Matthews (NASDAQ: MATW) reported Q2 EPS of $0.89, $0.15 better than the analyst estimate of $0.74. Revenue for the quarter came in at $417.2 million versus the consensus estimate of $392.97 million.

“I am very pleased to report another strong quarter for Matthews. Our consolidated sales, adjusted EBITDA, and adjusted earnings per share for the fiscal 2021 second quarter were each higher than the same quarter a year ago, reflecting a significant increase in sales for our Memorialization segment and benefits from our ongoing cost-reduction and productivity initiatives.

“In addition, the Company’s consolidated cash flow from operations for the first six months of this fiscal year was significantly higher than the same period last year reflecting our strong operating performance and emphasis on cash management, which has become a permanent part of our operating mentality. As a result, we further reduced our outstanding debt by $42.1 million during the recent quarter. Over the past 12 months (since March 31, 2020), we have reduced our outstanding debt by $183.3 million.

“Sales for the Memorialization segment for the current quarter were $205.5 million, compared to $161.8 million for the same quarter a year ago, representing an increase of $43.7 million, or 27.0%. The segment’s sales growth predominantly resulted from increased sales of caskets due to COVID-19. In addition, sales of cremation equipment, mausoleums and cemetery memorial products also increased from the same quarter a year ago.

“Despite the ongoing impact of the pandemic, particularly in our retail-based markets, sales for the SGK Brand Solutions segment were relatively stable for the quarter ended March 31, 2021 compared to a year ago. Although our retail-based sales (principally merchandising solutions and private label brand market sales), were lower for the current quarter, the segment generated higher sales of purpose-built engineered products. The increase in engineered products sales was primarily attributable to our energy storage business, which has seen significant order growth and market interest.

“The Industrial Technologies segment reported sales for the fiscal 2021 second quarter of $40.7 million, compared to $40.1 million a year ago, primarily reflecting sales growth in the segment’s warehouse automation business. Incoming orders for our warehouse automation solutions remained very strong, but access to job sites to complete these orders continues to be constrained.

“I continue to be extremely proud of our employees and want to thank them for their efforts during this pandemic. Our strong performance under these challenging conditions is the result of their hard work and dedication. The safety of our employees remains the top priority of our Board and leadership team.”

GUIDANCE:

Mr. Bartolacci further stated: “We remain cautiously optimistic regarding the balance of fiscal 2021. As COVID-19 subsides, we are already beginning to see recovery in many of our businesses. As expected, casket sales are anticipated to decline from the pandemic-impacted comparable months a year ago and recent increases in commodity costs such as steel, lumber and copper are expected to impact the coming quarters. However, the improvements in our other businesses are currently expected to lessen these impacts.

“Within the Memorialization segment, cemetery products sales have been constrained throughout the pandemic due to local stay-at-home orders limiting families’ access to cemeteries. We are already beginning to see these order rates returning to higher than normal levels. For the Industrial Technologies segment, order rates have increased recently for the product identification business and remain strong for warehouse solutions. In the SGK Brand Solutions segment, we continue to win new accounts and are beginning to see increasing order rates in the retail-based business. In addition, the energy storage business within our Saueressig subsidiary continues to grow significantly. Lastly, our cost-reduction initiatives have produced realized savings for the Company and are expected to generate additional benefits in future periods.

“Cash flow management efforts will continue to be a priority for the remainder of the fiscal year. Accordingly, we expect continued solid operating cash flow and additional debt reduction during the remainder of the fiscal year.”

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