.

The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of € 30.0 million ($ 33,485 ) as of September 30, 2024.

Currency losses of $ 3,820 (net of income taxes of $ 1,113 ), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2024.

Refer to Note 11, "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 (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Derivatives and Hedging Activities (continued)

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.

Share-Based Payments

1 unchanged sentence

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

In November 2024, the Board of Directors approved the Second Amended and Restated 2017 Equity Incentive Plan (the "Second Amended 2017 Plan"), which increases the maximum number of shares available for grants or awards to an aggregate of 4,950,000 .

The Second Amended 2017 Plan is subject to shareholder approval at the February 2025 Annual Shareholder Meeting.

At December 31, 2024, 1,720,138 shares have been issued under the 2017 Equity Incentive Plan.

1,459,643 time-based RSUs, 1,874,354 performance-based RSUs, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan.

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

1,685,714 of these share-based awards are outstanding as of December 31, 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 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.

For the three-month periods ended December 31, 2024 and 2023, stock-based compensation cost totaled $ 4,979 and $ 4,651 , respectively.

The associated future income tax benefit recognized for stock-based compensation was $ 818 and $ 684 for the three-month periods ended December 31, 2024 and 2023, respectively.

With respect to the grants of RSUs, awards generally vest on the third anniversary of the grant date.

The number of units that vest depend on certain time and performance thresholds.

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The Company issues common stock from treasury shares once the units become vested.

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

The transactions for RSUs for the three months ended December 31, 2024 were as follows:

RSUs Weighted-

1 unchanged sentence

Granted 520,900 25.52

Contingent grant *

145,800 25.45

Vested ( 423,295 ) 37.69

Expired or forfeited ( 119,240 ) 38.00

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

Non-vested at December 31, 2024 1,831,514 $ 27.38

* In connection with its annual grant of equity awards, the Compensation Committee of the Board of Directors granted the President and Chief Executive Officer an award contingent upon the approval by the Company's shareholders of the Second Amended 2017 Plan.

Such award consists of (i) time-based restricted stock units, which may settle into a maximum of 58,320 shares of Common Stock, subject to continued service to the Company through November 18, 2027, (ii) performance units, which may settle into a maximum of 43,740 shares of Common Stock at target levels, upon the Company achieving certain metrics based on return on invested capital (“ROIC”);

and (iii) performance units, which may settle into a maximum of 43,740 shares of Common Stock at target levels upon stock price appreciation for the Common Stock.

As of December 31, 2024, the total unrecognized compensation cost related to all unvested stock-based awards was $ 30,002 and is expected to be recognized over a weighted average period of 2.3 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 three-month period ended December 31, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

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Share-Based Payments (continued)

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 nine-month period ended June 30, 2024.

Nine Months Ended

June 30, 2024

Three Months Ended

December 31, 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 nine months ended June 30, 2024 represents an estimate of the average period of time for RSUs to vest.

The expected term for grants in the three months ended December 31, 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 50,725 shares and share units had been deferred under the Director Fee Plans as of June 30, 2024.

A total of 51,527 shares and share units had been deferred under the Director Fee Plans as of December 31, 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 2025.

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)

As of December 31, 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 December 31, 2024 under the Director Fee Plans.

Earnings Per Share Attributable to Matthews' Shareholders

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

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

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

Net income attributable to Matthews shareholders $ 1,777 $ 8,738 $ 8,501 $ 21,568

Net loss attributable to Matthews shareholders $ ( 3,472 ) $ ( 2,303 )

Weighted-average shares outstanding (in thousands):

3 unchanged sentences

Dividends declared per common share $ 0.25 $ 0.24

Pension and Other Postretirement Benefit Plans

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

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

Three months ended June 30,

Pension Other Postretirement

2024 2023 2024 2023

Service cost $ 30 $ 31 $ 14 $ 19

Interest cost * 130 106 171 161

Amortization:

Prior service credit — — ( 91 ) ( 92 )

Net actuarial gains * ( 13 ) ( 5 ) ( 180 ) ( 177 )

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

Nine months ended June 30,

Pension Other Postretirement

2024 2023 2024 2023

Service cost $ 91 $ 119 $ 41 $ 57

Interest cost * 388 354 513 483

Amortization:

Prior service credit — — ( 273 ) ( 274 )

Net actuarial gains * ( 33 ) ( 21 ) ( 541 ) ( 531 )

Settlement losses * — 1,271 — —

Net benefit cost $ 446 $ 1,723 $ ( 260 ) $ ( 265 )

* Non-service components of pension and postretirement expense are included in other income (deductions), net.

