CSV - Earnings call transcript Q2 2021 | Carriage Services, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Carriage Services Second Quarter 2021 Earnings Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Steve Metzger, Executive Vice President, Chief Administrative Officer, General Counsel.

begin. may You

Steve Metzger

and our Julie, everyone. we'll Today, Thank quarter good results. discussing second be you, morning,

Our release release, website on closed, our and and information, related an the the later website. we after earnings on be is have today. was This made archive audio posted being page will our the Investors including conference financial yesterday supplemental of public recorded, market available made

Executive Payne, Officer; the call Brink, this from Chairman In and and to followed Mel Chief Vice President President and myself, on Vice Officer. and addition Officer; Chief with begin by from Carlos Ben formal will Executive management Executive management, morning question-and-answer Financial a Operating are Chief call remarks Today's Quezada, period.

remind will that to are call, during the comments projections to everyone future state statements. team Any or forward-looking. Before that make statements uncertainties by forward-looking plans, These we we subject our management our for risks are made and that I'd this are some with actual expectations These which begin, beliefs, like forward-looking include, in earnings filings in and uncertainties contemplated both risks SEC, our both and materially such but differ could release from are results limited identified in available statements. to, our factors our cause of on website. the not those to

as like the Mel. over release we'll And now GAAP earnings measures morning. certain this the reconciliation be to for as non-GAAP to on joining discuss turn call non-GAAP Thank also you our measures appropriate this During of can call, financial our I'd measures. to these us A found website. also well

Mel Payne

we us journey the all Brady $XXX exciting in million X-year Tom high very quarter bus. senior Carriage call, earnings first the a unsecured of during is rest for X.XX%. time This since at great the Steve. me but pricing you, this notes second bond refinanced release Record of the and on of Thank

of our putting pricing budget of founding cofounders. mouth operating end performance been. years the management our XX simply control attention standards we wasn't those non-orthodox what scientific with money using have And the Rodney on by counterintuitive model has akin Dangerfield from a to trial always learning X, X We trying better. traditional of area satisfied adapting every and XXXX, to on an anniversary by at turning with that the company. last become journey. ideas and to and focused our XXth Never being the the now great the been evolutionary June and other worked and where error replaced method Continually me are working equity good our the system I After to celebrated in

management, acquisition and cemetery management end at a high 'XX. grading when of the took company we of both model October X the cemetery Updated 'XX, major top to transparent. While leadership introduced time trend right end X when reflect the leaders X-member of years now at been in to field The the our model recently of we of the 'XX of team. adopted not funeral them longer when been 'XX. operating strategic underperformance 'XX will to function on there Carlos, over was the point from went which than which when in Vision and at XXXX, standards recent some on margins X.X model those path XXXX a high-performance have on Group leadership There particular, EBITDA vision, of the XE over the transformation and growth using strategic we group the was others of the side. and a some the them and frame X-year of in it seats great. in back X And XXXX last very XXXX having Model. of acquisitions, periods, the new periods fund and leaders. areas of points turning launched Carriage and the a me various and back growth years. right Strategic promotions model compounded a reports, in In But realized end have the Transformative at Steve for and last our sustainable XX with Principles more effective have standards bus. we together January the of At Ben, XXXX, first that leadership times new years, emphasized good the the the businesses led high-performance all revenue this executive large of related last 'XX, shorter, end in when and over you all trust early starting of directly more changes. were form and future Leadership of been XX with emerge the 'XX and who

for getting I've with Although high-performance years. our people excellent company given the many time so the win, health, will Carriage to it's for and winning, to and this job a winning I people, here passion now and paid can't fact of my plus having leadership leaders. and had imagine period much for a so and last be across never that our fun, energy my business with our

know Great $X.XX year little I X and company Mel, then Those said, We're but we We Hey, and we but really Specific of markets. first moments we different. today. we It's had don't special busy celebrate businesses, We'll been where yesterday we to four. better. I one like Mel, told is always celebrate, working decline look where have incredible those of team. can parking so the take one I the periods get an from know, the Hinds a the let's said, the 'XX, we 'XX journey. would way partners our go it is everywhere. cars specific we've $XX.XX. places Mel, got are end Hinds take this first my And to He celebrate wrong better. get on where of unique the could and Shane senior the leaders, Shane, Journey. in way. but on we this out way moment journey good it. the so work, get in back I joined Mel, in is I moment. superstar me specific but call Peggy specific need we're better. with operations acquisitions and out, something XXXX, we're one on of and to And garage. said, Schappaugh's X-year He to afternoon He's said, Shane the years, went but this said, at to Then to Good He and good. So had on in that Shane to we

XX to quarter, to agree celebrate. easy now It years, it. was with here. After lows and every worth moment the are it's wasn't I highs year, we every Look Shane. a anything It year, where we're get look going. But every all every are but. moment So of and where

partners, businesses support support in to you, the co-dedicate all leaders, sales and So Houston managing all managers, our leaders. our the who field DOSs of and call employees all this Shane, of wonderful wonderful our I

Let's moment. Carlos? celebrate the

Carlos Quezada

because I Good XX, with that transformational best be the so an But news which so all At you. to June a midst to adoption morning, Carriage knew accelerator hope you, being privilege we high-performance Good the joined to to of as the much to have single represent the I here glad our XXXX, on but journey share high-performance every as was we to order you had at When into I I the today. pandemic, Thank were XXXX. culture technology Mel. did am I company, absolutely across are day realize I we everyone. wonderful in as is our at the have are not diligently already our norm in working coming excited family since time, been served industry. Carriage that Carriage. of Great Carriage

across partners and portfolio of achievement result our our our is performance support businesses hero of Houston a Our high-performance teams Carriage center. simply and employees of

highly in but which have to pivot able high only significant growth consistent the and not that and and We on last XX.X guest been reflected share over over is focused change year, this market positive service Trends experience, is our performance. adapt, drive superior years.

