Q3 2024 Matthews International Corp Earnings Call

William Wilson: Thank you, Renju, and good morning, everyone, and welcome to the Matthews International Third Quarter Fiscal Year 2024 conference call. This is Bill Wilson, Senior Director of Corporate Development. With me today are Joe Bartolacci, President and Chief Executive Officer, and Steve Nicola, our Chief Financial Officer.

Renju: Thank you, Renju.

Thank you Rajiv and good.

William Wilson: And good morning, everyone, and welcome to the Matthews International third codal fiscal year 2024 conference call.

Bill Wilson: Morning, everyone and welcome to the Matthews International third quarter fiscal year 2024 Conference call. This is Bill Wilson Senior director of corporate development with me today are Joe <unk>, President and Chief Executive Officer, and Steve Nicola Our Chief Financial Officer.

William Wilson: This is Bill Wilson, Senior Director of Corporate Development. With me today are Joe Bartolacci, President and Chief Executive Officer, and Steven Nicola, Chief Financial Officer. Before we start, I would like to remind you that our earnings release was posted on our website, www.matw.com, in the investor section last night. The presentation for our call can also be accessed in the investor section of the website under Presentations.

William Wilson: Before we start, I would like to remind you that our earnings release was posted on our website www.matw.com in the investor section last night. The presentation for our call can also be accessed in the investor section of the website under Presentations. Any forward-looking statements in connection with this discussion are being made pursuant to the safe harbor provisions of the Private Security Litigation and 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 public filings with the SEC.

Speaker Change: Before we start I would like to remind you that our earnings release was posted on our website www Dot M. A T. W. Dot com in the investors section last night and the presentation for our call can also be accessed in the investors section of the website under presentation any forward.

William Wilson: 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 public 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.

Speaker Change: 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.

Speaker Change: Because it 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.

Speaker Change: Other public filings with the S E T.

William Wilson: 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. Now, I'll turn the call over to Joe.

Speaker Change: 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.

William Wilson: 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.

Speaker Change: In connection with any forward looking statements and non-GAAP financial information.

Speaker Change: Please read the disclaimer included in today's presentation materials located on our website.

Jill: And now we'll turn the call over to Jill.

Speaker Change: Now I will turn the call over to Joe.

Joseph Bartolacci: Thank you, Bill. Good morning.

Jill: Thank you, Bill.

Joe: Thank you Bill good morning.

Jill: Good morning. Despite encountering challenges in our industrial technology segment, we were pleased with the results of the remainder of our businesses. Consolidated sales and adjustity, but I declined on a year-over-year basis, primarily due to ongoing customer delays of shipments and installations for our energy storage products. Also, slow market conditions in the warehouse automation business continued during the quarter and represented a smaller part of the overall decline in our industrial technology segment. Our memorialization segment reported another solid quarter on a year-over-year basis, especially when you consider that the US cascaded death decline mid-single digits during the quarter.

Joseph Bartolacci: Despite encountering challenges in our industrial technology segment, we were pleased with the results of the remainder of our business. Consolidated sales and adjusted EBITDA declined on a year-over-year basis primarily due to ongoing customer delays of shipments and installations for our energy storage products. Also, slow market conditions in the warehouse automation business continued during the quarter and represented a smaller part of the overall decline in our industrial technology segment. Our memorialization segment reported another solid quarter on a year-over-year basis, especially when you consider that the U.S. cascaded deaths declined mid-single digits during the quarter. Although memorial and casket volumes were down, improved pricing and mausoleum sales offset much of the decline.

Despite encountering challenges in our industrial technology segment.

Joe: We were pleased with the results. So the remainder of our businesses consolidated sales and adjusted EBITDA decline on a year over year basis, primarily due to ongoing customer delays of shipments and installations for our energy storage products.

Joe: Also slow market conditions in the warehouse automation business continued during the quarter and represented a smaller part of the overall decline in a row and our industrial technologies segment.

Joe: Our Memorialization segment reported another solid quarter on a year over year basis, especially when you consider that the U S. Caskets deaths declined mid single digits during the quarter.

Jill: Although memorial and cascade volumes were down, improved pricing and mausoleum sales offset much of the decline. Also, a small acquisition completed earlier in fiscal 24 contributed favoritly to the favorably to the segment's results. Although it is early, we saw improved volumes and good product mix through the month of July, which should allow the business to finish the year strong. As stated in the past, this segment has normalized post-COVID and a performance which is significantly higher than pre-COVID. SGK continues to demonstrate stable top-line growth with another good quarter, quarterly performance, benefiting from continued improvements in the pricing environment and cost reduction actions.

Joe: Although memorial in casket volumes were down improved pricing and modeling themselves offset much of the decline.

Joseph Bartolacci: Also, a small acquisition completed earlier in fiscal 24 contributed favorably to the segment's results. Although it is early, we saw improved volumes and good product mix through the month of July, which should allow the business to finish the year strong. As stated in the past, this segment is normalized post-COVID at a performance that is significantly higher than pre-COVID.

Joe: Also a small acquisition completed earlier in fiscal 'twenty four contributed favorably to the favourably to the segment's results.

Joe: Although it is early we saw improved volumes and good product mix through the month of July which should allow the business to finish the year strong.

Joe: As stated in the past this segment is normalized post COVID-19 than a performance, which is significantly higher than pre COVID-19.

Joseph Bartolacci: SGK continues to demonstrate stable top-line growth with another good quarterly performance, benefiting from continued improvements in the pricing environment and cost reduction actions. SGK's growth also benefited from a more buoyant private label market and increased activity in the European packaging market, a welcome sign which we hope will continue. SGK has won several significant new accounts over the last several quarters, driven by greater market differentiation through automation and technological solutions which we have begun to implement, and which are being well received by our clients. Assuming market conditions remain consistent, this position is positioned for continued improvement in fiscal 2025.

S. G. K continued to demonstrate stable topline growth with another good quarter quarterly performance benefiting from continued improvement in the pricing environment and cost reduction actions.

Jill: SGK's growth also drew from a more buoyant private label market and increased activity in the European packaging market, a welcome sign, which we hope will continue. SGK has won several significant new accounts over the last several quarters, driven by greater market differentiation through automation and technological solutions, which we have begun to implement and which are being well received by our clients. Assuming market conditions remain consistent, this position is positioned for continued improvement in fiscal 2025. Additionally, our e-commerce digital initiative continues to deliver positive results, and we expect to exceed the $40 million sales target we set earlier in the fiscal year.

Joe: S. G case growth also drew from a more buoyant private label market and increased activity in the European packaging market.

A welcome sign which we hope will continue.

Speaker Change: As she cares won several significant new accounts over the last several quarters driven by greater market differentiation through automation and technological solutions, which have been which have begun to implement which we have begun to implement and which are being well received by our clients.

Speaker Change: Assuming market conditions remain consistent dispositions is positioned for continued improvement in fiscal 2025.

Joseph Bartolacci: Additionally, our e-commerce digital initiative continues to deliver positive results, and we expect to exceed the $40 million sales target we set earlier in the fiscal year. This represents an area of focus and opportunity for us as our clients are looking for ways to consolidate their e-commerce marketing spend, and we are well positioned to cost-effectively deliver that solution, with respect to our industrial technology sector. Total sales were lower for the quarter, primarily driven by continued customer delays in shipments and installations of energy storage equipment.

Speaker Change: Additionally, our E Commerce digital initiative continues to deliver positive results and we expect to exceed that $40 million sales target, we set earlier in the fiscal year.

Jill: This represents an area of focus and opportunity for us as our clients are looking for ways to consolidate their e-commerce marketing spend, and we are well positioned to cost-effectively deliver that solution. With respect to our industrial technology segment, total sales were lower for the quarter, primarily driven by continued customer delays of shipments and installations of energy storage equipment. It is important to note that the particularly strong quarter that was reported last year, resulting from the nature and timing of the revenue reported last year. The higher margin revenue recognized last year reflected the high value portion of the energy storage order announced last year.

Speaker Change: This represents an area of focus and opportunity for us with our clients are looking for ways to consolidate their e-commerce marketing spend and we are well positioned to cost effectively deliver that solution.

Speaker Change: With respect to our industrial technologies segment.

Speaker Change: Total sales were lower for the quarter, primarily driven by continued customer delays of shipments and installations of energy storage equipment.

Joseph Bartolacci: It is important to note that the particularly strong quarter that was reported last year resulted from the nature and timing of the revenue reported last year. The higher margin revenue recognized last year reflected the high value portion of the energy storage order announced last year. The higher margin is attributable to the proprietary nature of our engineered solution, which was predominantly design and engineering services last year. The timing and nature of last year's revenue recognition makes for a more difficult comparison this year.

