Ladies and gentlemen, thank you for standing by and welcome to the Matthews International Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today’s conference is being recorded. And I would now like to turn the conference over to your host, Mr. Steve Nicola. Please go ahead.

Thank you, Brad. Good morning. I am Steve Nicola, Chief Financial Officer of Matthews. Also on the call this morning is Joe Bartolacci, our company’s President and CEO. Today’s conference call has been scheduled for 1 hour and will be available for replay later this morning. To access the replay, dial 1320-365-3844 and enter the access code 331303. The replay will be available until 11:59 PM August 1, 2014. We have posted on our website, which is www.matw.com, the third quarter earnings release and financial information we will discuss this morning. On the top of our homepage under the Investor tab, click on Investor News to access the earnings release. For the quarterly financial data, click on Financial Reports to access the information under the section Matthews International Quarterly Reports. The documents are presented in a PDF file format. Before beginning the discussion, at the advice of legal counsel, I have been advised to read the following disclaimer as it pertains to forward-looking statements. Any forward-looking statements in connection with this discussion are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from management’s expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the company’s results to differ from those discussed today are set forth in the company’s press release, Annual Report on Form 10-K and other periodic filings with the SEC. In addition, please note that the balance sheet, income statement and cash flow information provided today are preliminary data, since our quarterly report on Form…

Thank you, Steve. Good morning, during the quarter we had a very good performance from two very large projects delivered out of our Merchandising Solutions division and our Cremation division. In both divisions, successful project and production planning allow us to deliver solid results from these projects while continuing to deliver our normal business. These divisions are to be commended for a job well done and reflect our ability to ramp up production when necessary. Our Marking and Fulfillment business continued to improve versus prior years and is seeing traction with its new and innovative products. We have seen good backlog growth in our fulfillment businesses and strong shipment of traditional products in the United States and Europe. Generally these markets have been precursors for overall economic growth or decline. So the increased activity is a good sign for all of our businesses. We continue to expect improving performance from these divisions into fiscal year 2015 and beyond. In Memorialization business, our volumes were generally in line with the casketed death rate, but challenges in a couple of mausoleum projects negatively impacted the quarter in Cemetery Products. It is also important to note that many of you who have been shareholders for a very long period of time have heard us reference operating profit target a mid to high-teens for our Funeral Home Products division. We have finally attained those goals and we expect to continue to improve from here. Looking forward, as Steve indicated, we expect to close on our Schawk acquisition of SGK sometime later this month. We have been involved in an in-depth planning and I am pleased to confirm that we continue to expect $95 million to $100 million of incremental EBITDA over the next 24 to 36 months. We have many challenges ahead in the visibility on a quarterly basis remains cloudy at this time, but directionally we believe that we are on the right path. As I just stated our quarterly visibility is cloudy particularly in the near-term. Purchase accounting, integration costs, increased interest cost and increased share count, all combined to make the balance in 2014 difficult to foresee. I am pleased however to confirm our original guidance of $2.62 to $2.70 on our traditional core businesses despite the SGK transaction. With that, I would like to open it up to questions.

For those of you who will be asking questions, we request that you limit them to one question and a follow-up question until all those who wish to participate in the Q&A session has had an opportunity to do so. Brad?

(Operator Instructions) We do have a question from the line of Daniel Moore (CJS Securities). Please go ahead.

Good morning, thanks for taking the question.

Good morning, Dan.

Can you give us sense of the size of the two big shipments in the quarter, both the cremation sale as well as the merchandising display project?

Yes. The merchandising project was in the neighborhood of $12 million, $13 million and the cremation, the incineration project was about $10 million.

Great. And then just to clarify guidance, obviously, it’s adjusted to excluding non-recurring items, does the 2.62 to 2.70 adjusted include any potential initial dilution from Schawk or is that excluding Schawk?

No. That is looking at our Matthews businesses pre-SGK.

Perfect. Okay.

And we do have a question from the line of Liam Burke with Janney Capital Markets. Please go ahead.

Thank you. Good morning Joe. Good morning Steve. Joe, if we adjust for the mausoleum sales in Cemetery Products how have lean initiatives contributed to the improving operating margins. And then how much progress has been made on the electronic ordering side?

