What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-11-21 compared with 2024-11-22 · 182 added, 108 removed, 177 unchanged (62% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

SGK Business.

The gross profit decline also reflected the impact of lower sales, higher material and labor costs, and a $5.6 million loss on the sale of certain property and other assets.

These decreases were partially offset by the impact of improved price realization, benefits from the realization of productivity improvements and other cost-reduction initiatives, and the favorable net impact of recently completed acquisitions and divestitures within the Memorialization segment.

Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $4.6 million and $39.2 million in fiscal 2025 and 2024, respectively.

Selling and administrative expenses for the year ended September 30, 2025 were $467.2 million, compared to $488.3 million for fiscal 2024.

Consolidated selling and administrative expenses, as a percent of sales, were 31.2% for fiscal 2025, compared to 27.2% in fiscal 2024.

Selling and administrative expenses in fiscal 2025 reflected benefits from ongoing cost-reduction initiatives, and a $30.4 million reduction in selling and administrative expenses from the divestiture of the Company's interest in the SGK Business, partially offset by higher compensation costs.

Fiscal 2025 selling and administrative expenses included $5.1 million of costs related to the Company's 2025 contested proxy, $8.7 million of net gains on the sales of certain significant property and other assets, $3.5 million of accelerated stock-based compensation costs related to the Company's divestiture of its interest in the SGK Business, $8.0 million of expense related to the settlement of a contractual licensing matter within the Memorialization segment (see Legal Matters below) and a $2.1 million loss on a small divestiture in the Industrial Technologies segment.

Selling and administrative expenses included legal costs related to an ongoing dispute with Tesla totaling $22.2 million in fiscal 2025 and $12.4 million in fiscal 2024 (see Legal Matters below).

Selling and administrative expenses included fees for receivables sold under a receivables purchase agreement and factoring arrangement totaling $3.9 million in fiscal 2025 and $4.8 million in fiscal 2024.

Selling and administrative expenses included non-cash impairment charges for the write-down of certain net assets held-for-sale totaling $7.9 million and $13.7 million in fiscal 2025 and 2024, respectively.

Refer to Note 25, "Asset Write-downs" in Item 8 - "Financial Statements and Supplementary Data" for further details.

Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with certain commercial, operational and cost-reduction initiatives totaling $11.5 million in fiscal 2025, compared to $19.7 million in fiscal 2024.

Intangible amortization for the year ended September 30, 2025 was $20.1 million, compared to $37.0 million for fiscal 2024.

The fiscal 2025 decrease in intangible amortization reflected certain intangible assets reaching the end of their amortizable lives, and lower amortization following the Company's divestiture of its interest in the SGK Business.

During fiscal 2025, the Company recognized a $55.1 million pre-tax gain on the sale of its interest in the SGK Business (see Acquisitions and Divestitures below).

During fiscal 2024, the Company recorded a goodwill write-down of $16.7 million related to the Surfaces and Engineering reporting unit within the Industrial Technologies segment.

Refer to Note 24, "Goodwill and Other Intangible Assets" in Item 8 - "Financial Statements and Supplementary Data" for further details.

Adjusted EBITDA for fiscal 2025 was $187.5 million, compared to $205.2 million for fiscal 2024.

Memorialization segment adjusted EBITDA for fiscal 2025 was $169.5 million, compared to $162.6 million for fiscal 2024.

The increase in segment adjusted EBITDA reflected the impact of improved price realization, benefits from productivity initiatives, and the favorable net impact of recent acquisitions and divestitures.

These increases were partially offset by the impact of lower unit sales, and higher material and labor costs.

Adjusted EBITDA for the Industrial Technologies segment for fiscal 2025 was $27.9 million, compared to $39.7 million in fiscal 2024.

The decrease in segment adjusted EBITDA primarily reflected the impact of lower sales of engineered products, partially offset by benefits from cost-reduction initiatives.

Adjusted EBITDA for the Brand Solutions segment for fiscal 2025 was $40.3 million, compared to $61.6 million for fiscal 2024.

The decrease in segment adjusted EBITDA primarily reflected a reduction of $28.6 million resulting from the divestiture of the Company's interest in the SGK Business, partially offset by the inclusion of the Company's portion (40% ownership interest) of Propelis' adjusted EBITDA, which totaled $7.5 million in fiscal 2025.

See Notes 8, "Investments" and 23, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data" for further information with respect to the Company's sale of its interest in the SGK Business.

Adjusted EBITDA for the SGK Business prior to the divestiture (versus the comparable period of the prior year) reflected the impact of higher labor costs, partially offset by the impact of improved price realization and benefits from cost-reduction initiatives.

Brand Solutions segment adjusted EBITDA also reflected declines for the European cylinders (packaging) business, which was not part of the sale of the SGK Business and remains part of the Company.

Interest expense for fiscal 2025 was $62.9 million, compared to $50.5 million in fiscal 2024.

The increase in interest expense reflected higher average interest rates, partially offset by a decrease in average borrowing levels in the current fiscal year.