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 nine months ended June 30, 2023.

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

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

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Accumulated Other Comprehensive Income

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

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

Amounts reclassified from AOCI ( 212 ) (a)

( 232 ) ( 506 ) (b)

Net current-period OCI ( 234 )

( 401 ) ( 1,605 )

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

Attributable to noncontrolling interest:

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

OCI before reclassification — — — —

Net current-period OCI — — — —

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

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

Attributable to Matthews:

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

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

Amounts reclassified from AOCI ( 205 ) (a)

( 212 ) ( 238 ) (b)

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

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

Attributable to noncontrolling interest:

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

OCI before reclassification — ( 31 )

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

Balance, June 30, 2023 $ — $ 223

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

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 8).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Accumulated Other Comprehensive Income (continued)

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

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

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

6 unchanged sentences

2,215 ( 12,749 )

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

Balance, December 31, 2024 $ 4,602 $ ( 189,234 ) $ 3,141 $ ( 181,491 )

Attributable to noncontrolling interest:

2 unchanged sentences

Net current-period OCI — — — —

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

Balance, December 31, 2024 $ — $ 289 $ — $ 289

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

5 unchanged sentences

Net current-period OCI ( 80 ) 11,685 ( 4,881 ) 6,724

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

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

Attributable to noncontrolling interest:

2 unchanged sentences

Net current-period OCI — 22 — 22

Balance, June 30, 2023 $ — $ 223

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

Balance, December 31, 2023 $ — $ 288

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

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 8).

2 unchanged sentences

Accumulated Other Comprehensive Income (continued)

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

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

Amount reclassified from AOCI

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

Prior service credit (a)

Actuarial losses 193 574 Other income (deductions), net

284 847 Income before income tax (b)

( 214 ) Income taxes

$ 633 Net income

Cash flow hedges $ 678

$ 2,005 Interest expense

Net investment hedges 306 891 Interest expense

984 2,896 Income before income tax (b)

( 246 ) ( 724 ) Income taxes

$ 738 $ 2,172 Net income

Details about AOCI Components Three Months Ended

June 30, 2023 Nine Months Ended

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

Details about AOCI Components Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Affected line item in the

Financial Statements

Postretirement benefit plans

1 unchanged sentence

Actuarial losses 139 191 Other income (deductions), net

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

230 282 Income before income tax (b)

7 unchanged sentences

$ 618 $ 688 Net income

Divestitures $ ( 6,844 ) $ — Other current liabilities (c)

(a) Prior service cost amounts are included in the computation of pension and other postretirement benefit expense, which is reported in cost of goods sold and selling and administrative expenses.

For additional information, see Note 11.

(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

(c) Reflects the release of a reserve that was established for currency translation amounts related to certain net assets classified as held-for-sale as of September 30, 2024.

See Note 14, "Acquisitions and Divestitures."

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 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 $ 4,536 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.

The Company's consolidated income taxes for the first three months of fiscal 2025 represented a benefit of $ 2,358 , compared to a benefit of $ 726 for the first three months of fiscal 2024.

The difference between the Company’s consolidated income taxes for the first three months of fiscal 2025 compared to the same period for fiscal 2024 resulted from an increase in consolidated pre-tax loss in fiscal 2025 compared to fiscal 2024, as well as a discrete net tax benefit related to adjustments in tax reserves resulting from the progression of foreign tax audits .

The Company’s fiscal 2025 three month effective tax rate varied from the U.S.

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

The Company’s fiscal 2024 three 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 a net discrete tax benefit.

The Company had unrecognized tax benefits (excluding penalties and interest) of $ 1,941 and $ 4,506 on December 31, 2024 and September 30, 2024, respectively, which would impact the annual effective rate at December 31, 2024 and September 30, 2024, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $ 281 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 $ 702 and $ 730 at June 30, 2024 and September 30, 2023, respectively.

Total penalties and interest accrued were $ 229 and $ 588 at December 31, 2024 and September 30, 2024, respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Income Taxes (continued)

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

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

United States – Federal 2019, 2022 and forward

5 unchanged sentences

Australia 2020 and forward

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Segment Information

2 unchanged sentences

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;

The Industrial Technologies segment includes the design, manufacturing, service and sales 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;

1 unchanged sentence

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.

See Note 17, "Subsequent Event" for a description of proposed transactions with respect to the SGK Brand Solutions business.

