MATW - Earnings call transcript Q4 2020 | Matthews International Corporation

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Operator

Welcome to Matthews International Corporation Fourth Quarter and Year-end Fiscal 2020 Financial Results. [Operator Instructions]. At this time, I'll turn the conference over to Bill Wilson, Senior Director of Corporate Development. Mr. Wilson, you may begin.

William Wilson

Rob. you, Thank and and everyone, the International Matthews Good Year-end welcome XXXX Quarter Fiscal Conference Fourth morning, to Call. This is Corporate of Bill Wilson, Senior Director Development. Officer; are and Chief today Bartolacci, Officer. and Executive Financial us our Steve With Nicola, Joe Chief President

in remind for Before earnings that also our website, in call release like last section, accessed our our the on can you Investors we the posted night. would start, www.matw.com, I Investors to section. was The be presentation

discussion forward-looking periodic Private to As could made in report Act statements are a are Form this harbor the being company's differ and to with of of with any today annual discussed Securities on XX-K set safe the results filings reminder, SEC. those cause the that pursuant the in conjunction forth company's Reform other from XXXX. provisions Factors Litigation the

non-GAAP addition, and located the as tables metrics in material financial on and be encourage the consider reconciliation today's And I'll call disclaimer with our you forward-looking turn will these connection In to to and over please now carefully presentation read our financial In information, Steve. any we disclosures discussing included read website. you non-GAAP metrics. statements

Steven Nicola

are I earnings turn good quarter fiscal key and you, the XXXX our for X. fiscal yesterday Thank want year. that fourth consolidated and Bill, to regarding Slide items to There announcement highlight morning. our Please several from financial results

as emphasize we First, the generation to flow this reported continued cash again, challenging company, operating strong in cash environment.

set million. flow operations $XXX from XXXX, the cash company of For new a for record fiscal over

ratio leverage debt quarter. again, recent the reduced company, Second, outstanding the and its during

to XX, X, our debt outstanding XXXX. specifically net our X.X reduced leverage $XXX by we September XXXX, million fiscal at and below ratio For

the into to per difficult impacts continued of adjusted remain COVID-XX, of same a the growth Brand EBITDA basis, segments the acceleration the or all These to into compared year. basis loss intangible quarter COVID-XX for million of share fourth during quarter, has impacts share for in the continued share impact per quarter December in SGK amortization the to quarter compared to a compared last $XX.X million XXXX The share still the quarter goodwill consolidated Consolidated the of from share per earnings of year earnings million $X.XX pandemic current level quarter for varying impacts year. year included as experience On a Solutions included quantify, fourth to Third, quarters per per $X.XX last or amortization share. we XXXX the $X.XX commercial $X.XX of quarter. year. names both our ongoing expense last fiscal segment. respect and was the fiscal reported With the per a of $XX.X trade the $XX.X to XXXX share for certain Also, discontinued reported fiscal write-down fourth expect company GAAP ago. adjusted $X.XX and on or sales, earnings per GAAP we some fourth a

$X.XX the depreciation fiscal XXXX for segment, to related For fourth higher million other and to lower compared or $XX.X share of consolidated program addition last XXXX A in portion the realized $X.XX of expense $XX.X a year. and fiscal compared fiscal expenses. primarily intangible to reduction increase an before or fiscal travel-related share in adjustments and reflected and recent significant the million $X.XX per per expense, cost the the impacts quarter for company's and interest charges XXXX years or the Adjusted last decline reported million million per per ago. Memorialization income loss company fiscal which program. per million share compared for $XX.X expense were $X.XX increase GAAP for year, $X.XX represents reduction $XX.X amortization of which XXXX. share company's the fiscal The Both goodwill, the taxes, EBITDA, amortization million of $X.XX cost per net included was income XXXX $XX.X write-downs Intangible or reflected from was savings for to share share in year a to sales, $XX.X particularly amortization year.

were For earnings the and $X.XX higher year, per EBITDA EBITDA sales. primarily on adjusted to $XXX.X compared compared The million ago. fiscal decrease for earnings share adjusted the expense. year-to-date share last $X.XX non-GAAP the was $XXX.X a and consolidated year adjusted XXXX our reconciliations EBITDA see for per fourth basis, reflected a increase year, non-GAAP share lower adjusted adjusted primarily of interest XXXX Please a in million On website. to fiscal quarter per reflecting

of plans. same decline income average the interest For XX, XXXX fiscal compared the XXXX fourth the in ended fourth the rates quarter quarter XXXX fiscal average million year-to-date year certain fiscal to were reflecting in compared was year. expense the for last current share of for to trust primarily $X was XXXX $XXX,XXX to last Interest ago. earnings the September Investment ago, $X.XX for year fiscal year in year, the reduction reflecting lower for the debt for investments relative $X.X EBITDA. income year, per $X.X and compared $X.XX adjusted $XXX,XXX $X a the quarter for value reflects income in primarily Investment million million Investment changes quarter held XXXX. a to adjusted to company's the for million a compared benefit was

last income net cost $X.X million included For year. million decrease cost. September XXXX the for $X.X pretax represented million the income last of investment pension XX, income XX, income a a quarter The year. and represented and Other decrease the compared the $X.X a year. to September quarter deductions and assets. ended $XX.X income million include year interest XX, same September portion expense post-retirement ended year of loss Other in year nonservice compared net million in on $XX a $X.X and of to deductions method deductions XXXX, ended for million for compared Other related last prior XXXX was $X.X million pretax to and the

