Pennsylvania | 25-0644320 | |||||||
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Large accelerated filer |
ý
|
Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
March 31, 2021 | September 30, 2020 | ||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 46,980 | $ | 41,334 | |||||||||||||||||||
Accounts receivable, net | 292,703 | 295,185 | |||||||||||||||||||||
Inventories, net | 186,522 | 175,100 | |||||||||||||||||||||
Other current assets | 73,410 | 63,954 | |||||||||||||||||||||
Total current assets | 599,615 | 575,573 | |||||||||||||||||||||
Investments | 49,048 | 63,250 | |||||||||||||||||||||
Property, plant and equipment, net | 228,362 | 236,788 | |||||||||||||||||||||
Operating lease right-of-use assets | 78,944 | 72,011 | |||||||||||||||||||||
Deferred income taxes | 3,457 | 3,757 | |||||||||||||||||||||
Goodwill | 777,823 | 765,388 | |||||||||||||||||||||
Other intangible assets, net | 305,295 | 333,498 | |||||||||||||||||||||
Other assets | 21,216 | 22,368 | |||||||||||||||||||||
Total assets | $ | 2,063,760 | $ | 2,072,633 | |||||||||||||||||||
LIABILITIES | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Long-term debt, current maturities | $ | 4,274 | $ | 26,824 | |||||||||||||||||||
Current portion of operating lease liabilities | 24,458 | 23,942 | |||||||||||||||||||||
Trade accounts payable | 89,321 | 82,921 | |||||||||||||||||||||
Accrued compensation | 57,547 | 58,058 | |||||||||||||||||||||
Accrued income taxes | 2,764 | 3,612 | |||||||||||||||||||||
Other current liabilities | 145,906 | 121,511 | |||||||||||||||||||||
Total current liabilities | 324,270 | 316,868 | |||||||||||||||||||||
Long-term debt | 778,209 | 807,710 | |||||||||||||||||||||
Operating lease liabilities | 55,984 | 49,297 | |||||||||||||||||||||
Accrued pension | 150,995 | 149,848 | |||||||||||||||||||||
Postretirement benefits | 18,629 | 18,600 | |||||||||||||||||||||
Deferred income taxes | 83,861 | 78,911 | |||||||||||||||||||||
Other liabilities | 32,213 | 39,966 | |||||||||||||||||||||
Total liabilities | 1,444,161 | 1,461,200 | |||||||||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||||||||||
Shareholders' equity-Matthews: | |||||||||||||||||||||||
Common stock | $ | 36,334 | $ | 36,334 | |||||||||||||||||||
Additional paid-in capital | 143,324 | 135,187 | |||||||||||||||||||||
Retained earnings | 848,254 | 859,002 | |||||||||||||||||||||
Accumulated other comprehensive loss | (224,493) | (240,719) | |||||||||||||||||||||
Treasury stock, at cost | (184,373) | (178,997) | |||||||||||||||||||||
Total shareholders' equity-Matthews | 619,046 | 610,807 | |||||||||||||||||||||
Noncontrolling interests | 553 | 626 | |||||||||||||||||||||
Total shareholders' equity | 619,599 | 611,433 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,063,760 | $ | 2,072,633 |
Three Months Ended
March 31, |
Six Months Ended
March 31, |
||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Sales | $ | 417,154 | $ | 374,800 | $ | 803,811 | $ | 739,744 | |||||||||||||||
Cost of sales | (276,143) | (250,036) | (537,302) | (499,253) | |||||||||||||||||||
Gross profit | 141,011 | 124,764 | 266,509 | 240,491 | |||||||||||||||||||
Selling expense | (32,360) | (33,182) | (63,155) | (65,445) | |||||||||||||||||||
Administrative expense | (70,749) | (68,399) | (139,858) | (138,864) | |||||||||||||||||||
Intangible amortization | (22,930) | (17,872) | (38,151) | (35,814) | |||||||||||||||||||
Goodwill write-down | — | (90,408) | — | (90,408) | |||||||||||||||||||
Operating profit (loss) | 14,972 | (85,097) | 25,345 | (90,040) | |||||||||||||||||||
Investment income (loss) | 969 | (1,108) | 2,046 | 191 | |||||||||||||||||||
Interest expense | (7,233) | (9,613) | (14,961) | (18,853) | |||||||||||||||||||
Other income (deductions), net | (2,584) | (1,843) | (4,318) | (4,662) | |||||||||||||||||||
Income (loss) before income taxes | 6,124 | (97,661) | 8,112 | (113,364) | |||||||||||||||||||
Income tax (provision) benefit | (972) | 11,066 | (4,952) | 16,463 | |||||||||||||||||||
Net income (loss) | 5,152 | (86,595) | 3,160 | (96,901) | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (163) | 231 | 71 | 71 | |||||||||||||||||||
Net income (loss) attributable to Matthews shareholders | $ | 4,989 | $ | (86,364) | $ | 3,231 | $ | (96,830) | |||||||||||||||
Earnings (loss) per share attributable to Matthews shareholders: | |||||||||||||||||||||||
Basic | $ | 0.16 | $ | (2.77) | $ | 0.10 | $ | (3.11) | |||||||||||||||
Diluted | $ | 0.16 | $ | (2.77) | $ | 0.10 | $ | (3.11) |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
Matthews | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Net income (loss): | $ | 4,989 | $ | (86,364) | $ | 163 | $ | (231) | $ | 5,152 | $ | (86,595) | |||||||||||||||||||||||
Other comprehensive income (loss) ("OCI"), net of tax: | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (8,898) | (30,648) | 1 | 1 | (8,897) | (30,647) | |||||||||||||||||||||||||||||
Pension plans and other postretirement benefits | 2,255 | 1,827 | — | — | 2,255 | 1,827 | |||||||||||||||||||||||||||||
Unrecognized gain (loss) on derivatives: | |||||||||||||||||||||||||||||||||||
Net change from periodic revaluation | 2,088 | (4,305) | — | — | 2,088 | (4,305) | |||||||||||||||||||||||||||||
Net amount reclassified to earnings | 567 | (137) | — | — | 567 | (137) | |||||||||||||||||||||||||||||
Net change in unrecognized gain (loss) on derivatives | 2,655 | (4,442) | — | — | 2,655 | (4,442) | |||||||||||||||||||||||||||||
OCI, net of tax | (3,988) | (33,263) | 1 | 1 | (3,987) | (33,262) | |||||||||||||||||||||||||||||
Comprehensive income (loss) | $ | 1,001 | $ | (119,627) | $ | 164 | $ | (230) | $ | 1,165 | $ | (119,857) |
Six Months Ended March 31, | |||||||||||||||||||||||||||||||||||
Matthews | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
Net income (loss): | $ | 3,231 | $ | (96,830) | $ | (71) | $ | (71) | $ | 3,160 | $ | (96,901) | |||||||||||||||||||||||
OCI, net of tax: | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 8,157 | (19,537) | (2) | (4) | 8,155 | (19,541) | |||||||||||||||||||||||||||||