Other income (deductions), net for the year ended September 30, 2025 represented an increase in pre-tax income of $3.7 million, compared to a decrease in pre-tax income of $6.8 million in fiscal 2024.

Other income (deductions), net includes investment income, banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances.

Other income (deductions), net included currency losses associated with highly inflationary accounting for the Company's subsidiaries in Turkey totaling $1.1 million and $1.0 million in fiscal years 2025 and 2024, respectively (see Note 2, "Summary of Significant Accounting Policies" in Item 8 - "Financial Statements and Supplementary Data" for further details).

Fiscal 2025 other income (deductions), net included $2.1 million of paid-in-kind interest income related to the Company's preferred equity investment in Propelis.

Fiscal 2025 other income (deductions), net also included loss

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

recoveries totaling $1.7 million which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Fiscal 2024 other income (deductions), net included a non-cash impairment charge of $3.1 million for the write-down of a cost-method investment (see Note 8, "Investments" in Item 8 - "Financial Statements and Supplementary Data" for further details).

The Company's consolidated income taxes for the year ended September 30, 2025 were an expense of $40.7 million, compared to a benefit of $10.0 million for fiscal 2024.

The difference between the Company's consolidated income taxes for fiscal 2025 compared to fiscal 2024 partially resulted from the Company's fiscal 2025 pre-tax consolidated income position compared to a pre-tax consolidated loss for fiscal 2024.

The fiscal 2025 tax rate included charges related to changes in the realizability of certain foreign deferred tax assets.

These changes included both current year foreign net operating losses requiring a full valuation allowance as well as other changes in realizability of certain foreign net operating losses from prior years.

The fiscal 2025 consolidated income before income taxes also reflected impacts related to the divestiture of the Company's interest in the SGK Business, the write down of certain net assets held-for-sale that were non-deductible for tax purposes, tax associated with the sale of certain foreign assets not offset by losses, and top-up tax related to the OECD Pillar Two global minimum tax.

Additionally, the fiscal 2025 tax rate benefited from research and development and foreign tax credits.

The fiscal 2024 effective tax rate benefited from research and development and foreign tax credits, and changes in realizability of certain foreign deferred tax assets due to the utilization of foreign tax net operating losses with a valuation allowance.

The fiscal 2024 effective tax rate was negatively impacted by share-based compensation.

Legal Matters

Refer to Note 20, "Commitments and Contingent Liabilities" in Item 8 - "Financial Statements and Supplementary Data," for information regarding the settlement of a contractual licensing matter within the Memorialization segment, and details related to an ongoing dispute with Tesla.

Related Party Transactions

Refer to Note 26, "Related Party Transactions" in Item 8 - "Financial Statements and Supplementary Data" for information regarding transactions with Propelis.

Comparison of Fiscal 2024 and Fiscal 2023:

For a comparison of the Company's results of operations for the fiscal years ended September 30, 2024 and September 30, 2023, see "Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operation" of the Company's annual report on Form 10-K for the fiscal year ended September 30, 2024 filed with the SEC on November 22, 2024.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

NON-GAAP FINANCIAL MEASURES:

Included in this report are measures of financial performance that are not defined by GAAP.

The Company uses certain non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition and divestiture costs, gains and losses on divestitures, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to certain commercial and operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense.

Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results.

The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.

The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business.

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, gains and losses on divestitures, ERP integration costs, and strategic initiatives and other charges.

Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and divestiture costs, gains and losses on divestitures, and ERP integration costs, and items that do not reflect the ordinary earnings of the Company’s operations.

This measure may be useful to an investor in evaluating operating performance.

It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance.

Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity.

The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

The reconciliation of net income to adjusted EBITDA is as follows:

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Net (loss) income $ (24,471) $ (59,660) $ 39,136

Income tax (benefit) provision (9,997) 1,774 (4,391)

(Loss) income before income taxes (69,657) 40,910 (104,219)

Income tax provision (benefit) 40,680 (9,997) 1,774

Income (loss) before income taxes 16,209 (69,657) 40,910

Net loss attributable to noncontrolling interests — — 155

Propelis depreciation, amortization, interest and other items (1)

Interest expense, including Receivables Purchase Agreement ("RPA") and factoring financing fees (2)

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39,586 65,586 13,923

Non-recurring / incremental COVID-19 costs (4)***

Gain on sale of SGK Business (55,139) — —

Highly inflationary accounting losses (primarily non-cash) (5)

1,135 1,027 1,360

Defined benefit plan termination related items (6)

Goodwill and asset write-downs (6)

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Total Adjusted EBITDA $ 187,508 $ 205,157 $ 225,809

(1) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other items incurred by Propelis (see Note 8, "Investments" in Item 8 - "Financial Statements and Supplementary Data" for further information with respect to the equity-method investment in Propelis).