September For and pension million XX, was XXXX, compared year. the ended nonservice to portion $X.X the of post-retirement $XXX,XXX cost last quarter

in compared last ended prior review million the to equipment. $XXX,XXX million year to X price sales XXXX of tax $XXX.X last year The of our primarily Please XX, Memorialization year expected XXXX also $X.X million Slide year. $XX.X year XXXX, favorable XX, in an segment were compared impact reflected The Consolidated and Cemetery quarter sales $X pretax the benefit foreign and The ago. income ended benefit million fourth increase resulted ago. reflected of were XXXX a last and had to Memorial quarter an current for loss begin $X.X was million fiscal and nonservice for and compared to caskets product the increase from for to a fiscal international casket for $XXX,XXX expense from cost a pension portion year. of exchange million results. quarter the were generated to to for sales the from income a $X.X primarily year improved for expense the higher in currency the rates benefit. turn income memorial higher same pretax September were to post-retirement of loss primarily For realization cremation XXXX a taxes caskets, Products Changes of for deaths increased of compared COVID-XX. the U.S. compared operating quarter sales loss sales resulted of year. sales increase on to ago. Fiscal a segment on taxes due compared quarter $XXX.X fourth Mausoleum carryback goodwill year a September benefit of quarter million Consolidated the unit write-down. net the the a the

was year memorial orders September XX, primarily the last sales. compared sales by by For memorial of year. $XXX.X segment sales stay-at-home cremation sales related lower Cemetery casket offset $XXX higher product The XXXX, and Memorialization local were of the an sales product in result to million cemetery partially ended on increase were equipment, in impacted million fiscal adjusted to the cemeteries million fourth their year million was compared XXXX limited unfavorable last $XX.X $XX.X access to year. which exchange approximately for an memorials. to $XXX,XXX order had segment compared segment COVID-XX, a Changes order rates impact quarter the of foreign in to ago. families' EBITDA currency Memorialization to sales increase

sales ended the market, decrease and cylinders to were the by the year Brand SGK partially segment surfaces performance-based compared higher the was primarily the on $XXX Sales X. were engineered decreases million year. for travel-related the foreign $X.X Memorialization ago. of year-to-date XXXX segment material merchandising XX, and and revenues impact year with a increased lower turn for of Changes September sales exchange expenses, adjusted rates costs European attributable sales The by benefits and productivity was favorable last had sales, brand higher a million resulted U.S. and same which in brand to XXXX, compared ended initiatives $XXX.X primarily sales increases currency from solutions. These offset million segment lower and in September lower solutions, to label from in of the of million offset EBITDA compensation much COVID-XX. partially Slide declines impact the XX, to quarter quarter For of $XXX.X Please and $XXX.X year. private products sales higher The Solutions compared of million reflected quarter last expense.

sales the SGK the Brand Solutions Fiscal unfavorable Solutions XXXX $XX.X Brand to $XX.X were million for rates for compared on in million for adjusted segment an $X.X million million the to our segment with $XXX.X had SGK fourth shift combined for last The for sales fiscal ago. year. September $XXX.X product mix fiscal higher an year tobacco-related declines last partly EBITDA million cylinders currency last sales segment a compared adjusted unfavorable to margins. quarter pricing compared compared year, unfavorable the the lower XX, impact in to product lower EBITDA XXXX reflected year-to-date of Changes in year. pressure. XXXX was For The which million $XXX.X of shift incremental segment's ended and million have sales generally and was quarter ongoing business, mix primarily The reflected the $XX.X year. year XXXX impact

the sales compared current for year-to-date September initiatives In expense Industrial the savings and travel-related Technologies and Slide for the segment to to reduction in Changes ended automation fiscal foreign $XX.X favorably remained were addition, of for quarter periods. by reflected the cost ago. than same EBITDA impact million on Orders currency access and COVID-XX. current the expenses year last to releases million solutions turn Realized year. quarter primarily warehouse with year systems. XXXX these quarter to The segment recent projects favorable for adjusted X. job has Sales sites lower a performance-based strong, warehouse XX, of a had $XXX,XXX decrease exchange and segment's compensation higher compared the the automation impacted Please ago. complete $XX.X quarter lower order a impacted from but for been year were sales rate

XX, September to ended year lower were XXXX, Industrial warehouse the $XXX.X primarily for Technologies compared sales. For year, million last million fiscal sales automation reflecting $XXX.X XXXX

year. year $X.X quarter EBITDA the consistent currency last the the in year. a was Adjusted sales ended and million company's year. impact million in in lower adjusted flow product accounts segment's year year-to-date $XX.X periods million capital, identification year ago. of was the payment the for year activities $XXX.X fourth for on sales segment's -- an current the to sales of which Cash million segment was from the compared $XXX.X compared offset XXXX, year Cash efforts. receivable last XXXX last had Changes flow to X. million significant $XX.X increase September fiscal reflected activities flow EBITDA decrease primarily were segment million sales, compared expenses. reflected operating compared lower quarter from and operating to primarily particularly collection management for compared cash $XX.X For working a XX, million changes segment's to Technologies XXXX impact unfavorable rates million relatively year-to-date quarter favorable was our with ago. $X.X the for with The with current to from Industrial EBITDA turn $XX.X travel-related in Year-to-date, Please a operating partially the for was last adjusted by The $XXX,XXX compared the fiscal Slide ago.

