SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from _____ to _____

Commission File No. 0-09115

____________________________________________________________


Pennsylvania						25-0644320
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of ~~December~~March 31, ~~2021,~~2022, shares of common stock outstanding were: Class A Common Stock ~~31,550,416~~31,306,248 shares.

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

(Dollar amounts in thousands)


		December 31, 2021				September 30, 2021					March 31, 2022				September 30, 2021
ASSETS	ASSETS									ASSETS
Current assets:	Current assets:									Current assets:
Cash and cash equivalents	Cash and cash equivalents			$	70,984			$	49,176	Cash and cash equivalents			$	53,777			$	49,176
Accounts receivable, net	Accounts receivable, net			313,997				309,818		Accounts receivable, net			223,283				309,818
Inventories, net	Inventories, net			192,744				189,088		Inventories, net			201,566				189,088
Restricted cash, current	Restricted cash, current			19,167				—		Restricted cash, current			22,295				—
Other current assets	Other current assets			89,860				76,083		Other current assets			111,371				76,083

Total current assets	Total current assets			686,752				624,165		Total current assets			612,292				624,165

Restricted cash, non-current	Restricted cash, non-current			—				19,167		Restricted cash, non-current			—				19,167
Investments	Investments			30,416				30,438		Investments			23,697				30,438

Property, plant and equipment, net	Property, plant and equipment, net			221,940				223,707		Property, plant and equipment, net			213,104				223,707
Operating lease right-of-use assets	Operating lease right-of-use assets			79,128				80,262		Operating lease right-of-use assets			78,984				80,262
Deferred income taxes	Deferred income taxes			2,987				3,489		Deferred income taxes			2,950				3,489
Goodwill	Goodwill			771,983				773,787		Goodwill			769,111				773,787
Other intangible assets, net	Other intangible assets, net			239,724				261,542		Other intangible assets, net			227,255				261,542
Other assets	Other assets			20,385				15,521		Other assets			25,400				15,521

Total assets	Total assets			$	2,053,315			$	2,032,078	Total assets			$	1,952,793			$	2,032,078

LIABILITIES	LIABILITIES									LIABILITIES
Current liabilities:	Current liabilities:									Current liabilities:
Long-term debt, current maturities	Long-term debt, current maturities			$	4,271			$	4,624	Long-term debt, current maturities			$	3,872			$	4,624
Current portion of operating lease liabilities	Current portion of operating lease liabilities			24,535				25,151		Current portion of operating lease liabilities			24,541				25,151
Trade accounts payable	Trade accounts payable			112,016				112,722		Trade accounts payable			114,984				112,722
Accrued compensation	Accrued compensation			38,506				68,938		Accrued compensation			47,580				68,938
Accrued income taxes	Accrued income taxes			4,728				4,235		Accrued income taxes			3,751				4,235
Other current liabilities	Other current liabilities			157,074				138,555		Other current liabilities			143,831				138,555

Total current liabilities	Total current liabilities			341,130				354,225		Total current liabilities			338,559				354,225

Long-term debt	Long-term debt			831,791				759,086		Long-term debt			749,092				759,086
Operating lease liabilities	Operating lease liabilities			56,859				57,272		Operating lease liabilities			56,719				57,272
Accrued pension	Accrued pension			33,990				84,803		Accrued pension			33,544				84,803
Postretirement benefits	Postretirement benefits			18,010				17,958		Postretirement benefits			17,897				17,958
Deferred income taxes	Deferred income taxes			108,683				97,416		Deferred income taxes			109,596				97,416
Other liabilities	Other liabilities			18,180				24,915		Other liabilities			18,371				24,915
Total liabilities	Total liabilities			1,408,643				1,395,675		Total liabilities			1,323,778				1,395,675

SHAREHOLDERS' EQUITY	SHAREHOLDERS' EQUITY									SHAREHOLDERS' EQUITY
Shareholders' equity-Matthews:	Shareholders' equity-Matthews:									Shareholders' equity-Matthews:
Common stock	Common stock	$	36,334			$	36,334			Common stock	$	36,334			$	36,334
Additional paid-in capital	Additional paid-in capital	148,425				149,484				Additional paid-in capital	151,891				149,484
Retained earnings	Retained earnings	807,581				834,208				Retained earnings	798,548				834,208
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(159,114)				(192,739)				Accumulated other comprehensive loss	(161,230)				(192,739)
Treasury stock, at cost	Treasury stock, at cost	(188,406)				(190,739)				Treasury stock, at cost	(196,353)				(190,739)
Total shareholders' equity-Matthews	Total shareholders' equity-Matthews			644,820				636,548		Total shareholders' equity-Matthews			629,190				636,548
Noncontrolling interests	Noncontrolling interests			(148)				(145)		Noncontrolling interests			(175)				(145)
Total shareholders' equity	Total shareholders' equity			644,672				636,403		Total shareholders' equity			629,015				636,403

Total liabilities and shareholders' equity	Total liabilities and shareholders' equity			$	2,053,315			$	2,032,078	Total liabilities and shareholders' equity			$	1,952,793			$	2,032,078

The accompanying notes are an integral part of these consolidated financial statements.

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share data)

The accompanying notes are an integral part of these consolidated financial statements.

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollar amounts in thousands)



	Three Months Ended March 31,
	Matthews				Noncontrolling Interest				Total
	2022		2021		2022		2021		2022		2021

Net (loss) income:	$	(1,905)	$	4,989	$	(31)	$	163	$	(1,936)	$	5,152
Other comprehensive income (loss) ("OCI"), net of tax:
Foreign currency translation adjustment	(6,181)		(8,898)		4		1		(6,177)		(8,897)
Pension plans and other postretirement benefits	(27)		2,255		—		—		(27)		2,255

Unrecognized gain on derivatives:
Net change from periodic revaluation	3,538		2,088		—		—		3,538		2,088
Net amount reclassified to earnings	554		567		—		—		554		567
Net change in unrecognized gain on derivatives	4,092		2,655		—		—		4,092		2,655
OCI, net of tax	(2,116)		(3,988)		4		1		(2,112)		(3,987)
Comprehensive (loss) income	$	(4,021)	$	1,001	$	(27)	$	164	$	(4,048)	$	1,165

The accompanying notes are an integral part of these consolidated financial statements.

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

for the three and six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 (Unaudited)

(Dollar amounts in thousands, except per share data)


	Shareholders' Equity
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Treasury Stock		Non- controlling Interests		Total
Balance, September 30, 2021	$	36,334	$	149,484	$	834,208	$	(192,739)	$	(190,739)	$	(145)	$	636,403
Net loss	—		—		(19,803)		—		—		(7)		(19,810)
Minimum pension liability	—		—		—		34,133		—		—		34,133
Translation adjustment	—		—		—		(1,989)		—		4		(1,985)
Fair value of derivatives	—		—		—		1,481		—		—		1,481
Total comprehensive income													13,819
Stock-based compensation	—		3,709		—		—		—		—		3,709
Purchase of 62,746 shares of treasury stock	—		—		—		—		(2,435)		—		(2,435)
Issuance of 174,107 shares of treasury stock	—		(6,859)		—		—		6,859		—		—
Cancellations of 31,057 shares of treasury stock	—		2,091		—		—		(2,091)		—		—
Dividends, $0.22 per share	—		—		(6,824)		—		—		—		(6,824)


Balance, December 31, 2021	$	36,334	$	148,425	$	807,581	$	(159,114)	$	(188,406)	$	(148)	$	644,672
Net loss	—		—		(1,905)		—		—		(31)		(1,936)
Minimum pension liability	—		—		—		(27)		—		—		(27)
Translation adjustment	—		—		—		(6,181)		—		4		(6,177)
Fair value of derivatives	—		—		—		4,092		—		—		4,092
Total comprehensive loss													(4,048)
Stock-based compensation	—		5,222		—		—		—		—		5,222
Purchase of 289,184 shares of treasury stock	—		—		—		—		(9,703)		—		(9,703)
Issuance of 45,096 shares of treasury stock	—		(1,761)		—		—		1,761		—		—
Cancellations of 80 shares of treasury stock	—		5		—		—		(5)		—		—
Dividends, $0.22 per share	—		—		(7,128)		—		—		—		(7,128)


Balance, March 31, 2022	$	36,334	$	151,891	$	798,548	$	(161,230)	$	(196,353)	$	(175)	$	629,015

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued

for the three and six months ended March 31, 2022 and 2021 (Unaudited)

(Dollar amounts in thousands, except per share data)
Shareholders' Equity
Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
(Loss) Income Treasury
Stock Non-
controlling
Interests Total
Balance,
September 30, 2021 $ 36,334 $ 149,484 $ 834,208 $ (192,739) $ (190,739) $ (145) $ 636,403
Net loss — — (19,803) — — (7) (19,810)
Minimum pension liability — — — 34,133 — — 34,133
Translation adjustment — — — (1,989) — 4 (1,985)
Fair value of derivatives — — — 1,481 — — 1,481
Total comprehensive income 13,819
Stock-based compensation — 3,709 — — — — 3,709
Purchase of 62,746 shares of treasury stock — — — — (2,435) — (2,435)
Issuance of 174,107 shares of treasury stock — (6,859) — — 6,859 — —
Cancellations of 31,057 shares of treasury stock — 2,091 — — (2,091) — —
Dividends, $0.22 per share — — (6,824) — — — (6,824)
Balance,
December 31, 2021 $ 36,334 $ 148,425 $ 807,581 $ (159,114) $ (188,406) $ (148) $ 644,672

Shareholders' Equity
Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
(Loss) Income Treasury
Stock Non-
controlling
Interests Total
Balance,
September 30, 2020 $ 36,334 $ 135,187 $ 859,002 $ (240,719) $ (178,997) $ 626 $ 611,433
Net loss — — (1,758) — — (234) (1,992)
Minimum pension liability — — — 2,124 — — 2,124
Translation adjustment — — — 17,055 — (3) 17,052
Fair value of derivatives — — — 1,035 — — 1,035
Total comprehensive income 18,219
Stock-based compensation — 3,246 — — — — 3,246
Purchase of 162,291 shares of treasury stock — — — — (4,237) — (4,237)
Issuance of 10,300 shares of treasury stock — (407) — — 407 — —
Cancellations of 34,727 shares of treasury stock — 1,982 — — (1,982) — —
Dividends, $0.215 per share — — (6,808) — — — (6,808)
Balance,
December 31, 2020 $ 36,334 $ 140,008 $ 850,436 $ (220,505) $ (184,809) $ 389 $ 621,853


	Shareholders' Equity
	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Treasury Stock		Non- controlling Interests		Total
Balance, September 30, 2020	$	36,334	$	135,187	$	859,002	$	(240,719)	$	(178,997)	$	626	$	611,433
Net loss	—		—		(1,758)		—		—		(234)		(1,992)
Minimum pension liability	—		—		—		2,124		—		—		2,124
Translation adjustment	—		—		—		17,055		—		(3)		17,052
Fair value of derivatives	—		—		—		1,035		—		—		1,035
Total comprehensive income													18,219
Stock-based compensation	—		3,246		—		—		—		—		3,246
Purchase of 162,291 shares of treasury stock	—		—		—		—		(4,237)		—		(4,237)
Issuance of 10,300 shares of treasury stock	—		(407)		—		—		407		—		—
Cancellations of 34,727 shares of treasury stock	—		1,982		—		—		(1,982)		—		—
Dividends, $0.215 per share	—		—		(6,808)		—		—		—		(6,808)


Balance, December 31, 2020	$	36,334	$	140,008	$	850,436	$	(220,505)	$	(184,809)	$	389	$	621,853
Net income	—		—		4,989		—		—		163		5,152
Minimum pension liability	—		—		—		2,255		—		—		2,255
Translation adjustment	—		—		—		(8,898)		—		1		(8,897)
Fair value of derivatives	—		—		—		2,655		—		—		2,655
Total comprehensive income													1,165
Stock-based compensation	—		4,001		—		—		—		—		4,001
Purchase of 6,000 shares of treasury stock	—		—		—		—		(249)		—		(249)
Issuance of 17,357 shares of treasury stock	—		(685)		—		—		685		—		—

Dividends, $0.215 per share	—		—		(7,171)		—		—		—		(7,171)

Balance, March 31, 2021	$	36,334	$	143,324	$	848,254	$	(224,493)	$	(184,373)	$	553	$	619,599

The accompanying notes are an integral part of these consolidated financial statements.

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollar amounts in thousands)

The accompanying notes are an integral part of these consolidated financial statements.

MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

~~December~~March 31, ~~2021~~2022

(Dollar amounts in thousands, except per share data)

Note 1. Nature of Operations

Matthews International Corporation ("Matthews" or the "Company"), founded in 1850 and incorporated in Pennsylvania in 1902, is a global provider of brand solutions, memorialization products and industrial technologies. The Company manages its businesses under 3 segments: SGK Brand Solutions, Memorialization and Industrial Technologies. Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment. This business segment change is consistent with internal management structure and reporting changes effective for fiscal 2022. Prior periods were revised to reflect retrospective application of this segment realignment. Brand solutions consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. Memorialization products consist primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries. Industrial technologies includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

The Company has facilities in North America, Europe, Asia, Australia, and Central and South America.

