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, 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.

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, 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 Peninsula Parent LLC, d.b.a. Propelis Group ("Propelis"), 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 or supply chain disruptions, 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 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 beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to ou…

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 product identification, and the design, manufacturing, service and sales of high-tech custom energy storage solutions. The segment historically provided 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 historically provided 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.

Current 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 product identification, and the design, manufacturing, service and sales of high-tech custom energy storage solutions including coating and converting lines. The segment historically provided 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 historically provided 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.

Previous 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.

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 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 including coating and converting lines, 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, for the three months ended March 31, 2026, the Company's portion of earnings (losses) for its equity-method investment in Propelis includes the months from October 2025 through December 2025. For the six months ended March 31, 2026, the Company's portion of earnings (losses) for its equity-method investment in Propelis includes the months from July 2025 through December 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”), 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.

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. In addition, adjusted EBITDA does not include depreciation, intangible amortization, interest expense and other items incurred by Propelis. Reportable Segments adjusted EBITDA is also determined before corporate and non-operating expenses. 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-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.

Current wording

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the three and six-month periods ended March 31, 2026 and 2025. Refer to Note 15, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment. Net loss was $21.8 million compared to a net loss of $8.9 million for the three months ended March 31, 2026 and 2025, respectively, and net income was $21.8 million compared to a net loss of $12.4 million for the six months ended March 31, 2026 and 2025, respectively. Refer to "Non-GAAP Financial Measures" below for a reconciliation of net income to adjusted EBITDA.

Previous 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.

Current wording

Sales for the six months ended March 31, 2026 were $543.4 million, compared to $829.5 million for the six months ended March 31, 2025. The decrease in fiscal 2026 sales primarily reflected a sales reduction of $241.9 million resulting from the divestiture of the Company's interest in the SGK Business on May 1, 2025. Additionally, other recent acquisitions and divestitures had a net unfavorable impact of $23.3 million on fiscal 2026 sales compared to the prior year (see Acquisitions and Divestitures below). The fiscal 2026 change in sales also reflected 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 $7.5 million on fiscal 2026 sales compared to the prior year.

Previous 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.

Current wording

Memorialization segment sales for the first six months of fiscal 2026 were $419.4 million, compared to $396.1 million for the first six 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 caskets, cremation equipment, mausoleums, and cemetery memorials. Changes in foreign currency exchange rates had a favorable impact of $1.5 million on the segment's sales compared to the prior year. Industrial Technologies segment sales were $112.4 million for the first six months of fiscal 2026, compared to $161.4 million for the first six 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), the impact of divesting the Company's warehouse automation and tooling businesses in December 2025 (see Acquisitions and Divestitures below), and lower tooling sales for the fiscal 2026 period prior to the divestiture. These declines were partially offset by higher product identification sales, and increased sales of warehouse automation solutions for the fiscal 2026 period prior to the divestiture. 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 $6.0 million on the segment's sales compared to the prior year. In the Brand Solutions segment, sales for the first six months of fiscal 2026 were $11.6 million, compared to $272.0 million for the first six 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, and the divestitures of the Company's European roto-gravure packaging and flexographic print businesses in December 2025 (see Acquisitions and Divestitures below). Fiscal 2026 segment sales reflected sales for the European packaging and print businesses for the period prior to the divestitures.

Previous 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.

Current wording

Gross profit for the six months ended March 31, 2026 was $201.7 million, compared to $269.8 million for the same period a year ago. The decrease in gross profit reflected a reduction of $57.4 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, labor, and other production costs, lower sales and margins on engineered products, and the impact of divesting the Company's warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses in December 2025. 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 fiscal 2025 acquisition of The Dodge Company. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling $1.8 million and $338,000 for the six months ended March 31, 2026 and 2025, respectively.

Previous 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).