by As debt quarter its cash result operating the company XXXX the during company's reduced fourth the a strong flow, fiscal million. outstanding $XX.X of

covenant was fiscal $XXX.X current ratio at $XXX debt, the outstanding reduced well was XX, net ratio the at XX, represents compared net debt approximated this XXXX, $XXX X.X its our of leverage the in domestic by within September At at million. X.XX. on the net Outstanding September year, XXXX, for based which debt For XXXX covenant debt XX, covenant company is facility with to credit September debt. million. bank company our less bank outstanding cash, The limit covenant leverage purposes as million

recall, As to negotiated the global facility leverage the covenant ratio X.X the a economic revolving in in due increase you last temporary of will of credit threshold at quarter, XXXX. covenant uncertainties company may back COVID-XX. net This the XX, reduce to renewal the March limit proactively

X-year of at The rate the and As our XX.X were renewed XX, facility. revolving renewed previous receivable credit facility March up revolving maintains terms renewed previously domestic we credit outstanding accounts facility revolving for has to and credit The in provides September facility reported, credit interest XXXX. structure same generally shares $XXX million a the facility XXXX. term. Approximately securitization million borrowings and

the pension quarter, recent the shares XXX,XXX principal-defined contributed to plan. its benefit company During

company company repurchased Year-to-date, repurchase XXX,XXX XXX,XXX addition, the its under the shares. In program. shares approximately purchased share

to this quarterly cash dividend share earlier increased performance Joe XX, increase, in The share. Directors on our is December the reflects This XXXX. concludes from the confidence record Finally, which XXXX November and increase, the financial continued XXth operations. XX, company's dividend $X.XX the of dividend The $X.XXX Board's company's flow. and to comment Board of per stockholders week, consecutive the company's represents review, annual operating now will company's payable the per

Joseph Bartolacci

Memorialization of we circumstances truly underappreciated Again, throughout our long delivered these our we while portfolio Steve. results, financial the pleased most again, colleagues of results. Most continue significant colleagues resiliency we to results, all which offices situations, you, very the pandemic given them particularly keep less that businesses the with days We of strong businesses are Thank delivered of of remaining very our ideal to our our remarkably facet resiliency important our worked proud have more the as to our production instrumental morning. achieving very world demonstrated satisfy Once results, one various while centers, results. than Perhaps work am Good our quarter, this to factories, around operated. of ongoing homes, the the business stable been in their our of is but believe the businesses all acknowledge in XX,XXX company. safe. needs I efforts who in we this and clients' have hard than in

essential the are Of and EBITDA almost deliver to our $XX clients generated success they the we products of million that quarter. recognize up which for have colleagues to our Memorialization and Our segment, and is stepped services, critical of the plate delivered. which particular note

of expected I well pandemic, they businesses during have many these Although the to well. you performed perform may have exceptionally believe

hitting delivering operating EBITDA at for margins XX% business is consider satisfaction This performance, benefiting and with for demand revenue Our and you improvement a saw EBITDA, Funeral customer high example, the Products when level of particularly from a and today business, increase years is XX% increase quarter. Home efforts in a a performance remarkable XX% of the in continuous very business. increased on the

our this production the of the engineered facilities. of beyond pushed as All done facilities team was capacity

with operations many by ever-changing and our thanks a revenue While business to increase our traditional teams results. Even production, country cost receive efforts. assure the had logistics the long or containment country families Cemetery the Products the modest across way a clients while planning keep and with rose, this EBITDA delayed to business to across struggle the reduced also hours Similarly, demand saw improve selected. found services pandemic, critical up grieving that to products worked that warehouse

but it the feel quarter. excuse Cemetery contributor not fully to increase business me, to a recent COVID-related has of Products nevertheless, in revenue opportunity significant was strong Our a the deaths, realize, to begun -- yet

cremation also and EBITDA All provider all, hope to customers Finally, Environmental strong I in business continuing leading orders the very of in recognize in year-over-year and on of equipment as increase the In a whole, the Solutions, a in North our the Solutions world Brand to agree basis, a expand marketing world. modest as revenue in services core more saw a while results around us build as significant changing this increase all our difficult particularly well brand strong Memorialization lines markets. a packaging business, SGK to quarter, their environment. America, that again, as would clients you very saw exceptionally and meet has in segment, a efforts product continue consumer performed backlog our

private surfaces In to to continue segment fact, spot, with energy surfaces quarter part keeping allowed nonwoven reduced business which in and however, their been prior due of managing reported year. struggled continue despite shelves traffic revenues a business, our several a A cylinder, business began the remains consumer which the Similarly, did excellent flat foot in be EBITDA an traditional strong core bright the stores. businesses our date core In challenged. and this particular, deliver businesses to slight their the struggling the commissioning during to has the to large focused due global to our grocers retail decline consolidated label significant continued and which order, SGK team goods markets. struggle segment on tobacco we to and job for equipment reductions quarter as in Unfortunately, results stocked in when business, cylinder, for our compared costs, results the to engineering be retailers and our our successful. of storage who in first of business, the SGK engineering packaging