Pension plans and other postretirement benefits | 4,379 | 3,554 | — | — | 4,379 | 3,554 | |||||||||||||||||||||||||||||
Unrecognized gain (loss) on derivatives: | |||||||||||||||||||||||||||||||||||
Net change from periodic revaluation | 2,441 | (3,739) | — | — | 2,441 | (3,739) | |||||||||||||||||||||||||||||
Net amount reclassified to earnings | 1,249 | (412) | — | — | 1,249 | (412) | |||||||||||||||||||||||||||||
Net change in unrecognized gain (loss) on derivatives | 3,690 | (4,151) | — | — | 3,690 | (4,151) | |||||||||||||||||||||||||||||
OCI, net of tax | 16,226 | (20,134) | (2) | (4) | 16,224 | (20,138) | |||||||||||||||||||||||||||||
Comprehensive income (loss) | $ | 19,457 | $ | (116,964) | $ | (73) | $ | (75) | $ | 19,384 | $ | (117,039) |
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 | |||||||||||||||||||||||||||
Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive (Loss) Income |
Treasury
Stock |
Non-
controlling Interests |
Total | |||||||||||||||||||||||||||||||||||
Balance,
September 30, 2019 |
$ | 36,334 | $ | 137,774 | $ | 972,594 | $ | (228,361) | $ | (200,235) | $ | 1,130 | $ | 719,236 | |||||||||||||||||||||||||||
Net (loss) income | — | — | (10,466) | — | — | 160 | (10,306) | ||||||||||||||||||||||||||||||||||
Minimum pension liability | — | — | — | 1,727 | — | — | 1,727 | ||||||||||||||||||||||||||||||||||
Translation adjustment | — | — | — | 11,111 | — | (5) | 11,106 | ||||||||||||||||||||||||||||||||||
Fair value of derivatives | — | — | — | 291 | — | — | 291 | ||||||||||||||||||||||||||||||||||
Total comprehensive income | 2,818 | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | 2,031 | — | — | — | — | 2,031 | ||||||||||||||||||||||||||||||||||
Purchase of 52,104 shares of treasury stock
|
— | — | — | — | (1,845) | — | (1,845) | ||||||||||||||||||||||||||||||||||
Issuance of 11,225 shares of treasury stock
|
— | (450) | — | — | 450 | — | — | ||||||||||||||||||||||||||||||||||
Cancellations of 17,509 shares of treasury stock
|
— | 1,171 | — | — | (1,171) | — | — | ||||||||||||||||||||||||||||||||||
Dividends, $0.21 per share
|
— | — | (6,535) | — | — | — | (6,535) | ||||||||||||||||||||||||||||||||||
Balance,
December 31, 2019 |
$ | 36,334 | $ | 140,526 | $ | 955,593 | $ | (215,232) | $ | (202,801) | $ | 1,285 | $ | 715,705 | |||||||||||||||||||||||||||
Net loss | — | — | (86,364) | — | — | (231) | (86,595) | ||||||||||||||||||||||||||||||||||
Minimum pension liability | — | — | — | 1,827 | — | — | 1,827 | ||||||||||||||||||||||||||||||||||
Translation adjustment | — | — | — | (30,648) | — | 1 | (30,647) | ||||||||||||||||||||||||||||||||||
Fair value of derivatives | — | — | — | (4,442) | — | — | (4,442) | ||||||||||||||||||||||||||||||||||
Total comprehensive loss | (119,857) | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | 2,508 | — | — | — | — | 2,508 | ||||||||||||||||||||||||||||||||||
Purchase of 20,750 shares of treasury stock
|
— | — | — | — | (506) | — | (506) | ||||||||||||||||||||||||||||||||||
Dividends, $0.21 per share
|
— | — | (6,648) | — | — | — | (6,648) | ||||||||||||||||||||||||||||||||||
Balance,
March 31, 2020 |
$ | 36,334 | $ | 143,034 | $ | 862,581 | $ | (248,495) | $ | (203,307) | $ | 1,055 | $ | 591,202 | |||||||||||||||||||||||||||
Six Months Ended
March 31, |
|||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 3,160 | $ | (96,901) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 62,530 | 58,250 | |||||||||
Stock-based compensation expense | 7,247 | 4,539 | |||||||||
Deferred tax provision (benefit) | 930 | (6,155) | |||||||||
(Gain) loss on sale of assets, net | (511) | 27 | |||||||||
Unrealized (gain) loss on investments | (844) | 70 | |||||||||
Loss from equity-method investments | — | 1,345 | |||||||||
Goodwill write-down | — | 90,408 | |||||||||
Changes in working capital items | 2,730 | 19,384 | |||||||||
Decrease in other assets | 2,556 | 5,587 | |||||||||
Increase (decrease) in other liabilities | 12,962 | (1,107) | |||||||||
Other operating activities, net | 1,422 | (9,452) | |||||||||
Net cash provided by operating activities | 92,182 | 65,995 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (15,819) | (19,082) | |||||||||
Acquisitions, net of cash acquired | (13,100) | — | |||||||||
Proceeds from sale of assets | 2,065 | 181 | |||||||||
Proceeds from sale of investments | 15,000 | — | |||||||||
Investments and advances | — | (9,637) | |||||||||
Net cash used in investing activities | (11,854) | (28,538) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt | 249,833 | 942,692 | |||||||||
Payments on long-term debt | (303,781) | (921,359) | |||||||||
Purchases of treasury stock | (4,486) | (2,351) | |||||||||
Dividends | (13,979) | (13,183) | |||||||||
Acquisition holdback and contingent consideration payments | (1,556) | (1,739) | |||||||||
Other financing activities | (1,484) | (3,475) | |||||||||
Net cash (used in) provided by financing activities | (75,453) | 585 | |||||||||
Effect of exchange rate changes on cash | 771 | (1,006) | |||||||||
Net change in cash and cash equivalents | 5,646 | 37,036 | |||||||||
Cash and cash equivalents at beginning of year | 41,334 | 35,302 | |||||||||
Cash and cash equivalents at end of period | $ | 46,980 | $ | 72,338 | |||||||
Accounts Receivable Allowance for Doubtful Accounts | |||||||||||
Balance at October 1, 2020 | $ | 9,618 | |||||||||
Current period expense / (deductions) | (621) | ||||||||||
Translation and other adjustments (1)
|
(216) | ||||||||||
Balance at March 31, 2021
|
$ | 8,781 |
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, |
|||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||
North America | $ | 66,282 | $ | 75,448 | $ | 190,253 | $ | 152,253 | $ | 32,260 | $ | 32,380 | $ | 288,795 | $ | 260,081 | ||||||||||||||||||||||
Central and South America | 1,319 | 1,360 | — | — | — | — | 1,319 | 1,360 | ||||||||||||||||||||||||||||||
Europe | 89,190 | 83,015 | 12,662 | 7,637 | 7,013 | 7,453 | 108,865 | 98,105 | ||||||||||||||||||||||||||||||