We are at the initial stages of our electronic ordering side. We have about little over 80 customers who are online. Some of our larger customers are anxious to get on and between their challenges of integration and our availability frankly of capacity we think that is yet to come. But with regard to lean initiatives, I think the best way to phrase it Liam is that we are improving our margins everyday. We exclude that there wasn’t a sales impact from the mausoleum, it was purely operating profit. So that we excluded the impact of the mausoleums, you are seeing the return of up to decent operating margin percentages in our Cemetery Products businesses.

Great. And on the marking and fulfillment, how many customers have you added on the fulfillment side of business now?

I can’t give you exact number on the number of customers, but I can tell you that we continue to expand new customers and expanding within existing customers. Our backlog is pretty strong in that business. So, we are expecting fourth quarter, but more importantly rolling in the 2015 to be a pretty good year for those folks.

Great. Thanks, Joe.

And we do have a question from the line of Jamie Clement with Sidoti. Please go ahead.

Joe, Steve. Good morning.

Hi, Jamie.

Steve thanks for the approximate revenue contributions from the incineration and from merchandising. It sounds from your commentary and in looking at the press release that maybe some of this work came a little bit sooner than what you all were expecting. So, are we – it sounds like some of this work continues here into the September quarter about how much?

It’s guess difficult to tell, Jamie. One of these – in both of these businesses, we think there is probably 20% yet to come or so. The challenge really is, is that in both of these cases we are not complete. And when you look at the incineration product, we were out on a percentage of completion basis and will recognize full revenue and operating profit when we turn it on before the end of the quarter. So, at this point in time, we think there is more out there, but we are being cautious with our guidance on that.

Okay. So, Joe, it sounds like the – I know in recent years having to do with cost savings and that kind of thing. The seasonality of the business maybe has been a little bit distorted, but over time it seems like there is a natural slight seasonal drop off between the June quarter and the September quarter. And based on your guidance, it sounds like you are expecting that this year too, right?

Exactly, right.

Okay, great. Thanks very much.

(Operator Instructions) And our next question here comes from the line of Jason Rodgers with Great Lakes Review. Please go ahead.

An update of the tobacco-related orders in Graphics Imaging, how those are progressing?

Jason, we didn’t hear the beginning part of that question.

The tobacco-related orders in Graphics Imaging, the labeling requirements just wanted to get an update on how that’s going?

It’s interesting I just got some information from one of our largest customers just recently where they have been holding back frankly on their order rates. We are expecting pretty good orders throughout 2015 and ‘16 since we have not received everything we had expected and they confirmed that to me in an e-mail. So, we think more is coming.

Okay. And then you had mentioned in the Cremation segment about a possible opportunity in China last quarter, I wanted to see if you had an update on that?

Yes. Unfortunately, we did not win that one, but we have landed on about another three or four large potential projects similar to the one that we did in Saudi Arabia that we are bidding on at this time. So, we think incineration becomes a – is becoming a more important part of the business albeit lumpy, but on our core Cremation business, a pretty nice little addition.

Yes. We have been invited to bid on those projects.

Assuming you win one of those three or four, could we see potential revenue this fiscal year from those?

No. It will be – I mean, these are – these generally are fairly large engineering projects. We will be seeing it in next year.

Thank you.

And we do have a question from the line of Daniel Moore with CJS Securities. Please go ahead.

Thank you again. Realizing obviously the deal hasn’t closed, anything incremental at all you can share about Schawk business, the challenges and/or opportunities obviously you have reiterated the EBITDA – incremental EBITDA expectation, but what other thing incremental are you seeing, Joe, as you look at the opportunity in front of you there?

Well, when we look at this, I mean a lot of what we – as you know when you go through an acquisition, you start the process through due diligence without being able to expose yourself on the transaction. And I am pleased to tell you that we have pretty much confirmed a lot of what we thought was out there. The opportunities exist from a customer standpoint without significant, I would say overlapping risks from our customers we think that our product mixes, the addition for example of Merchandising Solutions to the offerings that SGK has whereas adding some design capabilities in the European markets where we don’t have anything today. We think that those remain positive. We have been very, very, very pleased with the quality of the team that has been added to the group. We culturally seem to fit pretty well and they are good guys to have on the team. So we are pleased at this point in time. What really it is Dan we are left with execution and execution will be the next 24 to 36 months and it’s on us. Right now no negatives coming out of it, all the positive we expected to being confirmed and we are bringing on a good team to be part of our organization.

And their U.S. business was relatively soft in Q1, any sense of what the tone is kind of graphics imaging type businesses, the climate in the U.S. as we move into the middle of the year?

