Matthews International Corp (MATW) 2023 Q2 法說會逐字稿

Greetings. Welcome to the Matthews International Second Quarter Fiscal 2023 Financial Results. At this time, our participants are in a listen-only-mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Bill Wilson, Senior Director of Corporate Development. You may begin.

問候。歡迎閱讀 Matthews International 2023 財年第二季度財務業績。此時，我們的參與者處於只聽模式。問答環節將在正式介紹之後進行。 （操作員說明）請注意，正在錄製此會議。我現在將會議轉交給你的主持人，企業發展高級總監比爾威爾遜。你可以開始了。

Thank you, (inaudible). Good morning everyone, and welcome to the Matthews International Second Quarter Fiscal Year 2023 Earnings Conference Call. This is Bill Wilson, Senior Director of Corporate Development. With me today are Joe Bartolacci, President and Chief Executive Officer; and Steven Nicola, our Chief Financial Officer. Before we start, I want to remind you that our earnings release was posted on our website, www.matw.com, in the Investors section last night.

謝謝，（聽不清）。大家早上好，歡迎來到 Matthews International 2023 財年第二季度收益電話會議。我是企業發展高級總監 Bill Wilson。今天和我在一起的是總裁兼首席執行官 Joe Bartolacci；和我們的首席財務官 Steven Nicola。在我們開始之前，我想提醒您，我們的收益發佈於昨晚發佈在我們網站 www.matw.com 的投資者部分。

The presentation for our call can also be accessed in the Investors section of the website. Any forward-looking statements in connection with this discussion are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors that could cause the company's results to differ from those discussed today are set forth in the company's annual report on Form 10-K and other periodic filings with the SEC. In addition, we will be discussing non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. In connection with any forward-looking statements and non-GAAP financial information, please read the disclaimer included in today's presentation materials located on our website. And now I will turn the call over to Joe.

也可以在網站的“投資者”部分訪問我們電話會議的演示文稿。與本次討論相關的任何前瞻性陳述均根據 1995 年《私人證券訴訟改革法案》的安全港條款作出。可能導致公司業績與今天討論的業績不同的因素載於公司年度報告向 SEC 提交的 10-K 表格和其他定期文件。此外，我們將討論非 GAAP 財務指標，並鼓勵您在考慮這些指標時仔細閱讀我們的披露和調節表。關於任何前瞻性陳述和非 GAAP 財務信息，請閱讀我們網站上今天的演示材料中包含的免責聲明。現在我將把電話轉給喬。

Thank you Bill. Good morning. Let me first thank all of our employees globally for their contributions to our continuing success last quarter. We are very pleased with our results for the fiscal '23 second quarter as we continue to see momentum and interest in our Energy Solutions business, growth in our warehouse automation business and strong results in our Memorialization segment despite a significant decline in COVID-related deaths. We are on target to meet our financial guidance for the current year, and we remain focused on continuing to evolve our businesses to meet the opportunities before us.

謝謝比爾。早上好。首先，我要感謝我們全球的所有員工，感謝他們為我們上個季度的持續成功做出的貢獻。我們對 23 財年第二季度的業績感到非常滿意，因為我們繼續看到能源解決方案業務的勢頭和興趣、倉庫自動化業務的增長以及紀念部門的強勁業績，儘管與 COVID 相關的死亡人數大幅下降.我們的目標是實現本年度的財務指導，我們仍然專注於繼續發展我們的業務以迎接擺在我們面前的機遇。

Consolidated sales increased by almost 8%, and adjusted EBITDA improved by 6% in the second quarter of fiscal '23 on a year-over-year basis. Importantly, on a constant currency basis compared to prior year, our sales increased 10% and our EBITDA increased almost 9%, a strong performance in a challenging environment. Looking at our businesses. Industrial Technologies grew by over 60% year-over-year, primarily through higher sales from our Energy Storage Solutions business as well as the acquisitions of OLBRICH  and R+S Automotive. 

23 財年第二季度，綜合銷售額增長近 8%，調整後的 EBITDA 同比增長 6%。重要的是，與上一年相比，在固定貨幣基礎上，我們的銷售額增長了 10%，我們的 EBITDA 增長了近 9%，在充滿挑戰的環境中表現強勁。看看我們的業務。 Industrial Technologies 同比增長超過 60%，這主要是由於我們的儲能解決方案業務的銷售額增加以及對 OLBRICH 和 R+S Automotive 的收購。

The interest in our energy storage offerings remains strong as we engage with many industry leaders in the battery space, including most of the Asia Pacific-based battery manufacturers, as well as OEMs around the world, we stand positioned to continue to grow this business. Progress on the over $200 million of energy orders we announced last quarter is on track and going well. We look forward to sharing additional information in detail on new orders over the next few quarters as several of our discussions are approaching the final phase of negotiations. Although OLBRICH has yet to be a contributor to our bottom line, the acquisition was a clear message to the EV market that we now have the skills and the capacity to significantly grow our energy business. But for the OLBRICH acquisition, I am doubtful our current and prospective customers would have entrusted us with the orders we have received, let alone the orders and relationships that we are discussing. 

