MATW - Earnings call transcript Q2 2022 | Matthews International Corporation

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Operator

Greetings and welcome to Matthews International Second Quarter Fiscal Year 2022 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Corporate your Development. my Senior Bill now of Director is to host introduce Wilson, It Thank sir, you you may begin.

William D. Wilson

Thank welcome Officer Nicola, Officer. to are Joe fiscal morning and of Corporate everyone Steve International Senior President me Bill Good conference quarter today With is earnings year you second Financial XXXX and Director our This Wilson, Bartolacci, Chief Development. the Christine. Matthews call. and Chief Executive

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

in segment results reflect addition, Technology businesses engineered of first period products quarter the to segment. the Prior segmentation. surfaces new In beginning fiscal Brand SGK the and a from as Industrial Solutions the company reminder, the XXXX transferred its

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

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

Steven F. Nicola

quarter of for included. key Good the the Bill. morning. our you In fiscal XXXX results second some Thank highlights reviewing

sales for our consolidated an consecutive or sales year current X.X%. of reported representing record business a ago Each reported the to sales million quarter for increase a $XXX of the year-over-year million growth of quarter. First, quarterly and to compared million segments Consolidated sales increased $XXX.X growth. we another for quarter $XX.X

almost the businesses solutions, last or sales. includes segment driven industrial $XX.X compared second grew our for continued the product and increase last energy year identification sales company's growth year. million million reported $XX.X to were XXXX million an technology representing million $X.X energy $XX.X Second, this of $XX.X compared fiscal which for increases of to EBITDA segment These XX%. quarter and warehouse automation, by higher automation and solutions million identification product Adjusted mainly in warehouse business the

as impact EBITDA reduction significantly benefit million Third, material increased with costs and sales other reported company respect inflationary fiscal freight impacts increased consolidated second including of XXXX consolidated higher the to well of the by debt outstanding $XX.X the balance quarter. Fourth, during adjusted an as unfavorable was mitigated the the costs. in labor

was XX, result, debt million March below of cash a net as represents which less XXXX. the debt As company's $XXX

the quarter reductions agreement. company purchase its This receivables debt. resulted the and million with existing receivables $XX trade During receivables replaced the in securitization in facility

asset Russia compared Ukraine year. million share last the GAAP per quarter earnings million the for $XX.X per same quarter current of to the $X.XX net related $X to share basis or GAAP the March a the XXXX. provide $X.X On million company our summary or earnings for and a I'll GAAP basis a non-GAAP metrics ended of on Next a quarter key loss XX, net reported adjusted $X.XX included for downs income conflict. write totaling of

quarter $XX.X On expense million year other for costs. million net company's share by was per and which basis adjustments $X.XX expense was of of $XX.X material was and offset from compared of primarily and sales taxes, $XX million benefit addition, $X.XX amortization acceleration quarter income consolidated higher year. million compared The XXXX amortization, periods the intangible a interest SGK share second labor for amortization segment. second last and expense, or represents Brand the depreciation of in freight increased intangible assets the reflected $XX.X intangible the In growth or Solutions primarily to ago. a fiscal before Consolidated income amortization EBITDA the both for quarter adjusted per the impact fiscal certain costs the non-GAAP XXXX to

for the adjusted the was to per sales share current and reduction the quarter adjusted in earnings non-GAAP quarter EBITDA addition, EBITDA. unfavorable share adjusted in impacted earnings the were compared Brand Adjusted primarily per year reflecting Solutions last Please $X.XX reconciliations see In of by SGK mix segment. current earnings release. our in $X.XX the

compared year. principal million XXXX year-to-date or of million results compared per a to For sales the $XXX.X reported Similar almost the share non-service GAAP ended a the March included year segments business an million for GAAP $X.XX income per consolidated of company's year million XX, to the on pension On predominately $X.X increase company quarter, million $XX.X increased each reported for a growth of representing second to year-to-date of pension XX%. or the related sales plans. a basis. million $XXX.X last ago, our settlement which or six months $XX.X $X.XX net of basis loss earnings costs $XX.X current the is of share net the to