Note 2. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information for commercial and industrial companies and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2021. The consolidated financial statements include all domestic and foreign subsidiaries in which the Company maintains an ownership interest and has operating ~~control.~~control and any variable interest entities for which the Company is the primary beneficiary. Investments in certain companies over which the Company exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. All intercompany accounts and transactions have been eliminated.

Note 3. Revenue Recognition

The Company delivers a variety of products and services through its business segments. The SGK Brand Solutions segment delivers brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. The Memorialization segment produces and delivers bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment designs, manufactures, services and distributes high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 3. Revenue Recognition (continued)

The Company disaggregates revenue from contracts with customers by geography, as it believes geographic regions best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Disaggregated sales by segment and region for the three and six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:



	SGK Brand Solutions				Memorialization				Industrial Technologies				Consolidated
	Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2022		2021		2022		2021		2022		2021
North America	$	69,080	$	66,282	$	205,655	$	190,253	$	34,768	$	32,260	$	309,503	$	288,795
Central and South America	1,123		1,319		—		—		—		—		1,123		1,319
Europe	60,852		64,581		11,924		12,662		41,611		31,622		114,387		108,865
Australia	2,687		3,456		2,425		2,542		—		—		5,112		5,998
Asia	13,078		10,777		—		—		1,775		1,400		14,853		12,177
Total Sales	$	146,820	$	146,415	$	220,004	$	205,457	$	78,154	$	65,282	$	444,978	$	417,154

Revenue from products or services provided to customers over time accounted for approximately ~~13%~~9% of revenue for both the three months ended March 31, 2022 and 7%2021, and 11% and 8% of revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. As of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the Company had contract assets of ~~$15,701~~$22,896 and $23,998, respectively, that were recorded in other current assets within the Consolidated Balance Sheets. As of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the Company had contract liabilities of ~~$21,138~~$12,701 and $19,752, respectively, that were recorded in other current liabilities within the Consolidated Balance Sheets.

Note 4. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level fair value hierarchy is used to prioritize the inputs used in valuations, as defined below:



			Level 1:			Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets.
			Level 2:			Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
			Level 3:			Unobservable inputs for the asset or liability.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 4. Fair Value Measurements (continued)

The fair values of the Company's assets and liabilities measured on a recurring basis are categorized as follows:


		December 31, 2021								September 30, 2021									March 31, 2022								September 30, 2021
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:	Assets:																	Assets:
Derivatives (1)	Derivatives (1)	$	—	$	3,906	$	—	$	3,906	$	—	$	209	$	—	$	209	Derivatives (1)	$	—	$	9,464	$	—	$	9,464	$	—	$	209	$	—	$	209
Equity and fixed income mutual funds	Equity and fixed income mutual funds	—		6,914		—		6,914		—		6,936		—		6,936		Equity and fixed income mutual funds	—		3,646		—		3,646		—		6,936		—		6,936
Life insurance policies	Life insurance policies	—		4,585		—		4,585		—		4,626		—		4,626		Life insurance policies	—		4,560		—		4,560		—		4,626		—		4,626
Total assets at fair value	Total assets at fair value	$	—	$	15,405	$	—	$	15,405	$	—	$	11,771	$	—	$	11,771	Total assets at fair value	$	—	$	17,670	$	—	$	17,670	$	—	$	11,771	$	—	$	11,771

Liabilities:	Liabilities:																	Liabilities:
Derivatives (1)	Derivatives (1)	$	—	$	1,254	$	—	$	1,254	$	—	$	2,232	$	—	$	2,232	Derivatives (1)	$	—	$	314	$	—	$	314	$	—	$	2,232	$	—	$	2,232
Total liabilities at fair value	Total liabilities at fair value	$	—	$	1,254	$	—	$	1,254	$	—	$	2,232	$	—	$	2,232	Total liabilities at fair value	$	—	$	314	$	—	$	314	$	—	$	2,232	$	—	$	2,232

(1) Interest rate swaps and cross currency swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

The carrying values for other financial assets and liabilities approximated fair value at ~~December~~March 31, ~~2021~~2022 and September 30, 2021.

Inventories consisted of the following:


	March 31, 2022		September 30, 2021
Raw materials	$	46,485	$	37,673
Work in process	78,527		75,997
Finished goods	76,554		75,418
	$	201,566	$	189,088

Non-current investments consisted of the following:


	March 31, 2022		September 30, 2021
Equity and fixed income mutual funds	$	—	$	6,936
Life insurance policies	4,560		4,626
Equity-method investments	379		458
Other (primarily cost-method) investments	18,758		18,418
	$	23,697	$	30,438

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note ~~5. Inventories~~

~~Inventories consisted of the following:~~
December 31, 2021 September 30, 2021
Raw materials $ 43,041 $ 37,673
Work in process 79,040 75,997
Finished goods 70,663 75,418
$ 192,744 $ 189,088

~~Note 6. Investments~~

~~Non-current investments consisted of the following:~~
December 31, 2021 September 30, 2021
Equity and fixed income mutual funds $ 6,914 $ 6,936
Life insurance policies 4,585 4,626
Equity-method investments 391 458
Other (primarily cost-method) investments 18,526 18,418
$ 30,416 $ 30,438

~~Note~~ 7. Debt and Financing Arrangements

Long-term debt at ~~December~~March 31, ~~2021~~2022 and September 30, 2021 consisted of the following:

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $750,000 senior secured revolving credit facility, which matures in March 2025. A portion of the revolving credit facility (not to exceed $350,000) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at LIBOR plus a factor ranging from 0.75% to 2.00% (1.00% at ~~December~~March 31, ~~2021)~~2022) based on the Company's secured leverage ratio. The secured leverage ratio is defined as net secured indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15% to 0.30% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the domestic credit facility. Unamortized costs were ~~$2,004~~$1,826 and $2,182 at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35,000) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at ~~December~~March 31, ~~2021~~2022 and September 30, 2021 were ~~$405,000~~$380,540 and $349,780, respectively. The weighted-average interest rate on the outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at ~~December~~March 31, 2022 and 2021 was 1.89% and ~~2020 was 1.86% and 2.07%~~2.17%, respectively.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

~~Note 7. Debt (continued)~~

The Company has $300,000 of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned ~~domestic~~ subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The Company incurred direct financing fees and costs in connection with the 2025 Senior Notes. Unamortized costs were ~~$2,069~~$1,935 and $2,204 at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively.

The Company has a $115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions which matures in March 2022 and the Company intends to extend this facility. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote subsidiary of the Company. In March 2022, Matthews RFC ~~in turn assigns~~entered into a ~~collateral interest in these~~receivables purchase agreement (“RPA”) to sell up to $125,000 of receivables to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, which matures in March 2024, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables.

The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. Gross receivables sold and cash collections reinvested under the RPA program were $121,616 and $46,615 for the six months ended March 31, 2022, respectively. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of March 31, 2022, the amount sold to the Purchasers was $75,001, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $29,288 as of March 31, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 7. Debt and Financing Arrangements (continued)

Previously, the Company had a $115,000 accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions ~~and then may borrow funds under the Securitization Facility.~~that matured in March 2022. The Securitization Facility ~~does~~did not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations ~~remain~~remained on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility ~~bear interest at~~were based on LIBOR plus 0.75%.~~The~~ and the Company iswas required to pay an annual commitment fee ranging from0.25% to 0.35% of the unused portion of the Securitization Facility. Outstanding borrowings under the Securitization Facility at ~~December 31, 2021 and~~ September 30, 2021 ~~were $104,690 and $95,990, respectively.~~totaled $95,990. At ~~December~~March 31, 2021, ~~and 2020,~~ the interest rate on borrowings under this facility was ~~0.85%and 0.89%, respectively.~~0.86%.

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments, which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected an unrealized ~~loss~~gain net of unrealized ~~gains~~losses of $~~102 ($77~~5,318($4,015 after tax) at ~~December~~March 31, ~~2021~~2022 and an unrealized loss net of unrealized gains of $2,062 ($1,558 after tax) at September 30, 2021, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Assuming market rates remain constant with the rates at ~~December~~March 31, ~~2021,~~2022, a ~~loss~~gain (net of tax) of approximately $~~663~~839 included in AOCI is expected to be recognized in earnings over the next twelve months.

At ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the interest rate swap contracts were reflected on a gross-basis in the Consolidated Balance Sheets as follows:

Derivatives December 31, 2021 September 30, 2021
Current assets:
Other current assets $ 269 $ 31
Long-term assets:
Other assets 883 139
Current liabilities:
Other current liabilities (1,148) (1,922)
Long-term liabilities:
Other liabilities (106) (310)
Total derivatives $ (102) $ (2,062)


Derivatives	March 31, 2022		September 30, 2021
Current assets:
Other current assets	$	1,426	$	31
Long-term assets:
Other assets	4,206		139
Current liabilities:
Other current liabilities	(314)		(1,922)
Long-term liabilities:
Other liabilities	—		(310)
Total derivatives	$	5,318	$	(2,062)

The losses recognized on derivatives were as follows:


Derivatives in Cash Flow Hedging Relationships	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives				Amount of Loss Recognized in Income on Derivatives


		Three Months Ended March 31,				Six Months Ended March 31,
		2022		2021		2022		2021
Interest rate swaps	Interest expense	$	(735)	$	(751)	$	(1,536)	$	(1,654)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 7. Debt and Financing Arrangements (continued)

~~The losses recognized on derivatives were as follows:~~

Derivatives in Cash Flow Hedging Relationships Location of Loss Recognized in Income on Derivative Amount of Loss Recognized in Income on Derivatives
Three Months Ended
December 31,
2021 2020
Interest rate swaps Interest expense $ (801) $ (903)

The Company recognized the following gains (losses) in AOCI:

Derivatives in Cash Flow Hedging Relationships

Amount of Gain
Recognized in AOCI on Derivatives

Location of Loss Reclassified From AOCI into Income (Effective Portion*)

Amount of Loss
Reclassified from
AOCI into Income
(Effective Portion*)

Derivatives in Cash Flow Hedging Relationships

Amount of Gain
Recognized in AOCI on Derivatives

Location of Loss Reclassified From AOCI into Income (Effective Portion*)

Amount of Loss
Reclassified from
AOCI into Income
(Effective Portion*)

December 31, 2021

December 31, 2020

December 31, 2021

December 31, 2020

March 31, 2022

March 31, 2021

March 31, 2022

March 31, 2021

Interest rate swaps

875

353

Interest expense

(606)

(682)

Interest rate swaps

4,413

2,441

Interest expense

(1,160)

(1,249)

* There is no ineffective portion or amounts excluded from effectiveness testing.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €25.0 million ($~~28,361)~~27,789), which includes €8.0 million ($~~9,075)~~8,893) for bank guarantees. In the first quarter of fiscal 2022, the Company extended this facility to a current maturity of December 2022 and the Company intends to continue to extend this facility. ~~There were no outstanding borrowings under the credit facility at December 31, 2021.~~ Outstanding borrowings under the credit facility totaled €7.8 million ($8,676) and €0.7 million ($817) at March 31, 2022 and September 30, ~~2021.~~2021, respectively. The weighted-average interest rate on outstanding borrowings under this facility was 2.25%at ~~December~~March 31, ~~2020.~~2022 and 2021.

Other borrowings totaled ~~$20,296~~$58,522 and $10,150 at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. Other borrowings at March 31, 2022 included $37,789 of collateralized borrowings in connection with the RPA arrangement discussed above. The weighted-average interest rate on all other borrowings was ~~1.88%~~1.92% and ~~2.11%~~2.18% at ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The Company has a U.S. Dollar/Euro cross currency swap with a notional amount of $94,464 as of ~~December~~March 31, ~~2021,~~2022, which has been designated as a net investment hedge of foreign operations. The swap contract matures in September 2028. The Company assesses hedge effectiveness for this contract based on changes in fair value attributable to changes in spot prices. A gain of ~~$2,079~~$2,893 (net of income taxes of ~~$675)~~$939) and a gain of $29 (net of income taxes of $10), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. Income of ~~$365,~~$420and $785, which represented the recognized portion of the fair value excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended ~~December~~March 31, ~~2021.~~2022, respectively. At ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the swap, which is included in other assets in the Consolidated Balance Sheets, totaled ~~$2,754~~$3,832 and $39, respectively.

As of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets. The Company was in compliance with all of its debt covenants as of ~~December~~March 31, ~~2021.~~2022.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

Note 8. Share-Based Payments

The Company maintains an equity incentive plan ~~(the~~(as amended, the "2017 Equity Incentive Plan") that provides for grants of stock options, restricted shares, restricted share units, stock-based performance units and certain other types of stock-based awards. Under the 2017 Equity Incentive Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of ~~1,700,000. In November 2021,~~3,450,000, following the ~~Board~~amendment and restatement of ~~Directors approved~~ the ~~Amended and Restated~~ 2017 Equity Incentive Plan ~~(the "Amended 2017 Plan"), which increases the maximum number of shares available for grants or awards to an aggregate of 3,450,000. The Amended 2017 Plan is subject to shareholder approval~~ at the ~~February~~Company's 2022 Annual Shareholder Meeting. At ~~December~~March 31, ~~2021,~~2022, 211,788 shares have been issued under the 2017 Equity Incentive Plan. ~~768,498~~769,698 time-based restricted share units, 933,212 performance-based restricted share units, and 75,000 stock options have been granted under the 2017 Equity Incentive Plan. ~~1,479,325~~1,477,525 of these share-based awards are outstanding as of ~~December~~March 31, ~~2021.~~2022. The 2017 Equity Incentive ~~plan~~Plan is administered by the Compensation Committee of the Board of Directors. The number of shares issued under performance-based restricted share units may be up to 200% of the number of performance-based restricted share units, based on the satisfaction of specific criteria established by the plan administrator.