(2) Includes fees for receivables sold under the RPA and factoring arrangements totaling $3.9 million, $4.8 million and $4.0 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

(2) Includes certain non-recurring costs associated with recent acquisition and divestiture activities, and also includes a gain of $1.8 million in fiscal year 2023 related to the divestiture of a business in the Industrial Technologies segment.

(3) Includes certain non-recurring items associated with recent acquisition and divestiture activities and also includes a loss of $2.1 million for the fiscal year ended September 30, 2025 related to the divestiture of a business in the Industrial Technologies segment (See Note 23, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data").

Fiscal 2023 includes a gain of $1.8 million related to the divestiture of a business in the Industrial Technologies segment.

(4) 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, which totaled $12.4 million (See Note 19, "Commitments and Contingent Liabilities" in Item 8 - "Financial Statements and Supplementary Data").

Fiscal 2023 includes loss recoveries totaling $2.2 million which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

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

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

Also includes legal costs related to an ongoing dispute with Tesla, which totaled $22.2 million and $12.4 million for the fiscal years ended September 30, 2025 and 2024, respectively (See Note 20, "Commitments and Contingent Liabilities" in Item 8 - "Financial Statements and Supplementary Data" ).

Fiscal 2025 includes costs related to the Company's 2025 contested proxy which totaled $5.1 million.

Fiscal 2025 includes $8.0 million of expense related to the settlement of a contractual licensing matter within the Memorialization segment (See Note 20, "Commitments and Contingent Liabilities in Item 8 - Financial Statements and Supplementary Data").

Fiscal 2025 includes net gains on the sales of certain significant property and other assets of $3.6 million.

Fiscal 2025 and 2023 include loss recoveries totaling $1.7 million and $2.2 million, respectively, which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

(5) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Summary of Significant Accounting Policies" in Item 8 - “Financial Statements and Supplementary Data”).

(6) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.

(6) Fiscal 2025 includes asset write-downs within the Brand Solutions segment of $7.9 million (see Note 25, "Asset Write-Downs" in Item 8 - “Financial Statements and Supplementary Data").

Fiscal 2024 includes goodwill write-downs within the Industrial Technologies segment of $16.7 million (see Note 24, "Goodwill and Other Intangible Assets" in Item 8 - “Financial Statements and Supplementary Data"), asset write-downs within the Memorialization segment of $13.7 million (see Note 25, "Asset Write-Downs" in Item 8 - “Financial Statements and Supplementary Data"), and investment write-downs within Corporate and Non-operating of $3.1 million (see Note 8, "Investments" in Item 8 - “Financial Statements and Supplementary Data").

Fiscal 2022 includes goodwill write-downs within the SGK Brand Solutions segment of $82.5 million (see Note 23, "Goodwill and Other Intangible Assets" in Item 8 - “Financial Statements and Supplementary Data"), and asset write-downs net of recoveries within the SGK Brand Solutions segment of $10.1 million (see Note 24, "Asset Write-Downs" in Item 8 - “Financial Statements and Supplementary Data").

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

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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.

* Depreciation and amortization was $27.8 million, $23.7 million, and $23.2 million, for the Memorialization segment, $23.8 million, $23.2 million, and $11.4 million for the Industrial Technologies segment, $38.7 million, $44.8 million, and $64.2 million for the SGK Brand Solutions segment, and $4.6 million, $4.8 million, and $5.3 million for Corporate and Non-Operating, for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $3.5 million, $1.0 million, and $3.5 million for the Memorialization segment, $54.4 million, $4.1 million, and $5.6 million for the Industrial Technologies segment, $3.0 million, $10.9 million, and $19.4 million for the SGK Brand Solutions segment, and $10.3 million, $3.2 million, and $7.5 million for Corporate and Non-Operating, for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.

*** Non-recurring/incremental COVID-19 costs were $1.3 million for the Memorialization segment, $6,000 for the Industrial Technologies segment, $1.2 million for the SGK Brand Solutions segment, and $466,000 for Corporate and Non-Operating, for the fiscal year ended September 30, 2022.

* Depreciation and amortization was $30.3 million, $27.8 million, and $23.7 million, for the Memorialization segment, $21.9 million, $23.8 million, and $23.2 million for the Industrial Technologies segment, $16.9 million, $38.7 million, and $44.8 million for the Brand Solutions segment, and $2.6 million, $4.6 million, and $4.8 million for Corporate and Non-Operating, for the fiscal years ended September 30, 2025, 2024, and 2023, respectively.

** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $13.9 million, $3.5 million, and $1.0 million for the Memorialization segment, $27.9 million, $54.4 million, and $4.1 million for the Industrial Technologies segment, $4.0 million, $3.0 million, and $10.9 million for the Brand Solutions segment, and $3.1 million, $10.3 million, and $3.2 million for Corporate and Non-Operating, for the fiscal years ended September 30, 2025, 2024, and 2023, respectively.

† Strategic initiatives and other charges includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling $1.2 million, $45.7 million and $13.2 million in fiscal years 2025, 2024 and 2023, respectively.

