MATTHEWS INTERNATIONAL CORP

Previous wording

The following discussion should be read in conjunction with the consolidated financial statements of Matthews International Corporation ("Matthews" or the "Company") and related notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the joint venture transaction with Propelis Group ("Propelis"), and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include our ability to achieve the anticipated benefits of the joint venture transaction with Propelis that recently closed, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, including changes in costs due to adjustments to tariffs, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, divestitures, and business combinations, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors be…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The following discussion should be read in conjunction with the consolidated financial statements of Matthews International Corporation ("Matthews" or the "Company") and related notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated benefits and risks associated with the joint venture transaction with Peninsula Parent LLC, d.b.a. Propelis Group ("Propelis") and the timing thereof, and may be identified by the use of words such as “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include risks to our ability to achieve the anticipated benefits of the joint venture transaction with Propelis that closed in fiscal year 2025, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, including changes in costs due to adjustments to tariffs, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, divestitures, and business combinations, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls,…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Company manages its businesses under three segments: Memorialization, Industrial Technologies and Brand Solutions. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. The Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment (the "SGK Business") to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Propelis is expected to be a leading global provider of brand solutions. Following the completion of this transaction, the Company's Brand Solutions segment consists of its printing plates and cylinders business, and its 40% ownership interest in Propelis. The Company recognizes its portion of the earnings or losses for its equity-method investment in Propelis on a three-month lag to ensure consistency and timely filing of the Company’s financial statements. As a result, the Company has not recorded earnings or losses for its investment in Propelis during the quarter ended June 30, 2025. See Notes 6, "Investments" and 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further information with respect to the Company's sale of its interest in the SGK Business.

Current wording

On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment (the "SGK Business") to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Propelis is a leading global provider of brand solutions. In December 2025, the Company sold its European roto-gravure packaging and tooling and flexographic print businesses to the local management of those businesses in exchange for cash and other consideration. On December 31, 2025, the Company sold its warehouse automation business for cash and other consideration. Following the completion of these transactions, the Company's Industrial Technologies segment consists of product identification, and the design, manufacturing, service and sales of high-tech custom energy storage solutions, and the Company's Brand Solutions segment consists of its 40% ownership interest in Propelis. Activity prior to May 1, 2025 for the SGK Business is included within the consolidated financial statements of the Company. As of May 1, 2025 the SGK Business has been deconsolidated from the financial statements and is now accounted for as part of the Company's equity-method investment in Propelis. The Company recognizes its portion of the earnings or losses for its equity-method investment in Propelis on a three-month lag to ensure consistency and timely filing of the Company’s financial statements. Consequently, in fiscal 2026, the Company's portion of earnings for its equity-method investment in Propelis includes the months of July, August and September 2025. See Notes 7, "Investments" and 16, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further information.

Previous wording

The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, gains and losses on divestitures, enterprise resource planning ("ERP") system integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

Current wording

The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, gains and losses on divestitures, enterprise resource planning ("ERP") system integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”), identified as the Company's President and Chief Executive Officer, evaluates the results of operations versus budgets, forecasts, and historical performance, and makes strategic and resource allocation decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

Previous wording

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and nine-month periods ended June 30, 2025 and 2024. Refer to Note 14, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment. Net income was $15.4 million and $1.8 million for the three months ended June 30, 2025 and 2024, respectively, and $3.0 million and $8.5 million for the nine months ended June 30, 2025 and 2024, respectively. Refer to "Non-GAAP Financial Measures" below for a reconciliation of net income to adjusted EBITDA.

Current wording

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three-month periods ended December 31, 2025 and 2024. Refer to Note 15, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment. Net income was $43.6 million compared to a net loss of $3.5 million for the three months ended December 31, 2025 and 2024, respectively. Refer to "Non-GAAP Financial Measures" below for a reconciliation of net income to adjusted EBITDA.

Previous wording

Sales for the nine months ended June 30, 2025 were $1.18 billion, compared to $1.35 billion for the nine months ended June 30, 2024. The decrease in fiscal 2025 sales reflected a sales reduction of $80.2 million resulting from the divestiture of the Company's interest in the SGK Business on May 1, 2025 (see Acquisitions and Divestitures below). The fiscal 2025 sales decline also reflected lower sales in the Industrial Technologies and Memorialization segments. On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $1.1 million on fiscal 2025 sales compared to the prior year.

Current wording

Sales for the three months ended December 31, 2025 were $284.8 million, compared to $401.8 million for the three months ended December 31, 2024. The decrease in fiscal 2026 sales reflected a sales reduction of $115.3 million resulting from the divestiture of the Company's interest in the SGK Business on May 1, 2025 (see Acquisitions and Divestitures below). The fiscal 2026 change in sales also reflected higher sales in the Memorialization segment, partially offset by lower sales in the Industrial Technologies segment. On a consolidated basis, changes in foreign currency exchange rates were estimated to have a favorable impact of $2.6 million on fiscal 2026 sales compared to the prior year.