as expectations fuel our very you have know which the mentioned storage for market, energy business, past, we all and have cells. a in we fast-moving high batteries As lithium-ion in operates

energy achieve In Meanwhile, our results add XXXX we're throughout very orders year. Technologies strong this in in are this miss But which for delays segment, when Industrial the to in year in tissue have to cost result. a our add again, the fact, wins EBITDA to This only new their have business, new engineering and and orders is, business to turnaround services of track significant business business, the in launch those to portfolio this cellular bode caused record In overall by tobacco later taken on $X and with our team critical return our in to together expected to storage million. is deliver continues actions an modest year projects expected delays prior and orders identification all talent And adding we resulted in of and XXXX. product process for orders a segment, the warehouse strong to of goals. automation begun backlog projecting our regarding production XXXX. well team significant

begun also have we alternative discussing the which product, nature solution. believe this potential innovative our proves the of uses for We

These As we noted us have good release, to evidence and management combined and $XXX performance environment our in results Again, strong current cash our press believe we debt reduce the performance as we my for million the fiscal the in business year. are our in operating our remarks is quality the the Steve's do career. allowed in resiliency result of our reflected our of gross of most in the and best our by of stock difficult have part not and people demonstrated operating team as price.

outside can forecast arise, as we results. impact XXXX, and Looking ability still remain difficult control our forward our events to thus, can remains to which of our cautious,

plant our the of performance at and or Although quarter. remain the history overall government those our action localized backlog of Nevertheless, given can company. in our not cause of we in in impact any any businesses, can facilities with shutdowns which orders our disruption outbreaks the our have largest strong businesses clients, experienced significant

proven In a attributed can us our to and of period, new challenging compared our year. this ability business, SGK gives confidence clients, our wins in financial stability competitors even Brand to recent good also onboard in which be our addition, to

increased well meet Our global ability us served capacity in to client even these has demand our in continue times. to difficult

demonstrated ultimately be delivered. due Although these ability results. those uncertain we orders will to during quarterly to will manage ultimately be challenged pandemic, we the our have results may the reflected Moreover, times, believe which in be

expect initiatives should able allow we continue and are operate to cash focus perform businesses, our which to Assuming well. most to on we cost generation, us, our structure to significant to continue again,

our Although be we to this for will current our the time fiscal of current is results relatively not environment, will 'XX at uncertainties expectations in year specific guidance similar results. that providing we deliver present because the

orders the same Nevertheless, due sure the matters cannot have be the to be of quarters, we we have to throughout year, our at coming our our throughout deliver We improve the year. while we to control. sheet stronger outside balance ability better provide of a able time, to hope but to visibility

questions. it let's open Now for up

Operator

our question is first Instructions]. from Daniel Securities. of [Operator the with And Moore line CJS

Daniel Moore

in Curious quarter start stroke fiscal results I fiscal to kind how strong broad the -- in wanted very posted? QX see how terms those continuing, you you the just just you quarter. shaping with Obviously, that Memorialization. of relative see to up

Steven Nicola

mean, I So same that newspapers the read read. all you we

what business, as is today first our to our lot rates And that that elevated -- we of of quarter would abundantly have we're relatively I matter, of we getting the businesses death are parts time. clients of them saw whether seeing rest But packaging, that And in core a the businesses. where aware, that be So need are automation as are critical in consistent and have. into our this going Memorialization what industrial you for quarter businesses remain business. operate last be, it at with XXXX those we whether they performance all to on that be tied it to our

Daniel Moore

the stay-at-home examples back on, one opportunity markers, historically likelihood continuing of the pull And quarter because of talk Do the granite -- bronze any Just still is expect purchasing I is don't that markers? kind families what impact to and X if any know about longer there? thoughts Does we helpful. Very and delayed, or to orders. of you being lingers? things build the now of it set for that but going there's -- memorials obviously,

Joseph Bartolacci

around And of have been last the back. an memorials crisis. I we financial did time those had mean event XXXX-XXXX that this come would kind the

the We next want caution in next coming everybody come I it quarter what doesn't in back XX orders is next the maybe to months. months. Just in XX saw or XX to over the

more at marked. get rather than latter end those the of Now part, the day, at sites the generally beginning but the

now, the you at you that just with know, tell consistent as I hundreds operating with passed deaths, thousands being have can't So are time -- of more come normalized at people right may all should levels you would when. we tell the point rates of of some in to memorialized. which that

Daniel Moore

Understood.

one maybe it about and at I'll Solutions, for Or maybe we've has activity with XX versions, the seen last, like And talk more, same Okay. of been hand starting it status, that for new largely to now months? over. But kind say, what CPGs? just the of level upgrades, folks new conversations larger they're Are designs Brand 'XX? look the the product

Joseph Bartolacci

then you our a at take look and what of take the into at call covers we up the So that business look it, if a core break engineering. underneath surfaces, segment segment, really we we cylinders, that

relatively segment, frankly, frankly, the struggled. for the in-store be grocers work or private bad, would call we business, it we last have challenging quarter do before is we our X And the with Those that. in merchandising environments I strong do our businesses, what whether that On whether despite it that results label displays core really be the that retail so had business. quarter not and