由於我們與電池領域的許多行業領導者（包括大多數亞太地區的電池製造商）以及世界各地的原始設備製造商合作，人們對我們的儲能產品的興趣依然濃厚，我們有能力繼續發展這項業務。我們上個季度宣布的超過 2 億美元的能源訂單進展順利。我們期待在未來幾個季度分享更多關於新訂單的詳細信息，因為我們的一些討論已接近談判的最後階段。儘管 OLBRICH 尚未對我們的利潤做出貢獻，但此次收購向電動汽車市場發出了一個明確的信息，即我們現在擁有顯著發展我們的能源業務的技能和能力。但是對於 OLBRICH 的收購，我懷疑我們的現有和潛在客戶是否會將我們收到的訂單委託給我們，更不用說我們正在討論的訂單和關係了。

We are beginning to raise our prices and reduce our costs at OLBRICH as we look to position the business as a significant contributor to our overall results going forward. Our Memorialization business grew despite the return to more normalized death rates following COVID. As stated in our earlier calls, we've evolved this business since COVID to a higher level of overall performance through market share gains, tuck-in acquisitions, our growing cremation products business and significant capital investments designed to improve productivity. This business is poised for continuing success. For example, memorialization sales grew by 44% when compared to fiscal 2020 first quarter, the immediately preceding quarter before COVID deaths began to emerge. These improvements are shows of a continued steady cash flow necessary to evolve our overall business and focus on reducing our debt. 

我們開始提高我們的價格並降低我們在 OLBRICH 的成本，因為我們希望將業務定位為我們未來整體業績的重要貢獻者。儘管在 COVID 之後死亡率恢復到更正常的水平，但我們的紀念業務仍在增長。正如我們之前的電話會議所述，自 COVID 以來，我們通過市場份額增加、收購、我們不斷增長的火葬產品業務以及旨在提高生產力的重大資本投資，將這項業務發展到更高水平的整體績效。該業務有望持續取得成功。例如，與 2020 財年第一季度（即 COVID 死亡人數開始出現之前的前一個季度）相比，紀念銷售額增長了 44%。這些改進表明持續穩定的現金流是發展我們整體業務和專注於減少債務所必需的。

We are innovators at our core, and this attribute can clearly be seen in our product identification business where we continue to make good progress in the development of our new products. For one of those products, which I've mentioned before, a silicon-based printhead, we have received external third-party revalidation of its value proposition, giving us increased confidence of the opportunity ahead as we move to production. Our external research confirms that the total cost of ownership of this new product can be up to 30% lower over the lifetime of competitive products. When coupled with the ability to meet changing marketing and coding demand like 2D codes or QR codes and ease of use, our business proposition gets stronger each day. In our warehouse automation business, we are in the early stages of a new phase of evolution at this business as well. As you are aware, we are a leading provider of warehouse execution software and pick the like technologies that help companies meet the demand of an ever-expanding e-commerce market. 

我們的核心是創新者，這一屬性在我們的產品標識業務中可以清楚地看到，我們在新產品的開發方面繼續取得良好進展。對於我之前提到的其中一種產品，矽基打印頭，我們已經收到了外部第三方對其價值主張的重新驗證，這讓我們在轉向生產時對未來的機會更有信心。我們的外部研究證實，在競爭產品的整個生命週期內，這款新產品的總擁有成本最多可降低 30%。再加上滿足不斷變化的營銷和編碼需求（如二維碼或二維碼）以及易用性的能力，我們的業務主張每天都在變得更加強大。在我們的倉庫自動化業務中，我們也處於該業務新發展階段的早期階段。如您所知，我們是倉庫執行軟件的領先供應商，並選擇可幫助公司滿足不斷擴大的電子商務市場需求的類似技術。

Our latest solution in this business will enable Matthew's proprietary autonomous vehicle management solutions to further penetrate the automated warehouse. This solution is still in its early stages, but we have great confidence in our ability to innovate in this space for further success. Moving on to SGK. The business continues to be impacted by a variety of elements, including unfavorable currency rate changes and difficult market conditions in Europe.

我們在該業務中的最新解決方案將使 Matthew 專有的自動車輛管理解決方案能夠進一步滲透到自動化倉庫中。該解決方案仍處於早期階段，但我們對我們在這一領域進行創新以取得進一步成功的能力充滿信心。轉到 SGK。該業務繼續受到各種因素的影響，包括不利的匯率變化和歐洲艱難的市場條件。

However, the cost reduction actions we initiated in Europe last quarter are beginning to take effect and have mitigated some of the negative impact. Further actions to improve our cost structure in this business, particularly in Europe, are planned in the coming quarters, and we expect margin improvement throughout the remainder of fiscal '23 and into '24. As we look forward to the remainder of the year, we are expecting continued consolidated growth. We are only in the early stages of the Energy Solutions order we announced in January of this year. As a result, we expect these orders to provide some benefit throughout the remainder of fiscal '23 and into and through the second quarter of fiscal '24. But given the nature of these significant orders, the timing of revenue recognition is subject to change. 

然而，我們上個季度在歐洲發起的成本削減行動開始生效，並減輕了一些負面影響。計劃在未來幾個季度採取進一步行動來改善我們在這項業務中的成本結構，特別是在歐洲，我們預計在整個 23 財年剩餘時間和 24 財年期間利潤率都會提高。在展望今年剩餘時間的同時，我們期待持續的綜合增長。我們僅處於今年 1 月宣布的能源解決方案訂單的早期階段。因此，我們預計這些訂單將在整個 23 財年的剩餘時間以及整個 24 財年的第二季度提供一些好處。但鑑於這些重要訂單的性質，收入確認的時間可能會發生變化。

Backlog for our warehouse automation business remains strong, assuring us of another strong year in this business. We remain confident that our Memorialization business will continue to perform despite a return to normalized death rates post-COVID. And as for SGK, we do see an improvement in the pricing environment and as discussed earlier, we're also starting to realize the benefits from recently implemented cost reduction actions. With these factors in mind, in addition to the continuation of uncertain near-term economic environment, we remain cautious in our outlook. Consequently, we are maintaining our previous guidance for fiscal 2023 of adjusted EBITDA of between $215 million to $235 million. Although we have the orders to deliver a strong year, we have chosen to remain cautious on the timing of revenue recognition on the existing energy orders and the timing of future orders in this business. Let me now hand over the call to Steve, who will discuss the financial results for the quarter in greater detail.