Australia | 3,456 | 2,937 | 2,542 | 1,929 | — | — | 5,998 | 4,866 | ||||||||||||||||||||||||||||||
Asia | 10,777 | 10,095 | — | — | 1,400 | 293 | 12,177 | 10,388 | ||||||||||||||||||||||||||||||
Total Sales | $ | 171,024 | $ | 172,855 | $ | 205,457 | $ | 161,819 | $ | 40,673 | $ | 40,126 | $ | 417,154 | $ | 374,800 |
SGK Brand Solutions | Memorialization | Industrial Technologies | Consolidated | |||||||||||||||||||||||||||||||||||
Six Months Ended March 31, | Six Months Ended March 31, | Six Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||
North America | $ | 136,684 | $ | 151,678 | $ | 360,577 | $ | 296,298 | $ | 59,895 | $ | 60,679 | $ | 557,156 | $ | 508,655 | ||||||||||||||||||||||
Central and South America | 2,694 | 3,196 | — | — | — | — | 2,694 | 3,196 | ||||||||||||||||||||||||||||||
Europe | 170,999 | 165,428 | 23,102 | 15,466 | 13,004 | 14,379 | 207,105 | 195,273 | ||||||||||||||||||||||||||||||
Australia | 6,937 | 5,939 | 5,052 | 4,460 | — | — | 11,989 | 10,399 | ||||||||||||||||||||||||||||||
Asia | 21,850 | 21,494 | — | — | 3,017 | 727 | 24,867 | 22,221 | ||||||||||||||||||||||||||||||
Total Sales | $ | 339,164 | $ | 347,735 | $ | 388,731 | $ | 316,224 | $ | 75,916 | $ | 75,785 | $ | 803,811 | $ | 739,744 |
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.
|
March 31, 2021 | September 30, 2020 | ||||||||||
Raw materials | $ | 38,112 | $ | 36,157 | |||||||
Work in process | 75,206 | 70,128 | |||||||||
Finished goods | 73,204 | 68,815 | |||||||||
$ | 186,522 | $ | 175,100 |
March 31, 2021 | September 30, 2020 | ||||||||||
Equity and fixed income mutual funds | $ | 25,455 | $ | 24,610 | |||||||
Life insurance policies | 4,626 | 4,621 | |||||||||
Other (primarily cost-method) investments | 18,967 | 34,019 | |||||||||
$ | 49,048 | $ | 63,250 |
March 31, 2021 | September 30, 2020 | ||||||||||
Revolving credit facilities | $ | 367,352 | $ | 416,793 | |||||||
Securitization facility | 97,590 | 67,700 | |||||||||
Senior secured term loan | — | 22,359 | |||||||||
2025 Senior Notes | 297,526 | 297,256 | |||||||||
Other borrowings | 12,022 | 20,742 | |||||||||
Finance lease obligations | 7,993 | 9,684 | |||||||||
782,483 | 834,534 | ||||||||||
Less current maturities | (4,274) | (26,824) | |||||||||
$ | 778,209 | $ | 807,710 |
March 31, 2021 | September 30, 2020 | |||||||||||||
Pay fixed swaps - notional amount | $ | 250,000 | $ | 312,500 | ||||||||||
Net unrealized loss
|
$ | (2,905) | $ | (7,792) | ||||||||||
Weighted-average maturity period (years) | 2.7 | 2.6 | ||||||||||||
Weighted-average received rate | 0.11 | % | 0.15 | % | ||||||||||
Weighted-average pay rate | 1.34 | % | 1.34 | % |
Derivatives | March 31, 2021 | September 30, 2020 | ||||||||||||
Current assets: | ||||||||||||||
Other current assets | $ | 78 | $ | — | ||||||||||
Long-term assets: | ||||||||||||||
Other assets | 393 | — | ||||||||||||
Current liabilities: | ||||||||||||||
Other current liabilities | (2,425) | (3,164) | ||||||||||||
Long-term liabilities: | ||||||||||||||
Other liabilities | (951) | (4,628) | ||||||||||||
Total derivatives | $ | (2,905) | $ | (7,792) |
Derivatives in Cash Flow Hedging Relationships |
Amount of Gain (Loss)
Recognized in AOCI on Derivatives |
Location of (Loss) Gain Reclassified From AOCI into Income (Effective Portion*) |
Amount of (Loss) Gain
Reclassified from AOCI into Income (Effective Portion*) |
|||||||||||||||||||||||||||||
March 31, 2021 | March 31, 2020 | March 31, 2021 | March 31, 2020 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | 2,441 | $ | (3,739) | Interest expense | $ | (1,249) | $ | 412 | |||||||||||||||||||||||
*There is no ineffective portion or amount excluded from effectiveness testing. |
Shares /Units |
Weighted-
average Grant-date Fair Value |
||||||||||
Non-vested at September 30, 2020 | 750,322 | $ | 40.88 | ||||||||
Granted | 499,050 | 30.06 | |||||||||
Vested | (104,895) | 56.11 | |||||||||
Expired or forfeited | (36,667) | 57.05 | |||||||||
Non-vested at March 31, 2021 | 1,107,810 | $ | 34.03 |
Six Months Ended
March 31, 2021 |
|||||||||||
Expected volatility | 42.9 | % | |||||||||
Dividend yield | 3.2 | % | |||||||||
Average risk-free interest rate | 0.2 | % | |||||||||
Average expected term (years) | 3.0 |
Three Months Ended
March 31, |
Six Months Ended
March 31, |
||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net income (loss) attributable to Matthews shareholders | $ | 4,989 | $ | (86,364) | $ | 3,231 | $ | (96,830) | |||||||||||||||
Weighted-average shares outstanding (in thousands): | |||||||||||||||||||||||
Basic shares | 31,665 | 31,150 | 31,697 | 31,141 | |||||||||||||||||||
Effect of dilutive securities | 418 | — | 337 | — | |||||||||||||||||||
Diluted shares | 32,083 | 31,150 | 32,034 | 31,141 |
Three months ended March 31, | |||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Service cost | $ | 1,983 | $ | 2,170 | $ | 50 | $ | 64 | |||||||||||||||
Interest cost * | 1,546 | 1,933 | 94 | 140 | |||||||||||||||||||
Expected return on plan assets * | (2,762) | (2,232) | — | — | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Prior service cost | (41) | (47) | (91) | (23) | |||||||||||||||||||
Net actuarial loss * | 3,023 | 2,386 | — | — | |||||||||||||||||||
Net benefit cost | $ | 3,749 | $ | 4,210 | $ | 53 | $ | 181 |
Six months ended March 31, | |||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Service cost | $ | 4,196 | $ | 4,340 | $ | 100 | $ | 128 | |||||||||||||||
Interest cost * | 3,094 | 3,866 | 188 | 280 | |||||||||||||||||||
Expected return on plan assets * | (5,525) | (4,464) | — | — | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Prior service cost | (58) | (94) | (182) | (46) | |||||||||||||||||||
Net actuarial loss * | 6,044 | 4,773 | — | — | |||||||||||||||||||
Net benefit cost | $ | 7,751 | $ | 8,421 | $ | 106 | $ | 362 |
Contributions | Pension | Other Postretirement | ||||||||||||
Contributions during the six months ended March 31, 2021: | ||||||||||||||
Supplemental retirement plan | $ | 408 | $ | — | ||||||||||
Other postretirement plan | — | 228 | ||||||||||||
