Matthews 1Q 2021 shows improvement, Memorialization segment grows revenue

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Earnings period is upon us again in the death care industry.  Over the next 8 weeks the eight death care public companies that make up the Funeral Director Daily Death Care Index (DCI) will report sales and earnings for the October, November, and December periods.  To those on a calendar year accounting format that will be their 4th Quarter, but to some on a different fiscal year it will represent a different quarter of the fiscal year.

Matthews International is one of those companies reporting on a fiscal year and they released their 2021 First Quarter results last week.  Overall, the company reported sales of over $386 million for the quarter which is about $21 million or 5.9% higher than the same months of their 2020 1st Quarter.  On that revenue Matthews reported a net loss of about $1.8 million as compared to a net loss of over $10 million for the same period last year.

You can see the Matthews International 1Q 2021 report here.

Matthews International operates in three distinct operating segments —  SK Brand Solutions, Industrial Technologies, and Memorialization.  It is the Memorialization segment that we spend time analyzing at Funeral Director Daily. 

Specifically, the Memorialization segment had 2021 1Q sales of $183.2 million as compared to its prior year 1Q sales of $154.4 million.  That is an increase of over 18%. . . . of course, last year’s sales were done in a quarter that, as far as we know, contained no COVID related deaths.

It is interesting to note that as the Memorialization segment grows for the company it has become a larger percentage of the total sales volume for Matthews International.  Even going back to the 4th Quarter of the 2020 fiscal year (July, August, and September 2020), the Memorialization segment contributed 44.5% of all Matthews sales.  However, just one quarter later (October, November, and December 2020), the $183.2 million in Memorialization sales reflects 47.3% of the company’s total sales. . . .a growth of almost 3% in just one quarter. . . . .thus showing the value of the segment to the overall operations of the company.

Here’s what Joseph Bartolacci, CEO of Matthews had to say about the company outlook,  “Uncertainty in the global markets and several of the industries that we serve remains ongoing due to the pandemic. However, due to the nature of our largest businesses, we are cautiously optimistic regarding the remainder of this fiscal year. Recent COVID-19 trends are expected to continue to have an impact on our Memorialization business in the near term and, as the pandemic subsides reducing our casket sales, our cemetery memorial products and retail-based businesses should benefit from pent-up demand. In addition, orders have grown significantly for the energy storage business within our Saueressig subsidiary and our warehouse automation business, which are expected to benefit the Company’s consolidated performance in the second half of the current fiscal year. Lastly, our ongoing cost reduction initiatives, which have already produced realized savings for the Company, are expected to generate additional long-term benefits in future periods.”

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