And a to to Oftentimes, the we we have event in But to packaging have have a in-store always been really believe nature business you any efforts pretty XXXX. is hope you not looks significant performed, all sure. mean, uptick give I core done at not for to day, has so try we're it as me critical And At we before a well. amount revise. of And in encourage work expected. of it said, and has spend retail of entice it at robust, the Christmas as that let where done pent-up pleased. since like -- these purpose, in don't anything We take see you and kind and anybody environments. if be look segment there would saw and there whole. the has kinds is we what we We those significant consumers an and of end in that's packaging when much demand of the believe practical been work that significant perspective. retail that a this

gets time let's So store this to months and current out, X will having pandemic state again, by its past X we done any better into openings, without the gets than are investment. say, -- months XX we retail be

the but lot That's out. of we'll period, have of of packaging. maybe wins some had, plays to were we had that lot So in going We that place demand see a at things core were the point just XX be come nature very significant a know months contracts out We packaging at to over visibility pent significant. new buildup meantime, we how think -- expect expect it time. that upticks that were business of in to that have remain that a pandemic canceled, to we're In we this with back at end. We stable business. beginning the the the those the relatively suggest we our don't

Operator

the comes Riley. Burke next The question from with Liam B. line of

Liam Burke

I sort of invest after CPG imagine business? to a you a been could parse I Europe? And through? Joe, U.S. all and wanted shutdowns that side? COVID challenging, have on the business, get continue CPG little whatnot, U.S. has more they how Europe the to Or that, versus on of with influenced the sense

Joseph Bartolacci

great a question. it's So

the on better facets, largest we subdivide lot where products that and industry. we've And food down world, staying and forward. are than sporting they We spend a clients a lot business we of and the a kind and an was subdivide in in that But breakfast it backs the of frankly, cereal break of eating little America, before. of explosion try year in that see the nature, the move we contain what areas, food a of costs this let's and a was divide of is did you things were Whereas our geographically to other the at in of can in things do the significantly You new consumer the work that tied to trying we've North industry. but and seen down. They seen did a first. year in of with beverage normal basis. meet to in -- home industry restaurants We do on number Well, significantly events do there. of demand of new work that spent just number clients beverage the In world clients. fractionally one to

in geographically, spending does shutdowns significantly, that mean I Europe, impacted market in more when to home is this more look But of whole we as portfolio we But was Now businesses, not forever a in at market. less the expect North relatively -- America right. that stays our a consumer probably The overall APAC a less you're reverse. people traditionally than stable. them have general.

we exceptionally of the challenging well expect. what misunderstood that probably think because by So business they which has very performed in was times, market these

printers. not are We

not the the of are design high We spectrum. end

what these France's those We have the example, of work, very core for France. packaging has challenged. very, have that, Air we Air businesses down. and in lot businesses We been significantly times. business is that But spending overall, well do do performed for call challenging a

Liam Burke

And -- on incineration in incineration is front, Great. that the backlog number? have any you cremation do

Joseph Bartolacci

Yes. Yes, we do.

the might occur is as U.K. because of environment. postponed, the we that expect, to were XXXX in done A In lot work in that fact, of expected projects you

those shutdowns, have can't do this have is working and we people would in as epicenter what's as remain accepted that of their the going in incineration U.K. now, little know today. a the various part bit all of Europe I discussion. in probably what's on ramped wait. happening You probably you as well we But projects tell normal environment up right more with they

We at expect a when to year. this today expect this projects but we is those can't done not be least word completed control substantially big control, year,

Liam Burke

revenue giving that XXXX, just you're XXXX, an you guidance, And know relative a or clarification, you're comments, on sort Okay. the Relatively said your over a is of quick but prepared in Joe. basis? steady Even year-over-year EBITDA a I just giving directional sense. us on not on

Joseph Bartolacci

basis, that I revenue for mean, off. that we the more, would our can't we we And can expect deliver speak control materially on have we but more. not be to really knowing but opportunity the guidance we whether give EBITDA

Liam Burke

isn't So EBITDA, it it is revenue.

EBITDA. it's Okay, so

Okay.

Joseph Bartolacci

revenue. was principally and Well, it EBITDA

Operator

line Our is Advisers. next the of Blumenthal Emerald from with Scott question

Scott Blumenthal

this for the gross Terrific one's work you. capital. great performance working year-over-year, margin Steve, there on

other I let's in think you order that And with or one. there. little there? more swing start a cash opportunities Any had $XX bit pull out million of to a something

Steven Nicola

set a are we're points So make. we're couple threshold that progress year. that when think on the that difficult time. capital, Scott, We to and of for I on the It's, certainly all One, made in about working believe a yes, we guess, you working there opportunities. we the environment next

now. when So that through several on we implemented we recall, -- the optimize are if through work you we years systems having one though, our ERP. ERP, opportunity to And we're said ago going that we're global talked about those once our going

more the capital. that in project of is about. embedded we working is about, that for in that one that cost But looking of improvement that the outcomes talked initiative talked we're that from Some we