Current wording

Selling and administrative expenses for the six months ended March 31, 2026 were $210.9 million, compared to $243.2 million for the same period last year. Consolidated selling and administrative expenses, as a percent of sales, were 38.8% for the six months ended March 31, 2026, compared to 29.3% for the same period last year. Selling and administrative expenses in fiscal 2026 reflected benefits from ongoing cost-reduction initiatives, and a $37.4 million reduction in selling and administrative expenses from the fiscal 2025 divestiture of the Company's interest in the SGK Business, partially offset by higher compensation costs. Selling and administrative expenses included legal costs related to an ongoing dispute with Tesla, Inc. ("Tesla") totaling $11.2 million in fiscal 2026 and $8.6 million in fiscal 2025 (see Legal Matters below). Selling and administrative expenses included activist shareholder/contested proxy costs totaling $2.5 million in fiscal 2026 and $4.9 million in fiscal 2025. Selling and administrative expenses included fees for receivables sold under a receivables purchase agreement and factoring arrangement totaling $1.1 million in fiscal 2026 and $2.3 million in fiscal 2025. Fiscal 2026 selling and administrative expenses included $11.6 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 $11.5 million of expenses related to the fiscal 2025 divestiture of the Company's interest in the SGK Business, $8.7 million of net gains on the sales of certain significant property and other assets, and a $2.1 million loss on a small divestiture in the Industrial Technologies segment. 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 $7.4 million in fiscal 2026, compared to $4.7 million in fiscal 2025. Intangible amortization for the six months ended March 31, 2026 was $5.6 million, compared to $12.9 million for the six months ended March 31, 2025. The fiscal 2026 decrease in intangible amortization primarily reflected lower amortization following the Company's fiscal 2025 divestiture of its interest in the SGK Business. During the first six months of fiscal 2026, the Company recognized $109.3 million of net pre-tax gains on divestitures (see Acquisitions and Divestitures below).

Previous 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.

Current wording

Adjusted EBITDA for the six months ended March 31, 2026 was $80.0 million, compared to $91.4 million for the six months ended March 31, 2025. Memorialization segment adjusted EBITDA was $87.8 million for the first six months of fiscal 2026, compared to $81.7 million for the first six 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, labor, and other production costs. Adjusted EBITDA for the Industrial Technologies segment was a loss of $7.8 million for the six months ended March 31, 2026 compared to income of $7.9 million for the six months ended March 31, 2025. The decrease in segment adjusted EBITDA reflected the impact of lower sales and margins on engineered products, lower product identification margins, the impact of divesting the Company's warehouse automation business in December 2025, and unfavorable sales mix for warehouse automation solutions for the fiscal 2026 period prior to the divestiture. These declines were partially offset by benefits from cost-reduction initiatives and lower performance-based compensation compared to fiscal 2025. Adjusted EBITDA for the Brand Solutions segment was $22.3 million for the first six months of fiscal 2026, compared to $27.9 million for the same period a year ago. The decrease in segment adjusted EBITDA primarily reflected a reduction of $28.3 million resulting from the fiscal 2025 divestiture of the Company's interest in the SGK Business, partially offset by the inclusion of the Company's portion (40% ownership interest) of Propelis' adjusted EBITDA, which totaled $22.4 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 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.

Current wording

Interest expense for the first six months of fiscal 2026 was $24.7 million, compared to $31.5 million for the same period during the last fiscal year. The decrease in interest expense reflected lower average borrowing levels and lower average interest rates in the current fiscal year. During the second quarter of fiscal 2026, the Company recognized $16.3 million of debt extinguishment charges in connection with the redemption of the Company's 2027 Senior Secured Notes (see Liquidity and Capital Resources below). Other income (deductions), net, for the six months ended March 31, 2026 represented an increase in pre-tax income of $3.0 million, compared to an increase in pre-tax income of $2.5 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 $2.5 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 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.