Previous wording

Memorialization segment sales for the first nine months of fiscal 2025 were $599.8 million, compared to $632.9 million for the first nine months of fiscal 2024. The sales decrease principally reflected lower unit sales of caskets, bronze and granite memorial products, and cremation equipment, primarily reflecting a decline in U.S. death rates. These declines were partially offset by improved price realization and the favorable net impact of recently completed acquisitions and divestitures (see Acquisitions and Divestitures below). Industrial Technologies segment sales were $249.3 million for the first nine months of fiscal 2025, compared to $319.2 million for the first nine months of fiscal 2024. The decrease in sales reflected lower sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market and coating and converting equipment). The decrease also reflected lower sales of R+S automotive engineering solutions, as the Company has discontinued these product offerings. Fiscal 2025 sales for the Industrial Technologies segment were impacted by customer delays impacting the timing of projects within the energy storage business. Changes in foreign currency exchange rates had a favorable impact of $1.0 million on the segment's sales compared to the prior year. In the Brand Solutions segment, sales for the first nine months of fiscal 2025 were $329.7 million, compared to $396.9 million for the first nine months of fiscal 2024. The decrease in sales primarily reflected the divestiture of the Company's interest in the SGK Business on May 1, 2025. Sales for the SGK Business prior to the divestiture (versus the comparable period of the prior year) reflected higher brand sales in the U.S. and Asia-Pacific regions, improved retail-based sales, increased private-label brand sales, and improved price realization to mitigate inflationary cost increases. These increases were partially offset by lower brand sales in Europe and the impact of unfavorable changes in foreign exchange rates. Brand Solutions segment sales also reflected lower sales for the European cylinders (packaging) business, which was not part of the sale of the SGK Business and remains part of the Company. Changes in foreign currency exchange rates had an unfavorable impact of $1.8 million on the segment's sales compared to the prior year.

Current wording

Memorialization segment sales for the first three months of fiscal 2026 were $204.2 million, compared to $190.5 million for the first three months of fiscal 2025. The sales increase principally reflected inflationary price realization and the favorable impact of the fiscal 2025 acquisition of The Dodge Company (see Acquisitions and Divestitures below). These increases were partially offset by lower sales of cremation equipment and mausoleums. Industrial Technologies segment sales were $69.0 million for the first three months of fiscal 2026, compared to $80.5 million for the first three months of fiscal 2025. The decrease in sales reflected lower sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market and coating and converting equipment), and the impact of divesting the Company's tooling business in December 2025 (see Acquisitions and Divestitures below). These declines were partially offset by increased sales of warehouse automation solutions. Fiscal 2026 sales for the Industrial Technologies segment were impacted by customer delays impacting the timing of projects within the energy storage business. Changes in foreign currency exchange rates had a favorable impact of $2.9 million on the segment's sales compared to the prior year. In the Brand Solutions segment, sales for the first three months of fiscal 2026 were $11.6 million, compared to $130.8 million for the first three months of fiscal 2025. The decrease in sales primarily reflected the divestiture of the Company's interest in the SGK Business on May 1, 2025. Fiscal 2026 segment sales reflected sales for the European cylinders (packaging) business through December 1, 2025, at which time this business was divested (see Acquisitions and Divestitures below). Changes in foreign currency exchange rates had an unfavorable impact of $804,000 on the segment's sales compared to the prior year.

Previous wording

Gross profit for the nine months ended June 30, 2025 was $391.8 million, compared to $412.4 million for the same period a year ago. Consolidated gross profit as a percent of sales was 33.2% and 30.6% for the first nine months of fiscal 2025 and fiscal 2024, respectively. The decrease in gross profit reflected a reduction of $19.3 million resulting from the divestiture of the Company's interest in the SGK Business. The gross profit decline also reflected the impact of lower sales, and higher material and labor costs. These decreases were partially offset by the impact of improved price realization, benefits from the realization of productivity improvements and other cost-reduction initiatives, and the favorable net impact of recently completed acquisitions and divestitures within the Memorialization segment. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $3.9 million and $9.2 million for the nine months ended June 30, 2025 and 2024, respectively.

Current wording

Gross profit for the three months ended December 31, 2025 was $99.7 million, compared to $125.7 million for the same period a year ago. The decrease in gross profit reflected a reduction of $26.6 million resulting from the fiscal 2025 divestiture of the Company's interest in the SGK Business. The gross profit decline also reflected the impact of higher material and labor costs, and lower sales and margins on engineered products. These decreases were partially offset by the impact of improved price realization, benefits from the realization of productivity improvements and other cost-reduction initiatives, and the favorable impact of the Dodge acquisition within the Memorialization segment. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $1.3 million and $1.1 million for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

