<PAGE>
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For The Quarterly Period Ended June 30, 1996
Commission File Nos. 0-9115 and 0-24494
MATTHEWS INTERNATIONAL CORPORATION
(Exact Name of registrant as specified in its charter)
PENNSYLVANIA 25-0644320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
TWO NORTHSHORE CENTER, PITTSBURGH, PA 15212-5851
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 442-8200
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
Class of Common Stock Outstanding at July 31, 1996
Class A - $1.00 par value 5,856,126 shares
Class B - $1.00 par value 3,018,372 shares
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1996 September 30, 1995
------------- ------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 15,432,791 $ 39,204,010
Short-term investments 2,952,115 -
Accounts and notes receivable, net 26,513,066 28,515,610
Inventories:
Materials and finished goods $10,405,613 $ 9,209,411
Labor and overhead in process 762,394 812,178
Supplies 642,901 618,907
Less LIFO reserve (298,673) (298,673)
---------- ----------
11,512,235 10,341,823
Other current assets 956,253 1,174,796
---------- ----------
Total current assets 57,366,460 79,236,239
Investments 34,790,636 -
Property, plant and equipment: Cost 62,376,869 62,429,586
Less accumulated depreciation (25,503,406) (24,407,809)
---------- ----------
36,873,463 38,021,777
Deferred income taxes and other assets 11,547,512 15,588,221
Goodwill 10,529,467 5,360,139
----------- -----------
Total assets $151,107,538 $138,206,376
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt, current maturities 379,618 433,465
Accounts payable 3,719,908 5,181,954
Accrued compensation 7,069,696 7,944,824
Accrued income taxes 1,907,660 1,165,805
Customer prepayments and other current liabilities 8,291,287 8,183,972
---------- ----------
Total current liabilities 21,368,169 22,910,020
Long-term debt - 270,092
Estimated cemetery and finishing costs 3,044,915 4,991,476
Postretirement benefits 20,458,840 19,727,632
Deferred revenue and other liabilities 1,565,942 3,508,752
Shareholders' equity:
Common stock: Class A, par value $1.00 5,989,007 4,009,753
Class B, par value $1.00 3,094,491 4,840,597
Other shareholders' equity 95,586,174 77,948,054
---------- ----------
104,669,672 86,798,404
----------- -----------
Total liabilities and shareholders' equity $151,107,538 $138,206,376
=========== ===========
/TABLE
<PAGE>
<PAGE> 3
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- --------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 44,304,394 $ 42,729,909 $128,281,218 $124,901,297
Cost of sales 24,580,058 23,588,458 71,001,775 68,490,988
Selling and
administrative expenses 12,744,710 12,783,734 37,001,278 37,339,518
---------- ---------- ---------- ----------
Operating profit 6,979,626 6,357,717 20,278,165 19,070,791
Other income
(deductions), net 505,633 356,900 7,325,608 883,313
Interest expense 9,000 23,977 76,696 64,342
---------- ---------- ---------- ----------
Income before income taxes 7,476,259 6,690,640 27,527,077 19,889,762
Income taxes 2,996,188 2,548,264 11,424,972 7,757,093
---------- ---------- ---------- ----------
Net income $ 4,480,071 $ 4,142,376 $ 16,102,105 $ 12,132,669
========== ========== ========== ==========
Earnings per share $ .50 $ .47 $ 1.81 $ 1.37
===== ===== ===== =====
Dividends per share $ .07 $ .06 $ .21 $ .18
===== ===== ===== =====
Weighted average number
of common shares
outstanding 9,006,898 8,850,350 8,908,370 8,850,350
========= ========= ========= =========
/TABLE
<PAGE>
<PAGE> 4
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
--------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Income $16,102,105 $12,132,669
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,978,008 3,538,786
Deferred taxes 77,417 (542,609)
Net increase in certain working capital items (1,332,450) (1,588,540)
Increase in other noncurrent assets (551,545) (282,752)
Increase in estimated finishing and cemetery costs 246,900 281,346
Decrease in deferred revenue and expenses and
other liabilities (299,758) (168,935)
Increase in postretirement benefits 731,208 1,202,731
(Gain) loss on sale of property, plant and equipment (131,273) 51,049
Loss on sale of investments 38,802 -
Gain on sale of subsidiary (9,409,058) -
Equity income of investees (22,771) -
Effect of exchange rate changes on operations 10,665 312,707
---------- ----------
Net cash provided by operating activities 11,438,250 14,936,452
---------- ----------