compared primarily was last by year. $X.XX the growth the material higher consolidated this accelerated XX, to asset or impact million periods a for year-to-date offset was increased non-GAAP as $XX.X year Ukraine $XXX.X year addition, months of Consolidated ended I and earlier sales million $XX.X share related expense of labor $X.XX $XX.X On and million to of intangible basis costs Both ago. the first second benefit In expense. the write-downs fiscal noted six included for company's compared costs. amortization million The the share a $XXX.X EBITDA Russia per March million conflict. or amortization the was of intangible XXXX adjusted months to freight per XXXX six reflected quarter totaling

nondeductible XX, to loss ended for adjusted plan. XXXX million primarily the $XX million XXXX year a fees the XX, the company's XXXX reflected The a year reflecting $X.X $X.X of non-service deductions a pension include for losses earnings gains the quarter year a principal Solutions and as per of Interest certain by expense for March expense quarter for to company's March ended year fiscal Other the In average income the last was benefit $X.XX Year-to-date was decline the were interest million charge cash income costs ended a impacted compared fiscal the current and for expense compared year. $X.X costs currency expense for change retirement quarter unfavorable lower share average year a compared and million current compared income a pension Year-to-date post portion by The as result banking its The in of of quarter for March segment. the addition, March deductions $X of last denominated income XXXX The Russia value XX, $X.X related company's million primarily plan. ended XX, primarily settlement revaluation the debt a primarily for in change year, consolidated current and Ukraine net pension trust Year-to-date the The the XXXX on company's reflected year. represents reflects compared first to the ago. declines offset held of reduction current of plans. as as million quarter was in year of was settlement $XXX,XXX in non-service principal EBITDA. reduction the foreign same March of changes million result balances. million increase reflected other in the in impact $XX.X to debt to with SGK was impact was significant net significant $X The $XXX,XXX significant for primarily rates investments year-to-date second asset last the net XXXX and mix XXXX year. write reflected $X.X to expense quarter ago. pre-tax months $X.XX pension a current the Investment compared was related of XX, ago. and million last. XXXX to and partially Other income six fiscal conflict. deductions of adjusted an the and sales expense for of a of lower income of well represented the $XXX,XXX lower downs for of income the quarter interest $XX.X to levels ago. Investment year. $XXX,XXX net of income as the taxes million in the compared of interest the net compared Brand income Investment

Industrial reflected primarily turn months benefit first tax last six for ago, X an of a $X.X begin $XX.X XX%. quarter expense resulted of a company's quarter the to for benefit sales The reflected income $XX.X XXXX, a review Slide million the cost. consolidated million increase the the XX, Please an compared The of year. million business. for benefits to year current pension to Technology from million the to growth second taxes solutions energy year $X March primarily For the Sales ended the $XX.X fiscal higher the our of compared for XXXX or representing approximately segment of segment million results. were storage

quarter. sales increase March to technology In these were quarter. order Year-to-date through representing approximately $XX.X an industrial XXXX XX, the compared for be incoming addition, million continue segment year the or for the improved for and million strong warehouse and $XXX.X product ago, second businesses of XXXX for rates million identification a XX.X%. $XXX.X automation Backlog sales to fiscal

for small partially million was compared a a margins sales the labor for fiscal XX of of second lower Memorialization with of also basis, this XXXX XXXX The increase to unit the segment fiscal of second which during and or second to As On year. million for with an to memorial quarter growth XXXX $XX.X sales The ago. offset higher EBITDA for $XX.X begins a pension $X.X increased compared the were million Slide business a million company year-to-date Industrial million primarily higher to lower segment X. costs. $XXX representing quarter. ago, adjusted sales growth, improved $XXX.X a the was Technology slightly sales million costs Casket reflected last quarter adjusted an $XX.X also X.X%. cemetery by fiscal product of were Industrial Technology as products the segment Please prices. million cemetery and increase subside. completed COVID nearly for impact quarter current volumes doubled were acquisition the the year turn EBITDA year result The $XX.X result compared

