Matthews International Corporation (NASDAQ GSM: MATW) has reported its fiscal 2026 first-quarter financial results, showing a significant improvement in earnings per share (EPS). The company's EPS on a GAAP basis for the current quarter was $1.39, a substantial increase from a loss of $0.11 in the same period last year.
The Memorialization segment reported higher sales and adjusted EBITDA compared to a year ago. Sales for the Memorialization segment in the first quarter of fiscal 2026 were higher than the previous year, primarily due to the recent acquisition of the Dodge Company. The company expects this acquisition to be accretive to earnings as it leverages the benefits of its memorialization commercial platform and realizes cost synergies from integration. Additionally, inflationary price realization and higher sales volumes for caskets and cemetery memorials contributed to sales growth in the quarter.
In contrast, the Industrial Technologies segment reported a decline in sales for the fiscal 2026 first quarter, mainly due to challenges in the engineering business, including the impacts of the ongoing Tesla dispute. However, the segment anticipates strong customer interest in its dry battery electrode solutions, with expectations for orders to start converting in the second half of fiscal 2026.
The company reduced consolidated outstanding debt by $174 million during the fiscal 2026 first quarter. This reduction primarily reflected the proceeds from divestitures, offset partly by typical first-quarter reductions in working capital, seasonally lower earnings, and funding of expenditures associated with divestitures, strategic initiatives, and other items. In January, Matthews International Corporation redeemed $300 million aggregate principal of 8.625% senior secured second lien notes due 2027, expected to significantly reduce interest expense and improve future cash flow.
Propelis Group ("Propelis"), the new company formed through the integration of the SGK business with SGS, has reported solid operating results since its formation in May 2025. The new management team has made good progress towards achieving its projected cost synergy estimate of approximately $60 million, much of which is expected to be realized in calendar 2026.
The company's strategic alternatives review remains ongoing, with the divestitures of SGK in 2025, and the warehouse automation and European packaging businesses in the first quarter of fiscal 2026, outcomes of the effort to simplify Matthews' business structure and enhance shareholder value.
Based on the results through December 31, 2025, and projections for the remainder of fiscal 2026, Matthews International Corporation is maintaining its previous earnings guidance of adjusted EBITDA of at least $180 million for fiscal 2026, which includes the estimated 40% share of Propelis adjusted EBITDA.
The market has reacted to these announcements by moving the company's shares -4.64% to a price of $27.36. Check out the company's full 8-K submission here.
