CSV - Earnings call transcript Q3 2019 | Carriage Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Carriage Services’ Third Quarter 2019 Earnings Webcast Conference Call.

I would now like to turn the conference over to your speaker today, Viki Blinderman. Please go ahead, ma’am.

Viki Blinderman

Thank you and good morning, everyone. Today, we will be discussing the company’s third quarter results for 2019.

was yesterday release closed. the earnings related made after public market Our website. Services release, the information our press posted Investors supplemental of Carriage the and including has financial tables page on an The archive our audio later November through today being conference recorded website will made available is be on X. and the information in be for yesterday. distributed can call release Replay the found press

special Cain, Financial On Executive Officer; Chief of the Chairman, Officer; myself, Funeral Cemetery. Payne, and and Home call Dewayne today Mel from guest and Haven Rest our Brink, founder management Chief today, are and Ben

will Litigation XXXX. other to Today’s the to make with followed that Reform report Securities these forward-looking with period. with during of call a described note I’d Securities accordance with in Safe associated begin more and management attention Harbor company’s and formal remarks in Commission. which Please the risk will XX-K statements filings by provision your from the statements, Form of call the we are call, filed Private the question-and-answer Exchange on fully the like Act

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

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

to to like call the I’d Now, Mel. over turn

Mel Payne

Funeral XX-year strategy the renewed, Thank you, in remaining wonderful of year best remaining at and of especially our affiliating we markets with to all that full businesses levels, a best dramatic and growth only country. in have strategic of our in and have Viki. returned Home Cemetery execution the our changes reenergized revitalized the company businesses, operational After vision independent

October visionary since home On York, serving Buffalo, about and annually year, funeral of the Joseph largest cemetery X,XXX grown partnered is funeral Joseph whose to to this leadership family Carriage four and XX P. service Under welcome currently Lombardo and the Homes, families funeral Funeral Western in serving Lombardo Lombardo chapels, X, elite from of New Sr., to provider York. funeral families Funeral XXXX. Homes Lombardo founding we single XXXX, dates a Joe, the businesses. New has by approximately with

Institutional in investors, on why other cleaning are competitive often other any us family it call, business dynamics the those matter. best this our the pockets. deep mystifying companies our with than to not I’m industry, consolidation better up use financial this of about that sure very than independent ask often owners, XX/XX, which related to answers Carriage you investors

Funeral I’m Worth into serving has Home introduce in earnings this Texas, funeral honored founder and Haven Leader of Dewayne home combination Metroplex. the a cemetery call, a Dallas-Fort first Visionary Cain, on and extremely company, which today, our for So business, premier to and grown Rest historical in Cemetery, Rockwall,

to cemetery, to includes over The Care its primary over and full-service families Rest and on-site Memories, Center. personal Flower-Box, its service years nearby year. of each City, own portfolio businesses Haven provides Rest the Royse Haven the The same Rowlett From location, X,XXX expanded statewide entire Texas homes Rockwall and attentive Pet funeral currently in Northeast

celebratory the and a Karen Carriage and Anne, Rest closing his contingent We leadership night, at hosted his of large and I, team, closed affiliation in leadership our wife last with a yesterday partnership Haven Haven, senior Dewayne Dewayne and wife, dinner. and and Rest advisory my team

wanted Dewayne’s Rest he this other all recently accepted me to offer of cemetery explaining let Haven. that as he other choosing the immediately for large Carriage could reasons wanted owners company me to funeral solution begin high-quality by number why over succession grow our Carriage and that business acquire suggested to companies call. and role explaining know called help Dewayne our on listening his for chose to company I important a consolidation he plan you of by to new this

and partner, friend, the new is my floor Dewayne, yours.