Yes. Their businesses remain soft. We are going to start to talk a little bit more about as we go forward is our proposition with some of the largest CPGs. They have wonderful market positions within a lot of CPGs that does not change abruptly, and it’s just a question of the marketing spend of those organizations. We are expecting that to pick up a little bit more in the second half although it is not necessarily in our control to drive those sales. Having said that, we see some cross-border opportunities that we think we might pick up a few opportunities from a customer standpoint, and/or project standpoint globally.

Got it. And lastly you touched on tobacco anything in the proposed combination of Reynolds American and Lorillard that’s good, bad or presents an opportunity, anything you may comment on there?

Not significantly for us. The Reynolds folks spend – do more of their work in the United States as you are aware and we don’t have a large percentage. Having said that we expect consolidation in the overall tobacco business, particularly outside of the United States since there are still more businesses over in Europe yet to be consolidated, but we do business with just about every single one of them as the largest provider.

Good, appreciate it.

And we do have a question from the line of Scott Blumenthal with Emerald Advisers. Please go ahead.

Good morning Joe. Good morning Steve.

Good morning Scott.

Gentlemen I am sorry, I got dropped kind of in the middle of all call and I got on a little late for Q&A. So if I ask a question that’s already been answered, I apologize. Can you talk about maybe the margin profile of the incineration project, is it similar to the existing segment margins that you would get for a Crematory?

Yes, Scott, it’s a little different than a regular crematory, but I would say in total that it would be in line in general with our total Cremation segment, obviously because it was significantly incremental. You saw a nice bump in our margins for the year – I am sorry for the quarter. And actually it bumped our margins – our year-to-date margins as well. And I just think in general, I think those projects are the same whether its cremation equipment or incineration.

The only thing I would add to that Scott is unlike our Crematory businesses where we know that when we deliver it’s going to start up, we have some startup risk on a project of this scale that we think we have added – really prepared for.

Okay. And since it is a little bit riskier Joe, you priced that I guess?

Yes, so you need to follow within those pricing parameters.

Okay. Are there ongoing engineering support costs or is it kind of maintenance tell that we go along with this?

There are always going to be parts and some maintenance, but probably not as significant as you might think of a scale of this size, because this is done in Saudi Arabia. We worked through partners in that area and I think we are still working those arrangements out.

Okay. And I guess my follow-up would be that this is very meaningful during the quarter, more than 5% of the quarterly sales do you think at some point you may have to break this out as a different segment?

We are having some internal discussions as this becomes more prominent part of our cremation business whether we need to look at this differently, we will probably have more indication of that as we go into next fiscal year.

Okay, great. Thank you.

We do have a question from the line of Jamie Clement with Sidoti. Please go ahead.

Joe if I can ask a follow-up just on the comments about some of CPG graphics business at Schawk. Is this just more of the same kind of SKU rationalization and just sort of temporary slowdown in terms of, for example, serial box changes and serial box launches and that kind of thing that we are hearing about from some of those customers?

Exactly, right. We are looking at SKU rationalization a little bit what I would consider lack of innovation in the product development and/or packaging, but at the end of the day, that’s their bread and butter. We expect that to return, I wouldn’t call it seasonality as much as economic situation.

Yes, absolutely. I mean, I think that’s been pretty well discussed by some of those customers recently. Alright, thanks very much.

(Operator Instructions) And we do have a follow-up question from Scott Blumenthal with Emerald Advisers. Please go ahead.

Gentlemen, can you give us an update on some of your web-based ordering initiatives that you have been working on over the past 18 months or so?

We have started the rollout on our Cemetery Products side. It’s been at very, very, very favorable reviews on the project. As you might expect, there is still more development. It will go on. I think this will be an ongoing process for us, but we are still early. We have about 80 customers on it at this point in time. Some of the most – some of the larger customers are still anxiously awaiting they have their own integration issues to deal with, but we will see that change, we believe our material change in our order rate as well as some of those anticipated benefits whenever one of some of the bigger guys come on.

Do you have an idea, Joe, as to how long you think that will take? Have they given you any indications?

No, I wouldn’t say they have given us any indication. Our teams have spread a little thin at this point in time also working on the SGK transaction, but I expect that over the next 12 to 24 months, we will be up and running.

Terrific. Thank you.

(Operator Instructions) And at this time, there are no further questions from the phone lines. Please continue.

Alright. Well, thank you, Brad. We would like to thank everyone for participating in the call this morning and we look forward to our conference call and fourth quarter earnings release in November. Thank you and have a good day.