CSV - Earnings call transcript Q1 2024 | Carriage Services, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Carriage Services First Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Metzger, President. Please go ahead, sir.

Steve Metzger

thank results. joining and our to everyone, quarter first morning, you us for discuss Good

to on and addition Granmayeh, Carlos the In myself, of Executive Quezada, management morning Board Chief Chief are Vice for President Executive Financial and Officer Directors; Vice and of the Chairman Kian call Officer. this

issued Services market closed. the website, Carriage our the after can find earnings yesterday press On you release, which was

of information, remarks differences begin remarks Our GAAP press this our question-and-answer including release the will supplemental include with and period. supplement financial reconciliation is non-GAAP a and morning financial between will and followed measures. from intended and call by be Kian to Today's Carlos formal

comments everyone during to Before we we'll like begin, projections this that I'd and plans. our about business, statements, make remind including call, some forward-looking

all risks can Forward-looking turn include, the us and to risks uncertainties identified filings, now to this in release statements today. reflect like SEC our limited joining factors and our I'd uncertainties of Carlos. as our of morning. for to, involve on earnings and well in be inherently our views These but call not Thank all which as are And you only as website. found over

Carlos Quezada

quarter thank for you you, Thank and Steve, joining earnings our all first call.

excited you each want driving in family, share whether center, the a before to We in results. gratitude support But are the played I to of Carriage entire our or crucial express do, these fell we performance. outstanding to our heart has field role our

your goals. to our success. all delivering continued elevated appreciate to in have passion families an for relentless and deeply commitment instrumental our support and dedication an wavering Your shared We service

letter our vision of our statement. had to initiatives read transformative and are and for the information objectives setting our X-year of I an hope reaching for core the you stage a future. XXXX Before to we related proxy XXXX, the start, strategic Both opportunity shareholder Carriage

highlights. financial into dive let's Now our

plan starting cost objective the our the to results. to reduce positive We in executing produce are initiatives that is individual is progress and to well and proud strategic report underway revenue grow

revenue the substantial million For total marks remarkable for This a as results our successful the primarily the cemetery deliver surpassed in our objectives. integration history the and most time it position is was single to ability quarter. strategic of million recent have financial our or the Greenland, Carriage performance we significant achievements driven These mark first exceptional $XXX.X by of quarter, first increase on team acquisition. our our milestone million, X.X%. $X $XXX was This a a of strong and underscore preneed

each at that million, volume Despite strategy the have revenue made home part impact. of improvements post-pandemic as funeral of $X.X $XX.X targeted an expected total to significant our Looking our of to funeral a operating million we or increase see the X.X% normalization, revenue of in increased positive our operating X.X%. segments, decrease total pricing

a to testament year. is and an year. will confidence believe additional in the make of last of seen contract effectiveness, to per funeral per its to average our same throughout contract operating have We we quarter pricing our result or compared X% This total increase continue progress the $XXX in strategy we

dedication achievement, prouder first towards milestone impressive of the $X.X growth this for year. sales We delivered sales. work The which couldn't This operating record be at million, last period direct to preneed same cemetery organization another quarter cemetery result the achieving preneed cemetery to excellence. of Carriage, last hard we entire a is $XX.X team year. our an XX.X% sales XX.X% an compared and quarter a of our revenue, ended compared Regarding same in quarter increase or the is million significant

primarily an last growth XXX% by million, same For $XXX,XXX income, first quarter XX.X%, driven in to by quarter compared funeral the preneed increase $XXX,XXX or ended the financial revenue, $X.X impressive year. at the we which or total commission of increased

produce preneed Guardian with future and to We exclusive our performance. explore strategy Our through we funeral Life to be strategic very and about performance National excited Pricoa growth positive and our continues our Insurance the committed will results, continue we partnership to Company. strategy, opportunities remain our to potential financial continue to enhance

XX.X%. contract field with $X.X XX.X%, grew first quarter, cemetery continued XXX XX% increase success, EPS of total to EBITDA and quarter, cost points, overhead $X.XX XXX an great or execution basis of our EBITDA an separation and higher million consolidated The field or of adjusted of of revenue experienced combination during quarter to and agreement. basis points an increase XX.X%. nonrecurring first was of Regarding related of diluted EBITDA of first XX.X%, an it million, increase in for initiatives $X.X margin our of average of management increase the $XX.X total the an per Mel we delivered demonstrated while funeral Adjusted million our share, finished per the a corporate margin increase the by $X.XX

