Slide 1: Maximizing Value at Matthews
Maximizing Value at Matthews Matt January 2025 1
Slide 2: Important Disclosures
Important Disclosures The materials contained herein (the “Materials”) represent the opinions of Barington Companies Equity Partners, L.P. and the other participants in its proxy solicitation (“Barington,” the “Barington Group” or “we”) and are based on publicly available information with respect to
Slide 3: Quote: Death Is Certain: Can Matthews International Profit?
“Some would think that this business is a no-brainer to make money in. However, my experience is that companies in the funeral services industry have a hard time retaining their focus on their core competencies and profitability.” Death Is Certain: Can Matthews International Profit? New Low Observer
Slide 4: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 5: A. Executive Summary
A. Executive Summary Barington has substantial experience investing in manufacturing and industrial companies, with a 24-year history of working collaboratively with management teams and boards to improve long-term value. As owners of approximately 1.9% of the outstanding shares of common stock
Slide 6: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 7: We have a 24-year track record of creating value
We have a 24-year track record of creating value Invested companies About Barington Companies Equity Partners, L.P. is a value- oriented activist investment fund that was founded by James Mitarotonda in January 2000. Barington seeks to invest in undervalued publicly traded companies that we believe
Slide 8: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 9: During our engagement, the Company has made little progress
During our engagement, the Company has made little progress We have been engaged with Mathews since we entered into an agreement in December 2022. As part of the agreement, we withdrew our director nominations and agreed to consult with the Company on opportunities to increase shareholder value.
Slide 10: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 11: The Company has not delivered value for shareholders
The Company has not delivered value for shareholders Matthews’ total shareholder return (including dividends) has drastically lagged its peers and major indexes. The Company’s share price has underperformed the S&P 500 index by -339.6% since Mr. Bartolacci started his role as CEO on October 1, 200
Slide 12: Poor capital allocation and uneven execution have hurt margins and return on capital
Poor capital allocation and uneven execution have hurt margins and return on capital Over Mr. Bartolacci’s 18-year tenure, Matthews spent approximately $1.8 billion on acquisitions and other capital investments to increase revenue by $1.2 billion, from approximately $715.9 million in 2006 to $1.8
Slide 13: Poor execution has eroded operating results
Poor execution has eroded operating results Matthews has identified a few key metrics which it believes drive shareholder value creation, including adjusted net income, economic value added, and adjusted operating cash flow. During the periods that the Company has reported these metrics, results
Slide 14: The SGK Brand Solutions transaction underscores the destruction of value at Matthews
The SGK Brand Solutions transaction underscores the destruction of value at Matthews The Company has invested heavily in its SGK Brand Solutions business, even though it has been the Company’s worst performing segment. We do not believe that the Company will recoup its investments in this business
Slide 15: Comparatively high SG&A spending is one driver of poor operating results
Comparatively high SG&A spending is one driver of poor operating results Matthews’ annual SG&A spending has grown significantly faster than its revenue during the prior 18 years. Today, the Company’s SG&A spending as a percent of revenue exceeds the median expenditures of its peer group by a sub
Slide 16: Poor capital allocation has elevated Matthews' debt and borrowing cost
Poor capital allocation has elevated Matthews’ debt and borrowing cost Leverage has grown rapidly in the last 18 years, with limited debt reduction since the Company’s acquisition of Schawk Inc. a decade ago. Interest expenses are up more than 600% in the last 18 years and consumed half of opera
Slide 17: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 18: Matthews has significant embedded value
Matthews has significant embedded value We believe that Matthews has tremendous embedded value. We estimate that the Company’s businesses could have a combined value of $44-57 per share, before any additional value from its Energy Storage business. Our analysis reflects the recent SGK Brand So
Slide 19: But investors don't expect the Company to fully realize its potential
But investors don’t expect the Company to fully realize its potential Poor capital allocation and deteriorating operating results have caused Matthews’ shares to trade at declining multiples. Today, the Company’s TEV/EBITDA multiple is at a near all-time low and less than one-half its value before
Slide 20: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Highly Qualified Director Nominees H. Our Four-Ste