Fiscal 2024 amounts totaling $32.5 million, $1.4 million and $11.8 million were presented in cost of sales, selling expense, and administrative expense, respectively.

Fiscal 2023 amounts totaling $9.0 million, $1.9 million and $2.3 million were presented in cost of sales, selling expense, and administrative expense, respectively.

Fiscal 2022 amounts totaling $1.8 million, $267,000 and $12.6 million were presented in cost of sales, selling expense, and administrative expense, respectively.

Accrued severance and other employee termination benefits totaled $42.2 million and $7.3 million as of September 30, 2024 and 2023, respectively.

Refer to Note 13, "Restructuring" in Item 8 - "Financial Statements and Supplementary Data" for further details.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

LIQUIDITY AND CAPITAL RESOURCES :

Net cash provided by operating activities was $79.3 million for the year ended September 30, 2024, compared to $79.5 million and $126.9 million for fiscal years 2023 and 2022, respectively.

Operating cash flow for fiscal 2024 principally included net income (loss) adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, goodwill and other asset write-downs, non-cash pension expense, gain on divestitures and sale of assets, and other non-cash adjustments, and changes in working capital items.

The change in working capital in fiscal 2024 primarily reflected lower inventory levels, higher accrued compensation related to severance and other employee termination benefits, changes in contract assets and liabilities related to products and services provided to customers over time, lower trade accounts payable, lower performance-based compensation accruals, and changes in other accounts.

Operating cash flow for fiscal 2023 principally included net income (loss) adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, non-cash pension expense, gain on divestitures and sale of assets, and other non-cash adjustments, and changes in working capital items.

Fiscal 2023 operating cash flow also reflected $24.2 million of contributions to fund the settlement of the Company's SERP and ORRP obligations, and $10.5 million of proceeds from the settlement of cash flow hedges.

The change in working capital in fiscal 2023 primarily reflected higher inventory levels, lower trade accounts payable, and changes in contract assets and liabilities related to products and services provided to customers over time, partially offset by proceeds from the sale of receivables under a receivables purchase agreement and a non-recourse factoring arrangement (see below for further discussion).

Operating cash flow for fiscal 2022 principally included net income (loss) adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, goodwill and other asset write-downs, non-cash pension expense, gain on divestitures and sale of assets, and other non-cash adjustments, and changes in working capital items.

Fiscal 2022 operating cash flow also reflected $35.7 million of contributions to fully fund the settlement of the Company's DB Plan obligations.

The favorable movements in working capital in fiscal 2022 primarily reflected proceeds from the sale of receivables under a receivables purchase agreement, partially offset by higher inventory levels reflecting increased commodity costs, lower performance-based compensation accruals, and changes in other accounts.

Cash used in investing activities was $47.0 million for the year ended September 30, 2024, compared to $58.7 million and $80.9 million for fiscal years 2023 and 2022, respectively.

Net cash used in operating activities was $23.6 million for the year ended September 30, 2025, compared to net cash provided by operating activities of $79.3 million and $79.5 million for fiscal years 2024 and 2023, respectively.

Operating cash flow for fiscal 2025 principally included net (loss) income adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, asset write-downs, net gains on divestitures and sales of assets, and other non-cash adjustments, and changes in working capital items.

Fiscal 2025 operating cash flow also reflected $8.9 million of non-reimbursed transaction costs related to the sale of the Company's interest in the SGK Business.

The change in working capital in fiscal 2025 primarily reflected payments of severance and other employee termination benefits, changes in contract assets and liabilities related to revenue recognized using the over time method, lower accounts receivable and inventory levels, and changes in other accounts.

Operating cash flow for fiscal 2024 principally included net (loss) income adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, goodwill and other asset write-downs, non-cash pension expense, gain on divestitures and sale of assets, and other non-cash adjustments, and changes in working capital items.

The change in working capital in fiscal 2024 primarily reflected lower inventory levels, higher accrued compensation related to severance and other employee termination benefits, changes in contract assets and liabilities related to revenue recognized using the over time method, lower trade accounts payable, lower performance-based compensation accruals, and changes in other accounts.

Operating cash flow for fiscal 2023 principally included net (loss) income adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, non-cash pension expense, gain on divestitures and sale of assets, and other non-cash adjustments, and changes in working capital items.

Fiscal 2023 operating cash flow also reflected $24.2 million of contributions to fund the settlement of the Company's non-qualified Supplemental Retirement Plan ("SERP") and the defined benefit portion of the Officers Retirement Restoration Plan ("ORRP") obligations, and $10.5 million of proceeds from the settlement of cash flow hedges.

The change in working capital in fiscal 2023 primarily reflected higher inventory levels, lower trade accounts payable, and changes in contract assets and liabilities related to revenue recognized using the over time method, partially offset by proceeds from the sale of receivables under a receivables purchase agreement and a non-recourse factoring arrangement (see below for further discussion).

