Calls for Prompt Replacement of CEO Joseph C.
Bartolacci Following 18 Years of Unacceptable Capital Allocation,
Dismal Share Price Performance, Poor Execution and Excessive
Spending
Believes Company Must Also Reduce
Indebtedness, Explore Options to Divest Underperforming Businesses
and Improve Corporate Governance to Unlock Trapped Value
Nominates Three Directors with Strong
Boardroom Skills and Experience as Well as Proven Track Records of
Creating Long-Term Value for Shareholders
NEW
YORK, Dec. 10, 2024 /PRNewswire/ -- Barington
Capital Group, L.P. ("Barington Capital") and certain of its
affiliates (collectively "Barington" or "we"), a fundamental,
value-oriented activist investor that beneficially owns
approximately 2% of the outstanding common stock of Matthews
International Corporation (NASDAQ: MATW) ("Matthews" or the
"Company"), today sent a letter to the Chairman of Matthews' Board
of Directors (the "Board"), Alvaro
Garcia-Tunon, highlighting Barington's belief regarding the
immediate need for new leadership at the Company and the steps the
Company must take to improve long-term value for shareholders.
James Mitarotonda, Chairman and
CEO of Barington Capital, said, "Barington first invested in
Matthews because we believed it was significantly undervalued and
had the potential to deliver substantial, above market returns for
its investors. We continue to believe this remains true and that
the Company's Memorialization business is an exceptionally valuable
asset with substantial market share and strong, long-term customer
relationships. Unfortunately, however, under the leadership of CEO
Joseph Bartolacci, the Company
continues to meaningfully underperform and fall short of
expectations.
"As a consultant to Matthews for the last two years, Barington
has tried hard to work constructively with Mr. Bartolacci to
reverse this underperformance. Despite our long track record of
helping numerous companies unlock their potential, the Company has
not demonstrated meaningful progress on any of the initiatives we
suggested to improve its long-term performance. We are patient,
long-term investors, but we can no longer accept the status quo. We
strongly believe new leadership at the management and Board levels
is required to ensure the value potential of Matthews can be
unlocked. It is for this reason that we have nominated three highly
qualified directors for election to the Board at the Company's 2025
annual meeting of shareholders."
In its letter, Barington recommends that Matthews take the
following decisive steps:
- Focus its efforts on businesses where Matthews can create
long-term shareholder value by exploring options to divest
its poorly performing SGK Brand Solutions segment, following
through with its strategic review of its Warehouse Automation and
Product Identification businesses within its Industrial
Technologies segment, and selling or identifying an experienced and
well-funded industry partner for its emerging Energy Storage (dry
cell lithium-ion battery) manufacturing business.
- Improve cash flow by increasing the amount of its
cost reduction initiatives from $50
million to at least $80
million and allocating cash received from divestitures and
the Memorialization segment to reduce indebtedness.
- Promptly replace Mr. Bartolacci, given his
disappointing record during his extended 18-year tenure as CEO,
during which time the Company's share price has declined by 20.2%,
debt has increased and return on invested capital has fallen below
the Company's cost of capital.
- Strengthen the composition of its Board and its corporate
governance by adding new, experienced directors with
proven records of creating long-term value for shareholders, and
declassifying its staggered Board.
Mr. Mitarotonda concluded, "Eighteen years of results speak for
themselves. Matthews' shareholders deserve better. We are confident
that with a new CEO, a more streamlined business, improved cashflow
and a refreshed Board, Matthews can be a stronger, better
capitalized company that generates substantial long-term value for
all shareholders."
The full text of the letter can be found
at: https://barington.com/matthews
ABOUT BARINGTON CAPITAL GROUP, L.P.
Barington Capital Group, L.P. is a fundamental, value-oriented
activist investment firm established by James Mitarotonda in January 2000.
Barington invests in undervalued publicly traded companies that
Barington believes can appreciate significantly in value when
substantive improvements are made to their operations, corporate
strategy, capital allocation and corporate governance.
Barington's investment team, advisors and network of industry
experts draw upon their extensive strategic, operating and
boardroom experience to assist companies in designing and
implementing initiatives to improve long-term shareholder
value.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Barington Companies Equity Partners, L.P. ("Barington"),
together with the other participants named herein, intend to file a
preliminary proxy statement and accompanying universal proxy card
with the Securities and Exchange Commission ("SEC") to be used to
solicit votes for the election of Barington's slate of
highly-qualified director nominees at the 2025 annual meeting of
shareholders of Matthews International Corporation, a Pennsylvania corporation (the "Company").
BARINGTON STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO
READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A
PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION,
THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF
THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR.
The participants in the anticipated proxy solicitation are
expected to be Barington, Barington Companies Investors, LLC
("Barington Companies Investors"), Barington Capital Group, L.P.
("Barington Capital Group"), LNA Capital Corp. ("LNA Capital"),
James A. Mitarotonda, 1 NBL EH, LLC
("NBL"), Ana B. Amicarella,
Chan W. Galbato, and Joseph Gromek.
As of the date hereof, Barington directly beneficially owns
563,962 shares of Class A Common Stock, $1.00 par value (the "Common Stock"), of the
Company, 100 shares of which are held in record name. As of the
date hereof, Barington Companies Investors, as the general partner
of Barington, may be deemed to beneficially own the
563,962 shares of Common Stock beneficially owned by
Barington. Barington Capital Group, as the majority member of
Barington Companies Investors, may be deemed to beneficially own
the 563,962 shares of Common Stock beneficially owned by
Barington. LNA Capital, as the general partner of Barington Capital
Group, may be deemed to beneficially own the 563,962 shares of
Common Stock beneficially owned by Barington. Mr. Mitarotonda, as
the sole shareholder and director of LNA Capital, may be deemed to
beneficially own the 563,962 shares of Common Stock. As of the
date hereof, Ms. Amicarella and Mr. Galbato do not beneficially own
any shares of Common Stock. As of the date hereof, NBL directly
beneficially owns 17,990 shares of Common Stock. Mr. Gromek, as the
managing member of NBL, may be deemed to beneficially own the
17,990 shares of Common Stock beneficially owned by NBL.
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SOURCE Barington Capital Group, L.P.