Cash flows from investing activities:
Acquisitions of property, plant and equipment (3,794,583) (4,361,903)
Acquisition of subsidiary, net of cash acquired (3,667,062) -
Purchases of investments (42,851,139) -
Proceeds from disposals of property,
plant and equipment 439,802 50,758
Proceeds from sale or maturity of investments 5,202,739 -
Proceeds from sale of subsidiary 13,070,853 -
Collections on loans to officers and employees 1,216,854 1,278,382
---------- ----------
Net cash used in investing activities (30,382,536) (3,032,763)
---------- ----------
Cash flows from financing activities:
Payments on long-term debt (323,939) (314,639)
Proceeds from the sale of treasury stock 107,969 -
Purchases of treasury stock (2,838,201) -
Dividends paid (1,878,935) (1,592,609)
---------- ----------
Net cash used in financing activities (4,933,106) (1,907,248)
---------- ----------
Effect of exchange rate changes on
cash and cash equivalents 106,173 (30,354)
---------- ----------
Net increase (decrease) in cash and cash equivalents $(23,771,219) $ 9,966,087
========== ==========
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 76,696 $ 64,342
Income Taxes 9,779,747 8,754,905
/TABLE
<PAGE>
<PAGE> 5
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1. Nature of Operations
Matthews International Corporation, founded in 1850 and incorporated in
Pennsylvania in 1902, is a designer, manufacturer and marketer of custom-made
products which are used to identify people, places, products and events. The
Company's products and operations are comprised of three business segments:
Bronze, Graphic Systems and Marking Products. The Bronze segment is a leading
manufacturer of cast bronze memorial products used primarily in cemeteries as
well as cremation related products. The Graphic Systems segment manufactures
and provides custom identification-related products and services used by the
corrugated packaging industry and the flexible packaging industry. The Marking
Products segment designs, manufactures and distributes a wide range of
equipment and consumables used by customers to mark or identify various
consumer and industrial products, components and packaging containers.
Matthews International Corporation has manufacturing facilities in the United
States, Canada, Australia and Sweden as well as sales and distribution
facilities in France and Germany.
Note 2. Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information for commercial and industrial companies and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for fair presentation have been included. Operating results for the
three-month and nine-month periods ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended September 30, 1995.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 3. Income Taxes
The income tax provision for the period is based on the effective tax rate
expected to be applicable for the full year. The difference between the
estimated effective tax rate of 41.5% and the Federal statutory rate of 35%
primarily reflects the impact of state and foreign income taxes.
<PAGE>
<PAGE> 6
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
JUNE 30, 1996
Note 4. Investments
On February 19, 1996, the Company acquired for $1,596,688 cash 40% of the
common stock of Applied Technology Developments, Ltd. (ATD), a British
manufacturer of impulse ink-jet printing equipment. On May 6, 1996, the
Company acquired an additional 9% interest in ATD in exchange for 19,286 shares
of Class A common stock (valued at $527,975). The investment has been recorded
under the equity method of accounting. The Company's investment in ATD at
June 30, 1996 was $2,166,706.
All other investment securities are classified as available-for-sale and are
recorded at market value at the consolidated balance sheet date. Short-term
investments consist of securities with purchased maturities of over three
months but less than one year. Accrued interest on all investment securities,
including purchased interest, is also classified with short-term investments.
Investments classified as non-current consist of securities with purchased
maturities intended to range from one to five years.
Unrealized gains and losses on investment securities are included as a separate
component of shareholders' equity. Realized gains and losses are based on the
specific identification method and are recorded in other income. Bond premiums
and discounts are amortized on the straight-line method which does not
significantly differ from the interest method.