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 six months of fiscal 2026 represented an expense of $34.6 million, compared to a benefit of $5.1 million for the first six months of fiscal 2025. The difference between the Company’s consolidated income taxes for the first six 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, partially offset by other net discrete tax benefits. The Company’s fiscal 2026 six 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, partially offset by other net discrete tax benefits. The Company’s fiscal 2025 six 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

The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business. 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, ERP system integration costs, and strategic initiatives and other charges. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and divestiture and ERP system integration costs, and items that do not reflect the ordinary earnings of the Company’s operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Current wording

The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business. 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, ERP system integration costs, and strategic initiatives and other charges. In addition, adjusted EBITDA does not include depreciation, intangible amortization, interest expense and other items incurred by Propelis. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and divestiture and ERP system integration costs, and items that do not reflect the ordinary earnings of the Company’s operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Previous 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.

Current wording

(2) Includes fees for receivables sold under the RPA and factoring arrangements totaling $382,000 and $1.1 million for the three months ended March 31, 2026 and 2025, respectively, and $1.1 million and $2.3 million for the six months ended March 31, 2026 and 2025, respectively.

Previous 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.

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 $2.2 million and $1.8 million for the three months ended March 31, 2026 and 2025, respectively, and $11.2 million and $8.6 million for the six months ended March 31, 2026 and 2025, respectively (see Note 18, "Legal Matters" in Item 1 - "Financial Statements and Supplementary Data"). Fiscal 2025 includes costs related to the Company's 2025 contested proxy which totaled $4.5 million for the three months ended March 31, 2025 and $4.9 million for the six months ended March 31, 2025. Fiscal 2025 includes net gains on the sales of certain significant property and other assets of $8.7 million for the six months ended March 31, 2025. Fiscal 2025 also includes loss recoveries totaling $1.2 million for the six months ended March 31, 2025 which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.

Previous 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.

Current wording

** Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $380,000 and $2.4 million for the Memorialization segment, $2.7 million and $192,000 for the Industrial Technologies segment, income of $91,000 and charges of $416,000 for the Brand Solutions segment, and $3.6 million and $16.1 million for Corporate and Non-Operating, for the three months ended March 31, 2026 and 2025, respectively. Acquisition costs, ERP system integration costs, and strategic initiatives and other charges were $449,000 and $3.7 million for the Memorialization segment, $13.1 million and $4.3 million for the Industrial Technologies segment, $3.4 million and $1.1 million for the Brand Solutions segment, and $6.0 million and $11.1 million for Corporate and Non-Operating, for the six months ended March 31, 2026 and 2025, 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 $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.

Current wording

†Strategic initiatives and other items includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling expenses of $782,000 and income of $2.5 million for the three months ended March 31, 2026 and 2025, respectively, and expenses of $2.3 million and income of $1.3 million for the six months ended March 31, 2026 and 2025, 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 $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.

Current wording

Net cash used in operating activities was $67.4 million for the first six months of fiscal 2026, compared to $18.7 million for the first six 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 (losses) on divestitures and sales of assets, and other non-cash adjustments, and changes in working capital items. Net changes in working capital items decreased operating cash flow by $38.0 million and $43.4 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 $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.

Current wording

Cash provided by investing activities was $239.7 million for the six months ended March 31, 2026, compared to cash used in investing activities of $3.9 million for the six months ended March 31, 2025. Investing activities for the first six months of fiscal 2026 primarily reflected capital expenditures of $9.3 million, acquisitions, net of cash acquired, of $524,000, proceeds from sale of assets of $3.5 million, proceeds from sale of investments of $3.0 million, and proceeds from divestitures (net of divested cash) of $243.4 million. Investing activities for the first six months of fiscal 2025 primarily reflected capital expenditures of $18.3 million, acquisitions, net of cash acquired, of $2.2 million, proceeds from sale of assets of $14.6 million, and proceeds from divestiture of $2.0 million.

Previous 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.

Current wording

Cash used in financing activities for the six months ended March 31, 2026 was $168.4 million, primarily reflecting repayments, net of proceeds, on long-term debt of $130.4 million, treasury stock purchases of $5.7 million, dividends of $17.5 million, payment of debt redemption premium of $12.9 million, and payment of debt issuance costs of $1.6 million. Cash provided by financing activities for the six months ended March 31, 2025 was $33.6 million, primarily reflecting proceeds, net of repayments, on long-term debt of $50.2 million, treasury stock purchases of $4.4 million, dividends of $17.0 million, proceeds from net investment hedge of $15.0 million, and $10.2 million of holdback and deferred purchase price payments related to acquisitions from prior years.

