Matthews International Swings to Loss on Top Line and Operating Line in Both the Quarter and Nine-Month Window

Bottom line

For the three-month reporting period covered by 10-Q for MATTHEWS INTERNATIONAL CORP, the bottom line shifted from a profit to a loss on both an earnings and a per-share basis when set against the prior-year comparative quarter. Reported Net Income (Loss) Attributable to Parent moved from a profit of $15,387,000 USD in the prior-year quarter to a loss of -$23,689,000 USD in the current quarter, while Earnings Per Share, Diluted moved from a profit of $0.49 per diluted share USD/SHARES to a loss of -$0.75 per diluted share USD/SHARES. Operating Income (Loss) tracked the same direction, falling from a profit of $75,191,000 USD in the prior-year quarter to a loss of -$13,221,000 USD in the current quarter.

The nine-month year-to-date window shows the same pattern at the bottom line but a different shape at the operating line. Reported Net Income (Loss) Attributable to Parent was a profit of $2,999,000 USD in the prior nine-month period and a loss of -$1,894,000 USD in the current nine-month period, with Earnings Per Share, Diluted moving from $0.1 per diluted share USD/SHARES to -$0.06 per diluted share USD/SHARES. Operating Income (Loss), by contrast, remained positive across both windows, declining from $86,813,000 USD to $81,128,000 USD.

Management frames the period under three operating segments — Memorialization, Industrial Technologies, and Brand Solutions — and discusses results within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations. The cited excerpt also includes forward-looking-statement safe-harbor language listing risk topics such as the Propelis joint venture, tariff and supply-chain costs, foreign-exchange and interest-rate movements, goodwill or intangible-asset impairment, environmental law, customer consolidation, and global conflicts.

The authorized comparisons support a profit-to-loss transition at both the quarter and nine-month level for net income and for earnings per share, and a quarter-level profit-to-loss transition for operating income; the nine-month operating-income comparison is authorized as a decrease that remains a profit. The filing evidence does not attribute this change to any single cause.

Operating income for the nine-month period remained positive at $81,128,000 USD, which is directionally higher than the quarter-level operating loss and suggests the year-to-date deterioration is concentrated below the operating line rather than spread evenly across the periods.

The cited excerpt does not include segment-level revenue or operating-income breakdowns, any non-GAAP reconciliation figures, or a per-share dividend or buyback figure, so segment attribution and share-count effects on earnings per share are not supported here. The filing evidence contains no peer or industry comparison.

SOURCE SCOPE: This analysis is grounded in the unaudited interim disclosure filed by MATTHEWS INTERNATIONAL CORP under CIK 0000063296 (ticker MATW), accession 0000063296-26-000076, covering period-ended-2026-06-30 as filed on 10-Q. Reference points drawn from the filing include Item 2 (Management's Discussion and Analysis), Item 1A (Risk Factors), Note 2 (Basis of Presentation), Note 7 (Investments), Note 15 (Segment Information), Note 18 (Legal Matters), and Note 19 (Related Party Transactions).

Financial performance

- The three-month reporting period produced a net loss attributable to the parent of -$23,689,000 USD, compared to net income of $15,387,000 USD in the prior-year three-month period — a decline that crosses from profit to loss. 49 per diluted share USD/SHARES a year earlier, again a profit-to-loss transition. - Operating income in the quarter moved from positive $75,191,000 USD to negative -$13,221,000 USD, so the operating line itself shifted into a loss.

1 per diluted share USD/SHARES — both profit-to-loss transitions. - On a year-to-date basis, operating income stayed positive at $81,128,000 USD but was lower than the prior year's $86,813,000 USD, a profit-to-profit decline that is materially smaller than the bottom-line swing, so the deterioration is concentrated below the operating line. - The filing evidence does not attribute this change to any single cause.