The amortized cost and market values of investment securities at June 30, 1996
were as follows:
Book Value Gross Gross
(Amortized Unrealized Unrealized Market
Cost) Gains Losses Value
---------- ---------- ---------- ------
Short-term investments:
U.S. government and
its agencies $ 1,499,896 $ - $ 196 $ 1,499,700
Corporate obligations 1,100,000 - - 1,100,000
Other 352,415 - - 352,415
---------- ------ ------- ----------
Total $ 2,952,311 $ - $ 196 $ 2,952,115
========== ====== ======= ==========
Investments:
U.S. government and
its agencies $14,503,141 $ - $417,647 $14,085,494
Corporate obligations 18,444,961 - 348,311 18,096,650
Other 441,786 - - 441,786
---------- ------ ------- ----------
Total $33,389,888 $ - $765,958 $32,623,930
========== ====== ======= ==========
<PAGE>
<PAGE> 7
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
JUNE 30, 1996
Note 5. Acquisitions
On March 25, 1996, Matthews International Corporation acquired Industrial
Equipment and Engineering Company, Inc., a Florida corporation ("IEECF"), for
213,862 shares of Matthews Class A common stock (valued at $5.4 million) and
$3.6 million cash. The acquisition was consummated through a statutory merger
among IEECF, a real estate holding corporation related to IEECF, and a wholly-
owned subsidiary of Matthews International Corporation. The wholly-owned
subsidiary of Matthews International Corporation, Industrial Equipment and
Engineering Company, Inc., a Delaware corporation ("IEECD"), was the surviving
corporation from the merger. In addition, IEECD executed employment agreements
with the two former shareholders of IEECF pursuant to which performance-based
incentive compensation would be payable to such shareholders if the cumulative
pre-tax earnings of the merged business for the five-year period beginning
April 1, 1996 exceeds $8.0 million, which amount is significantly greater than
the profit levels earned by IEECF in recent years. Matthews International
Corporation has accounted for this acquisition using the purchase method and,
accordingly, has recorded the acquired assets and liabilities at their
estimated fair values at the date of acquisition. The excess of the purchase
price over the fair value of the net assets was recorded as goodwill to be
amortized on a straight-line basis over 20 years.
On August 1, 1996, IEECD acquired for cash substantially all of the assets and
certain of the liabilities of ALL Crematory Corporation. The total purchase
price, including the assumption of liabilities, was $2.3 million. The
transaction will be recorded in the Company's fourth quarter.
Note 6. Disposition
On January 5, 1996, Matthews International Corporation sold for $13.1 million
cash its cemetery and mortuary facility (Sunland Memorial Park, Inc.) in Sun
City, Arizona to Service Corporation International. Matthews recorded a pre-
tax gain of $9.4 million on the sale which was recorded in other income.
Sunland Memorial Park, Inc., which was purchased in 1982, was the only such
facility owned by the Company. The facility had sales in fiscal year 1995 of
approximately $5 million, representing about 3 percent of the consolidated
sales of the Company.
Note 7. Supplemental Cash Flow Information
On March 25, 1996, the Company issued 213,862 shares of authorized Class A
common stock, valued at $5.4 million, in connection with the acquisition of
IEECF (See Note 5). On May 6, 1996, the Company issued 19,286 shares of
authorized Class A common stock, valued at $527,975, in connection with the
purchase of an additional 9% interest in ATD (See Note 4).
<PAGE>
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth certain income statement data of the Company
expressed as a percentage of net sales for the periods indicated.
Nine months ended Years ended
June 30, September 30,
----------------- --------------------
1996 1995 1995 1994 1993
---- ---- ---- ---- ----
Sales 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit 44.7 45.2 44.8 45.1 42.4
Operating profit 15.8 15.3 14.7 15.1 11.6
Income before income taxes 21.5 15.9 15.0 14.9 11.0(1)
Net income 12.6 9.7 9.3 8.8 6.6(1)
(1) Excludes the cumulative effect of changes in accounting principles for
the adoptions of SFAS No. 106 and SFAS No. 109.
Sales for the nine months ended June 30, 1996 were $128.3 million and were
$3.4 million, or 2.7%, higher than sales of $124.9 million for the first nine
months of fiscal 1995. The increase for the first nine months of fiscal 1996
reflected higher sales in all three of the Company's business segments. Bronze
segment sales for the period were up 4% over fiscal 1995 despite the sale of
Sunland Memorial Park, Inc. in January 1996 (see "Liquidity and Capital
Resources") reflecting increases in both price and unit volume. In addition,
the segment's revenues for the fiscal 1996 third quarter were up 6% over the
third quarter of fiscal 1995 and included sales by Industrial Equipment and
Engineering Company, Inc. which was acquired on March 25, 1996 (see "Liquidity
and Capital Resources"). Marking Products segment sales for the first nine
months of fiscal 1996 were up 2% over the same period a year ago reflecting
higher demand in Europe and Australia. The segment's international sales
increased 9% over the same period a year ago which more than offset a decline
in North American sales volume. Graphic Systems sales for the first nine
months of fiscal 1996 were slightly higher than the first nine months of fiscal
1995. Sales for this segment have been adversely impacted, beginning in the
third quarter of fiscal 1995, from the postponement by many customers of
printing plates purchases in an attempt to offset increased costs for
linerboard.
