Matthews International Corporation Q3 FY2025 earnings call

• Implemented value creation plan with initial benefits from SGK divestiture and cost reduction programs.
• Propelis merger moving smoothly, projecting $100M initial adjusted EBITDA, $10M synergies by year-end, $40M by end-2026, and $60M total synergies.
• Memorialization's Dodge acquisition closed in May, contributing $6M sales and expected $12M EBITDA, with $1M EBITDA contribution in Q3.
• Industrial Technologies' warehouse automation showing positive order trends, product identification's Axiom product launching fall, engineering facing Tesla challenges but pipeline of over $150M quotes.
• Cost reduction programs on track to exceed $50M annual savings, debt reduced, and quarterly dividend declared.

Memorialization Segment: Sales for the fiscal 2025 third quarter were $203.7 million compared to $202.7 million a year ago. Adjusted EBITDA was $42.8 million compared to $38.7 million a year ago. Benefits from cost savings initiatives and price realization, offset partially by lower sales volumes and higher material costs. Industrial Technologies Segment: Sales were $87.9 million compared to $91.7 million a year ago. Adjusted EBITDA was $9 million compared to $4.2 million a year ago. Decline mainly from lower engineering sales, offset by higher warehouse automation sales. Brand Solutions Segment: Sales were $57.7 million for the quarter ended June 30, 2025, compared to $133.4 million a year ago. Adjusted EBITDA was $5 million compared to $16.1 million a year ago. Decrease due to SGK divestiture.

• Adjusted EBITDA guidance for fiscal 2025 remains at least $190 million, including estimated 40% share of Propelis adjusted EBITDA from May 1, 2025, through September 30, 2025.
• Propelis expected to have initial annual adjusted EBITDA of about $100 million, with $10 million run rate of synergies by year-end and $40 million by end-2026.
• Dodge Company expected to continue at $6M sales run rate into Q4.

• Tesla legal challenges impacting engineering revenue.
• Tariffs affecting product identification's sourcing and supplier issues.
• Operational challenges with start-up solutions and market dynamics affecting certain segments.

Q: Regarding the Dodge Company, what was the EBITDA contribution this quarter and expectations for Q4?

A: The EBITDA contribution this quarter was approximately $1 million on $6 million sales, with similar run rate expected in Q4.

Q: On the industrial side, about energy storage-related revenue and warehouse automation, where were declines and growth areas?

A: Sales in energy and engineering businesses were down, mitigated by improvements in warehouse automation.

Q: Synergies between new printhead business and warehouse automation over 3-5 years?

A: Connection between automated warehouses and printhead business due to product movement, with focus on software integration.

Q: Status of rotogravure sale, European packaging business metrics, and debt bridge?

A: Rotogravure sale expected to close before Sep 30, European packaging has $50-60M annual revenue run rate, debt reduction driven by SGK proceeds, currency hedges, and Dodge acquisition.

Q: Tesla's urgency on DBE platform and product identification business?

A: Tesla and others seeking DBE solutions, product identification ramping up with Axiom launch despite temporary challenges.