Selling and administrative expenses for the nine months ended June 30, 2025 were $345.7 million, compared to $347.1 million for the first nine months of fiscal 2024. Consolidated selling and administrative expenses, as a percent of sales, were 29.3% for the nine months ended June 30, 2025, compared to 25.7% for the same period last year. Selling and administrative expenses in fiscal 2025 reflected benefits from ongoing cost-reduction initiatives, and a $12.1 million reduction in selling and administrative expenses from the divestiture of the Company's interest in the SGK Business, partially offset by higher compensation costs. Fiscal 2025 selling and administrative expenses included $5.1 million of costs related to the Company's 2025 contested proxy, $8.7 million of net gains on the sales of certain significant property and other assets, $3.5 million of accelerated stock-based compensation costs related to the Company's divestiture of its interest in the SGK Business, and a $2.1 million loss on a small divestiture in the Industrial Technologies segment. Selling and administrative expenses included legal costs related to an ongoing dispute in the Company's energy storage business totaling $14.4 million in fiscal 2025 and $8.1 million in fiscal 2024 (see Legal Matter below). Selling and administrative expenses included fees for receivables sold under a receivables purchase agreement and factoring arrangement totaling $3.3 million in fiscal 2025 and $3.6 million in fiscal 2024. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with certain commercial, operational and cost-reduction initiatives totaling $8.0 million in fiscal 2025, compared to $5.5 million in fiscal 2024. Intangible amortization for the nine months ended June 30, 2025 was $16.4 million, compared to $27.8 million for the nine months ended June 30, 2024. The fiscal 2025 decrease in intangible amortization reflected certain intangible assets reaching the end of their amortizable lives, and lower amortization following the Company's divestiture of its interest in the SGK Business. During the third quarter of fiscal 2025, the Company recognized a $57.1 million pre-tax gain on the sale of its interest in the SGK Business (See Acquisitions and Divestitures below).

Current wording

Inc. ("Tesla") totaling $9.0 million in fiscal 2026 and $6.9 million in fiscal 2025 (see Legal Matters below). Selling and administrative expenses included fees for receivables sold under a receivables purchase agreement and factoring arrangement totaling $668,000 in fiscal 2026 and $1.2 million in fiscal 2025. Fiscal 2026 selling and administrative expenses included $2.3 million of equity-method losses for the Company's equity-method investment in Propelis. See Note 7, "Investments" in Item 1 - "Financial Statements" for further information. Fiscal 2025 selling and administrative expenses included $8.7 million of net gains on the sales of certain significant property and other assets. Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with certain commercial, operational and cost-reduction initiatives totaling $6.1 million in fiscal 2026, compared to $3.1 million in fiscal 2025. Intangible amortization for the three months ended December 31, 2025 was $3.0 million, compared to $8.6 million for the three months ended December 31, 2024. The fiscal 2026 decrease in intangible amortization reflected lower amortization following the Company's fiscal 2025 divestiture of its interest in the SGK Business. During the first quarter of fiscal 2026, the Company recognized $113.2 million of net pre-tax gains on divestitures (see Acquisitions and Divestitures below).

Previous wording

Adjusted EBITDA was $136.0 million for the nine months ended June 30, 2025 and $147.0 million for the nine months ended June 30, 2024. Memorialization segment adjusted EBITDA was $124.5 million for the first nine months of fiscal 2025 compared to $122.1 million for the first nine months of fiscal 2024. The increase in segment adjusted EBITDA reflected the impact of improved price realization, benefits from productivity initiatives, and the favorable net impact of recent acquisitions and divestitures. These increases were partially offset by the impact of lower unit sales, and higher material and labor costs. Adjusted EBITDA for the Industrial Technologies segment was $16.9 million for the nine months ended June 30, 2025 compared to $23.8 million for the nine months ended June 30, 2024. The decrease in segment adjusted EBITDA primarily reflected the impact of lower sales of engineered products, partially offset by benefits from cost-reduction initiatives. Adjusted EBITDA for the Brand Solutions segment was $32.9 million for the first nine months of fiscal 2025 compared to $44.3 million for the same period a year ago. The decrease in segment adjusted EBITDA primarily reflected a reduction of $11.0 million resulting from the divestiture of the Company's interest in the SGK Business. Adjusted EBITDA for the SGK Business prior to the divestiture (versus the comparable period of the prior year) reflected the impact of higher labor costs, partially offset by the impact of improved price realization and benefits from cost-reduction initiatives. Brand Solutions segment adjusted EBITDA also reflected declines for the European cylinders (packaging) business, which was not part of the sale of the SGK Business and remains part of the Company.

Current wording

Adjusted EBITDA was $35.2 million for the three months ended December 31, 2025 and $40.0 million for the three months ended December 31, 2024. Memorialization segment adjusted EBITDA was $38.9 million for the first three months of fiscal 2026 compared to $36.6 million for the first three months of fiscal 2025. The increase in segment adjusted EBITDA reflected the impact of improved price realization, benefits from productivity initiatives, and the favorable impact of the fiscal 2025 acquisition of The Dodge Company. These increases were partially offset by the impact of higher material and labor costs. Adjusted EBITDA for the Industrial Technologies segment was a loss of $4.5 million for the three months ended December 31, 2025 compared to income of $1.8 million for the three months ended December 31, 2024. The decrease in segment adjusted EBITDA primarily reflected the impact of lower sales and margins on engineered products, and unfavorable sales mix for warehouse automation solutions. These declines were partially offset by benefits from cost-reduction initiatives. Adjusted EBITDA for the Brand Solutions segment was $12.7 million for the first three months of fiscal 2026 compared to $12.3 million for the same period a year ago. The change in segment adjusted EBITDA primarily reflected a reduction of $12.2 million resulting from the fiscal 2025 divestiture of the Company's interest in the SGK Business, offset by the inclusion of the Company's portion (40% ownership interest) of Propelis' adjusted EBITDA, which totaled $12.9 million in fiscal 2026. See Notes 7, "Investments" and 16, "Acquisitions and Divestitures" in Item 1 - "Financial Statements" for further information.

