Matthews International Corporation · NASDAQ:MATW

Matthews International — Q2 2017 Earnings Presentation

31 slides from Matthews International's earnings presentation, May 19, 2017

  1. Slide 1: Investor Presentation 2nd Quarter Fiscal 2017

    ©2016 Matthews International Corporation. All Rights Reserved. INVESTOR PRESENTATION 2nd QUARTER FISCAL 2017 Exhibit 99.1

  2. Slide 2: Business Overview

    ©2016 Matthews International Corporation. All Rights Reserved. Business Overview 2

  3. Slide 3: Disclaimer

    ©2016 Matthews International Corporation. All Rights Reserved. Disclaimer Any forward-looking statements with respect to Matthews International Corporation (the “Company”) in connection with this presentation are being made pursuant to the safe harbor provisions of the Private Securities Litigation

  4. Slide 4: Matthews

    ©2016 Matthews International Corporation. All Rights Reserved. Matthews  Founded in 1850 – headquartered in Pittsburgh, PA  Three business segments:  SGK Brand Solutions  Memorialization  Industrial Technologies  Approximately 11,000 employees  Over 25 countries  NASDAQ – 32.2 million shares

  5. Slide 5: Fiscal 2016 Sales by segment

    ©2016 Matthews International Corporation. All Rights Reserved. 51% 8% 41% Memorialization SGK Brand Solutions Industrial Technologies 5 Fiscal 2016 Sales

  6. Slide 6: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK BRAND SOLUTIONS 6

  7. Slide 7: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions 7 Brand Development Brand Deployment Create Brand Performance Improved top- line growth Activate Improved bottom-line performance = + Premedia Tooling Merchandising Delivering Brand Performance

  8. Slide 8: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions 8 The full U.K. packaging portfolio for Kit Kat was redesigned by Anthem, a global creative agency that is part of the brand development business of the SGK Brand Solutions segment. The SGK Brand Solutions segment pro

  9. Slide 9: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. MEMORIALIZATION 9

  10. Slide 10: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 10 Building signs are an example of the segment’s architectural product offerings. Memorialization Matthews is well known for its heritage of creating beautiful, time-tested bronze memorials. The segment designs unique glass-front niches

  11. Slide 11: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 11 Memorialization The Company is a leading manufacturer and distributor of caskets (wood, metal and cremation) in North America. The Super Power Pak III Plus cremation unit has some of the most advanced features in combustion technology

  12. Slide 12: Memorialization: Casketed Deaths vs. Total Deaths

    ©2016 Matthews International Corporation. All Rights Reserved. 12 Memorialization  Casketed Deaths vs. Total Deaths Company estimates. Data compiled from CDC, US Census Bureau, Industry reports and internal projections.

  13. Slide 13: Industrial Technologies

    ©2016 Matthews International Corporation. All Rights Reserved. INDUSTRIAL TECHNOLOGIES 13

  14. Slide 14: Industrial Technologies

    ©2016 Matthews International Corporation. All Rights Reserved. 14 Industrial Technologies Non-contact ink-jet printing units apply print on products. Driven by sophisticated automation software and controls, multiple integrated distribution and fulfillment systems (including laser-based identificati

  15. Slide 15: Financial Overview

    ©2016 Matthews International Corporation. All Rights Reserved. Financial Overview 15

  16. Slide 16: Key Elements of Long-Term EPS Growth

    ©2016 Matthews International Corporation. All Rights Reserved. Key Elements of Long-Term EPS Growth  Internal Growth  Expand market presence of existing products  Manufacturing/cost structure improvements  New product development  Acquisitions  Primary objective to support strategic business p

  17. Slide 17: Consolidated Results

    ©2016 Matthews International Corporation. All Rights Reserved. Consolidated Results 17 2014 2015 2016 2016 2017 (unaudited) (unaudited) Sales 1,106,597$ 1,426,068$ 1,480,464$ 721,408$ 729,914$ Operating Profit 81,522$ 105,023$ 118,815$ 38,473$ 45,891$ Adj. Operating Profit (a) 120,120$ 141,906$ 154,

  18. Slide 18: Segment Results – Sales

    ©2016 Matthews International Corporation. All Rights Reserved. Segment Results – Sales 18 (Dollars in thousands) 2014 2015 2016 2016 2017 Sales: (unaudited) (unaudited) SGK Brand Solutions 497,328$ 798,339$ 755,975$ 362,675$ 365,921$ Memorialization 508,420 508,058 610,142 304,987 307,730 Industrial