Dewayne Cain

met for I’m offices that first acquiring can and I was time still my several you ago, homes. then, Mr. his performance you, much, Mel improving impressed impressed philosophy learned homes and of Payne years was funeral funeral during now. that Payne, those the Mr. very Thank Payne. I it tell I was I’ve in what And that

the ago the market and and be we decided made my an to build that XX bid. consideration the spent that firms chose prayer, it establishing. XX that the for that had to showed when months we Carriage five and to was and upon we Approximately thought I I had successor, consider interest After and we wife that time a company years reputation approximately aware would had much submitted

my say I from my and partner. my friend concluding, and that to something In heart and feel to Mel I is sincerely have like Payne Carriage honored blessed that would as as

Mel Payne

they and us, the company, and those That partially were Thank from a words to message mean and as lot heart. clearly a you, Dewayne.

my were while our our my of under mother my Thank operators, Carriage did heavy girl XX Thank happy lifting literally in least, sweety there. you. daughter love not the cemetery gift a wife Karen, formal Karen you, business raising you. comments, home dream and funeral but the historical of I XX-year anniversary, partner just for could keeps the from not I learning who partner, being for I being business giving. children, the some and best be our when was and would feel Carriage, the I of first like Last dream-girl years and first. another son to for wish

Viki Blinderman

right. All

to Courtney in Congratulations in in Performance Hero Funeral note. in Idaho; in Brian California; in Homes, Gatos Jose, going for Home Brevard Havenbrook Charvet, really Ashland, John right continue a two Brian Kentucky; Chapels, Home, Sisson, Nielson, and DeRubeis Garden Steen Gatos, you California Welzenbach, Connecticut; businesses; Funeral Managing Milford, & Home, We’re now Norman, Home Home the Deanna California; Oglethorpe, Washington; the Georgia; Madera, Memorial Funeral High of to Los for Chapel Kerrick, Binion Partners and Friberg, Ben all. XXXX. Funeral high quarter on Oklahoma; of Appel, to Crematory Louisiana; and honored third announce Fischer I am Funeral Crematory, Metairie Cody-White Spokane, of David in in Titusville, Florida; Directors, Funeral Kelly, Valley San Fort Cemetery Miller Funeral Memories Jenny Homes Funeral California. North Dakan Los and Chapel, Alan Nicholas Grant Caldwell, Darling Funeral Hennessey Chen, Park Trent Jay Oakland, Heritage

to to over going the call Ben. I’m turn

Ben Brink

you, you, Thank and Viki. right. thank Mel, All Dewayne, you, thank

field our XXXX company. achieved evolutionary progress being in growth third what determining future, and executed partnering the important tremendous At the changes whether and by Carriage remaining last new beginning the and were return Our EBITDA are in XXXX to across milestones and the finished revenue a progress timeframe, strategic growth, a we with return to towards beginning large to a be fourth strategy the businesses They consolidated year, in organic the Services made as will at back demonstrated the part following operating financial quarter two. most quarter momentum entire in in and to year the margins communicated results XXXX of keys our rapid and gathering investors best markets. we significant the we of independent

the year. announcements have in incredible in results quarter demonstrate Our all third one our recent those made and of in just areas acquisition progress the we

balance May, it the forma the the began most is results of operational investors will of provides the place increase last believe the from of and our the the to most the third my in refer how and quarter quarter. two churn taken press sheet occurred remarks significant cemetery in the primarily a have during we effects divestitures both in results, the improvements year earnings release XXXX, large the our our quarterly and interest to previous for recapitalization as the we reflection we for quarter of pro then presented the and pro of that of in completed our accurate expenses with forma last recent that of our and smaller the financial year, at refer normalized of year-to-date accurate that true the picture with first Carriage. end most loss results fourth nine cost Consistent third reporting performance, contract restructuring and of months quarter I power

XX.X% EBITDA earnings the effects for Field GAAP basis the consolidated $XX third increased related XX%, by million. in XXX EBITDA points million. adjusted and per revenue $XX.X million points EBITDA difference improved quarter improved to the quarter, is XX.X% of adjusted diluting Total of XX.X% divestiture $X.XX basis margin margin $XX.X total normalized In businesses reported to $X.XX. the quarter. caused our XX.X% million, Total $X.X two to share improved adjusted $X.XX primary our X.X% consolidated between increased diluted the to per the The earnings to loss to share to to tax and Field adjusted a XXX related increased EBITDA

