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MATTHEWS INTERNATIONAL CORP (MATW)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 results and the earnings call were scheduled for Nov 20–21, but the company had not released the 8-K 2.02 or transcript at the time of this writing; consensus expects $290.8M revenue, $0.20 EPS, and $42.2M EBITDA for Q4 (prelim) . Q4 estimates marked with an asterisk; values retrieved from S&P Global.*
  • Strategic catalyst: MATW signed a definitive agreement to sell its Warehouse Automation business to Duravant for total consideration of ~$230M ($223.3M cash plus assumed liabilities); proceeds will be used primarily to reduce debt and strengthen the balance sheet; the business did ~$72M sales in FY2025 .
  • FY2025 guidance: Management reiterated “adjusted EBITDA of at least $190M” including 40% of Propelis on a pro forma basis (updated in Q2; maintained in Q3) .
  • Trend into Q4: Q3 showed stable adjusted EBITDA YoY despite SGK divestiture, with margin gains in Industrial Technologies and Memorialization aided by cost reductions; energy storage engineering remained pressured given Tesla-related litigation impacts, but management cited a favorable arbitration ruling and a growing quote pipeline .

What Went Well and What Went Wrong

  • What Went Well

    • Cost actions drove margin improvement: Industrial Technologies adjusted EBITDA rose to $9.0M vs $4.2M y/y; corporate/non-operating costs fell; company tracking to exceed $50M savings target .
    • Memorialization resilience and accretive M&A: Dodge acquisition contributed ~$6M Q3 sales and ~$1M EBITDA in first partial quarter, with management targeting ~$12M annual EBITDA when fully integrated .
    • Portfolio simplification and deleveraging: SGK divestiture closed May 1; Q3 debt reduced by $120M; announced sale of Warehouse Automation to further reduce leverage toward 2.5x long-term target .

  • What Went Wrong

    • Energy storage engineering softness: Lower engineering sales (energy, coating/converting) weighed on Industrial Technologies revenue, with working capital and Tesla legal costs pressuring cash flow .
    • Higher interest expense and tax effects: Despite relatively flat adjusted EBITDA y/y, higher net interest and the absence of prior-year discrete tax benefits reduced adjusted EPS .
    • Volume headwinds in Memorialization: Casket and cemetery memorial volumes were modestly lower, though price/mix and productivity largely offset the impact .

Selected management quotes:

  • “We are realizing the benefits of the cost reduction actions that we initiated last year… [and] expect further reductions into next fiscal year as a result of the SGK divestiture.”
  • “Order rates and backlog [in warehouse automation] continued to improve… We believe that we will enter fiscal [2026] with very strong backlogs.”
  • “We received a positive ruling from an arbitrator that reaffirmed our… right to sell [dry battery electrode] solutions… Our pipeline now consists of over $150 million in quotes.”

Financial Results

Overall comparables (oldest → newest)

MetricQ2 FY2025Q3 FY2025Q4 FY2025 (Consensus)
Revenue ($USD Millions)$427.6 $349.4 $290.8*
GAAP Diluted EPS ($)$(0.29) $0.49 $0.20*
Adjusted EPS ($)$0.34 $0.28 —
Adjusted EBITDA ($USD Millions)$51.4 $44.6 $42.2*
Gross Margin (%)33.7% 34.9% —

Segment breakdown (sales, adjusted EBITDA)

SegmentQ2 Sales ($M)Q3 Sales ($M)Q2 Adj. EBITDA ($M)Q3 Adj. EBITDA ($M)
Memorialization205.6 203.7 45.0 42.8
Industrial Technologies80.8 87.9 6.0 9.0
Brand Solutions/SGK141.2 57.7 15.6 5.0
Corporate & Non-Op——(15.3) (12.3)

Key KPIs

KPIQ2 FY2025Q3 FY2025
Net Debt ($USD Millions)$781.9 $682.1
Net Debt Leverage (x)4.0x 3.5x
Share Repurchases (QTD)—~386k shares @ $19.96 avg

Note on estimates: Q4 FY2025 revenue $290.8M, EPS $0.20, EBITDA $42.2M; FY2025 revenue $1,469.7M, EPS $0.96; target price $37.0.*