Cash provided by investing activities was $159.6 million for the year ended September 30, 2025, compared to cash used in investing activities of $47.0 million and $58.7 million for fiscal years 2024 and 2023, respectively.

Investing activities for fiscal 2025 primarily reflected capital expenditures of $35.8 million, acquisition payments (net of cash acquired or received from sellers) of $55.8 million, proceeds from the sale of assets of $21.3 million, proceeds from sale of the SGK Business, net of divested cash, of $228.0 million, and proceeds from other divestitures of $2.0 million.

Investing activities for fiscal 2024 primarily reflected capital expenditures of $45.2 million, acquisition payments (net of cash acquired or received from sellers) of $5.8 million, purchases of investments of $825,000, and proceeds from the sale of assets of $4.2 million.

Investing activities for fiscal 2023 primarily reflected capital expenditures of $50.6 million, acquisition payments (net of cash acquired or received from sellers) of $15.3 million , purchases of investments of $1.6 million, proceeds from the sale of assets of $2.1 million, and proceeds from divestitures of $6.7 million .

Investing activities for fiscal 2022 primarily reflected capital expenditures of $61.3 million, acquisition payments (net of cash acquired or received from sellers) of $44.5 million , purchases of investments of $2.2 million, proceeds from the sale of assets of $5.0 million, proceeds from the sale of investments of $8.8 million, and proceeds from the settlement of net investment hedges of $13.1 million .

Capital expenditures were $35.8 million for the year ended September 30, 2025, compared to $45.2 million and $50.6 million for fiscal years 2024 and 2023, respectively.

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The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

Cash used in financing activities for the year ended September 30, 2024 was $35.0 million, and principally reflected repayments, net of proceeds, on long-term debt of $31.3 million, purchases of treasury stock of $20.6 million, payment of dividends of $31.4 million, payments of debt issuance costs of $10.2 million (see below), and proceeds from net investment hedges of $58.4 million (see below).

Cash used in financing activities for the year ended September 30, 2025 was $144.3 million, and principally reflected repayments, net of proceeds, on long-term debt of $67.0 million, purchases of treasury stock of $12.2 million, payment of dividends of $32.8 million, payments, net of proceeds, on net investment hedges of $22.1 million (see below), and $10.2 million of holdback and deferred purchase price payments related to acquisitions from prior years.

Cash used in financing activities for the year ended September 30, 2024 was $35.0 million, and principally reflected repayments, net of proceeds, on long-term debt of $31.3 million, purchases of treasury stock of $20.6 million, payment of dividends of $31.4 million, payments of debt issuance costs of $10.2 million , and proceeds from net investment hedges of $58.4 million (see below) .

Cash used in financing activities for the year ended September 30, 2023 was $50.2 million, and principally reflected repayments, net of proceeds, on long-term debt of $18.2 million, purchases of treasury stock of $2.9 million, and payment of dividends of $28.2 million.

Cash used in financing activities for the year ended September 30, 2022 was $37.2 million, and principally reflected proceeds, net of repayments, on long-term debt of $35.7 million, purchases of treasury stock of $41.7 million, payment of dividends of $27.7 million, and $725,000 of holdback and contingent consideration payments related to acquisitions from prior years.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

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The amended and restated loan agreement includes a $750.0 million 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 Company's and certain of its domestic subsidiaries' assets.

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 $350.0 million ) can be drawn in foreign currencies.

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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 debt issuance costs of $4.9 million in connection with the amended and restated agreement, which were deferred and are being amortized over the term of the facility.

Unamortized costs were $5.0 million and $949,000 at September 30, 2024 and 2023, respectively.

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

Unamortized costs were $3.9 million and $5.0 million at September 30, 2025 and 2024, respectively.

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

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dollar denominated borrowings on the revolving credit facility at September 30, 2025 and 2024 were $384.2 million and $410.5 million, respectively.

Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 and 2023 were €30.0 million ($33.5 million) and €55.0 million ($58.2 million), respectively.

There were no outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2025.

Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 were €30.0 million ($33.5 million).

The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at September 30, 2025 and 2024 was 3.99% and 4.59%, respectively.

In September 2024, the Company issued $300.0 million 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 Company’s and certain of its domestic subsidiaries’ assets.

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

The net proceeds from the 2027 Senior Secured Notes, together with additional funds borrowed under the Company’s domestic credit facility, were irrevocably deposited into a trust and were subsequently used to redeem all of the Company’s outstanding 5.25% senior unsecured notes due December 1, 2025 (the “2025 Senior Notes”) on October 24, 2024, and to pay accrued and unpaid interest on the 2025 Senior Notes at such time.

Effective with the irrevocable deposit of these amounts into the trust in September 2024, the Company satisfied and discharged the indenture governing the 2025 Senior Notes in accordance with its terms.

Accordingly, the remaining unamortized direct financing costs from the 2025 Senior Notes, which totaled $585,000 , were charged to interest expense during the fourth quarter of fiscal 2024.