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

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 and divestiture costs, enterprise resource planning ("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, enterprise resource planning ("ERP") system 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.

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Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

Memorialization $ 190,486 $ 208,071

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( 577 ) ( 1,237 )

Strategic initiatives and other charges (2)**

Strategic initiatives and other items (2)**†

( 615 ) ( 5,920 )

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( 16,854 ) ( 12,751 )

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

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

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

Net income $ 1,777 $ 8,671 $ 8,501 $ 21,443

Loss before income taxes ( 5,830 ) ( 3,029 )

Income tax benefit 2,358 726

Net loss $ ( 3,472 ) $ ( 2,303 )

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

(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 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.

Also includes legal costs related to an ongoing dispute with Tesla, Inc.

("Tesla"), which totaled $ 6,867 and $ 2,370 for the three months ended December 31, 2024 and 2023, respectively (see Note 16, "Legal Matter").

Fiscal 2025 includes $ 8,702 of net gains on the sales of certain significant property and other assets.

Fiscal 2025 also includes loss recoveries totaling $ 1,170 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").

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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 $ 1,225 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.

(5) Includes fees for receivables sold under the RPA and factoring arrangements totaling $ 1,172 and $ 1,175 for the three months ended December 31, 2024 and 2023, respectively.

* Depreciation and amortization was $ 7,202 and $ 6,413 for the Memorialization segment, $ 5,674 and $ 6,377 for the Industrial Technologies segment, $ 8,860 and $ 9,572 for the SGK Brand Solutions segment, and $ 768 and $ 1,161 for Corporate and Non-Operating, for the three months ended December 31, 2024 and December 31, 2023, respectively.

** Acquisition costs, ERP system integration costs, and strategic initiatives and other items were $ 1,303 and $ 60 for the Memorialization segment, $ 4,119 and $ 5,367 for the Industrial Technologies segment, $ 714 and $ 863 for the SGK Brand Solutions segment, and income of $ 4,944 and charges of $ 867 for Corporate and Non-Operating, for the three months ended December 31, 2024 and December 31, 2023, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Segment Information (continued)

† Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee terminations) totaling $ 313 and $ 1,961 for the three months ended December 31, 2024 and 2023, respectively.

Fiscal 2025 amounts totaling charges of $ 601 and income of $ 288 for the three months ended December 31, 2024 were presented in cost of sales and administrative expense, respectively.

Fiscal 2024 amounts totaling charges of $ 1,902 , income of $ 256 and charges of $ 315 for the three months ended December 31, 2023 were presented in cost of sales, selling expense, and administrative expense, respectively.

Accrued severance and other termination benefits totaled $ 23,637 and $ 42,245 as of December 31, 2024 and September 30, 2024, respectively.

Acquisitions and Divestitures

In October 2024, the Company completed a small acquisition within the Memorialization segment for a purchase price of $ 2,218 .

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

During the first quarter of fiscal 2025, the Company completed a small divestiture within the Memorialization segment.

The net assets for this business were fully written-down in fiscal 2024 in anticipation of the disposal transaction.

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 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.

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 in the fourth quarter of fiscal 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 Company finalized the allocation of the purchase price in the first quarter of fiscal 2024, resulting in no significant adjustments.

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 $ 3,800 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 first quarter of fiscal 2024, resulting in adjustments to certain liability 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.

The Company finalized the allocation of the purchase price in the fourth quarter of fiscal 2024, resulting in no significant adjustments.

Goodwill and Other Intangible Assets

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Translation and other adjustments ( 2,744 ) ( 895 ) ( 10,284 ) ( 13,923 )

Net goodwill at June 30, 2024

Net goodwill at December 31, 2024

$ 373,167 $ 98,650 $ 214,150 $ 685,967

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

(Dollar amounts in thousands, except per share data)

Goodwill and Other Intangible Assets (continued)

The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2024 (January 1, 2024) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, therefore no impairment charges were necessary.

The net goodwill balances at December 31, 2024 and September 30, 2024 included $ 277,913 of accumulated impairment losses.

Accumulated impairment losses at December 31, 2024 and September 30, 2024 were $ 5,000 , $ 40,673 and $ 232,240 for the Memorialization, Industrial Technologies and SGK Brand Solutions segments, respectively.

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 7 %.

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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 June 30, 2024 and September 30, 2023, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Goodwill and Other Intangible Assets (continued)

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

Amount Accumulated

Amortization Net

June 30, 2024:

December 31, 2024

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

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$ 581,691 $ ( 455,665 ) $ 126,026

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.

