Matthews (MATW) Q1 2026 Earnings Call Transcript

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Wednesday, February 4, 2026 astatine 9:00 a.m. ET

• President & Chief Executive Officer — Joseph Bartolacci

• Chief Financial Officer — Daniel Stopar

Joseph Bartolacci: Thank you, Dan. Good morning. Thanks for joining america contiguous to sermon the fiscal results for Matthews fiscal 2026 archetypal quarter. Today, we aren't conscionable reporting connected a quarter. We are reporting connected the palmy execution of a strategical pivot. Over the past 12 months, we acceptable a people to bring our leverage ratio beneath 3x. I americium pleased to denote that pursuing a bid of actions, we've achieved our goal. During our archetypal quarter, we closed connected the merchantability of our warehouse automation concern for $225 million, representing a precise accretive 15x adjusted EBITDA and a precise accretive after-tax aggregate of 11x for an plus that was highly underappreciated by the market.

In addition, we precocious closed connected the merchantability of Saueressig, our European Packaging and Surfaces concern for a full information of $41 million, including cash, the presumption of pension and different liabilities and promissory notes. Selling the Saueressig assets enabled america to debar important restructuring costs and shed pension liabilities from our books. Saueressig represented the remaining assets of the packaging concern that was not sold oregon transferred successful our transaction with SGS. Saueressig was held backmost from the SGS transaction due to the fact that we would not person received overmuch worth for the business. Instead, we converted the concern to a highly favorable transaction for the company. Since past year, Saueressig EBITDA was lone $1.5 million.

Also, arsenic a effect of the Saueressig transaction and actions taken implicit the past fewer years, our remaining pension liabilities basal good beneath $10 cardinal from good implicit $300 cardinal conscionable a fewer years ago, of which $125 cardinal was unfunded. As a effect of these transactions, our nett indebtedness is down to astir $500 million. We present beryllium beneath 3x, a equilibrium sheet-driven people that we had acceptable for ourselves 12 months ago. Beyond conscionable reducing the indebtedness balance, we person fundamentally improved our equilibrium expanse and our currency travel profile. In January, we executed the aboriginal redemption of our -- of each $300 cardinal of our 8.625% elder secured notes.

By replacing high-cost indebtedness with little outgo capital, we expect to summation our yearly currency travel and trim our yearly involvement disbursal by $12 million. This determination reclaims superior tin present beryllium deployed toward our dividend, interior innovation and high-margin opportunities successful memorialization. A cardinal pillar of our aboriginal currency realization is our 40% involvement successful Propelis. The merger of SGK and SGS is already outperforming expectations. Propelis is present operating astatine an EBITDA tally complaint importantly higher than the $100 cardinal that was assumed astatine the clip the woody was closed. In a determination that should further heighten inbound currency flow, the Propelis squad is presently migrating onto their ain mentation of SAP.