So expect to 'XX. going quick I suggest be be to to level think and in do same we as that able overly would there's would I at I it's the to But as optimistic achieve more were come. -- fiscal I

Scott Blumenthal

sales working at all? a Have to you capital target enunciated

Steven Nicola

have not. we No,

Scott Blumenthal

with Matthews. that industrial. weren't XX% this Is do to compared you we were and the some in fact you kind And certain higher? time? Is the get backlog right. backlog number, of All sites XX% that us that where give projects there. in just Okay. higher? the customer has that you up can don't at a to backlog know is cremation suspect that on of you for that able ever Joe, gauge I it of I the history to to a largest mentioned it but Maybe size of give in kind

Joseph Bartolacci

other cremation than difficult. X our backlog essentially. than might do more a we our equipment business, expect, Each weeks, lasts of Yes, it's as that in Memorialization one segment you are have not businesses our --

come you, work. and the to perfect I I for win example time in. today we a there. you're caution higher added Well, a a dollar-wise, XX% that's is because, But a than get I before at new backlog. can't continued give that that's this -- get you the to So recent orders U.S. right, higher not Canada into specific though, to to not to Canada. on things example than -- see you couldn't XX% I'll was warehouse we're number XX% probably were give we do can't we out at portfolio where year least. of the Cremation, side, that operating X% because client in

to talked So that's why we when can cylinders I the other get over But there? is of surfaces, cautious about engineering. had on remain of year. puzzle part course and We the And there? the know. in just we don't am in next I get going How

Our located our practical engineering energy where all is which has for function storage is its backlog business, tripled purposes.

hope the with to going that that, contributor control that it's a things number are and those orders over be again, in dollar we're delivered. about a significant not of, of, that talk of amounts I'm Now it very we big But course ultimately you associated we give proud will not we'll the but year. to be

is delivered whether they but control I expectation the don't be can over they'll XXXX, be. of course Our

Scott Blumenthal

any to of an weren't be on you for of able the you venture to number you guess feel much able either that had a get to to you just of sales, Will as QX how customer sites by impact on reasons? Sure. fact

Joseph Bartolacci

expectations simple Could not And million industrial I it's better our $XX they $X were Customer -- the a in our would year-over-year necessarily million, have automation sites? $X have been, I business not they mean, to would result. down. million. fair. million, not that been million, $X that look, answer It's is have $X mean,

I have want you better results don't modest to mislead we I But expected So there. year-over-year We amount. to mean, sure, poor had by a results. year-over-year

year-over-year. So kind that the been to number closer have -- we of would flat would that's

Operator

line Next the Bruce of with Ventures. question Geller Geller comes from

Bruce Geller

the admire here. difficult period company's through very a I resilience

Joseph Bartolacci

we. do So

Bruce Geller

I How a of how call, this storage for how -- you've segment energy Could what exactly business that. potential this opportunity appreciate shareholder, some Solutions? made last big big the you component then is? On And engineering is business references that today? to a As on please to both business. this you elaborate How call your an and the is is a you? large called that And the also for there? within even fits Brand backlog

Joseph Bartolacci

fits let Innovation. of through couple go really But those and -- of That's what me it questions. there. of kind dissect kind a how

utilizes and particularly, they historically has where engineering cylindrical our I to equipment solutions. off, purpose-built technology first in print used packages anything printing that produce and technology, related products. that hygiene, produce and towels, business right capacity our group. work Germany, principally a produce do that Well, is is from do paper gravure that engineering made everything What cylindrical cylinder that is produced solutions in business, that other in I capacity. equipment wallpaper areas So and to printing feminine our solution cylinders tissues, in roller the business Meaning a now over nonwovens,

plates when at form you technology, can over with look investments energy still Now that invested The can are equipment continue small that have there or it business highly produce we've take in for same made the to plates that highly, It we of the and to embossed to us cylindrical cells. in you used we are storage things, take want something fixture you years, we purpose-built the group look produce in be. but necessary of that we with. a embossed calendar that overall business the market It's lithium, a several sophisticated referred fuel And and the or invest in or are is may the used solutions solutions today you how might piece effort is our printing relatively anything of is it types understand business a years battery portfolio. is multiple to raw cells. amongst mixture a fuel that lithium-ion that at to that have and for sheets of in equipment to lithium whatever other

X We have that next it. X, that It be space the matter. your significant contributor protective X, some in year could years hopes of. very, this proud even we intellectual But are the of the property for question? answer or and for have we very over of Does high course very, a that

Bruce Geller

So run is that how on large an today, rate? annualized roughly business

Joseph Bartolacci

We $XX $XX probably million million did Go year. this or ahead.