For the three-month periods ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, stock-based compensation cost totaled ~~$3,709~~$5,222 and ~~$3,246,~~$4,001, respectively. For the six-month periods ended March 31, 2022 and 2021, stock-based compensation cost totaled $8,931 and $7,247, respectively. The associated future income tax benefit recognized for stock-based compensation was ~~$409~~$1,278 and ~~$239~~$738 for the three-month periods ended ~~December~~March 31, 2022 and 2021, respectively, and ~~2020,~~$1,688 and $976 for the six-month periods ended March 31, 2022 and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 8. Share-Based Payments (continued)

With respect to the restricted share grants, generally one-half of the shares vest on the third anniversary of the grant, one-quarter of the shares vest in one-third increments upon the attainment of pre-defined levels of adjusted earnings per share, and the remaining one-quarter of the shares vest in one-third increments upon attainment of pre-defined levels of appreciation in the market value of the Company's Class A Common Stock. Additionally, restricted shares cannot vest until the first anniversary of the grant date. Unvested restricted shares generally expire on the earlier of three or five years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death. The Company issues restricted shares from treasury shares.

With respect to the restricted share unit grants, units generally vest on the third anniversary of the grant date. The number of units that vest depend on certain time and performance thresholds. Such performance thresholds include adjusted earnings per share, return on invested capital, appreciation in the market value of the Company's Class A Common Stock, or other targets established by the Compensation Committee of the Board of Directors. Approximately 42% of the outstanding share units vest based on time, while the remaining vest based on pre-defined performance thresholds. The Company issues common stock from treasury shares once vested.

The transactions for restricted shares and restricted share units for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 were as follows:


		Shares /Units	Weighted- average Grant-date Fair Value			Shares /Units	Weighted- average Grant-date Fair Value
Non-vested at September 30, 2021	Non-vested at September 30, 2021	1,083,365	$	34.07	Non-vested at September 30, 2021	1,083,365	$	34.07
Granted	Granted	636,800	38.20		Granted	638,000	38.20
Vested	Vested	(163,201)	42.21		Vested	(163,201)	42.21
Expired or forfeited	Expired or forfeited	(116,368)	48.40		Expired or forfeited	(119,448)	48.06
Non-vested at December 31, 2021		1,440,596	$	33.81
Non-vested at March 31, 2022					Non-vested at March 31, 2022	1,438,716	$	33.82

During the third quarter of fiscal 2021, 75,000 stock options were granted under the 2017 Equity Incentive Plan. The option price for each stock option granted was $41.70, which was equal to the fair market value of the Company's Class A Common Stock on the date of grant. These options vest in one-third increments annually over three years from the grant date. Unvested stock options expire on the earlier of five years from the date of grant, or upon employment termination, retirement or death. The Company generally settles employee stock option exercises with treasury shares.

As of ~~December~~March 31, ~~2021,~~2022, the total unrecognized compensation cost related to all unvested stock-based awards was ~~$30,245~~$25,764 and is expected to be recognized over a weighted average period of ~~2.7~~2.6 years.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

~~Note 8. Share-Based Payments (continued)~~

The Company maintains the 2019 Director Fee Plan, the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan (collectively, the "Director Fee Plans"). There will be no further fees or share-based awards granted under the Amended and Restated 2014 Director Fee Plan and the 1994 Director Fee Plan. Under the 2019 Director Fee Plan, non-employee directors (except for the Chairman of the Board) each receive, as an annual retainer fee for fiscal 2022, either cash or shares of the Company's Class A Common Stock with a value equal to $90. The annual retainer fee for fiscal 2022 paid to the non-employee Chairman of the Board is $210. Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board. The total number of shares of stock that have been authorized to be issued under the 2019 Director Fee Plan or credited to a deferred stock compensation account for subsequent issuance is 150,000 shares of Common Stock (subject to adjustment upon certain events such as stock dividends or stock splits). The value of deferred shares is recorded in other liabilities. A total of ~~38,832~~44,943 shares and share units had been deferred under the Director Fee Plans as of ~~December~~March 31, ~~2021.~~2022. Additionally, non-employee directors each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares or units) with a value of $140 for fiscal 2022. As of ~~December~~March 31, ~~2021, 265,225~~2022, 305,911 restricted shares and restricted share units have been granted under the Director Fee Plans ~~91,996~~and are outstanding as of March 31, 2022, 132,682 of which were issued under the 2019 Director Fee Plan. ~~74,639~~58,008 restricted shares and restricted share units are unvested at ~~December~~March 31, ~~2021.~~2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 9. Earnings Per Share Attributable to Matthews' Shareholders

The information used to compute loss per share attributable to Matthews' common shareholders was as follows:


		Three Months Ended December 31,			Three Months Ended March 31,						Six Months Ended March 31,
			2021			2020			2022		2021		2022		2021
Net loss attributable to Matthews shareholders			$	(19,803)		$	(1,758)
Net (loss) income attributable to Matthews shareholders								Net (loss) income attributable to Matthews shareholders	$	(1,905)	$	4,989	$	(21,708)	$	3,231

Weighted-average shares outstanding (in thousands):	Weighted-average shares outstanding (in thousands):							Weighted-average shares outstanding (in thousands):
Basic shares	Basic shares		31,719			31,725		Basic shares	31,692		31,665		31,695		31,697
Effect of dilutive securities	Effect of dilutive securities		—			—		Effect of dilutive securities	—		418		—		337
Diluted shares	Diluted shares		31,719			31,725		Diluted shares	31,692		32,083		31,695		32,034

Anti-dilutive securities excluded from the dilution calculation were insignificant for the three and six months ended ~~December~~March 31, ~~2021.~~2022. During periods in which the Company incurs a net loss, diluted weighted-average shares outstanding are equal to basic weighted-average shares outstanding because the effect of all equity awards is anti-dilutive.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

Note 10. Pension and Other Postretirement Benefit Plans

The Company provides defined benefit pension and other postretirement plans to certain employees. Net periodic pension and other postretirement benefit cost for the plans included the following:



	Three months ended March 31,
	Pension				Other Postretirement
	2022		2021		2022		2021

Service cost	$	5	$	1,983	$	41	$	50
Interest cost *	48		1,546		103		94
Expected return on plan assets *	—		(2,762)		—		—
Amortization:
Prior service credit	(66)		(41)		(91)		(91)
Net actuarial loss *	91		3,023		—		—


Net benefit cost	$	78	$	3,749	$	53	$	53


		Three months ended December 31,									Six months ended March 31,
		Pension				Other Postretirement					Pension				Other Postretirement
		2021		2020		2021		2020			2022		2021		2022		2021

Service cost	Service cost	$	380	$	2,213	$	41	$	50	Service cost	$	385	$	4,196	$	82	$	100
Interest cost *	Interest cost *	990		1,548		103		94		Interest cost *	1,038		3,094		206		188
Expected return on plan assets *	Expected return on plan assets *	(1,042)		(2,763)		—		—		Expected return on plan assets *	(1,042)		(5,525)		—		—
Amortization:	Amortization:									Amortization:
Prior service cost (credit)		47		(17)		(91)		(91)
Prior service credit										Prior service credit	(19)		(58)		(182)		(182)
Net actuarial loss *	Net actuarial loss *	201		3,021		—		—		Net actuarial loss *	292		6,044		—		��
Settlement loss *	Settlement loss *	30,856		—		—		—		Settlement loss *	30,856		—		—		—
Net benefit cost	Net benefit cost	$	31,432	$	4,002	$	53	$	53	Net benefit cost	$	31,510	$	7,751	$	106	$	106
* Non-service components of pension and postretirement expense are included in other income (deductions), net.	* Non-service components of pension and postretirement expense are included in other income (deductions), net.									* Non-service components of pension and postretirement expense are included in other income (deductions), net.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 10. Pension and Other Postretirement Benefit Plans (continued)

Benefit payments under the Company's principal defined benefit retirement plan ("DB Plan") ~~are~~were made from plan assets, while benefit payments under the supplemental retirement plan and postretirement benefit plan are made from the Company's operating funds. In the first quarter of fiscal 2022, the Company terminated its DB Plan and made plan contributions totaling $35,706 to fully fund the planned settlement of the DB Plan obligations. Also during the first quarter of fiscal 2022, lump sum distributions of $185,958 were made from the DB Plan to plan participants, and non-participating annuity contracts totaling $56,274 were purchased by the DB Plan for plan participants, resulting in the full settlement of the DB Plan obligations. The settlement of the DB Plan obligations resulted in the recognition of a non-cash charge of $30,856, which has been presented as a component of other income (deductions), net for the ~~three~~six months ended ~~December~~March 31, ~~2021.~~2022. This amount represents the immediate recognition of the remaining portion of the deferred AOCI balances related to the DB Plan.

Contributions made and anticipated for fiscal year 2022 are as follows:


Contributions	Pension		Other Postretirement

Contributions during the ~~three~~six months ended ~~December~~March 31, ~~2021:~~2022:
Principal defined benefit retirement plan	$	35,706	$	—
Supplemental retirement plan	~~199~~387		—
Other postretirement plan	—		83340

Additional contributions expected in fiscal 2022:

Supplemental retirement plan	$	~~561~~373	$	—
Other postretirement plan	—		~~801~~544

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 11. Accumulated Other Comprehensive Income

The changes in AOCI by component, net of tax, for the three-month periods ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 10).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 7).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 11. Accumulated Other Comprehensive Income (continued)

The changes in AOCI by component, net of tax, for the six-month periods ended March 31, 2022 and 2021 were as follows:



	Post-retirement benefit plans			Currency translation adjustment		Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2021	$	(35,930)		$	(155,251)	$	(1,558)		$	(192,739)
OCI before reclassification	10,741			(8,170)		4,413			6,984
Amounts reclassified from AOCI	23,365		(a)	—		1,160		(b)	24,525
Net current-period OCI	34,106			(8,170)		5,573			31,509

Balance, March 31, 2022	$	(1,824)		$	(163,421)	$	4,015		$	(161,230)
Attributable to noncontrolling interest:
Balance, September 30, 2021	$	—		$	241	$	—		$	241
OCI before reclassification	—			8		—			8
Net current-period OCI	—			8		—			8
Balance, March 31, 2022	$	—		$	249	$	—		$	249



	Post-retirement benefit plans			Currency translation adjustment		Derivatives			Total
Attributable to Matthews:
Balance, September 30, 2020	$	(82,954)		$	(151,881)	$	(5,884)		$	(240,719)
OCI before reclassification	—			8,157		2,441			10,598
Amounts reclassified from AOCI	4,379		(a)	—		1,249		(b)	5,628
Net current-period OCI	4,379			8,157		3,690			16,226
Balance, March 31, 2021	$	(78,575)		$	(143,724)	$	(2,194)		$	(224,493)
Attributable to noncontrolling interest:
Balance, September 30, 2020	$	—		$	368	$	—		$	368
OCI before reclassification	—			(2)		—			(2)
Net current-period OCI	—			(2)		—			(2)
Balance, March 31, 2021	$	—		$	366	$	—		$	366

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 10).