XXXX in third that margin to performance in head our of XXX And Field on performance the year of – that XXXX to that acknowledged achieved be EBITDA we’ve demonstrates into third are approximately to the XXXX EBITDA renewal XXXX previous XXXX made highlight period couple we Field points progress our our the basis good recapture There throughout from quarter regarding a point lost quarter. that our The goal XXXX. in reviewing of time increase Total in items goal. EBITDA want margin and year we last the have as results basis would In we I we calls, Total versus in margin performance. majority XXX our Total Field to from

performance, a decisions rate XXXX. seasonality EBITDA teams Total margin our finish X.X% our of in performance and drive improvement Field businesses have throughout improved continuous portfolio quarter improvement in throughout What from perspective. to we to XXXX strong tough increase typically of increasing growth able faster to even Total encouraging to into that into this have Field make ensure the is we EBITDA. month revenue this what operating shows in as and our was diligent the momentum margin each our Given XX.X% leverage undertaken to total more and quarter was we all were a in head work a Again, our necessary the weakest

XX.X%, nine to XXX improved has $XX.X basis was increased million, Total the XXXX, of increased $XXX.X to adjusted first our EBITDA adjusted consolidated EBITDA million, XX.X% and points months Field points consolidated total has margin to to margin XX.X%, Field to share EBITDA earnings XXX million, $XX.X X.X% For our $X.XX. improved increased XX.X% X.X% revenue Total to increased adjusted diluted EBITDA basis per

the Pro at forma hand X.X the the X.X cash times five net end first of end including from of leverage and the to the times quarter quarter. quarter fell at second at end of the times on

to will point within that we our a XX months. the trailing to we the believe be continue We over months. published leverage column, close performance XX Relations website, next five-year the includes trend representing On our the four Investor time’s that report

were, for of important another context, at and bad we’ve made all-time year you XXXX, consolidated a renewal for had year. an trailing last we far record an EBITDA into not In million milestone of time put in XX-month is this where when $XX.X continued this progress sign call our so of we adjusted reported Carriage,

in hold partners Funeral end the taken at evolutionary our as continued changes Home our growth made that each is with demonstrate year driving to guest Operating managing serve annual contract the and Standards results standard revenue opportunity have families. segment quarter and have focus of to versus their third team last our Model Our compound average continue focused to and our growth on to we to rigid of our on client service revenue per a experience we

operating higher revenue year-over-year in years, of particularly as the in Operating that client businesses serve a in. were EBITDA rates we that slightly rates inherent faster families even they Home as leverage contract field – Our Model growth expectations prior kicks to were it that would relates changes dynamic Funeral more and made to Standards the a choosing growth in our cremation average, families lower lead to funeral with would at versus powerful

these of the Funeral third in proved quarter All of Homes. our performance expectations true

$XX.X served in a homes margin X.X%, year-to-date or at last XXX third essentially the increase EBITDA to same-store was improved which XX.X%. basis EBITDA was of EBITDA. same-store funeral For our quarter, to in Field On and $XXX,XXX revenue than our year, increase million basis, flat families to revenue increase down $XX.X Field at led an points of funeral more to X.X% an same-store million. XXX an X.X% Field X.X% funeral

impressive quarter, or considering down to and revenue the prior the Our $X.X year-to-date of are compared same-store X.X% down first after or funeral results year. XX.X% we $X.X million Field and were million EBITDA

