THE FACTS: DEBUNKING MATTHEWS’ CULTURE OF DECEIT
Matthews’ False Claim: “Our Board and CEO have strategically positioned Matthews for long-term success.”
Shareholders’ Reality: In the last 18 years, Matthews has invested $1.8 billion to increase revenue by $1.1 billion while the Company’s profitability and share price have declined.1 This was a poor use of capital, no matter how many times the Company tells you otherwise.
• Over the last 18 years, Matthews’ operating performance has significantly deteriorated, its total shareholder returns have underperformed the Company’s self-selected peers and the market, and its share price has tumbled.2
• Rather than take accountability for their value destruction, Matthews’ Board and CEO continue to rationalize long-term share price underperformance by redirecting blame to recent challenges in the Company’s energy storage business.3 Look no further than the numbers to uncover the truth. From October 2, 2006 (the day Joseph Bartolacci became CEO) until November 2, 2020 (when press articles first linked Tesla’s 4680 batteries with Matthews dry electrode capabilities4), Matthews’
share price sank by a staggering 37.8%. 5
• Adding insult to injury, the Board and CEO continue to pin their hopes on Matthews’ Industrial Technology businesses, despite their apparent limited understanding of this segment, as evidenced by continuous setbacks such the Company’s ongoing failure to launch its “innovative” new printing product since 2017. Investments in Industrial Technologies totaling $371.4 million during the last 18 years have not created value for shareholders, according to our analysis.6
Matthews’ False Claim: “Our strategy and governance are overseen by our actively refreshed, diverse and fit for purpose board.”
Shareholders’ Reality: The Board is radically entrenched and long tenured, lacks accountability and relevant skillsets, and has demonstrably failed in its duty to serve as a good fiduciary to shareholders.
• Three of the 11 directors are current or former Matthews executives, and five directors have been on the Board for 10 or more years. According to leading proxy advisory firm ISS, “a tenure of more than nine years is considered to potentially compromise a director’s independence.”7 We could not agree more. We believe these tenures undermine the Board’s independence while weakening effective oversight and decision-making.
• The Board has idly watched as CEO Bartolacci has eroded shareholder value for nearly two decades. During Mr. Bartolacci’s entire 18-year tenure, Matthews’ share price declined by 20%, and the Company’s Common Stock (including dividends) significantly underperformed its self-selected peers and the market as whole.8
• During the tenures of Matthews’ incumbent nominees, Mr. Garcia-Tunon and Mr. Dunlap – who have either been unable or unwilling to hold Mr. Bartolacci accountable – the Company’s share price declined by 19.3% and 40.3%, respectively; total returns, including dividends, were a paltry 1.4% and disappointingly dropped 9.9%, respectively.
9 Furthermore, Mr. Garcia-Tunon’s and Mr. Dunlap’s experience in industrial engines and steel, respectively, offer minimal value to the Company, as demonstrated by the percentages above.
Matthews’ False Claim: “Barington’s nominees do not enhance the variety of skills and expertise on our Board.”
Shareholders’ Reality: Barington’s nominees bring the public company board and leadership
experience, sector expertise and commitment to shareholder value creation that the incumbent Board sorely lacks.
• Mr. Galbato has experience on more than 20 boards, including at 6 public companies; Mr.
Mitarotonda has experience on more than 18 public company boards; and Ms. Amicarella has experience on two public company boards. We are unsure how anyone can make a comparison between the board experience of Barington’s nominees and that of the Company’s nominees. Mr. Nauman has no public company board experience beyond a three-yearstint at a micro-cap company, which lost 76.3% of its market value during his tenure. Similarly, Mr. Garcia-Tunon and Mr. Dunlap have watched Matthews’ share price plummet to the detriment of shareholders during their Board tenures. (See above)
• Mr. Galbato has overseen superior execution and M&A, including at Avon Products (formerly NYSE:AVP), where investors saw share price appreciation of 49.3% from the time he started as Chairman through the sale of the company10—a level of performance we could have only longed for under Mr. Garcia-Tunon’s Chairmanship at Matthews. Furthermore, Mr. Galbato has relevant industry experience that the Board lacks, including digital distribution and business models (for Memorialization); commercial printing and building products (for Product Identification); automotive (for Energy Storage); and iot and intelligent devices (for Product Automation).