Speaker Change: It is important to note that.

Speaker Change: The particularly strong quarter that was reported last year, resulting from the nature and timing of the revenue reported last year.

The higher margin revenue recognized last year reflected the high value portion of the energy storage order announced last year.

Jill: The higher margin is attributable to the proprietary nature of our engineered solution, which was predominantly designed and engineering services last year. The timing and nature of last year's revenue recognition makes for a more difficult comparison this year. Third quarter warehouse automation results were down, consistent with industry trends. End users continued delay placing orders as confirmed by industry data and likely related to the higher interest rate environment. With that said, we do see quoting activity picking up and believe that we have hit the bottom of this slowdown as indications of recovery begin to appear. Product identification revenues for the third quarter were flat year over year, though we are expecting a strong finish to the year.

Speaker Change: The higher margin is attributable to the proprietary nature of our engineered solution, which was predominantly design and engineering services last year.

Speaker Change: The time, the timing and nature of last year's revenue recognition makes for a more difficult comparison this year.

Joseph Bartolacci: Third quarter warehouse automation results were down, consistent with industry trends; end users continue to delay placing orders, as confirmed by industry data and likely related to the higher interest rate environment. With that said, we do see quoting activity picking up, and believe that we have hit the bottom of this slowdown as indications of recovery begin to appear. Product identification revenues for the third quarter were flat year-over-year, though we are expecting a strong finish to the year.

Speaker Change: Third quarter warehouse automation results were down consistent with industry trends and users continue to delay, placing orders as confirmed by industry data and likely related to the higher interest rate environment with that said, we do see quoting activity picking up and believe that we have hit the bottom of this slowdown as indication.

Speaker Change: The recovery beginning to appear.

Speaker Change: Product identification revenues for the third quarter were flat year over year, though we are expecting a strong finish to the year.

Jill: Consistent with our focus on constant innovation, we are expanding our portfolio in this business with the launch of a new line of laser products in August. The launch of our laser system is designed for marking and coding on consumer packets goods, and together with our new printheaded technology, we will further develop our strategy of attacking this $2 billion market opportunity with innovative superior solutions. Regarding a new printhead technology, we are still on track for a launch in early next year. Our strategy is to continue to develop on this new and disruptive solution, which expands the market opportunities to areas which we currently do not serve.

Joseph Bartolacci: Consistent with our focus on constant innovation, we are expanding our portfolio in this business with the launch of a new line of laser products in August. The laser system is designed for marking and coding on consumer packaged goods, and together with our new printhead technology, we'll further develop our strategy of attacking this $2 billion market opportunity with innovative, superior solutions. Regarding the new printhead technology, we are still on track for a launch early next year.

Speaker Change: Consistent with our focus on constant innovation, we are expanding our portfolio in this business with the launch of a new line of laser products in August.

Speaker Change: The launch of our laser system is designed for marking and coding and consumer packaged goods and together with our new printhead. Its technology will further develop our strategy of attacking this $2 billion market opportunity with innovative superior solutions.

Speaker Change: Regarding our new printer technology, we are still on track for a launch in early next year.

Joseph Bartolacci: Our strategy is to continue to develop this new and disruptive solution which expands market opportunities to areas which we currently do not serve. With respect to our energy business, as I am sure you are aware, Tesla recently filed a suit attempting to restrict us from selling our dry battery electrode equipment solution to other companies and alleging that we have misappropriated unidentified trade secrets resulting in significant damage. Our position with respect to the lawsuit remains clear, firm, and unchanged.

Speaker Change: Our strategy is to continue to develop on this new and disruptive solution, which expands the market opportunity to errors, which we currently do not serve.

Jill: With respect to our energy business, as I am sure you are aware, Tesla recently filed a suit attempting to restrict us from selling our drive battery electrode equipment solutions to other companies in the legend that we have misappropriated, unidentified trade secrets, resulting in significant damages. Our position with respect to the lawsuit remains clear, firm, and unchanged. This is an effort by Tesla to bully us and force us to transfer our highly valuable proprietary technology to them by undue pressure. We have been offering various engineered solutions in the battery industry since 1998 for some of the largest companies in the world.

Speaker Change: With respect to our energy business.

Speaker Change: I'm sure you're aware Tesla recently filed a suit attempting to restrict us from selling our dry battery electrode equipment solutions to other companies in the alleging that we have misappropriated.

Speaker Change: Unidentified trade secrets, resulting in significant damages.

Speaker Change: Our position with respect to the lawsuit remains clear firm and unchanged.

Joseph Bartolacci: This is an effort by Tesla to bully us and force us to transfer our highly valuable proprietary technology to them under undue pressure. We have been offering various engineered solutions in the battery industry since 1998 for some of the largest companies in the world. We produced the first dry battery electrode equipment and converted lithium-rich powder to film and applied it to aluminum and copper foils to produce the first dry battery electrodes before ever having any discussions, let alone orders, from Tesla.

Speaker Change: This is an effort by Tesla tabbouleh us enforce us to transfer our highly valuable proprietary technology to them by undue pressure.

Speaker Change: We have been offering various engineered solutions in the battery industry since 1998 for some of the largest companies in the world. We produced the first dry battery electrode equipment and converted lithium rich powder to film and applied it to aluminum and copper foils to produce the first dry battery electrode before ever.

Jill: We produced the first drive battery electrode equipment and converted lithium-rich powder to film and applied it to aluminum and copper foils to produce the first drive battery electrodes before ever having any discussions, let alone orders from Tesla. Tesla sought us out due to our well-established industry-leading knowledge. Coach. Our technology provides battery producers significant reductions in capital and operating expenses, and our multi-year head start makes us the go-to company when it comes to the equipment needed to produce dry battery electrodes. This is the capability that we have developed, marketed, and commercialized for over 25 years through relationships with some of the earliest innovators in battery development.

Speaker Change: Having any discussions let alone orders from Tesla.

Joseph Bartolacci: Tesla sought us out due to our well-established industry-leading knowledge. Our technology provides battery producers with significant reductions in capital and operating expenses, and our multi-year head start makes us the go-to company when it comes to the equipment needed to produce dry battery electrodes. This is a capability that we have developed, marketed, and commercialized for over 25 years through relationships with some of the earliest innovators in battery development. During that time, we have accumulated extensive know-how and IP on battery equipment in general and, in particular, dry battery electrode equipment, which has led to groundbreaking energy storage.

Speaker Change: Tesla sought us out due to our well established industry leading knowledge.

Speaker Change: Our technology provides battery producers significant reductions in capital and operating expenses and our multi year head start makes us the go to company when it comes to the equipment needed to produce dry battery electrodes.

Speaker Change: This is a capability that we have developed marketed and commercialized for over 25 years through relationships with some of the earliest innovators and battery development. During that time, we have accumulated extensive knowhow and IP on battery equipment in general and in particular dry battery electrode equipment, which has led to.

Jill: During that time, we have accumulated extensive know-how and IP on battery equipment in general and, in particular, dry battery electrode equipment, which has led to the groundbreaking energy storage capabilities. Thus, we remain confident we will prevail in this meritless lawsuit, and the entire global industry will benefit from our tremendously valuable technology. As for the impact of the lawsuit on our business, legal fees are having an impact on our SGNA cost, but as stated earlier, we continue to draw industry-wide interest in our technology. We continue to take orders for DBE equipment and production lines from the largest global battery manufacturers and automotive OEMs. We are extremely confident in the company's ongoing ability to produce and sell DBE manufacturing equipment, and we continue to make significant advancements in the technology, improving its efficacy and its speed.

Speaker Change: The drawn braking energy storage capabilities.

Joseph Bartolacci: Thus, we remain confident we will prevail in this meritless lawsuit, and the entire global industry will benefit from our tremendously valuable technology. As for the impact of the lawsuit on our business, legal fees are having an impact on our SG&A costs.

Speaker Change: Thus, we remain confident we will prevail in this meritless lawsuit and the entire global industry will benefit from our tremendously valuable technology.

Speaker Change: As for the impact of the lawsuit on our business legal fees are having an impact on our SG&A costs, but as earlier as stated earlier, we continue to drive industry wide interest in our technology.

Joseph Bartolacci: But, as stated earlier, we continue to draw industry-wide interest in our technology. We continue to take orders for DBE equipment and production lines from the largest global battery manufacturers and Automotive OEMs. We are extremely confident in the company's ongoing ability to produce and sell DBE manufacturing equipment, and we continue to make significant advancements in the technology, improving its efficacy and its speed. But many have asked, how did we get into this? It was not an accident.

