CSV - Earnings call transcript Q1 2018 | Carriage Services, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Carriage Services First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Viki Blinderman, Senior Vice President and Principal Financial Officer. ahead. go Please

Viki Blinderman

made quarter good posted audio to Investors available and Today, We’d conference later to closed. the April like be information, in yesterday was Thank and the can yesterday. press after Carriage our of morning, release, distributed Services you market first after results our tables archive the site Services page will our be release on an on call. 'XX, its be being first Web welcome today is XXth. site. which discussing for financial released has you recorded Carriage Replay company's everyone. of found and the quarter we’ll The supplemental the press conference Web through including the information call

call the statements, Harbor fully in statements management attention with XX-K by Form to with today the SEC. and the report Operating filings Chief and call, call will formal your are the Securities Mark during forward-looking that with Mel XXXX. begin Financial I'd Safe Today's Act more accordance provisions like call Private we management of to associated filed period. on risks Litigation which Officer; Officer; Executive the in will are from Officer. followed Payne, Reform these make with Chief a the from of On question-and-answer Chairman Please Bruce, company's described and other note Ben Chief Brink, the remarks

of Services disclaims circumstances provide these other or information events, this the expectations. assumptions call or forward-looking Forward-looking factors to are the of stated on Carriage updates of based factors, call on expressly as to Services statements, occurrence statements, this available to in conference duty date changes to or or reflect to referred after any Carriage assumptions today.

a reconciliation morning's such the In the in are opinion of comparable included Management's measure release directly periods, certain with will the SEC. the to usefulness measures, regarding financial of the company's addition, measures of the reference press we most course with performance together during GAAP call, historical filings the non-GAAP measures. for such and

to the Ben. Now, call over turn I'd like to

Ben Brink

and Viki, call our organization. everyone to points metric across led the and year percentage but the high death our last businesses the our and a support of spending our first managing This rate year-over-year for Cemetery important full year-over-year segments, dedication teams Home January to in an joined in Carriage increase basis fell overhead improvement respectively. is Funeral the X.X%. and Particularly were year-over-year a was and of performance record High to as of X% was made we and Carriage execution Cemetery XXX results across within fourth Overhead quarter revenue hard platform. revenue increase flat above the acquisitions the us quarter effectiveness measure of best-in-class today. consolidation and average in partners of quarter revenue impressive Services essentially the in and on of reflective work X% results quarter you, a Thank XX%. and has thanks and same-store that our their Funeral of quality

of both XXXX to overhead total fall. forward line as the levered EBITDA across our continue the the increase by a first and in year-over-year of to increase EPS expect revenue diluted as increase into execution percentage federal increase decrease quarter XX-basis driven in tax which of XX.X% a we in we and and rate. field The consolidated for from revenue to and EBITDA first Adjusted XX.X%. to were of EBITDA year-over-year X.X% rest consolidated businesses be share point a overhead As were spending in and percentage $X.XX was of a roughly the move year, a with The for improvement margin a in diluted revenue last per adjusted was quarter in earnings year. lower the broad overhead the

Our last compared XX% effective year. for quarter the to was tax XX.X% rate

we to Free program. Free quarter. cash of X.X and with cash rate reduce overall first be million. expect lower XX.X% doubled of that year-over-year more Total generation lower free a for allowed was also our representing flow to paid severance XX% end flow Carriage outstanding our Great of to reduced as flow outstanding incentive expense benefitted GAAP debt improved quarter due cash forward, debt million estimated by XX.X million Going payment the than the quarter in payments, tax operational tax rate. for $XXX to the million from This Good the from long-term taxes performance. primarily to strong XX approximately cash

Our of debt stood to leverage first total pro as agreement X.XXx adjusted the end the in EBITDA forma at credit defined ratio at our quarter.

leverage. As previously we Xx Xx we our comfortable have between stated, and business are operating

free of our approach of These we on year generation flow. of Carriage be characteristics ratio and longer acquisition free the acquisition end the of finance as cash at to strategic execute range flow X.Xx. and will X.Xx is even targets a our our fact that majority cash the achieved expectation the model within out that leverage expect to activity we can operate given ratio of the We leverage term Xx our

to of I’ll discuss report to our to quarter, Mark throughout rolling right diluted EPS reduction the Overall, chose our not on rest the debt turn And year. really an complete diluted and outlook with lowering about due to shares our $X.XX the we the our The acquisition we floating increase notes. are in that, are entirely over results. an call quarter expected four interest attributable first results adjusted to the roughly range our feel to of good a excited operational X.XX% $X.XX. expense quarter rate was the higher for convertible in outstanding We to and to