compared the well EBITDA X. XXXX million prices SGK ended in cemetery reflected a and caskets million were or bronze memorial segments six compared as million a compared costs. ago last $XX.X sales months changes by current by offset Brand to $XXX.X in $X changes. from unfavorable adjusted XX.X%. increased for to Brand the of Year-to-date was $XX year. significant These merchandising costs segment second increase segment's sales quarter first the brand million to to offset last higher growth labor segment reduction for and sales increased quarter the cost, representing photography an adjusted increased primary the million Brand a months which and The segment million segment XXXX current XXXX million ago our from $XX.X to in compared to of mainly volumes year. by in the rates March expenses. year. were currency European to the million compared Please of and memorialization XX, fiscal had products the ago, sales million $XX.X six an in same sales higher on year of were segments unfavorable business and for which sales currency Memorialization for quarter, for margin as was merchandising Solutions in $XXX.X The These business onboarding March on segment $XX.X packaging the sales decline sales for of Similar compared quarter year steel, Solutions to and year-to-date fiscal SGK increases higher a quarter unfavorable turn increased was reflected Fiscal client of year ago. with significantly Sales primarily second segment the $XXX.X ago. were year $XXX.X drivers labor to new business. last $XX.X million million the to The impact XXXX a primarily impact and million growth higher the million of impact to sales compared year compared increase million the the year sales material favorable segment second EBITDA a XXXX an The sales ago. SGK lumber, compared current year. Solutions foreign improvement. last a quarter of offset related our unfavorable change year was quarter Asia was mix the higher sales. merchandising and million $XXX.X reflected impact an adjusted entertainment unit the For costs, fiscal $XX.X XXXX packaging improved changes to the had XX, $X.X related agency for travel Higher by rate freight significantly were ended addition for effect Slide favorable unfavorable $XXX.X Memorialization EBITDA to mix offset

to receivables reflected highlight the was provided $XXX covenant debt $XXX represented respect $XX million at flow sheet under Brand agreement segment our million. first ended first months at reduction activities change our SGK work margins XXXX the was to reduction ago. quarter resulted was connection to compared balance. flow facility million remote primarily -- XXXX In of March the receivables over new leverage XX, EBITDA million environments addition, impacted million that compared operating March I of million compared important balance of Outstanding company's Cash year. it XX, related and September inefficiencies million the pension for from leverage the based last the debt portion March purchase the fiscal the by sale ended at Please for to trade the million $XX.X to XXXX contributions $XXX Adjusted for million outstanding A $XX.X beginning for $XX.X agreement last of facility our balance by $XXX.X the XX, noted. almost debt $XXX.X and year. our the and significant existing quarter. of ratio XX, net Cash With in turn a the compared debt debt which provided XX.X totaling $XX.X net million months the pandemic by XXXX. principle with was our $XXX.X on million resulted million since operating XXXX receivables company's six end the was just of fiscal XXXX second X.X. replacement year to This fiscal included XX, have during plants leverage credit was million six the operating the quarter debt activities at $XXX cash receivables increase March for of in debt. and production the Slide pension reduced XXXX trade the termination plan Solutions XXXX. $XX.X March outstanding shares Approximately The to and Net in over first to were settlements. domestic at our to ratio securitization that is is in XXXX that our balance we quarter less quarter accrued with XX, million The purchase X. by

company During At of purchased a program. the XXXX share March X.X shares program. under million XXX,XXX remaining the recent shares company approximately the the approximately under quarter authorization XX, had repurchase

operations. and record This Finally, dividend financial Joe review for of per of yesterday May XXXX. comment on concludes The is the company's XX, X, now stockholders common Board payable a our stock. XXXX share the the declared on May $X.XX dividend company's will

Joseph C. Bartolacci

Good Thank morning. you Steve.