Gross profit for the nine months ended June 30, 1996 was $57.3 million, or
44.7% of sales, compared to $56.4 million, or 45.2% of sales, for the first
nine months of fiscal 1995. The increase in gross profit of $869,000, or 1.5%,
was attributable principally to improvements in the Bronze and Graphic Systems
segments. Bronze segment gross profit increased as a result of increased sales
as its gross margin percentage remained relatively consistent with the prior
period. Graphic Systems gross margin as a percent of sales improved from the
prior year reflecting overhead cost reduction efforts. Marking Products gross
profit for the first nine months of fiscal 1996 was slightly lower than the
first nine months of fiscal 1995 reflecting lower year-to-date sales and gross
margin percentages in North America. International gross profit of the Marking
Products segment improved with higher sales volume.<PAGE>
<PAGE> 9
Selling and administrative expenses for the nine months ended June 30, 1996
were $37.0 million, representing a decrease of $338,000, less than one percent,
from $37.3 million for the first nine months of fiscal 1995. The reduction in
selling and administrative costs for the first nine months of fiscal 1996
reflected the absence of Sunland Memorial Park, Inc. (Sunland), which was sold
in January 1996, and the discontinuance of the Company's Italian operations
effective November 1, 1995. In addition, North American selling costs of the
Marking Products segment declined for the period on lower sales volume.
Selling and administrative costs of Industrial Equipment and Engineering
Company, Inc. partially offset these declines.
Operating profit for the nine months ended June 30, 1996 was $20.3 million and
was $1.2 million, or 6.3%, higher than operating profit of $19.1 million for
the first nine months of fiscal 1995. The higher consolidated operating profit
for the first nine months of fiscal 1996 resulted from operating profit
increases in all three of the Company's business segments. The Bronze segment
recorded the largest increase, due principally to higher sales and related
gross profit. Higher operating profit for the Graphic Systems segment also
resulted from improved sales and operating margins. Operating profit
improvement for the Marking Products segment reflected the increase in
international sales combined with lower North American selling expenses.
Interest expense for the nine months ended June 30, 1996 was $77,000, compared
to $64,000 for the first nine months of fiscal 1995. Interest expense
principally relates to the Company's capital lease obligations.
Other income (deductions), net for the nine months ended June 30, 1996 was
$7.3 million compared to $883,000 for the first nine months of fiscal 1995.
Other income for the first nine months of fiscal 1996 reflected a $9.4 million
pre-tax gain on the sale of Sunland. This gain was partially offset by the
write-off of the remaining goodwill ($2.3 million) with respect to the
Company's investment in its Swedish subsidiary, which manufactures drop-on-
demand ink-jet printing equipment, and a charge for certain other non-operating
expenses during the period. Investment income for the first nine months of
fiscal 1996 was $1.8 million compared to $1.0 million for the same period a
year ago reflecting the Company's higher cash and investment position during
the current year.
The Company's effective tax rate for the nine months ended June 30, 1996 was
41.5%, compared to 38.4% for the year ended September 30, 1995. The higher
effective tax rate for fiscal 1996 is primarily the result of an increase in
the estimated impact of foreign income taxes, mainly in Sweden and Germany, on
the Company's consolidated tax position. The difference between the Company's
effective tax rate and the Federal statutory rate of 35% primarily reflects the
impact of state and foreign income taxes.
Liquidity and Capital Resources
Net cash provided by operating activities was $11.4 million for the nine months
ended June 30, 1996, compared to $14.9 million for the first nine months of
fiscal 1995. Operating cash flow for the first nine months of fiscal 1996
reflected the Company's net income for the period of $16.1 million adjusted to
exclude the gain on the sale of Sunland and non-cash depreciation and
amortization (including the write-off of goodwill related to the Company's
Swedish subsidiary). Cash flow from operations for the first nine months of
fiscal 1995 principally reflected the Company's net income for the period.
<PAGE>
<PAGE> 10
Cash used in investing activities was $30.4 million for the nine months ended
June 30, 1996 compared to $3.0 million for the same period a year ago.
