Matthews International Corporation

For Q3 fiscal 2026, Matthews reported consolidated sales of $246 million versus $349 million a year ago, a net loss of $23.7 million or $0.75 per share versus net income of $15.4 million or $0.49 per share, and consolidated adjusted EBITDA of $35 million versus $44.6 million a year ago. Non-GAAP adjusted net income was $1.9 million, or $0.06 per share, versus $9.2 million, or $0.28 per share last year. Memorialization sales were $208.1 million versus $203.7 million, with adjusted EBITDA of $42.2 million versus $42.8 million. Industrial Technologies sales were $38 million versus $87.9 million, with adjusted EBITDA of a loss of $5.4 million versus a profit of $9 million. Brand Solutions adjusted EBITDA was $9.7 million versus $5 million a year ago, with Propelis’ preliminary April-June adjusted EBITDA estimate implying Matthews’ 40% share would be $12.7 million. Cash used in operating activities for the first nine months was $69.5 million versus $33.9 million a year ago; outstanding debt was $567 million and net debt was $530 million at June 30, 2026. Management cut full-year adjusted EBITDA guidance to $158 million-$162 million, while still targeting about $175 million of full-year Memorialization adjusted EBITDA and expecting Propelis to exit calendar 2026 at an annualized EBITDA run rate of about $130 million.

Joe Bartolacci struck a candid, defensive tone, saying the quarter was difficult and that all four previously identified risks hit results negatively: engineering order timing, tariffs, Propelis synergies, and geopolitical/economic pressures. He emphasized that management has taken action to prevent a repeat, including restructuring European engineering operations, seeking strategic alternatives, and reducing corporate costs. At the same time, he highlighted optimism around DBE, Axian, and the Linx partnership, arguing that customer interest is increasing and the company’s technology value is being validated.

Dan Stopar focused on the reported numbers and the balance sheet. He said Q3 consolidated sales were $246 million, adjusted EBITDA was $35 million, and the net loss was $23.7 million, while the nine-month period used $69.5 million of operating cash. He also noted gross debt fell by $144 million from fiscal 2025 year-end to $567 million, helped by $244 million of divestiture proceeds and $28 million from redemption of part of the Propelis preferred equity, partly offset by operating cash use and fees to redeem $300 million of senior secured notes. He pointed to the revised guidance range of $158 million-$162 million in adjusted EBITDA and said the company bought 404 shares under its repurchase program only to satisfy withholding tax obligations.

Analysts pressed on DBE commercial visibility, with management saying customer discussions have moved from lab machines to pilot and mass-production stages and that the new mass-production machine is now being commissioned with soft commitments from several customers. On Memorialization, management acknowledged some elasticity and mix-down from higher prices, but said the bigger issue remains historically low U.S. death rates and rapidly rising copper, steel, labor, and fuel costs. Questions on Propelis centered on the $12.7 million quarterly EBITDA estimate and the timing of SAP-related synergies; management said the delay is mainly a one-quarter slip in migrating work off legacy systems, not a failure of the implementation. Management also said Tesla litigation has become less of a blocker, though it still affected at least one lost order decision.