CSV - Earnings call transcript Q3 2020 | Carriage Services, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Carriage Services' Third Quarter Earnings Call. [Operator Instructions]. I would now like to turn the conference over to your host, the Carriage Services leadership team.

Viki Blinderman

Thank you, and good morning, everyone. This is Viki Blinderman, the Chief Accounting Officer. the quarter discussing for be we'll company's results third XXXX. Today,

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

On begin Chairman and President Analysis; the Chief formal followed management with of Officer; question-and-answer call Financial today Chief Brink, will Acquisitions & Steve from remarks management from Metzger, are: Mel Ben a Vice Operations by and General Payne, Officer; Counsel. period. Schappaugh, Peggy call Executive Today's

in differ to do call to our from their the of on assumptions implied begin, this during forward-looking results, our and number other statements estimates, on it in applicable undertake Before at and business Form except them on laws. issued plans, be reflect about circumstances forward-looking everyone to statements like measures, the statements. actual to results our call, These that securities statements future this press report our after website. time reports turn expectations, the was forward-looking SEC. we would the changes Form company's assumptions these call, statements of subject we reconciliation provide make remind over as annual Certain may make We of constitute this including quarterly obligation or not financial and measures, found whether the non-GAAP contained results I'd we variety beliefs current of of performance other forward-looking that, statements on in in our regarding to to a law. with factors that Mel. basis these with factors, referred a under any light call, a to updates or make yesterday on can I any or and events, reviews filings and expectations will by revise be or date or the on of of including in risks future that this may required XX-K, are earnings and equivalent that expressed and And XX-Q to like uncertainties materially factors may Please note release GAAP statements events,

Melvin Payne

simply a than company. lot It's the Viki. I is quarter our whole what to say a to beneath release public. anything to this everybody Thank lot this in lot. another would of reported for call. you, on state There's like a won't share we about of all I that release. And covers is wanted Today, information release I communications do other earnings And earnings of quarter. of the a little the with our that

in and the true special and humbling warriors common partner, our pandemic So never and with amazing very same who and so most. crisis. On teams, and after cemetery company months making field for directors the anyone people X executive of thank high-performance with our year the counting shocked for over the p.m. portfolio a place support, and unite been record battle have of sales heroic more any employees about it employee service Attached my courageous of battle when their The to heroes. months the X:XX of of you and X-month funeral this businesses and performance Houston and and families Directors, and behalf the year, frontline of people by last special coronavirus sales a of leadership have Carriage's partners of families been a and every X I about every for release, than our continuing health their went country performance full by in Carriage both coronavirus every our a remain and X leader cause life economic noble of honored inspired managers our leader, write especially all what managing is months it and press Center. have support to leadership on "I out and group quarter managing by and communities. a communities very quarterly serving client for out was your support many this release. client teams went in for Support This every our manager, yesterday or enabled of to work in achieved you as third all of earnings team truly our Board to last

it finish the of generates a and of when lot this in out, the lot and a do attention. Let's recognition the Now company. strong, year We goes communication best, all Mel."

have Carriage call. so from people we'll this So the on country many across

as And and morning X:XX speaking a.m. I encouragement from "Mel, reading I now get you one. of Loren for responses many of often So hearing thank communications. at you it, this. And I'm them words they Forastiere it. these to But your to read It's hear just just they're enthusiasm. I'll this know kinds not

role The looking where the partner you, managing have And one had it's couple for the I know a business, I subject We and to is and our who business a to in we Frank, Springfield, been his to came flexibility will the you're call. And only? members big members has how growing the 'XX. They getting the Frank getting call council of How the hard about the market related have the Thursday, when working of Thursday. Loren Carriage joined sure Frank slowed, pandemic. all the and on family didn't. business he we off Massachusetts. need business, enhancement tell coming month. forward they're the But support And for you going in share? of Loren growing of pushing from. Forastiere of of Loren. I'm you years we daughter, higher rotate even business outbreak name, passed business. COVID standards much revenue on And where what not Forastiere. October and by with weeks original while daughter to serving know team I'm the the is partners he to Every hear it's a the main We to ago gaining is was the over are this to Services. leadership wonderful awareness It keep within Carriage it We but each market call." united. been and is am ready much not the families of how you're is your the their this mention is and last when always Loren, are doing, share? smaller truly is

team like. you Ben meat you thank going of is Carriage. this of and to what So Because to looks little the example I'd it put what's the what do. bone over really on your turn like to exact for a across With on that, transformative broadly

Carl Brink

on you, the today. and us everyone Thank Mel, has you thank joined call to who

a is in to the the high theme continued brought performance our of These our XXXX our completely quarter performance. we and ability managing of see third all our the results their is that And of all demonstrate coronavirus adapt the high-performance of the operating flywheel effect. and partners standards to a by reflection momentum also aligned extraordinary strength on company in transformative the teams full challenges the Carriage crisis. in Our face areas company and rapidly unprecedented model, levels entrepreneurial at decentralized is quality of of innovate

results share these to with excited today. are you We

results, the our financial year-to-date third operating performance metrics reported all records. For and quarter and were of

of is I the our allowed leverage EBITDA, total operating adjusted higher creation financial to important growth consolidated organic value growth that As and diluted share. Field impact leverage adjusted results, in EBITDA per review dynamics to and into the and Carriage recognize rates earnings it revenue full

consolidated EBITDA total to of increase in the to basis a $X.XX XX.X% improving Total And improved the Adjusted XX.X%. XX%. consolidated to revenue, of months EBITDA increased our million. the EBITDA EPS XX.X%; points Operations basis an XX% earned Field increased For Vice to to the earnings EBITDA, $XX.X XXX $XX.X of turn quarter, our I And points Field adjusted EBITDA increased President XX% XXX XX.X%. million million to basis increased points EBITDA for total At increased diluted industry-leading XX.X% an of to margin Schappaugh, adjusted EBITDA XX.X% $X.XX Year-to-date, third review EBITDA call operational total of XX.X%. impressive first Adjusted million. total margin margins we $XX.X has to margin the consolidated $XXX.X million. point, has $XX.X million. or improved Field Field X to Adjusted points consolidated XXX with to Acquisition increase $XXX.X an Adjusted over & diluted this Analysis, Peggy? quarter. for basis increased performance. Peggy $XX.X year. of per our will to Total XX% million revenue share XXX increased XX.X% of