我們倉庫自動化業務的積壓情況依然強勁，確保我們在該業務中再創佳績。我們仍然相信，儘管 COVID 後死亡率恢復正常，但我們的紀念業務將繼續表現。至於 SGK，我們確實看到定價環境有所改善，而且如前所述，我們也開始意識到最近實施的成本削減行動帶來的好處。考慮到這些因素，加上短期經濟環境持續不明朗，我們對前景保持謹慎。因此，我們維持之前對 2023 財年調整後 EBITDA 的指導在 2.15 億美元至 2.35 億美元之間。儘管我們有訂單交付強勁的一年，但我們選擇對現有能源訂單的收入確認時間和該業務未來訂單的時間保持謹慎。現在讓我把電話轉給史蒂夫，他將更詳細地討論本季度的財務業績。

Thank you Joe, and good morning. I'll begin with Slide 7. Consolidated sales for the fiscal 2023 second quarter were $479.6 million compared to $445 million a year ago, representing an increase of $34.6 million or 7.8%. On a constant currency basis, sales were 10% higher than the same quarter last year. The increase primarily reflected higher sales for the Industrial Technologies segment. The Industrial Technologies segment reported a sales increase of $47.4 million or 60.6% compared to a year ago, primarily reflecting higher engineering energy storage solution sales and the impact of the acquisitions of OLBRICH, GMBH and RNS automotive GMBH in August of last year.

謝謝喬，早上好。我將從幻燈片 7 開始。2023 財年第二季度的合併銷售額為 4.796 億美元，而去年同期為 4.45 億美元，增加了 3460 萬美元或 7.8%。按固定匯率計算，銷售額比去年同期增長 10%。這一增長主要反映了工業技術部門銷售額的增加。工業技術部門的銷售額與去年同期相比增長了 4740 萬美元或 60.6%，這主要反映了工程儲能解決方案銷售額的增加以及去年 8 月收購 OLBRICH、GMBH 和 RNS 汽車 GMBH 的影響。

Memorialization segment sales also increased modestly for the current quarter. Sales for the SGK Brand Solutions segment were lower than a year ago. On a consolidated basis, changes in currency rates had an unfavorable impact of $9.9 million on current quarter sales compared to a year ago. On a GAAP basis, the company's net income was $9.1 million or $0.29 per share for the current quarter compared to a loss of $1.9 million or $0.06 per share for the same quarter last year. 

本季度紀念部門的銷售額也小幅增長。 SGK Brand Solutions 部門的銷售額低於一年前。在綜合基礎上，與一年前相比，匯率變化對本季度銷售額產生了 990 萬美元的不利影響。根據 GAAP，公司本季度的淨收入為 910 萬美元或每股 0.29 美元，而去年同期為虧損 190 萬美元或每股 0.06 美元。

The second quarter last year included asset write-downs of approximately $10.3 million or $0.33 per share related to the Russia, Ukraine war. On a non-GAAP basis, consolidated adjusted EBITDA, which represents net income before interest expense, income taxes, depreciation and amortization and other adjustments for the fiscal 2023 second quarter was $58.4 million compared to $55.2 million a year ago, representing an increase of $3.2 million or 5.9%. The year-over-year change primarily reflected increases for the Memorialization and Industrial Technologies segments offset partially by lower adjusted EBITDA for the SGK Brand Solutions segment.

去年第二季度包括與俄羅斯、烏克蘭戰爭相關的資產減記約 1030 萬美元或每股 0.33 美元。在非美國通用會計準則基礎上，合併調整後的 EBITDA 代表 2023 財年第二季度扣除利息支出、所得稅、折舊和攤銷及其他調整前的淨收入為 5840 萬美元，而去年同期為 5520 萬美元，增加了 3.2 美元萬或 5.9%。同比變化主要反映了 Memorialization 和 Industrial Technologies 部門的增長被 SGK Brand Solutions 部門較低的調整後 EBITDA 部分抵消。

Changes in currency rates had an unfavorable impact of $1.5 million on current quarter consolidated adjusted EBITDA compared to a year ago. Adjusted earnings per share for the current quarter was $0.65 compared to $0.74 for the same quarter a year ago. The increase in consolidated adjusted EBITDA for the current quarter was offset by higher interest expense. The increase in interest expense primarily reflected higher interest rates and higher average debt levels compared to a year ago. Please refer to the reconciliations of adjusted EBITDA, non-GAAP adjusted earnings per share and constant currency sales and adjusted EBITDA provided in our earnings release. 

與一年前相比，匯率變化對本季度合併調整後 EBITDA 產生了 150 萬美元的不利影響。本季度調整後每股收益為 0.65 美元，而去年同期為 0.74 美元。本季度綜合調整後 EBITDA 的增長被更高的利息支出所抵消。利息支出的增加主要反映了與一年前相比更高的利率和更高的平均債務水平。請參閱我們的收益發布中提供的調整後 EBITDA、非 GAAP 調整後每股收益和固定貨幣銷售額以及調整後 EBITDA 的對賬。

Please turn to Slide 8 to begin a review of our segment results. Sales for the Industrial Technologies segment for the fiscal 2023 second quarter were $125.5 million compared to $78.2 million a year ago, representing an increase of $47.4 million or 60.6%. The acquisitions of OLBRICH and RNS Automotive contributed $33.2 million to the current quarter. The Engineering business reported higher sales for the current quarter compared to a year ago, primarily reflecting continued growth in our Energy Storage Solutions business. Our warehouse automation and product identification businesses also reported higher sales for the current quarter compared to last year.