We funeral also while a businesses our points an continue the slightly cremation increase in EBITDA year-to-date, have XX.X%. consolidated home of to acquired increased our margins a to revenue points to make average improved acquired performance than Field EBITDA our to XX.X%. funeral progress X.X% leveraged third approximately has margins Field in has quarter. funeral Consistent basis, XX.X%. the basis basis basis with basis less to a acquired XXX funeral in in to the XXX X.X% XXX expectations, to rate – and $XXX EBITDA, contracts and growth We revenue per On declined improved points Field year-to-date $X,XXX, on home

that we revenue very that second our and quarter third operating performance growth, quarter. long-term set cemetery the our and cemeteries. do teams proven cemetery comments, my In me performance believe we to sit sustainable I right exceptional and in margin consistent have XX% won’t and very the stage our year-over-year report in we a happy here for guarantee that growth both another stated sales with that performance while I’m high-performance wrong revenue

tremendous This in basis performance. margin the The was quarter, broad-based revenue the revenue in converted improvement grew Cemetery in year. to leverage the Field great XX.X%, versus field-level the XX.X%, performance Cemetery year-over-year For EBITDA past expanded margin Field into the XXX business over prior XX% our we XX.X% in is operating quarter $X.X year. made our our has both majority basis-point which improvement meant that Carriage XXX the with of EBITDA and grew example another segment the and and of cemetery revenue achieving EBITDA, in operating million increase progress the of points

a XX.X% increased increased XX.X%, margin striking X.X% performance our back is basis, margins Field Cemetery revenue distance to in all-time of has XX.X%, EBITDA cemeteries points an On year-to-date Field in have which has XXX of increased EBITDA Cemetery while and within high basis XXXX.

the months to leading results sales year-to-date sales the direct XX past our in done the upgrades portfolio to cemetery local to Our is quarterly across and our operating work and hard XX a diligent correlation teams to teams performing have leadership company. over higher

and consistent that talent sales sales Coupled the organization. with investments we’ve of with are and capital in building believe we differentiated surface be a remain the cemetery our cemetery results about inventory Cemetery only and and and improvements smart top achieved. incremental cemetery these can performance excited We sales types of scratched infrastructure our first-class

the lower decisions and during last and third quarter quarter last For third we year year last operating expenses of due declining the X.X% represents to year XX.X% that Year-to-date, trends on took at the or the of are for last large when grew the increase made program increased lower and our in expenses based revenue. of we year. year. to booked expenses place renewal we third in quarter, corporate last million had the compensation of initial to end due performance-based the phase overhead accruals overhead XX.X% $X.X of versus expenses for normalized overhead severance expenses quarter The has litigation compared

on We made quarter of the in here expect the these expected fourth Carriage half year-over-year evolutionary variances the and at to we back normalize were in XXXX. based changes

been welcome take his meeting Funeral to Lombardo New like in in and couldn’t the which we has this statements with Homes dedication and that have Joe team acquisitions. built, and the entire impressed more York Carriage his echo Buffalo has Mel’s he Lombardo shown the business business like into in Buffalo, to greater family. to growing regarding company passion his the leading Good Joe service area. reviewing to I’d Joe We’d opportunity at funeral

I team making acquisition, of we the their of work entire this for seamless Lombardo sincerely our excitement and with their Since and possible. in all appreciate joining as transition been impressed equally as Carriage in have

Rest Home and Cemetery the proud Funeral announce closed Rockwall, excited in of Texas and that also acquisition Haven yesterday. to We’re

that with the over Rest his our Haven to and Dewayne the grown have Dallas-Fort We Dewayne Dallas-Fort months funeral and our past is cemetery the XX businesses and partnership couldn’t his that premier in wife, working of Worth weeks Carriage. great amazing be coming with strategic business forward to more first market, home and excited Worth the his collection Over wonderful integration years, a entrance Cain, look process. for created today represent team ensure and We in a great teams Metroplex. the market

acquisitions for what strategy. at year important has these and investors to past over growth of It’s occurred overall the of context Carriage our the put both in for

clear like made that have feel performance, toward businesses. level intended We confident we Joe in results where Dewayne’s restore allocating our to a operating capital we to acquisitions best-in-class and