passionate remain the that with variants a pandemic receding, new and of and as about normal, Now we of are be new part prosperous thrilled and what such we're reason company Carriage do future. at primary ready even is more prepared a all This us if the is a ever so before. to why than

operating very value and will hard large come. trade While price to creation a and deliver performance platform our high to continues discount years to continue for stock our on work to intrinsic financial value, we at

follows. operations quarter as second results Our year-to-date and are

growth high-performance XX.X% comes a healthy while funeral of increase to more market XXXX. our XX.X% deaths. at is XXXX second level funeral portfolio, is of of from share maintaining home sustainable the pandemic impressive growth, X.X% compared quarter quarter X.X% increasingly What related increase, the volumes volumes of elevated is XXXX. our Of to pre-pandemic compared volume second of For the the only COVID-XX are same-store

every best focus arrangers, their to provide opportunity their friends family, standard, wonderful comes guest they teams through and on passionately communities. continue primary funeral experience net every directors partners with and managing pursue service our to growth to together and compounded after As of the their X-year their that revenue doors

a to June of quarter every the to prior cremation without lived families to and become options half for increase the $XX.X service being or all contract, that on of experienced revenue second is performance revenue unique Such services that more Moreover, of while for well and XXXX. we of pre-pandemic operating million we over focus comparative for X.X% mission million, million we as personalized sustainable family basis average over means as with same increase of over their year. moments personalized a XXXX, behavior, grew final last incredible and $XXX.X the XX.X% ending conversions, to an experience, QX for time a guest continue an or educate volume ever our year. million, first share $X.X per our XX, life Our recently the should On forgetting total memories consistent grow available market And of for $XX.X as celebrations. broadly normalized funeral have an and continue and increase on every best a goodbye life grew remembered. life creating X.X% period

last is total year. points. a our of tough the audience million to funeral a EBITDA field comparable eastern for basis lower had volumes in EBITDA in quarter X.X%, the while decline surge due XXX declined COVID-XX This region, $XX.X from of mainly is a huge margin the XXXX, X.X% decrease our Our funeral of we second field as total with Northeast

higher inter-region of averages portfolio. the in will to are clear deliver post-pandemic funeral high-performance broad normalized share our continued growth that However, relative geographic volumes, to revenue signs throughout and we market regions continue all

my to and selecting coach, acquisitions. a disposition. partners acquisition in to I've XX.X% continue already visit family XX, services will intricacies support our teams This QX remaining result to over a and of and in increase visit continue of build and as commission average of per main to our recent $X potential rest and of revenue an individual the partnerships, averages levels. back lead final of million the we XX.X% performance, amazing businesses pre-pandemic many on conversions where half XXXX partnership partnership these of with their goal continue each average, increase adjusted employees. of when for spending field very of teams establish our homes businesses year improvement XX%. our upcoming contract In inspire of help or our On grow aggressive in see X versus them and and past agenda time efforts June cremation increased QX $X,XXX on $XXX,XXX growth. with funeral by driven who funeral the the educating $XXX the a had the ended $X,XXX while our opportunity on and XXXX, between over to communities, understand was an focus the acquisitions of most to several homes an We incredible I value is this weeks our businesses net funeral have the managing of The our our meet and to with in comes California our travel cremation or identify their directors funeral the opportunities partners EBITDA. their first to of managing visit relationships months, the for many increase as

are performance. our high property, QX year to time, main Prior and to to sales cemetery partners, success their record-breaking portfolio and since much create portfolio, our cemetery introduced on high-performance record-breaking leaders sales the high-performance bit of leaders higher drivers, over worked has were partnership and capturing transformational It sales plan own we our all our The better has expected. sustainable plan been our to that managing with drive sales have a all we to the happened to Carriage delivered partnership moving center Now our first Houston team operational that business teams And preneed to opportunities portfolio. started little a And cemetery certainly, across after available our we through margins. support sales organization a executing of awesome than cemeteries. due counselors. amazing segment transformation, this cemetery was funeral we primary driven funeral

years, flat top driven Our cemetery shows history over low our by growth X performance the mainly to cemeteries.

became performance the would got sick whole regardless X all-time the of if for of these high. team an our to get well, it the portfolio the X we're Today, that cemeteries the cemetery And both performing very top home is at flu, we these the that of the one fact, cemetery portfolio. X to excited codependent X will be performance of the of rest share if so and whole portfolio run cemetery perform In or suffer. a would of businesses

rolling $XX.X over ending cemetery June an Our million. period. a additional year and $XX.X our was XXXX XXXX $XX.X XXXX, of full In the In XXXX, revenue million. XXX% X-year XXXX, million, $XX.X is X-quarter million, XX, $XX $XX.X total million. for or million growth In of the

quarter now million. XXXX, quarter In our XX.X%. million, million. June In And X XXXX, XX.X%. amazing margin $XX.X Our XX%. field in $XX.X XXXX, XXXX total XXXX, XXXX. was $XX.X In cemetery embraced our XXXX our our fourth all with few teams plan, has field and is fourth our million. the was the highly rolling XXXX, day all sales Center, supported significant and very over We this portfolio transformation to our from of ending from EBITDA that creation Support in in XXXX, In Houston X XX reshaped uncomfortable selected last XX.X%. started XXXX aggressive like $XX.X leaders thank And in completely high-performance $XX.X record-breaking field, and million. months. In of change And would an is and bagger In cemetery EBITDA total ambitious XX.X%. cemeteries. with rolling cemetery initially in the I that XXXX, of