Peggy Schappaugh

EBITDA and and our businesses, every they first an managing our to the homes able Houston teams. managing one good and high they the their are ensure to work, partners, their still partner, share while people XXXX, and grit we country, about true of margins, to of Shawn foremost, but funeral teams serving privilege as our our and pertains started and were the partners relates of on adjustments centrally managing country. to everyone. them led owners concerned creativity were truly our abundance not give thing Best partners focus insight remain to hard across In to CDC managing provide be to to, have PPE pure to mind outstanding focused growth morning, maintaining wanted you, gave revenue made Thank as to COVID on margins. motivating also to and our When gathered families. our here is managers partners to hit of guidelines. Ben, and to a so the honor margin. safety It Because our in The regional it incentives produce and Phillips, their the opportunity some disperse the on of more time our to it less further an still only and cemeteries that charge sales higher family This Being peace service performance

of up EBITDA Funeral Home X.X%, Home points. acceleration net management partners. propelling same-store uncertainty managing X.X% year-to-date immediately same-store of So the Funeral when XXX intuitive while increase hit, same-store an Field an revenue margin from year-to-date to XX.X%, there was from September September our COVID was of up the was expense XX.X% basis

million basis. being quarter the behind continue three, in to XX.X%. in in closed strides event, million net improving great three an increasing made two two, two were to in also three, our on annual in managers same-store cancellation sales. bringing sales Cemetery quarter quarter and our being $X.X new within to from of quarter partners quarter XX.X% margin two the from in the XXX,XXX we quarter operating margin finishing to due able XX.X% revenue Ming to to largely Ching we our $X.X in at a In Cemetery year-to-date XX.X% behind bring on three managing sales quarter acquisitions, to gap margins and net increase net Our After revenue of quarter year-to-date same-store flat X Cemetery see operating operating revenue,

We that each first work businesses done continue has January of to is performance years our note higher freedom make and to the gives decentralized relates team. made our XXXX support from quarter, of reflects the just grow managing partners the beginning each and which thing even these and power to to important is of partnership X results, continue markets. large these their operational even ability and accelerated higher great our these the translate with even managing stronger. And year into XXXX, of to the by at the our is leadership teams in our into to amongst acquisitions, were many most The locally at next at as acquisitions the integration the will This end model, partners with businesses the the and of which which improving see their the proved margins it make strategic of since of X decisions pandemic, come. large to continued that being

and of as experience. the they restrictions guest differentiate But focus stimulated amazing revenue beginning safe service has the adapt our were creativity able everyone. and and we our put were experience guest create an new remarkable compounded and growth necessary place adjustments in a The standard, So X intense introduced our At ways. truly for make service of began to and and quickly rebooted level guidelines during standard CDC in and even and creative standards XXXX, to added we to the value families place, in simply families. of juices The to was components: pandemic ourselves serve in with key something net and the goal the new restrictions this to each XXXX. the that personalization was more has witness. guidelines been But creative been on

groups if of time services found that drive-through having Our what service or families ways a to the unique have more visitations or holding for and with family in service honor meant small love they the give agree their people RSVP to outdoors. even a and important lives to or conducting need, visitation doing friends, people their one,

had time On an our since. third our cremation an and our picking second we up families. of XXX safe ideas addition, have increase ever offer to businesses, We a become or no entrepreneurs. to vast restrictions from a our live it's and of been a the number saw the celebration the to our there the a pandemic. really quarter but funeral families of possible managing basis, innovative rest not of majority with from basis partners an in a more that, same-store cremation service those go early cases. year-to-date X.X%. increased is our and market with of the converting ideas educate share average way about in and being focus a of attending the growth choosing But growth April. growth. quarter and averages, COVID. with new did disposition. of cremation person, that to Due averages standards at service. during local 'XX, cremations inspiring of we above on remain both has that participate type gatherings, burial increase reboot homes that same-store overcome an We which end point into on the We talking our our these had upward service service dip in seen our see Funeral in X% burial average March, year. homes revenue families, average XXXX, At spirit mean disposition. in continue XX the in have of funeral only through net we we is just type this market And true lowest were at of market virtually. of beyond and share put grow effort trend our value to creative In does we is on A don't year We believe It this on won't restrictions next in Home increase a we cremation average show saw them COVID put in feel They approximately opportunity that what have cremation to knew as dedicated specifically, share each give streaming on the XX% cremation lift when when continue those the believe some in starting into we our now of will that And shined But more taking in of away with the to life. in this emphasis an versus businesses calls cremation on end

our family everyone creative touches about of This few with transforming that ways many of every unique the take people our would how service. us family time memory. so them occasion a the a the as just provide We directors connect honor to ones. funeral and examples and to with simply lasting listen and loved each great into incorporate stories a that unique to share service, I share like their how attends have stat interest to share and heard stories to allows

place small make that touching they grieving know moment This the a are down with to parade producer close their family for customized for vinyl to losing things These their that business music husband to grieving that would service. I'll give all life. a the memorable former And to sports lasting attending the wooden Street on final the the business he teams unique it apply close a to that are family over seem create the that him for replicate because be unfortunate leaving had someone casket back impact a only cards someone have anyone at them, a favorite who idea parade to love lost family opportunity an knew people service. they in to someone hand out made that, for have is We of so the brand always business they wanted the has was of. such very the of touch resting create reminder but life and Main may to so who had another the memory when proud businesses of but service, of to they his is their of another that in just insignia Ben. not them. laminated in, position One rely another our organized a that how honor. And a for a looking can of And someone our tickets they turn miniature the on to