請轉到幻燈片 8 開始查看我們的細分結果。工業技術部門在 2023 財年第二季度的銷售額為 1.255 億美元，而去年同期為 7820 萬美元，增加了 4740 萬美元或 60.6%。對 OLBRICH 和 RNS Automotive 的收購為本季度貢獻了 3320 萬美元。工程業務本季度的銷售額比去年同期有所增加，這主要反映了我們儲能解決方案業務的持續增長。我們的倉庫自動化和產品識別業務本季度的銷售額也高於去年。

Changes in currency rates had an unfavorable impact of $3.3 million on the segment's current quarter sales compared to a year ago. Adjusted EBITDA for the Industrial Technologies segment for the current quarter was $15.6 million compared to $14.4 million a year ago. The increase primarily reflected the segment sales growth for the current quarter. The segment's adjusted EBITDA margin percentage was unfavorably impacted by the OLBRICH RNS Automotive acquisitions. As we previously discussed, these acquisitions were not anticipated to contribute to adjusted EBITDA immediately. Changes in currency exchange rates had an unfavorable impact of $1.2 million on the segment's current quarter adjusted EBITDA compared to a year ago. 

與一年前相比，匯率變化對該部門當前季度的銷售額產生了 330 萬美元的不利影響。本季度工業技術部門調整後的 EBITDA 為 1560 萬美元，而一年前為 1440 萬美元。這一增長主要反映了本季度的分部銷售增長。該部門調整後的 EBITDA 利潤率受到 OLBRICH RNS Automotive 收購的不利影響。正如我們之前所討論的，預計這些收購不會立即對調整後的 EBITDA 做出貢獻。與一年前相比，貨幣匯率的變化對該部門當前季度調整後的 EBITDA 產生了 120 萬美元的不利影響。

Please turn to Slide 9. Sales for the Memorialization segment for the fiscal 2023 second quarter were $222.9 million compared to $220 million for the same quarter a year ago. The modest increase primarily reflected the benefits of improved pricing, higher sales of cemetery memorial products, mausoleums and U.S. cremation equipment and the acquisition of Eagle Granite Company. These increases were partially offset by lower unit sales of caskets reflecting lower COVID-related deaths. Changes in currency rates had an unfavorable impact of $672,000 on the segment's current quarter sales compared to a year ago. Memorialization segment adjusted EBITDA for the current quarter was $48 million compared to $42.9 million for the second fiscal quarter last year.

請轉到幻燈片 9。2023 財年第二季度紀念部分的銷售額為 2.229 億美元，而去年同期為 2.20 億美元。適度增長主要反映了定價改善、公墓紀念產品、陵墓和美國火葬設備銷售額增加以及收購 Eagle Granite Company 帶來的好處。這些增長部分被棺材單位銷售額下降所抵消，反映出與 COVID 相關的死亡人數減少。與一年前相比，匯率變化對該部門當前季度的銷售額產生了 672,000 美元的不利影響。紀念部門本季度調整後的 EBITDA 為 4800 萬美元，而去年第二財季為 4290 萬美元。

The increase primarily resulted from higher sales, improved pricing and benefits from operational cost savings initiatives. These increases were partially offset by the impact of lower casket sales volumes and increased materials, labor and other inflation-related costs. Please turn to Slide 10. The SGK Brand Solutions segment reported sales of $131.2 million for the quarter ended March 31, 2023 compared to $146.8 million a year ago. The segment's European businesses continue to be challenged by unfavorable market conditions resulting from the Russia and Ukraine war. 

增長的主要原因是銷售額增加、定價提高以及運營成本節約舉措帶來的好處。這些增長部分被棺材銷量下降以及材料、勞動力和其他與通貨膨脹相關的成本增加的影響所抵消。請轉到幻燈片 10。SGK Brand Solutions 部門報告截至 2023 年 3 月 31 日的季度銷售額為 1.312 億美元，而一年前為 1.468 億美元。該部門的歐洲業務繼續受到俄羅斯和烏克蘭戰爭造成的不利市場條件的挑戰。

In addition, changes in currency rates had an unfavorable impact of $5.9 million on current quarter sales compared to a year ago. Sales for the segment's retail-based businesses were also lower. Adjusted EBITDA for the SGK Brand Solutions segment was $11 million for the current quarter compared to $13.5 million a year ago. The decrease primarily reflected lower sales and inflation-related cost increases. These impacts were partially offset by benefits from the segment's recent cost reduction actions. Changes in currency rates had an unfavorable impact of $308,000 on adjusted EBITDA compared to a year ago. Please turn to Slide 11. Cash flow from operating activities for the fiscal 2023 second quarter was $80.9 million compared to $99.9 million a year ago. For the 6 months ended March 31, 2023, operating cash flow was $44.6 million compared to $72.7 million a year ago. Operating cash flow for both year-to-date periods reflected final payouts for the settlement of the company's U.S. retirement plan obligations. The final payouts for the settlement of the supplemental retirement plans totaled $24.2 million in the fiscal 2023 first quarter, final payouts for settlement of the company's principal U.S. pension plan totaled $35.7 million in the first fiscal quarter last year.

