| 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.
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Three Months Ended
June 30, |
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Nine Months Ended
June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
| Sales: |
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| Memorialization |
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$ |
208,728 |
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$ |
203,158 |
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$ |
638,119 |
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$ |
633,868 |
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| Industrial Technologies |
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130,533 |
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78,443 |
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365,190 |
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230,928 |
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| SGK Brand Solutions |
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132,647 |
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140,118 |
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397,419 |
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440,480 |
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| Consolidated Sales |
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$ |
471,908 |
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$ |
421,719 |
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$ |
1,400,728 |
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$ |
1,305,276 |
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| Adjusted EBITDA: |
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| Memorialization |
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$ |
39,929 |
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$ |
32,090 |
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$ |
127,096 |
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$ |
118,404 |
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| Industrial Technologies |
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15,041 |
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11,809 |
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42,808 |
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33,377 |
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| SGK Brand Solutions |
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16,364 |
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14,546 |
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39,616 |
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43,422 |
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| Corporate and Non-Operating |
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(15,146) |
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(12,421) |
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(45,594) |
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(40,656) |
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| Total Adjusted EBITDA |
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$ |
56,188 |
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$ |
46,024 |
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$ |
163,926 |
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$ |
154,547 |
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Acquisition and divestiture costs (1)**
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(308) |
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(951) |
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(4,445) |
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(951) |
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Strategic initiatives and other charges (2)**
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(4,694) |
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(6,339) |
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(7,734) |
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(16,912) |
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Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (3)***
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— |
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(301) |
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— |
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(2,204) |
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Highly inflationary accounting losses (primarily non-cash) (4)
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(1,826) |
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— |
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(3,074) |
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— |
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Defined benefit plan termination related items (5)
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— |
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63 |
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(21) |
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(284) |
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Asset write-downs (6)
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— |
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469 |
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— |
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(10,017) |
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| Stock-based compensation |
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(5,023) |
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(5,197) |
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(13,635) |
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(14,128) |
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Non-service pension and postretirement expense (7)
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(85) |
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(238) |
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(1,556) |
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(31,588) |
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Depreciation and amortization *
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(23,936) |
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(22,938) |
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(71,813) |
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(80,163) |
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Interest expense, including RPA and factoring financing fees (8)
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(12,136) |
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(6,659) |
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(35,944) |
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(19,426) |
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| Net loss attributable to noncontrolling interests |
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(67) |
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(18) |
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(125) |
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(56) |
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| Income (loss) before income taxes |
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8,113 |
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3,915 |
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25,579 |
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(21,182) |
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| Income tax benefit (provision) |
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558 |
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(1,040) |
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(4,136) |
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2,311 |
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| Net income (loss) |
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$ |
8,671 |
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$ |
2,875 |
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$ |
21,443 |
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$ |
(18,871) |
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Note 14. Segment Information (continued)
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(1) Includes certain non-recurring costs associated with recent acquisition and divestiture activities.
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(2) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts, net of loss recoveries of $2,154 related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.
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(3) 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.
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(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation").
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(5) Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.
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(6) Represents asset write-downs within the SGK Brand Solutions segment (see Note 17, "Asset Write-Downs").
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(7) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement 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. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. 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.
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(8) Includes fees for receivables sold under the RPA and factoring arrangements totaling $1,212 and $2,758 for the three and nine months ended June 30, 2023, respectively.
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* Depreciation and amortization was $5,807 and $5,835 for the Memorialization segment, $5,815 and $2,459 for the Industrial Technologies segment, $11,164 and $13,334 for the SGK Brand Solutions segment, and $1,150 and $1,310 for Corporate and Non-Operating, for the three months ended June 30, 2023 and 2022, respectively. Depreciation and amortization was $17,092 and $17,448 for the Memorialization segment, $17,584 and $7,643 for the Industrial Technologies segment, $33,543 and $51,119 for the SGK Brand Solutions segment, and $3,594 and $3,953 for Corporate and Non-Operating, for the nine months ended June 30, 2023 and 2022, respectively.
** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $270 and $902 for the Memorialization segment, $120 and $1,183 for the Industrial Technologies segment, $3,897 and $1,970 for the SGK Brand Solutions segment, $715 and $3,235 for Corporate and Non-Operating, for the three months ended June 30, 2023 and 2022, respectively. Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $981 and $2,090 for the Memorialization segment, $3,494 and $1,376 for the Industrial Technologies segment, $7,028 and $7,673 for the SGK Brand Solutions segment, $676 and $6,724 for Corporate and Non-Operating, for the nine months ended June 30, 2023 and 2022, respectively.
*** Non-recurring/incremental COVID-19 costs were $225 for the Memorialization segment, $1 for the Industrial Technologies segment, $74 for the SGK Brand Solutions segment, and $1 for Corporate and Non-Operating, for the three months ended June 30, 2022. Non-recurring/incremental COVID-19 costs were $1,268 for the Memorialization segment, $6 for the Industrial Technologies segment, $464 for the SGK Brand Solutions segment, and $466 for Corporate and Non-Operating, for the nine months ended June 30, 2022.
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