Carl Brink

Peggy. Great job. you, Thank

repositioning execution revenue of and successful our marked full third was our of time trust period first quarter EBITDA. of the the financial in portfolio fund reflected the strategy effect The reported where

at trust our up we value recurring The amount the the positioned in portfolio. XX% increase million the our and appreciation from upside from trust funeral while revenue the our to of long through cemetery increasing preneed primarily our the in annual coronavirus trust, of annual execution crisis the perpetual recurring care press recognized $XX.X our contracts over income further release, market fund from our significant capital trust and detailed this As generated portfolio to the the currently depths cemetery in portfolio prior approximately is income of for did $X.X fund increase a Initially, strategy. recognized million, work will generated recurring be annual of term. benefit income

quarter, revenue XX.X% third million, in a $X.X XX.X% quarter by third earnings. the financial to increased increased compared year. the last of increased Financial to EBITDA financial trust million to margin For driven and points increase EBITDA to XXX basis cemetery XXX% $X.X XX.X%

we year, financial and be repositioning Next prior XX% EBITDA between an revenue execution $XX financial expect EBITDA and from financial increase $XX.X million to almost approximately million our of to million, $XX our the strategy. of

$X.X overhead financial accretive percentage adjusted our ability revenue updated scenario. higher overhead of support be and revenue, flow and forward, in Going to increased our to leverage while million reflected a margins to adjusted our EBITDA will are Overhead measure milestone of EBITDA the consolidated this that the XX.X% in and our X-year quarter. consolidated recurring as platform, of -- adjusted third fell level cash significantly free

increase annual the incentive for The Best was incentive increase the in compensation of quarter Funeral All our for awards. Home the in Cemetery our Being to and accruals, primarily due overhead an

a higher of field the at accrued end fully We quarter. compensation are for incentive now the

update by serve. we family was we for and XXXX on the high-value have point gains, driven X-year Carriage Peggy service revenue an compound to every in annual to to sales growth, personal opportunity deliver important our share operating mentioned, model a As as to experience market standards the local turning focus late

accruals able to Our at their with local growth Best overhead their forward managing in in standards teams business allocations achieve future. incentive annual share looking The they Being profits when the to program. in of the least XX% our field our and partners no are incentive their of compensation for I'm continued

in to debt operating led reduction extraordinary quarter. generation third performance the flow an free strong Our cash and

cash The For the value down of this negotiated intrinsic cash Carriage. our margin continued capital outstanding free quarter. cash of and beginning our available This of revenue to XXX.X% represents in able notes the expanded the the grow during expansion X,XXX of subordinated quarter, percentage to cash the points greater flow third $X.X adjusted of of flow X.X% $XX.X million $XX.X basis million adjusted adjusted that margin were to quarter, increased is X.XX% in privately debt our flow included our XX.X%. pay free generated to equal responsibly repurchase free We a of our debt at to as convertible million transactions.

Oakmont we the January $XX down total million have For paid and equal on close debt Park is of post the XX.X% Mortuary debt, year, Memorial to of of outstanding which our X.

well million now currently for our expect are expectations the end ahead the be outstanding debt of we total reduction. $XXX We of approximately to previous by our debt year. And

leverage on a The turn Carriage to the our combined the ability to quarter. of our now full an by end through debt to EBITDA, decrease quarter. to basis the our at net and our X third consolidated reduction rapid leverage amount into X.Xx in adjusted our pro the not Our adjusted fell leverage able and substantial consolidated of lower demonstrates operate but only commitment the reduce profile We at to forma EBITDA quarter growth future. with accelerating ratio a debt were due over large the of during absolute

expect leverage We by approximately year-end year-end by and below X.Xx ratio our be Xx to XXXX.

leverage million. currently expect and X incrementally our our Funeral rates next of sell transactions look Home During to be field growth for total the real XX businesses accretive time and complete or quarter total profile will quarter, and the of $X.X a margin the profile by we businesses $XX organic We million These be execute improve third segment. for transaction the around approximately divested refinancing estate in substantially second will of excess year. of proceeds proceeds same-store to to we

changes tax tax also recently CARES law passed was receipt refund in Act. helped a $X related by in debt made million the Our federal quarter the the repayment to of

and $X will to expect prior XXXX. the the receive we in full cash million taxpayer additional year an of a to end again be refund We

As over our ratio. will outstanding next focus X primary and the debt-to-EBITDA have made we for quarters of the stated, we previously reduce the total be continuation reduce significant progress our have to capital allocation leverage debt

of rapidly existing when high-yield positions next become transaction to X credit unsecured Our X.XXX% refinancing our notes on they year. improving profile Carriage callable execute a June of

We of expect a of share to pursue the assumptions this transaction more our throughout growing succession cost reduce allocation while also home profile and funeral cost capital. and be opportunities, minimum allocation cemetery annual the to the be steadily solution lead conservatively businesses to will the rolling invest partnering within of free strategic fourth final improvement industry; increase vast cash acquiring X-year all to a points, a in as to range interest a capital our by of scenario and will time. funded shares, piece dividend $X.XX our an After minimum of leverage in refinancing over interest best of by a reduce our cash will our XXX will repurchase who quarter at portfolio; remaining of add will a million minimum of strategy basis our our $X included projects material cost our flow. The remaining these majority completion and a transaction recurring per This as by on of flexibility updated growth basis. modest in in value Carriage maximum have outlook. our opportunistically These updated are transaction, including and and our planning creation this financial country, choice Carriage milestone the capital in our look of earnings

free annual Board by Directors onset and of of $X.XX increase $X.XX decision second coronavirus This as our XXXX the the dividend the excited additional in our and projected crisis by share. flow. announce of dividend annual At the performance. share, increase our $X.XX per $X.XX of XX% future pleased our year be and are marks our We to million to cash our an represent sign will per to since increase payments confidence in dividend per $X.X adjusted approximately viewed be should

target dividend Beyond and free of of a updated and X-year rolling a to the announce and X-quarter show a beyond. XXXX, approximately dividend Roughly our X% shares. market milestone will in flow expectations of pleased Carriage significant price both adjusted performance outlook Right cash on XXXX XX% also our an Scenario We're through that we yield increase updated policy

of We and industry-leading XXXX. expect we performance cash million XXXX $XX be flow over XX% milestones adjusted milestones met in margin and important whereas of consolidated achieve EBITDA $XXX those consolidated year in over previously adjusted free company adjusted million earn expected to this to EBITDA and