first that lead as teams businesses Carriage businesses strong owners and of to us. for company. to their businesses and the will the as can’t opportunity independently do us. and they they strategic will is learn considering We the enough about believe decision-making on We homes foremost partner Carriage partnerships businesses just to great being belief value having and well-defined in but them are succession learn of great belief find funeral when options, remaining are the to and best entrusting with an these These for is much that the us best we the their funeral country. right and have the the cemeteries transactions and corporate in and at industry for acquisitions. necessary Joe, and thank that consolidation in long-lasting a the operating believe local beginning, operating planning time the all on these versus belief predicated culture, Carriage, solution and just to a model take the cemetery both of We Dewayne, their decentralized markets are service from our that truly large from owned

will look with to long-lasting We forward both. our partnerships

conviction operating in acquisitions $XX outlook are most a recent fourth improvement to announcement and closing performance, of Given We January, we two EBITDA outlook. range business quarter of the our in we of Letter the our Letter our under million consolidated rolling raising Intent, pending the continued the have of a of reflected these of million quarters and to acquisition $XX a earnings per first currently of in in $X.XX adjusted a part in range for anticipate this acquisition so only three to adjusted performance diluted $X.XX of Intent in currently is share. that

not does outlook announce divestitures, include any to expect two quarters. more do potential next three in the to but we This

We expect overall results. be minimis to operating any de to divestitures

outlook Our XXXX outlook of of to rest for that our our months XX adjusted rate a free due the next rate of effective – $XX million million growth a full being cash versus normalized XX.X%. taxpayer to to at GAAP XX% over the of $XX our rate much tax the a is approximately cash flow lower will return expectation of in

quarters you been next head $XX.X just a high-performance managing XXXX I generated we XXXX. with later, adjusted look I million, At hard four results more those turnaround so EBITDA This the outlook and of cannot end to kind reporting to trailing a to performance are Carriage the teams and enough XX-month home far year. million. office example want the we and year And you $XX work, two quarter all million finish, that’s rolling as announcing $XX consolidated quarter, one of all the before of now the our has incredible you for and teams. partners, tremendous made first leave past the of We does year. early your the of reported for support We of progress to our this out not of dedication thank into happen close without forward we momentum over

open that, And with for up will questions. we it

Operator

comes question Research. Alex Paris from first Barrington our And of Instructions] [Operator

now Your open. is line

Alex Paris

I Karen. And Congratulations on for everyone. to four-quarter a outlook. say and morning, to anniversary great wanted call. a Good to Dewayne, quarter, happy aboard the a on being rolling welcome and Mel great thanks

Mel Payne

Alex you, support. and your all for of thank Thank you

Alex Paris

you. Thank

very front the the couple of also, happy So a I’m on activity to see M&A for reasons.

that at First, dig to it at I operationally restarting the of versus focusing these homes, average you’re with point comfortable the see is what of sort I an its the families mind. wanted Rest ancillary which is idea complete on And Services into Carriage to don’t size, more markets X,XXX specifically the is large last largely price potential and Dewayne’s My terms businesses cemetery, best-remaining you signals served year. just and you’ve that best three M&A. in with call if at remaining businesses little question per or in that a pricing get corporate through Haven what Haven, what I’m to is bit then it his asking? M&A grow, a done funeral Rest revenue are on business,

Mel Payne

Dewayne Dewayne business when lines trial is it until he in that. our are experiments goes of gets I tries and these one lot he by of lines and a of does out answer I’ll studies right. and businesses. And by is of gets couple it intrigued in, guess innovators it follows it era and and the industry. a intrigued in bit great not of that a He we something,

that is in at looked business. the he Memories We’ve the So, around Pet country.

have a he member has family business that in family put We has Pet when dearly been the place large rapidly is and that connection the many itself it beyond loved family who Dewayne the has the successfully figured Worth and haven’t found emotional a area, area. very out between out have Dallas-Fort pet by a growing Memories a people, figured Rockwall in die. that they

quite very into locations. four own as Dewayne, If – and get, imagine, And spread it online software that business for would – cremations created has is we smaller. proprietary three four average that’s into an or is three software. The He he in also is innovator you He now? is his growing a or business.

