Matthews International Corporation · NASDAQ:MATW

Matthews International — Q2 2019 Earnings Presentation

23 slides from Matthews International's earnings presentation, May 3, 2019

  1. Slide 1: Second Quarter Fiscal 2019 Earnings Teleconference

    Second Quarter Fiscal 2019 Earnings Teleconference May 3, 2019 Joseph C. Bartolacci President and Chief Executive Officer Steven F. Nicola Chief Financial Officer ©2019 Matthews International Corporation. All Rights Reserved.

  2. Slide 2: Disclaimer

    Disclaimer Any forward-looking statements contained in this presentation are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actua

  3. Slide 3: Financial Overview

    Financial Overview ©2019 Matthews International Corporation. All Rights Reserved. 3

  4. Slide 4: Q2 FY2019 Summary

    Q2 FY2019 Summary EPS - Diluted  $0.57 Items impacting Q2 GAAP and $0.48 non-GAAP EPS comparability . Lower sales • Unfavorable impact of changes in foreign currency rates • Decline in U.S. casketed deaths • Loss of a significant brand client account Q2 FY2018 Q2 FY2019 . Higher interest expense .

  5. Slide 5: 1H FY2019 Summary

    1H FY2019 Summary EPS - Diluted  Items impacting 1H GAAP EPS comparability . Q2 operating results $1.68 . Prior year included significant net favorable tax adjustment ($0.84) . $0.58 Loss on sale of a 51% ownership interest in pet cremation business ($0.10) . Higher interest expense ($0.08) 1H FY20

  6. Slide 6: Q2 FY2019 Consolidated Results

    Q2 FY2019 Consolidated Results ($ in millions) Sales GAAP Gross Profit and Margin $414.1 $391.4 $150.7 $136.3 36.4 % 34.8% Q2 FY2018 Q2 FY2019 Q2 FY2018 Q2 FY2019 Net Income Adjusted EBITDA* Attributable to Matthews and Margin $18.2 $15.4 $62.5 $56.2 15.1% 14.4% Q2 FY2018 Q2 FY2019 Q2 FY2018 Q2 FY20

  7. Slide 7: 1H FY2019 Consolidated Results

    1H FY2019 Consolidated Results ($ in millions) Sales GAAP Gross Profit and Margin $282.1 $262.7 $783.5 $765.6 36.0 % 34.3% 1H FY2018 1H FY2019 1H FY2018 1H FY2019 Net Income Adjusted EBITDA* Attributable to Matthews and Margin $53.4 $109.0 $102.7 $18.5 13.9% 13.4% 1H FY2018 1H FY2019 1H FY2018 1H FY

  8. Slide 8: Q2 FY19 SGK Brand Solutions Results

    Q2 FY19 SGK Brand Solutions Results ($ in millions) Sales  Sales fluctuations $207.1 . $190.7 Currency $11.1 million unfavorable . Significant brand client account loss ~ $7.0 million . Higher organic sales in Europe and Asia . Sales growth in the private label brand market Q2 FY2018 Q2 FY2019 . In

  9. Slide 9: 1H FY19 SGK Brand Solutions Results

    1H FY19 SGK Brand Solutions Results ($ in millions) Sales  Sales fluctuations $398.8 $376.0 . Currency $15.8 million unfavorable . Significant brand client account loss ~ $12.0 million . Higher organic sales in Europe, private label, surfaces and engineered products 1H FY2018 1H FY2019 . Frost Conv

  10. Slide 10: Q2 FY19 Memorialization Results

    Q2 FY19 Memorialization Results ($ in millions) Sales  $168.7 $162.2 Sales fluctuations . Higher sales of memorial products in U.S. . Lower casket sales ~$6.0 million . Currency $1.0 million unfavorable . Divestiture13.1% of controlling interest14.8% in pet cremation business Q2 FY2018 Q2 FY2019 .