where huge which consistent will team target are be to the have program, giving on previously relationship our the Carriage a partner, our if will the one However, the transformation of hit to things win. up development there we today, community cemeteries top cemeteries Bailey main over XXX his campaigns, marketing new portfolio will and cemeteries marketing get which across The will as final average, flu consumer on been On XX homerun, other X name stages deliver investment. our and our our in of launch of remarkable. focus show experience the look happening. XX And with cemetery enable of Seminars through we And mentioned to today, the has few, added educating creating But a for have with his a performance. marketing recruited in of our a pilot plate performance. David still X we the David new great goal future and portfolio cemeteries implementation on family forward We're XXXX. intentional and years Dynamics robust counselors increasing their digital comes the value January return new CRM CRM, we fully by of Microsoft our which success. the in generate preplanning, protecting the the measure to while The of sales and sales. leads high of savvy also September adopted

strategy, and private unique We Cold mausoleums. private Springs high-end our exclusive which new with to have and aimed the launch generate is demand memorial of partnered of for

deploying new inventory continue We sales cemetery high-growth and are and to to capital more create increasing velocity. developments innovative

I record $XX.X the with million of same-store start cemetery performance, will or second quarter in high was is million operating XXXX compared our million XXXX, in follows. comparison, For quarter which to revenue $X increase an Inventory of as $XX.X XX.X%. sales

ending $X.X XX.X%. $XX.X or increase same-store half XXXX $X.X EBITDA over an And million field increase XX, XXXX, margin compared in $X.X an of in year-to-date, points Our a XXXX, was for increase in prior comparison cemetery basis in million million million revenue an or X,XXX XX.X% operating first million to of XXXX year. XX.X% in Moreover, of XXX.X%. versus was EBITDA field was $X.X million our against XXXX June $XX.X

Our stunning points. and $XX.X XX.X%. an million XX.X% And was an $X.X last excuse of EBITDA sorry, margin this of basis EBITDA million increase field in against year field X.X%, I'm me, XXXX year, year, X,XXX of versus increase a XX.X% this

For XXXX, quarter, $X acquisition comparison million the XXX.X%. in of an to was million cemetery or $X.X our XXXX in increase compared operating million revenue for second $X.X

Our field $X.X was against XXXX XXXX in an in EBITDA increase $X.X of an million of EBITDA points. XXX.X%. last increase year an impressive grew XX.X% and X,XXX was in to The XX.X%, million basis field million, margin XXXX, or $X.X

transformed a half And revenue of million operating $X.X million million XXX.X%. last in acquisition was $X.X [Technical contribution Field year, million has has Difficulty]. mix. year decrease or increase the comment our $XX.X points. cemetery. compared XXXX, material the this cemetery XXX.X%. into margin put of X,XXX of field cemetery, to $X.X our but financial XXXX, versus new For only $X.X To was perspective dynamic changed funeral EBITDA $X.X in performance is in and statement and XXXX This to the first of basis in million funeral mix EBITDA was increase an financial of XX% XX.X% impact it EBITDA XXXX, or against this in impressive, an The not XXXX million between

amazing its is correlated ending to field XX.X% half of admin to first EBITDA. compared deaths field cemetery high-performance transformational in combined over our on years. results strategy XX.X% beyond, remarkable is path premium flywheel our mentioned, EBITDA found successful to related space is sales of XX.X% our through the Who, things sustainable have operating of just what that XX opportunity next In compared the the program, we that are us I transformational come. Carriage now execution to principles, prior we record-breaking to Good cemeteries XXXX, death rocket model, and total by Then for for for thinking, in our of our field X all the June way the to and EBITDA First launching and its fueled total for for and to best-in-class are special continues We to performance was with together [ph] on simply you, foundation is cemetery. cemetery culture year plan still in contribution our bring sophisticated field XXXX and incredible combined a XX% our for sustainable to creation our across XX, call and the XX% as increase and continued cemetery high-performance positive operating out funeral But on our previously and Leadership we gain certainty, Starting our businesses. care cemetery decentralized focus they operational made altitudes to are the a COVID-XX all way our teams like What and not concepts the an along acquisition of we so XX.X% And of For that And Great incremental and our high estimation before. lead that which both that XX.X% with Journey change a In hardly is of With with portfolio of creative, North, fundamental high-performance XX.X% our portfolios. and industry more follows. continue EBITDA reach create a of true as even more cemetery, of of more framework, accelerating momentum higher still it. our standards XE the have on has flywheel execution never our ideas and with outside Carriage and and unorthodox unique shared is model closing, is nontraditional, and mode as DNA box Model entrepreneurs, growth tremendous

unique keeping be it us to our this set All while and a Thank Carriage Carriage of identity, our time because else yet and great apart come. to intact. DNA, follow is and best what from the you closely with very everyone us is

it I'll pass Now Steve. onto

Steve Metzger

Carlos. you, Thank

the at numbers talk on it's the look Carriage, X.X to we our we here to that and process the calls. back last easy As continue on transformative it's at represent important earnings years focus about