此外，與一年前相比，匯率變化對本季度銷售額產生了 590 萬美元的不利影響。該部門零售業務的銷售額也有所下降。 SGK Brand Solutions 部門本季度的調整後 EBITDA 為 1,100 萬美元，而一年前為 1,350 萬美元。下降主要反映了銷售額下降和與通貨膨脹相關的成本增加。這些影響部分被該部門最近的成本削減行動帶來的好處所抵消。與一年前相比，匯率變化對調整後的 EBITDA 產生了 308,000 美元的不利影響。請轉到幻燈片 11。2023 財年第二季度經營活動產生的現金流為 8090 萬美元，而一年前為 9990 萬美元。截至 2023 年 3 月 31 日的 6 個月，經營現金流為 4460 萬美元，而一年前為 7270 萬美元。年初至今兩個期間的經營現金流反映了公司美國退休計劃義務結算的最終支出。 2023財年第一季度補充退休計劃的最終支付總額為2420萬美元，去年第一財季公司主要美國養老金計劃的最終支付總額為3570萬美元。

In addition, operating cash flow for the current year reflected an increase in working capital, primarily resulting from higher inventories and reduced current liabilities. Outstanding debt was $778 million at March 31, 2023, representing a decrease of $59.1 million during the current quarter. Outstanding debt was $837 million as of December 31, 2022, and $799 million on September 30, 2022. At March 31, 2023, the company's leverage ratio based on net debt, which represents outstanding debt less cash, and the trailing 12 months adjusted EBITDA was 3.5% compared to 3.85% at the end of December 2022 and 3.5% at September 30, 2022.

此外，本年度的經營現金流反映了營運資金的增加，這主要是由於存貨增加和流動負債減少所致。截至 2023 年 3 月 31 日，未償債務為 7.78 億美元，本季度減少了 5910 萬美元。截至 2022 年 12 月 31 日，未償債務為 8.37 億美元，2022 年 9 月 30 日為 7.99 億美元。截至 2023 年 3 月 31 日，公司基於淨債務的槓桿率（代表未償債務減去現金）以及過去 12 個月的調整後 EBITDA與 2022 年 12 月末的 3.85% 和 2022 年 9 月 30 日的 3.5% 相比為 3.5%。

Based on our projections for the remainder of the fiscal year, we expect these levels to decline further. Approximately 30.5 million shares were outstanding at March 31, 2023. During the fiscal 2023 second quarter, the company purchased 7,600 shares at a cost of $287,000, the purchases related to withholding tax obligations on equity compensation. At March 31, 2023, the company had remaining authorization of approximately 1.2 million shares under its repurchase program. 

根據我們對本財年剩餘時間的預測，我們預計這些水平將進一步下降。截至 2023 年 3 月 31 日，流通在外的股票約為 3050 萬股。在 2023 財年第二季度，公司以 287,000 美元的成本購買了 7,600 股股票，購買涉及股權補償的預扣稅義務。截至 2023 年 3 月 31 日，公司在其回購計劃下剩餘約 120 萬股股票的授權。

Finally, earlier this week, the Board declared a quarterly dividend of $0.23 per share on the company's common stock. The dividend is payable May 22, 2023 to stockholders of record May 8, 2023. This concludes the financial review, and we will now open the call to questions.

最後，本週早些時候，董事會宣布派發公司普通股每股 0.23 美元的季度股息。股息將於 2023 年 5 月 22 日支付給 2023 年 5 月 8 日登記在冊的股東。財務審查到此結束，我們現在開始提問。

And at this time, we will be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Daniel Moore with CJS Securities. Please proceed with your question.

此時，我們將進行問答環節。 （操作員說明）我們的第一個問題來自 CJS 證券公司的 Daniel Moore。請繼續你的問題。

Thank you. Good morning Joe, Bill, Steve. Thanks for taking questions. Thank you. I'll start with the industrial piece and specifically energy storage. How much -- if assuming revenue does approach $500 million, how much of that is represented by energy storage? And maybe just talk about what you're seeing in terms of the pipeline of new opportunities beyond that $200 million of new orders that we took in.

謝謝。早上好，喬、比爾、史蒂夫。感謝您提出問題。謝謝。我將從工業部分開始，特別是儲能。多少——如果假設收入確實接近 5 億美元，那麼其中有多少來自儲能？也許只是談談你在我們接受的 2 億美元新訂單之外的新機會管道方面所看到的。

I think I heard 2 questions here. So I'll try to get it to you. So if we are approaching 200 -- $500 million worth of revenue, the timing of our recognition of revenue is going to be determined about how much of that is made up of energy. We're expecting that 200 -- that $200 million worth of orders to be recognized about half in this particular fiscal year. And we have other revenues that we're going to recognize.

我想我在這裡聽到了 2 個問題。所以我會盡力把它送給你。因此，如果我們接近 200 - 5 億美元的收入，我們確認收入的時間將取決於其中有多少是由能源組成的。我們預計 200 - 價值 2 億美元的訂單將在這個特定的財政年度中確認大約一半。我們還有其他收入要確認。

So if we were to achieve half I would expect it to be about $140 million to $150 million total of energy orders this year. Now recognize -- and Dan that about half includes the impact of the acquisitions of OLBRICH and RNS Automotive. No, no, no, not $100 million. No, half of the $500 million. Half of the $500 million, yes, Okay. Now I was saying, okay, half of the orders were recognized, Dan. So out of the $200 million, about half if we hit that 50% of those orders this fiscal year, we should have somewhere around $140 million to $150 million of energy orders for the fiscal year. Timing of that is dependent on revenue recognition, which is not necessarily in our control. 