Previous wording

Interest expense for the first nine months of fiscal 2025 was $47.4 million, compared to $36.9 million for the same period last year. The increase in interest expense reflected higher average interest rates, partially offset by a decrease in average borrowing levels in the current fiscal year. Other income (deductions), net, for the nine months ended June 30, 2025 represented an increase in pre-tax income of $2.0 million, compared to a decrease in pre-tax income of $2.7 million for the same period last year. Other income (deductions), net includes investment income, banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances.

Current wording

Interest expense for the first three months of fiscal 2026 was $14.6 million, compared to $15.7 million for the same period during the last fiscal year. The decrease in interest expense reflected lower average borrowing levels, partially offset by the impact of higher average interest rates in the current fiscal year. Other income (deductions), net, for the three months ended December 31, 2025 represented an increase in pre-tax income of $1.5 million, compared to an increase in pre-tax income of $4.2 million for the same period last year. Other income (deductions), net includes investment income, banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances. Fiscal 2026 other income (deductions), net included $1.3 million of paid-in-kind interest income related to the Company's preferred equity investment in Propelis. Fiscal 2025 other income (deductions), net included loss recoveries totaling $1.2 million which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Previous wording

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first nine months of fiscal 2025 represented a provision of $38.4 million, compared to a benefit of $10.7 million for the first nine months of fiscal 2024. The difference between the Company’s consolidated income taxes for the first nine months of fiscal 2025 compared to the same period for fiscal 2024 resulted from consolidated pre-tax income in fiscal 2025 compared to a consolidated pre-tax loss in fiscal 2024, net discrete tax expense related to the divestiture of the Company's interest in the SGK Business, net discrete tax benefits related to adjustments in tax reserves resulting from the progression of tax audits, and recognition of certain previously unrecognized deferred tax assets. The Company’s fiscal 2025 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, discrete tax related to the sale of the Company's interest in the SGK Business, and other net discrete tax benefits. The Company’s fiscal 2024 nine month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to tax credits, jurisdictional tax rate netting, recognition of certain previously unrecognized deferred tax assets and other net discrete tax benefits.

Current wording

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first three months of fiscal 2026 represented an expense of $40.8 million, compared to a benefit of $2.4 million for the first three months of fiscal 2025. The difference between the Company’s consolidated income taxes for the first three months of fiscal 2026 compared to the same period for fiscal 2025 resulted from consolidated pre-tax income in fiscal 2026 compared to a consolidated pre-tax loss in fiscal 2025, and net discrete tax expense related to the divestiture of the Company's warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses. The Company’s fiscal 2026 three month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses and discrete tax expense related to the divestiture of the Company's warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses. The Company’s fiscal 2025 three month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, and other net discrete tax benefits.

Previous wording

Refer to Note 17, "Legal Matter" in Item 1 - "Financial Statements" for details related to an ongoing dispute with Tesla.

Current wording

Refer to Note 18, "Legal Matters" in Item 1 - "Financial Statements" for information regarding the settlement of a contractual licensing matter within the Memorialization segment, and details related to an ongoing dispute with Tesla.

Previous wording

Included in this report are measures of financial performance that are not defined by GAAP. The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition and divestiture costs, gains and losses on divestitures, ERP system integration costs, strategic initiatives and other charges (which includes non-recurring charges related to certain commercial and operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.

Current wording

Included in this report are measures of financial performance that are not defined by GAAP. The Company uses certain non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition and divestiture costs, gains and losses on divestitures, ERP system integration costs, strategic initiatives and other charges (which includes non-recurring charges related to certain commercial and operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.

Previous wording

(1) Includes fees for receivables sold under the RPA and factoring arrangements totaling $1.0 million and $1.2 million for the three months ended June 30, 2025 and 2024, respectively, and $3.3 million and $3.6 million for the nine months ended June 30, 2025 and 2024, respectively.

Current wording

(2) Includes fees for receivables sold under the RPA and factoring arrangements totaling $668,000 and $1.2 million for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

(2) Includes certain non-recurring items associated with recent acquisition and divestiture activities and also includes a loss of $2.1 million for the nine months ended June 30, 2025 related to the divestiture of a business in the Industrial Technologies segment (See Note 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements and Supplementary Data"). The fiscal 2025 third quarter amount reflects a reclassification of transaction costs totaling $9.7 million, which have been presented as a component of gain on sale of SGK Business.

Current wording

(3) Includes certain non-recurring items associated with recent acquisition and divestiture activities.

Previous wording

(3) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts. Also includes legal costs related to an ongoing dispute with Tesla, which totaled $5.8 million and $3.2 million for the three months ended June 30, 2025 and 2024, respectively, and $14.4 million and $8.1 million for the nine months ended June 30, 2025 and 2024, respectively (see Note 17, "Legal Matter" in Item 1 - "Financial Statements and Supplementary Data"). Fiscal 2025 includes costs related to the Company's 2025 contested proxy which totaled $207,000 for the three months ended June 30, 2025 and $5.1 million for the nine months ended June 30, 2025. Fiscal 2025 includes net gains on the sales of certain significant property and other assets of $8.7 million for the nine months ended June 30, 2025. Fiscal 2025 also includes loss recoveries totaling $538,000 for the three months ended June 30, 2025 and $1.7 million for the nine months ended June 30, 2025 which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Current wording

(4) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts. Also includes legal costs related to an ongoing dispute with Tesla, which totaled $9.0 million and $6.9 million for the three months ended December 31, 2025 and 2024, respectively (see Note 18, "Legal Matters" in Item 1 - "Financial Statements and Supplementary Data"). Fiscal 2025 includes net gains on the sales of certain significant property and other assets of $8.7 million. Fiscal 2025 also includes loss recoveries totaling $1.2 million for the three months ended December 31, 2024 which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Previous wording

(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation" in Item 1 - "Financial Statements and Supplementary Data").