(b) Amounts were included in interest expense in the periods the hedged item affected earnings (see Note 7).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 11. Accumulated Other Comprehensive Income (continued)

Reclassifications out of AOCI for the ~~three-month~~three and six-month periods ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:



	Amount reclassified from AOCI
Details about AOCI Components	Three Months Ended March 31, 2022		Six Months Ended March 31, 2022		Affected line item in the Statement of income

Postretirement benefit plans
Prior service credit (a)	$	157	$	201
Actuarial losses	(91)		(292)		Other income (deductions), net
Settlement loss	—		(30,856)		Other income (deductions), net
	66		(30,947)		Income before income tax (b)
	(16)		7,582		Income taxes
	$	50	$	(23,365)	Net income
Derivatives
Interest rate swap contracts	$	(735)	$	(1,536)	Interest expense
	(735)		(1,536)		Income before income tax (b)
	181		376		Income taxes
	$	(554)	$	(1,160)	Net income


		Amount reclassified from AOCI
Details about AOCI Components	Details about AOCI Components	Three Months Ended December 31, 2021		Three Months Ended December 31, 2020		Affected line item in the Statement of income	Details about AOCI Components	Three Months Ended March 31, 2021		Six Months Ended March 31, 2021		Affected line item in the Statement of income

Postretirement benefit plans	Postretirement benefit plans						Postretirement benefit plans
Prior service credit (a)	Prior service credit (a)	$	44	$	108		Prior service credit (a)	$	132	$	240
Actuarial losses	Actuarial losses	(201)		(3,021)		Other income (deductions), net	Actuarial losses	(3,023)		(6,044)		Other income (deductions), net
Settlement loss		(30,856)		—		Other income (deductions), net

		(31,013)		(2,913)		Income before income tax (b)		(2,891)		(5,804)		Income before income tax (b)
		7,598		789		Income taxes		636		1,425		Income taxes
		$	(23,415)	$	(2,124)	Net income		$	(2,255)	$	(4,379)	Net income
Derivatives	Derivatives						Derivatives
Interest rate swap contracts	Interest rate swap contracts	$	(801)	$	(903)	Interest expense	Interest rate swap contracts	$	(751)	$	(1,654)	Interest expense
		(801)		(903)		Income before income tax (b)		(751)		(1,654)		Income before income tax (b)
		195		221		Income taxes		184		405		Income taxes
		$	(606)	$	(682)	Net income		$	(567)	$	(1,249)	Net income


(a) Prior service cost amounts are included in the computation of pension and other postretirement benefit expense, which is reported in both cost of goods sold and selling and administrative expenses. For additional information, see Note 10.
(b) For pre-tax items, positive amounts represent income and negative amounts represent expense.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 12. Income Taxes

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first ~~three~~six months of fiscal 2022 were a benefit of ~~$6,628,~~$3,351, compared to an expense of ~~$3,980~~$4,952 for the first ~~three~~six months of fiscal 2021. The difference between the Company’s consolidated income taxes for the first ~~three~~six months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 compared to pre-tax income in fiscal 2021. Additionally, fiscal 2022 included discrete tax expenses related to non-tax deductible asset write-downs in Russia, due to the ~~addition of uncertain tax liabilities.~~full valuation allowance for the Russian entity. Fiscal 2021 included discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a net operating loss (“NOL”) carryback to tax years where the U.S. federal statutory rate was 35%, and additional foreign tax credits. The Company’s fiscal 2022 ~~three~~six month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to the non-deductible asset write-downs in Russia, state taxes, foreign statutory rate differentials, and tax credits. The Company’s fiscal 2021 ~~three-month~~six month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a NOL carryback to tax years where the U.S. federal statutory rate was 35%, and additional foreign tax credits.

The Company had unrecognized tax benefits (excluding penalties and interest) of ~~$3,328~~$3,231 and $2,807 on ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively, which would impact the annual effective rate at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately ~~$414~~$350 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.

The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were ~~$808~~$775 and $691 at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

~~Note 12. Income Taxes (continued)~~

The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions. As of ~~December~~March 31, ~~2021,~~2022, the tax years that remain subject to examination by major ~~jurisdiction~~jurisdictions generally are:


United States – Federal			2018 and forward
United States – State			2017 and forward
Canada			~~2017~~2019 and forward
Germany			2019 and forward
United Kingdom			2020 and forward
Singapore			~~2017~~2018 and forward
Australia			~~2017~~2018 and forward

Note 13. Segment Information

The Company manages its businesses under 3 segments: SGK Brand Solutions, Memorialization and Industrial Technologies. Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment. This business segment change is consistent with internal management structure and reporting changes effective for fiscal 2022. Prior periods were revised to reflect retrospective application of this segment realignment. The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 13. Segment Information (continued)

The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition costs, ERP integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis. Accordingly, for segment reporting purposes, the Company does not allocate corporate costs to its reportable segments. Corporate costs include management and administrative support to the Company, which consists of certain aspects of the Company’s executive management, legal, compliance, human resources, information technology (including operational support) and finance departments. These costs are included within "Corporate and Non-Operating" in the following table to reconcile to consolidated adjusted EBITDA and are not considered a separate reportable segment. Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued~~

~~(Dollar amounts in thousands, except per share data)~~

~~Note 13. Segment Information (continued)~~

The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income.
Three Months Ended
December 31,
2021 2020
Sales:
SGK Brand Solutions $ 153,542 $ 149,959
Memorialization 210,706 183,274
Industrial Technologies 74,331 53,424
Consolidated Sales $ 438,579 $ 386,657


	Three Months Ended March 31,				Six Months Ended March 31,
	2022		2021		2022		2021
Sales:
SGK Brand Solutions	$	146,820	$	146,415	$	300,362	$	296,374
Memorialization	220,004		205,457		430,710		388,731
Industrial Technologies	78,154		65,282		152,485		118,706
Consolidated Sales	$	444,978	$	417,154	$	883,557	$	803,811

Strategic initiatives and other charges (1)**

Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (2)***

Defined benefit plan termination related costs (3)

Defined benefit plan termination related items (3)

Asset write-downs (4)

Non-service pension and postretirement expense (4)

Non-service pension and postretirement expense (5)

Depreciation and amortization *

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 13. Segment Information (continued)


(1) Includes certain non-recurring items associated with recent acquisition activities, costs associated with global ERP system integration efforts, and certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
(2) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19.
(3) Represents ~~costs~~items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.
(4) Represents asset write-downs within the SGK Brand Solutions segment (see Note 15, "Asset Write-Downs").
(5) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.

* Depreciation and amortization was ~~$23,725~~$14,060 and ~~$17,848~~$25,261 for the SGK Brand Solutions segment, ~~$5,810~~$5,803 and ~~$5,469~~$5,709 for the Memorialization segment, ~~$2,653~~$2,531 and ~~$2,740~~$2,880 for the Industrial Technologies segment, and ~~$1,313~~$1,330 and ~~$1,294~~$1,329 for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Depreciation and ~~2020,~~amortization was $37,785 and $43,109 for the SGK Brand Solutions segment, $11,613 and $11,178 for the Memorialization segment, $5,184 and $5,620 for the Industrial Technologies segment, and $2,643 and $2,623 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were ~~$1,229~~$4,475 and ~~$4,696~~$2,865 for the SGK Brand Solutions segment, ~~$671~~charges of $516 and ~~$1,130~~income of $335 for the Memorialization segment, ~~$32~~charges of $161 and ~~$2,659~~$126 for the Industrial Technologies segment, and ~~$1,891~~$1,598 and ~~$2,707~~$2,437 for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Acquisition costs, ERP integration costs, and ~~2020,~~strategic initiatives and other charges were $5,703 and $7,561 for the SGK Brand Solutions segment, $1,188 and $795 for the Memorialization segment, $193 and $2,785 for the Industrial Technologies segment, and $3,489 and $5,144 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

*** Non-recurring/incremental COVID-19 costs were ~~$220~~$170 and ~~$409~~$297 for the SGK Brand Solutions segment, ~~$464~~$579 and ~~$650~~$1,240 for the Memorialization segment, $4$1 and ~~$18~~$12 for the Industrial Technologies segment, and $2$463 and ~~$47~~$23 for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Non-recurring/incremental COVID-19 costs were $390 and ~~2020,~~$706 for the SGK Brand Solutions segment, $1,043 and $1,890 for the Memorialization segment, $5 and $30 for the Industrial Technologies segment, and $465 and $70 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

Note 14. Goodwill and Other Intangible Assets

A summary of the carrying amount of goodwill attributable to each segment as well as the changes in such amounts are as follows:

The net goodwill balances at ~~December~~March 31, ~~2021~~2022 and September 30, 2021 included $178,732 of accumulated impairment losses. Accumulated impairment losses at ~~December~~March 31, ~~2021~~2022 and September 30, 2021 were $149,786, $5,000, and $23,946 for the SGK Brand Solutions, Memorialization, and Industrial Technologies segments, respectively.

The Company performed its annual impairment review of goodwill and indefinite-lived intangible assets in the second quarter of fiscal ~~2021~~2022 (January 1, ~~2021)~~2022) and determined that the estimated fair values for all goodwill reporting units exceeded their carrying values, therefore no impairment charges were necessary. The estimated fair value of the Company's Graphics Imaging reporting unit, within the SGK Brand Solutions segment, exceeded the carrying value (expressed as a percentage of carrying value) by approximately 5%10%. If current projections are not achieved or specific valuation factors outside the Company’s control (such as discount rates and continued economic and industry impacts of COVID-19) significantly change, goodwill write-downs may be necessary in future periods.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited), Continued

(Dollar amounts in thousands, except per share data)

Note 14. Goodwill and Other Intangible Assets (continued)

The following tables summarize the carrying amounts and related accumulated amortization for intangible assets as of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively.

The net change in intangible assets during the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 included the impact of foreign currency fluctuations during the period and additional amortization.

Amortization expense on intangible assets was ~~$21,546~~$11,953 and ~~$15,221~~$22,930 for the three-month periods ended ~~December~~March 31, 2022 and 2021, respectively. For the six month period ended March 31, 2022 and ~~2020,~~2021, amortization expense was $33,499 and $38,151, respectively. Amortization expense is estimated to be ~~$35,988~~$23,976 for the remainder of fiscal 2022, $41,064 in 2023, $35,505 in 2024, ~~$19,770~~$19,684 in 2025 and $14,686 in 2026.

Note 15. Asset Write-Downs

The Company has certain operations in Russia within its SGK Brand Solutions segment. In light of the current war between Russia and Ukraine, and the resulting regional instability and evolving political and economic conditions within the region, the Company evaluated certain of its assets for recoverability and impairment. As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $10,486 during the second quarter of fiscal 2022 to reduce the carrying value of these assets to zero. Asset write-downs (primarily related to property, plant and equipment) totaling $9,686 and $800 were reported within cost of sales and administrative expense, respectively, for the three and six months ended March 31, 2022.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES:

The following discussion should be read in conjunction with the consolidated financial statements of Matthews International Corporation ("Matthews" or the "Company") and related notes thereto included in this Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Any forward-looking statements contained herein are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in the cost of materials used in the manufacture of the Company's products, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, cybersecurity concerns, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, and other factors described in Item 1A - "Risk Factors" in this Form 10-Q and Item 1A - "Risk Factors" in the Company's Form 10-K for the fiscal year ended September 30, 2021. In addition, although the Company does not have any customers that would be considered individually significant to consolidated sales, changes in the distribution of the Company's products or the potential loss of one or more of the Company's larger customers are also considered risk factors. Matthews cautions that the foregoing list of important factors is not all inclusive. Readers are also cautioned not to place undue reliance on any forward looking statements, which reflect management's analysis only as of the date of this report, even if subsequently made available by Matthews on its website or otherwise. Matthews does not undertake to update any forward looking statement, whether written or oral, that may be made from time to time by or on behalf of Matthews to reflect events or circumstances occurring after the date of this report.

Included in this report are measures of financial performance that are not defined by generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures assist management in comparing the Company's performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company's core operations. For additional information and reconciliations from the consolidated financial statements see "Non-GAAP Financial Measures" below.

RESULTS OF OPERATIONS:

The Company manages its businesses under three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment. This business segment change is consistent with internal management structure and reporting changes effective for fiscal 2022. Prior periods were revised to reflect retrospective application of this segment realignment. The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries. The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage, marking, coding and industrial automation technologies and solutions, and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

2124

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

The following table sets forth the sales and adjusted EBITDA for the Company's three reporting segments for the ~~three-month~~three and six-month periods ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021. Refer to Note 13, "Segment Information" in Item 1 - "Financial Statements" for the Company's financial information by segment.


		Three Months Ended December 31,					Three Months Ended March 31,				Six Months Ended March 31,
			2021		2020				2022		2021		2022		2021
Sales:	Sales:		(Dollar amounts in thousands)					Sales:	(Dollar amounts in thousands)
SGK Brand Solutions	SGK Brand Solutions		$	153,542	$	149,959		SGK Brand Solutions	$	146,820	$	146,415	$	300,362	$	296,374
Memorialization	Memorialization		210,706		183,274			Memorialization	220,004		205,457		430,710		388,731
Industrial Technologies	Industrial Technologies		74,331		53,424			Industrial Technologies	78,154		65,282		152,485		118,706
Consolidated Sales	Consolidated Sales		$	438,579	$	386,657		Consolidated Sales	$	444,978	$	417,154	$	883,557	$	803,811

Total Adjusted EBITDA (1)

(1) Total Adjusted EBITDA is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section below.

Sales for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 were ~~$438.6~~$883.6 million, compared to ~~$386.7~~$803.8 million for the ~~three~~six months ended ~~December~~March 31, ~~2020,~~2021, representing an increase of ~~$51.9~~$79.7 million. The increase in fiscal 2022 sales reflected higher sales in all of the Company's segments. Fiscal 2022 sales continued to be impacted by the global outbreak of coronavirus disease 2019 ("COVID-19"), which has caused some commercial impacts in certain of the Company's segments and geographic locations. ~~These~~Recent impacts have included higher sales volumes for memorialization products and ~~services, but have also included temporary business disruptions and customer project delays for certain of the Company's businesses.~~services. Additionally, recent increases in the cost of certain raw materials and other inflationary pressures have had an unfavorable impact on the Company's results of operations. ~~While substantially all~~On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $15.2 million on fiscal 2022 sales compared to the Company's operations have remained open during the COVID-19 pandemic, management expects COVID-19 to continue to impact its sales and results of operations in the short-term until the pandemic subsides (see "Forward Looking Information" below).prior year.