Additional contributions expected in fiscal 2021: | ||||||||||||||
Principal retirement plan * | $ | 15,000 | $ | — | ||||||||||
Supplemental retirement plan | 497 | — | ||||||||||||
Other postretirement plan | — | 603 |
Post-retirement benefit plans | Currency translation adjustment | Derivatives | Total | |||||||||||||||||||||||
Attributable to Matthews: | ||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | (80,830) | $ | (134,826) | $ | (4,849) | $ | (220,505) | ||||||||||||||||||
OCI before reclassification | — | (8,898) | 2,088 | (6,810) | ||||||||||||||||||||||
Amounts reclassified from AOCI | 2,255 |
(a)
|
— | 567 |
(b)
|
2,822 | ||||||||||||||||||||
Net current-period OCI | 2,255 |
|
(8,898) |
|
2,655 | (3,988) | ||||||||||||||||||||
Balance, March 31, 2021 | $ | (78,575) | $ | (143,724) | $ | (2,194) | $ | (224,493) | ||||||||||||||||||
Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | — | $ | 365 | $ | — | $ | 365 | ||||||||||||||||||
OCI before reclassification | — | 1 | — | 1 | ||||||||||||||||||||||
Net current-period OCI | — | 1 | — | 1 | ||||||||||||||||||||||
Balance, March 31, 2021 | $ | — | $ | 366 | $ | — | $ | 366 |
Post-retirement benefit plans | Currency translation adjustment | Derivatives | Total | |||||||||||||||||||||||
Attributable to Matthews: | ||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | (70,016) | $ | (145,103) | $ | (113) | $ | (215,232) | ||||||||||||||||||
OCI before reclassification | — | (30,648) | (4,305) | (34,953) | ||||||||||||||||||||||
Amounts reclassified from AOCI | 1,827 |
(a)
|
— | (137) |
(b)
|
1,690 | ||||||||||||||||||||
Net current-period OCI | 1,827 | (30,648) | (4,442) | (33,263) | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | (68,189) | $ | (175,751) | $ | (4,555) | $ | (248,495) | ||||||||||||||||||
Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | — | $ | 370 | $ | — | $ | 370 | ||||||||||||||||||
OCI before reclassification | — | 1 |
|
— | 1 | |||||||||||||||||||||
Net current-period OCI | — | 1 | — | 1 | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | — | $ | 371 |
|
$ | — | $ | 371 |
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 |
Post-retirement benefit plans | Currency translation adjustment | Derivatives | Total | |||||||||||||||||||||||
Attributable to Matthews: | ||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | (71,743) | $ | (156,214) | $ | (404) | $ | (228,361) | ||||||||||||||||||
OCI before reclassification | — | (19,537) | (3,739) | (23,276) | ||||||||||||||||||||||
Amounts reclassified from AOCI | 3,554 |
(a)
|
— | (412) |
(b)
|
3,142 | ||||||||||||||||||||
Net current-period OCI | 3,554 | (19,537) | (4,151) | (20,134) | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | (68,189) | $ | (175,751) | $ | (4,555) | $ | (248,495) | ||||||||||||||||||
Attributable to noncontrolling interest: | ||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | — | $ | 375 | $ | — | $ | 375 | ||||||||||||||||||
OCI before reclassification | — | (4) |
|
— | (4) | |||||||||||||||||||||
Net current-period OCI | — | (4) | — | (4) | ||||||||||||||||||||||
Balance, March 31, 2020 | $ | — | $ | 371 |
|
$ | — | $ | 371 |
Amount reclassified from AOCI | ||||||||||||||||||||
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 | ||||||||||||||||||||
Prior service credit (a)
|
$ | 132 | $ | 240 | ||||||||||||||||
Actuarial losses (a)
|
(3,023) | (6,044) | ||||||||||||||||||
(2,891) | (5,804) |
Income before income tax (b)
|
||||||||||||||||||
636 |
|
1,425 | Income taxes | |||||||||||||||||
$ | (2,255) |
|
$ | (4,379) | Net income | |||||||||||||||
Derivatives |
|
|||||||||||||||||||
Interest rate swap contracts | $ | (751) |
|
$ | (1,654) | Interest expense | ||||||||||||||
(751) | (1,654) |
Income before income tax (b)
|
||||||||||||||||||
184 | 405 | Income taxes | ||||||||||||||||||
$ | (567) | $ | (1,249) | Net income |
Amount reclassified from AOCI | ||||||||||||||||||||||||||
Details about AOCI Components |
Three Months Ended March 31, 2020 |
Six Months Ended
March 31, 2020 |
Affected line item in the Statement of income | |||||||||||||||||||||||
Postretirement benefit plans | ||||||||||||||||||||||||||
Prior service credit (a)
|
$ | 70 | $ | 140 | ||||||||||||||||||||||
Actuarial losses (a)
|
(2,386) | (4,773) | ||||||||||||||||||||||||
(2,316) | (4,633) |
Income before income tax (b)
|
||||||||||||||||||||||||
489 |
|
1,079 | Income taxes | |||||||||||||||||||||||
$ | (1,827) |
|
$ | (3,554) | Net income | |||||||||||||||||||||
Derivatives |
|
|||||||||||||||||||||||||
Interest rate swap contracts | $ | 182 |
|
$ | 546 | Interest expense | ||||||||||||||||||||
182 | 546 |
Income before income tax (b)
|
||||||||||||||||||||||||
(45) |
|
(134) | Income taxes | |||||||||||||||||||||||
$ | 137 | $ | 412 | Net income |
United States – Federal | 2017 and forward | ||||
United States – State | 2016 and forward | ||||
Canada | 2017 and forward | ||||
Germany | 2019 and forward | ||||
United Kingdom | 2019 and forward | ||||
Singapore | 2017 and forward | ||||
Australia | 2016 and forward |
Three Months Ended
March 31, |
Six Months Ended
March 31, |
|||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||
SGK Brand Solutions | $ | 171,024 | $ | 172,855 | $ | 339,164 | $ | 347,735 | ||||||||||||||||||
Memorialization | 205,457 | 161,819 | 388,731 | 316,224 | ||||||||||||||||||||||
Industrial Technologies | 40,673 | 40,126 | 75,916 | 75,785 | ||||||||||||||||||||||
Consolidated Sales | $ | 417,154 | $ | 374,800 | $ | 803,811 | $ | 739,744 |
Adjusted EBITDA: | ||||||||||||||||||||||||||
SGK Brand Solutions | $ | 20,832 | $ | 22,224 | $ | 42,168 | $ | 40,962 | ||||||||||||||||||
Memorialization | 51,606 | 35,193 | 95,678 | 65,286 | ||||||||||||||||||||||
Industrial Technologies | 5,809 | 6,212 | 9,302 | 10,526 | ||||||||||||||||||||||
Corporate and Non-Operating | (17,307) | (14,232) | (31,445) | (27,147) | ||||||||||||||||||||||
Total Adjusted EBITDA | $ | 60,940 | $ | 49,397 | $ | 115,703 | $ | 89,627 | ||||||||||||||||||
Acquisition related items (1)**
|