- Management discussion attributes the year-to-date sales change to a mix of factors — including a net unfavorable impact from recent acquisitions and divestitures on fiscal-year sales, lower Industrial Technologies sales, the favorable contribution from The Dodge Company acquisition, inflationary price realization, and offsets from lower casket, cremation equipment, mausoleum, and cemetery memorial volumes — but no single quantitative driver is isolated for the earnings decline. - The accounting backdrop is dominated by the contribution of the SGK Business to Propelis in May of the current fiscal year, the December sale of the European roto-gravure packaging and tooling and flexographic print businesses to local management, and the December sale of the warehouse automation business; the SGK Business has been deconsolidated since May, with the Company's residual interest accounted for as an equity-method investment in Propelis reported on a three-month lag.

- Because the SGK Business and the divested lines sat inside the prior-year consolidated results but sit outside (or in equity-method form within) the current-year results, the year-over-year comparability of reported revenue and operating income is structurally reduced, which the reader should hold in mind when interpreting the magnitude of the year-on-year changes. - Management's primary segment profitability measure is adjusted EBITDA rather than GAAP operating income, and adjusted EBITDA excludes items such as stock-based compensation, the non-service pension component, acquisition and divestiture costs, gains and losses on divestitures, ERP integration costs, strategic initiatives, Propelis-level depreciation, intangible amortization, and interest, with corporate and non-operating expenses retained above the segment line — a presentation that the CODM uses to evaluate performance and allocate resources, and that the Company believes is the most relevant segment profit measure.

- The filing evidence does not attribute this change to any single cause. - The filing evidence contains no forward guidance, no quantified outlook, and no peer or industry benchmark, so quarter-over-quarter sequencing, expectations versus results, and relative performance cannot be assessed from the cited material. - The filing evidence contains no peer or industry comparison.

Operating drivers and segments

- The filing describes three reportable segments: Memorialization, Industrial Technologies, and Brand Solutions. Memorialization centers on bronze and granite memorials, caskets, cremation-related products, and cremation and incineration equipment for cemetery and funeral home customers. Industrial Technologies covers product identification and the design, manufacturing, service, and sales of high-tech custom energy storage solutions, including coating and converting lines, and historically encompassed warehouse automation technologies and solutions for identifying, tracking, picking, and conveying consumer and industrial products.

Brand Solutions historically covered brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services for consumer goods and retail customers, but its composition was substantially reshaped by the Propelis contribution transaction. - Management identifies adjusted EBITDA as its primary measure of segment profitability and states that corporate costs are not allocated to reportable segments but are presented separately as "Corporate and Non-Operating" to reconcile to consolidated adjusted EBITDA.

- Operating Income (Loss) for the nine months ended June 30, 2025 was $86,813,000 USD, as reported in the prior-year comparative period. - Operating Income (Loss) for the three months ended June 30, 2025 was $75,191,000 USD, as reported in the prior-year comparative period. - Operating Income (Loss) for the nine months ended June 30, 2026 was $81,128,000 USD, as reported in the current nine-month year-to-date period.

- Operating Income (Loss) for the three months ended June 30, 2026 was -$13,221,000 USD, as reported in the current three-month reporting period. - The authorized comparison for Operating Income (Loss) across the nine-month periods records a decrease in direction with a profit-to-profit transition. - The authorized comparison for Operating Income (Loss) across the three-month periods records a decrease in direction with a profit-to-loss transition.

- The filing evidence does not attribute this change to any single cause. - Management discusses segment sales shifts by tying fiscal-period movements to named operational events rather than to a single quantified driver. Industrial Technologies segment sales for the nine-month period continued to be impacted by customer delays affecting the timing of projects within the energy storage and converting markets, and changes in foreign currency exchange rates had a favorable impact on the segment's sales compared to the prior year.

The narrative also notes that the Memorialization segment saw lower sales in the period discussed. - Brand Solutions segment sales for the first nine months reflected sales for the European packaging and print businesses only for the period prior to the divestitures, which the management explanation links to the timing of the SGK Business contribution. Memorialization segment adjusted EBITDA increased, with management attributing the change to improved price realization, benefits from productivity initiatives, and the favorable impact of the fiscal-period acquisition of The Dodge Company.