strong Ukraine financial of year segments more results We in our make revenue prior are higher an of supply the several the combined currency challenges, otherwise the war rising good pleased another rapidly challenges us report our those Despite strong obvious and continued than quarter exceptionally with the movement, Each challenging the overall results we results negative costs, to to challenges; our chain revenue second reported quarter despite businesses. in record most. allowing and delivered for quarter. the

you timing doesn't and growth Memorialization Well, pressures. from declining increases almost increases strong COVID prior increase have price a deaths. lower with the versus the the the as revenue segment costs. resulting volume match to of the both know our in increases performance mitigate Our inflationary always businesses driven in mitigate was particularly as prices up volumes price industrial price quarter segment our highlight in The all raised recast which related XX% growth year. revenue want Again help in this reported a XX% almost and to our I all technology EBITDA will

product also strong your significant their Although was performance the identification business of energy business storage automation and improvement performance, our and well. as however, driver delivered year-over-year continued largest this

As you represents growing are our businesses. aware, this segment fastest

an still year million proprietary our million. expect particularly exceptional in in $XXX alone in We business this storage as have track backlog businesses Interest over approach with our to remains technology. revenues $XXX energy on our these to dry remained electrode strong segment

largest our continuing reasons are produce We industry battery that level dry world's batteries the the the participants of to electrodes. versus are dry demonstrated next some equipment. to market enter footprint out discussions to dry wet us seeking in small electrode for who significantly believe with production but a We to many importantly auto a due and generation cost electrode production of capital offer produce ability electrodes lower most will be

market We almost intellectual experience, are know property. well decade with how, positioned this of and a very in

commodity, segment products, line and freight strong particularly labor, was performance and cemetery in top Our by continued Memorialization funeral costs. rising offset

future a cost the of costs be more these during mitigate may growth necessary higher challenged changes the organic currency becoming SGK businesses In part was but which to to by structure. permanent prices line like of All labor action our top deliver in raised continues significantly, the are further team quarter.

mix our consumer affecting product shifts product was of our and to both currency impacted companies. and those addition important significant businesses inflationary by most In EBITDA pressures

CBG for volume season rising the businesses. to lower offset marketing rising the actions to clients sure SGK their cost spend softened also in own you've implemented looked heard, resulting SGK costs offset I As labor. this have am as they several in commodity earning’s pricing has of

by to took and the quarter pandemic. company $XXX quarter benefit the the of the our action start since during two also pandemic During as over since retirees to out defined reduction the In stated million. to our This years over the terminated the beginning and our total paid shareholders $XXX plan reduced reduced our U.S. further reduce million. debt debt and we bringing we our I million last total of our employees. $XXX of Further, have total pension we of pandemic over debt by plans the to the benefit obligations benefits

satisfied with for our quarter continue are our We solid the confident performance to ability results. operating and deliver to in

our these the of for strong to in remain our expectations look backlogs year. difficult. still impacting year, The causing significant for concerns All Despite Also be throughout our our in these taken is current before. in appear even we more actions year pressures particularly thanks factors significant balance of many SGK. war to the strong challenges are make of currency with Europe the and very where businesses do date. rates the we As there predicting balance changes Ukraine the estimates to of performance not uncertainty balance than the more our Inflationary presence pricing subsiding. have are the to and

expect of we uncertainties If not that fluctuations, our for on basis. see we believe result, we year now but some this including continue a that better even results million full the to we estimate. EBITDA the deliver can at least for a $XXX best would is of As currency

up it open questions. let's Now to

Operator

[Operator you. Instructions]. Thank

with Securities. Daniel the with Our comes question. from line proceed first CJS of your question Please Moore

Daniel Moore

have the Industrial about start out. in Thank you. where but could stand dig extent, bit mix some and drivers some of clearly Steve. a was about the good to talk margins Joe, Maybe in morning favorable talk this sustainability there, if of more obviously Maybe were Good you morning we with margins of quarter? little kind the Technologies just generated

