Matthews International’s first quarter results were impacted by soft demand across key segments, leading to a year-over-year sales decline that missed Wall Street’s revenue expectations. Management cited ongoing challenges in its Energy Solutions business, including delayed customer projects and long sales cycles, as central factors behind the weaker top line. CEO Joe Bartolacci acknowledged that “consolidated sales came in generally as expected but lower on a year-over-year basis, primarily due to the challenge faced by our Energy Solutions business.” Additionally, Memorialization volumes fell as casketed deaths normalized after pandemic-driven highs, and the company’s cost reduction initiatives partially offset these declines.
Is now the time to buy MATW? Find out in our full research report (it’s free).
Matthews (MATW) Q1 CY2025 Highlights:
- Revenue: $427.6 million vs analyst estimates of $435.6 million (9.3% year-on-year decline, 1.8% miss)
- Adjusted EPS: $0.34 vs analyst expectations of $0.38 (10.5% miss)
- Adjusted EBITDA: $51.4 million vs analyst estimates of $49.9 million (12% margin, 3% beat)
- EBITDA guidance for the full year is $190 million at the midpoint, below analyst estimates of $205.6 million
- Operating Margin: 0.8%, down from 4.7% in the same quarter last year
- Market Capitalization: $676.9 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Matthews’s Q1 Earnings Call
- Daniel Moore (CJS Securities) asked how the $100 million in Energy Solutions quotes compared to prior periods. CEO Joe Bartolacci explained that quoting activity was significantly higher than last year, driven by renewed customer engagement after resolving technology rights issues, particularly in South Korea and grid storage applications.
- Moore queried the outlook for Memorialization and causes of recent volume declines. CFO Steven Nicola and Bartolacci cited normalization of casketed death rates and fading pandemic-era backlogs, with expectations for continued stabilization but little organic growth ahead.
- Moore sought clarification on cost reduction timing. Nicola detailed that $20 million in savings are expected this year and $30 million next year, with most benefits tied to engineering and corporate restructuring.
- Colin Rusch (Oppenheimer) pressed for insight into the maturity of customer testing in battery technologies. Bartolacci replied that most quoted projects are now for mass production lines, indicating customers are moving beyond prototypes to full-scale production planning.
- Justin Bergner (Gabelli Funds) inquired about the retrofit opportunity for dry battery electrode equipment. Bartolacci explained that retrofit projects allow customers to replace less efficient wet processes with dry production lines, using the same core equipment as new installations to drive operational efficiencies.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of order conversion and revenue recognition in the Energy Solutions segment, (2) the operational impact and integration progress following the SGK Brand Solutions divestiture, and (3) the recovery in Warehouse Automation demand and backlog execution. The effectiveness of ongoing cost reduction initiatives and any progress toward additional asset sales will also be important markers of Matthews’ strategic execution.
Matthews currently trades at $21.83, up from $20.46 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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