Matthews International produces memorials and gravestones, like those found at Arlington National Cemetery. Photo courtesy Supermac1961/flickr.com. About Matthews International Matthews International is a manufacturer and provider of packaging and memorialization products. The company has 9,400 employees and is headquartered in Pittsburgh, PA. The origins of Matthews International date back to before the Civil War, when John Dixon Matthews emigrated from Sheffield, England and opened up an engraving shop in Pittsburgh. His shop produced a variety of metal products, including military stamping dies and branding irons. Matthews International was incorporated in Pennsylvania in 1902. Matthews reports financial results in three segments: SGK Brand Solutions, Memorialization, and Industrial. The SGK Brand Solutions segment is responsible for providing products and services that improve customer’s branding, including marketing and design services, imaging services for packaged goods and packaging. The segment serves the packaging, wallpaper, flooring and automotive industries, among others. The segment expanded its products and capabilities with the acquisition of Schawk, Inc. in July 2014 for $617 million, and provided 45% of the company’s total revenues in fiscal year 2014 (which ended September 30, 2014). The Memorialization segment produces and distributes bronze and granite memorials, caskets and cremation equipment for the cemetery and funeral home industries. In addition, the segment also produces architectural products designed to commemorate people, events and accomplishments. The segment is the largest of the three by sales, contributing nearly 46% of total company sales in fiscal year 2014. The Memorialization segment should see a jump in sales next year from the August 2015 acquisition of Aurora Casket Company from Kohlberg & Company for $214 million. The Industrial segment produces marking and coding equipment and associated consumables, and order fulfillment systems that are used for tracking product deliveries. According to Matthews’ annual report, a significant portion of the Industrial segment’s revenues comes from the sale of consumables and replacement parts needed by the various pieces of equipment that is sold through the segment. In fiscal year 2014, Matthews International had sales of $1.1 billion, which was up 12.3% from FY 2013. Due to costs associated with the Schawk acquisition, and lower volume in the Memorialization segment, net income was down 21.2% to $42.6 million. Earnings per share were $1.49, down from the $1.95 in FY 2013. With the current dividend of 52 cents a year, Matthews International has a payout ratio of 34.9%. For the first 3 quarters of FY 2015, sales have been up 40% year-over-year, but earnings per share are only up about 2% due to an increase in cost of sales, and general and administrative expenses. In addition, currency effects from Euro weakness reduced earnings per share by 7 cents. (Matthews International gets about 60% of its revenue from within the United States and another 35% from Europe.) The company also has an active share repurchase program. At the end of FY 2014, about 966,000 shares, representing about 3% of the outstanding shares, remained to be repurchased under the current program. The company is a member of […]
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