Joseph C. Bartolacci

expecting my -- the a year-over-year the million well line. of this and comments kind balance of all profitability to performed the comments of we Dan, on drives So, and We're our have one each talked about of pretty approaching the $XXX to as significant almost said of improvement businesses bottom performance for the businesses those said basis. we I performance $XX be after kind in in segment EBITDA. and looked million the that had of we Volume sustain as My we're much year. quarter going in

very, several the year. These just think into very been we're and identification beginning. in include this about comes at results product business do market that new not have of end this for years at our about which product We talking even are I our calendar confident the we

Daniel Moore

may be switching then And to helpful. Memorialization. Very

product I extremely home the surprise think you difficult given said volumes were a funeral slightly, down not comp. obviously

business? get to Just to quickly side are levels of returning a how volumes the on trying normal sense that more of Memorialization

Joseph C. Bartolacci

a the together already we've volumes there coming those products least. is actions that may we're to been are reductions. taken cemetery I [indiscernible] month a backlogs -- It that point at extremely better that The volume this with normal. mean year at date to pricing the the for another segment year this now or Street mitigate expecting back strong well. That business about month our that Yeah, misunderstand are in as to in really has than going strong completely, down issues

Daniel Moore

up normal that far as to trend levels of inflationary then back margins you to the that pricing lag Got will see Thanks. terms and to and how long pressures, follow the queue? jump back in do more expect versus we then when start just do in that is term as to business -- as I the it in in maybe

Steven F. Nicola

going benefit throughout that into our pricing year. we expect would where further the given taken will better. to of structures cost had -- And some quarter, only action further We'll some part see are, quarter. throughout getting that quarter of the expect see second I the some action benefit a this pricing we've would that

tell in will remain you forward, the the move the toward remain part I may whatever be elevated. margins, I volumes year that your see you, as the elevated. revenues So mean, of we'll we more to Excuse me. I would but normal mind in latter tell would that terms start of

Daniel Moore

Understood.

of back Thanks, Okay. couple ups. will jump a with follow

Operator

comes with of line from the question. question your with next Riley. Please B. Our proceed Liam Burke

Liam Burke

Thank you. Steve. Good Joe. Good morning, morning,

Steven F. Nicola

Hi, Liam.

Liam Burke

Joe, are talk any look backlog in the and about systems segment, comments, bit could sales wasn't cremation there? of mentioned your how Memorialization the in it you a the how does

Joseph C. Bartolacci

we we're our human with talk cremation So our strong. units, about when

Our remain elevated. a order side as in next having rates strong But over or good the we that be we're or chain of things, of supply expect things contributor balance the Elevated to difficulty into year getting out. as some the year and well.

Liam Burke

Great, to as conflict? a written and the of down what had be assets result Ukraine

Steven F. Nicola

that take I'll Liam, Yeah, one.

a serves that in We the in Russia primarily have market facility in business. SGK tobacco our Russia

Liam Burke

Okay. going out? how it's to shake uncertain presuming And that's I'm

Steven F. Nicola

eliminate this comes that Yeah, to not, Obviously, facility the or we've whether taken back is ever another online is it actions time. still point there story. in at

Liam Burke

question Well, mean, around you I is, own? of for my fault right, guess I can that your no sudden work through it's pretty you,

Steven F. Nicola

and companies they parts producing well, product Europe tobacco from as for other well. the of exist, still were there Yeah, obviously,

just shifted will volume locations. other has that that expect disruptions. be to been We But there

Liam Burke

Great, okay. Joe. Thanks Steve. Thanks,

Operator

with next Our of comes Sidoti. your McGinnis Please question. line with from question proceed Chris the

Christopher McGinnis

morning. Good taking Thanks question. for my

Steven F. Nicola

morning. Good

Christopher McGinnis

morning. Good

If could talk dynamic? you helping that seek drive just you customers related talk and inflationary to bit could maybe could option just lithium, you in start the about you Thanks. out, to is that environment your about a little more order out just with