Current wording

(5) Represents exchange losses associated with highly inflationary accounting related to certain Turkish subsidiaries which were recently divested (see Note 2, "Basis of Presentation" in Item 1 - "Financial Statements and Supplementary Data").

Previous wording

** Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $552,000 and $1.1 million for the Memorialization segment, $9.1 million and $4.5 million for the Industrial Technologies segment, $1.7 million and $1.5 million for the Brand Solutions segment, and income of $10.5 million and costs of $1.4 million for Corporate and Non-Operating, for the three months ended June 30, 2025 and 2024, respectively. Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $4.3 million and $2.2 million for the Memorialization segment, $15.5 million and $14.3 million for the Industrial Technologies segment, $2.8 million and $2.7 million for the Brand Solutions segment, and $631,000 and $3.5 million for Corporate and Non-Operating, for the nine months ended June 30, 2025 and 2024, respectively.

Current wording

** Acquisition and divestiture costs, ERP system integration costs, and strategic initiatives and other charges were $69,000 and $1.3 million for the Memorialization segment, $10.4 million and $4.1 million for the Industrial Technologies segment, $3.5 million and $714,000 for the Brand Solutions segment, and charges of $2.5 million and income of $4.9 million for Corporate and Non-Operating, for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

†Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling expenses of $2.4 million and $1.1 million for the three months ended June 30, 2025 and 2024, respectively, and expenses of $1.1 million and $3.9 million for the nine months ended June 30, 2025 and 2024, respectively. Refer to Note 9, "Restructuring" in Item 1 - "Financial Statements and Supplementary Data" for further details.

Current wording

†Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling expenses of $1.5 million and $313,000 for the three months ended December 31, 2025 and 2024, respectively. Refer to Note 10, "Restructuring" in Item 1 - "Financial Statements and Supplementary Data" for further details.

Previous wording

Net cash used in operating activities was $33.9 million for the first nine months of fiscal 2025, compared to net cash provided by operating activities of $43.3 million for the first nine months of fiscal 2024. Operating cash flow for both periods principally included net income adjusted for depreciation and amortization, stock-based compensation expense, gains (losses) on divestitures and sales of assets, other non-cash adjustments, and changes in working capital items. Net changes in working capital items decreased operating cash flow by $50.6 million and $29.2 million in fiscal 2025 and fiscal 2024, respectively. The fiscal 2025 change in working capital principally reflected incentive compensation-related payments, payments of severance and other employee termination benefits, changes in contract assets and liabilities related to revenue recognized using the over time method, and changes in other accounts.

Current wording

Net cash used in operating activities was $52.0 million for the first three months of fiscal 2026, compared to $25.0 million for the first three months of fiscal 2025. Operating cash flow for both periods principally included net income (loss) adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, net gains on divestitures and sales of assets, and other non-cash adjustments, and changes in working capital items. Net changes in working capital items increased operating cash flow by $1.5 million and decreased operating cash flow by $39.2 million in fiscal 2026 and fiscal 2025, respectively. The fiscal 2026 change in working capital principally reflected incentive compensation-related payments, a settlement payment related to a contractual licensing matter (see Legal Matters above), changes in contract assets and liabilities related to revenue recognized using the over time method, increased accrued income taxes primarily related to the warehouse automation divestiture (see Acquisitions and Divestitures below), and changes in other accounts.

Previous wording

Cash provided by investing activities was $153.2 million for the nine months ended June 30, 2025, compared to cash used in investing activities of $38.6 million for the nine months ended June 30, 2024. Investing activities for the first nine months of fiscal 2025 primarily reflected capital expenditures of $26.4 million, acquisitions, net of cash acquired, of $57.8 million, proceeds from sale of assets of $14.9 million, proceeds from sale of the SGK Business, net of divested cash, of $228.0 million, proceeds from other divestitures of $2.0 million, and investments and advances of $7.4 million. Investing activities for the first nine months of fiscal 2024 primarily reflected capital expenditures of $33.2 million, acquisitions, net of cash acquired, of $5.8 million, and purchases of investments of $825,000.

Current wording

Cash provided by investing activities was $237.4 million for the three months ended December 31, 2025, compared to $1.4 million for the three months ended December 31, 2024. Investing activities for the first three months of fiscal 2026 primarily reflected capital expenditures of $5.3 million, acquisitions, net of cash acquired, of $524,000, proceeds from sale of assets of $3.5 million, and proceeds from divestitures (net of divested cash) of $240.2 million. Investing activities for the first three months of fiscal 2025 primarily reflected capital expenditures of $9.5 million, acquisitions, net of cash acquired, of $2.2 million, and proceeds from sale of assets of $13.2 million.