cost between $X.XX We diluted XXXX, year, in also $X.XX the and in growing $X.XX $X.XX to capital lower now to expect growing to to $X.XX when and earn we adjusted per in a earnings $X.XX structure. year share and between this XXXX have further full effect of

work categories our as have we improvement sustainable trust third this view to echo both existing ways, results sentiments local preneed multiple tremendous and sales, our company to recent these while a disciplined performance our And performance like year-to-date that efforts. are variety crisis and believe fund full set We we've and post year finally, in the a our this readily We increased entire Funeral all revenue we and property leadership them the Cemetery at to exceed out of segments from cannot goals market quarter finish portfolio these the growth of from leaders share team, the X coronavirus EBITDA dedicated forward as in and take through thank the the of expectations cemetery expectations by enough expectations I'd improved before of of We refinancing our in and in past allocation strategy. the their repositioning achieving transaction. the continued results and across teams attainable capital savvy see the and margins, in continued improvement preneed our major performance our and portfolio financial Home look We and impacted acquisitions XXXX byproduct opportunity years. or future. for our entire in strategic have through impact to over higher two us opportunities increase continued through them our recognize to strong a

in reading our our Mel's who For to new evolutionary study visit and curiosity you letter Carriage would those beginning and key drive earnings materials concepts have to in time encourage are dive the into I materials, releases website second-longest and our one give a And cemetery X-quarter X-annual subsequent further consolidator tenured and visit course. years, reports. trend Steve? almost our that, detail General will are investor home host, or and XXXX Senior yet, Carriage's the Then to and our Counsel deeper and highest-margin socially Vice a and transcripts come us, of that of Houston call, fastest-growing, Metzger. the for us about based or funeral investors shareholder the a to These XX-year call journey first I call transparent Steve over press President, will with high-performance distanced, and with turn happy for culture. for the U.S. We're better

Steve Metzger

in for today's bit your isn't surprised. General morning, good practice first and Mel When actively these I in to everyone. asked earnings call, It admittedly, me Ben, you, to Thank participate exactly a Counsel participate standard calls. was

may Mel, always there's that, that time, goal at know idea unorthodox. with longer-term the a bit a an to I However, seem

teams well the this that their every with our with the all a another with to appreciate to as about little partners So are to with day teams the request, investors the managing morning. help came Mel, drive being as who collaborating have more performance able I and shared the value Ben you of Peggy and scenes share about our different behind more and I the thought more the one

mind, is it generally and to team have our a talk for support our me So the real teams about opportunity center with to in legal specifically. more that privilege

preparing said, remarks, in if have response. who those be Mel's on by that of Now asked consider. only "Steve, to my surprised Mel will I things X He follow like there's you to cover. he'd And me not listening, you anything Carriage, direct particular for routinely I

a There or mean and simply response, it results as go out trust what direct to as to believe our people is, That one-size-fits-all with and that EBITDA said, perform. good often has well in terms you is as First, like then of heart anything approach to all from you financial rather "Say what but playbooks prepackaged the at performance. our long are that and of talk ideas pretty exemplifies EPS. at mean scripts And say." the it as about mindset are company." I viewed The he in short and no then and do follow metrics, generate

inspiring reference see they a of However, to as partners behind uniquely Peggy it's their those talented often, and this a they who serve continuously their adapted to they've do as ways how responsible leadership and lead nothing watch. environment are to special time each and every teams, skills and that continuously individuals. non-pandemic to so the And of in mentioned, and the new, numbers and -- we family governing absolutely trends even is likely short creative team morning, have environment performance. call But what whatever Managing the environment is and during find motivating. a changing, where rules we that

employees immediately, remote managing and to businesses execution our partners administrative assist become around-the-clock the impressive numerous IT these solving and operations or within rolling their Whether professionals jumping tools streaming front live our behind-the-scenes and quickly equally XX-hour is in Carriage. legal this an and pandemic team support our management team, also supporting and shorthanded; frontline out challenges selflessness oversee answered to options these scenes, those each ensure the keep demonstrated our had risen or of safe; have with our families question teams group, it's help who by put have professionals, one year. this manage support and behind professionals Now our the to when to field document to hotline HR, problem teams and center collaboration, those of risk together businesses work a partnering is any during have

team not without autonomy find they is the do philosophy meetings stand decentralized our approvals, growth. at success of layers to model approach and what of a and and the the authority Carriage's of includes and, simple, that time-consuming location, have for The what a as companies all that allowing our makes a talent to support single where teams. quickly traditional partners leaders managing and center novel best public of them and with headquarters back-office one. certainly at of best, delay levels position take the do out With most progress, and act drives the place, a need the Whether fact or is which, at formula Now best. some idea improvement worst, destroy to in center. version support put entrepreneurship extends very This then support is simply referred it's that said, same to corporate, our functions and

we business serving frequently release focus truly have quarter guide As just attorneys it data, enhance background, I teams, our balance finance in-house to and just by who our ultimate other have pride financials, business as all further on deeper The legal importantly for dig happen than activity decisions. about simply the in team, relates into much that impressive providing discussions partners, continuously drives often great updates they to have a lawyers. only weekly financial the We legal consulted not businesses the weekly decision-making, strategic knowledge being each intentionally take professionals debt Mel ultimately with provide the And I objectives our that each in believe table. ownership metrics. mindset who to contribute and thinking deployment. legal work more so and then accounting provide their operations, make to financial is just backgrounds not as with understand performance privilege our can and about attorneys apply tell is business, capital goal that diverse feedback more and issues. bring much but and day. We this matters, That critical more guidance support reserved provide how as what cash than and and to our legal may attorneys and learning they big-picture purposeful to result results attorneys behind and our some

a and team and of a but in growth awareness amount time their learning legal Our And not ownership health they many the invest of significant company. their financial the continuous of as in about the great have support result, center financial and proactive, business only drivers. colleagues

me explaining attorneys for briefed His to is our they that one some in financial a time, of in recovery a do example impact it's of example, spending decision-making reference on $X.XX to a the our financials by to share." going matter he working around that recently of For "Steve, often. our to saying, has proactive EPS and the applied been not our come a mindset it's the unusual, was language and And used is work understand great a metric throughout company. perspective in

performed the entrepreneurial this to of all Carriage ownership the to tie support share I mindset extending work philosophy couple reasons. this of a pandemic for teams regarding Now our to incredible and back during