now level will the million high, of interest this Kian payments debt later we're remain to we flow towards quarter. on as paid to continue committing rates, this more we quarters. call. that most $XX we And comparable high rates are this at evidenced paying focused be in of down interest cash debt a free though previous share our by While on even

very the expectations. these quarters out proud of results this last X of We as makes outperforming X of are

post impact diligent March and year. had the continuing the volume near a decline first greater months X in panic remain the term. of first how about being and volumes strategic we we execute had capital While to in allocation our quarter, the our seasonality while of may initiatives, in solid normalization mindful

outlook. closely will reconfirm we we So Therefore, forward. those levels monitor going our XXXX

of about Kian hard about in at underway past As dedication turn the work more for achievements. shareholders have share. near-term more also closing, you well information Thank the innovation come. we years to and Carriage. In into we sustained we With are excited a initiatives invested the the interest very about to to over end second strategic this and not cover we over gather for on future our to well quarter, year, the establishing more insight for that, What leading will should this With lasting I will is call. It's and financial to now are progress. deliver your just we're positioned value and things support. foundation building our Kian.

L. Granmayeh

Carlos, and on to the Thank you, morning call. good everyone

make, and of objectives. alignment I review a to into mention our recent to relentless focus Carlos' comments dive reinforce of statement is I regarding important disclosure financials, wanted to purpose earlier our our the and new executing strategic This X-year aligned the is mind. strategic Before to our our foundation and our we is decision the whether large shareholder focus goals every and This vision and small, or generating achieving long-term vision outlined on since discipline on with in objectives value.

metrics our Carlos also I additional key of leverage, overview our cash and flow on this around financial for financials. Since and review Now an will divestitures provide recent a some few color outlook. I'll on our and our XXXX update completing provided to turning quarter, financial highlights overhead, an noncore

where cost-saving be opportunities. off start First, I laser-focused corporate will overhead, on and we to spending continue with

along review which adjusting continues our This late of of XX% than transition year full treatment items of or million our concluded track revenue, approximately Metals with overhead previously approximately for costs XXXX. $XX.X quarter, XX.X% related the which the when to February, agreement, strategic to accounting our the lower totaled stated special in alternatives, target

up solid $XX.X Next, When increased million, let's flow from cash quarter. flow operations in XX.X% same adjusted onetime operations to cash cash operations flow discuss the cash for flow from This for translated the quarter million from robust free year. from cash into normalizing our last flow. items, $XX.X

calculation, include calculation capital all we our a transitioning will free As traditional a which cash are reminder, flow expenditures. adjusted to

provided expenditures end of provides the press a a historical that includes reconciliation only and includes traditional capital bridge maintenance more methodology methodology have We our the release table our all capital that expenditures. reporting that between at

continue methodologies beyond. traditional in before XXXX the XXXX will methodology of reporting exclusively We and the both for to converting remainder

flow historical and the by lower $X.X by adjusted quarter, For including with increased maintenance prior our million $X.X period. the the expenditures million year for over expenditures increased capital capital free calculation quarter, all cash same when than approximately

relative are focus compromising period our disciplined strategy XX% numbers, initiatives. growth our This again on without last flow me to in year, which notice rate organic expenditures highlights the allocation credit As third down strong capital you allocation brings cash my from outstanding same capital highlight, with may these the reduction capital facility. our generation, our well-defined tracking along variable under borrowings to

facility. noncore an were approximately we divestitures our in from to the borrowings pay fueled facility, included down in able on million proceeds X gross directly note, down credit Of quarter $XXX.X our quarter, million down $XX towards this paying additional $XX by pay $XX.X end. was reducing to million that outstanding credit the were This quarter million

average related We our our for ratio our compared the higher I threshold, allow increasing the the covenant last us to net us review to pay resulted leverage discipline continue proud in the by approximately closed Xx slightly the leverage facility quarter our that seem combination to allowed would our our and of pay of allocation bank our same same at weighted expenses, and the ratio. alternatives. X.X% credit as year. ratio we of debt-to-EBITDA that credit first back has expenses does our here decreasing of has the acquisition of compliance defined rate quarter decrease a a on ratio normal special the down And not are The end our rates bank a since EBITDA interest the than $XX to leverage on year. leverage hover X.X% in may note our especially like particular, ratio million down, as as item Greenlawn in facility the leverage of calculation. to quarter X.XXx to fact last capital Despite strategy result, capital in ending below at add strategic on entirety interest

has receive will a Xx. rate leverage XX spread However, below our point our that interest relief landed ratio we basis now on