Slide 21: We believe that change is warranted
Current management and Board are ineffective, over tenured and entrenched As discussed further in the following slides: Mr. Bartolacci has proven to be ineffective and lacks credibility – Poor execution, capital allocation and operating results – No value creation in 18 years – History of making p
Slide 22: We do not believe that Mr. Bartolacci is a credible leader
We do not believe that Mr. Bartolacci is a credible leader Mr. Bartolacci has a long history of making lofty commitments to shareholders without delivering meaningful results. In our view, he has exhibited a troubling pattern of using promises of future value creation from the Company’s investment
Slide 23: Now, it appears Mr. Bartolacci's latest Energy Storage promises are beginning to falter
Now, it appears Mr. Bartolacci’s latest Energy Storage promises are beginning to falter After failing to launch a new Product Identification product, Mr. Bartolacci has refocused on other investment projects. In the last few years, Mr. Bartolacci has started to make grand promises about Matthews
Slide 24: Matthews directors' long tenure undermines the Board's independence
Matthews directors’ long tenure undermines the Board’s independence Despite the Company’s poor operating and share price performance, as of the 2025 shareholder meeting, Matthews' directors will have an average tenure of approximately 11 years, 4 years, or 60% longer, than the average director ten
Slide 25: Matthews' directors have little public company board experience
Matthews’ directors have little public company board experience Matthews’ directors have stunningly little previous public company board experience. Only four of its nine non-executive directors have ever been on the board of another public company. Three of the last four directors nominated to
Slide 26: And this Board has approved CEO compensation that does not reflect shareholder interest
And this Board has approved CEO compensation that does not reflect shareholder interest We do not believe that Matthews’ compensation committee follows its principle to “pay for performance,” based on its own peer benchmarks, stagnant performance targets for executives, and the comparatively small
Slide 27: We do not believe this Board acts without Barington's influence
We do not believe this Board acts without Barington’s influence During the last few decades, the Company invested heavily in diversification, using cash from its Memorialization segment and debt. Operating performance declined and the Company’s financial position deteriorated while the Board took
Slide 28: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington Capital Group C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Director Nominees H. Our Four-Step P
Slide 29: Ana Amicarella brings innovation, global leadership, and energy storage expertise
Ana Amicarella brings innovation, global leadership, and energy storage expertise Ana Amicarella serves as CEO of EthosEnergy, a global independent provider of services for the power generation, oil and gas, industrial and aerospace sectors. She has drawn on her more than 30-year track record at G
Slide 30: Chan Galbato bring extensive board, operating, printing industry and digital experience
Chan Galbato bring extensive board, operating, printing industry and digital experience We believe that Chan Galbato brings a nearly unparalleled track record of operational leadership and corporate board service, with experience on more than 20 boards and chairmanships or lead-director roles on m
Slide 31: Mr. Mitarotonda brings a proven record of value creation on corporate boards
Mr. Mitarotonda brings a proven record of value creation on corporate boards Mr. Mitarotonda, CEO of Barington Capital Group, L.P., has been instrumental in creating value at the companies where he has been a director or advisor to the Board. As an investor, Mr. Mitarotonda brings an owner’s persp
Slide 32: The incumbent directors lack relevant experience
The incumbent directors lack relevant experience Nominee Industry and functional experience Board experience Terry Dunlap • Brings no relevant industry experience after an entire career (33 • Has 16 years of cumulative public company board experience, years) in the steel industry excluding Matthews
Slide 33: Maximizing Value at Matthews: Agenda
Maximizing Value at Matthews: Agenda A. Executive Summary B. About Barington Capital Group C. Our Extended Engagement with Matthews D. Underperformance at Matthews E. Value Potential at Matthews F. Issues with Incumbent Management and Incumbent Board G. About Our Director Nominees H. Our Four-Step P
Slide 34: Our Four-Step Plan to Drive Long-Term Value Creation at Matthews
Our Four-Step Plan to Drive Long-Term Value Creation at Matthews We believe our four-step plan represents the best path forward for Matthews to drive long-term value creation. Our plan includes four steps: 1. Refreshing the composition of the Board and improving Matthews’ corporate governance and
Slide 35: Contact Information
Contact Information 888 Seventh Avenue 6th Floor New York, NY 10019 www.barington.com Office: (212) 974-5735 35 BARINGTON