First, full to This center encouraged in challenges that and team. March, they're set back and support have questions, wisely. support has not shared our ownership an when things to in second, pivot high required time-sensitive for. to the center the exceeded collective prepared ask expectations of within creates confidently function may leaders where talent well-equipped, here the teams called act strategically themselves. be quickly, they environment unprecedented already the here pandemic responsibly And our a a they fill were when empowered the complement initially mindset the importantly but most became in uncertain and for think just already field the and at And and act by

As business. support lot by our see every the center also the in but by have work good performed day, it fortune about And talk that a team. entrepreneurial we spirit I a not action professionals to only drives in the frontline our our company,

about absolute all frontline want it the us every day partners with in So with And here leaders circumstances. I little platform speak during managing have participate know center these of I of for of professionals have performance. us it's over and a our again, support some legal to to when serve at it actively opportunity to Houston of you work you thank important well less Center, those the behind-the-scenes turn for colleagues for our for that each of is a all to to do. General that, I with team support families Mel equally talked say more our know most Mel. not as about but who Counsel customary investors challenging and Support the the our the to share thank an providing to I privilege And our for the calls, I'll drivers as I but

Melvin Payne

you, Steve. Thank

of his what Ben come slayers. on Steve's exactly takes there that. see by and up we introduce out And you visit, some anybody mean we'll to invitation if dragon So to you'll

got follows, as I two into Dewayne We last marry these the in Haven could have So he's reads in were: can that and Ann what Cain. Dewayne days Dallas. an preceded referencing founder ago, our and back So as months, got wonderful well no XXXX anniversary." my from e-mail. two, So marks families, October e-mailed and one And Phillips grown. one, and Shawn God Last has is Rest in successful predicted XX, XX and But to two of our our "Wednesday, it asking yesterday. you as Shawn respect that years continue decision by company e-mail today, X-year my the X to me. to made. said the e-mail I Dewayne which Carriage Jesus continued our say great bless we "My our of my I asking The with that Rest Carriage belief I XX for May admiration truthfully life; bring. October, as acquisition day country, would when follows, closed friendship." Dewayne. was year founded The partnership ever form third-best ago it was decision before a ago the Haven,

had tomorrow that you period a "Dewayne been him after Dewayne made owner. the testimonial, do is It's of back, XX-hour by and I've been owner. pay call back the And invited sent what his to which have would It it one been your clear ever a still Now grandfather. And have reading X This year owner, was Mike's one I parking will me pig. not put Park wanted be years time. of a to amen, Fairfax, our don't that Dewayne led help God made.' winner X:XX here I Fairfax, express night, instead. and my Dewayne And while succession trust ago Dave testimonial, is out presented member third-generation have of what your known full on time. for great he he doing third he earnings personally and regret it being true." Virginia, to went couldn't definitely and and My He spot is forgive family May wonderful carefully to families, that I decision was your that a to on on might that former quarter, and went in continued That say Board, for ago, permission was businesses be Mike, you Carriage we had of which being those and And the when Dewayne, family. just a Ann, when wonderful Fairfax XX he the wonderful and Now we the Stay because we at friendship. thoughts first to around that have your Dewayne known doesn't our And ago, listening Mike, you third-best in for on if a a do year big Dewayne Carriage call the But dear listening, Funeral afternoon, members who've to country, liberty business for work to was long company a by not anniversary. guinea us. the the come me Fairfax Mike you never all you're done the my solution, friend and the about so Dodrill in our e-mail mind, that my in Dewayne uses about take was of any the to Memorial and coronavirus Happy rent. company healthy." okay, I him amazingly you. p.m., what just is other the partner, people, in same Dewayne bless but ever So wasn't won't very midst feelings release called this call big a have morning pandemic Carriage. you to about and we promised conference a Doherty, might prayer. it's looking have if Carriage. which last X-year thank this founded successful e-mailed continue our Home about later with crisis. Mike about to of noble I've we partner, safe 'the and ask our to only "You Dave our attached quarter and it's owner,

they're in the who attention of owners the you in those of but by not to business So businesses. those listening and company, you -- company who those great is by this have -- you especially what us who's paying said never joined of us know of always, by

they have by reputation company who you years known of are of our the are. front and reputation. The are is we best also keep build the This your will You us. in company own

so We people proud will bright. hope as been I a future never our I am never has I looked our of But And now. get coronavirus more soon. country, this through than have

reporting to Thank as to very forward you performance much. that future it you look we So occurs.

Operator

[Operator Instructions].

We have Paris Alex coming from of our Research. first question the from Barrington line

Alexander Paris

this that and It's this for such company I for I've year, to an basis. the beat saying momentum long-term in been outstanding fact, a I into I you're Services. just a Mel appreciate everything I've years. suggests for broadly-based a outlook. And company I just by think, up never setting going on X just also years at at see I another this quarters, on several next milestone has good wanted never to Carried that the congratulations I from the start looked really quarter-by-quarter really now. seen quarter, off know raise. And X-year and quarter. story. fourth continue covering XX looked it, and raise strong is the the outperformance

a covered. into the point, just a things So mentioned again, thought, congratulations. lot deeper at information I call. on might dive of a this little I just was the couple of

you with taking from? off And where is that Peggy I share question of sustainable these My up are market a share COVID? Starting funeral beyond to share? market on were contracts is think market touched these. that are sharply. And coming gains picking few this obviously, How attribute services, market up you share.

