Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.24.1.u1
Segment Information
 6 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company manages its businesses under three segments: Memorialization, Industrial Technologies and SGK Brand Solutions. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, cremation-related products, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, décor and tissue industries. The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries.

The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, enterprise resource planning ("ERP") integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis. Accordingly, for segment reporting purposes, the Company does not allocate corporate costs to its reportable segments. Corporate costs include management and administrative support to the Company, which consists of certain aspects of the Company’s executive management, legal, compliance, human resources, information technology (including operational support) and finance departments. These costs are included within "Corporate and Non-Operating" in the following table to reconcile to consolidated adjusted EBITDA and are not considered a separate reportable segment. Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.




























Note 14.   Segment Information (continued)

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

Three Months Ended
March 31,		 Six Months Ended
March 31,
  2024 2023 2024 2023
Sales:  
Memorialization $ 222,156  $ 222,889  $ 430,227  $ 429,391 
Industrial Technologies 116,136  125,514  227,510  234,657 
SGK Brand Solutions 132,931  131,177  263,472  264,772 
Consolidated Sales $ 471,223  $ 479,580  $ 921,209  $ 928,820 
Adjusted EBITDA:        
Memorialization $ 46,614  $ 48,030  $ 83,314  $ 87,167 
Industrial Technologies 10,028  15,565  19,650  27,767 
SGK Brand Solutions 15,370  11,020  28,263  23,252 
Corporate and Non-Operating (15,212) (16,168) (28,945) (30,448)
Total Adjusted EBITDA $ 56,800  $ 58,447  $ 102,282  $ 107,738 
Acquisition and divestiture related items (1)**
(2,062) (2,852) (3,299) (4,137)
Strategic initiatives and other charges (2)**
(4,962) (1,280) (10,882) (3,061)
Highly inflationary accounting losses (primarily non-cash) (3)
(390) (160) (710) (1,248)
Stock-based compensation (4,327) (4,278) (8,978) (8,612)
Non-service pension and postretirement expense (4)
(110) (83) (219) (1,471)
Depreciation and amortization *
(23,261) (24,148) (46,784) (47,877)
Interest expense, including RPA and factoring financing fees (5)
(13,783) (13,137) (26,534) (23,808)
Net loss attributable to noncontrolling interests —  (2) —  (58)
Income before income taxes 7,905  12,507  4,876  17,466 
Income tax benefit (provision) 1,122  (3,382) 1,848  (4,694)
Net income $ 9,027  $ 9,125  $ 6,724  $ 12,772 
(1) Includes certain non-recurring items associated with recent acquisition and divestiture activities.
(2) Includes certain non-recurring costs associated with commercial, operational and cost-reduction initiatives, and costs associated with global ERP system integration efforts. Fiscal 2024 also includes costs related to an ongoing contractual dispute which totaled $4,972 for the six months ended March 31, 2024. Fiscal 2023 includes loss recoveries totaling $2,154 for the six months ended March 31, 2023, which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.
(3) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries (see Note 2, "Basis of Presentation").
(4) 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.
(5) Includes fees for receivables sold under the RPA and factoring arrangements totaling $1,238 and $1,090 for the three months ended March 31, 2024 and 2023, respectively, and $2,413 and $1,546 for the six months ended March 31, 2024 and 2023, respectively.
* Depreciation and amortization was $6,914 and $5,711 for the Memorialization segment, $5,571 and $5,916 for the Industrial Technologies segment, $9,669 and $11,319 for the SGK Brand Solutions segment, and $1,107 and $1,202 for Corporate and Non-Operating, for the three months ended March 31, 2024 and 2023, respectively. Depreciation and amortization was $13,327 and $11,285 for the Memorialization segment, $11,948 and $11,769 for the Industrial Technologies segment, $19,241 and $22,379 for the SGK Brand Solutions segment, and $2,268 and $2,444 for Corporate and Non-Operating, for the six months ended March 31, 2024 and 2023, respectively.
** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $1,037 and $333 for the Memorialization segment, $4,431 and $2,437 for the Industrial Technologies segment, $358 and $2,610 for the SGK Brand Solutions segment, and $1,198 and income of $1,248 for Corporate and Non-Operating, for the three months ended March 31, 2024 and 2023, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $1,097 and $711 for the Memorialization segment, $9,799 and $3,374 for the Industrial Technologies segment, $1,221 and $3,131 for the SGK Brand Solutions segment, and $2,064 and income of $18 for Corporate and Non-Operating, for the six months ended March 31, 2024 and 2023, respectively.