<SEC-DOCUMENT>0001193125-25-022815.txt : 20250207
<SEC-HEADER>0001193125-25-022815.hdr.sgml : 20250207
<ACCEPTANCE-DATETIME>20250207172656
ACCESSION NUMBER:		0001193125-25-022815
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20250207
DATE AS OF CHANGE:		20250207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MATTHEWS INTERNATIONAL CORP
		CENTRAL INDEX KEY:			0000063296
		STANDARD INDUSTRIAL CLASSIFICATION:	NONFERROUS FOUNDRIES (CASTINGS) [3360]
		ORGANIZATION NAME:           	04 Manufacturing
		IRS NUMBER:				250644320
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09115
		FILM NUMBER:		25602971

	BUSINESS ADDRESS:	
		STREET 1:		TWO NORTHSHORE CENTER
		CITY:			PITTSBURGH
		STATE:			PA
		ZIP:			15212-5851
		BUSINESS PHONE:		4124428200

	MAIL ADDRESS:	
		STREET 1:		TWO NORTHSHORE CENTER
		CITY:			PITTSBURGH
		STATE:			PA
		ZIP:			15212-5851

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MATTHEWS JAMES H & CO
		DATE OF NAME CHANGE:	19780823
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<TYPE>DEFA14A
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<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
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</B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Securities Exchange Act of 1934 </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Preliminary Proxy Statement </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Confidential, for Use of the Commission Only (as permitted by Rule
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Definitive Proxy Statement </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Definitive Additional Materials </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Soliciting Material under <FONT STYLE="white-space:nowrap">&#167;240.14a-12</FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>MATTHEWS INTERNATIONAL CORPORATION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Name of Registrant as Specified In Its Charter) </B></P>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Fee paid previously with preliminary materials </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
<FONT STYLE="white-space:nowrap">14a-6(i)(1)</FONT> and <FONT STYLE="white-space:nowrap">0-11</FONT></P></TD></TR></TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>On February&nbsp;7, 2025, Matthews International Corporation held a teleconference to discuss its
financial results for the fiscal quarter ended December&nbsp;31, 2024. The script for the teleconference is below: </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Conference Call
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">February&nbsp;7, 2025 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Good morning.
I&#146;m Steve Nicola, Chief Financial Officer of Matthews, and with me today is Joe Bartolacci, our Company&#146;s President and Chief Executive Officer. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Before we start, I would like to remind you that our earnings release was posted on the Company&#146;s website, www.matw.com, in the Investors section last
night. The presentation for our call can also be accessed in the Investors section of the website under presentations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Any forward-looking statements in
connection with this discussion are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors that could cause the Company&#146;s results to differ from those discussed today are set forth in
the Company&#146;s Annual Report on Form <FONT STYLE="white-space:nowrap">10-K,</FONT> and other public filings with the SEC. In addition, we will be discussing <FONT STYLE="white-space:nowrap">non-GAAP</FONT> financial metrics and encourage you to
read our disclosures and reconciliation tables carefully as you consider these metrics. In connection with any forward-looking statements and <FONT STYLE="white-space:nowrap">non-GAAP</FONT> financial information, please read the disclaimer included
in today&#146;s presentation materials located on our website. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Now, I will turn the call over to Joe. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Thank you, Steve. Good morning. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To start our discussion today,
I want to provide some color around an important development related to the company&#146;s energy business from earlier this week. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On Wednesday, an
arbitrator in a proceeding that we initiated against tesla over one year ago issued a ruling in which the arbitrator acknowledged our company&#146;s long history, extensive research and development and growing patent portfolio in advanced dry
battery electrode technology and confirmed our right to continue marketing, offering and selling that technology to others. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This ruling effectively clarifies our rights in this groundbreaking technology and <FONT
STYLE="white-space:nowrap">re-establishes</FONT> what we have been saying for years &#150; we have valuable solutions, founded on extensive <FONT STYLE="white-space:nowrap">know-how</FONT> and intellectual property, to support the advancement of dry
battery electrode technology and we have the right to sell it to others. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">After exhausting amicable efforts to negotiate a resolution with Tesla, Matthews
was forced to file for a declaratory judgment in a binding arbitration seeking clarification of Matthews&#146; rights to continue selling our innovative DBE solutions to others.</P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Tesla ignored the contractual obligation to arbitrate confidentially and, instead, initiated litigation in federal court long after we filed for arbitration,
vaguely alleging Matthews had stolen tesla trade secrets.</P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Tesla&#146;s retaliatory lawsuit, coupled with numerous other threats and actions, has impaired our ability
to work with others in the provision of DBE solutions and, as a result, harmed our business.</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">During the past 18 months we dutifully adhered to the terms
of the parties&#146; arbitration agreement, which necessarily prevented us from fully disclosing what was transpiring behind the scenes. But given Tesla&#146;s public filing of the trade secret suit and our requirements under federal securities
laws, we are required to share this news with our shareholders and customers. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As I have said numerous times, we have been working in the battery space
for over a decade and have independently developed significant intellectual property, including a recently issued foundational patent in the USA, that further confirms our development of this ground-breaking technology and our rights to continue
developing and selling it. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Pursuant to the arbitrator&#146;s ruling, we now intend to resume vigorously promoting our DBE solutions. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Given the ongoing confidentiality considerations, I remain limited in what can be discussed. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Moving on to other exciting news, I&#146;ll now share some details on our recent announcement of the sale of SGK brand solutions. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On January 8<SUP STYLE="font-size:75%; vertical-align:top">th</SUP>, we announced the sale of SGK to a newly formed entity created with SGS&nbsp;&amp; Co.,
which will combine the two businesses. We believe that the deal creates a world class provider of brand solutions which should be a highly attractive asset once integration is completed. The transaction will create an entity which begins with almost
$100MM of EBITDA but is expected to generate $50MM of synergies over the next <FONT STYLE="white-space:nowrap">24-30</FONT> months. In addition to the synergies created within the combined entities, the transaction substantially improves Matthews
operating structure and advances our business strategy for the following reasons. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">One, the deal significantly simplifies our operating and corporate structure thereby allowing us to focus on
higher growth and higher margin businesses. We expect that post-training services which we will provide for the new entity, our corporate function can be simplified and reduced by up to $15MM. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Two, the transaction as structured enables us to realize significant value for the SGK brand solutions segment at an attractive multiple for an asset that was
generally considered as dilutive by the market to the overall valuation of Matthews. We received a multiple of 10x for our 60% of SGK that was transferred to the new entity. Significantly higher than anyone in the market had anticipated and about
equal to the estimated value of all of SGK. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Three, proceeds from the transaction will be immediately applied to debt reduction pursuant to our stated
objectives. As a result, our net leverage will improve from 3.6x <FONT STYLE="white-space:nowrap">pre-transaction</FONT> to less than 3x post-transaction which will decline further when we refinance the new entity and cash out our $50MM preferred
instrument. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Four, we retained significant upside in the new entity which we believe upon an exit, will be a much
stronger business than it is now. We also retained several key SGK related assets, our German roto-gravure business and a critical software investment valued at over $20MM. We expect to exit these investments in the near future as we see the
appropriate opportunity. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We can provide additional details of the deal during Q&amp;A. But let me first provide you with some background behind our
discussions with SGS as it&#146;s important for you to understand how committed we have been to the idea of optimizing the full value of our asset portfolio. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We had been working on a deal with SGS and its various owners since 2019. Those discussions included various private equity firms that owned SGS during that
last 5 years and other entities, including a minority business entity or MBE. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We were close to an agreement on a deal in 2020 with the pe firm that owned SGS at that time but the covid
pandemic, and the market pressures that it created brought a restructuring of the SGS ownership. As the world slowly began to recover, we again initiated discussions with SGS and the new pe owner in 2021. But then the Ukraine crisis emerged in early
2022 resulting in a significant hit to commercial productivity in Europe for both businesses and resulted in yet another restructuring of the ownership of SGS. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In 2023, we initiated sale discussions with an MBE outlining a structure where Matthews would retain a portion of a new entity to be created through the
acquisition and the MBE would be the majority owner allowing it to use its minority designation to generate business from consumer goods companies from which we would benefit from as a minority owner. However, the MBE chose another acquisition
alternative. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We then reengaged with the current owners of SGS in early 2024 which led us to the current deal structure. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This was a complex transaction that required significant time to evaluate, negotiate, execute and announce.
It is also a highly accretive transaction that has preserved the true value of SGK. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Why is the multiple that we achieved so attractive? Because even
though Matthews is a minority owner in the deal, SGS is integrating onto SGK&#146;s platform &#150; a platform in which we have invested; a platform that has generated over $1&nbsp;billion in adjusted EBITDA since its acquisition in 2014; and a
platform that played a significant role in returning capital to our shareholders during that time period. Though we will not be running the new entity, the investments we made in SGK drove this deal and will ultimately result in significant value
creation for our shareholders. In fact, one analyst note on the deal stated that we could generate total consideration of close to $700 to $750&nbsp;million which would be almost equal to our market cap prior to the announcement date of the deal.
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are awaiting approval from the federal trade commission and expect the deal to close in the first half of this calendar year. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As we work towards closing this deal, it&#146;s useful to look back on what has been created through our
commitment to optimizing the value of our portfolio. Over the last ten years, and despite the challenges posed by a global pandemic, geopolitical events, and regulatory changes, our consolidated sales have grown by 62%. During that time, our
memorialization business has evolved into an industry leader, our energy business has unlocked significant opportunities to create value that has not been fully appreciated by the market, and our warehouse automation and product identification
businesses have found promising opportunities in innovative segments. We will continue to focus on driving growth at these emerging businesses which will ultimately force us to evaluate the portfolio at an opportune time. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Finally, turning to our upcoming annual shareholders meeting and the contested proxy, I ask you to realize that actions speak louder than words. In the last
30 days, this management team, together with the full support of the Board of Directors have disclosed 2 significant events that have been in the works for several years, but due to confidentiality requirements, we have been unable to disclose. Both
transactions required patience and a clear understanding by the board of directors of the value creation opportunity to be achieved upon success. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In the SGK transaction, we will realize hundreds of millions of dollars more than the market and Barrington
expected thanks to the patience of the board of directors. In the tesla arbitration, the management and the board of directors had the will to initiate an action against one of the largest companies in the world to protect our rights to our highly
valuable and proprietary DBE technology. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Both situations demonstrate the importance of having knowledgeable directors who understand the value and
complexity of our diverse businesses, and how true long term value can be created and protected when long term strategic plans are thoughtfully and patiently developed. This value proposition is in stark contrast to the position of our activist
investor, Barington Capital, whose prospective is short-term and who, remarkably, still knows very little about our businesses. </P>
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Indeed, our long-term shareholders stand to benefit from the knowledge embedded with our directors, especially as we continue our evaluation of strategic alternatives now after the developments
form earlier this week. I ask you to vote for our current slate of directors especially given recent announcements. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Lastly, with respect to our outlook
for the year, we are maintaining our guidance for adjusted EBITDA in the range of $205MM to $215MM; this of course is dependent on the timing of the closing of the SGK transaction. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Now I&#146;ll turn it over to Steve to talk about the results for the quarter. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Thank you, Joe. For the financial review, let&#146;s begin with Slide 7. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the fiscal 2025 first quarter, the Company reported a net loss of $3.5&nbsp;million, or 11 cents per share, compared to a net loss of $2.3&nbsp;million,
or 7 cents per share a year ago. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On a <FONT STYLE="white-space:nowrap">non-GAAP</FONT> adjusted basis, net income attributable to the Company
for the current quarter was $4.3&nbsp;million, or 14 cents per share, compared to $11.3&nbsp;million, or 37 cents per share last year. The decline primarily reflected the impacts of lower adjusted EBITDA, which I will discuss in a few minutes, and
higher interest expense for the current quarter. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Consolidated sales for the fiscal 2025 first quarter were $401.8&nbsp;million, compared to
$450&nbsp;million a year ago. The decline primarily reflected lower sales for the Industrial Technologies segment, mainly reflecting lower engineering sales. Additionally, sales for the Memorialization segment declined for the current quarter
compared to a year ago, primarily due to lower unit volumes. Estimated U.S. casketed deaths declined from the same quarter a year ago. Sales for the SGK Brand Solutions segment were modestly higher than the first quarter last year, which is
continuing to benefit from more stable market conditions. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Consolidated adjusted EBITDA for the fiscal 2025 first quarter was $40&nbsp;million, compared
to $45.5&nbsp;million a year ago. The decrease primarily reflected a decline in the Industrial Technologies segment. </P>
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Adjusted EBITDA for the Memorialization and SGK Brand Solutions segments remained relatively steady compared to last year. In addition, corporate and other
<FONT STYLE="white-space:nowrap">non-operating</FONT> costs were lower than a year ago, partly reflecting the Company&#146;s ongoing cost reduction efforts. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please see the reconciliations of adjusted EBITDA and <FONT STYLE="white-space:nowrap">non-GAAP</FONT> adjusted earnings per share provided in our earnings
release. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">(Pause) </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please move to Slide 8<B> </B>to review
our segment results. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sales for the Memorialization segment for the fiscal 2025 first quarter were $190.5&nbsp;million, compared to $208.1&nbsp;million
for the same quarter a year ago. The decrease primarily reflected lower granite memorial sales and a decline in casket unit volumes. Granite sales were higher last year as, in addition to regular volume, the business was working down backlogs which
had <FONT STYLE="white-space:nowrap">built-up</FONT> during the pandemic. The unit volume declines for caskets primarily reflected lower U.S. casketed deaths. </P>
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Bronze memorial sales were also lower for the quarter. In addition, Memorialization sales for the current quarter were unfavorably impacted by the disposal of the Company&#146;s unprofitable
European cremation and incineration equipment operations. These decreases were partially offset by higher price realization and incremental sales from the acquisition of a casket distributor in January 2024. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Memorialization segment adjusted EBITDA for the current quarter was $36.6&nbsp;million, which was relatively unchanged from $36.7&nbsp;million a year ago. The
unfavorable impact of the decline in sales was partially offset by the elimination of losses in the European cremation and incineration equipment operations as a result of the disposal of the business. In addition, benefits from cost-savings
initiatives and improved pricing also contributed to the current quarter, which were partially offset by higher U.S. healthcare costs. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please move to
Slide 9. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sales for the Industrial Technologies segment for the fiscal 2025 first quarter were $80.5&nbsp;million,
compared to $111.4&nbsp;million a year ago. The engineering business reported significantly lower sales for the current quarter compared to a year ago, primarily reflecting the slowdown in the Tesla project and the impact of the litigation on work
with other customers. Sales for the warehouse automation were also lower for the quarter. In addition, sales for the current quarter were unfavorably impacted by the closure of the unprofitable European automotive business that was acquired in
connection with the Olbrich transaction a few years ago. The product identification business reported modestly higher sales compared to last year. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Adjusted EBITDA for the Industrial Technologies segment for the current quarter was $1.8&nbsp;million, compared to $9.6&nbsp;million a year ago. The decrease
primarily reflected the impact of lower sales for the engineering business. The adjusted EBITDA decline also reflected the impact of lower warehouse automation sales. The declines were partially offset by higher sales and adjusted EBITDA for the
product identification business, lower bad debt and bonus expenses, and benefits from recent cost reduction actions in Germany. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please move to Slide 10. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The SGK Brand Solutions segment reported sales of $130.8&nbsp;million for the quarter ended December&nbsp;31, 2024, compared to $130.5&nbsp;million a year
ago, representing an increase of $282,000. The increase primarily reflected improved pricing to mitigate the impacts of inflationary cost increases and higher sales for our private label business, our European cylinder business, and in the
Asia-Pacific brand market. These increases were partially offset by a decline in brand experience sales and lower sales in the segment&#146;s European brand markets. Currency rate changes had an unfavorable impact of $700,000 on current quarter
sales compared to a year ago. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Adjusted EBITDA for the SGK Brand Solutions segment was $12.3&nbsp;million for the current quarter, compared to $12.9
million&nbsp;a year ago. The decrease primarily reflected higher wages and benefits for the current quarter, including increased U.S. healthcare costs. These increases were substantially mitigated by the benefits of improved pricing to mitigate
inflationary cost increases and the segment&#146;s recent cost reduction actions. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Please move to Slide 11. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Cash flow utilized in operating activities for the fiscal 2025 first quarter was $25&nbsp;million, compared to $27.3&nbsp;million a year ago. Our first fiscal
quarter is typically our slowest, generally reflecting a net operating cash outflow, due primarily to seasonally lower earnings and the payment of <FONT STYLE="white-space:nowrap">year-end</FONT> accruals, taxes, and insurance and other annual
payment items. The current quarter also reflected payments in connection with litigation costs and upfront costs related to our cost reduction actions, which were partially offset by proceeds from asset sales. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Outstanding debt was $809&nbsp;million at December&nbsp;31, 2024, compared to $776&nbsp;million at the end
of September, representing an increase of $32.7&nbsp;million during the fiscal 2025 first quarter. The Company&#146;s net debt (which represents outstanding debt less cash) was $776&nbsp;million at the end of the current quarter. At
December&nbsp;31, 2024, the Company&#146;s net debt leverage ratio was 3.88, which is based on net debt and trailing 12 months adjusted EBITDA. Again, the Company&#146;s first fiscal quarter is generally the slowest cash flow quarter and, similar to
prior years, we expect cash flow and our net leverage ratio to improve over the remainder of the fiscal year. In addition, the $250&nbsp;million cash proceeds from the SGK transaction, which is expected to close
<FONT STYLE="white-space:nowrap">mid-2025,</FONT> will be substantially applied to debt reduction upon receipt. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For the fiscal 2025 first quarter, the
Company purchased approximately 171,000&nbsp;shares under its stock repurchase program. These purchases were solely related to withholding taxes on equity compensation vesting. We remain primarily focused on debt reduction. There were approximately
31&nbsp;million shares outstanding at December&nbsp;31, 2024. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As we disclosed last quarter, we recently initiated cost reduction programs that span several of our
business units and corporate functions. These programs are expected to result in annual consolidated savings up to $50&nbsp;million and, to date, we are on track to achieve and potentially exceed this target. The most significant portions of the
estimated savings will be from our engineering and tooling operations in Europe and our general and administrative costs. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Finally, the Board declared
last week a quarterly dividend of 25&nbsp;cents per share on the Company&#146;s common stock. The&nbsp;dividend is payable February&nbsp;24, 2025, to stockholders of record February&nbsp;10, 2025. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">This concludes the financial review, and we will now open the call for any questions. </P>
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