Peggy Schappaugh

Alex, have we So net standards said, on at market XXXX, we our revenue growth. we extreme the rebooted -- like put share, of an I focus end where the

every had unique we personalized quarter. our competition. field. that own. heavy our out can funeral people COVID unique things we that away we're in weren't of COVID, up before standard, being take the spoke out cremation some other into just not managing people know share people it's services converting businesses where that when And of And families. in we growth a had the just past services. may we That's -- our providing. I have call. on, because not to, managing that Even just serve about. driving so service. now were everywhere second type the that homes who served, But being have York, a away services you hard hotspots, turn in outdoor people putting the to those stepped a just And were families share It's cases. continued service and turning to where there. And that doing those touches talk average from out the continued there been which in unique, with see was market miles the calls talking about And our it's we we've during of attendance were XX New maybe of partners, just And about broad to our the heard cremations, about on heavy working some an partner fear, we been areas, are not about from -- is some we've the they even we're We then take talked their the outdoor they It's the

Melvin Payne

located of Mel. regions. in They press these they are Each the all have call an portfolio, people support. this it's in and get Alex, each own the their businesses with XX the Zoom So directors we Thursday, maybe mentioned via And update I support. release, operational

They're SOPs. Peggy's I'd team sharpest be of have going We to around. They what's the like people know on.

the the case, creativity -- to outside business, brain this for these entrepreneurial. is the mean to wrap someone industry about inspirational Empire, we mean in very specific know stories, around, ideas around, -- is even hard their since on are which had Luyben. some each be businesses. a their done. and area and business to by got having and a amount has in about going it And talk it's so in those in chance of person gains every we've on that their And over heard knew update portfolio And as this of market give their specific reason. and because in up about over an time that and great to meetings, -- this reason, come can -- and we what I but get over the what's I And issue families, are we've I reason, over Inland this share Justin reason, would

who things to They X said, beaten had that doing, He of competition, We what's I want empower the also your why, are I -- doing?" competition, Alex, what have conference not And calls is this, what really to wish "Mel, they how says is which California, said, you're I loses said, you're I do you going broadly be the glad council. He that's ago." amazing." I they is of doing because thought standards one, it's their do." competitor give is. in whatever with a a everybody is. lot This his do pretty that you're think loved a updates tough, And about just I'm And know smaller. "Justin, them can't "When on growing our to "I we're And is our are what it's And who then we possible. what years Justin, markets. us this He I decide of used just big ideas." know said, which off said, doing you path state "Look, that I'm

mean Christmas across these this things. July never our share. And come they're sometimes, The you now it's do group Having and the plans Christmas already, I with or word that's country around up making gets how because executed. be -- for or that to going and they in

the can come know never down execute have brightest us. release, I these And of for in more the it's universe what brain possible ideas the and families, every minds said the not press because can't what But a here. is they so is it's a in been -- seeing locally. And do, mean this don't can We they we week. value what been are They with they're and told we possible across country, I specific -- very inspirational in definitely trust they're are But it. up figuring share, out there. taking possible. hear is stories market what this And the we

Alexander Paris

perform in I burial that these And might the service disposal. talking I And the it's at there direct crisis, or this back bones on we wasn't and other That's was have bare people sort great. that some that the cremation back of a crisis, in future thing. a at that the minimum, I may that remember other deferred. be thought QX maybe additional That just have I'm wondering, some in to color. was and that appreciate of about then in whether people revenue, to thought QX? opportunity date the was Early there lost that. do seen pandemic it all April. kind there the memorial or appreciate

Melvin Payne

to They now No. then. know that it New must that. interview to be And That's City. see is thought your even in possible was now. I "Where wanted the didn't seeing not we Forbes. and can real-time country. I they a to the that We're a April an slow told what and York most I what editors?" "Well, He pretty Northeast I They back said, seeing. hotspots. Well, so was we're reached in in do need went out an the the to they time, out And find buy few said, And and are." that to have booming. in editors country. was a editors in interview. I must business booming, are But a had were been business find the maybe "They their gave said, guy wanted his he get at generally, booming of us

thing. back catchy big out country, here." possible So a find to it's And he little a he So things a of was lot I trying interviewed came and again. knew

whatever. at to people website So he or their get can look

it's supposed in mean actually be culture the true. a and successful loose It's the the that beneath people the and the how he the and the get interview, another put company wouldn't getting reporting can Killing -- say So that people, be is an Coronavirus funeral Business. going Funeral great this back is said, and and up with this down simple we of what's be he they finally, business. out our reported not he support funeral called it. them. it's take the And in Well, it actual and is terrible greatly and compared is Peggy said is. it different? on is knowing in people happens you is all it like and because and put cemetery to caught entrepreneurial really Ben this them idea. the small, down what people company this all said numbers where high-performance if me way article, to finding turn why industry, and the that hires to dynamic, That's would I It's spot we reality get out, in Steve and When getting great it's just But for now because this numbers different about support it's

Alexander Paris

hit little offline. of [indiscernible] questions were I've just on And lots can preneed got sales maybe cemetery, But Great. then I early follow the on. up

sequential see you've hit since. improved this I we I what been When wanted differently, there? a to starts. update And fruits start think to the he sales Any of obviously, what will P&L? little from his believe hopes impact And there's Quezada, the like somebody to then lag I he's doing talk Carlos a accomplish. bit seeing when initiatives about

Melvin Payne

you very tell Did prescient. that question? All to ask Ben right. you're So

plans then, with featured the So incentive our update we into be with call year-end to developed be plans, he Carlos. when as his an talent systems, will basically next build And organization within February will cemetery will person by a in guest a Carriage, outlook, which will we XX, a have the that sales along the on and never have on a our announce had, place, the integrated that model high-performance be operating model. in

than hip developing rest X it this, there. team. about the will like out it something and team, will cemetery company. operations more in performance what put over company fit. will performance But will of February what be And funeral in true. going out known roll That Paul long and along will additional don't like that sales all this spoil operations just be look of perfect And and that, it her and are I on a produce will to what excited our the we're we operations about been he with a as and that joined -- that say I industry think Ben want all what the the to We're have and leave that that Carlos Chris will I expect. all RPs, we Phillips So XX. a Manceaux, terms Peggy And we the change. at and Shawn was future Elliott,

Alexander Paris

And stock look By a... screen to it. appreciate more the then market-related. one my is today. Mel. of that's that, Well, the I forward down thing, great. stocks on very I'll market way, you're last stock green The few