Bruce Geller

the Or I is? represent? one for -- are others? customers diversified you mean, big business involved with customers that many Is how just that like many customer I'm does that in moment? wondering at many and this how And industry looking how you're

Joseph Bartolacci

operating what in been of lines testing. of been in we've Much pilot has

-- which we has of we've out and obviously of different of Smaller done but the in lot their but right produce pieces to is the So for whether industry players. and a we industry now, lot principally try test they elsewhere. batteries, talked what auto in have to the to work scale. to application And a about, how equipment formulations to different size the players are sold talking than determine production

Bruce Geller

the industry. it? within current position in of that $XX today the So their industry be I'm this a but is with is the something business your based this $XX projected that million could growth with to multiples it to size numbers million in the projected on sure out, today, and growth being you're throw reluctant

Joseph Bartolacci

it But what's to It do multiples know that. produce applied stages I only solution. the Look, be as of hope today. don't a of a in marketplace. the early be the multiples energy we that We could have have mean, other think not all think all we we could We of solution? we're this that. well solution. you be also know, great that available what Is the of We we is development. to it solutions aware

us play. almost question -- hard we in have So space you, relative decade. answer a scale we to But this for hard a to in for I tell will what answer smaller operated

Bruce Geller

segment initial I how my question, should then business? this I highlight And guess, segment even? to it mean, guys in to have engineering you fit the great. That's does an

Joseph Bartolacci

but Well, that and not, our those assuming start discussions. in It's -- it kinds to probably reposition as it. size, something have its into we Industrial have we it current Technologies we'll segment highlight of grows, clearly

Steven Nicola

our which Yes. Brand the cylinders of the in out now, evolved supports business, Europe Bruce, evolution it's right Business it's today. really because

Operator

from question with the next line Securities. Daniel Moore of Your is CJS

Daniel Moore

control maybe expense come temporary as containment that those? of about sort talk just to initiatives of are Again, 'XX, reductions the those balance And additional of the maybe we of cost back things order magnitude wanted that look would and some your at between net of fiscal 'XX? -- in in

Joseph Bartolacci

substantially on expenses, our investment benefit from lockdown, we that And anybody's home. it our we made will -- fairly I XX mean, run estimate it's a that. months So normalized I is are are that's return significant the this bet. of improve there, about for we continue the in of I going I achieved results would to is be that next The U.S. a a I benefit on a have to rate mean, We've that say before. bet. would form call, SAP, I our benefits to in have call we we'll of, based talked good and initiative from. true markets to we fairly people on over are cost and significant anybody's X/X we SAP. our had and mean, utilizing own for XX currently our I way mean, -- German still our go working won't what

Apopka, Our have cremator Florida. to do without site from where do an Unfortunately, travel. of travel. a installation we're service travel. some got -- difficult we get can, to businesses the reducing or to I warehouse a mean, our it's for and to We've on

travel but seeing right a you're now, overall a I else. same going asking environment. and Dan. see. mean change structure side difficult what cost it's be in not we're that forward. really And to containment We'll a is cost it's I our estimate change, hard what maybe right have more just permanent permanent anything entertainment sales in now, we So on the extent might mean more to the than for, our more

Daniel Moore

on see right after little you sense fiscal headwind for holding maybe year? CapEx for you from bit think flow. more -- this could working Steve, maybe, just I seemed cash you're hear a And Any pin get you I And Did benefit that bit like potentially the it Okay. have indicating 'XX in hard. line to that it could a that a 'XX? thought would benefit were capital. down fiscal more you little more

Steven Nicola

at we've got We're capital initiatives going from hold think -- work going the have we hard working year-over-year. from to benefit right, longer-term to on. capital I least working the that Dan. think you're the I initial line do a

flow purposes, to I given modeling on be that cash from I perspective. we're in, prudent respect best I -- a be for we're -- would to CapEx, So think environment going my the that recommendation. With think still

that, traditionally, us So million was year, in be a normal this range. I less would a but year, we see what we than spent now, little million, which mid-$XX might mid-XXs, $XX bit Right million. $XX more than

Daniel Moore

just Perfect. And a -- few undervalued. dollars, the shares an been spent lastly, update that, you least on are adamant at buybacks. obviously, on you've know I

additional we about thinking 'XX? into Just with get reduction how balancing as fiscal debt leverage you're buybacks

Joseph Bartolacci

where all will If environment. $XX, bet we was it buying you to long cash you our to that would back that shares. get applying be that the we generate we think $XX, stock tell in we difficult I right I Dan, our not of was of ourselves what ago, demonstrated ability and generate cash a have Well, is year the the course over

think X. in our I to then move be, where our and we'll the flows we we where it's cash to coming balance we forward, We'll need their created As the think reflect -- still do. able that think well. price where be whatever take not If an do we've important we need headroom action to as does to are part of we

Operator

question next Niewood Phoenix with of David Company. from the Insurance is line Our

David Niewood

customers XXs $XX million it And you exclusive customer. business the about their Tesla specific speak the to -- given $XX specific say of going of Saueressig electrode, numbers been battery popular in talking curious on that relatively happy it's technology. something around to the if the XXX storage of anywhere like. hours, a your has period. the is X difficult about want And if terms the previously. Phoenix talk listening public to multiple as they're discussed, much may in business. domain, one follow-up I what million about even impressive on performance from not need a to battery that's which new suggested electrode we're press done, from was -- of I is with in is wouldn't a fold be tens specifically The all as working may, but press, the dry that mostly with to, dry to their has potential If terawatt issue able energy or gigawatts I popular discussed suggests shareholder, did to when Tesla industry is

it is the terms? is, those question you there it the can to Or Is to think sell right so And broader in exclusivity? about industry?

