Matthews Memorialization segment shows revenue gains in 3Q 2020

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Matthews International, which operates on a fiscal year that begins on October 1 each year, released earnings reports last week.  The company has three operating segments and the one that is of interest to those of us in the death care profession is what Matthews refers to as its “Memorialization Segment”.

Matthews Memorialization Segment consists of four divisions which you can learn more about here.

  1. Matthews Aurora Funeral Solutions – Caskets, urns, remembrance jewelry
  2. Matthews Cemetery Products – Granite memorials and monuments
  3. Matthews Architectural Products – Custom metal products such as cast plaques
  4. Matthews Environmental Solutions – Cremation equipment, waste to energy conversion, and emission control systems.

During Matthews 3rd Quarter 2020 the company reported that the Memorialization segment produced revenue of $162.1 million as compared to 2019’s 3Q revenue of $158.2 . . . an increase of about 2.5%.

Here’s what CEO Joseph C. Bartolacci said in a press release, that you can access here, dated Thursday, July 30:

“I am very pleased with the performance of our overall business during these challenging times.  The relative stability of our consolidated results reflects the diversity of our core businesses and highlights what we believe to be the strength of the franchise … leading market positions in stable end markets.”

“The Memorialization segment reported sales growth compared to a year ago, reflecting higher casket sales and an increase in sales of cremation equipment.  These gains were partially offset by lower cemetery memorial products sales, which were impacted by many local stay-at-home orders that limited families’ access with cemeteries to arrange for their memorials.  However, we anticipate most of these orders are deferred to a future date.”

“Sales for the Memorialization segment for the fiscal 2020 third quarter were $162.1 million, compared to $158.2 million for the same quarter a year ago.  The increase was primarily the result of higher casket and cremation equipment sales, partially offset by lower cemetery memorial products sales.  International memorial product sales and mausoleum sales were unfavorably impacted by COVID-19. “

Funeral Director Daily take:  It is interesting that there was an increase in casket sales which is bucking the trend of revenue declines the casket companies have seen on a gradual scale over the last couple of years.  However, it is not surprising due to the COVID-19 pandemic and the increased number of deaths across America during the April to June reporting period.

It will be interesting to see going forward what result these deaths will have on casket sales in the future.  Much like a bad flu season when there is a “pull forward” of deaths (deaths that probably would have happened in the next year, but were “pulled forward” by the flu) it will be interesting to see if that is the case with COVID-19 deaths.  Our assumption is that when the statistics on age related deaths all come out, we may very well see that many COVID-19 deaths were what we refer to as “pull forward”.  If that is the case and we get a handle on COVID-19 soon, then you will probably see a drastic decease in casket sales in 2021.

And on the flip side of that in the cemetery memorial products business, we see cemetery products being somewhat difficult to sell during the past quarter as many client families probably did not want to make sales appointments.  So, it is quite possible that we will see monument sales increase in the future covering not only present date deaths but a back log of products being sold for those that died during the stay at home COVID-19 period.

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