  11. Slide 11: 1H FY19 Memorialization Results

    1H FY19 Memorialization Results ($ in millions) Sales  Sales fluctuations $313.6 $316.1 . Higher sales of memorial products in the U.S. . Star Granite & Bronze acquisition (Feb 2018) . Lower casket sales . Divestiture of controlling interest in pet cremation13.1% business 14.8% 1H FY2018 1H FY2019

  12. Slide 12: Q2 FY19 Industrial Technologies Results

    Q2 FY19 Industrial Technologies Results ($ in millions) Sales $38.3 $38.6  Sales fluctuations . Higher warehouse automation sales . Lower product identification (marking products)12.7% sales 11.0% . Currency $0.7 million unfavorable Q2 FY2018 Q2 FY2019  Adjusted EBITDA change impacted by Adjusted

  13. Slide 13: 1H FY19 Industrial Technologies Results

    1H FY19 Industrial Technologies Results ($ in millions) Sales $71.1 $73.6  Sales fluctuations . Higher warehouse automation sales . Compass Engineering acquisition (Nov 2017)12.7% 11.0% . Lower product identification sales 1H FY2018 1H FY2019 . Currency $1.3 million unfavorable Adjusted EBITDA*  a

  14. Slide 14: Capitalization and Cash Flows

    Capitalization and Cash Flows ($ in millions) Debt Operating Cash Flow $56.3 $960.6 $983.0 $975.7 $45.3 9/30/2018 12/31/2018 3/31/2019 1H FY2018 1H FY2019  Debt decreased by $7.3 million during Q2 FY2019 Cash  1H debt increase primarily to fund Frost acquisition and other investments $41.6 $37.7 

  15. Slide 15: Business Overview

    Business Overview ©2019 Matthews International Corporation. All Rights Reserved. 15

  16. Slide 16: Business Progress & Market Climate

    Business Progress & Market Climate  A large U.S.-based client transitioned  Equator continuing to add private label SGK Brand work internally business globally  Significant currency headwinds  IDL responding well to demand for quick Solutions  Several new account wins; but volume turnaround and

  17. Slide 17: Updating Outlook for Fiscal 2019

    Updating Outlook for Fiscal 2019* Observations  Don’t expect recovery from shortfall in Q2 casketed deaths  Currency expected to be ongoing headwind  Strong order rates for warehouse automation, engineered products and private label  Improving trends in product identification sales, U.S. brand a

  18. Slide 18: MATW Investor & Analyst Day

    MATW Investor & Analyst Day Wednesday, June 19, 2019 The Benjamin Hotel 125 East 50th Street New York, NY ©2019 Matthews International Corporation. All Rights Reserved. 18

  19. Slide 19: Supplemental Information

    Supplemental Information ©2019 Matthews International Corporation. All Rights Reserved. 19

  20. Slide 20: Reconciliations of Non-GAAP Financial Measures

    Reconciliations of Non-GAAP Financial Measures Included in this report are measures of financial performance that are not defined by generally accepted accounting principles in the United States (“GAAP”). The Company uses non-GAAP financial measures to assist in comparing its performance on a consis

  21. Slide 21: Adjusted Earnings Per Share Non-GAAP Reconciliation

    Adjusted Earnings Per Share Non-GAAP Reconciliation (In thousands, except per share data) Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Net income attributable to Matthews $ 15,417 $ 18,182 $ 18,514 $ 53,362 Acquisition costs 2,496 2,856 4,000 4,335 ERP integration cost

  22. Slide 22: Adjusted EBITDA Non-GAAP Reconciliation

    Adjusted EBITDA Non-GAAP Reconciliation (In thousands) Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Net income $ 15,194 $ 18,072 $ 18,178 $ 53,230 Income tax provision (benefit) (165) 2,212 440 (23,015) Income before income taxes 15,029 20,284 18,618 30,215 Net loss at

  23. Slide 23: Second Quarter Fiscal 2019 Earnings Teleconference

    Second Quarter Fiscal 2019 Earnings Teleconference May 3, 2019 ©2019 Matthews International Corporation. All Rights Reserved.

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