Matthews (MATW) Q4 2025 Earnings Call Transcript

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Friday, November 21, 2025 astatine 9 a.m. ET

• President and Chief Executive Officer — Joseph Bartolacci

• Chief Financial Officer — Steven F. Nicola

Joseph Bartolacci: Thank you, Steve. Good morning. Thanks for joining america contiguous to sermon the fiscal results for Matthews fiscal 2025 4th fourth and 2025 year-end. Before sharing our coagulated results for the 4th quarter, I privation to instrumentality a measurement backmost connected our strategical progress. Earlier this year, we laid retired respective objectives: simplify our firm structure, grow our enactment with -- successful higher maturation and higher-margin businesses and trim our costs. I americium arrogant to accidental that we person taken decisive actions passim the twelvemonth to present against each of those goals. I would similar to walk a fewer minutes elaborating connected our advancement crossed each of these buckets.

The divestiture of SGK and Warehouse Automation astatine compelling valuations person intelligibly simplified our story. In selling SGK, we retained a 40% involvement successful the caller company, Propelis, that is outperforming expectations. Thus, we expect to reap a important payment erstwhile we exit this business, which is apt implicit the adjacent 18 to 24 months. From a commercialized perspective, the marketplace effect to Propelis has been precise favorable. 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. After a play of consolidation station COVID, CPGs are realizing the request to innovate successful bid to fortify their brands.

Thus, the Propelis halfway packaging concern is having a beardown performance. Plus, fixed our caller scale, we are seeing opportunities connected the selling broadside of the concern that neither concern had the standard to present connected earlier the transaction. Note that implicit $50 cardinal of synergies are yet to beryllium executed with a important information of those synergies to beryllium delivered adjacent year. We expect this to beryllium a highly favorable transaction. Once we exit, we volition person a importantly delevered our business, putting america successful a presumption to further summation shareholder value. Building connected this, past week, we announced an statement to merchantability our Warehouse Automation portion to Duravant LLC, a planetary person successful engineered instrumentality and automation solutions.

Under the woody terms, Matthews volition person $230 cardinal comprised of $223 cardinal successful currency information positive the presumption of definite liabilities. After taxes, fees and payments of different liabilities, we expect that $160 cardinal volition beryllium applied to indebtedness reduction, importantly reducing our full debt. We judge this to beryllium a highly charismatic transaction arsenic good that enables america to further trim our indebtedness presumption and fortify our equilibrium expanse arsenic we enactment towards our semipermanent people of 2.5x portion enhancing our quality to prosecute further strategical initiatives. The worth of our Warehouse Automation concern was highly underappreciated by the market, but this transaction reflects its existent value.