The Company incurred direct financing fees and costs of $5.2 million in connection with 2027 Senior Secured Notes, which were deferred and are being amortized over the term of the 2027 Senior Secured Notes.

The Company has $300.0 million 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.

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 including cross default provisions in connection with the 2027 Senior Secured Notes.

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

Unamortized costs related to the Company’s notes were $3.9 million and $5.2 million at September 30, 2025 and 2024, respectively.

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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.

The RPA matures in April 2027.

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

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As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $63.7 million and $58.2 million as of September 30, 2025 and 2024, respectively.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

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

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(312,688) (384,594)

Net cash (payments) proceeds $ (5,500) $ 5,210

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

subsidiary, entered into a non-recourse factoring arrangement.

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

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

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

Net cash (reinvested) received $ (30,700) $ (5,500)

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

The Company, through its U.K.

subsidiary, previously participated in a non-recourse factoring arrangement.

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

These transfers of financial assets were recorded at the time the Company surrendered control of the assets.

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

As a result of the sale of the Company's interest in the SGK Business, this arrangement no longer exists for the Company at September 30, 2025.

The principal amount of receivables sold under this arrangement was $45.8 million and $70.2 million during the fiscal year ended September 30, 2025 and 2024, respectively.

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

As of September 30, 2024 and 2023, the amount of factored receivables that remained outstanding was $15.7 million and $18.0 million, respectively.

As of September 30, 2024, the amount of factored receivables that remained outstanding was $15.7 million.

See Note 23, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data" for further information with respect to the sale of the Company's interest in the SGK Business.

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 $6.1 million and $3.0 million at September 30, 2025 and 2024, respectively.

The following table summarizes the Program activities for the year ended September 30, 2025.

For the Year Ended

September 30, 2025

(Dollar amounts in thousands)

Outstanding Program payables at September 30, 2024

Obligations added 43,579

Obligations settled (40,457)

Outstanding Program payables at September 30, 2025

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.

There were no outstanding borrowings under the credit facility at September 30, 2024 or 2023.

Outstanding borrowings under the credit facility totaled at €659,000 ($774,000) at September 30, 2025.

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 4.16% at September 30, 2025.

Other borrowings totaled $7.2 million and $15.6 million at September 30, 2025 and 2024, respectively.

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Weighted-average pay rate 3.80 % 3.83 %

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

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

In order to transition the Company's swaps from LIBOR-based to SOFR-based rates, the LIBOR-based swaps were settled during the second quarter of fiscal 2023, resulting in cash proceeds of $10.5 million.

Concurrently, the Company entered into new interest rate swaps with SOFR-based rates with a notional amount of $175.0 million.

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

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

The fair value of the interest rate swaps reflected a net unrealized loss of $2.6 million ($1.9 million after tax) and a net unrealized gain of $4.0 million ($3.0 million after tax) at September 30, 2024 and 2023, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").

Unrecognized gains of $3.8 million ($2.9 million after tax) and $8.1 million ($6.0 million after tax) related to previously terminated LIBOR-based swaps were also included in AOCI as of September 30, 2024 and 2023, respectively.

Assuming market rates remain constant with the rates at September 30, 2024, a gain (net of tax) of approximately $1.0 million included in AOCI is expected to be recognized in earnings over the next twelve months.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

The fair value of the interest rate swaps reflected a net unrealized loss of $2.3 million ($1.8 million after tax) and a net unrealized loss of $2.6 million ($1.9 million after tax) at September 30, 2025 and 2024, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI").

Unrecognized gains of $1.6 million ($1.2 million after tax) and $3.8 million ($2.9 million after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of September 30, 2025 and 2024, respectively.

Assuming market rates remain constant with the rates at September 30, 2025, a gain (net of tax) of approximately $115,000 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 Losses Recognized in AOCI

Notional Amount Unrealized Losses (1)

Swap Currencies Maturity Date September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

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$ (6,379) (2)

(1) Unrealized gains/losses are recognized in AOCI unless a portion of a hedge is ineffective.

Ineffectiveness was insignificant for the year ended September 30, 2025.

(2) Total unrealized losses are presented net of tax of $4,652 and $2,156, for the years ended September 30, 2025 and 2024, respectively.

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dollar leg of the swaps.

Such amounts totaled $58.4 million, of which $17.4 million and $41.0 million were included in other current liabilities and other liabilities, respectively, on the Consolidated Balance Sheets at September 30, 2024.

The Company uses certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of €30.0 million ($33.5 million) as of September 30, 2024.

Outstanding advance payment amounts totaled $40.2 million at September 30, 2025, all of which were included in other current liabilities on the Consolidated Balance Sheet.

Outstanding advance payment amounts totaled $58.4 million at September 30, 2024, of which $17.4 million and $41.0 million were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively.

During fiscal 2025, certain cross currency swaps were terminated or modified following the sale of the Company's interest in the SGK Business.

The Company made payments totaling $37.1 million in connection with the settlement or modification of these cross currency swap contracts.