Investing activities for the first nine months of fiscal 1996 included net
investments of $36.0 million in short-term and intermediate-term securities of
the U.S. government and its agencies and corporate obligations. These
investments are designed to improve the investment rate of return on the
Company's excess cash position while maintaining a sufficient degree of
liquidity for future cash needs. Investing activities also included the
acquisition (for $1.6 million cash and 19,286 shares of Matthews International
Corporation Class A common stock) of 49% of the common stock of Applied
Technology Developments, Ltd., a British manufacturer of impulse ink-jet
printing equipment.
Capital expenditures for the nine months ended June 30, 1996 amounted to
$3.8 million, compared to capital expenditures of $4.4 million for the first
nine months of fiscal 1995. Capital spending for property, plant and equipment
has averaged approximately $4.9 million for the last three fiscal years. The
capital budget of the Company for fiscal 1996 is $12.7 million. The Company
expects to generate sufficient cash from operations to fund all anticipated
capital spending projects.
On January 5, 1996, the Company sold for $13.1 million cash its cemetery and
mortuary facility (Sunland Memorial Park, Inc.) in Sun City, Arizona to Service
Corporation International. The transaction resulted in a pre-tax gain of
$9.4 million. Sunland Memorial Park, Inc., which was purchased in 1982, was
the only such facility owned by Matthews International Corporation. The
facility had sales in fiscal year 1995 of approximately $5 million,
representing about 3 percent the consolidated sales of the Company. The
proceeds from this transaction will provide additional resources to fund
internal and acquisition growth in the Company's related businesses.
On March 25, 1996, the Company acquired Industrial Equipment and Engineering
Company, Inc., a Florida corporation ("IEECF"), for 213,862 newly-issued shares
of authorized Matthews Class A common stock (valued at $5.4 million) and
$3.6 million cash. The acquisition was consummated through a statutory merger
among IEECF, a real estate holding corporation related to IEECF, and a wholly-
owned subsidiary of Matthews International Corporation. The wholly-owned
subsidiary of Matthews International Corporation, Industrial Equipment and
Engineering Company, Inc., a Delaware corporation ("IEECD"), was the surviving
corporation from the merger. IEECF, headquartered in Orlando, Florida, is the
leading North American manufacturer of cremation equipment and also a supplier
of related cremation products. IEECF sales were approximately $7.5 million for
the year ended December 31, 1995 and consisted of about 70% in cremation
equipment, 15% in field repairs, and the remainder in cremation supply
products. The merger with IEECF is expected to provide Matthews International
Corporation with the opportunity to further participate in the increasing
cremation trend and expand its range of products and services to the death care
industry.
On August 1, 1996, IEECD acquired for cash substantially all of the assets and
certain of the liabilities of ALL Crematory Corporation. ALL Crematory
Corporation, located in Solon, Ohio, is also a manufacturer of cremation
equipment. The total purchase price, including the assumption of liabilities,
was $2.3 million. The transaction will be recorded in the Company's fourth
quarter.
<PAGE>
<PAGE> 11
Cash used in financing activities for the nine months ended June 30, 1996 was
$4.9 million principally reflecting the purchase of treasury stock and the
Company's quarterly dividends of $.07 per share. In May 1996, the Company
announced that the Board of Directors approved a limited stock repurchase
program authorizing the Company to purchase up to 500,000 shares of Class A and
Class B common stock. In conjunction with the buy-back program, the Company
also changed its practice regarding sales of Class B common stock by the
Company's employees. Effective July 21, 1996, the Company invoked the
provisions of Article Fifth of its Restated Articles of Incorporation. Such
Article provides (among other things) that any shareholder wishing to sell any
Class B common shares must first offer such shares to the Company for
redemption. The Company had previously waived its rights to such redemptions.
The Company will then have an option to purchase such shares for a 24-hour
period. Repurchased shares may be retained in treasury, utilized for
acquisitions, or reissued to employees or other purchasers, subject to the
restrictions of the Restated Articles of Incorporation.
Cash used in financing activities in the first nine months of fiscal 1995 was
$1.9 million consisting of dividends and capital lease payments. Dividends for
each of the first three quarters of fiscal 1995 were $.06 per share. The
Company currently has available lines of credit of approximately $11 million.
There were no outstanding borrowings on any of the Company's lines of credit
at June 30, 1996. As of such date, the Company's outstanding long-term debt,
which consisted of capital lease obligations, was approximately $380,000.
