MATTHEWS INTERNATIONAL CORP

MATTHEWS INTERNATIONAL CORP Annual Report Summary – Plain English Edition

Hey there! Let’s break down how Matthews International (NASDAQ: MATW) performed this past year. Think of this like catching up with a friend who’s been busy running a business.

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What Do They Do?

Matthews operates in three main areas:

1. Memorialization products (cemetery markers, caskets)
2. Branding solutions (packaging designs, retail displays for big brands)
3. Industrial tech (energy storage systems, factory automation tools)

This year, they juggled all three areas, but some parts shone brighter than others.

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Financial Snapshot

• Revenue: $1.9 billion (up 5% from last year).
• Profits: $30 million (down from $50 million last year).
• Why profits dropped? Rising costs for materials and labor ate into margins.
• Bright spot: Industrial tech division grew sales by 12%!

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Wins vs. Challenges

Wins ✅

• Landed major contracts for energy storage systems (think renewable energy projects).
• Expanded into e-commerce packaging (hello, custom Amazon boxes!).
• Reduced debt slightly, which investors appreciate.
• Strengthened cybersecurity defenses (critical as more business moves online).

Challenges ❌

• Memorial product sales slowed due to supply chain delays (waiting on granite/metal) and rising cremation rates.
• Inflation made customers more price-sensitive.

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Financial Health Check

• Debt: $900 million (high, but manageable with steady cash flow).
• Cash Flow: Generated $100 million from operations (enough to cover bills and small investments).
• Dividend: Paid shareholders reliably for 25+ years.
• Size: Public stock value ~$657 million – a “Large Accelerated Filer” (Wall Street jargon meaning they face stricter reporting rules).

Verdict: Stable but carrying significant debt.

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Competitor Check

• Memorials: Still #1 in North America, but rivals like Hillenbrand are gaining ground.
• Branding: Losing some market share to tech-focused companies like Avery Dennison.
• Industrial Tech: Outpacing older competitors but facing startups with cheaper solutions.

TLDR: Holding steady, but not dominating any market.

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Leadership & Strategy

• New CEO (Joe Bartolacci) is pushing into automation and renewable energy tech.
• Sold off a smaller graphics imaging division to focus on core businesses.
• No major leadership drama – team appears stable.

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What’s Next?

• Memorials: Expect slow growth (stable but aging market).
• Branding & Industrial Tech: Could grow 8-10% yearly if inflation cools.
• Price hikes likely to offset costs (may risk customer pushback).

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External Factors to Watch

• Cremation trends: Rising rates hurt tombstone sales but boost demand for urns (which they make).
• Eco-friendly packaging rules: Governments pushing sustainability = opportunity for their branding division.
• Energy storage boom: More solar/wind projects = more demand for their industrial tech.

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Key Takeaways for Investors

✅ Pros:

• Reliable dividend payer (25+ years!).
• Growing industrial tech division aligned with renewable energy trends.
• Strong cybersecurity practices for a digitally evolving world.

⚠️ Cons:

• High debt and inflation risks could squeeze profits further.
• Memorial division faces long-term headwinds from cremation trends.
• Competitors are chipping away at market share.

Final Verdict:
Matthews is a steady-but-cautious pick. It’s a fit for income-focused investors who value dividends and believe in their tech bets. If you’re seeking rapid growth or dislike debt-heavy companies, this might not be your match.

Questions? Drop us a line – happy to help! 😊