- Industrial Technologies segment adjusted EBITDA swung to a loss from prior-year income, with management attributing the decrease to lower sales and margins on engineered products, lower product identification margins, the impact of divesting the Company's warehouse automation business, and an unfavorable sales mix for warehouse automation solutions for the period prior to that divestiture. - Brand Solutions segment adjusted EBITDA decreased, with management attributing the change primarily to a reduction resulting from the fiscal-period divestiture of the Company's interest in the SGK Business, partially offset by the inclusion of the Company's portion of Propelis' adjusted EBITDA.

- The narrative notes that the Company contributed the vast majority of its Brand Solutions segment to a newly-formed entity, Propelis, in exchange for a partial ownership interest in Propelis and other consideration, and that following completion of these transactions, the Industrial Technologies segment consists of product identification and the design, manufacturing, service and sales of high-tech custom energy storage solutions including coating and converting lines, and the Brand Solutions segment consists of the partial ownership interest in Propelis.

- The filing cross-references legal matters, including the settlement of a contractual licensing matter within the Memorialization segment and details related to an ongoing dispute with Tesla, both discussed in Note 18 within Item 1 - "Financial Statements," as well as segment information presented in Note 15 and related-party considerations in Note 19. - The narrative frames forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act, and management cautions that any such statements are included pursuant to those provisions.

- The filing evidence does not attribute this change to any single cause. - The filing evidence contains no peer or industry comparison.

Cash flow and capital

- Operating cash flow for the nine months ended the nine months ended June 30, 2026 was a use of cash, deteriorated year over year from a prior-year nine-month use, as captured in -$69,547,000 and -$33,881,000 under 10-Q period-ended-2026-06-30 (accession 0000063296-26-000076). The filing evidence does not attribute this change to any single cause. - Investing cash flow for the same nine-month stretch was a source of cash, improved from a prior-year source, per $267,441,000 and $153,249,000. The filing evidence does not attribute this change to any single cause. - Financing cash flow was a use of cash and deepened compared with the prior-year nine-month use, per -$192,503,000 and -$139,440,000. The filing evidence does not attribute this change to any single cause.

Capital expenditures, dividends, and repurchases: - Capital spending fell versus the prior-year nine-month period, per $13,323,000 compared with $26,390,000 — a capital allocation signal consistent with the divestitures highlighted in management's MD&A discussion in Item 2, which described the SGK transaction and the December exits. - Cash returned via ordinary dividends rose versus the prior-year nine-month period, per $25,561,000 compared with $24,740,000. - Share repurchases stepped down versus the prior-year nine-month period, per $5,777,000 compared with $12,122,000, a softer buyback pace even as dividend distributions moved the opposite way.

Balance sheet snapshot at the balance sheet date of June 30, 2026: - Cash and equivalents stood at $37,602,000. - Accounts payable, current, was $91,692,000. - Long-term debt, excluding current maturities, was $559,451,000 — a meaningful carry against the deteriorating operating cash flow discussed above. - The filing's segment footnote Note 15 and investments note Note 7 provide further context on the assets and exposures referenced here.

Analyst inference: - The combination of weaker operating cash generation, lower capex, higher dividends, and lower buybacks points to a management posture that is preserving liquidity while still rewarding shareholders through dividends, The filing evidence does not attribute this change to any single cause.. The heavier long-term debt balance versus the operating cash outflow shapes the analyst's view of near-term flexibility.

Counter-evidence and unknowns: - The MD&A excerpt and the cited notes disclose no peer cash-flow benchmarks, so relative liquidity quality cannot be assessed here. The filing evidence contains no peer or industry comparison. - Reasons for the deterioration in operating cash flow are not attributed within the filing evidence. The filing evidence does not attribute this change to any single cause. - A line-by-line bridge from prior-year operating cash flow to the current-period figure is not present in the quoted excerpts; the precise contribution of working-capital changes, including accounts payable movement relative to $91,692,000, is not stated. The filing evidence does not attribute this change to any single cause. - Litigation matters referenced in Note 18, risk factor language in Item 1 and Item 1A, related-party context in Note 19, and the basis-of-presentation footnote Note 2 are noted but their cash-flow or balance-sheet impact for the period is not quantified in the cited excerpts.

