Matthews International, which provides memorialization products and cremation solutions among its multi-faceted business segments announced their Fiscal 4th Quarter and Fiscal Year End results last Thursday.  Matthews operates on a fiscal year that ends on September 30 of each year.

While the company had some positive attributes for the quarter such as reducing company debt by $53.8 million, Sales and Adjusted EBITDA for the company both declined for the quarter and the year end in comparison to last year for the same time periods.  As a company, 4th Quarter 2024 Revenues totaled about $446.6 million for the quarter as compared to $480.1 million for 4Q23 — that’s a decrease of about 7%.  For the Fiscal Year ending September 30, 2024, Total Revenues totaled $1.79 billion as compared to FY2023’s number of $1.88 billion — that’s a yearly decrease in sales of about 4.8%.

Total Adjusted EBITDA for the company dropped to $205.1 million for the year compared to 2023’s Fiscal Year total of $225.8 million — a drop of about 9.2% on the year.

Matthews operates in three segments — one of which is the Memorialization Segment which includes cemetery products, caskets, and cremation products.  That segment is the largest, by sales of the three segments and accounted for about 46% of company sales.  It did, however, see a reduction in annual sales from $842 million in FY23 to $829 million in FY24 — a drop of about 1.6%.  The segment’s Adjusted EBITDA almost kept up with last years and can be basically called “flat” for the year — it actually dropped by less than 1%. . . from $163.9 million to $162.5 million.

Here’s what Matthews International President and CEO Joseph C. Bartolacci said in prepared statements in the press release about the Memorialization Segment, “The Memorialization segment reported higher adjusted EBITDA for the current quarter despite lower unit volumes, which were related to a decline in U.S. deaths compared to a year ago. Ongoing cost control efforts combined with improved price realization were the key drivers in the improvement in operating margins. . . . .We expect another solid performance for our Memorialization business in fiscal 2025 as U.S. deaths appear to have generally normalized following COVID and we are projecting continued growth in our cremation-related products sales.” 

You can access the Matthews International November 21, 2024, press release here.

Stock Price Rises:  Interestingly enough, on the news of lower quarterly and annual sales and profits, Matthews International stock price jumped almost 21% on Friday after Thursday’s market closed press release.  Matthews International stock closed at $30.84 per share after opening that day at $25.49.

It’s difficult for one to read into why the value went up over 20% in one day, but the company’s earnings press release did show the SGK Brand Solution Segment gaining sales and the situation of retiring over $53 million of debt.

It could also have to do with the Industrial Technologies Segment of the company and opportunities there.   Here’s an interesting statement that President/CEO Bartolacci included in the earnings press release, “Lastly, as growth opportunities for the Industrial Technologies segment continue to emerge, the Company has been exploring strategies with respect to its portfolio of businesses.   Accordingly, we have retained J.P. Morgan to support the evaluation of potential strategic alternatives.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  This is total speculation on my part but, it’s interesting for me to see the stock price jump to over $30 per share on Friday after not closing at that level since March 2024.  I think the terms “potential strategic alternatives” lead to speculation by many that there could be acquistions on the horizon by Matthews or there could be a divestiture of one of the Matthews segments to come.  Again, from my point of view there is plenty of money in the private equity circles looking to invest.

More news from the world of Death Care:

Enter your e-mail below to join the 3,113 others who receive Funeral Director Daily articles daily:

“A servant’s attitude guided by Christ leads to a significant life”

In the last calendar year – dating back to October 16, 2023 – Matthews International stock, the parent company of Aurora Casket and Matthews Environmental Solutions (cremation), has dropped over 44% in a world, by contrast, where the Dow Jones Industrials have risen over 25% for the same dates.

A recent (October 6, 2024) article in Seeking Alpha titled “Matthews International: Lawsuit risks loom, but inflection point could be near”, gives an argument to the thought that the worst of the stock price drop may be behind the company.  Funeral Director Daily will give some quotes from the article and then let you read the article here and decide for yourself on the status of the company.

You may or may not know that Matthews International is a consolidated company with three distinct segments — Industrial Tehnologies, Memorialization, and SGK Brand Solutions.  As you can understand, most of our readers are interested in the Memorialization Segment.

Here’s a few quotes from the Seeking Alpha article authors:

• “Matthews International faces challenges due to an outstanding Tesla lawsuit casting a pall, but historically low stock levels present a potential buying opportunity as operating metrics may improve.”

• “The company’s memorialization business shows promise with expected Q4 improvements, lapping declining death rates and tough comparisons.”

• “Industrial technology struggles with stalled EV battery equipment orders . . . “

• “Cost-saving measures and strategic acquisitions aim to improve profitability. . .” 

• “Matthews International  is a stock we’ve covered for some time now. We’ve had successes with it, but the latest run for the stock has been difficult. The major news has been a Tesla  lawsuit against Matthews, looking for an injunction against the company to stop it from monetizing allegedly stolen “trade secrets” that hadn’t been specified.”

• “Memorialization is a cash cow, and with significant declines in the stock, we are beginning to get to prices where that cash cow will be downside protection.”

• “We also believe there is scope for improvements once again in industrial technology between the new product launch and the outstanding orders.”

Related Article — Matthews International completes Senior Notes offering.  PR Newswire

Here is the website for Matthews International

Here is the website for the Matthews International Memorialization Segment

More news from the world of Death Care:

Enter your e-mail below to join the 3,143 others who receive Funeral Director Daily articles daily:

“A servant’s attitude guided by Christ leads to a significant life”