turn X in noncore our remains outlook, full the quarter's XXXX year divestitures Lastly, this to I despite which quarter. will in outperformance closed unchanged our

our XXXX late outlook our of reminder, already February. we noncore in time a already call of our had these line since included earnings last X divestitures into at transactions the As sight

the range revenue, lastly, per share, which million includes be expenditures And cash is the XXXX to $XXX adjusted $XXX is of outlook million Our for maintenance aligned is historical diluted million to free consolidated our capital the $XXX to adjusted earnings EBITDA, $X.XX for adjusted range may with is the range guidance lower million XXXX range quarter $XX for for due with $X.XX. methodology is second financial flow, that total $XXX earlier, to are effect million. performance the range combined to COVID only, a we reaffirming and the is $XX to million our Carlos third year, quarters. pull-forward mentioned our solid which in remaining the in Though historically start seasonality first prudent unpredictable

brings Superstar and Chief initiatives organization executing X-year in position our with capital that transformational reevaluate will disciplined cash overhead observed and remarks flow my and paired is the especially industry our for call.I company has years additions, for quarter on enhancing versus on approach Carriage our will pass of to focus pleased results. earlier execute strategic XXXX questions. on his management than a our experience around performance best accounting and the team, a review are the earnings guidance objectives to speak continued With revenue, growth Accounting our with critical it ranges the next into We by to we to trends our themselves point with us our reiterating more back with XXXX that, momentum on conclude we macro with an results and operator strategic new as practices, with year alternatives opportunistic for reduced execute first who through my as leverage allocation in and Shanley, objectives. our and translated The Kathy emphasis and on increased financial key distraction strategic of Officer, finance of acquisition our on XXXX in behind return XX EBITDA I'll

Operator

We'll first Research. Paris Thank go Barrington you. to [Operator Instructions]. with Alex

Alexander Paris

to the year. strong start the Congratulate on

L. Granmayeh

Alex. you, Thank

Alexander Paris

release, I got revenue and a here. Starting driven funeral Revenue a contract. few contract in first by in X.X%, with clarifying the the decline X.X% press the X.X% increase volume according per a segment. average is up questions funeral to

down think I was said just volume X.X%. X.X% funeral total said, down release press Carlos the just

First difference X the of quoting? the all, what's you're between figures

Carlos Quezada

Yes.

and view is consolidated a include numbers those of one one So post other the divestitures.

we of basis. call So it's perspective, kind an so a operating that's revenue what go-forward on

Alexander Paris

So the the impact divestitures. $X.X million of excludes

Carlos Quezada

activities. our That's That more is correct. It's operating current current reflective volume. of

Alexander Paris

how contract, then And Helpful. the in revenue you. per Got that break cremation? traditional funeral does between and average funeral increase out

Carlos Quezada

on on first Yes, for increase contract absolutely. contract X% We had, contract X.X% our total X.X%, for on of totaling pricing. an of improvement cremation and barrel the quarter,

Alexander Paris

then, Good. made, previously said the year-over-year you kind was headwind for Carlos, significant comment volume that, you I going to And most of quarters? to we're full the coming you in the That's be that's the And And helpful. that last just expect of full had that diminish effect. will with decline volumes? pull-forward dig year's the year-to-date. to Do dealing year. COVID be then March into expect know again, volumes in And that the you still to present comparable that do year, for

Carlos Quezada

Yes.

Alex. question, So great

we debt death a bit potentially So and from what year-over-year we seasons some on expecting rate because our experienced than expecting a we're is more had something little or more a volume elevated flu perspective of basis. little or decline January to were related February

a little we on thought slower came volume. March than However,

And just so to be wanted why that's we mindful.

to is rest the on to throughout year, have quarter. of slow fourth a projection the volume continue decline first down Our through the progressively

market So see margin X%, by points volume for basis post and work XX around We we believe those are X% but through we in whatever to X.X% to just COVID-XX We'll normalization. we we from should we our we where up lose be That's between around continuing can can make by hope continue maybe projections. now. December, to gains share lines. to if are

Alexander Paris

in to Got you. the And quarter. completed first related divestitures then the

to $XX I million previously realize impact said the got then to all is those roughly for to you you guidance. pretty line and expected revenue million you where that, $X.X $X.X the them of And already had that's those. be. full EBITDA. year in million think much Are proceeds included And I had in

L. Granmayeh

This Alex. is correct, That's Kian.

and we were we million already and guidance, we So the the when as upcoming million revenue you $X.X did is at eliminated, of our $X.X EBITDA. year had what looking XX mentioned, of

guidance of adjustment 'XX that our So is out. already reflective

Alexander Paris

And you in think are asset a there others characteristics terms noncore XXXX. Okay. then represent ripe that divestiture for similar being might of in

Steve Metzger

Yes.

is estate Alex, that got things Steve. a solely. now on we're this transactions couple So are working We've of real

we to front. continue take on So effective at that, do weigh impact business rate. big everything, nothing we look the We'll potential to When our a including tax opportunities.

nothing take right of So a look as them, those report. door, things substance the at come to we'll through now but

Alexander Paris

question is the debt. Got I last you. now And then have for on

$XX down on the million paid credit line. You

$XXX roughly You're million. at

your leverage ratio is Now X.XX.