In the SGK Brand Solutions segment, sales for the first ~~three~~six months of fiscal 2022 were ~~$153.5~~$300.4 million, compared to ~~$150.0~~$296.4 million for the first ~~three~~six months of fiscal 2021. The increase primarily resulted from higher retail-based sales (principally merchandising solutions) ~~and~~, higher brand sales in the Asia-Pacific ~~market.~~market, and increased sales volume for cylinder (primarily packaging) products. These increases were partially offset by lower brand sales in the U.S. ~~and Europe.~~ Changes in foreign currency exchange rates had an unfavorable impact of ~~$2.4~~$9.4 million on the segment's sales compared to the prior year. Memorialization segment sales for the first ~~three~~six months of fiscal 2022 were ~~$210.7~~$430.7 million, compared to ~~$183.3~~$388.7 million for the first ~~three~~six months of fiscal 2021. The increase in sales predominantly resulted from increased unit sales of caskets and bronze and granite memorial products, primarily due to COVID-19. The segment also

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued~~

reported higher sales of mausoleums and cremation and incineration equipment. The increase in sales also reflected improved price realization and benefits from the fiscal 2021 acquisition of a

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

small cemetery products business. Changes in foreign currency exchange rates had an unfavorable impact of $1.2 million on the segment's sales compared to the prior year. Industrial Technologies segment sales were ~~$74.3~~$152.5 million for the first ~~three~~six months of fiscal 2022, compared to ~~$53.4~~$118.7 million for the first ~~three~~six months of fiscal 2021. The sales increase primarily reflected higher sales of purpose-built engineered products (primarily energy storage solutions for the electric vehicle market) ~~and~~, increased sales of warehouse automation ~~solutions.~~solutions, and higher product identification sales. These increases were partially offset by reduced sales of surfaces products. Changes in foreign currency exchange rates had an unfavorable impact of ~~$1.5~~$4.6 million on the segment's sales compared to the prior year. ~~On a consolidated basis, changes in foreign currency exchange rates were estimated to have an unfavorable impact of $4.1 million on fiscal 2022 sales compared to a year ago.~~

Gross profit for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was ~~$131.6~~$256.2 million, compared to ~~$125.5~~$266.5 million for the same period a year ago. Consolidated gross profit as a percent of sales was ~~30.0%~~29.0% and ~~32.5%~~33.2% for the first ~~three~~six months of fiscal 2022 and fiscal 2021, respectively. The ~~increase~~decrease in gross profit primarily reflected the impact of higher material (steel, lumber and bronze ingot), labor and transportation costs, particularly in the Memorialization segment, production inefficiencies related to onsite/remote-work transitions and unfavorable changes in sales mix within the SGK Brand Solutions segment. Fiscal 2022 gross profit also included $9.7 million of asset write-downs related to the current war between Russia and Ukraine (see below for further details). These decreases in gross profit were partially offset by the impact of higher sales, benefits from the realization of productivity improvements and other cost-reduction initiatives, and improved margins for surfaces and engineered products within the Industrial Technologies segment. These improvements were partially offset by the impact of higher material, labor and transportation costs, particularly in the Memorialization segment, and unfavorable changes in sales mix within the SGK Brand Solutions segment. Higher material costs in the Memorialization segment reflected a significant increase in commodity costs, particularly steel, lumber and bronze ingot. Gross profit also included acquisition integration costs and other charges primarily in connection with cost-reduction initiatives totaling ~~$1.5~~$6.4 million and ~~$8.0~~$10.7 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Selling and administrative expenses for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 were ~~$99.3~~$204.5 million, compared to ~~$99.9~~$203.0 million for the first ~~three~~six months of fiscal 2021. Consolidated selling and administrative expenses, as a percent of sales, were ~~22.6%~~23.1% for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, compared to ~~25.8%~~25.3% for the same period last year. Fiscal 2022 selling and administrative expenses reflected lower performance-based compensation compared to fiscal 2021 and benefits from ongoing cost-reduction initiatives, which were ~~partially~~ offset by the ~~impact~~impacts of higher salaries and wage ~~rates.~~rates and higher travel and entertainment ("T&E") costs. Fiscal 2022 selling and administrative expenses included $800,000 of asset write-downs related to the current war between Russia and Ukraine (see below). Selling and administrative expenses also included acquisition integration and related systems-integration costs, and other charges primarily in connection with cost-reduction initiatives totaling ~~$3.5~~$6.5 million in fiscal 2022, compared to ~~$4.4~~$8.3 million in fiscal 2021. Intangible amortization for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was ~~$21.5~~$33.5 million, compared to ~~$15.2~~$38.2 million for the ~~three~~six months ended ~~December~~March 31, ~~2020. The increase in~~2021. Fiscal 2022 intangible amortization ~~reflected~~included $4.0 million of incremental amortization resulting from the fiscal 2021 reduction in useful lives for certain customer relationships. Intangible amortization also included accelerated amortization ~~resulting from the fiscal 2019 reduction in useful lives for~~related to certain trade names that ~~are being~~have been discontinued. Amortization for these trade names totaled $9.5 million and ~~$7.0~~$16.5 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~December~~March 31, ~~2020,~~2021, respectively.

Adjusted EBITDA was ~~$53.3~~$108.5 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~$54.8~~$115.7 million for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. Adjusted EBITDA for the SGK Brand Solutions segment was ~~$15.4~~$28.9 million for the first ~~three~~six months of fiscal 2022 compared to ~~$21.8~~$40.2 million for the same period a year ago. The decrease in segment adjusted EBITDA primarily reflected the impact of production inefficiencies related to onsite/remote-work transitions, unfavorable changes in sales mix, and higher ~~travel and entertainment costs, and production inefficiencies related to the COVID-19 remote-work environment.~~T&E costs. These decreases were partially offset by the impact of higher sales, and benefits from cost-reduction initiatives. Changes in foreign currency exchange rates had an unfavorable impact of ~~$684,000~~$2.1 million on the segment's adjusted EBITDA compared to the prior year. Memorialization segment adjusted EBITDA was ~~$43.4~~$86.3 million for the first ~~three~~six months of fiscal 2022 compared to ~~$44.1~~$95.7 million for the first ~~three~~six months of fiscal 2021. Fiscal 2022 segment adjusted EBITDA reflected the benefits of higher sales and productivity initiatives, which were offset by the impact of higher material, labor and transportation costs. Adjusted EBITDA for the Industrial Technologies segment was ~~$7.2~~$21.6 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 compared to ~~$3.0~~$11.3 million for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. Industrial Technologies segment adjusted EBITDA primarily reflected the impact of higher sales, ~~of purpose-built engineered products and warehouse automation solutions,~~ improved margins for surfaces and engineered products and benefits from cost-reduction ~~initiatives.~~initiatives, which were partially offset by the impact of higher T&E costs. Changes in foreign currency exchange rates had an unfavorable impact of ~~$191,000~~$1.0 million on the segment's adjusted EBITDA compared to the prior year.

Investment income was ~~$1.0~~$676,000 for the six months ended March 31, 2022 and $2.0 million for the ~~three~~six months ended ~~December~~March 31, ~~2021 and $1.1 million for the three months ended December 31, 2020.~~2021. Investment income for both periods primarily reflected changes in the value of investments (primarily marketable securities) held in trust for certain of the Company's benefit plans. Interest expense for the first ~~three~~six months of fiscal 2022 was ~~$6.5~~$12.8 million, compared to ~~$7.7~~$15.0 million for the same period last year. The decrease in interest expense reflected a decrease in average borrowing levels and lower average interest rates in the current fiscal year. Other income (deductions), net, for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 represented a decrease in pre-tax income of ~~$31.7~~$31.2 million, compared to a decrease in pre-tax income of ~~$1.7~~$4.3 million for the same period last year. Other income (deductions), net includes the non-service components of pension and postretirement expense, which totaled ~~$31.1~~$31.4 million and ~~$1.9~~$3.8 million for the six months ended

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

~~the three months ended December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Fiscal 2022 non-service pension expense included a $30.9 million non-cash charge resulting from the full settlement of the Company's principal defined benefit retirement plan ("DB Plan") obligations. Refer to Note 10, "Pension and Other Postretirement Benefit Plans" in Item 1 - "Financial Statements" for further details. Other income (deductions), net also includes banking-related fees and the impact of currency gains and losses on certain intercompany debt and foreign denominated cash balances.

Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first ~~three~~six months of fiscal 2022 were a benefit of ~~$6.6~~$3.4 million, compared to an expense of ~~$4.0~~$5.0 million for the first ~~three~~six months of fiscal 2021. The difference between the Company’s consolidated income taxes for the first ~~three~~six months of fiscal 2022 compared to the same period for fiscal 2021 primarily resulted from a consolidated pre-tax loss in fiscal 2022 compared to pre-tax income in fiscal 2021. Additionally, fiscal 2022 included discrete tax expenses related to non-tax deductible asset write-downs in Russia, due to the ~~addition of uncertain tax liabilities.~~full valuation allowance for the Russian entity. Fiscal 2021 included discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a net operating loss (“NOL”) carryback to tax years where the U.S. federal statutory rate was 35%, and additional foreign tax credits. The Company’s fiscal 2022 ~~three month~~six-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to the non-deductible asset write-downs in Russia, state taxes, foreign statutory rate differentials, and tax credits. The Company’s fiscal 2021 ~~three-month~~six-month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to discrete tax expenses related to foreign operating losses, discrete tax benefits related to the resolution of uncertain tax liabilities, a NOL carryback to tax years where the U.S. federal statutory rate was 35%, and additional foreign tax credits.

Net losses attributable to noncontrolling interests were ~~$7,000~~$38,000 for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~$234,000~~$71,000 for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. The net losses attributable to noncontrolling interests primarily reflected losses in less than wholly-owned businesses.

The Company has certain operations in Russia within its SGK Brand Solutions segment. In light of the current war between Russia and Ukraine, and the resulting regional instability and evolving political and economic conditions within the region, the Company evaluated certain of its assets for recoverability and impairment. As a result of this assessment, and due to the uncertainty in projecting future cash flows for the Company's operations in Russia, the Company recorded asset write-downs totaling $10.5 million during the second quarter of fiscal 2022 to reduce the carrying value of these assets to zero. Asset write-downs (primarily related to property, plant and equipment) totaling $9.7 million and $800,000 were reported within cost of sales and administrative expense, respectively, for the three and six months ended March 31, 2022.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

NON-GAAP FINANCIAL MEASURES:

Included in this report are measures of financial performance that are not defined by GAAP. The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition costs, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.

The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s management in assessing the performance of its business. Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition costs, ERP integration costs, and strategic initiatives and other charges. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition and ERP integration costs, and items that do not reflect the ordinary earnings of the Company’s operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company’s management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

The reconciliation of net income to adjusted EBITDA is as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
	2022		2021		2022		2021
	(Dollar amounts in thousands)
Net (loss) income	$	(1,936)	$	5,152	$	(21,746)	$	3,160
Income tax provision (benefit)	3,277		972		(3,351)		4,952
Income (loss) before income taxes	1,341		6,124		(25,097)		8,112
Net loss (income) attributable to noncontrolling interests	31		(163)		38		71
Interest expense	6,260		7,233		12,767		14,961
Depreciation and amortization *	23,724		35,179		57,225		62,530
Strategic initiatives and other charges (1)**	6,750		5,093		10,573		16,285
Non-recurring / incremental COVID-19 costs (2)***	1,213		1,572		1,903		2,696
Defined benefit plan termination related items (3)	(79)		—		347		—
Asset write-downs (4)	10,486		—		10,486		—
Stock-based compensation	5,222		4,001		8,931		7,247

Non-service pension and postretirement expense (5)	242		1,901		31,350		3,801
Total Adjusted EBITDA	$	55,190	$	60,940	$	108,523	$	115,703

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

~~The reconciliation of net income to adjusted EBITDA is as follows:~~

Three Months Ended
December 31,
2021 2020
(Dollar amounts in thousands)
Net loss $ (19,810) $ (1,992)
Income tax (benefit) provision (6,628) 3,980
(Loss) income before income taxes (26,438) 1,988
Net loss attributable to noncontrolling interests 7 234
Interest expense 6,507 7,728
Depreciation and amortization *
33,501 27,351
Strategic initiatives and other charges (1)**
3,823 11,192
Non-recurring / incremental COVID-19 costs (2)***
690 1,124
Defined benefit plan termination related costs (3)
426 —
Stock-based compensation 3,709 3,246
Non-service pension and postretirement expense (4)
31,108 1,900
Total Adjusted EBITDA $ 53,333 $ 54,763


(1) Includes certain non-recurring items associated with recent acquisition activities, costs associated with global ERP system integration efforts, and certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
(2) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19.
(3) Represents ~~costs~~items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.
(4) Represents asset write-downs within the SGK Brand Solutions segment (see Note 15, "Asset Write-Downs" in Item 1 - "Financial Statements").
(5) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.