因此，如果我們要實現一半，我預計今年的能源訂單總額約為 1.4 億至 1.5 億美元。現在認識到 - 和丹，大約一半包括收購 OLBRICH 和 RNS Automotive 的影響。不，不，不，不是 1 億美元。不，是 5 億美元的一半。 5 億美元的一半，是的，好的。現在我說，好吧，一半的訂單被認可了，丹。因此，在 2 億美元中，如果我們在本財年達到 50% 的訂單，大約一半，我們本財年應該有大約 1.4 億至 1.5 億美元的能源訂單。時間取決於收入確認，這不一定在我們的控制範圍內。

In terms of what else is happening, you heard in my commentary, the ramp-up of inquiries is significant. We are in final stages of negotiations with fairly significant orders from several of the OEMs we've mentioned before, like ACC and Ola, but we are also in more relationship negotiations with a lot of the APAC related battery manufacturers that could result in significant orders as well. So we're pretty bullish as we have always been in this innovative technology that we have and where it's going.

就其他正在發生的事情而言，你在我的評論中聽到，查詢的增加非常重要。我們正處於與我們之前提到的幾家原始設備製造商（如 ACC 和 Ola）的相當大訂單的談判的最後階段，但我們也在與許多亞太地區相關電池製造商進行更多關係談判，這可能會帶來大量訂單以及。因此，我們非常樂觀，因為我們一直都在使用我們擁有的這項創新技術以及它的發展方向。

Very helpful. And obviously, you've discussed this before. Margins on OLBRICH and RNS are lower than average, and that's why margins are a little lower this quarter. Just talk about the path to getting kind of overall segment margins back to maybe double digits and maybe even mid-teens ultimately.

很有幫助。顯然，您之前已經討論過這個問題。 OLBRICH 和 RNS 的利潤率低於平均水平，這就是本季度利潤率略低的原因。只是談談將整體細分市場利潤率恢復到兩位數甚至最終可能達到十幾歲的途徑。

We expect for the full year to be in double digits from an EBITDA margin standpoint. We are starting to take actions at the latter part of this fiscal quarter -- the third fiscal quarter as it relates to OLBRICH and RNS. And those actions are both costs as well as pricing actions that should continue to improve that business for the quarters to come. So we're confident that they're going to be a contributor to the organization in their traditional business. But mind you, we would probably not be able to do some of the orders that we're talking about today on the energy side without them. So it was a good move on our behalf, I believe, and where we think this business will go.

從 EBITDA 利潤率的角度來看，我們預計全年將達到兩位數。我們開始在本財政季度的後半部分採取行動——與 OLBRICH 和 RNS 相關的第三個財政季度。這些行動既是成本也是定價行動，應該在未來幾個季度繼續改善該業務。因此，我們相信他們將在其傳統業務中為組織做出貢獻。但請注意，如果沒有它們，我們可能無法執行我們今天在能源方面討論的一些命令。因此，我相信，這對我們來說是一個很好的舉措，也是我們認為這項業務的發展方向。

Certainly. And then while we'll stick with industrial, just you mentioned warehouse automation. And it sounds like you've got some incremental progress on the new printhead solution. That's one. And two, just overall kind of order activity in warehouse solutions. And then I'll jump back to you.

當然。然後，雖然我們將堅持工業，但您剛才提到了倉庫自動化。聽起來你們在新的打印頭解決方案上取得了一些漸進的進展。那是一個。第二，只是倉庫解決方案中的整體訂單活動。然後我會跳回到你身邊。

Yes. Warehouse is full for the year. So we're not expecting any significant. Now you've been with us for a while, Dan you understand that when economic crisis sometimes hit people pause projects. We don't lose those projects, they get paused. In our guidance, we're not anticipating a pause of any of those projects. The order activity is a little bit slower than we would like at this time of the year. But we've watched this business change pretty rapidly when it comes to order intakes. And given the size of some of these contracts, it can change very, very rapidly in terms of where we see going into next year.

是的。倉庫滿了一年。所以我們預計不會有任何重大意義。現在你已經和我們在一起一段時間了，丹，你明白當經濟危機有時會打擊人們暫停項目。我們不會失去那些項目，它們會被暫停。在我們的指南中，我們預計不會暫停任何這些項目。一年中的這個時候，訂單活動比我們希望的要慢一些。但我們已經看到，在訂單接收方面，這項業務發生了相當迅速的變化。考慮到其中一些合同的規模，就我們對明年的展望而言，它可能會發生非常非常迅速的變化。

On the new product development, we are calling that out specifically because one of the things that we have done is an external third-party validation of our business propositions. That external party validation reconfirms and adds to our confidence, frankly. We are moving our production -- we are moving to a new fab lab for production purposes, and that is ramping up as we speak. We expect to be in market in '24, and the opportunities get bigger every day. So we're pretty confident right now with all 3 of those businesses in our industrial technologies. We've been building these little businesses into something fairly significant. We think next year could be another stellar year for us. But clearly, the balance of this year should remain strong.

在新產品開發方面，我們特別強調這一點，因為我們所做的其中一件事是對我們的業務主張進行外部第三方驗證。坦率地說，外部方驗證再次確認並增加了我們的信心。我們正在轉移我們的生產 - 我們正在轉移到一個新的工廠實驗室用於生產目的，並且在我們說話時正在加速。我們希望在 24 年進入市場，而且機會每天都在增加。因此，我們現在對我們工業技術中的所有這 3 家企業都非常有信心。我們一直在將這些小企業打造成為相當重要的企業。我們認為明年對我們來說可能是又一個輝煌的一年。但顯然，今年的平衡應該會保持強勁。

Very helpful, Joe. I'll jump back in queue with any follow-ups. Thanks.

