Matthews International Corp (MATW) 2023 Q3 法說會逐字稿

Greetings, and welcome to the Matthews International Third Quarter Fiscal 2023 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加馬修斯國際 2023 財年第三季度財務業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Bill Wilson, Senior Director of Corporate Development. Thank you, sir. You may begin.

現在我很高興向您介紹主持人，企業發展高級總監比爾·威爾遜 (Bill Wilson)。謝謝你，先生。你可以開始了。

Thank you, Christine. Good morning, everyone, and welcome to the Matthews International Third Quarter Fiscal Year 2023 Conference Call. This is Bill Wilson, Senior Director of Corporate Development.

謝謝你，克里斯汀。大家早上好，歡迎參加 Matthews International 2023 財年第三季度電話會議。我是比爾·威爾遜，企業發展高級總監。

With me today are Joe Bartolacci, President and Chief Executive Officer; and Steve Nicola, our Chief Financial Officer.

今天與我在一起的有總裁兼首席執行官喬·巴托拉奇 (Joe Bartolacci)；和我們的首席財務官史蒂夫·尼古拉。

Before we start, I'd like to remind you that our earnings release was posted on our website, www.matw.com, in the Investors section last night. The presentation for our call can also be accessed in the Investors section of the website.

在開始之前，我想提醒您，我們的收益報告已於昨晚發佈在我們網站 www.matw.com 的投資者部分。我們的電話會議演示也可以在網站的投資者部分訪問。

Any forward-looking statements in connection with this discussion are being 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.

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。公司年度報告中列出了可能導致公司業績與今天討論的結果不同的因素向SEC 提交的10-K 表和其他定期文件。

In addition, we will be discussing non-GAAP financial metrics and encourage you to read our disclosures and reconciliation table carefully as you consider these metrics.

此外，我們將討論非公認會計準則財務指標，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。

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.

關於任何前瞻性陳述和非公認會計準則財務信息，請閱讀我們網站上今天演示材料中包含的免責聲明。

And now I'll turn the call over to Joe.

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 continuing contributions to our success last quarter.

謝謝你，比爾。早上好。首先，我要感謝全球所有員工為我們上季度的成功做出的持續貢獻。

Again, this quarter, we're quite pleased with our results as all of our businesses performed well on a year-over-year basis. As we expected, we continued to see growth in our Industrial Technologies business, driven by our recent significant orders and the ongoing interest in our energy solutions business. We also saw continued growth in our warehouse automation and our product identification businesses, which were solid contributors to our overall performance.

同樣，本季度我們對我們的業績非常滿意，因為我們所有的業務同比都表現良好。正如我們預期的那樣，在我們最近的大量訂單以及對能源解決方案業務的持續興趣的推動下，我們的工業技術業務繼續增長。我們還看到倉庫自動化和產品識別業務持續增長，這對我們的整體業績做出了堅實的貢獻。

In addition, we had strong results in our Memorialization and improving results in SGK, which showed improvement year-over-year.

此外，我們在 SGK 的紀念活動和改善成績方面取得了強勁的成績，與去年同期相比有所改善。

Consolidated sales for the company increased by almost 12% and adjusted EBITDA improved by 22%. All in all, a very good quarter.

公司綜合銷售額增長近 12%，調整後 EBITDA 增長 22%。總而言之，這是一個非常好的季度。

As I look at the performance of our individual businesses, the Industrial Technologies segment grew by 66% over prior year, primarily through higher sales for our energy storage solutions business as well as benefits gained from the acquisitions of Olbrich and R+S Automotive. These acquisitions increased our capacity and provided the additional resources necessary to support our ability to execute on the recent orders and meet the growing demand for our energy solutions business.

當我審視我們各個業務的業績時，工業技術部門比上年增長了 66%，主要是通過我們的能源存儲解決方案業務的銷售額增加以及收購 Olbrich 和 R+S Automotive 獲得的收益。這些收購提高了我們的產能，並提供了必要的額外資源，以支持我們執行近期訂單的能力，並滿足我們能源解決方案業務不斷增長的需求。

We are continuing to make progress in fulfilling the over $200 million of energy orders announced earlier this year. These orders, together with other orders that we have already received and orders that we anticipate in the near term, will carry over into next fiscal year and provide a very good start for another strong year in our energy solutions business.

我們將繼續在履行今年早些時候宣布的超過 2 億美元的能源訂單方面取得進展。這些訂單，連同我們已經收到的其他訂單以及我們預計在短期內預計的訂單，將延續到下一財年，並為我們的能源解決方案業務又一個強勁的一年提供良好的開端。

Discussions on additional business opportunities are ongoing, and we will continue to share our progress on new orders as they are finalized.