702 | (742) | 360 | (2,221) | ||||||||||||||||||||||
ERP integration costs (2)**
|
(216) | (750) | (359) | (1,415) | ||||||||||||||||||||||
Strategic initiatives and other charges: (3)**
|
||||||||||||||||||||||||||
Workforce reductions and related costs | (1,792) | (1,387) | (8,818) | (3,649) | ||||||||||||||||||||||
Other cost-reduction initiatives | (3,787) | (7,750) | (7,468) | (16,208) | ||||||||||||||||||||||
Non-recurring / incremental coronavirus disease 2019 ("COVID-19") costs (4)
|
(1,572) | (663) | (2,696) | (663) | ||||||||||||||||||||||
Goodwill write-down (5)
|
— | (90,408) | — | (90,408) | ||||||||||||||||||||||
Joint Venture depreciation, amortization, interest expense and other charges (6)
|
— | (1,462) | — | (2,259) | ||||||||||||||||||||||
Stock-based compensation | (4,001) | (2,508) | (7,247) | (4,539) | ||||||||||||||||||||||
Non-service pension and postretirement expense (7)
|
(1,901) | (2,227) | (3,801) | (4,455) | ||||||||||||||||||||||
Depreciation and amortization *
|
(35,179) | (29,317) | (62,530) | (58,250) | ||||||||||||||||||||||
Interest expense | (7,233) | (9,613) | (14,961) | (18,853) | ||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 163 | (231) | (71) | (71) | ||||||||||||||||||||||
Income (loss) before income taxes | 6,124 | (97,661) | 8,112 | (113,364) | ||||||||||||||||||||||
Income tax (provision) benefit | (972) | 11,066 | (4,952) | 16,463 | ||||||||||||||||||||||
Net income (loss) | $ | 5,152 | $ | (86,595) | $ | 3,160 | $ | (96,901) |
(1) Includes certain non-recurring items associated with recent acquisition activities.
|
||
(2) Represents costs associated with global ERP system integration efforts.
|
||
(3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
|
||
(4) 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.
|
||
(5) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment.
|
||
(6) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
|
||
(7) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial 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. 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.
|
SGK Brand
Solutions |
Memorialization | Industrial Technologies | Consolidated | ||||||||||||||||||||
Net goodwill at September 30, 2020 | $ | 311,737 | $ | 361,682 | $ | 91,969 | $ | 765,388 | |||||||||||||||
Additions during period | — | 4,796 | — | 4,796 | |||||||||||||||||||
Translation and other adjustments | 6,526 | 372 | 741 | 7,639 | |||||||||||||||||||
Net goodwill at March 31, 2021 | $ | 318,263 | $ | 366,850 | $ | 92,710 | $ | 777,823 |
Carrying
Amount |
Accumulated
Amortization |
Net | |||||||||||||||
March 31, 2021: | |||||||||||||||||
Indefinite-lived trade names | $ | 30,540 | $ | — | $ | 30,540 | |||||||||||
Definite-lived trade names | 148,934 | (83,129) | 65,805 | ||||||||||||||
Customer relationships | 389,565 | (186,391) | 203,174 | ||||||||||||||
Copyrights/patents/other | 20,831 | (15,055) | 5,776 | ||||||||||||||
$ | 589,870 | $ | (284,575) | $ | 305,295 | ||||||||||||
September 30, 2020:
|
|||||||||||||||||
Indefinite-lived trade names | $ | 30,540 | $ | — | $ | 30,540 | |||||||||||
Definite-lived trade names | 148,867 | (64,462) | 84,405 | ||||||||||||||
Customer relationships | 379,246 | (166,892) | 212,354 | ||||||||||||||
Copyrights/patents/other | 20,704 | (14,505) | 6,199 | ||||||||||||||
$ | 579,357 | $ | (245,859) | $ | 333,498 |
Three Months Ended
March 31, |
Six Months Ended
March 31, |
|||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Sales: | (Dollar amounts in thousands) | |||||||||||||||||||||||||
SGK Brand Solutions | $ | 171,024 | $ | 172,855 | $ | 339,164 | $ | 347,735 | ||||||||||||||||||
Memorialization | 205,457 | 161,819 | 388,731 | 316,224 | ||||||||||||||||||||||
Industrial Technologies | 40,673 | 40,126 | 75,916 | 75,785 | ||||||||||||||||||||||
Consolidated Sales | $ | 417,154 | $ | 374,800 | $ | 803,811 | $ | 739,744 |
Adjusted EBITDA: | ||||||||||||||||||||||||||
SGK Brand Solutions | $ | 20,832 | $ | 22,224 | $ | 42,168 | $ | 40,962 | ||||||||||||||||||
Memorialization | 51,606 | 35,193 | 95,678 | 65,286 | ||||||||||||||||||||||
Industrial Technologies | 5,809 | 6,212 | 9,302 | 10,526 | ||||||||||||||||||||||
Corporate and Non-Operating | (17,307) | (14,232) | (31,445) | (27,147) | ||||||||||||||||||||||
Total Adjusted EBITDA (1)
|
$ | 60,940 | $ | 49,397 | $ | 115,703 | $ | 89,627 |
Three Months Ended
March 31, |
Six Months Ended
March 31, |
||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||||||||
Net income (loss) | $ | 5,152 | $ | (86,595) | $ | 3,160 | $ | (96,901) | |||||||||||||||
Income tax provision (benefit) | 972 | (11,066) | 4,952 | (16,463) | |||||||||||||||||||
Income (loss) before income taxes | 6,124 | (97,661) | 8,112 | (113,364) | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (163) | 231 | 71 | 71 | |||||||||||||||||||
Interest expense | 7,233 | 9,613 | 14,961 | 18,853 | |||||||||||||||||||
Depreciation and amortization *
|
35,179 | 29,317 | 62,530 | 58,250 | |||||||||||||||||||
Acquisition related items (1)**
|
(702) | 742 | (360) | 2,221 | |||||||||||||||||||
ERP integration costs (2)**
|
216 | 750 | 359 | 1,415 | |||||||||||||||||||
Strategic initiatives and other charges: (3)**
|
|||||||||||||||||||||||
Workforce reductions and related costs | 1,792 | 1,387 | 8,818 | 3,649 | |||||||||||||||||||
Other cost-reduction initiatives | 3,787 | 7,750 | 7,468 | 16,208 | |||||||||||||||||||
Non-recurring / incremental COVID-19 costs (4)
|
1,572 | 663 | 2,696 | 663 | |||||||||||||||||||
Goodwill write-down (5)
|
— | 90,408 | — | 90,408 | |||||||||||||||||||
Joint Venture depreciation, amortization, interest expense and other charges (6)
|
— | 1,462 | — | 2,259 | |||||||||||||||||||
Stock-based compensation | 4,001 | 2,508 | 7,247 | 4,539 | |||||||||||||||||||
Non-service pension and postretirement expense (7)
|
1,901 | 2,227 | 3,801 | 4,455 | |||||||||||||||||||
Total Adjusted EBITDA | $ | 60,940 | $ | 49,397 | $ | 115,703 | $ | 89,627 |
(1) Includes certain non-recurring items associated with recent acquisition activities.