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 $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.

Current wording

The Company has a domestic credit facility with a syndicate of financial institutions that was amended and restated in February 2026 and includes a $700.0 million secured revolving credit facility and a $150.0 million secured amortizing term loan. The term loan requires scheduled principal payments of $7.5 million per year, payable in quarterly installments. The balance of the revolving credit facility and the term loan are due on the maturity date of January 31, 2029, subject to the terms and conditions of the amended and restated 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 both the revolving credit facility and the term loan 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 March 31, 2026) 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 of $1.6 million in connection with the amended and restated agreement, which were deferred and are being amortized over the term of the facility. Unamortized costs were $4.6 million and $3.9 million at March 31, 2026 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 $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.

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 March 31, 2026 and September 30, 2025 were $404.8 million and $384.2 million, respectively. Outstanding borrowings on the term loan at March 31, 2026 were $148.8 million. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps) at March 31, 2026 and 2025 was 4.18% and 4.29%, respectively.

Previous 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.

Current wording

The Company previously 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 $3.9 million at September 30, 2025. In January 2026, the Company redeemed all of the outstanding 2027 Senior Secured Notes for a redemption price of 104.313% of the outstanding principal amount of the 2027 Senior Secured Notes, plus accrued and unpaid interest on such notes as of the redemption date. The total amount paid to redeem the 2027 Senior Secured Notes was $320.9 million, which was primarily funded using proceeds from recent divestitures, and additional borrowings under the Company’s domestic credit facility. In connection with this redemption, the Company recognized debt extinguishment charges of $16.3 million during the second quarter of fiscal 2026, which included the write-off of the remaining unamortized direct financing costs of $3.4 million.

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 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.

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 March 31, 2026 and September 30, 2025, the amount sold to the Purchasers was $55.8 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 $66.3 million and $63.7 million as of March 31, 2026 and September 30, 2025, respectively.

Previous 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.

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 March 31, 2026. The principal amount of receivables sold under this arrangement was $38.8 million during the six months ended March 31, 2025. 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 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.

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 $4.6 million and $6.1 million at March 31, 2026 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 €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.

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 ($6.9 million). The facility also provides €14.0 million ($16.1 million) for bank guarantees. This facility has no stated maturity date and is available until terminated. Outstanding borrowings under the credit facility totaled €659,000 ($774,000) at September 30, 2025. There were no outstanding borrowings under the credit facility at March 31, 2026. The weighted-average interest rate on outstanding borrowings under this facility was 4.60% at March 31, 2025.

Previous 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.

Current wording

Other borrowings totaled $6.4 million and $7.2 million at March 31, 2026 and September 30, 2025, respectively. The weighted-average interest rate on these borrowings was 1.90% and 2.16% at March 31, 2026 and 2025, respectively.

Previous 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.

Current wording

The fair value of the interest rate swaps reflected a net unrealized loss of $820,000 ($621,000 after tax) and $2.3 million ($1.8 million after tax) at March 31, 2026 and September 30, 2025, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1.0 million ($757,000 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 March 31, 2026 and September 30, 2025, respectively. Assuming market rates remain constant with the rates at March 31, 2026, a gain (net of tax) of approximately $392,000 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 $4,337 and $4,652 as of December 31, 2025 and September 30, 2025, respectively.

Current wording

(1)Total unrealized gains (losses) are presented net of tax of $3,376 and $4,652 as of March 31, 2026 and September 30, 2025, respectively.

Previous 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.

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, 4,814,491 shares remained available for repurchase as of March 31, 2026. 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") 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.

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 six months ended March 31, 2026, 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 $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.

