SCI - Earnings call transcript Q3 2017 | Service Corporation International

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Operator

Welcome to the Q3 2017 Service Corporation International Earnings Conference Call. My name is John and I'll be your operator for today's call. At this time all participants are in listen-only mode, later we will conduct a question-and-answer session. [Operator Instructions] Please note the conference is being recorded. And now I'll turn the call over to SCI management.

Debbie Young

you. Thank everyone. Hi, Young, Debbie Investor at Relations This Director SCI. is of

these release made our today to cash Before comments, Safe remarks, comments and we our adjusted historical factors team and and non-GAAP the with to that limited are A press and let in statements materially to today's filed start will on Harbor our include in on today flow me The and flow. expectations measures calculated and is are refer also from as customary of X-K prepared not with and our that in statements website in the cash operating certain SEC our available and uncertainties appropriate that adjusted we that management over were quickly language. forward reconciliation by are but cause may In not could measurements identified with risks accordance are release include, These the those looking. website. GAAP risks provided yesterday. actual press are measurements to, our our projections. subject uncertainties our such results differ filings These free to go EPS,

I'll us, So with call Tom over to SCI's turn that behind Chairman now the Ryan, CEO. and

Tom Ryan

Debbie, have that team my this disasters morning remarks of and you for comments today. begin to the their joining members and recent and you, hello Thank thank our call with everyone going us on communities. I'm the impacted regarding SCI some

and our full overview and the our more into year funeral an fourth on the quarter cemetery quarter. get operations XXXX. outlook a I'll comment Next, will analysis of I the finally, for I'll of then for and detailed provide

impacted weeks, many three and throughout then by live, Over major severely were the communities the Maria. company Harvey, hurricanes; in and which they Irma past our nine people

in Las the tragedy the wildfires Vegas Northern California. We also and endured suffered in

never homes, effects, that bring lost our serving will loss countless and client employees a our While heard your cars families. sacrifice personal we on to hundreds have personal experienced I've eye. personal tear of of focus of stories

prayers family and the all people tragedies and donations, Throughout for help have who of go $XXX,XXX United to through hard your and been have across with feet. we and personal were as deal challenge have hearts teamwork, employees of Our we these to by tragedies, of all recovery. employees The impacted, With stand and directly support of get on amazing. back the nothing affected unwavering to have items loss. sacrifice a beside experienced know you each been personal Vendors, have short our incredible. going States our these out members, shown SCI you our work the Relief members board Fund, that nearly examples the Canada of which hundreds company is well raised who as employees monetary as Disaster match, a SCI their of

with miles personal be entire more just And a time to as least, In group and couldn't homes, cleaned personal to caring local have I want such thank spent Way with own of of teammates, to I each hours our to compassionate fellow that and addition, moment in out. impacted. countless employees but you and help thousands working to drove sorted people. they a donated over tell the supplies team other of take proud and markets work SCI the not $XXX,XXX we've chapters their delivered last, side-by-side their United up

making earnings estimate our per third impact corporate we proceeds, profit by campus. offset loss the expense of impact a repairs from with in associated $X.X a front, On a estimated locations, This $X.XX insurance half approximately well on be damages for to and to in penny. the predominantly locations, to the Puerto damages net about our Rico, as operational million sustained Texas, quarter the and $X.X We the loss XXX Florida included approximated as share. million

Additionally, negative cents and reduced in which in Keep to share impacted another rebound repair our comparing continuing and the we in to we are we future. half and mind, as you should $X.XX view impact from estimate another the when home expect $X.XX quarter. fourth should the locations markets a office, one revenue that we temporary so our year-over-year, probably per of earnings lost near in

overview were for or prior challenges, several Now $X.XX in adjusted XX% light of the very There quarter. per moving with $X.XX the year earnings. the We share for over quarter. reported In were adjusted our pleased parts. $X.XX increase which third of a of an the is earnings quarter, we increase

try this by simply you per I'll quarter, the can, as from adjusted to walk year. as prior So roll a forward in the $X.XX through share current $X.XX in year doing I earnings posted to of

This before businesses. service comparable to was cemetery strong per with $X.XX, due impacts of gets $X.XX. the slightly results, prior as by hurricanes property the tempered results rates, softer growth higher to and funeral lower as you growth. production the year fix recognition the revenues earnings of operating First, merchandised ordinary primarily from $X.XX generated recognized in to business. our was of cemetery performance higher we of operating growth and Adding the cost share sales well growth and deliveries achieved $X.XX our This in

on, I affected $X.XX storms operating estimated from that mentioned was across the Moving just the loss approximately locations. our

So now at we're $X.XX.

