Matthews International Corporation Q2 FY2026 earnings call

• Balance sheet: Completed early redemption of $300 million senior secured notes, total long-term debt now $579 million, down from $822 million one year ago, net debt ~$543 million; interest expense savings ~$10 million. - Propelis: 40% equity interest continues to be a value driver; SAP migration progress, expect to see results in fourth quarter; expected EBITDA run rate around $130 million going into 2027; expect partial redemption of preferred interest in coming quarter. - Second quarter results: Total revenues $259 million vs $428 million year ago; adjusted EBITDA $45 million vs $51 million year ago. - Memorialization business: Engine of the company, sales $215 million in second quarter, almost 5% increase year-over-year; adjusted EBITDA $49 million, up 8% year-over-year. Dodge acquisition contributes meaningfully. - Industrial technologies: Actively working to convert order pipeline; product identification shipped first production units to paying customers; engineering and energy solutions business had $25 million order and $75 million of orders in pipeline, expect material change next year; DBE technology received favorable legal development in second quarter.

Memorialization segment: Second quarter sales were $215 million, almost 5% increase year-over-year; adjusted EBITDA $49 million, up 8% year-over-year. First half of fiscal 2026: Sales $419 million, adjusted EBITDA $88 million. Dodge acquisition contributes ~$10 million in sales per quarter and is ahead of EBITDA targets. Industrial technology segment: Second quarter revenue $43 million, down from $81 million year ago due to divestitures. Adjusted EBITDA was a loss of $3.3 million compared to a profit of $6 million year ago. Brand solution segment: No reportable revenue for the quarter ended March 31, 2026; adjusted EBITDA $9.6 million compared to $15.6 million year ago, mainly reflecting 40% interest in Propelis.

• Set guidance of at least $180 million in adjusted EBITDA for fiscal 2026, inclusive of 40% interest in Propelis. - Achieving full-year target requires stronger second half, driven by memorialization continuing trajectory, industrial technologies converting pipeline, and Propelis operational execution. - Reaffirm full year adjusted EBITDA guidance of $180 million. - Strategic alternative review continues with multiple potential partnerships and arrangements in discussion.

• Factors that could cause company's results to differ from discussed include those set forth in annual report on Form 10-K and other public filings with SEC. - Tariff environment impact on businesses remains fluid and needs to be managed proactively. - Pace and timing of engineering orders, outcome of current tariff discussions, timing of synergies, and economic impact of geopolitical challenges can impact full-year results. - Ruling on DBE technology has had some narrow injunction, but very narrow and has no material impact on technology, but previous ruling removed a key overhang that caused some counterparties to delay engagement.

Q: About memorialization outlook, sales growth, M&A inbounds; A: Volume to be stable to modestly down, doing cross-selling activities, M&A opportunities exist but timing based on when right.

Q: About Propelis progress; A: Standing up own instance of SAP, middle of implementation, will start migrating SGS locations onto SAP in next 6-9 months.

Q: About ultracapacitor customers, supercapacitor opportunity; A: Dealing with three largest producers of ultracapacitors, have equipment in Germany being commissioned, opportunity significant.

Q: About reshoring of supply chains, supporting battery manufacturing; A: Operating in several forms, have large order for North America battery separators, having discussions with solid state manufacturers.

Q: About memorialization performance, EBITDA, tariff impact; A: Quarter performed better at execution level, worse at revenue level, volumes modestly lower than expected, but execution better; factoring in modest tariff headwind.

Q: About cash costs, securitized receivables, strategic review costs; A: Items in quarter include payments on warehouse sale closure, tax payments, deal fees, securitized receivables ~$55 million; no ongoing significant costs associated with strategic review