Matthews International Seeks Covenant Relief as Operating Losses Mount
Credit Pressure
Company Background
Matthews International, based in Pittsburgh, operates two core businesses: Memorialization, which makes caskets, memorials and cremation equipment for cemetery and funeral customers, and Industrial Technologies, a precision-marking and dry-battery-electrode engineering operation. The company also holds a 40% equity stake in Propelis Group, a brand solutions joint venture created in May 2025 when Matthews contributed its SGK packaging-graphics business. Matthews carries a market capitalization of approximately $659 million.
The past twelve months have been a period of rapid portfolio contraction. Matthews completed the divestiture of its warehouse automation business for $232 million in December 2025, followed by the sale of its European roto-gravure packaging and tooling businesses for $41 million in January 2026. Proceeds were used to redeem $300 million of 8.625% Senior Secured Second Lien Notes in January 2026. Despite those debt-reduction steps, total net debt still stood at $529.7 million as of June 30, 2026.
Operating results have deteriorated sharply. Third-quarter fiscal 2026 sales (ended June 30, 2026) fell 29.6% year-over-year to $246 million, and the company recorded a GAAP net loss of $23.7 million. The Industrial Technologies segment posted negative adjusted EBITDA of $(5.4) million in the quarter, and operating cash flow consumed $(69.5) million in the nine months through June. Management cut its full-year fiscal 2026 adjusted EBITDA guidance to a range of $158 million to $162 million from a prior target of $180 million.
What Was Disclosed
On September 1, 2026, Matthews entered into the Ninth Amendment to its Third Amended and Restated Loan and Security Agreement. The revolving credit facility was reduced to $650 million from $700 million — the second reduction in 2026 alone, following a cut from $750 million to $700 million in the Eighth Amendment in February. Simultaneously, Matthews Europe GmbH was released as a "Foreign Borrower" under the credit agreement, reducing the sublimit available to foreign borrowers to $0.00 from a prior cap of $350 million. The company describes that foreign facility as having been unutilized.