The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of €30.0 million ($33.5 million) as of September 30, 2024.

Currency losses of $3.8 million (net of income taxes of $1.1 million), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2024.

No such net investment hedges were outstanding as of September 30, 2023.

The Company has a stock repurchase program.

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

On November 21, 2025, the Company announced that its Board of Directors approved the continuation of the stock repurchase program and increased the authorization for stock repurchases by an additional 5,000,000 shares during fiscal year 2025.

Under the current authorization, 5,043,567 shares remain available for repurchase as of September 30, 2025.

On March 11, 2025, in connection with the filing of an automatic shelf registration statement on Form S-3 pursuant to which the Company re-registered 3,000,000 shares of Class A Common Stock, the Company entered into an Equity Distribution Agreement for an At-The-Market equity offering program ("ATM Program") where the Company may issue and sell, from time

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

to time, up to 1,250,000 shares of its Class A Common Stock under the shelf registration.

The Company did not sell any shares of its Class A Common Stock under its ATM program during fiscal 2025.

As of September 30, 2025, the Company had 1,250,000 shares remaining for sale under the ATM Program.

The Company has no near-term intention to utilize the ATM Program.

Consolidated working capital was $169.7 million at September 30, 2025, compared to $197.8 million at September 30, 2024.

Cash and cash equivalents were $32.4 million at September 30, 2025, compared to $40.8 million at September 30, 2024.

The Company's current ratio was 1.5 and 1.6 at September 30, 2024 and 2023, respectively.

The Company's current ratio was 1.5 at both September 30, 2025 and 2024.

As of September 30, 2025 and 2024, the Company had net contract assets for projects recognized using the over time method totaling $99,700 and $64,246, respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings.

Net contract assets at September 30, 2025 and 2024 predominantly related to ongoing projects with Tesla.

Unbilled revenues are generally expected to be invoiced upon the attainment of certain contractual conditions and milestones.

The Company continues to perform according to the general terms and conditions of its contractual arrangements with Tesla.

Customer delays within the energy storage business have impacted the timing of projects, and consequently, have resulted in invoicing delays for this business.

Long-Term Contractual Obligations:

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(2) Includes $1,163 of severance and other employee termination benefit obligations, as well as $5,061 of deferred purchase price and contingent consideration obligations related to acquisitions completed in prior years.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

In the first quarter of fiscal 2023, the Company made lump sum payments totaling $24.2 million to fully settle the Company's non-qualified Supplemental Retirement Plan ("SERP") and defined benefit portion of the Company's Officers Retirement Restoration Plan ("ORRP") obligations.

The settlement of these plan obligations resulted in the recognition of a non-cash charge of $1.3 million, which has been presented as a component of other income (deductions), net for the year ended September 30, 2023.

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

Unrecognized tax benefits are positions taken, or expected to be taken, on an income tax return that may result in additional payments to tax authorities.

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Refer to Note 23, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data," for further details on the Company's acquisitions and divestitures.

SUBSEQUENT EVENT:

Refer to Note 27, "Subsequent Event" in Item 8 - "Financial Statements and Supplementary Data" for further details on the Company's subsequent event.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

FORWARD-LOOKING INFORMATION:

Management routinely develops and reviews with the Company’s Board of Directors strategic plans with the primary objective of continuous improvement in the Company’s consolidated sales and operating results.

Strategic plans are developed at the business segment level and generally contain strategies for organic growth and acquisitions.

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The significant factors influencing organic sales growth in the Industrial Technologies segment include economic/industrial market conditions, new product development, and the electric vehicles ("EV") and e-commerce trends.

Sales within this segment may also be influenced by the timing of work with the Company's largest energy storage customer, as well as the level of advancement by existing and potential new customers towards adopting new production solutions.

Sales within this segment are influenced by the timing of work with the Company's largest energy storage customer, which may be impacted by continuing disputes with such customer, as well as the level of advancement by existing and potential new customers towards adopting new production solutions.

For the Memorialization segment, the Company expects that sales growth will be influenced by North America death rates and the impact of the increasing trend toward cremation on the segment's product offerings, including caskets, cemetery memorial products and cremation-related products.

For the SGK Brand Solutions segment, the Company expects that sales growth will be influenced by global economic conditions, brand innovation, the level of marketing spending by the Company's clients, and government regulation.

Due to the global footprint of the Company’s businesses, particularly the Industrial Technologies and SGK Brand Solutions segments, currency fluctuations can also be a significant factor on the Company’s U.S.

dollar reported results.

Recent labor cost increases, supply chain challenges, and other inflation-related impacts are expected to impact the Company's results for the near future.

The Company expects to partially mitigate these cost increases through price realization and cost-reduction initiatives.

The Company initiated cost reduction programs during the fourth quarter of fiscal 2024, which are primarily focused on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions.

On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration.

Following the completion of this transaction, the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis.