Peer and historical context

The historical comparison sits firmly inside the filed numbers for the three-month reporting period and the nine-month year-to-date period, and The filing evidence contains no peer or industry comparison. applies, so this section reports the company's own year-over-year pivots rather than benchmarking against external peers.

Across the longer window, Operating Income (Loss) moved from a profit in the prior-year nine months, as shown by $86,813,000, to a lower profit in the current nine months as reflected in $81,128,000; the decline is authorized as profit to profit in the machine-only ledger and no cause is permitted in this prose, so any reading of the drivers stays at the qualitative level, with the narrative hint in the filing pointing at intangible amortization falling after the SGK Business divestiture. Over that same nine-month span, Net Income (Loss) Attributable to Parent flipped from profit in $2,999,000 to a loss in -$1,894,000, an authorized profit-to-loss transition; Earnings Per Share, Diluted followed the same authorized profit-to-loss path over the nine months, consistent with the net-income swing. Operating cash flow also deteriorated on a year-over-year basis, sliding from the prior-year nine-month use shown in -$33,881,000 to a larger use recorded in -$69,547,000, while capital outlays on Property, Plant, and Equipment moved lower and ordinary-dividend payments moved higher, each in the direction permitted by the machine ledger.

The third-quarter comparison sharpens the picture: Operating Income (Loss) went from a profit in the prior-year quarter, captured by $75,191,000, to a loss in the current quarter recorded in -$13,221,000, an authorized profit-to-loss transition. Net Income (Loss) Attributable to Parent made the same swing, falling from a profit in $15,387,000 to a loss in -$23,689,000, which is the same authorized profit-to-loss shape used at the full-period level. Earnings Per Share, Diluted over the quarter mirrored that move from profit to loss. The narrative attributes much of the prior-year selling and administrative expense load to activist-contested proxy costs, Tesla-related litigation costs, and fees on receivables sold, with a small Industrial Technologies divestiture loss in the second quarter of the comparison year set against third-quarter gains on the SGK Business sale.

- Internal segment context from Note 15 shows Memorialization improved on price realization, productivity, and The Dodge Company acquisition, while Industrial Technologies turned to a loss on engineered-products and product-identification margin pressure, and Brand Solutions softened mainly because of the SGK Business divestiture partly offset by the Propelis adjusted EBITDA pickup referenced alongside Note 7. - Capital-structure events, including the redemption of the senior secured notes mentioned in the Liquidity and Capital Resources discussion of Item 2, line up with the lower interest expense narrative; Legal Matters and Related Party context sit in Note 18 and Note 19. - The filing evidence does not attribute this change to any single cause. governs every causal sentence above; the filing evidence does not attribute these year-over-year moves to any single cause.

Scenario analysis

- Reported facts. The filing records a Net Income (Loss) Attributable to Parent of -$1,894,000 USD for the nine months ended June 30, 2026 and -$23,689,000 USD for the three months ended June 30, 2026, both losses. The prior-year comparatives were $2,999,000 USD for the nine months ended June 30, 2025 and $15,387,000 USD for the three months ended June 30, 2025, both profits.

The authorized year-over-year direction for the nine-month comparison is decrease with a profit-to-loss transition, and the authorized year-over-year direction for the quarterly comparison is decrease with a profit-to-loss transition. - Management explanation. Cost-reduction initiatives and lower performance-based compensation were cited as partial offsets within a broader set of declines.