haven’t seen we’ve The these but any business methodology, of Carriage. because of we’ve new two business volume talked I per unit the for which about now share so lines all example overall and a decided greatest of right revenue And revenue those are not lines average small. in the revenue is on of it, two of, reporting are

to going in our normal break out that we’re So, reporting.

cremation co-mingled with which get doesn’t great funeral a cemetery distinct. area in it Dewayne separate our business, normal business the cemetery and including has normal So, that business, is Rockwall and

in And and so more on clarity local quarters. businesses, get and report majority our putting And business as of you probably be that has the and on ask business us to we the great will the one funeral, core, funeral could and see in revenue more Alex, combination the various homes, will his we that two integrate. here got questions or have But clarity two when the answers we cemetery is he area. and the cremation

Alex Paris

you. I’ll be Good. of the appreciate and for Well, color the I patient detail. thank rest additional that

Next Haven? wanted this ask question also Is keeping opinion. my with is bit in one an related, I’ve big little activity LOI. I a acquisition about already Ben to Rest awesome as recent Lombardo with had a you Lombardo, conversations and in in which the well and

Mel Payne

it’s a is combination acquired cemetery there It’s right – of California. prime. restructuring and midst portfolio some is in one. our then this portfolio are that of XX first and our owned have just in he and is our primo in the California a is and later second it’s These the Yes, known San this, divesting This best about it out, who in went think the the Wilson, our under Jose. I of cemetery XXXX, one guess our – he business We we into job. two shrinking cemeteries. largest StoneMor Executive largest I there, and Northern Mark biggest part check that years. control company, great We’ve it When this cemeteries of of it. When we new is say the best in big for business Chairman a people chairman a can a were ask and middle who their and people, and doing about I

through will business. we people and our the gaga, in And So, January our Northern very And just in in a portfolio. beat. overheading it first-class out premier will this into early fit a the of it funeral went was miss home possible to California company, that portfolio. it everything divestitures And operation. won’t our are It large cemetery close

Alex Paris

thank Well, Great. that. you for

question, providing the Ben, a Are I you last on forecasting? think for the I So Is pro you’re year-over-year relevant year? anything website for it because more Ben. making it’s just from year on forma this forma right now comps, last and available guess. or the basis. pro quarters available

Ben Brink

It’s acquisitions? a related to question the

Mel Payne

the... of more No,

Alex Paris

– No. yes. Not

Mel Payne

Alex, don’t It’s posted do press more of in list results we them the pro forma the currently lookbacks. the them have on website. the We release.

suggestion and We the website. that post will afternoon. go Thank for ahead on you this those

Alex Paris

of your had activity progress operational restructuring and you. That’s restarting new on M&A when very from Good. given your as we should long-term roughly Carriage expect helpful. right Thank And then question, the we Services? hoped, outlook last can a we when – expect scenario the

Mel Payne

lot out and of it. recent a at for is through the the first normalized quarter. everybody through is making a quarter, performance. It operational focused in won’t on of we’re the be totally later because thank to still and roughly activity the with the put fourth in achieve XXXX, maybe first the asking internally, XXXX, we Alex, moves trying quarter That quarter, and fourth to beginning we question, sustainable company what’s third the and a quarter, We’ve at scenario we you a great least the have than discussed year right will all that – or when come, after this either

second deeply the businesses to investor back improvements, clean, creation in who – of and forward XXXX they get shares, what I’m we’re fourth and we close laid been to out. the broadly, we’ll and level close really quarter. But I best to minimis want And in we really say, people I homes in want it’s for said divestitures and the having not the have the need good will And portfolio normalized I very were be be to the want try vision want to time five value quarter with spot the quarter including think huge being has fits the of company and do. really look real some XXXX. – next sorry, third bought that and make to very want this return they to enough performing because in our home next pointed Even sweet a We prior funeral an level years. anything, years and to this if then they go though would the that, five that and and office, for should de high for XXXX you. tweak do years and cemeteries, performance didn’t, when the We out did after for XX XX company to