Speaker Change: We continue to take orders for D. B E equipment and production lines from the largest global battery manufacturers.

Speaker Change: And automotive Oems, we are extremely confident in the companys ongoing ability to produce and sell D. B manufacturing equipment, and we continue to make significant advancements in the technology, improving its efficacy and its fee.

Jill: Many have asked how did we get into this business. It was not an accident. Our intellectual property is built on a platform of innovation, especially in the case of our energy business. For years we have taken activities done in batches such as stamping or pressing and designed equipment to perform these actions in continuous process using roles or calendar equipment. These highly engineered calendars play a critical role in the DBE process.

Speaker Change: Many have asked how did we get into this business.

Speaker Change: It was not an accident our intellectual property is built on a platform of innovation.

Joseph Bartolacci: Our intellectual property is built on a platform of innovation, especially in the case of our energy. For years, we have taken activities done in batches, such as stamping or pressing, and designed equipment to perform these actions in a continuous process using rolls or calendaring equipment. These highly engineered calendars play a critical role in the DBE process. And one final piece of clean energy news. As further evidence of our role-to-role process know-how, we were recently awarded a Department of Energy Cooperative Agreement together with General Motors, NeoGraft Solutions, and others for the development of hydrogen fuel cells. The grant is to fund advancements in the production of fuel cell stacks with inexpensive graphite bipolar plates that will materially reduce the cost of fuel cells.

Speaker Change: Especially in the case of our energy business for years, we have taken activities done in batches, such as stamping or pressing and designed equipment to perform these actions and continuous process using rolls or calendar equipment.

Speaker Change: These highly engineered calendars play a critical role in the DB process.

Jill: One final piece of clean energy news. As further evidence of our role to role process, know how we were recently awarded a Department of Energy cooperative agreement together with General Motors, Neo-Graph Solutions, and others for the development of hydrogen fuel cells. The grand is to fund advancements in the production of fuel cell stacks with inexpensive graphite bipolar plates that will materially reduce the cost of fuel cells. The hydrogen market is still in its infancy, but as we have done in the past, we are at the forefront of this developing technology and we are operating with some of the leading companies in the world.

Speaker Change: One final piece of clean energy news as further evidence of our roll to roll process. Knowhow. We were recently awarded the Department of Energy Cooperative agreement together with General Motors Neo graph solutions and others for the development of hydrogen fuel cells, the granted to fun advancements in the production of fuel cell stacks.

Speaker Change: With inexpensive ratified bipolar plates that will materially reduce the cost of fuel cells.

Joseph Bartolacci: The hydrogen market is still in its infancy, but as we have done in the past, we are at the forefront of this developing technology, and we are operating with some of the leading companies in the world. Finally, in our earnings release, we mentioned plans to initiate a cost reduction program in the fourth quarter, spanning several of our business units, as well as our corporate. We are targeting up to $50 million in annual cost savings, with the bulk to be driven by changes in our engineering and tooling operations in Europe.

Speaker Change: Our hydrogen market is still in its infancy, but as we have done in the past we are at the forefront of this developing technology and we are operating with some of the leading companies in the world.

Jill: Finally, in our earnings release, we mentioned plans to initiate a cost reduction program in the fourth quarter, spanning several of our business units as well as our corporate function. We are targeting up to $50 million in annual cost savings, with a bulk to be driven by changes in our engineering and tooling operations in Europe. You may recall that after announcing the acquisition of Olbert in the fourth quarter of fiscal 22, we communicated our intention to extract savings once an agreement was reached with Olbert's union in Germany. We believe this is the right time to take this action and that it positions our business to capitalize on future growth opportunities while making Olbert a significant contributor to our overall portfolio.

Speaker Change: Finally in our earnings release, we mentioned plans to initiate a cost reduction program in the fourth quarter spanning several of our business units as well as our corporate functions.

Speaker Change: We are targeting up to $50 million in annual cost savings with the bulk to be driven by changes in our engineering and tooling operations in Europe, you may recall that after announcing the acquisition of olbrich in the fourth quarter of fiscal 'twenty. Two we communicated our intention to extract savings once an agreement was reached with Obits Union in Germany.

Joseph Bartolacci: You may recall that after announcing the acquisition of Olbrich in the fourth quarter of fiscal 22, we communicated our intention to extract savings once an agreement was reached with Olbrich's union in Germany. We believe this is the right time to take this action and that it positions our business to capitalize on future growth opportunities while making Olbrich a significant contributor to our overall portfolio. In addition, a significant portion of the savings comes from the reduction of corporate overhead resulting from years of planning and implementation of a global business services function, which capitalizes on our SAP backbone.

Speaker Change: We believe this is the right time to take this action and that it positions our business to capitalize on future growth opportunities opportunities, while making olbrich a significant contributor to our overall portfolio.

Jill: In addition, a significant portion of the savings comes from the reduction of corporate overhead resulting from years of planning and implementation of a global business services function which capitalizes on our SAP back. Phone. These actions are expected to span the next two fiscal years, but the majority of the cost savings will be achieved next year. With respect to our balance sheet, as we have outlined at the beginning of the fiscal year, we are laser-focused on reducing our outstanding debt. With that in mind, through another quarter of good cash flow management, we reduced our debt by $13 million and planned further reductions through year-end.

Speaker Change: In addition, a significant portion of the savings coming from the reduction of corporate overhead, resulting from years of planning and implementation of our global business services function, which capitalizes on our SAP backbone.

Joseph Bartolacci: These actions are expected to span the next two fiscal years, but the majority of the cost savings will be achieved next year. With respect to our balance sheet, as we have outlined at the beginning of this fiscal year, we are laser-focused on reducing our outstanding debt. With that in mind, through another quarter of good cash flow and management, we reduced our debt by $13 million and plan further reductions through year-end. Additionally, we are on track to refinance our outstanding bonds by fiscal year end.

Speaker Change: These actions are expected to span the next two fiscal years, but the majority of the cost savings will be achieved next year.

Speaker Change: With respect to our balance sheet as we add as we have outlined at the beginning of the fiscal year. We are laser focused on reducing our outstanding debt with that in mind through another quarter of good cash flow management, we reduced our debt by $13 million in planned further reductions through year end <unk>.

Jill: Additionally, we are on track to refinance our outstanding bond by fiscal year end. As we approach fiscal year end, we expect energy storage shipments and installation in order for warehouse automation to pick up in the fourth quarter and into fiscal 25. Memorialization and SGK should be in line with last year's results and provide a solid foundation for growth. As a result, we project adjusted EBITDA for fiscal 2024 to be in the range of $205 million to $210 million.

Speaker Change: Additionally, we are on track to refinance our outstanding bonds by fiscal year end.

Joseph Bartolacci: As we approach fiscal year-end, we expect energy storage shipments and installation orders for warehouse automation to pick up in the fourth quarter and into fiscal 25. Memorialization and SGK should be in line with last year's results and provide a solid foundation for growth. As a result, we project adjusted EBITDA for fiscal 2024 to be in the range of $205 million to $210 million. I'll now turn the call over to Steve for more insight on our financial results. Thank you, Joe.

Speaker Change: As we approach fiscal year end, we expect energy storage shipments and installations and orders for warehouse automation to pick up in the fourth quarter and into fiscal 'twenty five.

Speaker Change: Memorials Asian and S. G K should be in line with last year's results and provide a solid foundation for growth.

Speaker Change: As a result, we project adjusted EBITDA for fiscal 'twenty 'twenty four to be in the range of two to one 5 million to $210 million.

Steven Nicola: I'll now call over to Steve for more insight on our financial results.

Speaker Change: I'll now turn the call over to Steve for more insight on our financial results.

Steven Nicola: Thank you, Joe. A good warning.

Steven Nicola: Thank you, Joe.

Steve: Thank you Joe Good morning, let's begin with slide seven for.

Steven Nicola: Good morning. Let's begin with slide 7. For the fiscal 2024 third quarter, net income attributable to the company was $1.8 million, or $6 per share, compared to $8.7 million, or $0.28 per share a year ago. On a non-gap adjusted basis, earnings for the current quarter were $0.56 per share compared to $0.74 per share last year. The impacts of lower consolidated adjusted EBITDA and higher interest expense were partially offset by income tax benefits for the current quarter. Consolidated sales for the fiscal 2024 third quarter were $427.8 million compared to $471.9 million a year ago. Our largest businesses, memorialization and SGK Brand Solutions, continued to perform relatively well for the quarter.