關於其他商業機會的討論正在進行中，我們將在新訂單最終確定後繼續分享我們的進展。

Now that we have much -- now that we have much of the required capacity and resources to meet increased demand, we are focusing on improving the operating platform at Olbrich and R+S, which have impaired the performance of the business over the past few quarters. Beginning this quarter, cost actions will be taken over the next 12 to 18 months that will improve the performance of these acquisitions and contribute directly to the bottom line. We have been prevented from taking action earlier due to the labor contracts in place at the time of our acquisition, but those contracts have now expired.

現在我們已經擁有了很多所需的能力和資源來滿足不斷增長的需求，我們正在專注於改進 Olbrich 和 R+S 的運營平台，這些平台在過去幾年中損害了我們的業務績效宿舍。從本季度開始，我們將在未來 12 至 18 個月內採取成本行動，這將提高這些收購的業績並直接貢獻利潤。由於收購時簽訂的勞動合同，我們無法提前採取行動，但這些合同現已到期。

In the Memorialization business, we continued to outperform pre-pandemic results driven by the significant effort made by the team. We have retained much of the market share gains that we have made during COVID and improved our operating efficiencies. Thus, we have reset this business to a higher performance level than before the pandemic.

在紀念業務方面，在團隊付出的巨大努力的推動下，我們的業績繼續優於疫情前的業績。我們保留了新冠疫情期間獲得的大部分市場份額，並提高了運營效率。因此，我們已將該業務重置為比大流行之前更高的性能水平。

As a result of those efforts and the recent acquisition of Eagle Granite, operating results in the Memorialization segment grew by almost 3% in the fiscal '23 third quarter and by 29% when compared to the corresponding period before the pandemic began.

由於這些努力以及最近收購 Eagle Granite，紀念業務部門的運營業績在 23 財年第三季度增長了近 3%，與大流行開始前的同期相比增長了 29%。

Moving on to SGK. Top line results continued to be impacted by the market challenges in Europe and unfavorable currency rate changes. With that said though, we were pleased with the direction of operating results for the quarter as SGK was able to pass along cost increases and take actions to improve its performance relative to prior year. We anticipate additional cost actions to be taken over the coming year, geared towards further driving margin improvement in '24.

繼續前往SGK。營收業績繼續受到歐洲市場挑戰和不利匯率變化的影響。儘管如此，我們對本季度的經營業績方向感到滿意，因為 SGK 能夠轉嫁成本增加，並採取行動提高其與上一年相比的業績。我們預計明年將採取額外的成本行動，以進一步推動 24 年利潤率的提高。

As for our Warehouse Automation business and the Product Identification business, we saw good results but did see some softening in order activity in the warehouse business as we advised in our last quarterly earnings call. In particular, throughout the third quarter, we saw a decline in quoting activity, which began to strengthen early into the fourth quarter. Still early to -- it is still early to forecast the impact to fiscal '24 of any softening, but the recent impact -- the recent uptick in activity bodes well for another strong year next year.

至於我們的倉庫自動化業務和產品識別業務，我們看到了良好的業績，但正如我們在上一季度財報電話會議中建議的那樣，倉庫業務的訂單活動確實有所放緩。特別是，在整個第三季度，我們看到報價活動有所下降，並在第四季度初開始加強。現在預測任何經濟疲軟對 24 財年的影響還為時過早，但近期的影響——近期活動的增加預示著明年又將強勁。

Our Product Identification business also contributed a good quarter driven by slight price increases and volume increases. During the quarter, we made progress on our new print engine in our Product Identification business and our finalizing production plan this coming quarter. We expect to give you a better understanding of the timing of the rollout of the new product in our year-end earnings call.

在價格小幅上漲和銷量增加的推動下，我們的產品識別業務也貢獻了良好的季度業績。在本季度，我們在產品識別業務中的新打印引擎方面取得了進展，並在下個季度最終確定了生產計劃。我們希望在年終財報電話會議上讓您更好地了解新產品的推出時間。

Looking ahead to the fourth quarter, we continue to feel good about our future outlook in all of our businesses. The Industrial Technologies segment and in particular, the strength of our energy solutions business, is expected to have another solid quarter. This performance, combined with continued steady results from Memorialization and a trend towards improving results in SGK gives us the confidence to finish the year strong.

展望第四季度，我們對所有業務的未來前景仍然感到樂觀。工業技術部門，特別是我們能源解決方案業務的實力，預計將有另一​​個穩定的季度。這一表現，加上紀念活動持續穩定的業績以及 SGK 業績改善的趨勢，讓我們有信心強勁地結束這一年。

As a reminder, the fourth quarter of fiscal '22 benefited from the closing of projects in our energy solutions business, resulting in a particularly strong results. Although we do not have similar project closures in our upcoming quarter, we do anticipate operating results in our Industrial Technologies segment to remain relatively in line with prior year results as we make progress on the recent orders.