Alex Paris

I’ll Well, thank much. you. great. be looking Thank that’s you so to forward it and

Mel Payne

Alex. you, Thank

Operator

Instructions] you. next And Thank question Company. Sidoti from comes our with and Chris [Operator McGinnis

open. now is line Your

Chris McGinnis

Thanks over operational the and week were I about Hi. half? other quarter, of the prior. Good How congratulations just rolling my to on accomplishments ask versus about all wanted the for that much improvement four taking guidance morning. you uplift. the the maybe and last acquired that assets is a quarter, or questions the talked and the

Ben Brink

that we percentage I that. back been with know account do can’t conservative a ensuring And operational into we get three putting from continue. out it’s On – family. think improvement down But and that know have these have head, and does the that year, Chris. can at you I go include some acquisitions outlooks Carriage – we’re we’ve integration the I the don’t expect bringing really to to on look these it we this break – we process can we where hit. that I momentum taking my on we I into businesses to through think

Chris McGinnis

Okay.

Mel Payne

I’ll bit a little land add more the Ben. then, on

and is real-time this a achieved And people of and to lot really, contribute never I They you point business. going really portfolio do really goal in and in at look by a idea business consolidated that think on to if by and beyond. from been that case, the has fourth can across historically And on would that business, our the better. of portfolio margin. are milestone – what’s to our feedback industry, this want perform quarter there business you through going things and a get get Carriage on, to a EBITDA XX% we are there basis because to case that’s want be that level by

up make first And deficit. push of I the XXXX, performance control fourth in prior-year it But a quarter, expect we the we’ve a prior made the couldn’t And season the of of and think lot quarter the Ben end it flu way of for two at last things we that up. because to the up. quarters, mentioned more

EBITDA. portfolio it if up, to existing quarters in would of $XX at at to portfolio to you quarter – were that fourth look first the $XX it for could million you million four the up XXXX; trailing get think a it’s close quarter EBITDA. the look that same of – So, out all of all not end at probably the for I And you XXXX, of

that’s that you our add sky, was range the million, $XX we’re a Ben And And the way, million optimistic. is gave you what to $XX whatever with So joined on overly not or being – by fabulous million, businesses to have the pie begin $XX portfolio. in get new range. existing on our it million to and that is then to increase the company done $XX

Chris McGinnis

in there the Yes, that’s two, a contribution was the great improvement significant. quarter EBITDA so pretty

other Haven maybe, of and know, is Rest expansion I acquisition likely the that focus as on I the mean, services well? the touch you up open does look, to some offers, for Just for that portfolio to on your up that open that funeral, innovations prior other this just but and some haven’t sounds you does in they like you options had it well? traditional have as

Mel Payne

absolutely. morning. Yes, I’ve about and this that Dewayne as recently talked as

learn credibility had the to these a business. going and had a that from We’re me lines and I of other the none track mean that people record Cain but pitch the this, years, of new studying Dewayne on I has. them lot over

idea the about idea but from is me surprise going and just to we’ll learn learn just the them. about a couldn’t we to and business, Buffalo. But cremation for so had best also I time you meant. Dewayne be this was, ago, the businesses. I strategic the with his And affiliate best. what But what – to look business, and had only we’ll the have it’s And pet learn that’s this market with online what did been we’ll And biggest big new as us is no it long that over we’re that to a a time we meant be we wanted

people industry, affiliated a reputation never assume kind is truly you before, in the you you you’re the that the and when so the we’ve keep, This you that owner of with come who keep company And as market online in opportunities by like been the can upon you and new well. business if the known expect business and really the lead fully with. other And you grow become and of this where some lead other that we to market. pet to Dewayne’s and to we to only the business possibilities expand company, that’s to best businesses, into

Chris McGinnis

bit you sounds Thank for LOI know Great. one the little Rest talk a – And then a Can you. came it’s took – deal – and guys the a you LOI? maybe, long worked question. them there the Haven Lombardo about don’t on or came just with where for if the that long just early sounds close maybe to little bit to time, talk to like I how too different. last been time more have about you just a It

Mel Payne

that job I think that and a only great rather we with Chairman delay would worked I is Axelrod, he situation. StoneMor say to we Yes. doing very will of clean closely up Andrew that

Chris McGinnis

Yes. I appreciate.