• Mr. Mitarotonda has extensive capital allocation experience and a strong track record of successful M&A, including as a director of Ameron International Corporation (NYSE: AMN), Avon Products, Jones Group (formerly NYSE:JNY), and Omnova Solutions, Inc. (formerly NYSE:OMN). The closing price of the common stock for each company increased by 25.4%, 21.6%, 26.0%, and 13.3%, respectively, from the day he was appointed to the board to the day each company was sold. 11 Additionally, Mr. Mitarotonda brings an owner’s perspective to the boardroom, as reflected in his ability to challenge long-held assumptions, to make difficult decisions and to act resolutely to create long-term value for all shareholders.
• Ms. Amicarella’s has a widely recognized track record of superb execution. As CEO at
EthosEnergy, she doubled EBITDA from 2019 to 2023, leveraging her more than 20 years of
experience running P&Ls. She gained extensive manufacturing experience during her time at
EthosEnergy, which produces a variety of energy equipment, and Aggrekko, which manufactures and assembles all its rental equipment. Moreover, she has experience transforming companies by helping boards and leadership teams address performance challenges.
Matthews’ False Claim: “Barington’s four-step plan presents no new ideas.”
Shareholders’ Reality: Barington has put forth a comprehensive plan for Matthews to create value for all shareholders, not only during this proxy contest but starting in December 2022.
• Barington does not take launching a proxy contest lightly, but in the case of Matthews, we had no choice. Throughout the entirety of our consulting agreement with the Company, we observed that Mr. Mitarotonda was kept at arms-length. His involvement was siloed and his ability to add meaningful value was stymied. To this point: the Company withheld any materials from him that were not publicly reported and the limited meetings he was invited to attend were closely supervised by Matthews’ general counsel.
• As an engaged shareholder who has created tremendous value for companies, Barington understands the value that can be gained from a consulting agreement. Look no further than the two other times we were engaged as an advisor or consultant. At L Brands, Inc. (formerly NYSE:LB) and HanesBrands, Inc. (NYSE:HBI), we worked closely with the boards and management teams to deliver value for shareholders. The share price of L Brands increased by 221.5% during our tenure as advisor12 and the share price of HanesBrands increased by 95.2% between the start of our engagement and December 31, 2024.13 We still believe that if given the opportunity to meaningfully engage with Matthews, we can deliver positive results.
Matthews’ False Claim: “Barington’s misguided proxy contest”
Shareholders’ Reality: It appears that Matthews only began to take action after Barington notified the Company of its intention to launch a proxy contest.
• Over the last 18 years, the Company has failed to take any action to simplify its portfolio, conduct a strategic review, reduce costs or indebtedness, or address Board independence. Rather, Matthews pursued a path of diversification, allocated capital to grow revenue without regard for returns, increased costs, and fostered poor governance with inexperienced directors.
• Only after we repeatedly challenged the viability of the Company’s investments in Industrial Technologies did the Company announce a strategic review of these businesses.
• Only after we called for the departure of CEO Bartolacci and nominated new directors was a sale of SGK Brand Solutions announced.
• Only after we highlighted the lack of true independence on the Board and questioned Gregory S. Babe’s role as a director did the Company announce that Mr. Babe would not be standing for reelection at the Company’s 2026 Annual Meeting of Shareholders.
• The election of Barington’s nominees is critical, in our view, to ensure the Board takes all steps necessary to unlock the Company’s full value potential.
SIMPLY PUT: FACTS DON’T LIE. FOLLOW THE FACTS AND VOTE FOR CHANGE TODAY
We greatly fear that without our nominees, the Company will be emboldened to continue its status quo path of diversification, rather than simplification; capital allocation, rather than capital preservation; rising costs, rather than expense reductions; and poor governance with radically entrenched directors, rather than good governance backed by highly skilled, new directors focused on value creation.
We thank you for your continued support,
James Mitarotonda
Chairman and Chief Executive Officer
Barington Capital Group, L.P.
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