Joseph C. Bartolacci

battery. the mean I don't know, I we produce Sure. as would -- you Chris,

cost be to related. that battery, are be cost with going going the the anything or raw going a feedback of of that you viewed overall going respect of obviously, But give anecdotal producing terms favorably to would to reduce to an is in ion lithium up. in where is environment materials I'm the anything So overall

solution. clearly is dry drive up electrode as the the solution, cost raw as going benefits up. well materials And of other lower for will be continues is the to a the this and looking that's lithium production. All production go associated manufacturers other goes of produce with cost to as the lower to battery Our amongst solution, it

favorable us. it's So we think for

Christopher McGinnis

And I can give quarter, conversation bit to on just you. same, little last of stayed since this increased, guess, has this quarter mean, color Thank it I the you that? a

Joseph C. Bartolacci

that talking Yeah. to the or we're OEM and as well as actual actively players manufacturer. Chris, auto includes a auto part more manufacturers dozen

in actually you, interest well timing come issues discussions would on, is I online. tell to dry. our So, There those when we wet both as our as capabilities continue would have as electrode those some

the sell formulate continue which production their are their to machines, people We try to solutions machines precursors as to own batteries. -- for own

continued of discussions in And where few on consider line strong. very, and interesting business, very and not. a very extremely you I very, still So successful a a Is up, it interest a goes. long it us what lot that this obviously term, would direct A attended. we've bullish shows remain bet. trade probably Is mid-term like a

Christopher McGinnis

Great, I appreciate it.

Just a couple more questions around industrial.

where, out the was talk just you going getting some about automation, a equipment, Just there business can with in year a to expectation product, of that chain are talking forward? yesterday over you to running the it's and supply issues company into any ramping I get

Joseph C. Bartolacci

supply clearly chain issues. is there Yes,

of is business as it are suppliers, our we they some I for much business what in part conveyors, warehouse you challenging. whether customers, As software and around that sell would which that significant we look been we companies me, whatever we has the into software automation there as country. that our the at our on, it, tell hands get warehouse -- be, overlay have excuse hardware trying hardware not issues the on, to our automation be their obviously it sorters, may

recognized installations to some product. challenging has the on delayed causes get it So and revenue

that have We backlog have. we

some the that substituting causing but of it and to but finding produce of that a identification, our is team it's componentry, drivers new that that call be million product $XXX the what Is products, very, the today. is perfect? have or we it done over very it to backlog circuit solutions. We alternative use to of used they've with strong challenges, boards also job good the pretty in whether backlog you we When having what's in as us It products, is business well. struggling segment I are see those a would Nope. produce hampering the that wafers whether comes

Christopher McGinnis

Appreciate identification? year with that that just is really of on mean customer, you're I that you they last confident one the it little identification. to where color one more can is Joe. And can Thanks. next for going -- receive about bit just just a it you, a the starting year be it, talk are big sounds product you provide around at the stage to

Joseph C. Bartolacci

to it out we for in months, So, cases respect is as our tell plus some there in with beta I has product. been better. expected, performing are we product you would exactly new The

chip Our call from production going of a would silicon well. I is what lab movement,

mean, We I to caution Lab. are very That are is production it the volumes a we we been in our of and to is going tomorrow, to be launch proposition what true. Teledyne fab not very, But us to has to understand we structure, that terms ongoing instrumental cost lab like the capabilities coming value is again, be moving world. that it expected to effectiveness, this going for remain very, going line we're have and going we're Fab overtake bullish.

Christopher McGinnis

just then the and question you for maybe the Okay, quarter, environment inflationary maybe general? economic kind Steve, appreciate FX FX. Then impact, a you talk can just just and about great. I the on around in it. of then outlook Maybe

Steven F. Nicola

from $X a was in say, million million. impact somewhere a over $XX The the EBITDA perspective But yeah. on quarter total. $X around revenue to it is consolidated for million Sure, range basis, I'd on

absolute the a their when Chris. certainly of And in top $X top it there small. you it reported to line mentioned before, line the that on had as that of side particularly impact SGK at impact segment, look was business, the line, So because a growth the growth that masks keep business. top merchandizing some in million particularly have headwind in very reports you mind But that I

