| Information About the Company's Segments |
The following table sets forth information about the Company's segments, including a reconciliation of adjusted EBITDA to net income. Segment financial information for the three and nine months ended June 30, 2018 has been revised to present the prior period information on a comparable basis.
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Three Months Ended
June 30, |
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Nine Months Ended
June 30, |
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2019 |
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2018 |
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2019 |
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2018 |
Sales: |
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SGK Brand Solutions |
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$ |
181,930 |
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$ |
202,976 |
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$ |
557,881 |
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$ |
601,794 |
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Memorialization |
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158,217 |
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161,979 |
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474,279 |
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475,557 |
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Industrial Technologies |
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39,147 |
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46,666 |
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112,711 |
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117,785 |
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Consolidated Sales |
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$ |
379,294 |
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$ |
411,621 |
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$ |
1,144,871 |
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$ |
1,195,136 |
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Adjusted EBITDA: |
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SGK Brand Solutions |
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$ |
29,891 |
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$ |
37,003 |
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$ |
86,612 |
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$ |
102,954 |
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Memorialization |
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36,075 |
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39,677 |
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101,361 |
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107,598 |
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Industrial Technologies |
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7,278 |
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8,241 |
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15,665 |
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16,809 |
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Corporate and Non-Operating |
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(14,290 |
) |
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(15,709 |
) |
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(42,015 |
) |
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(49,198 |
) |
Total Adjusted EBITDA |
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$ |
58,954 |
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$ |
69,212 |
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$ |
161,623 |
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$ |
178,163 |
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Acquisition costs (1)**
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(2,980 |
) |
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(3,519 |
) |
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(8,386 |
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(9,309 |
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ERP integration costs (2)**
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(2,355 |
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(2,710 |
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(6,337 |
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(8,278 |
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Strategic initiatives and other charges (3)**
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(1,037 |
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(647 |
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(3,149 |
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(2,862 |
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Loss on divestiture (4)
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— |
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— |
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(4,465 |
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— |
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Joint Venture depreciation, amortization and interest expense (5)
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(866 |
) |
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— |
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(866 |
) |
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— |
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Stock-based compensation |
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(1,156 |
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(2,399 |
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(6,169 |
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(10,531 |
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Non-service pension and postretirement expense (6)
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(951 |
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(1,426 |
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(2,852 |
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(4,276 |
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Depreciation and amortization *
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(20,483 |
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(20,066 |
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(60,759 |
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(57,052 |
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Interest expense |
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(10,508 |
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(9,719 |
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(31,068 |
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(26,782 |
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Net loss attributable to noncontrolling interests |
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(205 |
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(69 |
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(541 |
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(201 |
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Income before income taxes |
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18,413 |
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28,657 |
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37,031 |
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58,872 |
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Income tax (provision) benefit |
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(3,989 |
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(4,312 |
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(4,429 |
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18,703 |
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Net income |
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$ |
14,424 |
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$ |
24,345 |
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$ |
32,602 |
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$ |
77,575 |
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(1) Includes certain non-recurring costs associated with recent acquisition activities.
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(2) Represents costs associated with global ERP system integration efforts.
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(3) Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels.
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(4) Represents a loss on the sale of a controlling interest in a Memorialization business.
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(5) Represents the Company's portion of depreciation, intangible amortization and interest expense incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
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(6) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.
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** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $449 and $2,299 for the SGK Brand Solutions segment and $5,923 and $4,108 for Corporate and Non-Operating, for the three months ended June 30, 2019 and 2018, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $467 for the Memorialization segment and $2 for the Industrial Technologies segment for the three months ended June 30, 2018. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $3,858 and $5,484 for the SGK Brand Solutions segment and $14,014 and $12,979 for Corporate and Non-Operating, for the nine months ended June 30, 2019 and 2018, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $1,397 for the Memorialization segment and $589 for the Industrial Technologies segment for the nine months ended June 30, 2018.
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