Greetings. Welcome to Matthews International Corporation First Quarter Fiscal 2020 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded.At this time, I’ll turn the conference over Bill Wilson, Senior Director of Corporate Development. Mr. Wilson, you may begin.

Thank you, Rob. Good morning everyone and welcome to the Matthews International first quarter 2020 earnings call. This is Bill Wilson, Senior Director of Corporate Development. With us today are Joe Bartolacci, President and Chief Executive Officer; and Steve Nicola, our Chief Financial Officer.Before we start, I’d like to remind you that our earnings release was posted on our Web site, www.matw.com, in the Investors section last night. The presentation for our call can also be accessed in the Investors section of the Web site.As a reminder, 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. Factors that could cause the company's results to differ from those discussed today are set forth in the company's annual report on Form 10-K, and other periodic filings with the SEC.In addition, we will be discussing non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. In connection with any forward-looking statements and non-GAAP financial information, please read the disclaimer included in today's presentation materials located on our Web site.And now, I'll turn the call over to Steve.

Thank you, Bill. Good morning. Let’s start at Slide 4. For the fiscal 2020 first quarter, the company reported consolidated sales of $365 million compared to $374 million a year ago. The fiscal 2020 first quarter reflected higher sales for the Memorialization and Industrial Technologies segments compared to a year ago, offset by lower sales in the SGK Brand Solutions segment.Higher cremation equipment sales and improved price realization on caskets and memorial products were the principal factors in the Memorialization sales increase and the sales improvement in the Industrial Technologies segment was primarily driven by higher product identification sales.For our SGK Brand Solutions segment, consistent with the last fiscal year, year-over-year sales comparability was affected by the loss of a significant client account which occurred during the first fiscal quarter last year. In addition, lower sales of cylinder, surfaces and engineered products in Europe and unfavorable currency changes contributed to the decline.On a GAAP basis, the company reported a loss per share of $0.34 for the current quarter compared to income of $0.10 per share last year. The loss on a GAAP basis for the current quarter primarily resulted from non-cash intangible amortization of $17.9 million, $0.43 per share. In addition, the current quarter included cost of $10.3 million or $0.24 per share related to strategic initiatives most of which related to our cost reduction program.On a non-GAAP basis, adjusted earnings were $0.47 per share for the fiscal 2020 first quarter compared to $0.50 last year. The decline primarily reflected the decrease in consolidated sales and lower operating income for the current quarter. Adjusted EBITDA for the fiscal 2020 first quarter was $40 million compared to $46 million a year ago.Investment income for the fiscal 2020 first quarter was $1.3 million compared to a loss of $1.4 million a year…

Thank you. Good morning. Our first quarter results were in line with our expectations. Several of our businesses exceeded our expectations, while several fell short. Together, however, we met our targets and see some positive trends in several of our business.First, as you are aware, a year ago this quarter we lost a significant SGK account in North America. This past quarter was the last quarter in which we had revenue from that account. With that in mind, relative to our expectations, the SGK Brand business reported higher sales in North America and in the APAC region during the quarter.Unfortunately, our German businesses, particularly our cylinders and our surfaces business, slowed as tobacco and surface orders, particularly tissues and flooring fell short of expectations. Despite these challenges, we remain positive on our business as early signs of increased marketing and product innovation at several of our customers should help us meet our expectations for the balance of the year.Similarly, as we’ve discussed last quarter, the engineering portion of the business is seeing strong interest in their energy storage solutions for lithium-ion batteries and fuel cell production. Our intellectual property and knowhow should lead this group to good year-over-year growth this year and beyond.As I noted last quarter, we have received a large order from a significant customer in the energy storage business. Together with our customer, we are finalizing the design and capabilities of this equipment that we expect to be delivered in the fourth quarter of this year.Regarding our Memorialization business, despite a decline in casketed death, this group delivered solid results. Better price realization, higher cremation equipment sales and growth in ancillary cremation products allowed this business to grow. We continue to expand our business for stone monuments and especially private mausoleums and cremation solutions. This market has…

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions]. Thank you. Our first question is from the line of Dan Moore with CJS Securities. Please proceed with your questions.

Good morning. This is Stefanos Crist calling for Dan.

Good morning.

Hi, Stefanos. Good morning.

Could you give us some more detail on the $25 million annual cost savings, maybe where we’ll see that on the income statement?

So over the course of time you’re going to see it as a reduction in our overall corporate class, what we call our back-office functions. And I would tell you out of the $25 million, $5 million to $10 million at most would come out of that. The balance is going to come out of SGK as operating costs.

Got it. And can you go into a little more detail around the energy storage, maybe the potential size of initial orders going forward?

So the initial order is upwards of $20 million or more as we finalize our pricing. I can tell you that our backlog continues to grow and we continue to quote extensively for projects ranging from 2 million or 3 million, upwards of 10 million to 15 million as well. We’ve been doing this work for a couple of years. It’s not something that is new to us. But I would tell you the industry as a whole has been more in the test phase rather than in production phase. Now that we’re moving more towards production phase, we expect to see a more consistent revenue stream here, although choppy, from a quarterly basis and we expect larger and more production-related equipment as we go forward.

Thank you so much. I’ll jump back in the queue.

Thank you. [Operator Instructions]. Our next question is from the line of Liam Burke with B. Riley FBR. Please proceed with your questions.

Thanks. Good morning, Joe. Good morning, Steve.

Good morning, Liam.

Good morning, Liam.

Joe, Asia Pacific had an influence on the SGK business. How does the coronavirus factor into what you expect out of that business in SGK for the rest of the year?

Frankly, Liam, that’s one of the areas that we are watching. Right now, as many of you know, we do a lot of work in the Asia Pac region. It is the source of a lot of our production. We’re very proud of that. We operate in principally four or five locations. One of those locations is China. And China today is small, but it is shutdown for us. It’s been shutdown all week. We’re cautiously both looking at what the impact it is to our P&Ls going forward but also taking steps to prepare for any other shutdowns that we might have, having to force work move to other parts of the world to be able to produce. So we’re cautious as everybody else in the world is. It is unfortunate, but it is a part of our focus today.

Okay. And how did private label do this quarter? And how do you – what kind of outlook do you have for that business in 2020?

So we continue to gain accounts. Private label has continued to be a significant part of our business and growing. Although in the quarter this is a seasonal business, you’re not having a lot of new product launches in the quarter. So our revenue there is not what you would say stellar. But our expectation on a full year basis is that this business will continue to grow as we take share and frankly as – we’re the leading provider of private label services for packaging in the globe today. So we’re bullish on this part of the market.

Great. Thank you, Joe.

Yes.

Thank you. As there are no additional questions at this time, I’ll turn the floor back to Bill for any further remarks.

Thank you, Rob. Again, thank you for joining us today and thank you for your interest in Matthews. For additional information about the company and our financial results, please visit our Web site. Thank you and enjoy the rest of your day.

Thank you. Ladies and gentlemen, this will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.