提醒一下，22 財年第四季度受益於我們能源解決方案業務項目的結束，取得了特別強勁的業績。儘管我們在下一季度沒有類似的項目關閉，但隨著我們在最近的訂單上取得進展，我們預計工業技術部門的運營業績將與去年的業績保持相對一致。

We remain on track to recognize about half of those orders in fiscal '23 and the remainder over the first half of '24. This performance should result in about a 40% increase year-over-year in our Energy Solutions business bringing our fiscal '23 revenue to about $140 million.

我們仍有望在 23 財年確認其中約一半的訂單，並在 24 財年上半年確認剩餘訂單。這一業績將使我們的能源解決方案業務同比增長約 40%，使我們 23 財年的收入達到約 1.4 億美元。

Moreover, our total Industrial Technologies segment is expected to report revenues that approach $500 million, more than double what they were in fiscal 2020.

此外，我們整個工業技術部門的收入預計將接近 5 億美元，是 2020 財年的兩倍多。

As I've laid out on earlier calls, the energy solutions business consists of large orders subject to revenue recognition accounting rules. Thus, the timing of our revenue recognition is not entirely in our control. Our Memorialization business is expected to continue to perform well in the fourth quarter. And at SGK, as we noted earlier, we are expecting to see continued margin improvement on a year-over-year basis. The wild card in our forecast remains the economic environment, which continues to hinder our efforts in Europe.

正如我在之前的電話會議中所闡述的那樣，能源解決方案業務由遵守收入確認會計規則的大訂單組成。因此，我們的收入確認時間並不完全由我們控制。我們的紀念業務預計第四季度將繼續表現良好。在 SGK，正如我們之前指出的，我們預計利潤率將同比持續改善。我們預測中的不確定因素仍然是經濟環境，它繼續阻礙我們在歐洲的努力。

With that in mind, and given the aforementioned assumptions, we believe it is prudent to remain cautious on our outlook. Therefore, we are maintaining our previous guidance for fiscal '23 with our current projections of at least $220 million of adjusted EBITDA.

考慮到這一點，並考慮到上述假設，我們認為對我們的前景保持謹慎是明智的。因此，我們維持之前對 23 財年的指導，目前預測調整後 EBITDA 至少為 2.2 億美元。

Let me now hand it over to Steve, who will discuss the financial results for the quarter in detail.

現在讓我將其交給史蒂夫，他將詳細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 third quarter were $471.9 million compared to $421.7 million a year ago, representing an increase of $50.2 million or 11.9%. The increase primarily reflected higher sales for the Industrial Technologies segment. The Industrial Technologies segment reported a sales increase of $52.1 million or 66.4% compared to a year ago, primarily reflecting higher engineering energy storage sales and the impact of the acquisitions of Olbrich GmbH and R+S Automotive GmbH in August last year.

謝謝你，喬，早上好。我將從幻燈片 7 開始。2023 財年第三季度的綜合銷售額為 4.719 億美元，與去年同期的 4.217 億美元相比，增加了 5020 萬美元，即 11.9%。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同比增長 5210 萬美元，即 66.4%，主要反映了工程儲能銷售額的增加以及去年 8 月收購 Olbrich GmbH 和 R+S Automotive GmbH 的影響。

Memorialization segment sales increased $5.6 million for the current quarter, and sales for the SGK Brand Solutions segment were $7.5 million lower than a year ago.

本季度紀念部門的銷售額增加了 560 萬美元，SGK 品牌解決方案部門的銷售額比去年同期減少了 750 萬美元。

On a consolidated basis, changes in currency rates had an unfavorable impact of $1.7 million on current quarter sales compared to a year ago.

綜合來看，與去年同期相比，匯率變化對本季度銷售額產生了 170 萬美元的不利影響。

On a GAAP basis, the company's net income was $8.7 million or $0.28 per share for the current quarter compared to $2.9 million or $0.09 per share for the same quarter last year. The increase primarily reflected higher operating income and an income tax benefit for the current quarter, offset partially by higher interest expense.

按 GAAP 計算，該公司本季度淨利潤為 870 萬美元，即每股 0.28 美元，而去年同期為 290 萬美元，即每股 0.09 美元。這一增長主要反映了本季度營業收入和所得稅優惠的增加，但部分被利息支出的增加所抵消。

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 third quarter was $56.2 million compared to $46 million a year ago, representing an increase of $10.2 million or 22.1%. The increase reflected higher adjusted EBITDA for all 3 of the company's reporting segments. Changes in currency exchange rates had an unfavorable impact of approximately $600,000 on current quarter consolidated adjusted EBITDA compared to a year ago.