* Depreciation and amortization was ~~$23.7~~$14.1 million and ~~$17.8~~$25.3 million for the SGK Brand Solutions segment, $5.8 million and ~~$5.5~~$5.7 million for the Memorialization segment, ~~$2.7~~$2.5 million and ~~$2.7~~$2.9 million for the Industrial Technologies segment, and $1.3 million and $1.3 million for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Depreciation and ~~2020,~~amortization was $37.8 million and $43.1 million for the SGK Brand Solutions segment, $11.6 million and $11.2 million for the Memorialization segment, $5.2 million and $5.6 million for the Industrial Technologies segment, and $2.6 million and $2.6 million for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were ~~$1.2~~$4.5 million and ~~$4.7~~$2.9 million for the SGK Brand Solutions segment, ~~$671,000~~charges of $516,000 and ~~$1.1 million~~income of $335,000 for the Memorialization segment, ~~$32,000~~charges of $161,000 and ~~$2.7 million~~$126,000 for the Industrial Technologies segment, and ~~$1.9~~$1.6 million and ~~$2.7~~$2.4 million for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Acquisition costs, ERP integration costs, and ~~2020,~~strategic initiatives and other charges were $5.7 million and $7.6 million for the SGK Brand Solutions segment, $1.2 million and $795,000 for the Memorialization segment, $193,000 and $2.8 million for the Industrial Technologies segment, and $3.5 million and $5.1 million for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

*** Non-recurring/incremental COVID-19 costs were ~~$220,000~~$170,000 and ~~$409,000~~$297,000 for the SGK Brand Solutions segment, ~~$464,000~~$579,000 and ~~$650,000~~$1.2 million for the Memorialization segment, ~~$4,000~~$1,000 and ~~$18,000~~$12,000 for the Industrial Technologies segment, and ~~$2,000~~$463,000 and ~~$47,000~~$23,000 for Corporate and Non-Operating, for the three months ended ~~December~~March 31, 2022 and 2021, respectively. Non-recurring/incremental COVID-19 costs were $390,000 and ~~2020,~~$706,000 for the SGK Brand Solutions segment, $1.0 million and $1.9 million for the Memorialization segment, $5,000 and $30,000 for the Industrial Technologies segment, and $465,000 and $70,000 for Corporate and Non-Operating, for the six months ended March 31, 2022 and 2021, respectively.

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued~~

LIQUIDITY AND CAPITAL RESOURCES:

Net cash ~~used in~~provided by operating activities was ~~$27.2~~$72.7 million for the first ~~three~~six months of fiscal 2022, compared to net cash provided by operating activities of ~~$35.3~~$92.2 million for the first ~~three~~six months of fiscal 2021. Operating cash flow for both periods principally included net ~~loss~~(loss) income adjusted for deferred taxes, depreciation and amortization, stock-based compensation expense, net losses (gains) related to investments, non-cash pension expense, asset write-downs, other non-cash adjustments, and changes in working capital items. Fiscal 2022 operating cash flow also reflected $35.7 million of DB Plan contributions to fully fund the settlement of the DB Plan obligations. Net changes in working capital items ~~reduced~~increased operating cash flow by ~~$40.8~~$18.8 million and ~~$3.7~~$2.7 million in fiscal 2022 and fiscal 2021, respectively. The fiscal 2022 change in working capital ~~primarily~~principally reflected proceeds from the sale of receivables under a receivables purchase agreement (see below for further discussion), increased fiscal year-end compensation-related payments, ~~and~~ higher inventory levels reflecting increased commodity ~~costs.~~costs, and changes in other accounts (primarily income taxes).

Cash used in investing activities was ~~$12.5~~$24.7 million for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, compared to ~~$5.8~~$11.9 million for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. Investing activities for the first ~~three~~six months of fiscal 2022 primarily reflected capital expenditures of ~~$12.6~~$28.1 million and proceeds from the sale of investments of $3.1 million. Investing activities for the first six months of fiscal 2021 reflected capital expenditures of $15.8 million, acquisitions payments (net of cash acquired) totaling $13.1 million, proceeds from the sale of investments of $15.0 million and proceeds from the sale of assets of ~~$301,000. Investing activities for the first three months of fiscal 2021 reflected capital expenditures of $7.5 million and proceeds from the sale of assets of $1.7~~$2.1 million.

Capital expenditures reflected reinvestment in the Company's business segments and were made primarily for the purchase of new production machinery, equipment, software and systems, and facilities designed to improve product quality, increase manufacturing efficiency, lower production costs and meet regulatory requirements. Capital expenditures for the last three fiscal years were primarily financed through operating cash. Capital spending for property, plant and equipment has averaged $35.6 million for the last three fiscal years. Capital spending for fiscal 2022 is currently estimated to be approximately ~~$60~~$70 million. The Company expects to generate sufficient cash from operations to fund all anticipated capital spending projects.

Cash provided by financing activities for the three months ended December 31, 2021 was $62.4 million, primarily reflecting proceeds, net of repayments, on long-term debt of $72.3 million, treasury stock purchases of $2.4 million and dividends of $6.8 million to the Company's shareholders. Cash used in financing activities for the ~~three~~six months ended ~~December~~March 31, ~~2020~~2022 was ~~$31.4~~$38.7 million, primarily reflecting repayments, net of proceeds, on long-term debt of ~~$18.0~~$10.5 million, treasury stock purchases of ~~$4.2~~$12.1 million, dividends of ~~$6.8~~$14.0 million to the Company's shareholders, and $613,000 of holdback and deferred payments related to acquisitions from prior years. Cash used

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

in financing activities for the six months ended March 31, 2021 was $75.5 million, primarily reflecting repayments, net of proceeds, on long-term debt of $53.9 million, treasury stock purchases of $4.5 million, dividends of $14.0 million to the Company's shareholders, and $1.6 million of holdback and ~~contingent consideration~~deferred payments related to acquisitions from prior years.

The Company has a domestic credit facility with a syndicate of financial institutions that includes a $750.0 million senior secured revolving credit facility, which matures in March 2025. A portion of the revolving credit facility (not to exceed $350.0 million) can be drawn in foreign currencies. Borrowings under the revolving credit facility bear interest at LIBOR plus a factor ranging from 0.75% to 2.00% (1.00% at ~~December~~March 31, ~~2021)~~2022) based on the Company's secured leverage ratio. The secured leverage ratio is defined as net secured indebtedness divided by EBITDA (earnings before interest, income taxes, depreciation and amortization) as defined within the domestic credit facility agreement. The Company is required to pay an annual commitment fee ranging from 0.15% to 0.30% (based on the Company's leverage ratio) of the unused portion of the revolving credit facility. The Company incurred debt issuance costs in connection with the domestic credit facility. Unamortized costs were ~~$2.0~~$1.8 million and $2.2 million at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively.

The domestic credit facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $35.0 million) is available for the issuance of trade and standby letters of credit. Outstanding U.S. dollar denominated borrowings on the revolving credit facility at ~~December~~March 31, ~~2021~~2022 and September 30, 2021 were ~~$405.0~~$380.5 million and $349.8 million, respectively. The weighted-average interest rate on outstanding borrowings for the domestic credit facility (including the effects of interest rate swaps and Euro denominated borrowings) at ~~December~~March 31, 2022 and 2021 was 1.89% and ~~2020 was 1.86% and 2.07%~~2.17%, respectively.

The Company has $300.0 million of 5.25% senior unsecured notes due December 1, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes bear interest at a rate of 5.25% per annum with interest payable semi-annually in arrears on June 1 and December 1 of each year. The Company's obligations under the 2025 Senior Notes are guaranteed by certain of the Company's direct and indirect wholly-owned ~~domestic~~ subsidiaries. The Company is subject to certain covenants and other restrictions in connection with the 2025 Senior Notes. The Company incurred direct financing fees and costs in connection with the 2025 Senior Notes. Unamortized costs were ~~$2.1~~$1.9 million and $2.2 million at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively.

The Company has a $115.0 million accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions which matures in March 2022 and the Company intends to extend this facility. Under the Securitization Facility, the Company and certain of its domestic subsidiaries sell, on a continuous basis without recourse, their trade receivables to Matthews Receivables Funding Corporation, LLC (“Matthews RFC”), a wholly-owned bankruptcy-remote

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued~~

subsidiary of the Company. In March 2022, Matthews RFC ~~in turn assigns~~entered into a ~~collateral interest in these~~receivables purchase agreement (“RPA”) to sell up to $125.0 million of receivables to certain purchasers (the “Purchasers”) on a recurring basis in exchange for cash (referred to as “capital” within the RPA) equal to the gross receivables transferred. The parties intend that the transfers of receivables to the Purchasers constitute purchases and sales of receivables. Matthews RFC has guaranteed to each Purchaser the prompt payment of sold receivables, and has granted a security interest in its assets for the benefit of the Purchasers. Under the RPA, which matures in March 2024, each Purchaser’s share of capital accrues yield at a floating rate plus an applicable margin. The Company is the master servicer under the RPA, and is responsible for administering and collecting receivables.

The proceeds of the RPA are classified as operating activities in the Company’s Consolidated Statements of Cash Flows. Cash received from collections of sold receivables may be used to fund additional purchases of receivables on a revolving basis, or to reduce all or any portion of the outstanding capital of the Purchasers. Gross receivables sold and cash collections reinvested under the RPA program were $121.6 million and $46.6 million for the six months ended March 31, 2022, respectively. The fair value of the sold receivables approximated book value due to their credit quality and short-term nature, and as a result, no gain or loss on sale of receivables was recorded. As of March 31, 2022, the amount sold to the Purchasers was $75.0 million, which was derecognized from the Consolidated Balance Sheets. As collateral against sold receivables, Matthews RFC maintains a certain level of unsold receivables, which was $29.3 million as of March 31, 2022.

Previously, the Company had a $115.0 million accounts receivable securitization facility (the "Securitization Facility") with certain financial institutions ~~and then may borrow funds under the Securitization Facility.~~that matured in March 2022. The Securitization Facility ~~does~~did not qualify for sale treatment. Accordingly, the trade receivables and related debt obligations ~~remain~~remained on the Company's Consolidated Balance Sheet. Borrowings under the Securitization Facility ~~bear interest at~~were based on LIBOR plus 0.75%~~. The~~ and the Company iswas required to pay an annual commitment fee ranging from 0.25% to 0.35% of the unused portion of the Securitization Facility. Outstanding borrowings under the Securitization Facility at ~~December 31, 2021 and~~ September 30, 2021 ~~were $104.7 million and~~totaled $96.0 ~~million, respectively.~~million. At ~~December~~March 31, 2021, ~~and 2020,~~ the interest rate on borrowings under this facility was ~~0.85% and 0.89% respectively.~~0.86%.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges (dollar amounts in thousands):


		December 31, 2021			September 30, 2021				March 31, 2022			September 30, 2021
Pay fixed swaps - notional amount	Pay fixed swaps - notional amount	$	250,000		$	250,000		Pay fixed swaps - notional amount	$	225,000		$	250,000
Net unrealized loss		$	(102)		$	(2,062)
Net unrealized gain (loss)								Net unrealized gain (loss)	$	5,318		$	(2,062)
Weighted-average maturity period (years)	Weighted-average maturity period (years)	2.0			2.2			Weighted-average maturity period (years)	1.9			2.2
Weighted-average received rate	Weighted-average received rate	0.10		%	0.08		%	Weighted-average received rate	0.45		%	0.08		%
Weighted-average pay rate	Weighted-average pay rate	1.34		%	1.34		%	Weighted-average pay rate	1.37		%	1.34		%

The fair value of the interest rate swaps reflected an unrealized ~~loss~~gain net of unrealized ~~gains~~losses of ~~$102,000 ($77,000~~$5.3 million($4.0 million after tax) at ~~December~~March 31, ~~2021~~2022 and an unrealized loss net of unrealized gains of $2.1 million ($1.6 million after tax) at September 30, 2021, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Assuming market rates remain constant with the rates at ~~December~~March 31, ~~2021,~~2022, a ~~loss~~gain (net of tax) of approximately ~~$663,000~~$839,000 included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company, through certain of its European subsidiaries, has a credit facility with a European bank, which is guaranteed by Matthews. The maximum amount of borrowing available under this facility is €25.0 million ($~~28.4~~27.8 million), which includes €8.0 million ($~~9.1~~8.9 million) for bank guarantees. In the first quarter of fiscal 2022, the Company extended this facility to a current maturity of December 2022 and the Company intends to continue to extend this facility. ~~There were no outstanding borrowings under the credit facility at December~~March 31, ~~2021.~~ 2022.Outstanding borrowings under the credit facility totaled €7.8 million ($8.7 million) and €704,000 ($817,000) at March 31, 2022 and September 30, ~~2021.~~2021, respectively. The weighted-average interest rate on outstanding borrowings under this facility was 2.25% at ~~December~~March 31, ~~2020.~~2022 and March 31, 2021.

Other borrowings totaled ~~$20.3~~$58.5 million and $10.2 million at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. Other borrowings at March 31, 2022 included $37.8 million of collateralized borrowings in connection with the RPA arrangement discussed above. The weighted-average interest rate on these borrowings was ~~1.88%~~1.92% and ~~2.11%~~2.18% at ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The Company has a U.S. Dollar/Euro cross currency swap with a notional amount of $94.5 million as of ~~December~~March 31, ~~2021,~~2022, which has been designated as a net investment hedge of foreign operations. The swap contract matures in September 2028. The Company assesses hedge effectiveness for this contract based on changes in fair value attributable to changes in spot prices. A gain of ~~$2.1~~$2.9 million (net of income taxes of ~~$675,000)~~$939,000) and a gain of $29,000 (net of income taxes of $10,000), which represented effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at ~~December~~March 31, ~~2021~~2022 and September 30, 2021, respectively. Income of ~~$365,000,~~$420,000 and $785,000, which represented the recognized portion of the fair value excluded from the assessment of hedge effectiveness, was included in current period earnings as a component of interest expense for the three and six months ended ~~December~~March 31, ~~2021.~~2022, respectively. At ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the swap, which is included in other assets in the Consolidated Balance Sheets, totaled ~~$2.8~~$3.8 million and $39,000, respectively.

