Matthews International Corporation (NASDAQ:MATW) Q3 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 09:00 am ET

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Matthews International Corporation (NASDAQ:MATW) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to Matthews International Corporation Third Quarter Fiscal Year Financial Results. [Operator Instructions]

I would now like to turn the conference over to Mr. Bill Wilson, Director of Finance, Corporate Development. Thank you, sir. You may begin.

Executive
William Wilson

Thank you, Latonya, and good morning, everyone, and welcome to the Matthews International Third Quarter Fiscal Year 2020 Conference Call. This is Bill Wilson, Senior Director of Corporate Development. With us today are Joe Bartolacci, President and Chief Executive Officer; and Steve Nicola, our 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 Investors section last night. The presentation for our call can be accessed in the Investors section of the website as well.

As a reminder, any forward-looking statements in connection with this discussion are being made pursuant to the safe harbor provisions of the Private Securities Litigations Reform Act of 1995. Factors that could cause the company's results to differ from those discussed today are set forth in the company's annual report on Form 10-K and other periodic filings with the SEC. In addition, we will be discussing non-GAAP financial metrics and encourage you to read the disclosures and reconciliation tables carefully as you consider these metrics. In connection with any forward-looking statements and non-GAAP financial information, please read the disclaimer included in today's presentation materials located on our website.

And now I'll turn the call over to Steve Nicola, our Chief Financial Officer.

Executive
Steven F. Nicola

Thank you, Bill. Good morning. Please turn to slide four. As you read in our earnings announcement yesterday, the company generated strong cash flow from operations during the fiscal 2020 third quarter, and reported a significant reduction in outstanding debt. Our consolidated earnings for the quarter, combined with our working capital management efforts and proceeds from the divestiture of an investment, facilitated debt reduction of $104.9 million for the three months ended June 30, 2020. With respect to our operating results for the fiscal 2020 third quarter, the company reported consolidated sales of $359 million compared to $379 million a year ago. Year-to-date fiscal 2020 consolidated sales were $1.1 billion compared to $1.14 billion last year. For both the quarter and year-to-date periods, fiscal 2020 reflected higher sales for the Memorialization segment compared to a year ago, offset by lower sales in the SGK Brand Solutions and Industrial Technologies segments. All segments continue to experience some level of commercial impact from COVID-19 during the third quarter, although these impacts remain difficult to quantify.

On a GAAP basis, the company reported earnings per share of $0.07 for the current quarter compared to $0.46 per share last year. A significant portion of the decrease related to noncash charges, including the acceleration beginning in the fiscal 2019 fourth quarter of the amortization of certain discontinued trade names in the SGK Brand Solutions segment, and a $10.6 million reserve for a letter of credit in connection with the previous incineration equipment project in Saudi Arabia.