|
||
(2) Represents costs associated with global ERP system integration efforts.
|
||
(3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
|
||
(4) 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.
|
||
(5) Represents the goodwill write-down for two reporting units within the SGK Brand Solutions segment.
|
||
(6) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
|
||
(7) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial 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. 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.
|
March 31, 2021 | September 30, 2020 | |||||||||||||
Pay fixed swaps - notional amount | $ | 250,000 | $ | 312,500 | ||||||||||
Net unrealized loss | $ | (2,905) | $ | (7,792) | ||||||||||
Weighted-average maturity period (years) | 2.7 | 2.6 | ||||||||||||
Weighted-average received rate | 0.11 | % | 0.15 | % | ||||||||||
Weighted-average pay rate | 1.34 | % | 1.34 | % |
Payments due in fiscal year: | |||||||||||||||||||||||||||||
Total |
2021
Remainder |
2022 (1) to 2023
|
2024 to 2025 |
After
2025 |
|||||||||||||||||||||||||
Contractual Cash Obligations: | (Dollar amounts in thousands) | ||||||||||||||||||||||||||||
Revolving credit facilities | $ | 367,352 | $ | — | $ | 3,587 | $ | 363,765 | $ | — | |||||||||||||||||||
Securitization Facility | 97,590 | — | 97,590 | — | — | ||||||||||||||||||||||||
2025 Senior Notes | 376,276 | 7,875 | 31,500 | 31,500 | 305,401 | ||||||||||||||||||||||||
Finance lease obligations (2)
|
8,703 | 1,905 | 4,147 | 897 | 1,754 | ||||||||||||||||||||||||
Non-cancelable operating leases (2)
|
84,435 | 13,667 | 40,508 | 20,509 | 9,751 | ||||||||||||||||||||||||
Other | 30,114 | 11,900 | 10,231 | 2,105 | 5,878 | ||||||||||||||||||||||||
Total contractual cash obligations | $ | 964,470 | $ | 35,347 | $ | 187,563 | $ | 418,776 | $ | 322,784 |
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 2020 | 40,000 | $ | 22.25 | 40,000 | 498,736 | |||||||||||||||||||||
November 2020 | 34,789 | 25.82 | 34,789 | 463,947 | ||||||||||||||||||||||
December 2020 | 87,502 | 27.99 | 87,502 | 376,445 | ||||||||||||||||||||||
January 2021 | — | — | — | 376,445 | ||||||||||||||||||||||
February 2021 | — | — | — | 376,445 | ||||||||||||||||||||||
March 2021 | 6,000 | 41.36 | 6,000 | 370,445 | ||||||||||||||||||||||
Total | 168,291 | $ | 26.65 | 168,291 |
MATTHEWS INTERNATIONAL CORPORATION | |||||||||||
(Registrant)
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Date: | April 30, 2021 | By: /s/ Joseph C. Bartolacci | |||||||||
Joseph C. Bartolacci, President | |||||||||||
and Chief Executive Officer | |||||||||||
Date: | April 30, 2021 | By: /s/ Steven F. Nicola | |||||||||
Steven F. Nicola, Chief Financial Officer | |||||||||||
and Secretary | |||||||||||
6. | Revolving Credit Note, made by the UK Borrower to Bank of the West, in the original principal Dollar Equivalent amount not to exceed Thirteen Million Three Hundred Seventy-Five Thousand Seven Hundred Ninety-Six and 18/100 Dollars ($13,375,796.18). | Agent | ||||||||||||
7. | Revolving Credit Note, made by the UK Borrower to Wells Fargo Bank, N.A. ("Wells Fargo") in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
8. | Revolving Credit Note, made by the UK Borrower to JPMorgan Chase Bank, N.A. ("JPMorgan") in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
9. | Revolving Credit Note, made by the UK Borrower to Bank of America, N.A. ("Bank of America") in the original principal Dollar Equivalent amount not to exceed Thirty-Four Million Seven Hundred Thirty-Two Thousand Four Hundred Eighty-Four and 08/100 Dollars ($34,732,484.08). | Agent | ||||||||||||
10. | Revolving Credit Note, made by the UK Borrower to Truist Bank ("Truist") in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
11. | Revolving Credit Note, made by the UK Borrower to TD Bank, N.A. ("TD") in the original principal Dollar Equivalent amount not to exceed Seventeen Million Eight Hundred Thirty-Four Thousand Three Hundred Ninety-Four and 90/100 Dollars ($17,834,394.90). | Agent | ||||||||||||
12. | Revolving Credit Note, made by the UK Borrower to Fifth Third Bank, National Association ("Fifth Third") in the original principal Dollar Equivalent amount not to exceed Seventeen Million Seven Hundred Thirteen Thousand Forty-Three and 48/100 Dollars ($17,713,043.48). | Agent | ||||||||||||
13. | Revolving Credit Note, made by the UK Borrower to PNC, Bank National Association ("PNC") in the original principal Dollar Equivalent amount not to exceed Forty-Two Million and 00/100 Dollars ($42,000,000.00). | Agent | ||||||||||||
14. | Revolving Credit Note, made by the German Borrower to Citizens in the original principal Dollar Equivalent amount not to exceed Sixty-Eight Million Six Hundred Thirty-One Thousand Three Hundred Fifty-Five and 95/100 Dollars ($68,631,355.95). | Agent | ||||||||||||
15. | Revolving Credit Note, made by the German Borrower to First National in the original principal Dollar Equivalent amount not to exceed Thirteen Million Thirty-Seven Thousand Seven Hundred Sixty-Six and 18/100 Dollars ($13,037,766.18). | Agent | ||||||||||||
16. | Revolving Credit Note, made by the German Borrower to HSBC, in the original principal Dollar Equivalent amount not to exceed Eight Million Nine Hundred Seventeen Thousand One Hundred Ninety-Seven and 45/100 Dollars ($8,917,197.45). | Agent |
