Matthews International (MATW) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were $427.8M, down from $471.9M in Q3 2023, with net income at $1.8M versus $8.7M last year; nine-month sales were $1.35B, down from $1.40B year-over-year.

• Adjusted EBITDA for Q3 was $44.7M, down from $56.2M year-over-year; adjusted EPS was $0.56, down from $0.74; nine-month adjusted EBITDA was $147.0M.

• Memorialization and SGK Brand Solutions segments remained resilient, offsetting lower volumes with improved pricing, mausoleum sales, and private label growth.

• Cost reduction initiatives targeting up to $50M in annual savings launched, mainly in European engineering and tooling, with $40M in one-time costs.

• Legal dispute with Tesla over battery electrode technology ongoing, with $8.1M in legal costs for the nine months.

Financial highlights

• Q3 net income was $1.8M ($0.06/share), down from $8.7M ($0.28/share) year-over-year; adjusted EPS was $0.56.

• Consolidated Q3 sales were $427.8M, down from $471.9M; nine-month sales were $1.35B.

• Adjusted EBITDA for Q3 was $44.7M, down from $56.2M; nine-month adjusted EBITDA was $147.0M.

• Operating cash flow for nine months was $43.3M, down from $76.9M last year.

• Quarterly dividend of $0.24/share declared, up 4.3% year-over-year.

Outlook and guidance

• Full-year 2024 adjusted EBITDA projected at $205M–$210M.

• Cost reduction programs to deliver up to $50M in annual savings, mainly from European operations.

• Further debt reduction and bond refinancing expected by fiscal year-end.

• Memorialization and SGK Brand Solutions expected to remain stable; improvement anticipated in energy storage and warehouse automation.

• Sufficient cash from operations expected to fund all planned capital spending.