Steven Nicola: Let's begin with slide 7. For the fiscal 2024 third quarter, net income attributable to the company was $1.8 million, or $0.06 per share, compared to $8.7 million, or $0.28 per share a year ago. On a non-GAAP-adjusted basis, earnings for the current quarter were $0.56 per share compared to $0.74 per share last year. The impacts of lower consolidated adjusted EBITDA and higher interest expense were partially offset by income tax benefits for the current quarter.

Speaker Change: For the fiscal 2024 third quarter net income attributable to the company was $1 $8 million or <unk> <unk> per share compared to $8 $7 million or 28 cents per share a year ago.

Speaker Change: On a non-GAAP adjusted basis earnings for the current quarter were 56 per share compared to <unk> 74 per share last year, the impacts of lower consolidated adjusted EBITDA and higher interest expense were partially offset by income tax benefits for the current quarter.

Steven Nicola: Consolidated sales for the fiscal 2024 third quarter were $427.8 million, compared to $471.9 million a year ago. Our largest businesses, Memorialization and SGK Brand Solutions, continued to perform relatively well for the quarter as the consolidated sales decrease primarily reflected a decline in the industrial technology segment. Sales for the SGK brand solution segment were modestly higher than a year ago, primarily reflecting increased sales for the European packaging business and in the private label market.

Speaker Change: Consolidated sales for the fiscal 2020 for third quarter were $427 8 million compared to $471 $9 million a year ago, our largest businesses memorials Asian, an SDK brand solutions continued to perform relatively well for the quarter as the consolidate consolidated <unk>.

Steven Nicola: As the consolidated sales decrease, primarily reflected to decline for the industrial technology segment. Sales for the SGK brand solution segment were modestly higher than a year ago, primarily reflecting increased sales for the European packaging business and in the private label market. Sales for the memorialization segment for the current quarter remained relatively steady compared to a year ago, reporting only a modest decline despite lower unit volumes related to a decrease in U.S. Casket of deaths. The decline for the industrial technology segment primarily reflected lower sales for its engineering and warehouse automation businesses. Consolidated adjusted EBITDA for the fiscal 2024 third quarter was $44.7 million compared to $56.2 million a year ago.

Speaker Change: <unk> decrease primarily reflected a decline for the industrial technology segment.

Speaker Change: Sales for the SDK brand solutions segment were modestly higher than a year ago, primarily reflecting increased sales for the European packaging business and in the private label market.

Steven Nicola: Sales for the memorialization segment for their current quarter remained relatively steady compared to a year ago, reporting only a modest decline despite lower unit volumes related to a decrease in U.S. cascaded deaths. The decline for the industrial technology segment primarily reflected lower sales for its engineering and warehouse automation business. Consolidated adjusted EBITDA for the fiscal 2024 third quarter was $44.7 million compared to $56.2 million a year. The decrease mainly resulted from a decline in the industrial technology segment, primarily related to its engineering and warehouse automation business. Adjusted EBITDA for the memorialization and SGK brand solution segments was only modestly lower for the quarter, which was substantially offset by lower corporate and non-operating costs.

Speaker Change: Sales for the Memorial <unk> segment for the current quarter remained relatively steady compared to a year ago reporting only a modest decline despite lower unit volumes related to a decrease in U S casted deaths.

Speaker Change: The decline for the industrial technology segment, primarily reflected lower sales for its engineering and warehouse automation businesses.

Speaker Change: Consolidated adjusted EBITDA for the fiscal 2020 for third quarter was $44 7 million compared to $56 2 million a year ago. The decrease mainly resulted from a decline in the industrial technology segment, primarily related to its engineering and warehouse automation businesses.

Steven Nicola: The decrease mainly resulted from a decline in the industrial technology segment, primarily related to its engineering and warehouse automation businesses. Adjust the EBITDA for the memorialization and SGK brand solution segments were only modestly lower for the quarter, which were substantially offset by lower corporate and non-operating costs. Please see the reconciliation of adjusted EBITDA and non-GAAP adjusted earnings per share provided in our earnings release. and please move to slide 8 to review our segment results. Sales for the memorialization segment for the fiscal 2024-3rd quarter were $202.7 million compared to $208.7 million for the same quarter a year ago.

Speaker Change: Adjusted EBITDA for the Memorial <unk>, an SDK brand solutions segment were only modestly lower for the quarter, which were substantially offset by lower corporate and non operating costs.

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

Speaker Change: And believe me please move to slide eight to review our segment results.

Steven Nicola: Please see the reconciliations of adjusted EBITDA and non-GAAP adjusted earnings per share provided in our earnings release, and please move to slide 8 to review our segment. Sales for the memorialization segment for the fiscal 2024 third quarter were $202.7 million compared to $208.7 million for the same quarter a year ago. Sales volumes for cemetery memorials, caskets, and cremation equipment were lower for the quarter compared to last year as U.S. casketed deaths declined.

Speaker Change: Sales for the Memorial <unk> segment for the fiscal 2020 for third quarter were $202 7 million compared to $208 7 million for the same quarter a year ago sales.

Steven Nicola: Sales volumes for cemetery memorials, caskets, and cremation equipment were lower for the quarter compared to last year as US casket and the deaths declined. These declines were significantly offset by the favorable impacts of improved price realization and higher mausoleum sales. Recent acquisitions also contributed to the segment sales for the current quarter. Memorialization segment adjusted EBITDA for the current quarter was $38.7 million compared to $39.9 million for the same quarter last year. The decrease primarily resulted from the impact of lower sales volumes and increased labor and material costs. These declines were substantially offset by the favorable impacts of improved pricing and benefits from cost savings initiatives.

Speaker Change: Sales volumes for cemetery memorials, caskets, and cremation equipment were lower for the quarter compared to last year as U S casket of deaths declined.

Steven Nicola: These declines were significantly offset by the favorable impacts of improved price realization and higher mausoleum sales. Recent acquisitions also contributed to the segment sales for the current quarter. Memorialization segment adjusted EBITDA for the current quarter was $38.7 million compared to $39.9 million for the same quarter last year.

Speaker Change: These declines were significantly offset by the favorable impacts of improved price realization and higher mozley themselves re.

Speaker Change: Recent acquisitions also contributed to the segment sales for the current quarter.

Speaker Change: Memorial <unk> segment adjusted EBITDA for the current quarter was $38 7 million compared.

Speaker Change: Compared to $39 9 million for the same quarter last year. The decrease primarily resulted from the impact of lower sales volumes and increased labor and material costs. These declines were substantially offset by the favorable impacts of improved pricing and benefits from cost savings initiatives.

Steven Nicola: The decrease primarily resulted from the impact of lower sales volumes and increased labor and material costs. However, these declines were substantially offset by the favorable impacts of improved pricing and benefits from cost savings initiatives. Please move to slide 9. Sales for the SGK Brand Solutions segment increased to $33.4 million for the quarter ending June 30, 2024, compared to $132.6 million a year ago. The increase primarily reflected higher sales in the private label market and for the segment's European packaging business and improved price realization to mitigate inflationary cost increases.

Steven Nicola: Please move to slide 9. Sales for the SGK brand solution segment increased to $33.4 million for the quarter ended June 30, 2024 compared to $132.6 million a year ago. The increase primarily reflected higher sales in the private label market and for the segments European packaging business, and improved price realization to mitigate inflationary cost increases. Currency rates had an unfavorable impact of $2.6 million on current quarter sales compared to a year ago. Adjusted EBITDA for the SGK brand solution segment was $16.1 million for the current quarter, which was relatively consistent with the segment's adjusted EBITDA of $16.4 million a year ago.

Speaker Change: Please move to slide nine.

Speaker Change: Sales for the SDK brand solutions segment increased to $33 4 million for the quarter ended June 32024, compared to $132 6 million a year ago.

Speaker Change: The increase primarily reflected higher sales in the private label market and for this segment's European packaging business.

Speaker Change: And improved price realization to mitigate inflationary cost increases.

Speaker Change: Increases.

Steven Nicola: Currency rates had an unfavorable impact of $2.6 million on current quarter sales compared to a year ago. Adjusted EBITDA for the SGK Brand Solutions segment was $16.1 million for the current quarter, which was relatively consistent with the segment's adjusted EBITDA of $16.4 million a year ago. The benefits of higher sales and the segment's cost-reduction actions were offset by higher labor-related costs and performance-based compensation. The segment's year-to-date adjusted EBITDA increased 12% to $44.3 million for the current year compared to $39.6 million last year, primarily reflecting the benefits of their cost-reduction actions. Please move to slide 10.