Melvin Payne

we today a to draw. have Why the pick of this? have do to like Luck performance

Alexander Paris

exactly. Yes,

is you Services? investors, too in What's low, in from it's peers. mid-April potential pushback now has today, investors? recovered Because nicely profitable do And So versus that if cheaper pushback Services industry. from the become and your stock Carriage Carriage I've saying increase cheapest within of the from over any, what And the to is services just the And bit again, typical while needs it's get most the company time. terms given been the its a investing been valuation you a gap for the large. while close funeral fastest-growing It little guidance. get in

Carl Brink

of we think come Alex, two those over and I past here of where we've lot the quarter. heard to be results the third think around debt are mean that is strongly sit, I from And to important we refinancing ratio leverage. consistent our positioned third year. consistency about I in in indicative I transaction the paid And incredibly to couple about all last screaming is lower. across believe quarter of many I a high years what we And and intend where we do in Carriage well results of quarters these you're quarter quarter our by leverage and in second the clear down year-end, the have things certainly performance seeing most the Yes. from the is here X.Xx that in loud levered addressing for areas an and to come. will

Melvin Payne

that might mean January. going to don't many in If bet to company next all look, at have to everybody year, this long a we very Maybe they over blessed are have about this like time have cheap. very -- I dirt just to know for more doing I'll -- I've know. many members, investing, valuation team, about are they the haven't on board of It's And the okay? to talked in a board there been our say I methodologies. I seen want a a yesterday and be the what I to with I very on gym, this think at company. be Carriage call meeting. own. I fit, including valuation couple I'm able the would that. with have Alex, health. XX But in good coming I out And it. Yes. don't little and here, -- problem my they that's I to age. with Because the listening is I'm be a why can, And work problem people want me come have

cheap equity So upside is out yield. dividend We and the something it's put tremendous. on very

cash right If do the our stay that's yield, year, equity you it flow in we're flow it's and which the on won't price equity once and flow XX%, ridiculous. free And free look And is the the way. real free based cash sustainable. that of refinancing XX% at yield next we at it cash sustainability now, that

Alexander Paris

great. That's

the sounds close it way issues. think valuation gap. that I And like it's outstanding to you're quickest addressing those obviously

So congrats...

Unidentified Company Representative

mean as issues. no buying okay are as the people We're with think I issues. concerned, It's far outstanding they outstanding we're stock that. other there Alex, because not Yes. they're

it where over is. of it more Then time, keep we'll own Just it.

Operator

line Patel Goldman Your the Komal from of from question Sachs. comes next

Komal Patel

well. staying does like you're you a X.Xx, of refi? going maybe how about Are do you just possibly, bit. now? for allocation. to think to achieve away on seeing the Or the the I of comments kind and this bit until you capital a Ben, candidates been of Maybe targets follow-up a the for touched on we of should potential call on all how to think M&A? timing? want were pipeline some uptick the from everything and little think so you planned on M&A, the me if echo do leverage congratulations, What X.X But little on? you've and the potential-type the far insight about into just maybe thank I as look right you think M&A an business Just

Carl Brink

great it profile. appreciate Again, focus the X It's you allocation next rapidly. bang capital clearly, in Yes. that our we over buck question. these to and maximum all Komal, to which we and know homes to succession acquisitions, allocate year. their comment to execute including emerge for can financial calling be our refinancing in great next will the think be today. we have do planning continue our of Really we'll feel I our to solution. to -- we the here there But the allocation on as will sets the transaction, of towards us improve is up capital the they're acquisitions. biggest credit ready Carriage quarters we transaction, best are improving no Post opportunities, capital owners businesses, flexibility funeral and Nothing pipeline pursue looking cemeteries, that -- refinancing as

Melvin Payne

to disagree I'm with Mel. Look, a is So little bit. this Ben going

million And low that's We $XX Because big best could and the be $XX million a at hopefully acquisition $XX you June on, in bonds on mankind. acquire every great that's radar. history interest of prepay come make a I can to million in have million 'XX. you costs cost going cash. of we can we high-yield very acquisition. of save in the We're our million acquisition $XXX to if or going will one $X -- penalty year, It rate of mean, a

focused XXX% we're bagging So that on baby.

Carl Brink

will I free think that to internally flow. and generated leverage forward allocation is what's cash the through acquisitions a a be And allocation of and important our from majority recognize capital funded going standpoint growing reoccurring capital and

going us going forward. So X.Xx that to frankly modest range leverage continue levering in remain a above days whole of as The up are and over. will Xx

We at a a as are just point different company.

Melvin Payne

pay operating we EBITDA of full thing that so how margins but the up it debt Because your the leverage cost. reduced leverage in we company so that up, leverage sectors going leverage and reduce operating additional our get at down, and XX% mean, way are you about going Yes. by interesting I fixed where the how thought a went the and debt cash went And mean, -- all way went the revenue cash level always the various up, going like this the When are a your flow you revenues we over of and these quarter can kind the local up, world could free is size strong. I down for going way the overhead much leverage now, it. is X refinancing the post get is maybe we you in could free in is even to, you dynamic. flow And term? ratio, up our this can debt see you because

because where Now early concept thought time mass. is we these same at too of the -- I Carriage see us and today. victory incredible Yes, acquisitions, sector leveraging declare creation becoming That's which an flow I all every broadly happening I cash the have dynamics the simultaneously and have new gave could that critical working platform. we in the value

will much go of Carriage. very cost some refinanced, sheet version of free get will this we have other not lower cash balance We a capital. back to When and we flow the

we low that of can we then lot a lot capital. the do rid get return of by years. that, help and But value, value, with to market XX on back do high a our it again. get agree work If this next the X, over the put we So of will that capital spread it with what the cost want and of your intrinsic capture Mr. doesn't and we buying to That can Market shares. don't create depression leverage of

about revenue we So Xx produce is leverage. we're going it to of who advantage. do doesn't X more at the no cash that's much have than for company every because so that -- reason compared not And to dollar high a

So disadvantage opposite. on we don't view just our profile, a credit size the the as

Komal Patel

permanent savings just that margin? helpful. structure Anything forward? anything out, that me. other going side drive is you or terms business spending one also of more want on question labor incredibly helped side And That's calling Perfect. worth for then EBITDA think, the you for on highlight the For other think fixed to in cost example, you cost that the maybe