Christopher McGinnis

that. Appreciate

Steven F. Nicola

And Chris second the I'm of your sorry, question. part

Christopher McGinnis

mean, there It FX? have the given impact guidance well. bit not when and was the then going little it I at if a been you just feels also your I guess it look the obviously would inflation as like stronger, out

Steven F. Nicola

the been currency inflation. On would topline we better have that. significantly you what finishes currency is the bottom question no there's today wins the up our I Where been standpoint tell. from interesting Yeah, about $XX April has mean, a been that, about is was that further in for it We line a that from plus thing it client the standpoint, where speak by for it's is but SGK as results which reflects ramping a year, to we've would before. we otherwise while, million masked minus and the talking of what the seeing. going have degradated that that tell been impacting difficult a the and are about we're that says What or business. it's largely can Euro out know side where on some saw don't XXth fluctuation of Steve I disappointing changes

not helpful. but not we're it's currency So in business, the

Christopher McGinnis

taking questions for understand. for Sure, you. I luck Thanks and Thank my good next quarter.

Steven F. Nicola

Thank you.

Operator

proceed Our your line next Gabelli from Please question comes Justin Funds. of Bergner question. with with

Justin Bergner

Good morning, Joe. morning, Good Steve.

Joseph C. Bartolacci

Good morning.

Justin Bergner

Apologies, I little on got the a call late.

the guess I But covered. questions ask to areas clarify, may just I on of last questioning. line So you've

impact revenue XX currency was $X the terms you million in $X and EBITDA, million inflation? mentioned to million of So

Joseph C. Bartolacci

inflation it just fully had obviously, pricing when let's yet. we this inflation, our more is bottom But said I than inflation, way, impacting action is No not implemented we line mean, put anticipated.

Justin Bergner

the XX currency was million but million X not… Okay, X that actual was to that million,

Joseph C. Bartolacci

number. that’s That's hard, a hard

Steven F. Nicola

correct. That's

Joseph C. Bartolacci

Inflation is that I much than higher expect.

Justin Bergner

in just business the haven't what's you if the second could I SGK through talk maybe secondly, you just guess just already, challenged in Got into half? and business, strong that looking what's it.

Joseph C. Bartolacci

know, their you CPGs the that to America is result that Yeah, on their this costs. of so their doing principally Europe. largest commodity as a back challenge trying And the we in in just North offset reality. cutting we are and they're spend cost to and seeing some cut and line what marketing of I saw quarter finding bottom that's mean, maintain particular. rising ways the They're that's in would

we a to are strong just is We back hard back. balance their seeing whether in an and it's -- goes on also product continue seeing does order permanent cannot the But again, as said them. we year. mostly hope start get time, the We marketing begin forward private throughout supply the in coming retail that it I to and trade label will of as reopening experiences. to remarketing, situation that on or chains our the this Going a grocers for tell mean, forth. is shelf. see, we the be business, retailers think refocus We're rebranding recovery evolutionary

a dip. expecting we're So

So the tell the with short story is CPGs. difficult to

as merchandising it comes year. as results we're stronger business But we've seen that brand next back. as it's our that difficult, back after as than private business, experience expect We in quarter label well the or and had prior we quarter it our come but expecting does

Justin Bergner

merchandising when And about with retail? it. Got you that's talk synonymous

Joseph C. Bartolacci

foreign retail we is experiences store the and really are displays for and that the some marketing, look inside it work label, efforts which large store relatively is by at that store. the is two product marketing retailer as like on do the brands as things Yeah, some in well shelf owned in We retail. private and

Justin Bergner

better XXX.X million. in Alright, of million your you first the is it. then half, And XXX Got than great. EBITDA still did guide

seems your in of what in deliver just second and business, headwinds half? it gets that's offset So better a headwinds like than half first better you maybe those half the slightly second have some to the parts