Speaker Change: Currency rates had an unfavorable impact of $2 6 million on current quarter sales compared to a year ago adjusted.

Adjusted EBITDA for the SDK brand solutions segment was $16 $1 million for the current quarter, which was relatively consistent with the segment's adjusted EBITDA of $16 $4 million a year ago.

Steven Nicola: The benefits of higher sales and the segments' cost reduction actions were offset by higher labor-related costs and performance-based compensation. The segments year-to-date adjusted EBITDA increased 12% to $44.3 million for the current year compared to $39.6 million last year, primarily reflecting the benefits of their cost reduction actions. Please move to slide 10. Sales for the industrial technology segment for the fiscal 2024-3rd quarter were $91.7 million compared to $130.5 million a year ago. The decrease primarily resulted from lower sales for the segments Engineering and Warehouse Automation businesses. As we previously discussed, our engineering sales have been unfavorably affected by customer delays and shipments and installations.

Speaker Change: The benefits of higher sales in the segment's cost reduction actions were offset by higher labor related costs and performance based compensation.

Speaker Change: The segment's year to date, adjusted EBITDA increased 12% to $44 $3 million for the current year compared to $39 $6 million last year, primarily reflecting the benefits of our cost reduction actions.

Speaker Change: Please move to slide 10.

Steven Nicola: Sales for the industrial technology segment for the fiscal 2024 third quarter were $91.7 million, compared to $130.5 million a year ago. The decrease primarily resulted from lower sales for the segment's engineering and warehouse automation businesses. As we've previously discussed, our engineering sales have been unfavorably affected by customer delays in shipments and installations. Additionally, operating results for our warehouse automation business have been unfavorably impacted by the current slow conditions in the U.S. warehouse industry.

Speaker Change: Sales for the industrial technology segment for the fiscal 2020 for third quarter were $91 7 million compared to $135 million a year ago. The.

Speaker Change: The decrease primarily resulted from lower sales for the segments engineering and warehouse automation businesses as.

Speaker Change: As we've previously discussed our engineering sales have been unfavorably affected by customer delays in shipments and installations.

Steven Nicola: Additionally, operating results for our warehouse automation business have been unfavorably impacted by the current slow conditions in the U.S. Warehouse industry. However, we are starting to see signs of improvement based on recent quoting rates. In addition, recent divestitures contributed to this segment's sales decline. Changes in foreign currency rates also had an unfavorable impact of $1.4 million on the segment's current quarter sales compared to a year ago. Adjusted EBITDA for the industrial technology segment for the current quarter was $4.2 million compared to $15 million a year. ago. The decrease primarily reflected the impacts of the sales declined in the engineering and warehouse automation businesses.

Speaker Change: Additionally, operating results for our warehouse automation business have been unfavorably impacted by the current slow conditions in the U S warehouse industry power.

Steven Nicola: However, we are starting to see signs of improvement based on recent quoting. In addition, recent divestitures contributed to this segment's sales decline. Changes in foreign currency rates also had an unfavorable impact of $1.4 million on the segment's current quarter sales compared to a year ago. Adjusted EBITDA for the industrial technology segment for the current quarter was $4.2 million compared to $15 million a year ago. The decrease primarily reflected the impact of sales declines in engineering and warehouse automation.

Speaker Change: However, we are starting to see signs of improvement based on recent quoting rates.

Speaker Change: In addition, recent divestitures contributed to this segment sales declined changes in foreign currency rates also had an unfavorable impact of $1 $4 million on the segment's current quarter sales compared to a year ago.

Speaker Change: Adjusted EBITDA for the industrial technology segment for the current quarter was $4 2 million compared to $15 million a year ago. The decrease primarily reflected the impacts of the sales declines in the engineering and warehouse automation businesses.

Steven Nicola: The declines were partially offset by lower performance-based compensation and the benefits of operational savings initiatives. Changes in currency exchange rates had an unfavorable impact of $217,000 on the segment's current order adjusted the EBITDA compared to a year ago. Please move to slide 11. Cash flow from operating activities for the quarter ended June 30, 2024 was $13.5 million compared to $32.2 million a year ago. Relative to a year ago, cash flow for the current quarter primarily reflected the company's lower consolidated adjusted EBITDA, offset partially by the benefit of working capital reductions. Outstanding debt was $830 million at June 32, 2024, compared to $843 million at the end of last quarter, representing a reduction of $12.6 million during the third quarter.

Speaker Change: The declines were partially offset by lower performance based compensation and the benefits of operational savings initiatives.

Steven Nicola: The declines were partially offset by lower performance-based compensation and the benefits of operational savings initiatives. However, changes in currency exchange rates had an unfavorable impact of $217,000 on the segment's current quarter-adjusted EBITDA compared to a year ago. Please move to slide 11.

Speaker Change: Changes in currency exchange rates had an unfavorable impact of $217000 on the segment's current quarter adjusted EBITDA compared to a year ago.

Speaker Change: Please move to slide 11.

Steven Nicola: Cash flow from operating activities for the quarter ended June 30, 2024 was $13.5 million compared to $32.2 million a year ago. Relative to a year ago, cash flow for the current quarter primarily reflected the company's lower consolidated adjusted EBITDA, offset partially by the benefit of working capital reductions. The outstanding debt was $830 million at June 30, 2024 compared to $843 million at the end of the previous quarter, representing a reduction of $12.6 million during the third quarter.

Speaker Change: Cash flow from operating activities for the quarter ended June 32024 was $13 5 million compared to $32 2 million a year ago.

Speaker Change: Relative to a year ago cash flow for the current quarter, primarily reflected the company's lower consolidated adjusted EBITDA offset partially by the benefit of working capital reductions.

Speaker Change: Outstanding debt was $830 million at June 32024, compared to $843 million at the end of last quarter, representing a reduction of $12 $6 million during the during the third quarter.

Steven Nicola: Net debt, which represents outstanding debt last cash was $787 million at June 32, 2024, compared to $797 million at March 31, 2024, representing a reduction of $9.8 million during the third quarter. Since the beginning of calendar 2024, the company has reduced its outstanding debt and net debt balances by $32 million and $37 million, respectively. At June 32, 2024, the company's leverage ratio based on net debt and trailing 12 months adjusted EBITDA was $3.77. As we reported last quarter, we renewed our $750 million domestic revolving credit facility during the fiscal 2024 second quarter and are now focused on refinancing our bonds, which do not mature until December 2025.

Steven Nicola: Net debt, which represents outstanding debt less cash, was $787 million at June 30, 2024, compared to $797 million at March 31, 2024, representing a reduction of $9.8 million during the third quarter. Since the beginning of calendar 2024, the company has reduced its outstanding debt and net debt balances by $32 million and $37 million, respectively. At June 30, 2024, the company's leverage ratio based on net debt and trailing 12-months adjusted EBITDA was 3.77.

Speaker Change: Net debt, which represents outstanding debt less cash was $787 million at June 32024, compared to $797 million at March 31, 2024, representing a reduction of $9 $8 million during the third quarter.

Speaker Change: Since the beginning of calendar 2024, the company has reduced its outstanding debt and net debt balances by $32 million and $37 million respectively.

Speaker Change: At June 32024, the company's leverage ratio based on net debt and trailing 12 months adjusted EBITDA was $3 77.

Steven Nicola: As we reported last quarter, we renewed our $750 million domestic revolving credit facility during the fiscal 2024 second quarter and are now focused on refinancing our bonds, which do not mature until December 2025. We currently expect this refinancing to be completed before the end of this fiscal year. For the fiscal 2024 third quarter, the company purchased only approximately 115,000 shares under a stock repurchase program, as we remain primarily focused on debt reduction.

Speaker Change: As we reported last quarter, we renewed our $750 million domestic revolving credit facility. During the fiscal 2020 for second quarter and are now focused on refinancing our bonds, which do not mature until December 2025. We currently expect this refinancing to be completed before the end of this.

Steven Nicola: We currently expect this refinancing to be completed before the end of this fiscal year. For the fiscal 2024 third quarter, the company purchased only approximately 115,000 shares under a stock repurchase program as we remain primarily focused on debt reduction. Approximately 30.6 million shares were outstanding at June 30, 2024. As Joe just noted, we are initiating cost reduction programs beginning this quarter that will span several of our business units and corporate functions. We are targeting annual consolidated savings from these programs to be up to $50 million, with the most significant portion from our engineering and tooling operations in Europe.

Speaker Change: Fiscal year.

