MATTHEWS INTERNATIONAL CORP Q4 FY2024 earnings call

• Strategic Priorities: At SGK, steady improvement with cost control, price improvements, APAC growth, and e-commerce transition. Memorialization has outperformed with pricing actions and acquisitions. Industrial Technology faced challenges but expects warehouse solutions market to improve in 2025. Energy Storage dealt with Tesla's claim, patent acquisition, and expects deliveries to be completed in 2025. - Balance Sheet: Renewed and extended revolving credit facility through 2028, refinanced senior notes with a one-year call option, reduced debt by over $50 million in the fourth quarter, and initiated a cost reduction program with charges in the quarter.

Memorialization: Fourth quarter sales were $196.8 million compared to $204.9 million in the same quarter of the previous year. Adjusted EBITDA for the quarter was $40.5 million compared to $36.9 million a year ago. SGK Brand Solutions: Fourth quarter sales were $135.9 million compared to $134.7 million a year ago. Adjusted EBITDA for the quarter was $17.3 million, relatively consistent with the prior year's $17.5 million. Industrial Technology: Fourth quarter sales were $113.9 million compared to $140.6 million a year ago. Adjusted EBITDA for the quarter was $15.9 million compared to $23.5 million a year ago.

• Projected adjusted EBITDA for fiscal 2025 is in the range of $205 to $215 million. - Expect Memorialization to perform strongly, SGK to continue growth, product identification to benefit from Acxiom launch, and warehouse automation to recover as market picks up. - Energy business deliveries expected to be substantially completed in fiscal 2025.

• Legal events outside control affecting business units. - Market conditions for warehouse solutions. - Impact of Tesla's claim on energy business. - Working capital related to energy solutions. - Interest rate changes affecting financing.

Q: Start with energy storage. What level of backlog entering fiscal 2025 and cadence of opportunity set?

A: Our backlog is about $100 million, mostly to be delivered over the next twelve months. There is interest but we're being cautious due to the dispute.

Q: On the guide for industrial technology, especially warehouse automation and Acxiom launch?

A: Warehouse automation expects a stronger year in 2025 and beyond due to quoting activity. Acxiom product beta testing went well, expected to be a significant contributor.

Q: On the strategic review of portfolio, what options are being contemplated?

A: Evaluating portfolio to maximize shareholder value, looking at energy, warehouse, and product identification businesses.

Q: On memorialization side, lift from increased cremations?

A: Memorialization has diversity including cremation-related products, which is growing, and expects organic growth with price increases.

Q: On $50 million savings, cadence and cost breakdown?

A: Expect $25-$30 million realized by end of 2024, remainder by end of 2025. Cost to achieve is $30-$40 million, 75% cash, 25% non-cash.

Q: On new patent for energy storage, what does it allow?

A: It's a critical piece in dry battery electrode production, evidence of long-standing experience in specialty calendaring.

Q: On non-Tesla customers and dry electrode process?

A: Cautious due to dispute, hope for clarity in early January. Expect more on conversations later.

Q: On product identification uptake of new products?

A: Laser product margins consistent, Acxiom product margin expected to grow, adoption to be more significant in 2026.

Q: On SGK top-line growth sustainability?

A: Driven by digital e-commerce growth in APAC, price increases to cover inflation, leading to stability and new wins in bottom line.

Q: On operating cash flow and CapEx for 2025?

A: Expected CapEx range $50-$60 million. Cash flow dependent on working capital and energy deliveries, but expected to be favorable.