Matthews International Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Tables)

Segment Information (Tables)

9 Months Ended

Jun. 30, 2020

Information About the Company's Segments

The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income.


	Three Months Ended June 30,						Nine Months Ended June 30,
	2020		2019		2020		2019
Sales:
SGK Brand Solutions	$	165,780	$	181,930	$	513,515	$	557,881
Memorialization	162,118		158,217		478,342		474,279
Industrial Technologies	31,524		39,147		107,309		112,711
Consolidated Sales	$	359,422	$	379,294	$	1,099,166	$	1,144,871


Adjusted EBITDA:
SGK Brand Solutions	$	20,846	$	29,891	$	61,808	$	86,612
Memorialization	37,734		36,075		103,020		101,361
Industrial Technologies	4,679		7,278		15,205		15,665
Corporate and Non-Operating	(13,862)		(14,290)		(41,009)		(42,015)
Total Adjusted EBITDA	$	49,397	$	58,954	$	139,024	$	161,623

Acquisition costs ^(1)**	(304)		(2,980)		(2,912)		(8,386)
ERP integration costs ^(2)**	(745)		(2,355)		(2,160)		(6,337)
Strategic initiatives and other charges ^(3)**	(5,570)		(1,037)		(25,040)		(3,149)
Gain (loss) on sale of ownership interests in a subsidiary ⁽⁴⁾	11,208		—		11,208		(4,465)
Legal matter reserve ⁽⁵⁾	(10,566)		—		(10,566)		—
Non-recurring / incremental COVID-19 costs ⁽⁶⁾	(1,871)		—		(2,534)		—
Goodwill write-down⁽⁷⁾	—		—		(90,408)		—
Joint Venture depreciation, amortization, interest expense and other charges ⁽⁸⁾	(2,473)		(866)		(4,732)		(866)
Stock-based compensation	(2,539)		(1,156)		(7,078)		(6,169)
Non-service pension and postretirement expense ⁽⁹⁾	(2,227)		(951)		(6,682)		(2,852)
Depreciation and amortization ^*	(30,168)		(20,483)		(88,418)		(60,759)
Interest expense	(8,082)		(10,508)		(26,935)		(31,068)
Net loss attributable to noncontrolling interests	(420)		(205)		(491)		(541)
(Loss) income before income taxes	(4,360)		18,413		(117,724)		37,031
Income tax benefit (provision)	6,209		(3,989)		22,672		(4,429)
Net income (loss)	$	1,849	$	14,424	$	(95,052)	$	32,602

Note 14. Segment Information (continued)


⁽¹⁾ Includes certain non-recurring costs associated with recent acquisition activities.
⁽²⁾ Represents costs associated with global ERP system integration efforts.
⁽³⁾Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
⁽⁴⁾ Represents a gain (loss) on the sale of ownership interests in a subsidiary within the Memorialization segment.
⁽⁵⁾ Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment (see Note 7, "Debt").
⁽⁶⁾Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19.
⁽⁷⁾Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment (see Note 16, "Goodwill and Other Intangible Assets").
⁽⁸⁾ Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
⁽⁹⁾ Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.

* Depreciation and amortization was $21,833 and $12,757 for the SGK Brand Solutions segment, $5,549 and $4,840 for the Memorialization segment, $1,450 and $1,545 for the Industrial Technologies segment, and $1,336 and $1,341 for Corporate and Non-Operating, for the three months ended June 30, 2020 and 2019, respectively. Depreciation and amortization was $65,274 and $37,364 for the SGK Brand Solutions segment, $15,024 and $14,898 for the Memorialization segment, $4,320 and $4,630 for the Industrial Technologies segment, and $3,800 and $3,867 for Corporate and Non-Operating, for the nine months ended June 30, 2020 and 2019, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $1,794 and $449 for the SGK Brand Solutions segment and $4,128 and $5,923 for Corporate and Non-Operating, for the three months ended June 30, 2020 and 2019, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $697 for the Memorialization segment for the three months ended June 30, 2020. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $9,058 and $3,858 for the SGK Brand Solutions segment and $19,032 and $14,014 for Corporate and Non-Operating, for the nine months ended June 30, 2020 and 2019, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $1,754 for the Memorialization segment and $268 for the Industrial Technologies segment, for the nine months ended June 30, 2020.