Mark Bruce

you, Ben. Thank

ending by underlying be throughout trends XX, months the and results Funeral our and acquired As same-store XXXX sales Cemetery three were improvements portfolios. we to and for good March Ben the shared encouraged in Funeral very the continue consolidated

Operating shared, place weighted XXX% main have it margin. in XX% same-store in focus served Standard families out operations; the number the for and achievement me growth particular volumes Let most to emphasis and possible has operating volume a of which leads we’ve and contract of on dollars color. as drives business. some Standards leverage Standards of model Funeral a a this share We Same-store positively higher because is previously field grow EBITDA growth to Funeral

XX, by EBITDA and three the March volumes XXXX, For we revenue ending by by same-store X.X%, X% field contract months Funeral increased X.X%.

or standards, time businesses in operations Partner short and of businesses and Funeral declustered. improve. most as previously demonstrated EBITDA two in The Managing good high with the see to volumes, a the operations; continued we we Funeral added for a have into in a by term continue three markets businesses Partner impact to focused EBITDA was more decision salary acquired period. commencing we the been where so Acquired expected growth has that the into to part be trending a of had the same-store business introduce the improvements XX recent performance throughout Partner. and We continue benefits led the to over on to decluster encouraged performance expectations be That’s we may overall Funeral Managing and consistent operating XXXX that a in our businesses more single to in group contract Managing businesses by that of is revenue

we measured same-store them have being as previously leaders high-performing the years against portfolio. As their moving Funeral now the Standards acquired to into hold for separate being time while we continuously and occurs businesses process shared, performance of integration takes performance. best for is typically is long improve it Funeral why full local internalize, This practice before five peers

three of between delta we acquired is to saw acquired versus XXXX, news positive is our performance months Funeral XXXX. revenues and The in of field ending fix performance is simply that XX.X% XXXX in XXXX. here. good to XXXX field with EBITDA compared XX.X% businesses nothing in EBITDA the For volumes, XXXX Funeral the trends March very record The margins in in and with contract XX, high comparison XXXX there

As for high framework takes to letter, understand recently earnings performance integration of we their variations steady-state initial full communications previous as we in our and Standards Operating have are years after be of achieve it most our the part into to shared framework. and potential our in many short-term to businesses power expected XXXX integration performance shareholder model culture the

expect by We to throughout continue continued high our Funeral to performance to by more there’s sales; of we teams. continue our and work Cemetery portfolio Cemetery much improvements performance. performance sales the be while encouraged be encouraged do, acquired improving trends

increased revenue EBITDA March XXXX, field For the Cemetery three ending XX.X%. XX, months X.X% and same-store

trends we’ve and the What First and talent As continue. to company always, Cemetery recent expect Then focus we sales on more performance leadership throughout Who, added

Cumby, Station, Miami, Now, High Martinez, Hillier Ransbottom, Texas. Huntington as Huntington, Katy, it’s Home; North Funeral Andrew Beard Lakeland, to my honor Cesar Florida. California. Carolina. Heritage-Dilday is Kyle Cumby Texas. Christi, Home; Services; Charvet, Home; Beach, Jersey. Barry John Heroes. Home; custom, Red New our Duffy, E. Funeral Lakeland Florida. Performance Mortuary; our Day Funeral Higginbotham, Home; Point, Jason Home; Funeral Ken Bank, announce West Funeral Courtney Bill Incardona, Corpus Virginia. Bryan/College Home; Stanfill Homes; Hoots, Texas. Florida. Funeral Titusville, Funeral Mark North Gutierrez, Funeral Seaside Brevard Cyndi Schmidt Memorial High Cooper,