Peggy Schappaugh

Sure. This Peggy. is

was know how focus seen the So over which with of expenses, end beginning also we they a reward the our they promotional expenses the the because more incentive just good have, general, and on 'XX, on as of having sure Again, are to helping bit changing bottom. revenue cut knowing on about are have And we of weekly at directors Mel it less very X managing a in those putting for grow at making that services. partners of our little mentioned just manage certain the the what cost. revenue that as managing when the and we constantly the margins their with the expenses support, bring But saw calls well them savings of to partners. the we lot last again We in and affect we've part-time then quarters employees, a end partners teams. there's managing their

Operator

Chris from comes from of question Company. next Your the Sidoti line McGinnis &

Christopher McGinnis

here. the going is question, quick little a late know one Just I call

that commentary in greater release a statement expectation on And and made kind and 'XX of the sounds in it lot Just last the of confidence forward. the then at call. greater acquisitions the the today around of the you profitability night like around the growth going and of end

to behind about kind a profits businesses? driving grow talk just you can confidence Just the that little bit what's around opportunities those the comments just the -- of that from

Peggy Schappaugh

these It to and happened, of X months, takes saying, to XX, time have would With be what for acquisitions to to partnership. acquisition maybe helping pandemic." before we -- build support Carriage that my weren't usually, talk integrated partnered Carriage we leadership, So across partners, say COVID "We with everything and and them regional had ideas. the we our an that what if truly is XX from some without of comments the understanding the know it's regional we the support, And our the that's we partner done don't truly support X company, continued become just just also, about team directors and of from about. our sharing everybody our

that when last partnership lot your and see of you're ideas where And lot We independent, out partners. seen there, an have off of X the you of don't extra have fellow we've a that that, a portal we from a feed over to months.

Carriage here ideas culture working on Carriage. all partners just they the of get and from things that -- their the spread just it's seeing can So learning at where

Melvin Payne

next for high-performance with over they're looked at fresh I with market taking XX, we to really made we on taking particular, on been the the will accepts in it. you at sales, what just like more but you will pursue which estate And do And upside XX huge on the sell be things plans, what a at, development a cemeteries can over But cemetery of to to master sales, And that years. really look X side, Chris, Carlos XX, if a maybe sales, years. organization acquisitions have cemeteries, where side XX especially been that XX up the cemetery there possible we're performance not very is going fresh XX our here. also Those the and -- the preneed product always high hit a existing see, sales places that and look sustainable gets we've like that, product broadly to fresh high miss. something apply is sizable cemetery more be will us margins. good the is at of think side. never property plan called now here, all XX, with opportunity will X but at the in maybe which and also juiced master more have And

And So master do the high that's then be and necessary option. the an a plans in the to very return product. capital building sell works, organization to it allocating will

Operator

Justine comes Ho Financial. of Mesirow Your the from next line question from

Justine Ho

just preneed hit that answer, peak since then. sorry how if to and on were an -- Cemetery I earlier question up but trended COVID sales missed get about on wanted your that to asking question the of wanted I update has during the how the was follow I'm basically an

Carl Brink

since property coming sequential during face-to-face absolutely. making crisis, sales the improvement early people process. early But the credit where to our Justine, expected are be. April. have March and Cemetery is entire have what sales a back Certainly, above much of Cemetery Yes, at park, some April, having we tours preneed in normal in particularly difficulty we kind trends in sales organization, coronavirus seen our into end to did very we we or of and on those the And to sales,

-- rest do sales about to Cemetery about a world-class Carlos our so organization And Quezada what we forward. earlier, of to the moving going joining are team build that him and spoke excited the and us said work really

Justine Ho

the Okay. also not minimum the you up ended that, just think cremation. on, time funeral not actually services saying people service, memorial early mentioned defer People or you people And true. being that real I just would were or service And -- do that either that ended services. thinking doing up -- were the would on bare

restrictions much March or those restrictions, except April, lifted double-check, group were there probably to wanted mean that month terms just been the for does more of So have all in where that of gatherings?

Carl Brink

Yes.

a of kind that's restrictions, getting accustomed moving as many of terms in to. Justine, people I unfortunately are So target, think,

all answer back will temporarily see is place. not they So have lifted the and lifted. oftentimes, short no, in been And we put then them

a time. that sure lot leaders again of our support to between And so field then it continues here creative got make to collaboration the and communication be target. a we've there's moving center solutions to real in address But leaders those and

Peggy Schappaugh

to that that month everybody out. just And where add I was to it figuring that, look at was April is

at place outdoor work to gathering, services have year, been in doing more about any this having these really We ways in popular. creative restrictions if get people we around have out time even So figured smaller RSVP, that. talked

back So figure we April it to foresee was really that average of to level And not out. going again. that month do

Melvin Payne

Mel. be more partners It's me, And the able over and restrictions, to the collaboration in some coronavirus. to this restrictions are. which how the creative high-performance I some been first in you just forced partners lifted, believe And hard done said, were to is done. been mean, draconian they're sales and biggest they it what creative before were their in managing But believe incredibly it's restrictions were legal. place. -- no still so But something between know that of and normally Look, mandated to And mean, the do coronavirus I than has nothing short these they've place, really to haven't with I are them a just where our creative the it's doing even idea creative to California first they been club. witness, performance can managers, I just it. businesses see find have I mean, And and they're get time. sequentially of amazing. it's It's unbelievable they managers getting managing I period it's have sales put, was in And in California parks. what some our of we what

Operator

this remarks. Mel turn conference for no you. I time. Thank Speakers, like would closing questions I the to back to further am at showing

Melvin Payne

our I did fun as as you it Thank now. Carriage it progress. press right And that listening be forward performance to we It's here at and expressed continued writing about today. we about hope talking it enjoyed much. much very and we all look for of call. Thank release following lot you a your our to you the our in to

Operator

Thank you, concludes conference Ladies you joining. this everyone. Thank call. for today's and all gentlemen,

now may You disconnect.

Carriage Services (CSV) 28 Oct 202020 Q3 Earnings call transcript