At June 30, 1996 and September 30, 1995 and 1994, the Company's current ratio
was 2.7, 3.5 and 2.9, respectively. The Company had cash and cash equivalents
at June 30, 1996 and September 30, 1995 of $15.4 million and $39.2 million,
respectively. Net working capital at June 30, 1996 was $36.0 million. The
reduction in the current ratio and cash and cash equivalents balance from
September 30, 1995 reflects investments in securities with longer maturities.
The Company believes that its current liquidity sources, combined with its
operating cash flow and additional borrowing capacity, will be sufficient to
meet its capital needs for the next 12 months.
<PAGE>
<PAGE> 12
PART II - OTHER INFORMATION
Item 2. Changes in Securities
In May 1996, the Company announced that the Board of Directors approved a
limited stock repurchase program authorizing the Company to purchase up to
500,000 shares of Class A and Class B common stock. In conjunction with the
buy-back program, the Company also changed its practice regarding sales of
Class B common stock by the Company's employees. Effective July 21, 1996, the
Company invoked the provisions of Article Fifth of its Restated Articles of
Incorporation. Such Article provides (among other things) that any shareholder
wishing to sell any Class B common shares must first offer such shares to the
Company for redemption. The Company had previously waived its rights to such
redemptions. The Company will then have an option to purchase such shares for
a 24-hour period. Repurchased shares may be retained in treasury, utilized for
acquisitions, or reissued to employees or other purchasers, subject to the
restrictions of the Restated Articles of Incorporation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following Exhibits to this report are filed herewith or incorporated
by reference:
Exhibit
No. Description
------- -----------
10.1 Capital Stock Purchase Agreement, Sunland Memorial Park,
Inc., incorporated by reference to Exhibit No. 10.1 to
Form 10-Q for the quarter ended December 31, 1995
10.2 Agreement and Plan of Merger, Industrial Equipment and
Engineering Company, Inc., incorporated by reference to
Exhibit No. 10.2 to Form 10-Q for the quarter ended
March 31, 1996
11 Computation of Earnings Per Share, filed herewith
27 Financial Data Schedule, filed herewith
(b) Reports on Form 8-K
None
<PAGE>
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MATTHEWS INTERNATIONAL CORPORATION
(Registrant)
Date 8/7/96 E.J. Boyle
------------- -------------------------------------
E.J. Boyle, Vice President,
Accounting & Finance
Date 8/7/96 J.L. Parker
------------- -------------------------------------
J. L. Parker, Senior Vice President,
General Counsel and Secretary
<PAGE>
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
----------
1996 1995
---- ----
1. Net income $16,102,105 $12,132,669
2. Weighted average number of
common shares outstanding
during the period 8,908,370 8,850,350
3. Shares issuable upon exercise
of dilutive stock options
outstanding during period,
based on higher of average
or period-end values 205,618 -
4. Weighted average number of
common shares outstanding
during the period, assuming
full dilution (2 + 3) 9,113,988 8,850,350
5. Primary earnings per share
(1 divided by 2) $ 1.81 $ 1.37
6. Fully diluted earnings per share
(1 divided by 4) $ 1.77 $ 1.37
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S QUARTERLY REPORT ON FORM 10-Q FOR THE NINE-MONTH PERIOD ENDED
JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> $ 15,432,791
<SECURITIES> 2,952,115
<RECEIVABLES> 26,513,066
<ALLOWANCES> 0
<INVENTORY> 11,512,235
<CURRENT-ASSETS> 57,366,460
<PP&E> 62,376,869
<DEPRECIATION> 25,503,406
<TOTAL-ASSETS> 151,107,538
<CURRENT-LIABILITIES> 21,368,169
<BONDS> 0
0
0
<COMMON> 9,083,498
<OTHER-SE> 95,586,174
<TOTAL-LIABILITY-AND-EQUITY> 151,107,538
<SALES> 128,281,218
<TOTAL-REVENUES> 128,281,218
<CGS> 71,001,775
<TOTAL-COSTS> 71,001,775
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,696
<INCOME-PRETAX> 27,527,077
<INCOME-TAX> 11,424,972
<INCOME-CONTINUING> 16,102,105
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,102,105
<EPS-PRIMARY> 1.81
<EPS-DILUTED> 1.77
</TABLE>