Speaker Change: For the fiscal 2024 third quarter. The company purchased only approximately 115000 shares under our stock repurchase program as we remain primarily focused on debt reduction.

Steven Nicola: Approximately 30.6 million shares were outstanding at June 30, 2024. As Joe just noted, we are initiating cost reduction programs beginning this quarter that will span several of our business units and corporate functions. We are targeting annual consolidated savings from these programs to be up to $50 million, with the most significant portion coming from our engineering and tooling operations in Europe.

Speaker Change: Approximately 36 million shares were outstanding at June 32024.

Speaker Change: As Joe just noted we are initiating cost reduction programs beginning this quarter that will span several of our business units and corporate functions. We are targeting annual consolidated savings from these programs to be up to $50 million with the most significant portion from our engineering and tooling operations.

Speaker Change: In Europe <unk>.

Steven Nicola: Finally, the board last week declared a quarterly dividend of $0.24 per share on the company's common stock. The dividend is payable August 19, 2024, to stockholders of record August 5, 2024.

Steven Nicola: Finally, the board last week declared a quarterly dividend of 24 cents per share on the company's common stock. The dividend is payable on August 19, 2024 to stockholders of record on August 5, 2000. This concludes the financial review, and we will now open the call to any questions.

Speaker Change: Finally, the board last week declared a quarterly dividend of 24 per share on the company's common stock.

Speaker Change: The dividend is payable August 19, 2024 to stockholders of record August five 2024.

Steven Nicola: This concludes the financial review, and we will now open the call for any questions.

Speaker Change: This concludes the financial review and we will now open the call for any questions.

Speaker Change: From June.

Steven Nicola: Thank you.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the... For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. The first question comes from the line of Daniel Moore with CJS Securities. Please go ahead.

June: Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the question.

Speaker Change: We will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Confirmation tone will indicate your line is in the question queue. You may start to if you would like to move your questions from the queue.

Operator: Thank you. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

June: For participants using speaker equipment it.

June: May be necessary to pick up your handset before pressing the star keys, one moment, please pull for questions.

Operator: One moment please, while we pull for questions.

Joseph Bartolacci: The first question comes from the line of Daniel Moore with C.J.S. Securities, please go ahead. The revised guidance for fiscal 24, in terms of the implication for Q4, how much energy storage revenue is in there and just talk about your confidence in any risk that maybe some of that additional revenue or shipments might slip into fiscal 25. So, let me kind of parse that out for you, Dan. We expect to carry over somewhere of about $60 to $70 million worth of backlog in the energy business into 25. Our current expectation is we should have about $30 million or so of billions in the quarter that we're approaching right on the fourth quarter.

Speaker Change: The first question comes from the line of Daniel Moore.

Daniel Moore: <unk> Securities. Please go ahead.

Daniel Moore: Thank you. Good morning, Joe. Good morning, Steve. Thanks for taking the time to answer the question. Good morning, Dan. Start with the guide and then kind of maybe switch gears to energy storage, but the revised guidance for fiscal 24, in terms of the implications for Q4, how much energy storage revenue is in there? And just talk about your confidence, you know, and any risk that maybe some of that additional revenue or shipments might slip into fiscal 20.

Daniel Moore: Thanks, Steve and good morning morning, Steve Thanks for taking the questions.

Steve: Good morning, Dan.

Speaker Change: Start with the guide and then kind of maybe switch gears to energy storage, but.

Speaker Change: The revised guidance for fiscal 'twenty four.

Speaker Change: In terms of the implications for Q4, how much energy storage revenue was in there and just talk about your confidence.

Speaker Change: And any risk that maybe some of that.

Daniel Moore: Additional revenue or shipments might slip into fiscal 'twenty.

Joseph Bartolacci: So, let me kind of parse that out for you, Dan. We expect to carry over somewhere between about $60 to $70 million worth of backlog in the energy business into 2025. Our current expectation is that we should have about $30 million or so of billings in the quarter that we're approaching right now, in the fourth quarter. So, our expectations, and we've had a pretty good discussion in terms of that with our customers, and right now, those are the current plans. It will shift through late February of next year, with some trailing off.

Speaker Change: So let me kind of parse that out for you Dan.

Speaker Change: We expect to carryover somewhere of about $60 million to $70 million worth of backlog in the energy business into 25. Our current expectation is we should have about $30 million or so.

Dan: Billings in the month in the quarter that were approaching rent out in the fourth quarter. So.

Joseph Bartolacci: So, our expectations, and we've had a pretty good discussion in terms of that with our customer, and right now that's the current plan that will ship through late February of next year with some training orders to be delivered thereafter. That's helpful. And then I think you said in the prepared remarks, you expect energy storage orders to pick up in Q4 and into fiscal 25. I don't know if there was orders or... It was revenue recognition, more revenue recognition. And warehouse is what we're seeing. Warehouse and product identification is what we're seeing things start to pick up again.

Daniel Moore: Our expectations and we've had a.

Speaker Change: A pretty good discussion in terms of that with our customer and right now thats. The current plans that will ship through late February of next year with some trailing orders to be delivered thereafter.

Joseph Bartolacci: That's helpful. And then, I think you said in the prepared remarks, you expect energy storage orders to pick up in Q4 and into Fiscal 25. I don't know if that was orders or... It was revenue recognition, Morton.

Speaker Change: That's helpful and then.

Speaker Change: Thank you said in the prepared remarks, you expect energy storage orders to pick up in Q4 and into fiscal 'twenty five I don't know if there was orders and with revenue recognition.

Speaker Change: Revenue recognition and warehouse or warehouses, what were seeing warehouse in product identification is what we're seeing things start to pick up again.

Joseph Bartolacci: And warehouse and product identification is what we're seeing things start to pick up again. Got it. That's really helpful. Sticking there on the DBE front, you talked about plans to build battery production capability in-house, and I think you said spending an incremental $40 million over the next 12-plus months. Are those plans still on track, and what would that look like from a capacity perspective once that build-out is complete?

Joseph Bartolacci: Got it, that's really helpful. It's sticking there on the DBE front.

Speaker Change: Got it that's really helpful.

Speaker Change: It's sticking there.

Speaker Change: The DBE front, you're talking about plans to build battery production capability in house and I think he said you know spending an incremental $40 million over the next 12 plus months.

Joseph Bartolacci: You're talking about plans to build battery production capability in-house. And I think you said, you know, spending an incremental 40 million over the next 12+ months. Are those plans still on track? And what would, you know, what would that look like from a capacity perspective? What's that build out? So, let me explain exactly what that is. First off, the numbers are materially lower. As a result of some of the cost structures and initiatives that we've initiated, we're freeing up a fair amount of real estate to be able to house. So the capital costs will come down materially.

Speaker Change: Are those plans still on track.

Speaker Change: What would what would that look like from a capacity perspective once that buildout.

Joseph Bartolacci: So let me explain exactly what that is. First off, the number is materially lower. As a result of some of the cost structures or initiatives that we've initiated, we're freeing up a fair amount of real estate to be able to house it. So the capital costs will come down materially. Secondly, we're not building production capability as much as we're building a production line. That production line will allow an accelerated adoption of the DB solution by some of the largest customers in the world.

Speaker Change: So let me explain exactly what that is first off the numbers materially lower as a result of some of the cost structures are.

Speaker Change: Initiatives that we've.

Speaker Change: <unk> initiated.

Steve: We're freeing up a fair amount of real estate to be able to houses. So the capital costs will come down materially secondly, what we're not we're not building production capability as much as we are building a production line that production line will allow an accelerated adoption.

Joseph Bartolacci: Secondly, what we're not building production capability as much as we're building a production line. That production line, it will allow an accelerated adoption of the DBE solution by some of the largest customers in the world. So we're moving away from selling a lab machine and then a small prototype machine and then finally waiting for an order. This is the process of standardizing the production line to a methodology that is consistent and we can sell it repeatedly. That will benefit timeline for adoption significantly with some of the largest customers as they try to go up from where they are today.

Steve: Of the DB solution by some of the largest customers in the world. So we're moving away from selling a.

Joseph Bartolacci: So we're moving away from selling a lab machine and then a small prototype machine and then finally waiting for an order. This is the process of standardizing the production line to a methodology that is consistent, and we can sell it repeatedly. That'll benefit the timeline for adoption significantly with some of the largest customers as they try to go up from where they are today. But more importantly, it should improve our cost structure as we standardize around a definitive solution.

Steve: Lab machine and then a small prototype machine and then finally waiting for an order. This is the process of standardizing the production line to a methodology that is consistent and we can sell repeatedly that'll benefit timeline for adoption significantly worse.