The Company has a stock repurchase program. The buy-back program is designed to increase shareholder value, enlarge the Company's holdings of its common stock, and add to earnings per share. Repurchased shares may be retained in treasury, utilized for acquisitions, or reissued to employees or other purchasers, subject to the restrictions set forth in the Company's Restated Articles of Incorporation. Under the current authorization, ~~2,595,881~~2,306,697 shares remain available for repurchase as of ~~December~~March 31, ~~2021.~~

272022.

Consolidated working capital of the Company was $273.7 million at March 31, 2022, compared to $269.9 million at September 30, 2021. Cash and cash equivalents were $53.8 million at March 31, 2022, compared to $49.2 million at September 30, 2021. The Company's current ratio was 1.8 at March 31, 2022 and September 30, 2021.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

Consolidated working capital of the Company was $345.6 million at December 31, 2021, compared to $269.9 million at September 30, 2021. Cash and cash equivalents were $71.0 million at December 31, 2021, compared to $49.2 million at September 30, 2021. The Company's current ratio was 2.0 at December 31, 2021 and 1.8 at September 30, 2021.

Long-Term Contractual Obligations:

The following table summarizes the Company's contractual obligations at ~~December~~March 31, ~~2021,~~2022, and the effect such obligations are expected to have on its liquidity and cash flows in future periods.


		Payments due in fiscal year:											Payments due in fiscal year:
		Total		2022 (1) Remainder		2023 to 2024		2025 to 2026		After 2026			Total		2022 (1) Remainder		2023 to 2024		2025 to 2026		After 2026
Contractual Cash Obligations:	Contractual Cash Obligations:	(Dollar amounts in thousands)										Contractual Cash Obligations:	(Dollar amounts in thousands)
Revolving credit facilities	Revolving credit facilities	$	405,000	$	—	$	—	$	405,000	$	—	Revolving credit facilities	$	389,216	$	8,676	$	—	$	380,540	$	—
Securitization Facility		104,690		104,690		—		—		—

2025 Senior Notes	2025 Senior Notes	360,931		7,875		31,500		321,556		—		2025 Senior Notes	361,066		7,875		31,500		321,691		—

Finance lease obligations (2)	Finance lease obligations (2)	8,797		2,830		3,347		1,025		1,595		Finance lease obligations (2)	7,761		1,795		3,344		1,026		1,596
Non-cancelable operating leases (2)	Non-cancelable operating leases (2)	85,063		19,851		38,958		20,821		5,433		Non-cancelable operating leases (2)	84,806		13,573		41,692		23,452		6,089
Other	Other	50,403		3,596		34,336		2,169		10,302		Other	87,878		2,616		73,699		2,169		9,394
Total contractual cash obligations	Total contractual cash obligations	$	1,014,884	$	138,842	$	108,141	$	750,571	$	17,330	Total contractual cash obligations	$	930,727	$	34,535	$	150,235	$	728,878	$	17,079

(1) The Company maintains certain debt facilities with maturity dates of twelve months or less that it intends and has the ability to extend beyond twelve months totaling ~~$104.7~~$8.7 million. These balances have been classified as non-current on the Company's Consolidated Balance Sheet.

(2) Lease obligations have not been discounted to their present value.

Benefit payments under the Company's DB Plan ~~are~~were made from plan assets, while benefit payments under the supplemental retirement plan ("SERP") and postretirement benefit plan are made from the Company's operating funds.

In the first quarter of fiscal 2022, the Company terminated its DB Plan and made plan contributions totaling $35.7 million to fully fund the planned settlement of the DB Plan obligations. Also during the first quarter of fiscal 2022, lump sum distributions of $186.0 million were made from the DB Plan to plan participants, and non-participating annuity contracts totaling $56.3 million were purchased by the DB Plan for plan participants, resulting in the full settlement of the DB Plan obligations. The settlement of the DB Plan obligations resulted in the recognition of a non-cash charge of $30.9 million, which has been presented as a component of other income (deductions), net for the ~~three~~six months ended ~~December~~March 31, ~~2021.~~2022. This amount represents the immediate recognition of the remaining portion of the deferred AOCI balances related to the DB Plan.

During the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 contributions of ~~$199,000~~$387,000 and ~~$83,000~~$340,000 were made under the SERP and postretirement benefit plan, respectively. The Company currently anticipates contributing an additional ~~$561,000~~$373,000 and ~~$801,000~~$544,000 under the SERP and postretirement benefit plan, respectively, for the remainder of fiscal 2022. The Company also expects to make payments totaling approximately $24.2 million in fiscal 2023 to fully settle the SERP and defined benefit portion of the officers retirement restoration plan obligations. The obligations of the SERP are expected to be funded from an existing rabbi trust. The Company believes that its current liquidity sources, combined with its operating cash flow and borrowing capacity, will be sufficient to meet its capital needs for the foreseeable future.

Unrecognized tax benefits are positions taken, or expected to be taken, on an income tax return that may result in additional payments to tax authorities. If a tax authority agrees with the tax position taken, or expected to be taken, or the applicable statute of limitations expires, then additional payments will not be necessary. As of ~~December~~March 31, ~~2021,~~2022, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately ~~$3.3~~$3.2 million. The timing of potential future payments related to the unrecognized tax benefits is not presently determinable. The Company believes that its current liquidity sources, combined with its operating cash flow and borrowing capacity, will be sufficient to meet its capital needs for the foreseeable future.

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued~~

REGULATORY MATTERS:

The Company’s operations are subject to various federal, state and local laws and regulations requiring strict compliance, including, but not limited to, the protection of the environment. The Company has established numerous internal compliance programs to further ensure lawful satisfaction of the applicable regulations. In addition, the Company is party to specific environmental matters which include obligations to investigate and mitigate the effects on the environment of certain materials at operating and non-operating sites. The Company is currently performing environmental assessments and remediation at certain sites, as applicable.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

FORWARD-LOOKING INFORMATION:

The Company's current strategy to attain annual operating growth primarily consists of the following: internal growth - which includes organic growth, cost structure and productivity improvements, new product development and the expansion into new markets with existing products - and acquisitions and related integration activities to achieve strategic and synergy benefits.

The significant factors (excluding acquisitions) influencing sales growth in the SGK Brand Solutions segment are global economic conditions, brand innovation, the level of marketing spending by the Company's clients, and government regulation. Due to the global footprint of this segment, currency fluctuations can also be a significant factor. Additionally, the retail-based businesses in the SGK Brand Solutions segment continue to recover from the unfavorable sales impacts of the pandemic (see below). For the Memorialization segment, sales growth will be influenced by North America death rates, and the impact of the increasing trend toward cremation on the segment's product offerings, including caskets, cemetery memorial products and cremation-related products. For the Industrial Technologies segment, sales growth drivers include economic/industrial market conditions, new product development, and the e-commerce trend. Order rates and backlogs in the warehouse and product identification businesses are expected to support continued sales growth for the Industrial Technologies segment in fiscal 2022. In addition, sales for the energy solutions business in the Industrial Technologies segment, which supports the electric vehicle market, grew significantly in fiscal 2021 and, based on current backlogs and significant interest from multiple well-known auto manufacturers, are expected to significantly grow again in fiscal 2022.

During fiscal 2019, the Company initiated a strategic evaluation to improve profitability and reduce the Company's cost structure. These actions leveraged the benefit of the Company's new global ERP platform, primarily targeted at the SGK Brand Solutions segment, both operational and commercial structure, and the Company's shared financial services and other administrative functions. This evaluation identified opportunities for significant cost structure improvements, which the Company expects to achieve throughout the remainder of fiscal 2022. The Company's strategic review has also resulted in improvements to the commercial structure within the SGK Brand Solutions segment.

On January 30, 2020, the World Health Organization declared an outbreak of COVID-19 to be a Public Health Emergency of International Concern, and subsequently recognized COVID-19 as a global pandemic in March 2020. Widespread efforts have been deployed by multiple countries around the world to prevent the virus from spreading, including temporary closures of non-essential businesses, event cancellations, travel restrictions, quarantines, and other disruptive actions. Substantially all of the Company’s operations have remained open during the COVID-19 pandemic, as they have been considered “essential” businesses during this time. However, theThe Company has experienced some commercial impact and business disruptions in certain segments and geographic locations as a result of COVID-19.

~~Considerable judgment is necessary to assess~~ Recent impacts have included higher sales volumes for memorialization products and predict the potential financial impacts of COVID-19 on the Company’s future operating results. Management expects that each of its business segments will experience some level of impacts in the short-term, potentially due to customer business disruptions, supply chain disruptions, facilities shut-downs, changing global economic conditions, and customer project delays.services. Additionally, recent increases in the cost of certain raw materials, labor, and other inflationary impacts are expected to impact the Company's results for the near future. The Company expects to partially mitigate these cost increases through price realization and the cost-reduction initiatives discussed above. ~~Longer-term financial impacts will depend on global economic conditions resulting from COVID-19.~~

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued~~

CRITICAL ACCOUNTING POLICIES:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Therefore, the determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, economic conditions, and in some cases, actuarial techniques. Actual results may differ from those estimates. A discussion of market risks affecting the Company can be found in Item 7A - "Quantitative and Qualitative Disclosures about Market Risk" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

A summary of the Company's significant accounting policies are included in the Notes to Consolidated Financial Statements and in the critical accounting policies in Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended September 30, 2021. Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about the Company's operating results and financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Company’s market risk during the three and six months ended ~~December~~March 31, ~~2021.~~2022. For additional information see Item 7A - "Quantitative and Qualitative Disclosures About Market Risk" in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

Item 4. Controls and Procedures

The Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to provide reasonable assurance that information required to be disclosed in our reports filed under that Act (the "Exchange Act"), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. These disclosure controls and procedures also are designed to provide reasonable assurance that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management, under the supervision and with the participation of our Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures in effect as of ~~December~~March 31, ~~2021.~~2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of ~~December~~March 31, ~~2021,~~2022, the Company's disclosure controls and procedures were effective to provide reasonable assurance that material information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, and that such information is recorded, summarized and properly reported within the appropriate time period, relating to the Company and its consolidated subsidiaries, required to be included in the Exchange Act reports, including this Quarterly Report on Form 10-Q.

There have been no changes in the Company's internal controls over financial reporting that occurred during the fiscal quarter ended ~~December~~March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

PART II ‑ OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Management does not expect that the results of any of these legal proceedings will have a material adverse effect on Matthews' financial condition, results of operations or cash flows.

Item 1A. Risk Factors

~~There~~Except as set forth below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The risk factors disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, in addition to the other information set forth in this report, could adversely affect the Company's operating performance and financial condition. Additional risks not currently known or deemed immaterial may also result in adverse effects on the Company.

Global conflicts may impact the business of the Company and the markets in which it operates. Global conflicts, such as the war in Ukraine, could impact the Company and its operations in a number of different ways, which are yet to be fully assessed and are therefore uncertain. The Company’s principal concern is for the safety of its employees and other personnel, specifically those who are based in the affected region. The Company has employees who are based in Eastern Europe, including Russia and Ukraine, who may be affected by the ongoing hostilities. The Company additionally has property, plant and equipment in or around the affected region. The continuing impact of this war and the response of the United States and other countries to it by means of trade and economic sanctions, or other actions, is still unknown; however it could disrupt the Company’s ability to work with certain parties. Similarly, the Company has employees based in and works with third-party providers from other parts of the world that may be affected by hostilities.

Due to the uncertainty relating to war or similar conflicts, the current war between Russia and Ukraine may adversely affect the Company's business, of which could materially and adversely affect the Company's results of operations. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and business and consumer spending; disruptions to the Company's global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion; adverse changes in international trade policies and relations; disruptions in global supply chains; exposure to foreign currency fluctuations; and constraints, volatility, or disruption in the capital markets. Similar uncertainties may arise in connection with other ongoing hostilities or future hostilities.

For so long as the hostilities continue, and perhaps even thereafter as the situation unfolds, the Company may see increased volatility in financial markets, which may impact equity markets generally, including the Company’s stock price, and make it more difficult for the Company to raise additional capital at a strategically advantageous time, or for financing to be available upon acceptable terms. All or any of these risks separately, or in combination could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Stock Repurchase Plan

The following table shows the monthly fiscal 2022 stock repurchase activity:


Period	Period	Total number of shares purchased	Weighted-average price paid per share		Total number of shares purchased as part of a publicly announced plan	Maximum number of shares that may yet be purchased under the plan	Period	Total number of shares purchased	Weighted-average price paid per share		Total number of shares purchased as part of a publicly announced plan	Maximum number of shares that may yet be purchased under the plan
October 2021	October 2021	—	$	—	—	2,658,627	October 2021	—	$	—	—	2,658,627
November 2021	November 2021	—	—		—	2,658,627	November 2021	—	—		—	2,658,627
December 2021	December 2021	62,746	38.79		62,746	2,595,881	December 2021	62,746	38.79		62,746	2,595,881

January 2022							January 2022	—	—		—	2,595,881
February 2022							February 2022	105,035	34.23		105,035	2,490,846
March 2022							March 2022	184,149	33.17		184,149	2,306,697

Total	Total	62,746	$	38.79	62,746		Total	351,930	$	34.49	351,930

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Not Applicable.