Current wording

Consolidated working capital of the Company was $186.4 million at March 31, 2026, compared to $169.7 million at September 30, 2025. Cash and cash equivalents were $36.1 million at March 31, 2026, compared to $32.4 million at September 30, 2025. The Company's current ratio was 1.6 at March 31, 2026 and 1.5 at September 30, 2025, respectively. As of March 31, 2026 and September 30, 2025, the Company had net contract assets for projects recognized using the over time method totaling $98.5 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 March 31, 2026 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

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

Current wording

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

Previous 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.

Current wording

(2)Includes $810 of severance and other employee termination benefit obligations, as well as $4,836 of deferred purchase price and contingent consideration obligations related to acquisitions completed in prior years.

Previous wording

The significant factors influencing organic sales growth in the Industrial Technologies segment include economic/industrial market conditions, new product development, and the electric vehicle ("EV") trend. Sales within this segment are influenced by the timing of work with the Company's largest energy storage customer, which may be impacted by continuing disputes with such customer, as well as the level of advancement by existing and potential new customers towards adopting new production solutions. For the Memorialization segment, the Company expects that sales growth will be influenced by North America death rates and the impact of the increasing trend toward cremation on the segment's product offerings, including caskets, cemetery memorial products and cremation-related products. On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Following the completion of this transaction, 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. See Notes 7, "Investments" and 16, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data" for further information. The underlying business performance for the Company's investment in Propelis will be influenced by global economic conditions, brand innovation, the level of marketing spending by the investee's clients, government regulation, currency fluctuations, and the ability of the investee to effectively integrate and achieve anticipated synergy benefits from the joint venture.

Current wording

The significant factors influencing organic sales growth in the Industrial Technologies segment include economic/industrial market conditions, new product development, and the energy storage market trends. Sales within this segment are influenced by the timing of work with the Company's largest energy storage customer, which may be impacted by continuing disputes with such customer, as well as the level of advancement by existing and potential new customers towards adopting new production solutions. For the Memorialization segment, the Company expects that sales growth will be influenced by North America death rates and the impact of the increasing trend toward cremation on the segment's product offerings, including caskets, cemetery memorial products and cremation-related products. On May 1, 2025, the Company contributed its SGK Business to a newly-formed entity, Propelis, in exchange for a 40% ownership interest in Propelis and other consideration. Following the completion of this transaction, 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. See Notes 7, "Investments" and 16, "Acquisitions and Divestitures" in Item 8 - "Financial Statements and Supplementary Data" for further information. The underlying business performance for the Company's investment in Propelis will be influenced by global economic conditions, brand innovation, the level of marketing spending by the investee's clients, government regulation, currency fluctuations, and the ability of the investee to effectively integrate and achieve anticipated synergy benefits from the joint venture.

Previous wording

The Matthews Board of Directors has launched a comprehensive review of strategic alternatives for the Company’s entire portfolio of businesses, which was publicly announced in November 2024. The Board is dedicated to driving long-term value creation, and the strategic alternatives process is a reflection of that commitment. In addition to the divestiture of the Company’s interest in the SGK Business, the Company also recently completed the divestitures of its warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses during the first quarter of fiscal 2026. The Company's strategic alternatives review to enhance shareholder value creation remains ongoing. The Company also initiated cost reduction programs during the fourth quarter of fiscal 2024, which were primarily focused on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions. The Company is reviewing further cost reduction actions for fiscal 2026.

Current wording

The Matthews Board of Directors has launched a comprehensive review of strategic alternatives for the Company’s entire portfolio of businesses, which was publicly announced in November 2024. The Board is dedicated to driving long-term value creation, and the strategic alternatives review process is a reflection of that commitment. In addition to the divestiture of the Company’s interest in the SGK Business, the Company also recently completed the divestitures of its warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses during the first quarter of fiscal 2026. The Company's strategic alternatives review to enhance shareholder value creation remains ongoing. The Company also initiated cost reduction programs during the fourth quarter of fiscal 2024, which were primarily focused on the Company's engineering and tooling operations in Europe, as well as the Company's general and administrative functions. The Company is reviewing further cost reduction actions for fiscal 2026.