Speaker Change: Some of the largest customers as they tried to go up from where they are today, but more importantly, it should improve our cost structure as we standardize around a definitive solution.

Joseph Bartolacci: But more importantly, it should improve our cost structure as we standardize around a definitive solution. really helpful.

Joseph Bartolacci: Really helpful. One more on energy storage, and then I'll ask one more and jump back in queue. But I know you're too early to get into Fiscal 25 guidance, but, given kind of where we are in terms of orders right now, do we think about 25 as, you know, being a growth year in that business? Or, you know, could that inflection maybe push out to Fiscal 26?

Speaker Change: Really helpful. One more on energy storage, and then I'll ask one more and jump back in queue, but.

Joseph Bartolacci: One more on energy storage, and then I'll less one more and jump back into you, but I know you're too early to get into fiscal 25 guidance. Given kind of where we are in terms of orders right now, do we think about 25 as being a growth year in that business, or could that inflection maybe push out to fiscal 26? I would tell you that 25 is going to be a good year, not right now. Things can change so dramatically, so quickly, Dan, but I would not expect a significant growth year. I would expect a good year in that business.

Speaker Change: I know you are.

Speaker Change: Too early to get into fiscal 'twenty guidance, but given kind of where we are in terms of orders right. Now do we think about 'twenty five as.

Speaker Change: Being a growth year in that business or that could that inflection may be pushed out to fiscal 'twenty six.

Joseph Bartolacci: I would tell you that 25 is going to be a good year, not a great year, right now, things can change so dramatically so quickly, Dan, but, you know, I would not expect a significant growth year. I would expect a good year in that business. The cost structure initiatives we're taking over there will make the overall engineering solution better. We're taking out a significant amount of costs. But more importantly, I'm hoping 25 will be, once we get past the litigation, more of an announcement year where we can speak more freely about what we're doing.

Speaker Change: I would tell you the 25 is going to be a goodyear not a.

Speaker Change: But right now things can change so dramatically so quickly Dan, but I would not expect a significant growth year I would expect a good year in that business the cost structure initiatives, we're taking over there will make the overall engineering solution.

Joseph Bartolacci: The cost structure initiative is we're taking over; there will make the overall engineering solution better. We're taking out a significant amount of cost over there, but more importantly, I'm hoping 25 to be, once we get past the litigation, to be more of an announcement year, where we can speak more freely. That's really helpful.

Speaker Change: Better we're taking out a significant amount of crossover there, but more importantly, I'm, hoping 'twenty five to be once.

Speaker Change: Once we get past the litigation to be more of an announcement year.

Speaker Change: We can speak more freely about what we're doing.

Joseph Bartolacci: That's really helpful. Last for me, you mentioned green shoots, or maybe my word, not yours, on warehouse automation, maybe order quoting rates, any additional color you can give there around what you're seeing, hearing from customers, and you know, when we might see a little bit of a return of that business. Thanks again. Unfortunately, we're working with some of the largest players in the industry when it comes to e-commerce and store fulfillment. And the names, Unfortunately, they are not allowing us to use their names, but I can tell you they are national brands in every sense.

Speaker Change: That's really helpful. Last for me you mentioned green shoots or maybe my word not yours on warehouse automation, maybe or the quoting rates any additional color you can give there around.

Joseph Bartolacci: Last for me, you mentioned green shoots, or maybe my word, not yours. I'm warehouse automation, maybe with a quoting rate. Any additional color you can give there around what you're seeing, hearing from customers, and when we might see a little bit of return about business. Thanks again. I'm hoping to have, unfortunately, we're working with some of the largest players in the industry, Dan, when it comes to e-commerce and store fulfillment. And the names, unfortunately, are not allowing us to use their names, but I can tell you they are national brands in every sense. Those orders are in pipeline right now.

Speaker Change: What you're seeing hearing from customers in <unk>.

Speaker Change: Might see a little bit of return in that business. Thanks again.

Speaker Change: I'm, hoping to have unfortunately, some we're working with some of the largest players in the industry Dan.

Speaker Change: <unk> e-commerce and store fulfillment.

Speaker Change: And the names Unfortunately are not allowing us.

Speaker Change: To use their names, but I can tell you. They are national brands in every sense. Those orders are in pipeline right now I would say that they are in final negotiations fairly significant orders and what interests or it has increased significantly around finally moving forward. Unfortunately as you know this is a cyclical.

Joseph Bartolacci: Those orders are in the pipeline right now. I would say that they're in final negotiations, fairly significant orders, but interest has increased significantly around finally moving forward. Unfortunately, as you know, this is a cyclical business when it comes to the year. Generally, we're out of warehouses in the first quarter, so don't expect a big first quarter as much as you start to see those revenues in the second and third quarters of next year. Understood. I'll jump back with any follow-ups. Thanks, Joe.

Joseph Bartolacci: I would say that they're in final negotiations, fairly significant orders, but interests have increased significantly around finally moving forward. Unfortunately, as you know, this is a cyclical business when it comes to the year. Generally, we're out of warehouses in the first quarter, so don't expect the big first quarter as much as you start to see those revenues into the second and third quarter of next year. Understood. I'll I'll jump back with it. Thanks, Jim.

Speaker Change: Business when it comes to two the year generally were out of warehouses in the first quarter. So don't expect a big first quarter as much as you start to see those revenues into the second and third quarter of next year.

Speaker Change: Understood.

Speaker Change: Back with any follow ups. Thanks, Jim.

Speaker Change: Yes.

Operator: Thank you.

Justin Bergner: Thank you. The next question comes from the line of Justin Bergner with Geberi Funds. Please go ahead.

Speaker Change: Thank you next question comes from the line of Justin Bergner with Gabelli funds. Please go ahead.

Justin Bergner: Next question comes on the line of Justin Bergner with Geberry Funds. Please go ahead.

Justin Bergner: Good morning, Joe. Good morning, Steve. A few questions here. Just to make sure, the one-time cost to achieve the savings in the $50 million cost-out plan of $40 million, are those all cash?

Justin Bergner: Good morning, Joe. Good morning, Steve. Good morning, Justin. A few questions here. Just to make sure the one-time cost to achieve the savings in the 50 million cost out plan of 40 million, those are all cash. No, not all. No, the majority of them are cash adjusted, but there is a component of it that would be asset right off-related. Okay. Any quantification of the cash portion? No, I don't have those numbers with me. We can get that for you, Jim. All right.

Justin Bergner: Good morning, Joe Good morning, Steve Hi.

Jonathan: Hi, Jonathan.

Justin Bergner: Few questions here.

Justin Bergner: Just to make sure the one time cost to achieve the savings and the $50 million.

Speaker Change: Cost out plan of 40 million those are all cash.

Joseph Bartolacci: No, not all.

Speaker Change: No not at all no.

Joseph Bartolacci: No, the majority of them are cash-adjusted, but there is a component of it that would be asset write-off related.

Speaker Change: The majority of them are cash adjustment, but there is there is a component of it that would be asset write off related.

Joseph Bartolacci: Okay, any quantification of the cash portion? No.

Speaker Change: Okay.

Speaker Change: Any quantification of the cash portion.

Joseph Bartolacci: No, I don't have those numbers with me. But we can get that for you.

Speaker Change: No I don't have those numbers with me.

Speaker Change: When we can get that.

Speaker Change: Alright.

Joseph Bartolacci: And then, you know, depending upon how the situation resolves itself with Tesla, I mean, could you see yourselves downsizing that cost, take out program? Do you send it around Europe? Let's put it this way. As it relates to Obrich itself, no; as it relates to the rest of our engineering business or their perhaps. I mean, the reality is that we're positioning it for growth over there. So, with the cost that we are taking out, we're anticipated when we acquired Obrich. If you recall, Obrich was a business we paid 45 million euros for that is coming out of bankruptcy for all practical purposes.

Joseph Bartolacci: All right, and then, depending upon how the situation resolves itself with Tesla, I mean... Could you see yourselves downsizing that cost takeout program, which is centered around Europe?

Speaker Change: And then.

Speaker Change: Depending upon how the situation resolves itself with Tesla.

Speaker Change: Could you see yourselves.

Speaker Change: Downsizing net cost takeout program centered around Europe.

Joseph Bartolacci: Let's put it this way. As it relates to Olbrich itself, no. As it relates to the rest of our engineering business over there, perhaps. I mean, the reality is that we're positioning it for growth over there, so the costs that we are taking out were anticipated when we acquired Olbrich. If you recall, Olbrich was a business we paid 45 million euros for that was coming out of bankruptcy for all practical purposes.