The net change in intangible assets during the three months ended December 31, 2024 primarily included the impact of foreign currency fluctuations during the period and additional amortization.

Amortization expense on intangible assets was $ 8,608 and $ 9,795 for the three-month periods ended December 31, 2024 and 2023, respectively.

Amortization expense is estimated to be $ 21,031 for the remainder of fiscal 2025, $ 14,171 in 2026, $ 13,068 in 2027, $ 10,995 in 2028 and $ 9,143 in 2029.

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

On October 7, 2024, the United States District Court for the Northern District of California granted the Company’s motion to compel arbitration in response to a complaint filed by Tesla on June 14, 2024 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.

Cal.), which alleged 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.

Given the Court’s favorable ruling, the matter filed by Tesla has been effectively stayed pending arbitration, which Tesla has initiated.

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

In light of the substantial harm caused to the Company by Tesla's actions, the Company is now pursuing counterclaims against Tesla in that arbitration.

On February 5, 2025, an arbitrator issued a decision on an arbitration demand filed by Matthews against Tesla in January 2024 seeking a declaratory ruling on certain contractual rights to Dry Battery Electrode (“DBE”) technology, know-how, and intellectual property under the terms and conditions of the agreement between Tesla and Matthews.

This ruling acknowledged Matthews’ extensive background in advanced DBE manufacturing technology and affirmed that the Company has the right to sell its solutions to customers other than Tesla.

The interim award issued by the arbitrator is subject to confirmation and a limited right of appeal.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Subsequent Events

On January 7, 2025, subsequent to the date of the balance sheet, the Company entered into a definitive contribution agreement (the "Contribution Agreement") under which it will sell its interest in the SGK Brand Solutions business to a newly formed entity created by affiliates of Southern Graphics, Inc., which will combine the SGK Brand Solutions business with the Southern Graphics, Inc.

Under the terms of the Contribution Agreement, at the closing of the proposed transactions, the Company will receive $ 250,000 in cash and $ 50,000 of preferred equity in the new entity.

In addition, at the closing of the proposed transactions, the Company will receive a 40 % interest in the common equity of the new entity.

Trade receivables under the Company's RPA will not be contributed to the new entity.

The Company will also retain its European cylinders (packaging) business and other related investments following the closing of the proposed transactions.

The proposed transactions are expected to be completed later this fiscal year, subject to customary closing conditions, including regulatory approvals.

The foregoing summary of the Contribution Agreement and the transactions contemplated thereby is incomplete and is qualified in its entirety to the complete text of the Contribution Agreement, which was filed as Exhibit 2.1 to that Current Report on Form 8-K with the SEC on January 8, 2025.

In January 2025, subsequent to the balance sheet date, the Company entered into an agreement for the acquisition of a Memorialization business for a purchase price of $ 57 million in cash.

The purchase price is subject to customary post-closing adjustments.

The acquisition, which is subject to certain closing conditions, is expected to be completed mid-2025.

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

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Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof.

These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the proposed joint venture transaction, and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof.

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, 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.

Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include the possibility that the terms of the final award to be issued by the Arbitrator in the Tesla, Inc.

("Tesla") dispute may differ from the terms of the interim award issued by the Arbitrator and may be challenged, our ability to satisfy the conditions precedent to the consummation of the proposed joint venture transaction on the expected timeline or at all, our ability to achieve the anticipated benefits of the proposed joint venture transaction, uncertainties regarding future actions that may be taken by Barington in furtherance of its intention to nominate director candidates for election at the Company’s 2025 Annual Meeting, potential operational disruption caused by Barington’s actions that may make it more difficult to maintain relationships with customers, employees or partners, 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, including changes in costs due to adjustments to tariffs, 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, divestitures and business combinations, 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 Company's plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company's plans and expectations with respect to its Board, 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, 2024.

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.

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For additional information and reconciliations from the consolidated financial statements see "Non-GAAP Financial Measures" below.

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

RESULTS OF OPERATIONS:

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The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage solutions;

The Industrial Technologies segment includes the design, manufacturing, service and sales 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;

1 unchanged sentence

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

Refer to Note 17, "Subsequent Event" in Item 1 - "Financial Statements" for a description of proposed transactions with respect to the SGK Brand Solutions business.

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

These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, enterprise resource planning ("ERP") system 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.

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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 nine-month periods ended June 30, 2024 and 2023.

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

Refer to Note 13, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(Dollar amounts in thousands)

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See the "Non-GAAP Financial Measures" section 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

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