Matthews Posts Record Revenues — Casket Sales Decline

Matthews International issued a press release last Thursday, November 16, reporting on their 4th quarter and 2017 year end results.  It is a report eerily similar to Hillenbrand’s 2017 year end report in that the report was overall excellent but both companies saw sales in their casket units drop.  You can read Matthews press release here.

As you may know, Matthews International has three operating segments – SGK Brand Solutions, the Industrial Technologies segment, and the Memorialization segment.  With record year end sales of $1.52 billion they explained that all segments had an increase in sales for the year which are compared year over year to last year’s sales of $1.48 billion.

Most specifically, the Memorialization segment, Matthews 2nd largest – had sales of $615.9 million as compared to sales of $610.1 million in 2016.  The company stated that the Memorialization segment sales reflected higher sales of cemetery memorial products and cremation equipment that was offset by a decline in casket sales.  The press release attributes the decline in casket sales simply to a decline in U.S. casketed deaths.

Here are some other highlights that should interest you from Matthews report.  Quotations are directly from the release:

  • “Strong results once again demonstrated the fundamental strengths of our company. . . which included record operating cash flow in fiscal 2017.”
  • “Despite challenges in the U.S. and European brands markets and a decline in a key Memorialization demographic (U.S. casketed deaths) the company again reported earnings growth”
  • “The Memorialization segment reported sales growth and higher operating profit for fiscal 2017 primarily reflecting higher sales of cemetery memorial products and cremation equipment.  In addition, continued synergy realization from the Aurora acquisition and the benefits from ongoing operating productivity initiatives contributed to the segment’s improvement in operating results.”
  • “The integration of Aurora Casket and other recent acquisitions will continue into fiscal 2018 and are progressing well. .  .we estimate additional remaining annual synergies from all current acquisition integration activity in the range of $15 million.”

In a separate press release on the same day Matthews International announced that they were raising their quarterly dividend to $0.19 per quarter.  That marks the 23rd consecutive annual dividend increase since becoming a publicly-traded company.  The stock closed on Monday, November 27 at $54.50 per share which makes the annual dividend rate out at 1.40%.

Funeral Director Daily take:  It is interesting to us how similar the results for Hillenbrand Industries and Matthews International turned out in 2017.  We believe that both companies are very well run and know what they want to do.  It’s also interesting to note that while both came of age in the death care industry — Hillenbrand with caskets and Matthews with memorial products – they both have been somewhat visionary in  seeing that those products, while giving a steady cash-flow, would no longer be their main business anchors.  Both sought out other acquisitions which have surpassed their original products in sales.

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