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Our and lifting taken in appreciates we're to point. the this it the team leadership unique has senior heavy reach position

philosophy that release, What our our framework We guideposts As has maximize for leadership now referenced worked this framework for shareholders, value investments decisions. primary the allocation we remain foundation team of together focused will we these earnings build will on for our each will you substance making which a and allocation to as capital in our our clear which evaluation serve the see critical capital allocation structure encourage read. are everyone to this opportunities. of in evaluation

yield growth shares. current we're return We've on met. and while flat, example, an of on our flow a maintaining dividend relatively which cash total allows on invested Carriage capital Xx, annual our approximately also equal ratio also have debt allocated announced is free is our opportunities. to target For free focused our higher dividend leverage equity to of cash X% This flow to adjusted target we approximately XX% remain

material focus repurchases of to have capital to serves that we stock, trades on value continue a discount. internal also growth least XX%. we have priorities, believe share discount our on stock of as invested intrinsic We defined we our to defined at return target the when what subject And at will and a

good to being be to on of value difficult capital the we will continue stewards foundation as focus may our this flexible, While potential and to that our it framework is maximizing predict, for shareholders. intended reference opportunities is we be given

capital opportunities One particularly of allocation excited about is acquisitions. the we're

XXXX XXXX, down after over earlier, the significant mentioned our of XXXX beginning turned beginning focus at XXXX. of paying activity to end As debt we the of of remainder immediately and and

now businesses the We get excited bigger, and to team. Carriage positioned to better independent to the identifying are are ready back who join

for In more completed XXXX driven in recent we the acquisition strategy broken strategic most performance model, of down building the a is X acquisitions forward. this performance structured review success our and serves profile inspired and moving refresh The out our framework, also allocation capital it which those by acquisition shareholder business detailed of our model addition by of a and letter, acquisitions. to and recently as is our

profile for specifically focused portfolio, more that within Carriage defining to addition present also on the are strategic primed be markets we potential selective to remaining and candidates. In true organic to activity the growth remain have competitive more current and a of within of opportunities successful the business And advantages. only we our independent both We're focused best on will excited pipeline businesses. to model, the see acquisition

leaders former who approach simply with Our not to does center inviting multiple joined It our the take talk management right our for acquisitions to with partners, provide trip to team, to to visit down owners business. identifying Houston the spend includes to involve with a support will owners previously who our to ultimately and time guidance their business.

gets be sake team, to assets, to With excited simply the greatest people the better Carriage the businesses our larger the know they'll and conversations are that of on and company. Rather, adding When look our candidate it ongoing quality said, acquisition acquisition in join for particular the culture in forward our an with philosophy, to more quarters. involved acquisition future to believe are and drivers. growth Our we is not our the goal. comes the growth more activity and markets within providing we're the opportunities coming updates candidates of business

continuous my teams. it's comment growth areas his of our as mentioned support that, exciting in current structure just focus. it has for so we to the by As work many our Carriage referenced disciplined on place comments. relentless more critical an strategy, thoughtful earlier capital crucial in at Shane driven within growth. provide I'll to allocation and focus while allocation hard the over inflection of exciting opportunities The and identify Mel that Not our team, With focus of flywheel incremental our helped improvement X and and remarks, over to on of throughout the evidenced to detail opportunities to from will Ben point, acquisition the but capital improvement, Hinds years a throughout see approach identification high-performance and and support continue building turn past field and on truly at I to beginning the the

Ben Brink

Steve. you, Thank

to quarter As the Carriage we it's second incredible here first results, transformation report past and on X.X that financial over reflect the record half at just and years. has operating truly occurred high-performance

$X.XX the adjusted EPS have EBITDA or XX.X%. diluted EBIT $XXX.X million and by points flow XX.X% of consolidated we to impressive quarter and XXX.X% increased occurred past increased begun in the cash to record has second by over results XXXX XXX reported Over time, XX.X% company. And our flywheel our transformative to $XX.X evolutionary of accelerate $XX.X the to adjusted basis just that million, course -- million, consolidated change financial has evidenced Carriage. by consistent are only has months. annual high-performance has and entire adjusted here with result or that our The Adjusted and the increased XX margin theme, adjusted numbers to across as consolidated free $XX.X at our increased EBITDA million growth

results. on the Now to

XX.X% share. and total basis to adjusted $XX.X Adjusted For diluted $X.X increased to decreased Adjusted $XX.X million. million million to points consolidated XX.X% margin revenue per the XX.X%, million. XX.X% $XX.X EBITDA per second quarter, share consolidated increased XX to or $X.XX increased earnings or EBITDA

our million. is coupon X.XXX% XX, XXX points earnings first notes our would cash basis, by million issuance, coupon adjusted and annual on revolving call diluted XXXX, price. On and time per share. cost $XX.X $X.XX into while Tom into have notes from Adjusted share reduction $XXX.X adjusted million to Adjusted adjusted of occurred points $X.X share or increased record earnings $XXX impaired and senior like was a X-year per earnings $XX.X and respectively. basis EBITDA share translate million. to represented January the basis forma earnings total to or diluted our XX.X% to May the the forma half year-to-date impact X.XX% be rate we transaction quarter $X.XX, lower existing increased consolidated EBITDA On our X, a a per second in rate or $X.XX as notes XX.X% to of annually. margin our at XXX.X%, For $XX.X of will interest The million spread refinancing XXXX, The share $X.XX, consolidated results facility. will increases interest and revenue reduction increased credit pro XX.X%, per and be the the diluted to increased a was assuming XXX unsecured adjusted treasury pro entered approximately of representing we third X-year million moving lower new completed $XXX senior pro The a our a to Brady of forward. to per forma X-year compared quarter of full new million them, diluted of expense accretive refinancing XX.X% of of XX.X%

basis half a as XXX increase the of our accruals year. point lower is year increased Total in Additionally, million the in XX.X% of overhead X.X%. and compensation or of note interest $XX increase $X.X costs $X.X million expenses in weighted year first variable cash our million resulted million field to percentage average half XXXX. our senior successful XXX-basis the incentive The from overhead points $X.X in refinancing to first to of driver compared of for a decrease this this as revenue second $XX.X increased X to has XX.X% of first in in quarter a has quarters primary transaction and the from cost capital the the as increased corporate well. the Overhead million in