& Sun California. Crematory; Mortuaries Justin Luyben, City, Evans-Brown

turn I’ll call Now, Mel. over to the

Mel Payne

process the that good and decided really a up I reasons as I there a in our one. future. in good why That We to we in release the away it four and was using takes reasons seeding that. but quarter. the come said, to our to history information might line That’s you to But of have XX not base have we is the opportunity won’t one team XX over am for for relationships Phillips mention get company. Ben proud building at doesn’t that not the another not mention that them. We in time, had I owners mean still how The us first gone This to doing we’ve specific of LOI of really relationship, the takes to it and thing with is some did back past mutually be time, first We mentioned of. Mark. part wanted this how to I trust you, takes it business were class relationship to while. speak and and away his to country, want something Shawn quarter what want vet. team it relationship I to reduced the even that of us was outlook in to had trust relationship and it a I and could the some of think at the Thank exchange building press a be really and and nice broken. really and close criteria are are compared stronger vetting will his across go not particular. point very And get for that he time and easy first want But

more that don’t businesses Now in we’ve gotten wasting time fit either driving market. with and better not long-term a those and characteristics efficient better or on and culturally

I we close and this so that mention in And in LOI call is particular because this didn’t often. wanted don’t an see to that

have right our now. We businesses XX on pipeline

information XX All of that’s revenue. XX about memory. vetted. The of we’ve These They’ve my do more first had is in than in approximately serious them activity been underway are million and class. businesses exchange

and review before. pipeline shareholder something don’t of an of X.X where through you larger analytical that larger deeply revenue if businesses have businesses the letter having in in XX I remember read So portfolio our I my our the average is Funeral go markets, million a

other strategic many how of I know. end zero. But gets how better of those beneficial be be it the will have partnership So this through or good mutually won’t of pipeline, framework? business will partnership, in a to a the actually many a those really don’t come

that And the should take don’t anybody we just an so to close. that rule. had I as think negative exception a didn’t it one This is

'XX, read I’m some to more excited we encourage performance is this None feel. thank one the did. feedback really in about next our your getting XX We people shareholder on would we of been years. to letter for through or have I a you to say what recent And year. get 'XX all company. and on possible of company, great good X the I for the more Never you want reporting to prior the a would be the performance. if this to our forward all This look go not you. call, of listening as you just one. your

and it ones it. just report to that lucky We’re enough the talk appointed get about

With you. of you I’ll questions. much, very thank So to that, turn all it over

Operator

[Operator Instructions].

the Paris first Barrington from Our Alex Research. comes question line of from

now line open. Your is

Chris Howe

in for Howe This is Chris morning. Alex Paris. Good sitting

Mel Payne

doing? Chris. are Hi, How you

Chris Howe

doing good. I’m

shareholder of in on letter, the all annual congrats just That’s wanted achieving reading to of on outcomes the range roughly achievement. First highlighted XX. I quite right your say Page

Mel Payne

you. Thank

Chris Howe

of question of – provided? you and on Mel in ago? guidance how unsigned the that in kind to X or maybe markets? very to to versus And new first reference pipeline my in addition My was But that it relates the how the the And lot LOIs potential rolling you question. pipeline overview regard maybe a can it where just regard compares and plan Any that two the next a regard pipeline was annual mix, the the bookkeeping businesses. to quarter a question you answered four XX XX-year the that in to XX to highlighted of well mix letter, shareholder was corridor year with LOI my in give in to general questions a the

Mel Payne

knew This is great would say today This is the Yes, the framework here. myself a joke. to say this of not what company that can Funeral performance And years depth wrote They’re the But to you performance. shareholder lot you relate the achieve. I’m this budget ideas that a good. people about. doing standards operational high performance the are didn’t in in what joke. previously the was these a at relate guiding standards the development knew a pipeline operators and two This eight I the the eight was part in change. the I is field. they never in a with XX% letter. And just performance a corporate consistently compares to out was the pipeline about the not This concept of they financial that. model. serious. call. They generate Washington like top are Two had thank had I years to ago on We’ve too that’s don’t today let’s principles But this XX% that. like, the the I standards idea, of industry, figured going you and because joke. blame no know the level, unless really shareholder to letter, relate the do wrote is a years question What be opposed jokers true. ago. financial I is if longer really and realize question these That’s got for high to linking are years two oh, good over is And easy true. ago for in to that’s after the can this I to it many that as players you going to that to side, But

Washington? We’re take – into we people many taking how

Mark Bruce

XX.