I still thinking? think all a of had year-end target you Are X.XX. those your in line with

L. Granmayeh

Yes.

Xx X.XX So of Steve landing within comfortably done of that X.XX noncore range. of range. looked kind going our just various comfortable and we potential to we're factors And analysis divestitures performance, the land mentioned on scenarios. We've based within feel model on and at of to to that Xx kind assets, kind the

Alexander Paris

have kind of do is you target? a expect And the then or that to target X.X% you fall When think I end a within at range do longer-term XXXX X%. of to

L. Granmayeh

Yes.

at turn acquisition So mode. next kind for anticipate then that Xx year-end interest into as probably decreased the to where milestones, look to of kind milestone kind where XXXX. getting kind that into get of XXXX as we get of as that And of we we we we and is expect going basis X.XXx kind the level. spread into back is And 'XX, half we when next by just level of XXX points by the back then is can below to of getting realistically X.Xx, down of our corner getting getting kind at kind us significantly of to rate look

Alexander Paris

into I'll Great. the get queue. all color. That's back great

Operator

Liam next go to B. Riley. Burke with We'll

Liam Burke

a an for contract need Home, had and on clarification Funeral revenue up Steve for I question. On you Kian. earlier contract revenue Carlos, and burial X.X% cremation X.X%? just up

Carlos Quezada

X.X% X.X% on on burial, cremation.

Liam Burke

on okay? that's a year-over-year And basis,

Carlos Quezada

Yes.

Liam Burke

sales, Okay. the have Hopping out further fully Or sales we over momentum to your preneed additional expect can momentum here? in staffed build an you force?

Carlos Quezada

throughout momentum experience believe continue the to I sustainable we'll year.

others. than months higher have You

over time, leading Qingming, huge services. experience cemetery to to celebration, leaders, place job. of know, We you summer, home. saw on middle starts are March, activity of we year up of momentum of As place. on more we April, those be we last to development to mainly of a significant growth a through level then this little plan Asian bit lot because sales, year-over-year property basis, is and in the and upgraded been not summer since leadership place little have done They of you due have which have bringing cemeteries families that the vacation momentum the and need bit are able a last to to took merchandise few continue incredible year, sales sales And a continues the type in the is this an the continue strategy our a in difficult then. in activity which should deliver a including year, But

So leadership efforts CRM we few in feel will that by encouraged team to regeneration very we over addition have in marketing grow led Putin, the for Shane to continue and the quarters. our next place, between

Liam Burke

Great. would stated ramp your I where acquisitions. anything that where that over to level know would up But to back see you'd and the there you And be comfortable now then? is between transom going acquisitions. you leverage be

L. Granmayeh

question, I actually good mean timely. Lee. a That's

interested just we week with some in the spent partnering last So with is time time business we're when a that right.

to those down we just at keeping is focus us active, a continue debt. and look our we that to to And while pay important key relationships so continue

carriage to conversations on to until people X.XX. those up we that do where get and continue we that So flowing date we'll keep sure to are and is, make

Operator

MKM. ROTH George to next with go We'll Kelly

George Kelly

remarks. saw And January curious said I'm volume I'm difference then follow-up but earlier, of you through great just compare the that you've so how curious think with volume where quick same the started in there ended topic February secondly, quarter? a was I to the growth just the and to trend sort that the think quarter. could saw you follow-up And a I if what between turned you prepared negative just in it were you is, question you on and if was March. then April? on in comment you far the with seen start March, you I'll a in comments where

Carlos Quezada

is point it typically March, sells. be and us, Yes. for month within coming XXX variance compare that to range, that February very and basis about was preneed which March large the between It happens from then a January, to just cemetry

So we made from but a it for of it, some was enough up to kind volume like through it funeral pay attention. us perspective, of