很有幫助，喬。我會跳回到隊列中進行任何跟進。謝謝。

Our next question comes from the line of Liam Burke with B. Riley. Please proceed with your question.

我們的下一個問題來自 Liam Burke 與 B. Riley 的對話。請繼續你的問題。

Thank you. Good morning Joe, Steve and Bill.

謝謝。早上好，喬、史蒂夫和比爾。

Good morning.

早上好。

Steve, in your prepared comments, you highlighted lower year-over-year operating cash from operations and specifically you talked about higher inventories. Could you give us some color? Is it just timing? Or what's in that number?

史蒂夫，在你準備好的評論中，你強調了運營現金同比下降，特別是你談到了更高的庫存。你能給我們一些顏色嗎？只是時機嗎？或者那個數字是什麼？

Business-driven, Liam. So our operating cash flow in the second quarter was still very good. It was $80.9 million, but it was a little bit lower than last year's number, and that had to do partly with inventory build. And the 2 areas that I'd point to, our energy-related businesses, those inventories were higher. And as you would expect, driven by increased revenues, increased demand, increased work. And similarly, our granite inventories on the memorialization side of the business because that business has been growing and we've seen volume increases there as well. So inventory growth to support growth in those 2 businesses.

業務驅動，利亞姆。所以我們二季度的經營現金流還是很好的。這是 8090 萬美元，但比去年的數字略低，這在一定程度上與庫存建設有關。我要指出的兩個領域，我們的能源相關業務，這些庫存更高。正如您所預料的那樣，在收入增加、需求增加和工作增加的推動下。同樣，我們在紀念業務方面的花崗岩庫存，因為該業務一直在增長，我們也看到那裡的數量也在增加。因此庫存增長支持這兩項業務的增長。

Great. Thanks Steve. And just sticking with the Granite, it seems like a consistent -- or the cemetery products seems to be a consistent contributor to revenue growth. Is there something in the business that's changed? It used to be rather variable on a quarter-to-quarter -- this seems to be a consistent contributor now.

偉大的。謝謝史蒂夫。堅持使用花崗岩，似乎是一致的——或者墓地產品似乎是收入增長的持續貢獻者。業務中有什麼變化了嗎？它過去每個季度變化很大——現在這似乎是一個穩定的貢獻者。

Yes. Liam, we've been calling it out for a while. We've had both market share gains in every one of those businesses as well as strong pricing realization that has allowed us to maintain that. As I said in my comments, this business has been reset from where we were pre-COVID. Volumes will be back to normal, but the revenues and we anticipate our bottom line to be going forward are materially different than they were before. The steps we're taking to continue to improve it, if I were to show you images of the automation that we put into businesses gives us great confidence in our continued ability to generate strong cash flows and improve our margins going forward.

是的。利亞姆，我們已經討論了一段時間了。我們在這些業務中的每一項都獲得了市場份額增長，並且強大的定價實現使我們能夠保持這一點。正如我在評論中所說，這項業務已經從我們在 COVID 之前的位置進行了重置。銷量將恢復正常，但收入和我們預計未來的利潤將與以前大不相同。如果我要向您展示我們投入業務的自動化圖片，我們正在採取繼續改進它的步驟，這讓我們對我們繼續產生強勁現金流和提高未來利潤率的能力充滿信心。

Great. Thank you. And real quick on the cemetery, you highlighted U.S. sales on cremation excuse me, were higher. How has the margin contribution been there?

偉大的。謝謝。在墓地裡，你很快就強調了美國火葬的銷售額，對不起，更高。保證金貢獻如何？

I mean, let's put it this way, Liam, on the cremation sales, we sold a little over $125 million of cremation-related products and services, and it's growing. I would tell you that the margins over there are consistent in the mid-teens. And we hope that over time, that gets better. We are moving into some new incineration projects and new incineration goals in the U.K. business that we think will improve our overall margins in our Cremation segment as well.

我的意思是，讓我們這樣說吧，利亞姆，在火葬銷售方面，我們銷售了超過 1.25 億美元的火葬相關產品和服務，而且還在增長。我會告訴你，那裡的利潤率在十幾歲左右是一致的。我們希望隨著時間的推移，情況會變得更好。我們正在英國業務中進入一些新的焚燒項目和新的焚燒目標，我們認為這也將提高我們火葬部門的整體利潤率。

Great. Thanks Steve, thanks Joe.

偉大的。謝謝史蒂夫，謝謝喬。

And our next question comes from the line of Justin Bergner with Gabelli Funds.

我們的下一個問題來自 Gabelli Funds 的 Justin Bergner。

Good morning.

早上好。

Good morning Justin. How are you.

早上好，賈斯汀。你好嗎。

How are you Joe? Are you, Steve?

你好嗎，喬？你是史蒂夫嗎？

We are well.

我們很好。

First question relates to the warehouse automation. You mentioned that you're seeing some pausing going on in activity, but you don't expect that to, I guess, affect the current fiscal year. Can you sort of speak to what that might mean for the first half of the next fiscal year, sort of just looking beyond the next.

第一個問題與倉庫自動化有關。你提到你看到一些活動正在暫停，但我猜你不認為這會影響當前的財政年度。你能不能談談這對下一個財政年度上半年可能意味著什麼，有點只是展望下一個財政年度。

It's difficult to tell. We're not anticipating any impact to the current fiscal year unless there is some significant economic disruption that causes a pause. So right now, the orders are in-house, and our projects are on time to deliver a strong year. As you might expect, projects of those scale end up being bid and won months in advance. We're seeing a slowing -- probably consistent with what I would say the overall market might be feeling.