  19. Slide 19: Segment Results – Operating Profit

    ©2016 Matthews International Corporation. All Rights Reserved. Segment Results – Operating Profit 19 (Dollars in thousands) 2014 2015 2016 2016 2017 Operating Profit: (unaudited) (unaudited) SGK Brand Solutions 2,536$ 21,864$ 42,909$ 8,255$ 8,551$ Memorialization 67,937 70,064 68,252 27,159 37,305 I

  20. Slide 20: Adjusted Free Cash Flow

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Free Cash Flow 20 (Dollars in thousands) 2014 2015 2016 Net Income 42,625$ 63,449$ 66,749$ Depreciation and Amortization 42,864 62,620 65,480 Stock-Based Compensation 6,812 9,097 10,612 Pension Cost (non-service portion) 4,020 5

  21. Slide 21: Free Cash Flow Yield

    ©2016 Matthews International Corporation. All Rights Reserved. Free Cash Flow Yield 21 2014 2015 2016 Free Cash Flow (1) 67,084$ 92,592$ 109,572$ Adjusted Free Cash Flow (1) 94,500 113,073 133,314 Market Capitalization 1,443,097$ 1,609,892$ 1,952,929 Free Cash Flow Yield (1) 4.65% 5.75% 5.61% Adjust

  22. Slide 22: Earnings Per Share

    ©2016 Matthews International Corporation. All Rights Reserved. Earnings Per Share 22 Note: Adjusted earnings per share reflects certain adjustments to facilitate comparability and other adjustments. See reconciliation at Appendix C. Earnings Per Share Adjusted Earnings Per Share $0.00 $0.50 $1.00 $1

  23. Slide 23: EBITDA

    ©2016 Matthews International Corporation. All Rights Reserved. EBITDA (Dollars in millions) 23 Note: EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. See reconciliation at Appendix B. Adjusted EBITDA represents EBITDA plus certain expenses, and also re

  24. Slide 24: Common Stock Price

    ©2016 Matthews International Corporation. All Rights Reserved. Common Stock Price 24 Note: Stock price obtained from NASDAQ for each respective month-end period. $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 9/30/2007 9/30/2008 9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/3

  25. Slide 25: Recent Highlights

    ©2016 Matthews International Corporation. All Rights Reserved. Recent Highlights  Reported record sales of $1.48 billion in fiscal 2016  2016 GAAP EPS of $2.03; Adjusted EPS of $3.38, an increase of 11.6% and a new record for the Company  Completed 5 acquisitions during the first six months of fi

  26. Slide 26: Institutional Shareholders

    ©2016 Matthews International Corporation. All Rights Reserved. Institutional Shareholders 26 Shares 3/31/2017 BlackRock Institutional Trust Company, N.A. 3,574,885 The Vanguard Group, Inc. 3,081,037 Franklin Advisory Services, LLC 2,953,919 Wellington Management Company, LLP 1,376,970 Dimensional Fu

  27. Slide 27: Appendices

    ©2016 Matthews International Corporation. All Rights Reserved. Appendices 27

  28. Slide 28: Adjusted Operating Profit Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Operating Profit Non-GAAP Reconciliation 28 Appendix A (Dollars in thousands) 2014 2015 2016 2016 2017 SGK Brand Solutions Operating Profit 2,536$ 21,864$ 42,909$ 8,255$ 8,551$ Acquisition-related items 28,214 33,605 24,872 14,9

  29. Slide 29: EBITDA and Adjusted EBITDA Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. EBITDA and Adjusted EBITDA Non-GAAP Reconciliation 29 Appendix B (Dollars in thousands) 2014 2015 2016 2016 2017 Net Income 42,625$ 63,449$ 66,749$ 18,971$ 24,008$ Interest expense 12,628 20,610 24,344 11,889 12,762 Income taxes 22,805 2

  30. Slide 30: Adjusted Earnings Per Share Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Earnings Per Share Non-GAAP Reconciliation 30 Appendix C 2014 2015 2016 2016 2017 EPS - GAAP 1.49$ 1.91$ 2.03$ 0.57$ 0.74$ Acquisition-related items 0.71 0.79 0.74 0.47 0.40 Intangible asset w rite-offs 0.10 - - - Litigation mat

  31. Slide 31: Adjusted Net Income Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Net Income Non-GAAP Reconciliation 31 Appendix D (Dollars in thousands) Pretax After Tax Pretax After Tax Pretax After Tax Net Income 66,076$ 42,625$ 89,652$ 63,449$ 95,234$ 66,749$ Acquisition-related items 28,662 19,490 38,865

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