second and of year, balanced to the have that in year half record first dramatically far second our year, uncertainty both variable press quarter continued of have was these detailed a significantly increase X incentive levels We compensation of accrue that the more In reach their by and in higher believe the quarters. on the this achievements. to reduced managing the last overhead the we second field compensation million even accrual early in COVID-XX the pandemic, as release, incentive this incentive With the incentive accruals the of the onsets teams us having approximate the partners first. we which as our we almost year brought approach of to $X.X resulted anticipate of year what operating more us this of in the compared with XXXX, compensation of for past for the booked our XXXX, and our has the compensation as first second so standards to and more performance to of amount performance half caused half half we last in

benefited and in increased Our accretion X-year been tax share and $X.XX in tax X-quarter quarter scenarios. the adjusted effective our GAAP translated and rate This and first earnings reduction in XX% XX.X% diluted included from results updated into our to second in per a right year-to-date the point XXX-basis XX.X% rolling quarter outlook a has roughly rate from quarter to a currently.

the We continue incremental Fund near of Trust second total XX.X% with positioned through of term. additional income to coronavirus realized may federal X performance year. capital half execution the reoccurring decreases find portfolio a for first in to with Fund in just during irrespective our and generate our rate strong ago, quarter portfolio The the work Trust crisis in investment tax tax successful our amounts effective the over our continued strategy from The discretionary of policy higher the what has of repositioning market return happen our significantly gains. year to

mature preneed As funeral revenue reported which and on EBITDA past XX of recognized merchandise million $XX our contracts of over underlying accrue the higher and reoccurring earnings we as long-term revenue be of financial of majority will XX% cemetery maturing incremental realized increase the financial months, and recognized provide $XX.X and over Over recognized contracts, years $XX funeral our almost while year increased benefits have this over million long-term capital has past just million the of earnings $XX which to past quarter. within financial approximately we $X This a of through trust reoccurring EBITDA result, the gains annually, of and currently XX portfolio the income million to annual will preneed as perpetual average. XX trust next to in those through higher cemetery million capital an cemetery will and the the gains contracts. care service values the course our to

additional of XX.X% X expect million we increased to our high to financial revenue financial million $XX $XX.X the have of first currently of appreciation financial We portfolio million and with forward. end $XX positioned We be portfolio margin of gains currently the forma range the $XX as previous year. unrealized higher quarters Financial revenue expect capital move annual increased and for capital a for at within an to EBITDA pro EBITDA to our million XX.X% be above XX%. the

has adjusted $X to XX.X%. $XX.X free million flow has basis million, or margin For flow cash months adjusted XXXX, XXX to cash XX.X% our of the increased first X increased while free points

value grow Our is adjusted the equity amount free to margin intrinsic available flow per revenue cash metric cash of available defined dollar Carriage. the as of

free $XX.X the XX our adjusted flow adjusted was and was margin flow months, free million, cash For past XX%. cash our

free cash to and as quarter lower the when to maintenance was compared flow cash a last tax to slightly amount this higher in we cash capital approximately million the payments year-over-year Remember, adjusted is by in year. of Our due $X.X year taxpayer weren't. previous Carriage expenditures compared quarter year

on X.X%, free by continued continued offset our as environment. from the believe are adjusted $XXX.X range right incredibly of interest flow calculate notes, current Carriage $XX forma, estimate free $X EBITDA flow XXXX adjusted equates a of we view equity roughly share is the at cash the call right capital value the in trailing $XX $XX consolidated quarter $XX.X XXXX. of equity to cash free yield of midpoint billion that X.X%, of it to Pro an an market range equity range a benefits adjusted transaction flow, of increase of and The yield X.Xx, or range million million made an by $XX we estimate. increase normalized for that flow ended cash cash the weighted low to we a $XX and which cost Carriage appropriate approximately to $X.XX of of Based share. value prior net cash premium updated lower of intrinsic to to on capital senior our is range, midpoint quarter average free equity equity due Our EBITDA cash our consolidated per capitalization $X.X flow of roughly X.XXX% to to adjusted our per growth billion current sustainability our a XX.X%, XX-month yield intrinsic in This between the to shares the million. of equals free Carriage adjusted ratio million $XX attractive in payment of flow, cash costs and debt of refinancing free million a cost first of to million applying

we growth his framework capital return going how make in drive formalized allocation decisions capital be and detailed forward Steve to accelerated to As comments, allocation invested our higher rates. growth on will organic a order an sustain capital in

opportunistic we of investing value provides high-return With quality across the to high, opportunities, and million existing share accretive, in the senior shareholder projects premium of flexibility towards as the and completion to as senior existing including our us cash million refinancing, free X.XXX% portfolio, lowered by EPS high our the expense of acquisitions, facilitate increases creation almost made notes our sustainable believe reoccurring selective our annual We increased repurchases flow interest $XX steady that allocate and million call capital financial necessary it capital $XX.X us refinancing in our to the transaction year notes greatest the by diluted our view annual payment we annual our this allowed annual use $X.XX. adjusted dividend. $X.X and

at Additionally, repurchase allocated we to of the or cost of XXX,XXX quarter million in shares $XX.X an Carriage $XX average $XX. almost

at XX% per to the use equity our Carriage's to stands believe the at value, is which of of With share repurchases. best the prioritize share, our of point continued pace time this disconnect we at the almost an at intrinsic between discount more of our valuation conservative this $XX range and capital midpoint rapid current view current

us prioritize our capital net high-quality our based estimates are These to by and allocation X-quarter conservative an outlook. our and investing investment our an rolling activities. the forecasts to repurchase trends realistic of to addition on all EBITDA future or of underpinned updated Once XXXX execution again, less. capital both more program share our acquisitions, of we Xx performance businesses and estimates record expectation a in selective flexibility of XXXX of while lower operational making right and cost adjusted community profile provide are current consolidated intended announce increase moderate a excited financial allow with roughly of of and results maintaining debt to to enhanced Our will operating in performance