按非公認會計原則計算，2023財年第三季度綜合調整後EBITDA（扣除利息費用、所得稅、折舊和攤銷及其他調整前的淨利潤）為5620萬美元，與去年同期的4600萬美元相比，增加了10.2美元百萬或22.1%。這一增長反映了公司所有 3 個報告部門調整後 EBITDA 的提高。與去年同期相比，貨幣匯率的變化對本季度合併調整後 EBITDA 產生了約 600,000 美元的不利影響。

Adjusted earnings per share for the current quarter was $0.74 compared to $0.58 for the same quarter a year ago. Similar to GAAP earnings per share, the increase primarily reflected higher adjusted EBITDA and a lower income tax expense impact for the current quarter, offset partially by higher interest expense.

本季度調整後每股收益為 0.74 美元，而去年同期為 0.58 美元。與公認會計準則每股收益類似，這一增長主要反映了本季度調整後 EBITDA 的提高和所得稅費用降低的影響，但利息費用的增加部分抵消了這一影響。

Please see the reconciliations of adjusted EBITDA, non-GAAP adjusted earnings per share and adjusted EBITDA provided in our earnings release.

請參閱我們的收益報告中提供的調整後 EBITDA、非 GAAP 調整後每股收益和調整後 EBITDA 的調節表。

Please turn to Slide 8 to begin a review of our segment results. Sales for the Industrial Technologies segment for the fiscal 2023 third quarter were $130.5 million compared to $78.4 million a year ago, representing an increase of $52.1 million or 66.4%. Recent acquisitions, primarily Olbrich and R+S Automotive contributed $25.2 million to the current quarter.

請翻到幻燈片 8 開始回顧我們的細分結果。 2023 財年第三季度工業技術部門的銷售額為 1.305 億美元，與去年同期的 7840 萬美元相比，增加了 5210 萬美元，即 66.4%。最近的收購（主要是 Olbrich 和 R+S Automotive）為本季度貢獻了 2520 萬美元。

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. Changes in currency rates had an unfavorable impact of approximately $350,000 on the segment's current quarter sales compared to a year ago.

工程業務本季度的銷售額較去年同期有所增加，主要反映了我們的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。與去年同期相比，匯率變化對該部門當前季度的銷售額產生了約 350,000 美元的不利影響。

Adjusted EBITDA for the Industrial Technologies segment for the current quarter was $15 million compared to $11.8 million a year ago. The increase primarily reflected the segment's sales growth for the current quarter. The segment's adjusted EBITDA margin percentage was unfavorably impacted by recent acquisitions, which reported operating losses for the current quarter. As we have previously discussed, these acquisitions were not anticipated to contribute to adjusted EBITDA immediately, but their results are expected to improve next fiscal year as we continue with integration actions.

本季度工業技術部門調整後 EBITDA 為 1500 萬美元，而去年同期為 1180 萬美元。這一增長主要反映了該部門本季度的銷售增長。該部門調整後的 EBITDA 利潤率受到最近收購的不利影響，這些收購報告了本季度的運營虧損。正如我們之前所討論的，這些收購預計不會立即對調整後的 EBITDA 做出貢獻，但隨著我們繼續採取整合行動，預計下一財年的業績將有所改善。

Please turn to Slide 9. Sales for the Memorialization segment for the fiscal 2023 third quarter were $208.7 million compared to $203.2 million for the same quarter a year ago. The increase primarily reflected the benefits of improved pricing, higher sales of U.S. cremation equipment and the acquisition of Eagle Granite Company, which were partially offset by lower unit sales of caskets and memorials reflecting lower COVID-related deaths.

請參閱幻燈片 9。2023 財年第三季度紀念部門的銷售額為 2.087 億美元，而去年同期為 2.032 億美元。這一增長主要反映了定價改善、美國火葬設備銷量增加以及收購 Eagle Granite Company 帶來的好處，但棺材和紀念館單位銷量的下降（反映了新冠肺炎相關死亡人數的減少）部分抵消了這些好處。

Memorialization segment adjusted EBITDA for the current quarter was $39.9 million compared to $32.1 million for the third fiscal quarter last year. 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 and memorial sales volumes and increased materials, labor and other inflation-related costs.