As on addition April, in Greenlawn, significant that pricing continue really our The that it funeral our to to ability have continue that line. to if same question is strategy the our in good That, relates to better great our that on amount better company. remains a and news perform momentum, is know, continues efforts our integration decline it to integrate make as which, all, to to not continued into most we of and your on enhancement up, to as recent continuing homes volume. you them which acquisition, X we of are have deliver

George Kelly

are X-wall that the and Okay. the side and on one question cost through and efficiencies if on on what is then curious of inning take pricing you're in, initiatives? you in to working with next efficiency system. one, each of funeral each you respect side, cost the the like I'm And those sort were to measures X-wall pricing the

Carlos Quezada

Yes.

significant month year. pricing going we to a to price business though a the on intention first need type on the quarter which new pricing have just even had of of best So of right our now in basis. course, strategic and, review, And increasing the conversation is not know this they what our be with the We on what it businesses reviewed communities, launched December It reflected sake for quarterly leaders is and our to field be by last just merchandise review of increase of competition, who in selling. price. really, then for this the pricing bump the a is to in is very the

does to performance just to best them significant month that a customized However, of to to options I continue decisions. amount increase. the reflection It's also, their previous a And one of better comprehensive in of have it's able be review about to presenting all not about loans. that to celebration and family strategies information to of lead price every present have the can to should very families, or life each the single quarter so

it's the can a families of average X, And a contract. plus data better process, thoughtful per pricing to at our presenting right, the we review become very That's Yes. analytic so strategic the process, side. how combination through on elevate revenue

to a cost, costs we it which relates of do our part of in getting good to second been question, down. As was work the lot your have able

have Carriage purpose scale. in some that fine maximize past ability of that things the We want find and is our Empower per statement partnership and to with to the as decentralization we mentioned do the between our balance our

moving supply have as procurement we review significant a process. forward. negotiation that elect terms practices that to And company That moving vendors discounts started some centralize And market chain leader share, to our that we and may of continuing of the benefit to as to the our forward, grow are how the full-blown continue items vendors, market to continue course, to to establish benefit one and that community will in relationships benefit ability are each not so of options. decisions, soon will encouraged influencing to include grow it's payment continuing with think now, whether and will lead some rebates are very locally. whether with it's of IT we their terms But it's And HR-related by centralization brand what about we those whether right process them. finish in things and utilities, we the we're

where we come cost on about but to what's on are a more even very excited So very, initiatives, stage about from that excited perspective.

George Kelly

would Or that exercise hit? that maybe now the And you're of going would year-end? next anticipate when start right you by in seeing the benefits to through

Carlos Quezada

time. will have low-hanging and our realized on already the be release some realized some are will we QX more more during share be year should and some XXXX. identified able that little that in likely be of we likely will quantify. be larger realized to most end that the starting a will take comprehensive, bit to before some believe there scope will be of Most and They're I XXXX. But fruit

George Kelly

assuming And then that look quick you me. this that there's Okay. considering an I'm divestitures mentioned just one I one already there's little that share or that on And some of for guys estate assumption. Any last monetizing. the no larger maybe a so you could that's more detail to than potentially or real that Can magnitude be you more? completed Steve, And are guess, could revenue like. far what that tied unfair you've year? smaller that the

Steve Metzger

great a George. question, That's

valuable is. time So than got on that is to sits valuable estate what more that on real we that time, business front, the real that, very will from quite estate we've recognize a business frankly,

us if proceeds it don't few, And a and to so these there's to between and if we to run that value, But opportunities. make determination the way on that not we'll one do any it's that we we're finalize now right a that a of lot working X-figure to able transaction for kind it. going once often estate. be try have we whenever It's gap we're have see market a makes sense numbers real on to the bridge of

from us, business. aware when to that then a estate do funnel something where to is calls looking we sure we at time So time look values in real market those is frequent nearby but take a would I like. at not a we're those again, to what say those it of opportunities, can we're Generally, look for make

losing not real estate. sell any we're we the business when out of So on the

Operator

[Operator the Instructions] portion Carlos This question-and-answer like does call. any this of At over I call turn would for to conclude closing to time, the today's remarks.

Carlos Quezada

joining. for you Thank

our I vision continued want call statements. express to for and our today, and purpose believe As our in support your gratitude we conclude

continue our a creating performance day. have clear growth indication objectives sustained and this value. that efforts on added the shareholder great performance confident you, X-year future, and quarter in a Our right strategic strong enhance that and driving will track. is these are We're Thank initiatives to

Operator

This does conclude today's conference call.

now may disconnect. You

Carriage Services (CSV) 2 May 242024 Q1 Earnings call transcript