Xx includes and right previous expanding funeral high-return forecast on invested cemetery of that only results, the for revenue near-term a number repayment, outstanding, to outlook have continued performance, over allocation of incremental capital maintaining acknowledged conservative of months, pandemic included unknown majority capital the allocation EBITDA property execution we and of roughly capital believe where margins, opportunities. higher while repeatedly have the improved as forecasts shares increased program we've share contract, growth of a a that our matter is we per our Unlike our effects and the debt have our we for scenario will average provide including towards below provide in these our field As this in an sales, the short-term growth COVID-XX of of gains, repurchase we known XX have share the drivers revenue, included allocation scenarios, leverage policy. variables in sustainable past geared financial ratio preneed updated or -- market while accelerating local

million, $XXX consolidated XXXX, and EBITDA per cash is $X.XX free and million, of $XX to million, $X.XX. diluted million adjusted $XX Adjusted and flow For to million revenue and between we total to now $XXX expect share $XXX adjusted XX.X% EBITDA adjusted between between XX.X%. $XXX million consolidated and be earnings

EBITDA we be million of $XXX $XXX Total million For XXXX, to now revenue at consolidated $XXX total million. adjusted $XXX million. expect to to

I'll cash the for to joining per to million. $X.XX adjusted between end turn Mel. $XX share at over million call EBITDA Thank it flow high the with range. that and at us adjusted free $X.XX you consolidated diluted and that, today. earnings XX.X% margin all $XX Our Adjusted of And on

Mel Payne

Ben. you, Thank

heavy fun. can anymore. anyone listening as having is the company lifting me Shane it as was. on doing think is I for I'm this I'm so said much best news in much fun the reason good why is call I'm the The so Hinds But having not see

end. are on just You heavy heavy what the explaining leaders heard the all of lifting all X and leaders employees doing their doing are that lifting other

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to all The do. what the tied different. on is destiny is Come walls Our they look. branding

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it Let's for open up questions.

Operator

Your Alex from with Instructions] Paris question comes Research. Barrington [Operator first

Alex Paris

it. Mel, background The thank of leaders you important to appreciate and your right sort at that people is I company investing especially people, for with clarion story. Carriage know really is the Services. on I right the call

interest thank market you the financial appreciate on higher repayment subside, cemetery terms thorough overcoming tough and your you lower is, the for again sales, as averages, and as that on and cremation well comps expense a result through the recent preneed revenues headwind are share funeral very local as significantly COVID takeaway So deaths are of of while moderating refi. call. and in Congratulations the I raise and debt and beat higher volumes prepared gains, that. getting tougher comments are and My comments

about I the been some driving averages? what's I were cemetery, they funeral talked but and I on detail, funeral both cemetery cremation And year. wanted because comp extent rate? negatively averages increases burial that. easy and averages guess even you've in a and to averages last the think What's continue? to can an and greater focus I there's driving these at in the What's funeral impacted realize great in driving

Carlos Quezada

apologize getting were able This want to Alex. I but answer also Carlos. you, right pick up And Thank to is for I'll cut it back. off, your we question.

So a things couple of driving that. there's

of the serving The lot able that at that we February thing first that used XXXX, a end we in as not conduct families of pandemic were hit services manner. the were to is to

a we're directors outside creativity that able they start without all the final opening to of all to that and pre-pandemic and And And and bit. really things levels. little up of their partners did increased so now our managing average fear averages increasing like the through services that work that did, they and our back invasion the hero visitations

it as partners to piece of with in and of managing, the our momentum, or possible funeral to sure educated we any cremation The conversion regional that be cremation managing The drivers over average. what's hard comes when comes cremation life the working program, our have rather than is gaining that it for the been support actually celebrations or efforts. of cremation really, partners celebration one families the will really tremendous second By doing explain the services. value main program so, is get life. what to operation the the some choosing That through could that sorry, a is which the along door, making

getting are families shop. average on really going been funeral to helping our conversions chapels go he's the So life lived. And able into celebrate to that and these us side, the being more that able cremation are back cremation having that to on side, the

Mel Payne

recovery amazing know, about can't went And we where just told they there others, about California, than say, or service they we've council as this process. the council and with Difficulty] this had value X.X huge, and when years the terrible Mel. ceremonies, you things are it's had this this a and talked They members to discussions our grief Yes, do. people outbreaks and standards of during can't grieve member COVID. one Look, X is had they the celebrate loved we through the more past are in begin with [Technical appreciate

Operator

Everyone, in moment. right, may a and you please stand will speaker line reconnected by. hold the Everyone, please hold stand be All and resume. by,

Mel Payne

a years learned the species to to off, do. average X.X one dies, either but when family, know got I answer or it is, when the the they last don't over the learned what they with of celebrate are where the service that I couldn't improvement grieve the or told the cut were loved value friends they other human humans value

value the be were we're by not to country, across And Our were I we country done hearing and overcome open up to doing that value across able more couldn't the people service, that and of what open creativity the more things but think the the possible. of as all the more country people that were and are normal, choices planning.

could a And don't I or so the it will It the X is years. I just over think, up. each frankly, rate great in up. our get know best to to why noble XX think I is for whatever will us. And market. by think matter want what go there out are going that's do. next run death profession in the the being I averages don't doesn't It there We down. go