這很難說。我們預計不會對當前財政年度產生任何影響，除非出現一些重大的經濟中斷導致暫停。所以現在，訂單在內部，我們的項目按時交付強勁的一年。正如您所預料的那樣，如此規模的項目最終會提前數月投標併中標。我們看到經濟放緩——可能與我所說的整體市場的感覺一致。

And I would call it more a cautiousness rather than a pause from our customer base as they try to figure out what's happening with the economic environment we're in. But that changes very, very, very quickly Justin, some of these projects can be $5 million to $10 million that you can land relatively quickly that you weren't anticipating necessarily at this time. We still have 4, 5 months before we begin next year. Some of the orders we have now will roll in the first quarter at least of next year. So right now, we're not anticipating any major challenges into next year, but we'll keep you up to date over the course of the next quarter or 2.

我認為這更像是一種謹慎，而不是我們客戶群的停頓，因為他們試圖弄清楚我們所處的經濟環境正在發生什麼。但這變化非常、非常、非常快，賈斯汀，其中一些項目可以500 萬到 1000 萬美元，你可以相對較快地落地，這是你此時未必預料到的。距明年開始還有 4、5 個月的時間。我們現在的一些訂單至少會在明年第一季度推出。所以現在，我們預計明年不會出現任何重大挑戰，但我們會在下一季度或第二季度讓您了解最新情況。

Okay. And secondly, you alluded to some of the new, I guess, product and technology initiatives on the warehouse automation side. Could you just elaborate a little bit further in terms of the additional areas you're looking to get into?

好的。其次，您提到了倉庫自動化方面的一些新產品和技術計劃。您能否就您希望進入的其他領域進一步詳細說明？

So one of the projects that we are working on that I think has some significant opportunities is the management of what's called AGVs, autonomous guided vehicles. Autonomous guided vehicles are basically robotic moving carts that will move around a warehouse autonomously and allow the moving of product without the conveyors. And the magic in this whole system is managing multiple pay EVs in a warehouse that could be upwards of 1.5 million square feet. So we're developing that technology.

因此，我認為我們正在開展的項目之一是管理所謂的 AGV（自動導引車）。自動導引車基本上是機器人移動車，可以在倉庫中自主移動，並允許在沒有傳送帶的情況下移動產品。整個系統的神奇之處在於在一個可能超過 150 萬平方英尺的倉庫中管理多個付費電動汽車。所以我們正在開發這項技術。

We've got a test model going out here, hopefully, in the next months or so with a large U.S. customer that I'm not at liberty to speak about. Obviously, if that is successful, we'll be rolling it out over the years to come. The commentary about that is more around -- we're not stack. In each one of these 3 businesses, what we call industrial technology. And for that matter, in all of our businesses, we continue to evolve them. And I think that part of it is lost on a lot of the market. The opportunities that are presented to us, Justin, are things that will allow us to continue to grow these businesses and meet market demands and be innovators in that space.

我們在這裡有一個測試模型，希望在接下來的幾個月左右與一個我不能隨意談論的美國大客戶一起推出。顯然，如果成功的話，我們將在未來幾年推出它。對此的評論更多是圍繞——我們不是堆棧。在這 3 項業務中的每一項中，我們稱之為工業技術。就此而言，在我們所有的業務中，我們都在不斷發展它們。而且我認為它的一部分在很多市場上都丟失了。賈斯汀，呈現給我們的機會將使我們能夠繼續發展這些業務並滿足市場需求並成為該領域的創新者。

Got it. And then in terms of the printhead innovation, any sort of thoughts on timing there?

知道了。然後在打印頭創新方面，有什麼關於時間的想法嗎？

Yes. We are -- in fact, we're off to -- it's a European fabrication lab here in the coming month or 2. Our expectation is we're going to start the production levels of that. It takes as you might expect, this is not an overnight production. We have a product. We have found a partner for the development of that product and for the production of that product, excuse me. And I would tell you, it is a 24 event.

是的。我們——事實上，我們即將——在接下來的一兩個月裡在這裡建立一個歐洲製造實驗室。我們的期望是我們將開始其生產水平。正如您所預料的那樣，這不是一夜之間的製作。我們有一個產品。對不起，我們已經找到了開發該產品和生產該產品的合作夥伴。我會告訴你，這是一個 24 小時的活動。

Okay. And then lastly, I believe you mentioned the relative cash outflows to settle your pension this year and last. Could you repeat those? I just didn't get the answer.

好的。最後，我相信你提到了今年和去年用於支付養老金的相對現金流出。你能重複這些嗎？我只是沒有得到答案。

Sure. So this year, we settled our supplemental plans in the first quarter of $24 million. Last year, we settled in the first quarter, our U.S. pension plan, and that was a little over $35 million.

當然。所以今年，我們在第一季度確定了 2400 萬美元的補充計劃。去年，我們在第一季度結算了我們的美國養老金計劃，這略高於 3500 萬美元。

Great. Thank you so much.

偉大的。太感謝了。

Justin, thank you.

賈斯汀，謝謝你。

We have reached the end of our question-and-answer session. I'll now turn the call back over to Bill Wilson for closing remarks.

我們的問答環節已經結束。我現在將把電話轉回比爾威爾遜的結束語。

Very good. Thank you. Again, thank you for joining us today and your interest in Matthews. For additional information about the company and our financial results, please contact me or visit our website. Enjoy the rest of your day.

非常好。謝謝。再次感謝您今天加入我們以及您對 Matthews 的關注。有關公司和我們財務業績的更多信息，請聯繫我或訪問我們的網站。享受你剩下的一天。

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時你們可以掛斷電話。感謝您的參與。