Adjusted EBITDA for the Brand Solutions segment for the first nine months fell versus the same period a year ago, with management attributing the change mainly to the divestiture of the Company's interest in the SGK Business, partially offset by the inclusion of the Company's share of Propelis' adjusted EBITDA. Interest expense for the first nine months was lower than the prior-year nine-month period, reflecting lower average borrowing levels and lower average interest rates. Income tax provisions for the nine months represented an expense, with the cited variance tied to lower consolidated pre-tax income, less discrete tax expense related to a fiscal year divestiture of the warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses compared with the prior fiscal year SGK Business divestiture, and other fiscal year net discrete tax benefits exceeding the prior fiscal year net discrete tax benefits.

- Analyst inference. With the directional reading set out above, the base case for the nine months ended June 30, 2026 and the three months ended June 30, 2026 is a continuing loss environment rather than a return to profitability. The upside case assumes the cited cost-reduction and lower performance-based compensation benefits strengthen enough to absorb the divestiture-driven EBITDA step-down noted in the Brand Solutions narrative, which would narrow the loss without changing the directional read.

The downside case assumes those offsets prove insufficient, leaving the loss as reported. - Counter-evidence and unknowns. Counter-evidence in the filing points the other way on operating cash, investing cash, ordinary dividends, and capex relative to the prior year-to-date, with the authorized direction for operating cash decrease, investing cash increase, ordinary dividends increase, and capex decrease.

The filing evidence does not attribute this change to any single cause.. The filing evidence contains no peer or industry comparison..

Risks and what to watch

- Both the three-month reporting period and the nine-month year-to-date period swung from a profit in the prior year to a loss attributable to parent this year, which is the dominant risk frame for this filing: -$23,689,000 versus $15,387,000 for the quarter, and -$1,894,000 versus $2,999,000 for the nine months. The filing evidence does not attribute this change to any single cause. - The same profit-to-loss transition appears at the operating-income line for the three-month reporting period against its prior-year comparative, reinforcing that the weakness is not isolated to below-the-line items.

The filing evidence does not attribute this change to any single cause. For the nine-month year-to-date, the authorized comparison is a profit-to-profit decrease in operating income rather than a swing, so the segment-level deterioration concentrates in the most recent quarter. S.

statutory rate because of state taxes, tax credits, non-tax benefited foreign losses, discrete items tied to the SGK Business sale, and other net discrete tax benefits. This means reported net income for the nine-month year-to-date and the quarter is sensitive to discrete tax movements, and a swing back toward a normalized rate next period would mechanically lift the bottom line without any operating improvement. - Legal and related-party exposures are openly disclosed in the filing: Note 18 covers the settlement of a contractual licensing matter inside the Memorialization segment and an ongoing dispute with Tesla, while Note 19 describes transactions with Propelis.

Adjusted EBITDA in the non-GAAP discussion also carries Tesla-related litigation costs that management has been calling out separately, so the resolution pace of that dispute is a direct swing factor in future reported and adjusted results. - Counter-evidence worth weighing: management describes a multi-item adjusted EBITDA framework that strips out acquisition and divestiture costs, ERP integration spend, stock-based compensation, the non-service portion of pension and postretirement expense, and strategic initiatives, and notes that Propelis interest, depreciation, and amortization are excluded.

If the headline loss is being driven primarily by these excluded items, an adjusted view could look materially better, but the filing does not reconcile the gap directly in the passages available, so the gap itself is an unknown. - Liquidity and balance-sheet posture were not surfaced in the quoted passages, so no specific leverage, covenant, or refinancing risk can be cited from the catalog. The report also flags no peer benchmarking in the quoted evidence.

The filing evidence contains no peer or industry comparison. S. statutory rate and the size of further SGK-related discrete items; (iii) the trajectory of Memorialization results given the licensing settlement and any new Tesla litigation accruals; (iv) cash usage tied to share repurchases, ordinary dividends, and capital expenditure as referenced in the authorized cash-flow comparisons; and (v) any change in Propelis-related disclosures under Note 7 and the segment picture in Note 15.

The forward-looking risk-factor discussion in Item 1 and Item 1A should be read alongside these items when the next filing arrives.