The underlying business performance for the Company's investment in Propelis will be influenced by global economic conditions, brand innovation, the level of marketing spending by the investee's clients, government regulation, currency fluctuations, and the ability of the investee to effectively integrate and achieve anticipated synergy benefits from the joint venture.

The Matthews Board of Directors has launched a comprehensive review of strategic alternatives for the Company’s entire portfolio of businesses, which was publicly announced in November 2024.

The Board is dedicated to driving long-term value creation, and the strategic alternatives process is a reflection of that commitment.

In addition to the recent divestiture of the Company’s interest in the SGK Business, the Company also announced a proposed transaction for the sale of the Company's Warehouse Automation business (see "Subsequent Event").

The Company's strategic alternatives review to enhance shareholder value creation remains ongoing.

The Company also initiated cost reduction programs during the fourth quarter of fiscal 2024, which are primarily focused on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions.

The Company is planning further cost reduction actions for fiscal 2026.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES:

3 unchanged sentences

A discussion of market risks affecting the Company can be found in Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," of this Annual Report on Form 10-K.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

The Company's significant accounting policies are included in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

1 unchanged sentence

The following accounting policies involve significant estimates, which were considered critical to the preparation of the Company's consolidated financial statements for the year ended September 30, 2025.

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

Long-Lived Assets, including Property, Plant and Equipment:

3 unchanged sentences

The Company reviews long-lived assets, including property, plant and equipment, and intangibles with finite useful lives, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Recoverability of assets is determined by evaluating the estimated undiscounted net cash flows of the operations to which the assets relate.

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

An asset considered held-for-sale is reported at the lower of the asset's carrying amount or fair value, less cost to sell.

Recoverability of assets and asset groups is determined by evaluating the estimated undiscounted net cash flows of the operations to which the assets or asset groups relate.

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

An asset or asset group considered held-for-sale is reported at the lower of the asset/asset group's carrying amount or fair value, less cost to sell.

No impairment charges for property, plant and equipment were recognized during the years presented, except as disclosed in Note 25, “Asset Write-Downs" in Item 8 - "Financial Statements and Supplementary Data."

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The discount rates used in the discounted cash flow analyses are developed with the assistance of valuation experts and management believes the discount rates appropriately reflect the risks associated with the Company's operating cash flows.

In order to further validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization is performed using a reasonable control premium.

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 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%.

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

If current projections are not achieved or specific valuation factors outside the Company's control (such as discount rates and continued economic and industry challenges) significantly change, additional goodwill write-downs may be necessary in future periods.

With respect to goodwill, in order to further validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization is performed using a reasonable control premium.

The Company performed its annual quantitative impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal 2025 (January 1, 2025) and determined that the estimated fair values for all goodwill reporting units and indefinite-lived intangible assets exceeded their carrying values, and, therefore, no impairment charges were necessary at such time.

The Company's Surfaces and Engineering reporting unit experienced declines during the fourth quarter of fiscal 2024, primarily related to the Company's recently acquired (August 2022) Olbrich GmbH business.

2 unchanged sentences

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

MANAGEMENT'S DISCUSSION AND ANALYSIS, (continued)

In fiscal 2022, in its assessment of the potential impacts of weakened economic conditions (particularly in Europe), increases in the cost of certain materials, labor, and other inflation-related pressures, and unfavorable changes in foreign exchange rates on the estimated future earnings and cash flows for the SGK Brand Solutions reporting unit, and in light of the limited excess fair value over carrying value for this reporting unit, management determined a triggering event occurred, resulting in a re-evaluation of goodwill for the reporting unit, as of September 1, 2022.

As a result of this interim assessment, the Company recorded a goodwill write-down totaling $82.5 million during the fiscal 2022 fourth quarter.

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

Income Taxes:

2 unchanged sentences

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

Recent labor cost increases and other inflation-related pressures have had an unfavorable impact on the Company's results of operations (see "Results of Operations").

Although recent economic conditions increase the level of uncertainty in the Company's near-term outlook, inflation is not currently anticipated to have a material impact on a long-term basis.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Refer to Note 3, "Accounting Pronouncements" in Item 8 - "Financial Statements and Supplementary Data," for further details on recently issued accounting pronouncements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

The following discussion about the Company's market risk involves forward-looking statements.

Actual results could differ materially from those projected in the forward-looking statements.

The Company has market risk related to changes in interest rates, commodity prices and foreign currency exchange rates.

The Company does not generally use derivative financial instruments in connection with these market risks, except as noted below.

Interest Rates - The Company's most significant long-term instrument is the domestic credit facility.

dollar denominated debt under the domestic credit facility bears interest at variable rates based on SOFR (LIBOR for periods prior to March 2023).

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

September 30, 2024 September 30, 2023

(Dollar amounts in thousands)

Pay fixed swaps - notional amount $ 175,000 $ 175,000

Weighted-average maturity period (years) 3.2 4.1

Weighted-average received rate 4.85 % 5.32 %

Weighted-average pay rate 3.83 % 3.83 %

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

Based on the Company's assessment, all 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.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis