Matthews International Corporation

What they do

The company operates through three segments: Memorialization (caskets, cemetery memorials and cremation equipment), Industrial Technologies (product identification marking and coding systems, energy storage dry electrode equipment, and previously warehouse automation systems which was divested in early fiscal 2026), and Brand Solutions (cylinders business and a 40% equity interest in Propelis, a brand solutions provider). Revenue is generated from product sales, consumables (inks and replacement parts), and services. A significant portion of Industrial Technologies revenue comes from consumables required for its marking equipment.

Revenue drivers

• Memorialization — Generates revenue from the sale of caskets, cemetery memorials, and cremation equipment. Recent acquisition of The Dodge Company has boosted sales, though volumes are pressured by lower U.S. casketed deaths and input cost inflation.
• Industrial Technologies – Product Identification — Provides marking, coding, and printing systems (laser and ink-jet) along with consumables (inks) for manufacturers across durable goods, food, pharmaceuticals, and other industries. This business grew 5% in the fiscal third quarter of 2026.
• Industrial Technologies – Energy Storage Solutions — Develops and sells dry electrode calendering equipment for lithium-ion battery manufacturing. A long-term growth driver but currently experiencing customer delays and a restructuring program to reduce costs by $10 million annually.

Recent performance

In the fiscal third quarter ended June 30, 2026, total revenue was $246.0 million, down from $258.6 million in the prior quarter and from $284.8 million a year earlier. Memorialization sales increased year-over-year due to the Dodge acquisition, but Industrial Technologies declined due to the divestiture of warehouse automation and ongoing challenges in the engineering business (including a dispute with Tesla). Net cash used in operating activities for the first nine months of fiscal 2026 was $69.5 million, compared to $33.9 million in the same period last year. The company reported a net loss of $24.5 million for fiscal 2025.

Strategy

Management is focused on reducing costs through restructuring, including a $10 million annual savings program in the European engineering operations and post-divestiture support savings. The company continues to invest in dry electrode battery technology, launching the MEODEO demonstration line in Germany to target the EV market. It aims to realize synergy benefits from Propelis (40% owned) and is leveraging its Memorialization commercial platform, including the accretive Dodge Company acquisition. Debt reduction is a priority, with $144 million repaid in fiscal 2026 through June 30.

Risks

• Customer delays in energy storage — Ongoing delays in the energy storage solutions business are expected to extend through the remainder of fiscal 2026, impacting revenue and profitability.
• Tesla dispute impact — A dispute with Tesla is contributing to challenges in the engineering business, resulting in a negative impact on Industrial Technologies segment results.
• Memorialization volume decline — Lower U.S. casketed deaths and escalating input costs that outpace inflationary price increases continue to pressure Memorialization segment margins.
• Environmental and legal liabilities — The company is subject to extensive environmental regulations and potential remediation costs, as well as ongoing legal matters (e.g., a contractual licensing settlement) that could result in significant unforeseen expenses.

Outlook

For fiscal 2026, management revised its adjusted EBITDA guidance to $158-$162 million, including the 40% share of Propelis adjusted EBITDA. The energy storage delays are expected to persist through year-end, and Propelis synergy realization is falling short by an estimated $5 million. Cost reduction actions, including the European restructuring, are intended to align the cost base with future operations and improve margins.