Previous wording

Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, and facilities designed to improve product quality, increase manufacturing efficiency and capacity, lower production costs and meet regulatory requirements. Capital expenditures for the last three fiscal years were primarily financed through operating cash. Capital spending for property, plant and equipment has averaged $52.4 million for the last three fiscal years. Capital spending for fiscal 2025 is currently estimated to be in the range of approximately$30 million to $40 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

Current wording

Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, and facilities designed to improve product quality, increase manufacturing efficiency and capacity, lower production costs and meet regulatory requirements. Capital expenditures for the last three fiscal years were primarily financed through operating cash. Capital spending for property, plant and equipment has averaged $43.9 million for the last three fiscal years. Capital spending for fiscal 2026 is currently estimated to be in the range of approximately$20 million to $30 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

Previous wording

Cash used in financing activities for the nine months ended June 30, 2025 was $139.4 million, primarily reflecting repayments, net of proceeds, on long-term debt of $70.3 million, treasury stock purchases of $12.1 million, dividends of $24.7 million, payments, net of proceeds, on net investment hedges of $22.1 million, and $10.2 million of holdback and deferred purchase price payments related to acquisitions from prior years. Cash used in financing activities for the nine months ended June 30, 2024 was $4.1 million, primarily reflecting proceeds, net of repayments, on long-term debt of $27.8 million, treasury stock purchases of $20.5 million, dividends of $24.1 million, payments of debt issuance costs of $4.7 million, and proceeds from a net investment hedge of $17.4 million.

Current wording

Cash used in financing activities for the three months ended December 31, 2025 was $186.6 million, primarily reflecting repayments, net of proceeds, on long-term debt of $172.0 million, treasury stock purchases of $5.2 million, and dividends of $9.5 million. Cash provided by financing activities for the three months ended December 31, 2024 was $18.4 million, primarily reflecting proceeds, net of repayments, on long-term debt of $31.9 million, treasury stock purchases of $4.3 million, and dividends of $9.2 million.

Previous wording

The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 2024. The amended and restated loan agreement includes a $750.0 million senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility. The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. A portion of the revolving credit facility (not to exceed $350.0 million) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10% per annum rate spread adjustment, plus a factor ranging from 1.00% to 2.00% (1.50% at June 30, 2025) based on the Company's leverage ratio. The leverage ratio is defined as total indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15% to 0.30% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the amended and restated agreement. Unamortized costs were $4.2 million and $5.0 million at June 30, 2025 and September 30, 2024, respectively.

Current wording

The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in September 2024. The amended and restated loan agreement includes a $700.0 million senior secured revolving credit facility, which matures in January 2029, subject to the terms and conditions of the amended facility. The obligations under the domestic credit facility are secured by a first priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. A portion of the revolving credit facility (not to exceed $350.0 million) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at the Secured Overnight Financing Rate ("SOFR"), plus a 0.10% per annum rate spread adjustment, plus a factor ranging from 1.00% to 2.00% (1.25% at December 31, 2025) based on the Company's leverage ratio. The leverage ratio is defined as total indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15% to 0.30% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the amended and restated agreement. Unamortized costs were $3.6 million and $3.9 million at December 31, 2025 and September 30, 2025, respectively.

Previous wording

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $75.0 million) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at June 30, 2025 and September 30, 2024 were $380.4 million and $410.5 million, respectively. There were no outstanding Euro denominated borrowings on the revolving credit facility at June 30, 2025. Outstanding Euro denominated borrowings on the revolving credit facility at September 30, 2024 were €30.0 million ($33.5 million). The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at June 30, 2025 and 2024 was 4.16% and 4.61%, respectively.

Current wording

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $55.0 million) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at December 31, 2025 and September 30, 2025 were $214.0 million and $384.2 million, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at December 31, 2025 and 2024 was 3.68% and 5.17%, respectively.

Previous wording

The Company has $300.0 million aggregate principal amount of 8.625% senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes"). The 2027 Senior Secured Notes bear interest at a rate of 8.625% per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year. The Company's obligations under the 2027 Senior Secured Notes are secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2027 Senior Secured Notes. The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes. Unamortized costs related to the Company’s notes were $4.4 million and $5.2 million at June 30, 2025 and September 30, 2024, respectively.

Current wording

As of December 31, 2025, the Company had $300.0 million aggregate principal amount of 8.625% senior secured second lien notes due October 1, 2027 (the "2027 Senior Secured Notes"). The 2027 Senior Secured Notes bore interest at a rate of 8.625% per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year. The Company's obligations under the 2027 Senior Secured Notes were secured by a second priority lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The Company was subject to certain covenants and other restrictions including cross default provisions in connection with the 2027 Senior Secured Notes. The Company incurred direct financing fees and costs in connection with 2027 Senior Secured Notes. Unamortized costs related to the Company’s notes were $3.4 million and $3.9 million at December 31, 2025 and September 30, 2025, respectively.

Previous wording

The Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC has a receivables purchase agreement (“RPA”) to sell up to $110.0 million of receivables as of June 30, 2025 to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables. The RPA will reduce to $75.0 million as of August 1, 2025, and matures in April 2027.

Current wording

The Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. Matthews RFC has a receivables purchase agreement (“RPA”) to sell up to $75.0 million of receivables to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables. The RPA matures in April 2027.

Previous wording

The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of June 30, 2025 and September 30, 2024, the amount sold to the Purchasers was $85.6 million and $96.3 million, respectively, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $79.5 million and $58.2 million as of June 30, 2025 and September 30, 2024, respectively.