Mel Payne

them getting worst. say, over This with and the a the because having XX getting like what to them when term be they company talking on just me dinners we we their and winners these is that could short two Pinnacle we And never our hook get XX winners like standard I’m people and and there and those passed up get realized kings now, company hard. we’re realized these they and I’m treat do ago Carriage, managed not high businesses Carriage just And we to – with never like portfolio across are days spouses. a in better emails achievement was for queens is emails.

in presence in we businesses and I So have the markets and of want mentioned already finding some letter, small we these shareholder my quality a some more. cities these we’re are top niche

Virginia, could Carolina, they on and to say Yes, who South on Carolina, them. and talking and on we’re California. North Let’s Chicago, are go and are. I there others know We

their We’re know finding pockets. were at didn’t new what and doing, their their who we’re they’re ideas, demographics we growth, shocked their ones and they

this. for everywhere. have It’s You look just to not

I what’s pipeline going am this this to more and consistent. in what coming. And is And about is so be excited

said, And and I a joke. tired joke. hit miss was was of It finally a was it joke. I’m Before it and the

start And a that Let’s while. over. took

We’re good. there it’s and

Ben Brink

Chris, quarter in outlook. are included LOIs bookkeeping this no that question, there four to your are rolling

Chris Howe

depreciation much Okay. to the and and specifically amortization, Mel. cash definitely more Ben, CapEx budgeting forward for I forward? kind you to look so much Carriage. CapEx had in and and horizon was what’s helpful the Thank you one you your just That question regards maintenance share very color, And what for on internally as moving for flow can of as

Ben Brink

assume like the will a last had to higher. – of a We to Yes, flow quarters lot probably good so cash year, so safe balance the it’s were few say off I look we’re I free a first would the last quarter, think the year start. for really really we strong little a

have can you So that on there.

CapEx, of D&A will Cemetery acquisitions were saw really And operating X% be we maintenance And think of increase spikes it year-over-year Cemetery little last the is first our steady. to where terms I Funeral property In first about at same-store higher quarter way CapEx to the sales be which CapEx going you made saw in any consistent the in year. due is revenue. revenue. large the pretty with to an Cemetery what and maintenance to up a and last It’s decreases in of throughout year or X% in the we We I CapEx quarter, don’t along would end good say see year. between tend consistent anywhere and it’s with X.X% a think be we

offline. have So give a specifics, to feel you any other shout me if free

Chris Howe

color. the for much so you Thank

Mel Payne

for lack color. don’t We

Ben Brink

Chris. Thanks,

Operator

the Chris next with question Sidoti. Our of comes McGinnis line from

now is open. line Your

Chris McGinnis

quarter. taking my for nice and Thanks morning. Good questions

Mel Payne

Chris. Good morning,

Chris McGinnis

And letter. great

portfolio just was the of thought really think insight interesting. especially same-store the level I around I Additionally,

out. putting So that thanks for

how question that? kind a to the between last Mel from personnel on Thanks. to follow last pipeline than regards the prior what’s – biggest and the the they not just just a team but was the Just on that in change driving more insight and of question little maybe up provide M&A are and effective and around the the little bit more the

Mel Payne

people long-term Standards and past never about good intentions. didn’t of in businesses wasn’t are had They way one. the question. they here strategic But That’s understand number good very a the the question. a Operating understood markets model, The That performance. the that thinking the who You business extensively and get an volumes. of drive out. and she I’ve drivers, a do in locally you volumes? How put the figure characteristics economic And model, about or written let entrepreneur it he charge

can’t at the where always was You that’s It from. that. like they understood that’s centralized figure out wasn’t and they They fit. top/down a initiatives came what Pentagon. and it never knew It

were So the more understand didn’t they business. a who people, people understand. didn’t and the they with operations the didn’t of And they either. understand but financial it people whatever, or They budget then business them put in also

Phillips So had 'XX of later joined individual what with we an us Alderwoods home. He have head and ran guy now, he West. long then to funeral September a is funeral he and SCI, careers Shawn the

headed was Regional So later this transferred got guy. and He an a it then Partner. was Central the West and operating he the to

high of for these in finding So Managing was he charge responsible standards. to businesses Partners achieve