17. | Revolving Credit Note, made by the German Borrower to Bank of the West, in the original principal Dollar Equivalent amount not to exceed Thirteen Million Three Hundred Seventy-Five Thousand Seven Hundred Ninety-Six and 18/100 Dollars ($13,375,796.18). | Agent | ||||||||||||
18. | Revolving Credit Note, made by the German Borrower to Wells Fargo in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
19. | Revolving Credit Note, made by the German Borrower to JPMorgan in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
20. | Revolving Credit Note, made by the German Borrower to Bank of America in the original principal Dollar Equivalent amount not to exceed Thirty-Four Million Seven Hundred Thirty-Two Thousand Four Hundred Eighty-Four and 08/100 Dollars ($34,732,484.08). | Agent | ||||||||||||
21. | Revolving Credit Note, made by the German Borrower to Truist in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
22. | Revolving Credit Note, made by the German Borrower to TD in the original principal Dollar Equivalent amount not to exceed Seventeen Million Eight Hundred Thirty-Four Thousand Three Hundred Ninety-Four and 90/100 Dollars ($17,834,394.90). | Agent | ||||||||||||
23. | Revolving Credit Note, made by the German Borrower to Fifth Third in the original principal Dollar Equivalent amount not to exceed Seventeen Million Seven Hundred Thirteen Thousand Forty-Three and 48/100 Dollars ($17,713,043.48). | Agent | ||||||||||||
24. | Revolving Credit Note, made by the German Borrower to PNC in the original principal Dollar Equivalent amount not to exceed Forty-Two Million and 00/100 Dollars ($42,000,000.00). | Agent | ||||||||||||
25. | Revolving Credit Note, made by the Dutch Borrower to Citizens in the original principal Dollar Equivalent amount not to exceed Sixty-Eight Million Six Hundred Thirty-One Thousand Three Hundred Fifty-Five and 95/100 Dollars ($68,631,355.95). | Agent | ||||||||||||
26. | Revolving Credit Note, made by the Dutch Borrower to First National in the original principal Dollar Equivalent amount not to exceed Thirteen Million Thirty-Seven Thousand Seven Hundred Sixty-Six and 18/100 Dollars ($13,037,766.18). | Agent | ||||||||||||
27. | Revolving Credit Note, made by the Dutch Borrower to HSBC, in the original principal Dollar Equivalent amount not to exceed Eight Million Nine Hundred Seventeen Thousand One Hundred Ninety-Seven and 45/100 Dollars ($8,917,197.45). | Agent | ||||||||||||
28. | Revolving Credit Note, made by the Dutch Borrower to Bank of the West, in the original principal Dollar Equivalent amount not to exceed Thirteen Million Three Hundred Seventy-Five Thousand Seven Hundred Ninety-Six and 18/100 Dollars ($13,375,796.18). | Agent |
29. | Revolving Credit Note, made by the Dutch Borrower to Wells Fargo in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
30. | Revolving Credit Note, made by the Dutch Borrower to JPMorgan in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
31. | Revolving Credit Note, made by the Dutch Borrower to Bank of America in the original principal Dollar Equivalent amount not to exceed Thirty-Four Million Seven Hundred Thirty-Two Thousand Four Hundred Eighty-Four and 08/100 Dollars ($34,732,484.08). | Agent | ||||||||||||
32. | Revolving Credit Note, made by the Dutch Borrower to Truist in the original principal Dollar Equivalent amount not to exceed Forty-Four Million Five Hundred Eighty-Five Thousand Nine Hundred Eighty-Seven and 26/100 Dollars ($44,585,987.26). | Agent | ||||||||||||
33. | Revolving Credit Note, made by the Dutch Borrower to TD in the original principal Dollar Equivalent amount not to exceed Seventeen Million Eight Hundred Thirty-Four Thousand Three Hundred Ninety-Four and 90/100 Dollars ($17,834,394.90). | Agent | ||||||||||||
34. | Revolving Credit Note, made by the Dutch Borrower to Fifth Third in the original principal Dollar Equivalent amount not to exceed Seventeen Million Seven Hundred Thirteen Thousand Forty-Three and 48/100 Dollars ($17,713,043.48). | Agent | ||||||||||||
35. | Revolving Credit Note, made by the Dutch Borrower to PNC in the original principal Dollar Equivalent amount not to exceed Forty-Two Million and 00/100 Dollars ($42,000,000.00). | Agent | ||||||||||||
36. |
Consent of Guarantors, made by The York Group, Inc., a Delaware corporation ("York Group"), Milso Industries Corporation, a Delaware corporation ("Milso"), IDL Worldwide, Inc., a Pennsylvania corporation ("IDL Worldwide"), Schawk Worldwide Holdings Inc., a Delaware corporation ("Schawk Worldwide"), Schawk Holdings Inc., a Delaware corporation ("Schawk Holdings"), Matthews Aurora, LLC, a Delaware limited liability company ("Matthews Aurora"), Aurora Casket Company, LLC, an Indiana limited liability company ("Aurora Casket"), Schawk USA, Inc., a Delaware corporation ("Schawk USA"), for the benefit of the Agent and the Banks (York Group, Milso, IDL Worldwide, Schawk Worldwide, Schawk Holdings, Matthews Aurora, Aurora Casket and Schawk USA are, collectively, the "Guarantors") (the Guarantors and the Borrowers are each a "Loan Party" and collectively the "Loan Parties") (the "Guarantors Consent").