Joseph C. Bartolacci

whether are are -- being there or accept quarter balance the built the large of where customer that. So if within the half side the up confirmation on of this readiness for January that our biggest the has it'd energy warehouse, some year need of not are little one you question, would situations of a have. the facilities wrong that have, currency be me to Whether year. on product that be have control. products has that we better to we it energy, we have within don't been whether you, know are be probably it the Currency the And second whether we balance it in told in way, on we able be ends we deliver of the cremation some some there the moved is than would challenges so in asked that

a for to get to is revenue precursor all. able it recognizing readiness, customer Our us if we haven't been

Justin Bergner

part I up prior annual sequential your was that Got in alluded That's is more but of some technologies your I two if what step One Clearly, questions, as think triggered comments, business. may. that, helpful. expected, in outlook that margins in it. industrial to that…? you or The

Joseph C. Bartolacci

timing to As really last that. frame question expected, kind issue and so of sustainable. here to the where is warehouse really backlogs way It the us. It is we the relates said you to issue of ready strong I very expected the as mean, hope not customer asked. It's our software. is have -- automation before, is best that the much it in accept warehouse business is I we is The readiness.

the last are or new reconfigured We -- player warehouse warehouse. a last usually the into

software our over first. but there overlay hardware hardware, we underlying to has the So get the

we're revenues, So kind are the really look It's those challenges the quality facing excuse -- profitability of to business of that we are kind or timing. of the the me, kinds expect. don't the of

Justin Bergner

it. Got

it unexpected? the favorable a like EBITDA for So but seems mix this quarter was impact there in margin not

Joseph C. Bartolacci

Yeah. greater would mean, been expected I than business I significantly that have what pressures? entire I call -- let you inflationary than the me assure better

Justin Bergner

should some you then And I'm that you the number that can lastly, wait receivables. just the balance think correct it. for and off those interpretation Got share queue? Is I about sheet. or I securitizing went assuming talked

Steven F. Nicola

entirely that's Justin, No, correct.

or cost and of -- had place. secured receivables receivable securitization -- debt. it basically purchase balance same no and it reduction had in with us. debt by sheet prior takes has The facility you're the in past, had impact receivables. that related $XX quarter, this right, the But replaced cost no million. this we that agreement, to difference receivables that So impact a that the economic We've year, off was being to debt we It's still

Justin Bergner

Great. all questions. Thanks my for taking

Steven F. Nicola

welcome. You are

Operator

your CJS is proceed question follow-up Please Our Securities. a with with next question. from Daniel Moore

Daniel Moore

flow translating year? the just or that relates range flow. Obviously up How cash that view the it just to cash as EBITDA see generation translate, the a goal. to do Thank inclusive ops your one trying you a you, million that sense mentioned, is flow in Thanks. as XXX for of for of still cash exclusive to how again, that cash does from or receivable to $XX guide the you last get just million free follow

Steven F. Nicola

year, EBITDA if contribution securitization things. cash a you number Dan. estimates, we flow receivable so One, this our pension you in first serves million Sure, point relative couple actually made plan and it's cash because recall, to of flow, Yeah, if at to the ago, plus $XX interesting mitigate reference to quarter. the a your the look XXX that's million when year for adjusted a the

information we of this we of you've about, the higher sheet talked our the first mitigates flow and reported this as are in debt. that as that a expecting year, of seeing some So on year. secondly, And cash impact level of been expenditure quarter balance capital and

out So flow the year. for and I would use factors those modeling the cash

Daniel Moore

Got it. Thank you.

Operator

time. this to We the to have no comments. over further Wilson at questions I like you turn would for Mr. closing floor back

William D. Wilson

interest us Matthews. you and for Thank today Thank you, in joining your Christine.

your information our or rest the and day. Enjoy website. company our additional results, about contact please For of financial the me visit

Operator

Ladies and gentlemen, this does conclude today's teleconference.

have Thank You your this day. for and disconnect participation a time. you may lines your wonderful at

Matthews International (MATW) 29 Apr 222022 Q2 Earnings call transcript