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (Consolidated)FY2025At least $205M (Nov 2024, as referenced) At least $190M (updated in Q2; maintained Q3) Lowered in Apr; maintained in Aug
Dividend per shareQuarterly$0.24 (Q3 FY2024 declared) $0.25 (declared payable 8/25/2025) Raised
Portfolio transaction (Warehouse Automation)Close timing—Expected close before FY2026 Q2-end New timing disclosed
Long-term net leverage targetLong-term—2.5x goal referenced with sale proceeds use Target reiterated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4 FY2025)Trend
Strategic alternatives/portfolio actionsQ2: SGK close early May, evaluation ongoing . Q3: evaluation “progressing… expect to complete… around November” .Sale of Warehouse Automation announced; review remains ongoing .Acceleration toward simplification/deleveraging
Cost reduction and marginsPrograms on track; savings >$50M targeted . Q3: on track to exceed; margins improved in Industrial Tech; lower corporate costs .Continued execution implied; awaiting Q4 print .Positive
Energy storage (DBE) & Tesla litigationQ2: engineering softness; legal costs .Q3: favorable arbitration ruling; Tesla moved to vacate; pipeline ~$150M; first production order (solid-state); separator coating line opportunity .Improving pipeline, legal overhang persists
Warehouse automation marketQ2: mixed;Q3: improved order rates/backlog; strong into FY2026 .Business now signed for sale; execution transfers to buyer
Printhead/AI/tech initiativesQ3: Axion printhead launching; ~$2B TAM; benefits from 2D barcode shift (Sunrise 2027) .Product push ongoing; awaiting Q4 update .Innovation narrative building
Tariffs/macroQ3: memorialization most susceptible; costs passed along .No new Q4 commentary yet.Manageable headwind

Management Commentary

  • Strategic alternatives: “We expect to complete this evaluation over the next several months and will provide an update… in November.”
  • Warehouse automation momentum (pre-transaction): “Order rates and order size are picking up… we will enter fiscal [2026] with very strong backlogs.”
  • Energy storage litigation and pipeline: “We received a positive ruling… [affirming] our right to sell DBE solutions… pipeline now consists of over $150 million in quotes…”
  • Dodge acquisition synergy: “We expect to eventually add around $12 million of annual EBITDA from this transaction.”
  • Debt reduction: “During the fiscal 2025 third quarter, we reduced consolidated outstanding debt by $120 million.”

Q&A Highlights

  • Dodge contribution/run-rate: ~$6M Q3 sales and ~$1M EBITDA; similar run-rate into Q4 .
  • Industrial mix: Energy storage and coating/converting down; warehouse automation improving .
  • Printhead/warehouse synergy: Management sees meaningful connection via barcode printing and conveyor scanning in automated warehouses .
  • DBE commercialization: First production-line order (solid-state player); potential ~$50M separator coating line order in testing with U.S. customer .
  • SGK proceeds and cash bridge: Net debt down $120M Q3; proceeds net of trapped cash, pension assumptions, currency hedges, Dodge acquisition, and fees .

Estimates Context

  • Q4 FY2025 consensus: Revenue ~$290.8M, EPS ~$0.20, EBITDA ~$42.2M; implies sequential step down vs Q3 revenue given loss of SGK contributions and portfolio shift; EBITDA roughly in line with Q3 [Q4 cells in Financial Results table]*.
  • FY2025 consensus: Revenue ~$1,469.7M, EPS ~$0.96; aligns with management’s “at least $190M” adjusted EBITDA pro forma framework including Propelis share [Q4/FY cells in Financial Results table]*.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term catalyst is the Q4 print/call and transaction update; the announced divestiture of Warehouse Automation is a balance sheet and portfolio simplification milestone supporting deleveraging toward 2.5x .
  • Margin improvement drivers (cost actions, pricing, mix) are evident in Q3 and should continue to underpin FY2026 as corporate costs decline post-SGK TSA and Dodge integration synergies scale .
  • Energy storage is a swing factor: legal overhang persists, but a favorable arbitration ruling, pipeline expansion, and initial production order provide optionality; watch order conversion and legal developments .
  • Memorialization remains the “bedrock,” offsetting volume variability with price realization and productivity; Dodge adds accretive EBITDA and cross-sell potential .
  • Liquidity/debt trajectory improving: Q3 debt down $120M; sale proceeds from Warehouse Automation expected to further reduce leverage; monitor cash generation and working capital .
  • Estimate setup: Consensus anticipates a softer Q4 revenue base post-divestitures but EBITDA roughly consistent with Q3; any upside surprise on order intake, Propelis performance, or cost savings could positively skew FY2026 expectations [Financial Results table]*.
  • Risk checks: Interest expense sensitivity, tariffs/materials in Memorialization, timing of portfolio actions (Warehouse Automation close by FY2026 Q2), and DBE commercialization pace remain key .

Sources: Q2 FY2025 press release ; Q3 FY2025 press release ; Q3 FY2025 earnings call transcript ; Q4 FY2025 earnings release schedule ; Warehouse Automation sale announcements and buyer release .