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Agent | ||||||||||||
ORGANIZATIONAL DOCUMENTS
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(US Borrower) |
37. | Certificate of Secretary of the Borrower as to (i) resolutions of its Board of Directors authorizing the Borrower to enter into the First Amendment and all related documents, (ii) no amendments to its Articles of Incorporation or Bylaws, (iii) incumbency, (iv) a list of all fictitious and trade names of Borrower; and (v) solvency. | Borrowers | ||||||||||||
(UK Borrower) | ||||||||||||||
38. | Copy of the Memorandum and Articles of Association of the UK Borrower, certified by a director of the UK Borrower. | Borrowers | ||||||||||||
39. | Certified copy of Certificate of incorporation from Companies House, certified by a director of the UK Borrower. | Borrowers | ||||||||||||
40. | Certificate of a director of the UK Borrower as to (i) resolutions of its Board of Directors authorizing the UK Borrower to enter into the Credit Facility and to execute and deliver the First Amendment and all related documents, (ii) resolutions of the shareholders of the UK Borrower approving entry into the Credit Facility, (iii) incumbency, and (iv) solvency. | Borrowers | ||||||||||||
(German Borrower) | ||||||||||||||
41. | Electronic copy of the articles of association and the list of shareholders of the German Borrower. | Borrowers | ||||||||||||
42. | Electronic copy of the Commercial Register extract of the German Borrower. | Borrowers | ||||||||||||
43. | Electronic copy of the resolutions of the shareholders of the German Borrower authorizing the German Borrower to enter into the Credit Facility and to execute and deliver the First Amendment and all related documents. | Borrowers | ||||||||||||
44. |
An electronic copy of the director's certificate addressed to the Agent in relation to the German Borrower, confirming that the borrowings under the Credit Facility will not exceed any borrowing or similar limits by which it is bound to be exceeded and appending copies of the following documents and certifying them in each case as being a true, complete and up-to-date copy:
(a)Commercial Register Extract (No. 43);
(b)Articles of Association (No. 42);
(c)List of Shareholders (No. 42);
(d)Shareholder Resolution (No. 44); and
(e) Specimen signatures of the persons authorized to sign the Credit Facility and First Amendments and related documents on behalf of the German Borrower.
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(Dutch Borrower) | ||||||||||||||
45. | An electronic copy of an official extract ("uittreksel") relating to the registration of the Dutch Borrower with the trade register of the Chamber of Commerce. | Borrowers |
46. | An electronic copy of the deed of incorporation ("akte van oprichting") of the Dutch Borrower as a private company with limited liability ("besloten vennootschap met beperkte aansprakelijkheid"). | Borrowers | ||||||||||||
47. | An electronic copy of the written resolutions of the Board of Directors ("Raad van Bestuur") of the Dutch Borrower (which includes the approval of a power of attorney) authorizing Joseph C. Bartolacci to negotiate, execute, deliver, ratify or perform, on behalf the Dutch Borrower, the Credit Facility and to execute and deliver the First Amendment and all related documents. | Borrowers | ||||||||||||
48. | An electronic copy of the unanimous resolutions of the General Meeting of Shareholders of the Dutch Borrower approving the resolutions of the Board of Directors referred to in item 47 above. | Borrowers | ||||||||||||
49. |
An electronic copy of the director's certificate addressed to the Agent in relation to the Dutch Borrower, confirming that the borrowings under the Credit Facility will not exceed any borrowing or similar limits by which it is bound to be exceeded and appending copies of the following documents and certifying them in each case as being a true, complete and up-to-date copy:
(a) Deed of Incorporation;
(b) Articles of Association;
(c) specimen signatures of the persons authorized to sign the Credit Facility and First Amendments and related documents on behalf of the Dutch Borrower; and
(d) a power of attorney executed by the Borrower appointing an attorney-in- fact.
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Borrowers | ||||||||||||
(York Group) | ||||||||||||||
50. |
Certificate of Secretary of York Group as to (i) resolutions of York Group to consent to the First Amendment and to execute the Guarantors Consent, and all related documents, (ii) incumbency of its officers, (iii) no amendments to its Articles of Incorporation or Bylaws, and (iv) a list of all fictitious and trade names of York Group.
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Borrowers | ||||||||||||
(Milso) | ||||||||||||||
51. |
Certificate of Secretary of Milso as to (i) resolutions of Milso's Board of Directors authorizing Milso to consent to the First Amendment and to execute the Guarantors Consent and all related documents, (ii) incumbency of its officers, (iii) no amendments to its Articles of Incorporation or Bylaws, and (iv) a list of all fictitious and trade names of Milso.
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Borrowers | ||||||||||||
(IDL Worldwide) |
58. |
(i) UCC Lien Searches or comparable jurisdictional equivalent searches in the United Kingdom, and The Netherlands with respect to each New Borrower in its jurisdiction of organization and (ii) judgment and tax lien searches or comparable judgment and tax lien searches in The Netherlands with respect to each New Borrower in its jurisdiction of organization and at each of its locations (collectively, the "Lien Searches"). [NOTE: In the UK, winding up and bankruptcy searches can/will be run together with searches of Companies House.]
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Borrowers | ||||||||||||
59. |
Fully executed copies of the UCC-3 Termination Statements (or comparable jurisdictional equivalent) and any other releases that may be necessary to satisfy any and all existing liens disclosed by the Lien Searches that are not permitted by the Banks (including payoff letters, if applicable), all in form and substance satisfactory to the Agent and the Banks. [NOTE: No security showing as registered at Companies House so no English law release required.]
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Borrowers/ Agent | ||||||||||||
60. | Winding up searches in respect of the UK Borrower. | Agent/ Borrowers | ||||||||||||
61. |
Evidence of Hazard and Liability Insurance of the Loan Parties at each of their locations in accordance with the terms of the Credit Agreement, along with endorsements naming the Agent as additional insured and lender loss payee, to the extent not previously delivered.
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Borrowers | ||||||||||||
62. |
Certificate of Beneficial Ownership of the Borrower, in form and substance satisfactory to the Agent, to the extent not previously delivered.
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Borrowers/
Agent
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63. |
Opinion Letter(s) with respect to the New Borrowers in form and substance acceptable to the Agent and the Banks with respect to the Credit Facility, the First Amendment and all related documents from the following:
UK Borrower – Addleshaw Goddard LLP;
German Borrower – Dentons; and
Dutch Borrower – Dentons.
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Borrowers/
Agent
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64. | Officer's Certificate of each of the New Borrowers confirming that: (i) such New Borrower's borrowing of the total amount of the Foreign Borrower Sublimit (as defined in the Loan Agreement) would not cause any borrowing or similar limit binding on such New Borrower to be exceeded; and (ii) no Event of Default under Sections 7.01(a), (b) and (c) of the Loan Agreement. | Borrowers | ||||||||||||
65. |
W-9s, or comparable jurisdictional equivalent (including a form W-8 for the UK Borrower), for each of the Loan Parties, to the extent not previously delivered.
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Borrowers | ||||||||||||
66. | Disbursement Statement. | Agent | ||||||||||||
67. | Funding Indemnity Letter, made by the [Borrowers][New Borrowers] in favor of the Agent. | Agent |