Most of us in the Death Care business recognize Matthews International as a trusted supplier in the monument, cemetery, cremation, and casket business.  However, this recent article from the Pittsburgh Post-Gazette gives us some insight into what has been fueling the company’s rise in stock price and potential future growth prospects.

 

The article talks about “dry battery electrodes”,  their importance to the burgeoning EV (electric vehicle) industry, and Matthews decade-long investment in producing them less expensively.  According to the article, Matthews CEO Joseph Bartolacci explained that the company is making progress on making equipment that builds those electrodes less expensively.

 

According to the article, “Matthews  doesn’t actually make batteries or electrodes.  It makes equiipment that flattens and thins that black powder into sheets 10 microns thick — a fifth of a diameter of a human hair — then coats it onto metal foil.”

 

That leads to an “increase in speed with which battery makers could churn out electrodes which in turn would drive down the cost of production”.  Batolacci added,  “And finally, (it) has no environmental impact whatsoever, since we don’t use solvents in the process to do that'”.

 

Just last year, Saueressig, a firm purchased by Matthews International opened a facility in San Antonio, Texas.  The proximity of that facility to the new Tesla Gigafactory in Austin, Texas, is telling.  However, the article states that “Matthews declined to elaborate on its relationship with Tesla”.

 

Funeral Director Daily take:  I’ve watched this development over time and now believe that many investors think Matthews International may be on to something.  2023 has been a fairly mixed year with the Death Care Index (DCI), the prices of stock in public companies that deal with the Death Care business in some fashion.

 

However, when you look at the stock price performance of Matthews International on a Year-to-Date basis, they far outpace the other DCI companies when you see that their stock has appreciated from $33.19 per share on January 1, 2023, to $48.14 per share as of last Friday, July 14.  That’s an increase of 45.04% in that time period. . . . . And, if you go back to last year, on July 14, 2022. . . . the stock has appreciated a whopping 81.25% — that’s almost doubling!

 

Matthews International has always appeared to me that it is a company that rests on a three-legged stool foundation.  That being three separate divisions that our referred to as Memorialization, Industrial Technologies, and Brand Solutions.  Historically, from my point of view, the Memorialization segment has grinded out the largest percentage of sales for the company and has given them, much like Batesville Casket gave Hillenbrand Industries, a solid year-in and year-out earnings division to grow the entire company from.

 

Much like Batesville Casket led Hillenbrand to being more prosperous in the “Processed Manufacturing” divisions, I see Matthews continuing to invest in their Industrial Technology business that seems to be moving forward with great expectation.  You can already see that, as a percentage of company sales, Memorialization will be yielding percentage to the fast-growing Industrial Technology segment.

 

According to the chart below which shows Matthews International sales by segment for the 1st Half of both 2022 and 2023, you can see that Memorialization has moved from 48.6% of company sales in 2022 to only 46.2% of sales in 2023.  Correspondingly, you can see the growth in Matthew’s Industrial Technology segment.

 

SEGMENT INFORMATION (Unaudited)
(In thousands)
	Three Months Ended March 31,								Six Months Ended March 31,
	2023				2022				2023				2022
Sales:
Memorialization	$	222,889			$	220,004			$	429,391			$	430,710
Industrial Technologies		125,514				78,154				234,657				152,485
SGK Brand Solutions		131,177				146,820				264,772				300,362
	$	479,580			$	444,978			$	928,820			$	883,557

 

To the point about divisional sales percentage, here’s what CEO Bartolacci had to say in the company’s 2nd Quarter 2023 Earnings Press Release:

 

“For the fiscal 2023 second quarter, our Industrial Technologies segment reported an increase of $47.4 million, or 60.6%, in sales from the same quarter a year ago. Higher sales for our energy storage solutions business and the acquisitions of Olbrich GmbH and R+S Automotive GmbH (August 2022) were the significant contributors to this increase. Our energy storage solutions business continues to grow and interest in our offerings is increasing. Our Industrial Technologies segment is on track to approach sales of $500 million for fiscal 2023, more than double its sales of $228.5 million three years ago (fiscal 2020).

 

Matthews International traces its roots back to 1850 when the company began as an engraving business that was perfect for engraving stone markers and that lead it into the Death Care supplier business.  Their headquarters are in Pittsburgh, Pennsylvania.

 

Here is the Matthews International website.

 

More news from the world of Death Care:

• Mid and East Antrim cemetery consultation:  overweight coffin charge would “stigmatize”.  Northern Ireland World (Ireland)
• Can you bury a relative at home in your back yard in North Carolina?  Here’s what state law says.  The Charlotte Observer (NC)
• Funeral insurance warning.  Is it worth the premium paid?  Insurance Business (Australia)
• Bill would ensure dignity in whole body donations.  WBKN Youngstown (OH)
• Burial and Cremation:   Understanding the differences in End-of-Life choices.  WhaTech
• Indianapolis start-up Bereave aims to improve funeral planning.  Inside Indiana Business (IN)

 

Enter your e-mail below to join the 3,297 others who receive Funeral Director Daily articles daily:

“A servant’s attitude guided by Christ leads to a significant life”