Matthews International Corporation · NASDAQ:MATW
Matthews International — Q3 FY2019 Earnings Presentation
21 slides from Matthews International's earnings presentation, Aug 2, 2019
Slide 1: Third Quarter Fiscal 2019 Earnings Teleconference
Third Quarter Fiscal 2019 Earnings Teleconference August 2, 2019 www.matw.com | Nasdaq: MATW Joseph C. Bartolacci President and Chief Executive Officer Steven F. Nicola Chief Financial Officer
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
Slide 3: Overview
Matthews Bie INTERNATIONAL® OVERVIEW
Slide 4: Q3 FY2019 Summary
Q3 FY2019 SUMMARY EPS - Diluted Q3 GAAP and non-GAAP EPS Comparison $0.77 $0.46 Sales • Loss of a previously reported brand client account • Decline in U.S. casketed deaths Q3 FY2018 Q3 FY2019 • Delays in several warehouse automation projects • Unfavorable impact of changes in foreign currency rates
Slide 5: YTD FY2019 Summary
YTD FY2019 SUMMARY EPS - Diluted YTD Q3 GAAP and non-GAAP EPS Comparison $2.44 Sales $1.05 • Higher sales in private label brand market, surfaces and engineered products, and warehouse automation • Higher sales of cremation and incineration equipment • Previously reported significant brand client ac
Slide 6: Q3 FY2019 Consolidated
Q3 FY2019 CONSOLIDATED RESULTS ($ in millions) Sales GAAP Gross Profit and Margin $411.6 $379.3 $152.6 $137.2 37.1 % 36.2% Q3 FY2018 Q3 FY2019 Q3 FY2018 Q3 FY2019 Net Income Attributable to Matthews Adjusted EBITDA* and Margin $24.4 $69.2 $59.0 $14.6 16.8% 15.5% Q3 FY2018 Q3 FY2019 Q3 FY2018 Q3 FY20
Slide 7: YTD FY2019 Consolidated
YTD FY2019 CONSOLIDATED RESULTS ($ in millions) Sales GAAP Gross Profit and Margin $1,195.1 $1,144.9 $434.7 $399.9 36.4 % 34.9% YTD FY2018 YTD FY2019 YTD FY2018 YTD FY2019 Net Income Attributable to Matthews Adjusted EBITDA* and Margin $77.8 $178.2 $161.6 $33.1 14.9% 14.1% YTD FY2018 YTD FY2019 YTD
Slide 8: Q3 FY19 SGK Brand Solutions
Q3 FY19 SGK BRAND SOLUTIONS RESULTS ($ in millions) Sales Sales $203.0 $181.9 • Currency $7.1 million unfavorable • Previously reported significant brand client account loss • Slow U.S. market conditions and delayed orders • Sales growth in the private label brand market • Frost Converting Systems a
Slide 9: YTD FY19 SGK Brand Solutions
YTD FY19 SGK BRAND SOLUTIONS RESULTS ($ in millions) Sales $601.8 Sales $557.9 • Currency $22.9 million unfavorable • Previously announced significant brand client account loss • Higher organic sales in Europe, private label, surfaces and engineered products • Frost Converting Systems acquisition (N
Slide 10: Q3 FY19 Memorialization
Q3 FY19 MEMORIALIZATION RESULTS ($ in millions) Sales Sales $162.0 $158.2 • Decline in U.S. casketed deaths • Divestiture of controlling interest in pet cremation business • Higher sales of cremation and incineration equipment • Currency $0.8 million unfavorable Adjusted EBITDA Q3 FY2018 Q3 FY2019 •
Slide 11: YTD FY19 Memorialization
YTD FY19 MEMORIALIZATION RESULTS ($ in millions) Sales $475.6 $474.3 Sales • Higher sales of cremation and incineration equipment in the U.K. • Star Granite & Bronze acquisition (Feb 2018) • Lower casket sales • Divestiture of controlling interest in pet cremation business YTD FY2018 YTD FY2019 • Cu
Slide 12: Q3 FY19 Industrial Technologies
Q3 FY19 INDUSTRIAL TECHNOLOGIES RESULTS ($ in millions) Sales $46.7 Sales $39.1 • Lower warehouse automation sales from customer delays • Currency $0.6 million unfavorable Adjusted EBITDA • Lower sales Q3 FY2018 Q3 FY2019 • Higher R&D costs Adjusted EBITDA* and Margin $8.2 $7.3 17.7% 18.6% Q3 FY2018
Slide 13: YTD FY19 Industrial Technologies
YTD FY19 INDUSTRIAL TECHNOLOGIES RESULTS ($ in millions) Sales $117.8 $112.7 Sales • Higher warehouse automation sales • Compass Engineering acquisition (Nov 2017) • Lower product identification sales • Currency $1.9 million unfavorable YTD FY2018 YTD FY2019 Adjusted EBITDA • Lower sales Adjusted EB
Slide 14: Capitalization and Cash Flows
CAPITALIZATION AND CASH FLOWS ($ in millions) Debt Operating Cash Flow $975.7 $979.6 $89.4 $960.6 $82.8 9/30/2018 3/31/2019 6/30/2019 YTD FY2018 YTD FY2019 Cash • $6.6 million increase in YTD operating cash flow $41.6 • YTD debt increase primarily to fund Frost acquisition $33.6 and other investment
Slide 15: Overview
Matthews (Efsitess INTERNATIONAL® OVERVIEW
Slide 16: Business Progress & Market Climate
BUSINESS PROGRESS & MARKET CLIMATE • Significant currency headwinds • Equator continuing to add private label business globally • Impact of large U.S.-based client who transitioned SGK BRAND • IDL responding well to demand for quick turnaround and work internally high value/design projects • Several
Slide 17: Outlook for Fiscal 2019
OUTLOOK FOR FISCAL 2019 Observations • Currency expected to be ongoing headwind • Don’t expect recovery from shortfall in casketed deaths • Impact of brand client loss and recent slowing in U.S. brand business • Strong order rates for warehouse automation, cremation and incineration, and surfaces an
Slide 18: Supplemental Information
Matthews uzzeavenia INTERNATIONAL’ INFORMATION
Slide 19: 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
Slide 20: Adjusted Earnings Per Share Non-GAAP Reconciliation
ADJUSTED EARNINGS PER SHARE NON-GAAP RECONCILIATION (Unaudited) ADJUSTED NET INCOME AND EPS RECONCILIATION (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Nine Months Ended June 30, 2019 2018 2019 2018 per share per share per share per share Net income attributable to M
Slide 21: Adjusted EBITDA Non-GAAP Reconciliation
ADJUSTED EBITDA NON-GAAP RECONCILIATION (Unaudited) (In thousands) Three Months Ended June 30, Nine Months Ended June 30, 2019 2018 2019 2018 Net income $ 14,424 $ 24,345 $ 32,602 $ 77,575 Income tax provision (benefit) 3,989 4,312 4,429 (18,703) Income before income taxes 18,413 28,657 37,031 58,87
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