Current wording

The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of December 31, 2025 and September 30, 2025, the amount sold to the Purchasers was $51.0 million and $65.6 million, respectively, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $73.0 million and $63.7 million as of December 31, 2025 and September 30, 2025, respectively.

Previous wording

The Company, through its U.K. subsidiary, previously participated in a non-recourse factoring arrangement. In connection with this arrangement, the Company periodically sold trade receivables to a third-party purchaser in exchange for cash. These transfers of financial assets were recorded at the time the Company surrendered control of the assets. As these transfers qualified as true sales under the applicable accounting guidance, the receivables were de-recognized from the Company's Consolidated Balance Sheets upon transfer. As a result of the sale of the Company's interest in the SGK Business, this arrangement no longer exists for the Company at June 30, 2025. The principal amount of receivables sold under this arrangement was $45.8 million and $53.1 million during the nine months ended June 30, 2025 and 2024, respectively. The discounts on the trade receivables sold are included within administrative expense in the Consolidated Statements of Income. The proceeds from the sale of receivables are classified as operating activities in the Company's Consolidated Statements of Cash Flows. As of September 30, 2024, the amount of factored receivables that remained outstanding were $15.7 million. See Note 15, "Acquisitions and Divestitures" in Item 1 - "Financial Statements and Supplementary Data" for further information with respect to the sale of the Company's interest in the SGK Business.

Current wording

The Company, through a former U.K. subsidiary, previously participated in a non-recourse factoring arrangement. In connection with this arrangement, the Company periodically sold trade receivables to a third-party purchaser in exchange for cash. These transfers of financial assets were recorded at the time the Company surrendered control of the assets. As these transfers qualified as true sales under the applicable accounting guidance, the receivables were de-recognized from the Company's Consolidated Balance Sheets upon transfer. As a result of the sale of the Company's interest in the SGK Business, this arrangement no longer exists for the Company at December 31, 2025. The principal amount of receivables sold under this arrangement was $21.4 million during the three months ended December 31, 2024. The discounts on the trade receivables sold are included within administrative expense in the Consolidated Statements of Income. The proceeds from the sale of receivables are classified as operating activities in the Company's Consolidated Statements of Cash Flows. See Note 16, "Acquisitions and Divestitures" in Item 1 - "Financial Statements and Supplementary Data" for further information with respect to the sale of the Company's interest in the SGK Business.

Previous wording

The Company facilitates a voluntary supply chain finance program (the "Program") to provide certain suppliers with the opportunity to sell receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier's decision to sell a receivable. The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the Program. All outstanding payments owed under the Program are recorded within trade accounts payable in the Consolidated Balance Sheets. The Company accounts for all payments made under the Program as a reduction to operating cash flows in changes in working capital within the Consolidated Statements of Cash Flows. The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $4.4 million and $3.0 million at June 30, 2025 and September 30, 2024, respectively.

Current wording

The Company facilitates a voluntary supply chain finance program (the "Program") to provide certain suppliers with the opportunity to sell receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The amounts owed to a participating financial institution under the Program and included in trade accounts payable were $5.8 million and $6.1 million at December 31, 2025 and September 30, 2025, respectively.

Previous wording

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €6.0 million ($7.0 million). The facility also provides €14.0 million ($16.4 million) for bank guarantees. This facility has no stated maturity date and is available until terminated. Outstanding borrowings under the credit facility totaled €311,000 ($366,000) at June 30, 2025. There were no outstanding borrowings under the credit facility at September 30, 2024. The weighted-average interest rate on outstanding borrowings under this facility was 4.16% and 5.88% at June 30, 2025 and 2024, respectively.

Current wording

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €6.0 million ($7.0 million). The facility also provides €14.0 million ($16.4 million) for bank guarantees. This facility has no stated maturity date and is available until terminated. Outstanding borrowings under the credit facility totaled €86,000 ($101,000) and €659,000 ($774,000) at December 31, 2025 and September 30, 2025, respectively. The weighted-average interest rate on outstanding borrowings under this facility was 4.93% and 5.10% at December 31, 2025 and 2024, respectively.

Previous wording

Other borrowings totaled $5.8 million and $15.6 million at June 30, 2025 and September 30, 2024, respectively. The weighted-average interest rate on these borrowings was 3.42% and 2.61% at June 30, 2025 and 2024, respectively.

Current wording

Other borrowings totaled $5.4 million and $7.2 million at December 31, 2025 and September 30, 2025, respectively. The weighted-average interest rate on these borrowings was 1.33% and 2.33% at December 31, 2025 and 2024, respectively.

Previous wording

The fair value of the interest rate swaps reflected a net unrealized loss of $2.2 million ($1.7 million after tax) and $2.6 million ($1.9 million after tax) at June 30, 2025 and September 30, 2024, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1.9 million ($1.4 million after tax) and $3.8 million ($2.9 million after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of June 30, 2025 and September 30, 2024, respectively. Assuming market rates remain constant with the rates at June 30, 2025, a gain (net of tax) of approximately $252,000 included in AOCI is expected to be recognized in earnings over the next twelve months.