紀念部門本季度調整後的 EBITDA 為 3990 萬美元，而去年第三財季為 3210 萬美元。這一增長主要得益於銷售額的增加、定價的改善以及運營成本節約舉措帶來的好處。這些增長被棺材和紀念館銷量下降以及材料、勞動力和其他通脹相關成本增加的影響部分抵消。

Please turn to Slide 10. The SGK Brand Solutions segment reported sales of $132.6 million for the quarter ended June 30, 2023, compared to $140.1 million a year ago. The segment's European businesses continued to be challenged by unfavorable market conditions. Retail-based sales, which includes private label and merchandising were also lower for the current quarter. Changes in currency rates had an unfavorable impact of $1.2 million on current quarter sales compared to a year ago.

請參閱幻燈片 10。SGK Brand Solutions 部門報告截至 2023 年 6 月 30 日的季度銷售額為 1.326 億美元，而去年同期為 1.401 億美元。該部門的歐洲業務繼續受到不利市場條件的挑戰。本季度零售銷售（包括自有品牌和商品銷售）也有所下降。與去年同期相比，匯率變化對本季度銷售額產生了 120 萬美元的不利影響。

Adjusted EBITDA for SGK Brand Solutions was $16.4 million for the fiscal 2023 third quarter compared to $14.5 million a year ago. Despite lower sales, adjusted EBITDA for the segment increased for the current quarter, primarily reflecting improvements in the ability to pass along cost increases and benefits from the segment's recent cost reduction actions. Changes in currency rates had an unfavorable impact of $473,000 on adjusted EBITDA compared to a year ago.

SGK Brand Solutions 2023 財年第三季度調整後 EBITDA 為 1,640 萬美元，而去年同期為 1,450 萬美元。儘管銷售額下降，但本季度該部門調整後的 EBITDA 有所增加，主要反映了轉嫁成本增加的能力以及該部門近期成本削減行動帶來的收益的提高。與一年前相比，匯率變化對調整後 EBITDA 產生了 473,000 美元的不利影響。

Please turn to Slide 11. Cash flow from operating activities for the fiscal 2023 third quarter was $32.2 million compared to $11.6 million a year ago. The increase primarily reflected higher earnings and a reduction in cash used for working capital in the quarter.

請參閱幻燈片 11。2023 財年第三季度經營活動產生的現金流為 3,220 萬美元，而去年同期為 1,160 萬美元。這一增長主要反映了本季度收益的增加和用於營運資本的現金的減少。

For the 9 months ended June 30, 2023, operating cash flow was $76.9 million compared to $84.4 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.

截至 2023 年 6 月 30 日的 9 個月，運營現金流為 7,690 萬美元，而一年前為 8,440 萬美元。今年迄今為止的兩個時期的運營現金流反映了公司美國退休計劃債務結算的最終支出。 2023 財年第一季度補充退休計劃結算的最終支出總計 2420 萬美元。去年第一財季，該公司美國主要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.

此外，本年度的經營現金流反映了營運資金的增加，這主要是由於庫存增加和流動負債減少所致。

Outstanding debt was $775 million at June 30, 2023, representing a decrease of $3 million during the current quarter. Outstanding debt was $778 million as of March 31, 2023, and $799 million on September 30, 2022. At June 30, 2023, the company's leverage ratio based on net debt, which represents outstanding debt less cash, and trailing 12 months adjusted EBITDA was 3.35 compared to approximately 3.5 at both March 31, 2023, and September 30, 2022.

截至 2023 年 6 月 30 日，未償債務為 7.75 億美元，本季度減少 300 萬美元。截至2023 年3 月31 日，未償債務為7.78 億美元，截至2022 年9 月30 日為7.99 億美元。截至2023 年6 月30 日，該公司基於淨債務（代表未償債務減去現金）和過去12 個月調整後EBITDA 的槓桿率為3.35 相比，2023 年 3 月 31 日和 2022 年 9 月 30 日均約為 3.5。

Approximately 30.5 million shares were outstanding as of June 30, 2023. During the fiscal 2023 third quarter, the company purchased 2,100 shares which were in connection with withholding tax obligations on equity compensation. At June 30, 2023, the company had remaining authorization of approximately 1.2 million shares under its repurchase program.

截至 2023 年 6 月 30 日，約 3050 萬股已發行股票。在 2023 財年第三季度，該公司購買了 2,100 股與股權補償預扣稅義務有關的股票。截至2023年6月30日，公司回購計劃剩餘授權約120萬股。

And 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 August 21, 2023, to stockholders of record August 7, 2023.

最後，本週早些時候，董事會宣布對公司普通股派發每股 0.23 美元的季度股息。該股息將於2023年8月21日支付給2023年8月7日登記在冊的股東。

This concludes the financial review, and we will now open the call to questions. Christine?

財務審查到此結束，我們現在開始提問。克里斯汀？

(Operator Instructions) Our first question comes from the line of Dan Moore with CJS Securities.