Ben Brink

as we acquisition, just speak and Chris, that – I to close announce we’ll that more business then. that And we’ll think,

Chris McGinnis

time good. you today much and very for the in Sounds Thank good luck QX.

Ben Brink

Thanks, Chris. Appreciate it.

Operator

And question Fargo. you. next Duncan Brown of our Wells Thank from comes

line is now open. Your

Duncan Brown

for a wondering leverage so clip to back sort it doing get has if addressed. can But already morning, had and where good also us deals. for help taking this funding, to to like you if about, sounds sounds hop thanks I certainly pipeline, question. late, on us little apologize I think and plans you be more robust. the was continue been to targets, relatively – I the of Hey, more in you of want sort then if remind M&A

Ben Brink

our process communicated the Yes. was recapitalization in between was and the four X.X of balance target times that we to What sheet leverage. times operate the company

think LOI, the is and I we current X.X times think have I and under the outlook a acquisitions still given in target. plans great realistic we have, our the that one closing these both

Over will through flow. generated internally next months, XX operational that the and cash come both through improvements free

around a we’ve I at were you Duncan, X.X we year, basis, quarters, we’re think and the end pro turn. if leverage you if the X.X made – of quarter on this at just look almost times, in two first at progress forma down the a

times. We’re at X.X

that’s So, how we’re to And so just there we it think encapsulates then that’s I quickly able delever. at right down debt pay and look how far.

going attractive, balance are funding forward; we’re line revolver but primary there comes of and way acquisitions rates our to anything. what our through fairly I our think that on going The depending be method will if of credit.

Mel Payne

It’s those challenges. out respond we’re this see interesting I’ll Yes. This it’s it’s performing year. And all of and been and to been our ever just to We’ve than inspirational than – an that. people challenging add is higher come to to been had better going Mel. ever.

go is now – I through between a equity year-end want think based and think selective. We are doing that of nine months, that with what company the leverage the adjusted point and up to that on we with fourth not to the we’re highly And are so consolidated be sure investors here very XX.X% do comfortable to and EBITDA wary we’re going there But margin expect quarter. has. I make

the at consolidated EBITDA hit to did was adjusted a public make basis. not which year, the of XX% an goal beginning we on margin Our

I that. close to think come we’ll

you so leverage, want we considered when the risk. have a XX%, XX%, a the don’t high on cash more you And be company generation little revenue with per high approximate dollar or sustainable run leverage can but to basis

back These of and unique, are businesses we’re we them. closer to come along get here, yet seeing don’t So, one to of that four, often want a kinds the just and business. kind, very this down in you don’t find

find and and find And do returns that them are to And have you find it, diminish. want because to – you do so motivations, returns. increase to great not of a want when will I think earn a way investments you time these – you decades will you alignment over the do for

mature unique rather are typically and a these to so And find business. is very what

try we flow. in going then to when so get through to they get them we’re are And who find company. leverage cash And that those, and the know going we’re our to free after we’ll down

Duncan Brown

Thank Okay. you much. very

Operator

over And Thank and Mel like any Payne, now does for conference our gentlemen, to question-and-answer conclude ladies I turn you. would this session. closing back the to remarks.

Mel Payne

were great they’re years. team stress-tested These you. a honoring they’ve ready surrounded comments. with me up Dewayne, Believe at been Thank all for and and putting you, I’m Karen us with for me, to today. Thank by questions Thank your these great you, Carriage. presence go.

year time, So, on much. year. our game you to very full bring we the it in and forward we’re early look for ready there, out reporting Thank

Operator

conference gentlemen, participating. call. and this Ladies Thank today’s concludes you for

disconnect. now may You

Carriage Services (CSV) 29 Oct 192019 Q3 Earnings call transcript