Current wording

The fair value of the interest rate swaps reflected a net unrealized loss of $2.3 million ($1.7 million after tax) and $2.3 million ($1.8 million after tax) at December 31, 2025 and September 30, 2025, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1.3 million ($1.0 million after tax) and $1.6 million ($1.2 million after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of December 31, 2025 and September 30, 2025, respectively. Assuming market rates remain constant with the rates at December 31, 2025, a loss (net of tax) of approximately $18,000 included in AOCI is expected to be recognized in earnings over the next twelve months.

Previous wording

(1)Total unrealized gains (losses) are presented net of tax of $4,506 and $2,156 as of June 30, 2025 and September 30, 2024, respectively.

Current wording

(1)Total unrealized gains (losses) are presented net of tax of $4,337 and $4,652 as of December 31, 2025 and September 30, 2025, respectively.

Previous wording

In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S. dollar leg of the swaps. Outstanding advance payment amounts totaled $40.2 million at June 30, 2025, of which $17.4 million and $22.8 million were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively. Outstanding advance payment amounts totaled $58.4 million at September 30, 2024, of which $17.4 million and $41.0 million were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively.

Current wording

In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S. dollar leg of the swaps. Outstanding advance payment amounts totaled $40.2 million at both December 31, 2025 and September 30, 2025, all of which were included in other current liabilities on the Consolidated Balance Sheet.

Previous wording

The Company has a stock repurchase program. The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its Class A Common Stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. Under the current authorization, 48,829 shares remained available for repurchase as of June 30, 2025. Refer to Item 2 - "Unregistered Sales of Equity Securities and Use of Proceeds" in Part II - "Other Information" for further details on the Company's repurchases in fiscal 2025.

Current wording

The Company has a stock repurchase program, which is designed to increase shareholder value, enlarge the Company's holdings of its Class A Common Stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. On November 21, 2025, the Company announced that its Board of Directors approved the continuation of the stock repurchase program and increased the authorization for stock repurchases by an additional 5,000,000 shares during fiscal year 2025. Under the current authorization, 4,837,444 shares remained available for repurchase as of December 31, 2025. Refer to Item 2 - "Unregistered Sales of Equity Securities and Use of Proceeds" in Part II - "Other Information" for further details on the Company's repurchases in fiscal 2026.

Previous wording

On March 11, 2025, in connection with the filing of an automatic shelf registration statement on Form S-3 pursuant to which the Company re-registered 3,000,000 shares of Class A Common Stock, the Company entered into an Equity Distribution Agreement for an At-The-Market equity offering program ("ATM Program") where the Company may issue and sell, from time to time, up to 1,250,000 shares of its Class A Common Stock under the shelf registration. For the three months ended June 30, 2025, the Company did not sell any shares of its Class A Common Stock under its ATM Program. As of June 30, 2025, the Company had 1,250,000 shares remaining for sale under the ATM Program. The Company has no near-term intention to utilize the ATM Program.

Current wording

On March 11, 2025, in connection with the filing of an automatic shelf registration statement on Form S-3 pursuant to which the Company re-registered 3,000,000 shares of Class A Common Stock, the Company entered into an Equity Distribution Agreement for an At-The-Market equity offering program ("ATM Program") pursuant to which the Company may issue and sell, from time to time, up to 1,250,000 shares of its Class A Common Stock under the shelf registration. For the three months ended December 31, 2025, the Company did not sell any shares of its Class A Common Stock under its ATM Program. As of September 30, 2025, the Company had 1,250,000 shares remaining for sale under the ATM Program. The Company has no near-term intention to utilize the ATM Program.

Previous wording

Consolidated working capital of the Company was $205.5 million at June 30, 2025, compared to $197.8 million at September 30, 2024. Cash and cash equivalents were $20.4 million at June 30, 2025, compared to $40.8 million at September 30, 2024. The Company's current ratio was 1.7 at June 30, 2025 and 1.5 at September 30, 2024, respectively.

Current wording

Consolidated working capital of the Company was $164.3 million at December 31, 2025, compared to $169.7 million at September 30, 2025. Cash and cash equivalents were $31.4 million at December 31, 2025, compared to $32.4 million at September 30, 2025. The Company's current ratio was 1.5 at both December 31, 2025 and September 30, 2025, respectively. As of December 31, 2025 and September 30, 2025, the Company had net contract assets for projects recognized using the over time method totaling $109.8 million and $99.7 million, respectively, which primarily represent unbilled revenues, net of deferred revenues related to customer deposits and progress billings. Net contract assets at December 31, 2025 and September 30, 2025 predominantly related to ongoing projects with Tesla. Unbilled revenues are generally expected to be invoiced upon the attainment of certain contractual conditions and milestones. The Company continues to perform according to the general terms and conditions of its contractual arrangements with Tesla. Customer delays within the energy storage business have impacted the timing of projects, and consequently, have resulted in invoicing delays for this business.

Previous wording

(1)Lease obligations have not been discounted to their present value.

Current wording

(2)Lease obligations have not been discounted to their present value.

Previous wording

(2)Includes $4,472 of severance and other employee termination benefit obligations, as well as $5,286 of deferred purchase price and contingent consideration obligations related to acquisitions completed in prior years.

Current wording

(3)Includes $775 of severance and other employee termination benefit obligations, as well as $5,061 of deferred purchase price and contingent consideration obligations related to acquisitions completed in prior years.