Joseph Bartolacci

would solutions talk not I'm off, going customers. can't that we're exclusivity anybody operating we confirm tell in our with not space. players as to -- So first providing to going to I do this to individual today deny I you or multiple individual not are customers. have And about we there. out

proven. we've else You're know what is out wonderful talked astronomical. there. right, solution got And that's I'm and the be markets only -- out don't team. turning not IP, about profess But a what can it's could We've to to. that I got wonderful wonderful be think the But got don't to be IP, we look and we've before. -- it's We and I not they

Operator

AIG. the with from is next Austin of The question Nelson line

Austin Nelson

trust? weren't have particularly to it all purchased had the demand to results with Memorialization. about of would to then keep know place have on very really I and actually the on the reported sales What -- strong continued yours you in Memorialization deliver the you able questions in -- will flow is, inability But through the have So mason, that, in you quarter, pent-up been and side? as to And your seeing the and the be to essentially if beyond impressive you up some into were the what memorials growth traded -- do a have very back a the versus to my sense publicly around to follow-up was perceived as pre-need caskets business -- backlog, reopening are cremation later have last surprising Like and pre-need that memorial you customers go the you of quarter. The the there and then kind stuff well I demand were think that demand. question that sales will booked given that the just well? that a wanted what backlog me. specifically happened last sold otherwise you you caskets. do but to we at least is growth did Do many how for memorials? actually go

Joseph Bartolacci

You the obviously understand market.

traded have group but pay. right, our sold -- to our pre-need collect doesn't of sales, large translate have So order an until a to clients us lot advance and they you're that publicly in report

And right. so you're

mean casket market, the our Our again, and markers have -- stone. -- strong behind I on been volume, share that control, of if from for you the bronze pretty we -- at deaths, standpoint stone a is clearly to but around have as not XX% we which And orders to order XX% basis be. But an you expect XX,XXX think but not strong And the we of caskets would been on And where We're translate dissect in come normally rough come. numbers, prior XX,XXX memorials the in time. take is more, our we nonexistent. have that markers much have year of minus. have the of or a about in would look should significantly pre-need Steve, in a plus we to not That, it correct and XX% to we When me, you. -- pieces that share sold do a market. over

say, we will have of XX,XXX markers that let's that. slice ultimately you If XX%, XX% be bronze marked, that

believe. -- in yet to somewhere XX,XXX come, to XX,XXX XX,XXX we So markers that you're

so Now we $XXX there's minus. terms But story how or everything we fast solutions a from the how equipment to or plus units. $XX about niches And well. -- other $XX XX% urns of whole, is in -- we memorials million as or other and that better to than operate million to are cremation in in service, that as better, probably do sides and we space. XX% today that's million in When of that which and do industry

we'll So on. that time some as moves as of get well

Austin Nelson

very one Solutions. on And Brand helpful. just That's then more

much it I So expected. had was better than

about the customers the you're there. doing I you big congratulations is growing -- what And results, pent-up can core mean, But pandemic look that thought maybe the CPGs caps demand So benefit. just retail for that there some essentially business of And your segment well. lot it thing. kind the And it think packaging me? and if it side. you I was saying on was understand of a The are I I is are way finally at I that of again. guess, that always end kind

end And essentially there's those So when I'm normalization, kind have trying But to to to and have can, of promotions? do sales you'll some on extent, really they're because No, go caps are get thing. you'll they because there or sorry. promotions that weekly no no that everything lost stock is to up ahead. -- that need we just it are

Joseph Bartolacci

We're store-in-store box don't question. mean, We No, end out no, corrugated guy not lot -- a in-store, I functions. not It's good that puts no, no, do of we no. end cap a do an a it's caps. there.

to example, to graphics $XX These national to do brass whatever for done. marketing of displays that electronics it's is million from for that global, projects refurbishing associated. a we a So are are million to and everything supplier, metal basis glass on complete $XX in-store large television

I we places because that We are We And not pent-up suggest we things also do come and in would foot think again, traffic, fast spend the will give of you redo industry. going them, a fast program do not some talk in we are do the that desire have. not done in-store work number have it national the displays on that that sales and lost industry, to with where had in to just work it's but lot about can't exact know. that food work those may that sense a food I large like same in-store had back. -- a therefore, have we've you're not I as a don't

these to will be, given the they turn be anyway. quarter hitting pandemic, it will that usually season, Our at with worth recurring all in be almost we'll base reopen, years' the of one stores timing of time. that our have investment come discussions vaccines are our out when those two And delayed which biggest if client around to there's what right pre-Christmas is

get we're to X fairly we're able to So on this next bullish X that, presuming through months.

Austin Nelson

That Yes. lot been... helpful. projects That sounds have very a There sense. of capital that makes essentially are big

Joseph Bartolacci

They're $XXX,XXX are. about projects. they not We're Yes, not talking small.

Operator

additional end At at time. this the of questions Bill, time, we we've reached session. have the question-and-answer no this

William Wilson

the Thank for your day. And today. our XX-K of for file results, and you, later as us for Matthews. our me Rob, please you. or website. financial you a your again, joining reminder, visit company and plan information and contact thank interest We today the our about to in additional Thank rest Enjoy

Operator

Thank concludes conference. This today's you.

time. for your you this your disconnect lines Thank participation. You may at

Matthews International (MATW) 20 Nov 202020 Q4 Earnings call transcript