Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.24.3
SEGMENT INFORMATION
 12 Months Ended
Sep. 30, 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 sales 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. The accounting policies of the segments are the same as those described in Note 2 "Summary of Significant Accounting Policies". Intersegment sales are accounted for at negotiated prices. Segment assets include those assets that are used in the Company's operations within each segment. Assets classified under "Corporate and Non-Operating" principally consist of cash and cash equivalents, investments, deferred income taxes and corporate headquarters' assets. Long-lived assets include property, plant and equipment (net of accumulated depreciation), goodwill, and other intangible assets (net of accumulated amortization).

Information about the Company's segments follows:
  Memorialization Industrial Technologies SGK Brand Solutions Corporate and Non-Operating Consolidated
Sales to external customers:
2024 $ 829,731  $ 433,156  $ 532,850  $ —  $ 1,795,737 
2023 842,997  505,751  532,148  —  1,880,896 
2022 840,124  335,523  586,756  —  1,762,403 
Intersegment sales:
2024 —  1,367  3,707  —  5,074 
2023 —  1,829  1,073  —  2,902 
2022 —  1,057  1,295  —  2,352 
Depreciation and amortization:
2024 27,768  23,772  38,667  4,563  94,770 
2023 23,738  23,184  44,842  4,766  96,530 
2022 23,228  11,387  64,173  5,268  104,056 
Adjusted EBITDA:
2024 162,586  39,716  61,620  (58,765) 205,157 
2023 163,986  66,278  57,128  (61,583) 225,809 
2022 151,849  56,762  60,120  (58,323) 210,408 
Total assets:
2024 790,098  460,650  532,178  51,964  1,834,890 
2023 794,129  482,444  572,601  38,207  1,887,381 
2022 800,666  414,019  631,291  36,795  1,882,771 
Capital expenditures:
2024 13,749  17,757  12,520  1,192  45,218 
2023 16,868  16,253  14,589  2,888  50,598 
2022 28,899  13,646  14,287  4,489  61,321 
A reconciliation of adjusted EBITDA to net income follows:
2024 2023 2022
Total Adjusted EBITDA $ 205,157  $ 225,809  $ 210,408 
Acquisition and divestiture related items (1)**
(5,576) (5,293) (7,898)
Strategic initiatives and other charges (2)**†
(65,586) (13,923) (28,060)
Non-recurring / incremental COVID-19 costs (3)***
—  —  (2,985)
Highly inflationary accounting losses (primarily non-cash) (4)
(1,027) (1,360) (1,473)
Defined benefit plan termination related items (5)
—  —  429 
Goodwill and asset write-downs (6)
(33,574) —  (92,504)
Stock-based compensation (18,478) (17,308) (17,432)
Non-service pension and postretirement expense (7)
(439) (1,640) (31,823)
Depreciation and amortization *
(94,770) (96,530) (104,056)
Interest expense, including RPA and factoring financing fees (8)
(55,364) (48,690) (28,771)
Net loss attributable to noncontrolling interests —  (155) (54)
(Loss) income before income taxes (69,657) 40,910  (104,219)
Income tax benefit (provision) 9,997  (1,774) 4,391 
Net (loss) income $ (59,660) $ 39,136  $ (99,828)
(1) Includes certain non-recurring costs associated with recent acquisition and divestiture activity, and also includes a gain of $1,827 in fiscal year 2023 related to the divestiture of a business in the Industrial Technologies segment.
(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 legal costs related to an ongoing dispute with Tesla, which totaled $12,399 (See Note 19, "Commitments and Contingent Liabilities"). Fiscal 2023 includes loss recoveries totaling $2,154 which were related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015.
(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.
(4) Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries.
(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.
(6) Fiscal 2024 includes goodwill write-downs within the Industrial Technologies segment of $16,727 (see Note 23, "Goodwill and Other Intangible Assets"), asset write-downs within the Memorialization segment of $13,716 (see Note 24, "Asset Write-Downs"), and investment write-downs within Corporate and Non-operating of $3,131 (see Note 8, "Investments"). Fiscal 2022 includes goodwill write-downs within the SGK Brand Solutions segment of $82,454 (see Note 23, "Goodwill and Other Intangible Assets"), and asset write-downs net of recoveries within the SGK Brand Solutions segment of $10,050 (see Note 24, "Asset Write-Downs").
(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.
(8) Includes fees for receivables sold under the RPA and factoring arrangements totaling $4,830, $4,042 and $1,046 for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.
* Depreciation and amortization was $27,768, $23,738, and $23,228 for the Memorialization segment, $23,772, $23,184, and $11,387 for the Industrial Technologies segment, $38,667, $44,842, and $64,173 for the SGK Brand Solutions segment, and $4,563, $4,766, and $5,268 for Corporate and Non-Operating, for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.
** Acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges were $3,514, $1,002, and $3,517 for the Memorialization segment, $54,357, $4,108, and $5,631 for the Industrial Technologies segment, $3,001, $10,905, and $19,359 for the SGK Brand Solutions segment, and $10,290, $3,201, and $7,451 for Corporate and Non-Operating, for the fiscal years ended September 30, 2024, 2023, and 2022, respectively.
*** Non-recurring/incremental COVID-19 costs were $1,314 for the Memorialization segment, $6 for the Industrial Technologies segment, $1,199 for the SGK Brand Solutions segment, and $466 for Corporate and Non-Operating, for the fiscal year ended September 30, 2022.
† Strategic initiatives and other charges includes charges for exit and disposal activities (including severance and other employee termination benefits) totaling $45,705, $13,210 and $14,596 in fiscal years 2024, 2023 and 2022, respectively. Fiscal 2024 amounts totaling $32,526, $1,379 and $11,800 were presented in cost of sales, selling expense, and administrative expense, respectively. Fiscal 2023 amounts totaling $9,028, $1,925 and $2,257 were presented in cost of sales, selling expense, and administrative expense, respectively. Fiscal 2022 amounts totaling $1,777, $267 and $12,552 were presented in cost of sales, selling expense, and administrative expense, respectively. Accrued severance and other employee termination benefits totaled $42,245 and $7,321 as of September 30, 2024 and 2023, respectively.
Information about the Company's operations by geographic area follows:

  North America Central and South America Europe Australia Asia Consolidated
Sales to external customers:
2024 $ 1,182,523  $ 5,456  $ 522,196  $ 19,514  $ 66,048  $ 1,795,737 
2023 1,219,238  5,260  572,736  19,913  63,749  1,880,896 
2022 1,230,267  4,729  444,606  21,206  61,595  1,762,403 
Long-lived assets:          
2024 799,545  10,040  238,214  14,412  40,437  1,102,648 
2023 806,182  11,690  255,748  14,099  41,194  1,128,913 
2022 822,566  10,787  242,614  14,895  42,778  1,133,640