（操作員指令）我們的第一個問題來自 CJS 證券的 Dan Moore。

It's Pete Lucas for Dan. I guess just touching on Warehouse Automation. You touched on it in the prepared remarks, you mentioned you saw some softening in Q3 and early strength in Q4. Can you give us any more color in terms of activity and what growth is likely to look like as we look into fiscal year '24?

丹是皮特·盧卡斯。我想只是觸及倉庫自動化。您在準備好的發言中談到了這一點，您提到您看到第三季度出現了一些疲軟，而第四季度出現了早期強勢。您能否為我們提供更多有關活動的信息以及我們展望 24 財年時可能出現的增長情況？

Pete, that's actually the challenge we're facing here. We saw some slowing in quoting. Quoting Is generally the starting point for order intake. It's early for us. Fortunately, as we look into '24, the first quarter is generally the slower of the quarters -- of the 4 that we have given that nobody wants you in their warehouses. So it's too early for us to begin to look at the impact on '24.

皮特，這實際上是我們面臨的挑戰。我們看到報價有所放緩。報價通常是訂單接收的起點。對我們來說還早。幸運的是，當我們回顧 24 年時，第一季度通常是我們給出的 4 個季度中較慢的一個季度，沒有人希望你進入他們的倉庫。因此，我們現在開始研究對 24 世紀的影響還為時過早。

Fair enough. And then in terms of Memorialization, what are your expectations for the trajectory of revenue as we look to '24?

很公平。然後就紀念而言，您對 24 世紀的收入軌蹟有何期望？

And also EBITDA margins have recovered nicely, now back above 20% for the past 2 quarters. How do you think about margins in terms of leveling off? And what is sustainable, do you think, for the mid-term outlook of, say, 3 to 5 years?

而且 EBITDA 利潤率也恢復良好，在過去兩個季度中恢復到 20% 以上。您如何看待利潤率趨於平穩的問題？您認為，對於 3 到 5 年的中期前景來說，什麼是可持續的？

Top line is difficult to project. I mean, death rates are something that, obviously, we don't have control of. But I would tell you that it's a modest grower for us. We're not expecting multiple double-digit growth in the Memorialization segment.

頂線很難預測。我的意思是，死亡率顯然是我們無法控制的。但我想告訴你，這對我們來說是一個適度的種植者。我們預計紀念領域不會出現兩位數的增長。

From a margin standpoint, I would say that we were pretty close to stable at this point in time. You're going to have quarters where you're going to be up and down a little bit. But at the end of the day, we have stabilized at around that -- our historic rates. We think that's where we should be.

從利潤率的角度來看，我想說我們目前已經非常接近穩定。你會有一些起伏不定的宿舍。但最終，我們已經穩定在這個水平上——我們的歷史利率。我們認為這就是我們應該在的地方。

And last one for me, jump into the SGK Brand Solutions. Do you anticipate revenue declines slowing or perhaps even reversing over the next few quarters?

最後一項是我要介紹的 SGK 品牌解決方案。您預計未來幾個季度收入下降速度會放緩甚至逆轉嗎？

And in terms of margins, what needs to happen to get margins back up to the low to mid-teens? And is that still achievable and sustainable there? I know you have made some improvements there, but just wondering the outlook.

就利潤率而言，需要採取什麼措施才能使利潤率恢復到十幾歲左右？這仍然是可以實現和可持續的嗎？我知道您已經在那裡做出了一些改進，但只是想知道前景。

Yes. The story with respect to top line and to the margins is Europe, Europe, Europe. It's completely there. Today, our -- the balance of our business in the North America and the APAC region are operating at historic rates or better. So we're -- the team has done a great job in the markets in which we have operated in for a long, long time.

是的。關於頂線和邊緣的故事是歐洲，歐洲，歐洲。它完全在那裡。今天，我們在北美和亞太地區的業務平衡以歷史水平或更好的速度運營。因此，我們的團隊在我們經營了很長時間的市場中做得非常出色。

The challenge we're facing is things that are somewhat out of our control. I don't have a good feel for the European market as to when or if it will recover to a profitability that is similar to the balance of the business. But we are going to take actions to shrink that size of that footprint over there. Not an easy task to do as we move forward. But that's the only way we see right now in getting that part of the world back to a more palatable margin rate.

我們面臨的挑戰是一些我們無法控制的事情。我對歐洲市場沒有很好的感覺，不知道它何時或是否會恢復到與業務平衡相似的盈利能力。但我們將採取行動縮小那裡的足跡規模。當我們前進時，這不是一件容易的事。但這是我們目前看到的讓該地區恢復到更容易接受的利潤率的唯一方法。

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

我們的下一個問題來自 Liam Burke 和 B. Riley 的對話。

On the Memorialization, you talked about market share gains. Specifically, that's both in Memorialization products and with caskets? Or is this across the board of all the product lines, including cremation?