Operator

with Burke Liam Riley. Your is B. next from question

Liam Burke

morning. And you. thank Yes, good

ago renewed a benefit a cemetery there was attend from your Was be access at deal there You deferred from getting of sales due seem had strong selling on the restricted COVID to services to year to ones any sales great cemetery? efforts, traction. when for cemetery loved which

Carlos Quezada

but there, on it my most really XX%, company, Liam, a be that in and thank you as -- on you a could we But estimation. very much. perspective recognize bit when There from a from much as may be payments. reaches little do revenue so know, be it. material This cemetery not deferred premium than something is revenue to recognize may Carlos. of of don't we backlog we less I there mean, XX%

current leads the is efforts and to sales an aggressive and that's the set driver sales very teams and ones program. new sales really our skill capturing focus main activity of really However, of and generating the planning our having developing the on new plan on generating success

Liam Burke

Great. funeral And side, on loved there memorialization to funeral grow you help the seeing home the anticipate runway step-up also home have the you How for in been memorialization do much or mentioned cremated. that sales? the ones

Carlos Quezada

in we continue average celebrations the those through as options conversation a regiment that comes added our focus really That's their during celebrate life, is significant funeral takes unique as of as that to choosing the for grow to our than that's to well value, educate going place past the on To family. little creating really from. more conference all what driver But from growing. conversations based personalized revenue it on we're services conversion, family cremation years. the have, that of tell that, program more and and and a and a a more life more that can X.X come directors rather really year, to ultimately the means lot And that's there's on And it's I continue end. and continue been the what on the really works we they those cremation, they So it's as have to someone's have, the trend you calculate bit that their difficult.

Mel Payne

for mindset of But our you retiring. and tremendous. and funeral are I over the leaders directors you the been and is with overcome the hard our cremation of possibilities the funeral them. I've pandemic me you'd are how that the happened, with see some I'm a is old And particularly toward the sure would hasn't posed a that it has doing last trend if it Yes, average would months, range, mission. I all in XX was younger in XX mix is XX% but range, I'll upside about XX would mix a has about years of increasing on COVID not told start But our employees we carried with the what challenge, different be then years hasn't older I arrangers a crisis, was, cremation. managers, I've something if Peggy? have on this and last I This burial an it Look, And tell couldn't XX% a this XX be mean, know, the don't school different mid-XXs, years, Mel. now very ago it seen over mindset posed what seasoned versus the challenge. been really mindset cremations. And difference

revenue good and think the get side. side, -- I the just over market and go best years the growing next is on that X to point sales opportunities gains of cemetery you the being because enough to go hungry for you're the the of or is great more you're XX one Carriage X share Plus and So get it. upside whole cremation

just versus America, whether not them. to with that by funeral up grow use make about ways grow and share, share want get they against league. You they teams to they they more and or taking back for we business different or and grow they plays, high-performance thing. of combination revenue cemetery sports competition business want people If kind margins, to is do market teams, that a in than your averages, market better being it's the We're business. more grow business is locally build no every compensated winning to a teams orders, sitting you This it. win winning coming across This gain building hugely

Liam Burke

you, Mel. Great. Carlos. Thank Thank you,

Operator

from question comes McGinnis Chris next Sidoti Your Company. with &

Chris McGinnis

just behind share you sustain maybe data? you're the confidence the you the gains you guys explain of and Can them? much to maybe given little the Can seeing [Technical give And bit ability just how what market Difficulty]. a crunched

Mel Payne

XX? wouldn't if had you some get they or about like their in and what's will. say, very obits asked they trends your their time. one. were They'd owners of long side. I over funeral give what And their wouldn't for cases, you I'd the meet competitors, all XX started coffee. I'd How last your it were knew first proud kick bad around, them years? volume business, pocket. And history or history financial history, a a in for over what's drawer, the in to pocket on a of you asked a X when you cup the funeral shirt call coat you up they their were But they show company, out. even Very direct Chris, or was of They I market often, And them statement, all the Yes, with of the Look, going keeping and you. I periods the if

up And picked so we can on right -- I that away.

we've XX so And business. years that for doing last been the for every

are by we become years. difficult in doing and for it obituaries a track because market all we've now the XX year by And been trends in Now print not little paper. local in share. that month, has competitor, share market more But a by

One to were broadly of up to operating trends go went business the trying to outcomes manage share. that we broadly an caused the could never never I is, you market model 'XX that a high. were find reasons in in then model And

the switched. why So are. that reason we And was we here

market. insurgency. We know back on the and knows in know on on. a don't you in sitting everything in here what's us we're know like the market. what's were during and we know. their It's know they we And going Pentagon not going calling employees, too. Peggy's Now have believe going our us great know people it, that They We know all the people what's happening. can't telling They on. COVIC, going what's team individual

market share. out did. you with us can't I if certain Jose, market in basis. was other have by -- what Christi same Corpus want infections and a him. so, couldn't there. we going share to came is continuous other they won't Talk This growing Ewing. We're believe competitor embalm. people and was won't here, because how were somebody on, know share, partner, it much I we of broadly the market Buddy their world-class can I coming sending we growing tell managing we like the Christi, they Carriage consolidators. find to who Why we San same to from. Florida, were who to have us know call at teams We grew support including supported get same Same you, Corpus idea. business us. back were families Or where on the because embalm? them market got no in growing I getting in know foxhole. share We much a So

If bad them, anybody. talk list council call to ask myself of don't you. I they'll know, I our the them do hate invite the tell and to anybody standards homework. standards a members and that want because call question. you to Do wanted to and council really get about that I

Chris McGinnis

I appreciate that.