Item 6. Exhibits and Reports on Form 8-K


(a)	Exhibits

	Exhibit No.	Description	Method of Filing

	3.1	Restated Articles of Incorporation*	Exhibit Number 3.1 to the Annual Report on Form 10-K for the year ended September 30, 1994 (filed in paper format)
	3.2	Restated By-laws of Matthews International Corporation, as amended January 8, 2021*	Exhibit Number 3.1 to the Current Report on Form 8-K filed on January 14, 2021
	10.1	Matthews International Corporation Amended and Restated 2017 Equity Incentive Plan*	Exhibit Number 10.1 to the Current Report on Form 8-K filed on February 18, 2022
	31.1	Certification of Principal Executive Officer for Joseph C. Bartolacci	Filed herewith
	31.2	Certification of Principal Financial Officer for Steven F. Nicola	Filed herewith
	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Joseph C. Bartolacci	Furnished herewith
	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Steven F. Nicola	Furnished herewith
	101.INS	XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	Filed herewith
	101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
	101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
	101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith
	104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)	Filed herewith

* Incorporated by reference

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		MATTHEWS INTERNATIONAL CORPORATION
		(Registrant)

Date:	~~January 28,~~April 29, 2022	By: /s/ Joseph C. Bartolacci
		Joseph C. Bartolacci, President
		and Chief Executive Officer


Date:	~~January 28,~~April 29, 2022	By: /s/ Steven F. Nicola
		Steven F. Nicola, Chief Financial Officer
		and Secretary


		Three Months Ended December 31,			Three Months Ended March 31,						Six Months Ended March 31,
			2021			2020			2022		2021		2022		2021

Sales	Sales		$	438,579		$	386,657	Sales	$	444,978	$	417,154	$	883,557	$	803,811
Cost of sales	Cost of sales		(306,942)			(261,159)		Cost of sales	(320,459)		(276,143)		(627,401)		(537,302)

Gross profit	Gross profit		131,637			125,498		Gross profit	124,519		141,011		256,156		266,509

Selling expense	Selling expense		(30,743)			(30,795)		Selling expense	(33,381)		(32,360)		(64,124)		(63,155)
Administrative expense	Administrative expense		(68,569)			(69,109)		Administrative expense	(71,819)		(70,749)		(140,388)		(139,858)
Intangible amortization	Intangible amortization		(21,546)			(15,221)		Intangible amortization	(11,953)		(22,930)		(33,499)		(38,151)

Operating profit	Operating profit		10,779			10,373		Operating profit	7,366		14,972		18,145		25,345

Investment income			1,003			1,077
Investment (loss) income								Investment (loss) income	(327)		969		676		2,046
Interest expense	Interest expense		(6,507)			(7,728)		Interest expense	(6,260)		(7,233)		(12,767)		(14,961)
Other income (deductions), net	Other income (deductions), net		(31,713)			(1,734)		Other income (deductions), net	562		(2,584)		(31,151)		(4,318)

(Loss) income before income taxes			(26,438)			1,988
Income (loss) before income taxes								Income (loss) before income taxes	1,341		6,124		(25,097)		8,112

Income tax benefit (provision)			6,628			(3,980)
Income tax (provision) benefit								Income tax (provision) benefit	(3,277)		(972)		3,351		(4,952)

Net loss			(19,810)			(1,992)
Net (loss) income								Net (loss) income	(1,936)		5,152		(21,746)		3,160

Net loss attributable to noncontrolling interests			7			234
Net loss (income) attributable to noncontrolling interests								Net loss (income) attributable to noncontrolling interests	31		(163)		38		71

Net loss attributable to Matthews shareholders			$	(19,803)		$	(1,758)
Net (loss) income attributable to Matthews shareholders								Net (loss) income attributable to Matthews shareholders	$	(1,905)	$	4,989	$	(21,708)	$	3,231

Loss per share attributable to Matthews shareholders:
(Loss) earnings per share attributable to Matthews shareholders:								(Loss) earnings per share attributable to Matthews shareholders:
Basic	Basic		$	(0.62)		$	(0.06)	Basic	$	(0.06)	$	0.16	$	(0.68)	$	0.10

Diluted	Diluted		$	(0.62)		$	(0.06)	Diluted	$	(0.06)	$	0.16	$	(0.68)	$	0.10


		Three Months Ended December 31,					Six Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss		$	(19,810)	$	(1,992)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net (loss) income						Net (loss) income	$	(21,746)	$	3,160
Adjustments to reconcile net (loss) income to net cash flows from operating activities:						Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Depreciation and amortization	Depreciation and amortization	33,501		27,351		Depreciation and amortization	57,225		62,530
Stock-based compensation expense	Stock-based compensation expense	3,709		3,246		Stock-based compensation expense	8,931		7,247
Deferred tax provision		47		707
Deferred tax (benefit) provision						Deferred tax (benefit) provision	(16)		930
Gain on sale of assets, net	Gain on sale of assets, net	(276)		(569)		Gain on sale of assets, net	(528)		(511)

Other investment loss (gain)	Other investment loss (gain)	91		(654)		Other investment loss (gain)	214		(844)
Pension settlement loss	Pension settlement loss	30,856		—		Pension settlement loss	30,856		—

Asset write-downs						Asset write-downs	10,486		—
Changes in working capital items	Changes in working capital items	(40,816)		(3,729)		Changes in working capital items	18,842		2,730
Decrease in other assets	Decrease in other assets	2,112		1,515		Decrease in other assets	5,823		2,556
(Decrease) increase in other liabilities	(Decrease) increase in other liabilities	(39,121)		8,813		(Decrease) increase in other liabilities	(41,971)		12,962

Other operating activities, net	Other operating activities, net	2,551		638		Other operating activities, net	4,607		1,422

Net cash (used in) provided by operating activities		(27,156)		35,326
Net cash provided by operating activities						Net cash provided by operating activities	72,723		92,182

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(12,640)		(7,535)		Capital expenditures	(28,096)		(15,819)

Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	—		(13,100)
Proceeds from sale of assets	Proceeds from sale of assets	301		1,689		Proceeds from sale of assets	360		2,065

Proceeds from sale of investments						Proceeds from sale of investments	3,127		15,000

Investments and advances	Investments and advances	(130)		—		Investments and advances	(130)		—

Net cash used in investing activities	Net cash used in investing activities	(12,469)		(5,846)		Net cash used in investing activities	(24,739)		(11,854)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from long-term debt	Proceeds from long-term debt	174,859		121,596		Proceeds from long-term debt	342,847		249,833
Payments on long-term debt	Payments on long-term debt	(102,514)		(139,635)		Payments on long-term debt	(353,385)		(303,781)

Purchases of treasury stock	Purchases of treasury stock	(2,435)		(4,237)		Purchases of treasury stock	(12,138)		(4,486)
Dividends	Dividends	(6,824)		(6,808)		Dividends	(13,952)		(13,979)
Acquisition holdback and contingent consideration payments	Acquisition holdback and contingent consideration payments	—		(1,556)		Acquisition holdback and contingent consideration payments	(613)		(1,556)
Other financing activities	Other financing activities	(725)		(735)		Other financing activities	(1,434)		(1,484)

Net cash provided by (used in) financing activities		62,361		(31,375)
Net cash used in financing activities						Net cash used in financing activities	(38,675)		(75,453)

Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(928)		1,736		Effect of exchange rate changes on cash	(1,580)		771

Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	21,808		(159)		Net change in cash, cash equivalents and restricted cash	7,729		5,646
Cash, cash equivalents and restricted cash at beginning of year	Cash, cash equivalents and restricted cash at beginning of year	68,343		41,334		Cash, cash equivalents and restricted cash at beginning of year	68,343		41,334
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	90,151	$	41,175	Cash, cash equivalents and restricted cash at end of period	$	76,072	$	46,980


Adjusted EBITDA:	Adjusted EBITDA:					Adjusted EBITDA:
SGK Brand Solutions	SGK Brand Solutions	$	15,414	$	21,833	SGK Brand Solutions	$	13,462	$	18,364	$	28,876	$	40,197
Memorialization	Memorialization	43,370		44,072		Memorialization	42,944		51,606		86,314		95,678
Industrial Technologies	Industrial Technologies	7,183		2,996		Industrial Technologies	14,385		8,277		21,568		11,273
Corporate and Non-Operating	Corporate and Non-Operating	(12,634)		(14,138)		Corporate and Non-Operating	(15,601)		(17,307)		(28,235)		(31,445)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	53,333	$	54,763	Total Adjusted EBITDA	$	55,190	$	60,940	$	108,523	$	115,703

Strategic initiatives and other charges (1)**	Strategic initiatives and other charges (1)**	(3,823)		(11,192)		Strategic initiatives and other charges (1)**	(6,750)		(5,093)		(10,573)		(16,285)
Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (2)***	Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (2)***	(690)		(1,124)		Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (2)***	(1,213)		(1,572)		(1,903)		(2,696)
Defined benefit plan termination related costs (3)		(426)		—
Defined benefit plan termination related items (3)						Defined benefit plan termination related items (3)	79		—		(347)		—
Asset write-downs (4)						Asset write-downs (4)	(10,486)		—		(10,486)		—
Stock-based compensation	Stock-based compensation	(3,709)		(3,246)		Stock-based compensation	(5,222)		(4,001)		(8,931)		(7,247)

Non-service pension and postretirement expense (4)		(31,108)		(1,900)
Non-service pension and postretirement expense (5)						Non-service pension and postretirement expense (5)	(242)		(1,901)		(31,350)		(3,801)
Depreciation and amortization *	Depreciation and amortization *	(33,501)		(27,351)		Depreciation and amortization *	(23,724)		(35,179)		(57,225)		(62,530)
Interest expense	Interest expense	(6,507)		(7,728)		Interest expense	(6,260)		(7,233)		(12,767)		(14,961)
Net loss attributable to noncontrolling interests		(7)		(234)
(Loss) income before income taxes		(26,438)		1,988
Income tax benefit (provision)		6,628		(3,980)
Net (loss) income attributable to noncontrolling interests						Net (loss) income attributable to noncontrolling interests	(31)		163		(38)		(71)
Income (loss) before income taxes						Income (loss) before income taxes	1,341		6,124		(25,097)		8,112
Income tax (provision) benefit						Income tax (provision) benefit	(3,277)		(972)		3,351		(4,952)
Net loss	Net loss	$	(19,810)	$	(1,992)	Net loss	$	(1,936)	$	5,152	$	(21,746)	$	3,160


		SGK Brand Solutions		Memorialization		Industrial Technologies		Consolidated			SGK Brand Solutions		Memorialization		Industrial Technologies		Consolidated

Net goodwill at September 30, 2021	Net goodwill at September 30, 2021	$	314,850	$	366,360	$	92,577	$	773,787	Net goodwill at September 30, 2021	$	314,850	$	366,360	$	92,577	$	773,787

Translation and other adjustments	Translation and other adjustments	(1,422)		(479)		97		(1,804)		Translation and other adjustments	(3,524)		(1,010)		(142)		(4,676)

Net goodwill at December 31, 2021		$	313,428	$	365,881	$	92,674	$	771,983
Net goodwill at March 31, 2022										Net goodwill at March 31, 2022	$	311,326	$	365,350	$	92,435	$	769,111


		Carrying Amount		Accumulated Amortization		Net			Carrying Amount		Accumulated Amortization		Net
December 31, 2021:
March 31, 2022:								March 31, 2022:
Indefinite-lived trade names	Indefinite-lived trade names	$	30,540	$	—	$	30,540	Indefinite-lived trade names	$	30,540	$	—	$	30,540
Definite-lived trade names	Definite-lived trade names	148,794		(114,714)		34,080		Definite-lived trade names	148,695		(115,701)		32,994
Customer relationships	Customer relationships	388,112		(220,667)		167,445		Customer relationships	387,088		(230,723)		156,365
Copyrights/patents/other	Copyrights/patents/other	23,485		(15,826)		7,659		Copyrights/patents/other	21,767		(14,411)		7,356
		$	590,931	$	(351,207)	$	239,724		$	588,090	$	(360,835)	$	227,255
September 30, 2021:	September 30, 2021:							September 30, 2021:
Indefinite-lived trade names	Indefinite-lived trade names	$	30,540	$	—	$	30,540	Indefinite-lived trade names	$	30,540	$	—	$	30,540
Definite-lived trade names	Definite-lived trade names	148,867		(104,211)		44,656		Definite-lived trade names	148,867		(104,211)		44,656
Customer relationships	Customer relationships	388,699		(210,361)		178,338		Customer relationships	388,699		(210,361)		178,338
Copyrights/patents/other	Copyrights/patents/other	23,584		(15,576)		8,008		Copyrights/patents/other	23,584		(15,576)		8,008
		$	591,690	$	(330,148)	$	261,542		$	591,690	$	(330,148)	$	261,542