在紀念活動上，您談到了市場份額的增長。具體來說，這既存在於紀念產品中，又存在於棺材中？或者這是所有產品線（包括火葬）的普遍做法？

I would tell you that we picked up market share in just about every one of the businesses that we operate in North America, but they're small. These are incremental. But as you know, that incremental drop-through is positive.

我想告訴你，我們在北美經營的幾乎每一項業務都獲得了市場份額，但它們都很小。這些都是增量的。但如您所知，增量下降是積極的。

The bigger issue, Liam, I think is -- and I think TheStreet may have keep missing this. I mean if you look at where our business was just 3 years ago, it's materially higher at this point in time. So that is a period of time that's both through margin -- excuse me, both through pricing and as well as with market share pickup. This is a different business than it was just 3 years ago.

利亞姆，我認為更大的問題是——而且我認為 TheStreet 可能一直忽視這一點。我的意思是，如果你看看我們三年前的業務狀況，就會發現此時的情況要高得多。因此，這段時間既通過利潤率實現——對不起，既通過定價實現，也通過市場份額的提昇實現。與三年前相比，這是一個不同的行業。

Great. And you have talked about, I mean, primarily Olbrich, but these acquisitions and your ability now to take a look at costs in those businesses, will you see any benefit in 2023? Or is this all a '24 event?

偉大的。我的意思是，您主要談到了 Olbrich，但這些收購以及您現在審視這些業務成本的能力，您會在 2023 年看到任何好處嗎？或者這都是 '24 事件？

So as we begin to deliver the -- more revenue recognition, I would say, the orders that we've talked about in the energy side, you'll start to see the utilization of some of the Olbrich capacity. So that will improve margins, but they have been negative throughout the course of the year.

因此，當我們開始提供更多的收入確認時，我想說，我們在能源方面討論過的訂單，您將開始看到奧爾布里奇的一些產能的利用率。因此，這將提高利潤率，但全年利潤率一直為負值。

I would tell you the impact should reverse into second, third quarter of next year.

我想告訴你，這種影響應該會在明年第二、第三季度逆轉。

Got it. Great. And Steve, real quickly, you did highlight increased working capital needs and its effect on operating cash flow for the year. Is there any specific business that you need to increase inventories at energy solutions? Or are there other businesses that require additional working capital investment?

知道了。偉大的。史蒂夫，很快，您確實強調了營運資金需求的增加及其對今年運營現金流的影響。您是否有任何特定業務需要增加能源解決方案的庫存？或者還有其他業務需要額外的營運資金投資嗎？

So the 2 businesses where we saw that the inventory increase for the year were that granite business, and that was addressing some of the built-up backlog in that business. And some of that increase you see on the balance sheet relates to our acquisition of Eagle Granite.

因此，我們看到今年庫存增加的兩個業務是花崗岩業務，這正在解決該業務中的一些積壓。您在資產負債表上看到的部分增長與我們收購 Eagle Granite 有關。

And then the second business as the business has grown, is our energy business. As you would expect, as our revenues have increased, the working capital related to that business has increased. So those are the 2 areas that were impacted.

隨著業務的增長，第二個業務是我們的能源業務。正如您所料，隨著我們收入的增加，與該業務相關的營運資金也增加了。這些是受到影響的兩個領域。

Our next question comes from the line of Justin Bergner with Gabelli.

我們的下一個問題來自賈斯汀·伯格納和加貝利的對話。

First question would be on energy storage. I mean, you mentioned that half of the $200 million or so of orders announced early in the year are likely to be recognized in fiscal year '24. Beyond that $200 million, are there additional drivers that should cause energy storage to meaningfully step up from '23 levels in '24? Or is that the next leg up, more of a '25 event?

第一個問題是關於能量存儲。我的意思是，您提到今年年初宣布的 2 億美元左右的訂單中有一半可能會在 24 財年得到確認。除了 2 億美元之外，是否還有其他驅動因素可以促使儲能在 24 年從 23 水平顯著提升？或者這是下一個階段，更像是 25 年的活動？

So we have -- if you assume around $100 million would carry, as you might expect, we've been receiving orders throughout the last couple of quarters since the announcements that we made. Obviously, not to the magnitude that we announced, otherwise, we would have put that announcement out.

因此，如果您假設大約有 1 億美元，正如您所預料的那樣，自我們發佈公告以來，我們在過去幾個季度一直在收到訂單。顯然，沒有達到我們宣布的規模，否則我們就會發布該公告。

But yes, we have -- we'll start the year with a very strong backlog ready to move forward. But we are also in discussions with multiple players for the beginning of what I would call production lines.