Speaker Change: Let's put it this way.

Speaker Change: As it relates to olbrich itself no as it relates to the rest of our engineering business over there perhaps.

Speaker Change: Reality is that we are.

Speaker Change: We're positioning it for growth over there so with the costs that we are taking out were anticipated when we acquired <unk>.

Speaker Change: If you recall olbrich was a business, we paid 45 million euros for that.

Speaker Change: Coming out of bankruptcy for all practical purposes.

Joseph Bartolacci: And it has not been a contributor. In fact, it's been a net loser for the last 18 months as we've gone through this. We're positioning that business to be a mid-teens operating EBITDA business over there, as well as leaving us the capacity and the engineering skills to grow our energy business.

Joseph Bartolacci: And it was; has not been a contributor. In fact, it's been a net loser for the last 18 months as we've gone through this. We're positioning that business to be a mid-teens operating EBITDA business over there. As well as leaving us the capacity and the engineering skills to grow our engineering energy. University business. Okay, got it. But that mid teens would be on a meaningfully lower revenue base. I assume if you're taking that much cost out. We're expecting that revenue base to be upwards of 80 million. Okay. All right. And then, by the way, Justin, that is just for over, not the energy business as a whole.

Speaker Change: It has not been a contributor in fact, it's been a net loser for the last 18 months as we've gone through this we're positioning that business to be a mid mid teens operating EBITDA business over there.

Speaker Change: As well as leaving us the capacity and the engineering skills to grow our engineering our energy business.

Joseph Bartolacci: Okay, got it. But that mid-teens would be on a meaningfully lower revenue base, I assume, if you're taking that much cost out.

Speaker Change: Okay got it but that mid teens would be on a meaningfully lower revenue base I assume if you're taking that much cost out.

Joseph Bartolacci: We're expecting that revenue base to be upwards of $1.5 billion.

Joseph Bartolacci: We're expecting...

Speaker Change: We're expecting that revenue base to be upwards of $80 million.

Speaker Change: Okay.

Joseph Bartolacci: Uh... all right, and then another by the way uh... by the way Justin, that is just for over. Not the energy business as a whole. Gotcha. Alright, and then if the Tesla situation is resolved, I mean, you wouldn't rule out... orders coming in for fiscal year 25 from that customer as well, right?

Speaker Change: Alright, and then by the way by the way adjustment that is just for overt.

Speaker Change: Not not the energy business as a whole.

Justin Bergner: Gotcha. All right.

Speaker Change: Gotcha.

Speaker Change: Alright, and then if the Tesla situations resolved I mean, you wouldn't rule out.

Joseph Bartolacci: And then, if the Tesla situation is resolved, I mean, you wouldn't rule out new orders coming in as we look into fiscal year 25 from that customer as well, right? I would, I mean, we look, we will take orders from anybody. We are taking orders, as I said earlier, from others. We're not at liberty right now to kind of speak more freely about that. But we continue to take orders, and interest levels are very high. Okay. This is, as I said in my statement, this is a. We've been saying it for a while. This is a solution that is tremendously valuable.

Speaker Change: New orders coming in as we look into fiscal year 'twenty five from that customer as well right.

Joseph Bartolacci: We will take orders from anybody. We are taking orders, as I said earlier, from others. We're not at liberty right now to kind of speak more freely about that. But we continue to take orders, and interest levels are...

Speaker Change: I mean, we're looking at.

Speaker Change: We will take orders from anybody we are taking orders as I said earlier from others. We're not at Liberty right now to kind of speak more freely about that but we continue to take orders and interest rate levels are very high.

Joseph Bartolacci: As I said in my statement, we've been saying it for a while. This is a solution that is tremendously valuable. It takes billions of dollars out of the process. What you're seeing is the reaction to that.

Speaker Change: Okay.

Speaker Change: Said in my statement. This is this is a we've been saying it for a while this is a solution that is tremendously valuable it takes billions of dollars out of the process.

Justin Bergner: It takes billions of dollars out of the process. What you're seeing is the reaction to that. Gotcha. Totally understand.

Speaker Change: What youre seeing is the reaction to that.

Joseph Bartolacci: Gotcha. I totally understand.

Speaker Change: Gotcha totally understand.

Justin Bergner: And all the best; you know, working your way through that lawsuit.

Speaker Change: And all the best working your way through that lawsuit maybe lastly.

Justin Bergner: Maybe lastly, I mean, in terms of non-core businesses, you know, with your leverage and your refinancing, how are you thinking about some businesses that may be non-core within the portfolio within the next 12 to 24 months? I mean, we are always looking at those. I would tell you that given where our debt position is and where we think there are industrial technologies, businesses going, we're now approaching that point where we think it's time to consider it more, more wholesomely. So we're considering everything right now. Okay.

Joseph Bartolacci: And all the best, you know, working your way through that lawsuit. Maybe lastly, in terms of non-corp businesses, you know, with your leverage and your refinancing, how are you thinking about? and some businesses that may be non-core within the portfolio within the next 12 to 24 months.

Speaker Change: In terms of noncore businesses.

Speaker Change: With your leverage and your refinancing how are you thinking about.

Joseph Bartolacci: Some businesses that maybe non core within the portfolio within the next 12 to 24 months.

Joseph Bartolacci: I mean, we are always looking at them. I would tell you that given where our debt position is and where we think industrial technologies businesses are going, we're now approaching that point where we think it's time to consider them more holistically. So we're considering everything right now.

Speaker Change: We are always looking at those and I would tell you that given where our debt position is.

Speaker Change: And where we think that our industrial technologies business is going we are now approaching that point, where we think it's time to consider it more more wholesome Lee.

Speaker Change: So we're considering everything right now.

Joseph Bartolacci: Okay, and then lastly, just on the share repurchases, you know, not a large quantity purchased in the quarter. Is it safe to say that, you know, those shares were purchased before the Tesla situation came to a head or just any perspective on why they were able to deploy that capital in that way?

Speaker Change: Okay.

Justin Bergner: And then lastly, just on the share we're purchases, you know, not a large, you know, quantity purchased in the quarter, is it safe to say that, you know, those shares were purchased before you saw the Tesla situation coming to a head, or just any perspective on, you know, what deployed that capital in that way? We did not buy a lot, but it was also well before the situation with Tesla's losses. So that is not something given, going into this environment we would be buying in today. Okay. Fantastic. All the best, Joan. Steve. Thank you.

Speaker Change: And then lastly, just on the share repurchases.

Speaker Change: Not a large quantity purchased in the quarter.

Speaker Change: Is it safe to say that you know those shares were purchased.

Speaker Change: Four.

Speaker Change: You saw the Tesla situation coming to a head or just any perspective on.

Speaker Change: You know why they're worth it deploy.

Speaker Change: Deploy that capital in that way.

Joseph Bartolacci: We did not buy a lot, but it was also well before the situation with Tesla's lawsuit. So that is not something that, going into this environment, we would be buying in today. OK.

Speaker Change: We did not by a lot, but it was also well before the.

Speaker Change: The situation with Tesla a lawsuit so.

Speaker Change: That is not something that going into this environment, we would be buying it today.

Joseph Bartolacci: Okay. Fantastic. All the best, Joe and Steve. Thank you.

Speaker Change: Okay Fantastic all the best John Stifel. Thank you. Thank you.

William Wilson: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I would now like to turn the floor over to Bill Wilson for closing comments.

Speaker Change: Thank you.

Operator: Ladies and gentlemen, we have reached the end of question on last session.

Speaker Change: Ladies and gentlemen, we have reached the end of question and answer session.

William Wilson: I would now like to turn the floor over to Bill Wilson for closing comments. Very good. Thank you. And thank you, everyone, for joining us today in your interest in Matthews. We would encourage you for additional information about the company and our financial results. Please visit our website or contact me. Enjoy the rest of your day. Thank you.

Speaker Change: I'd now like to turn the floor over to Bill Wilson for closing comments.

William Wilson: Very good. Thank you. And thank you everyone for joining us today and your interest in Matthew. We would encourage you to visit our website or contact me for additional information about the company and our fans' results. Enjoy the rest of your day.

Bill Wilson: Very good thank you and thank you everyone for joining us today and your interest in Matthews with.

Bill Wilson: We would encourage you for additional information about the company and our financial results. Please visit our websites or contact me enjoy the rest of your day.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

Operator: This concludes today's telecomment. You may disconnect your lines at this time. Thank you for your participants. Association. Justin Bergner, Steven Nicola, Joseph Bartolacci.

Speaker Change: [music].

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