And heads drivers, a is customized about business and and to [indiscernible]. because results of the It’s economic stuff. – get the understood around Shawn in powerful the hard this Operating he the It this around. produces a for model, methodologies a which high-performance understood lot wrote Standards and the he So language drivers. understood I’ve it’s their industry concepts idea people

need going, and done this know you I’m never model done be anything I’ve business. good. know should to That’s said, about in you the difference. you He it means take that. Shawn, how don’t the I you but know been finally oh, the job. So That said,

of so it he’s these people under guy these he a actually One Managing explain people. him. Now business brought to in He’s standards, can Partner, one tops. was a run under our

nature What the younger work a they’ve don’t part really So supported. they side world we and acquisition you’ve can provide not and And for partnership explain of a grow to idea. over corridors we’re it’s we business a business how they lot of grow in stories, relate and because up layers very share business And at level, got managed, the performance. Carriage, personal out got horror chapels real doing the people, owners strategic business wanting join the not the difference all ideas operating how to to younger people, them eating depth have it’s we financial it’s road because once and new made with and and their novel and finding becomes it them. the the then of new with of

That’s field come work in our know the do business. go doing really then people, here MPs. If the then So meets too know relate didn’t other them; be the it’s that’s this in initially, all references good of unique. the some the of they checking, we’re people And and down to find didn’t a former something. you rubber most nor these or to really they going out see doing But field. before And relate they our of road. top read, it These sit true. people do they if get it owners, people here, now and the difference. people owners, the all from they with then round where come But they

Chris McGinnis

just for That trust that ups talk about makes a remainder you people you due just but I year? little follow a that. the the maybe new thanks the sense in and the around the the and then shorter to place question just asking don’t and know side. bit And have mind the of just Is I on trends second, if little – there? can guess a term two it’s me for improvement Cemetery I around bit

Mark Bruce

Mark. is This

world of May It’s came year Kevin support difference. encouraged who operating to and our experience of and high-quality who other do to team continue Cemetery, out we with Partners made What. the our Who, in XX of but talented the addition to It’s yes. years recent the Managing have performance much in team more addition Then by going of a the the Doherty On has in provided period. we First the then most joined by supporting here last work finding And And experience, sales be them.

Chris McGinnis

Ben nice talk little you year about for the Yes, maybe the And earnings? just there. impact can lastly a if thoughts bit the Great. work the to your then and of just about Thanks. trust reminder

Ben Brink

very with we I the I see performance. we talked were and Yes, think or large that financial large reasons or one-for-one about I apples-to-apples little benchmark last for trust don’t changes. the is our trust positioning we we term the spikes We Certainly about not again now. our below a the for in good are. performance short where EBITDA know to those what revenue consistent our trust and feel where would from performance in quarter any in say was are financial revenue specific very year. be

we the like probably see done cash we’ve the income as last cash market the where shifted equities past the over have waiting or and lot in a which would today. to opportunities more holding nine relative flexibility way. and portfolio it months plus have of just good from to some portfolio continue years. manage fixed to the away And value either towards we we expect for a or just is over that’s to high-yield we than our certainly come We We XX of do normally

Chris McGinnis

Great.

I much Thanks -- that. Okay. again, thanks appreciate And for it. very

Mel Payne

we’ve this decline we’ve got bit that been down buy we for but that that or But for major still been We’ve real ready dry at. days, dips trust, a that scary is a powder. And looking whether happened waiting little some or we and on it then. or we way back ready. when the got On been not,

Chris McGinnis

Great.

and Okay. QX. again Thank you good luck in

Ben Brink

Thanks, Chris.

Operator

showing back you. I’d Payne this turn like At any to questions. call to over Thank further for the closing Mel no time, I’m remarks.

Mel Payne

to have add. really don’t anything I

I a been and quarter. it’s good short think call

Let’s keep you much. very Thank going. it

Operator

program. thank your This in the concludes Ladies for today’s and gentlemen, participation conference. you

day. a have You may all great disconnect. Everyone,

Carriage Services (CSV) 25 Apr 182018 Q1 Earnings call transcript