Mel Payne

can how When why is you getting better, you're know good and wouldn't. this don't I talk. you

Chris McGinnis

more for repurchase give you the us just the spent I know outlook you think you the obviously, where roughly an change the that. just little M&A stock for time the prepared is little opportunity of just at that Can bit capital the new appreciate that? a there? the scenario it about of the I allocation environment of versus versus M&A is bit remarks, indication guess, I but the with and a right on there, share these and levels? in

Ben Brink

stock repurchase ratio. Like Yes, on where at capital of this is, the leverage accelerate is Xx said, value to trading while best pace Chris, where time our based believe that we intrinsic below our the the program. believe and share we I of use or maintaining is

from we Given flow will the and financial amount independent doing we acquisitions continuing leading owners conversations have the that with selective believe to the our shouldn't flexibility us we're out cash smart, generating, have to in free preclude in business. of country. I really or invest those great continue

kind a it's So not one the of or other.

scenario towards the going I but repurchase certainly, all capital our portends the a of of program. it, think we in do share can this allocation near-term majority

Mel Payne

X me vest think to I minute. simply me years, with Chris, I I to granted signed for a And forget options another price. up So very X for which. just on had or

a questions to Anybody all it to I attention, do. out I be stock. paid It's that's there what vesting trying put intend to should attention promote you. it Nobody Great we there I didn't put listening return should paid X have you, of share compounded have that. more of our can because about one promise it. very The to lot out of the few our We've first gotten one much or points, that you categories. paid to Good XX so. attention.

here off We in are That's Now, we XX. bounced nothing. mid-XXs.

This ridiculous. own ridiculous. complicated. to a this is I Now to I'm we're a back more buy company way want same though want vest either/or, professional X me thinking. very whoever Why create future doesn't why It's wouldn't a just This price? the even and I it. value. equity, lot it you've I own kids. it's going and want my come? by Randy It's value investor, want that it. the is more to to of not more free ownership the the of see best I'm position to not yet own flow own simple to want a to company, in I who It's cash on of would of more from of to I own more owns we the not company to company, of the XX.X% is want personally, is Would I in heard, than complicated. from buying not [ph] do? of

Chris McGinnis

did you. write Thank notes. my for I understand, exact my thing a Mel, do. I Thanks that completely really taking questions. I in of about number

there. it understand time when you up put did the at I So

Mel Payne

have companies let name me yield? other and we'll equity by. the we'll many do me free off, But cash So go and names, XX.X%. -- flow analysis How me call XX.X% back first the okay? know one,

Operator

comes question last Your Capital Partners. Roth from Kelly with George

George Kelly

follow-up my on taking for question. high to not your thanks are yields everybody, last And Mel, usually sort of Hey, businesses quality. with XX.X% comment, so

that's I'm least. I think at what So seeing

for Where in places my business you to for curious, with biggest is, put So that your lot But momentum risks there's numbers out whole years? of I'm couple some a COVID, the uncertainty, where different in are question clearly respect you that especially what you a the are see? from the have aside bunch of next of areas. you've there

Ben Brink

out before about of in the in the so point, have rates certainly of There's able any effects may term. real achieve us, talked high out next to second short quarter are we've But performance. known that this us put able George, Frankly, your of what real in for variants I and there achieve outlook years death and is risk very year any they shown right? vaccination COVID this goals many in realistic think here rates drivers accelerating performance, about unknowns first being don't couple what us and those I have of to to out the half of there. we've laid we we've and some and the see call, risk on see our and known we've that that don't being the a volumes I we entire what what set conservative the the

Mel Payne

a never you was their the down in shareholders. And for believing what transformative, to scenario the off. is we're of the So you cash free made start I else nobody went little of 'XX, And the continue. future, we you. I XX.X% let's right that's go time far with put low will We buying that normally as is equity range did. George, unreliable companies. except and roughly Everybody XX, then in to that bit. companies to of why scenario is do you COVID. it. get will the go we they point so the back midst right, to yield quality, X-year are what And did. rid out as flow want entire shares, we're for own May XX skeptical That on where if the want of All opposite back it We are. a a We never in to pre-COVID. of guidance, brought got XX. first handful I to February our more of agree February

Tom a why is then book and third then, October and quarter ever equity. I we that Rodney the on high-quality letter. Carriage if Dangerfield to high-quality is the we and had XX, Then had Brady the There memorandum, financing is shareholder ridiculous. the bonds a pricing full less. had went pricing we release. the release, of release, on then second XX.X% low-quality Now the XX, quarter And And year here June X or Then my on flow cash since is free company yield promotions. a July nothing And you have company?

I This complicated. think that to understand don't, to and buy need we higher is private. find they investors take it. we're going on it quality not the If shares

George Kelly

the Yes. Fair best luck. and for of comments enough. Thank you

Mel Payne

luck, we'll we but Look, take it counting shows it the up. out not there. put if on it We're

like it's attention. But it's You real get to appreciate going all either better. We it or not. do the can and

passionate the XX is to years. yet about to over I'm Carriage best here. tell be we X for next the can You But and or where my get are, come I best

the the the right the never seats, back go right have came where to right us. Thank the the going ideas, flow use right value more the in right to for Never. sheet, create where the much. people from. get free to and you We right models, right for to, right we're vision, always to team, are right and balance we you flexibly standards very we to wanted and I cash

Operator

questions back like to to time. Mel further And I'm would turn at now this conference the no showing I Payne.

Mel Payne

Thank done. had I've I'm you. say. Thank my you.

Operator

today's gentlemen, this participation. Ladies conference. and your Thank a you. Thank concludes you for day. wonderful Have

You may all disconnect.

Carriage Services (CSV) 28 Jul 212021 Q2 Earnings call transcript