但是，是的，我們將在今年開始時積壓大量訂單，準備繼續前進。但我們也在與多個參與者討論我所說的生產線的開始。

So that could change dramatically. But I would expect it to be a good year next year from a revenue standpoint, the bigger year will probably be in '25.

所以這可能會發生巨大的變化。但從收入的角度來看，我預計明年將是一個好的一年，更大的一年可能是在 25 年。

Okay. That's helpful. And that bigger year in 2025 would hopefully relate to some of these production line discussions translating to material chunks of revenue. Okay.

好的。這很有幫助。 2025 年這一更重要的一年有望與這些生產線討論相關，並轉化為大量收入。好的。

Yes.

是的。

Second question would be just on SGK Brand Solutions, nice quarter, nice pickup. I mean given that the margins are improving, are you in a position where you might be closer to considering sales of non-core businesses in the distant future? Or do you think you'd still like to see improvement over a 12- to 24-month or longer period before you're ready to consider those actions?

第二個問題是關於 SGK Brand Solutions，不錯的季度，不錯的提貨。我的意思是，鑑於利潤率正在改善，您是否更願意考慮在遙遠的將來出售非核心業務？或者您是否認為在準備好考慮這些行動之前您仍然希望看到 12 至 24 個月或更長時間內的改善？

The bigger driver, I think, Justin, is where we stand on the energy side and the development of the whole Industrial Tech. As you heard Steve earlier talk about the additional capital that we consumed, we'll need more capital. And as these companies -- as those businesses get to scale, we would look to portfolio management.

賈斯汀，我認為更大的驅動力是我們在能源方面和整個工業技術發展方面的立場。正如您之前聽到史蒂夫談論我們消耗的額外資本一樣，我們將需要更多資本。隨著這些公司的業務規模不斷擴大，我們將尋求投資組合管理。

Will that be next year, would it be the year after, it is a difficult answer for me to say at this point in time. But we are still very pleased with where the direction of SGK is moving. And for that matter, the performance on Memorialization segment as well.

是明年，還是後年，我現在很難回答。但我們仍然對 SGK 的發展方向感到非常滿意。就此而言，紀念部分的表現也是如此。

Got it. And then are you sort of targeting normalized margins or sort of recovery margins for SGK at sort of the mid-teens or the low- to mid-teens? Like I'm just trying to get a sense...

知道了。那麼，您的目標是 SGK 的標準化利潤率或恢復利潤率在十幾歲左右或十幾歲以下嗎？就像我只是想了解一下...

Low to mid-teens. Low to mid-teens on a blended basis across all markets.

低至中青少年。所有市場的混合基礎上都是低至中十幾歲。

Okay. So you're not too far away from that based on this quarter.

好的。因此，根據本季度的情況，您距離這一目標已經不遠了。

No.

不。

Okay. And then lastly, I mean, Memorialization, great performance, great margins. It's great to see the margins sort of at or close to 20%. Is there anything that gives you concern that margins could step back down over the next couple of years? I mean I realize there are all sorts of unpredictable things that can happen.

好的。最後，我的意思是，紀念、出色的表現、巨大的利潤。很高興看到利潤率達到或接近 20%。有什麼事情讓您擔心未來幾年利潤率可能會下降嗎？我的意思是我意識到可能會發生各種不可預測的事情。

But is there -- do you think that outside of anything unpredictable, you can just report the margins at these levels for the next couple of years?

但是，您是否認為，除了不可預測的情況之外，您可以只報告未來幾年這些水平的利潤率嗎？

Look, what we have proven is that rapid spikes in commodity costs are things that we take a long-term look at from a business standpoint. We don't necessarily recover every last nickel of it all in one period. So yes, we could have a period of time where if we had rapid escalation of commodity costs, we could have a period of time where our margins are impaired. But over the course of a normal business cycle, we will return to these kind of margins.

看，我們已經證明，大宗商品成本的快速飆升是我們從商業角度長期關注的問題。我們不一定能在一個​​時期內收回所有的最後一分錢。所以，是的，我們可能會在一段時間內，如果商品成本迅速上升，我們的利潤可能會在一段時間內受到損害。但在正常的商業周期中，我們將恢復到這樣的利潤水平。

Thank you. We have reached the end of the question-and-answer session. I would now like to turn the floor back over to Mr. Wilson for closing comments.

謝謝。我們的問答環節已經結束。我現在想請威爾遜先生髮表總結意見。

Thank you, Christine, and 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.

謝謝你，克里斯汀，感謝你今天加入我們以及你對馬修斯的興趣。有關公司和我們的財務業績的更多信息，請與我聯繫或訪問我們的網站。享受你一天剩下的時間。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您度過美好的一天。