we share-based two quarters additional tax resulting standard an the planning. noncash compensation, quarter, $X.XX new from was there to which Next, benefit related provision another of tax benefit past and in the the our accounting in the discussed $X.XX for from

per adjusted of $X.XX. earnings we're now share So at

in fewer expense by there reconciles was quarter benefit to the anticipated $X.XX back in $X.XX the corporate, and offset a increase then and that administrative about outstanding, Lastly, interest of the which from general shares quarter. was $X.XX partially expenses during

flat. the during less the Comparable level quarter. same services performed last revenue funeral Organic at operating some was decreased essentially were period average sales core by funeral year. Comparable to performance shifting X% to more the flat the quarter-over-quarter. Now compared detail funeral around customer than

flat of points also components impact income. growth revenue as increase offset were mix trust Typically, increase average home essentially core cremation average revenues. volume a other in XX revenue seen in by and Total in currency non-funeral was Canadian the to increased steady continued service. The recognized favorable by and per by fund basis growth a of impacted an X.X%, preneed we've

locations, a generated. the Recall, conjunction saw slightly the in amount of third core sold are the sales in due sales production products increase stream we a X% of of preneed hurricane-impacted $X.X contract in related decline by non-funeral funeral that decreased the Comparable was home that million home this to compared was to time third during Florida, protection where the XXXX. these funeral our X.X% prior through X.X% home the production decrease is a of preneed XXXX sale, year number However, funeral the that Other in quarter, $X.X to are primarily million sales primarily preponderance offset significant insurance channel. in cremation-related with down sales at production lost, revenue network. quarter funeral or drop production quarter total. slightly million primarily the particular production sold our production. approximately to contracts delivered in production non-funeral We or to the funded revenue, $X.X that in into year. at of representing impact would've we million travel account of was taking is affected on the the $X preneed preneed locations that decline When the than compared estimated believe plans the estimate lower of hurricanes sold prior General preneed which revenue, membership and Agency funeral we by been channel sales reduced This a by higher merchandise X.X%

operating driven and points. million decrease dropped decreased funeral operating and profit fixed comparable revenue growth. XX margins by Finally, cost primarily decreases This is ordinary $X.X basis in

the somewhat cost quarter. by mitigated efficiencies However, profit was during the enhanced reduced selling

to moving Now on operations. cemetery

is X%. or the barring to higher not sound disruption $X of by an been the estimated sales increase or hurricanes sales reduced activity higher broken and certainly cemetery our service outstanding grew have Included in million would line property $XX.X like $XX.X over hurricanes. and expectations. included cemetery which this in well Again, $X by or cemetery preneed increase deliver as million growth deliveries, X.X%, $XX.X service X.X% in comparable this the revenue, We which higher Our recognized have is production X.X% million sales a merchandise locations top at trust the sales continued segment higher to line record, of in the caused Preneed impact total, results, income. revenue revenue. which which preneed posting but that or led increase prior by includes million affected merchandise would a to as fund year, with production approximately estimate million

million margins to $XX and operating that an just nearly expanded cemetery Finally, XX%. we margin. have we just over or incremental said Typically, estimated under profits receive XX% expect XXX to XX% points grew basis operating

margin sales whereas inverse by production preneed million, However, the preneed by last sales sales recognition quarter, preneed exceeded production exceeded closer the quarter. $X.X million. quarter, the year's to third our XX% recognition In this was occurred. $X.X for sales year's Preneed

the investment recognized revenue years selling recognition the us the $X.X three of past had year. has savings activity. a us in cemetery has are recognize preneed selling three year-over-year reduced enabled cemetery with sell recognition, quarter-over-quarter As on in of more inventory This first sales effect of four about the quarters sale, the selling developing of or the $XX or on in in at Remember, a more for over of recognize actual of to the creates million this to basis now we selling time what costs consistent conjunction cost purposes million not costs. allowing

in growth news less continued The throughout recognition that should the the as negative effect on what on we also While year-over-year its of a installment for be recognition see of quarter, are that cash the sales revenues capital, the working items backlog. is way. is the rate year all lower the as are good should basis. preneed recognizing we is rate sold in we generally The on an higher is, has in fourth sold

Now about quarter. months earnings quarter business another step for be as overall the solid back remaining we three and we think will XXXX, the believe our fourth of

Vancouver $X.XX last new a that are the with $X.XX. share three $X.XX those our fact to it midpoint guidance of of comparison, raising development facing relates we to on have another guidance. had first this to year, year $X.XX approximately which noncash of share. benefit, impacted to the projects accounting $X.XX reduce expectation continue cemetery especially excess light $X.XX. resulting In in locations $X.XX full we versus per However, by quarters, coupled completion fourth This per is will the of that will probably contributed the from that $X.XX, the tough earnings we quarter repairs our per adjusted large tax previous as share share-based of very the $X.XX earnings are Included XXXX in success we to adjusted in our new in

benefits that when $X.XX believe backing annual the relative the are Even fourth. $X.XX $X.XX types an in We nominal the an long-term out of benefit, represents to XXXX X% in the excess absorbs estimated XXXX our in an third hurricanes, the growth expecting earnings of these quarter. increase $X.XX We tax additional is then the for Further XX% growth negative our of in the the XX% a impact over share. expected amount and expectations. of fourth XX% impressive, adjusted to tax quarter remember, per $X.XX

and impressive challenges Once proud to not a despite we be were rash more we of faced of team. Eric. Astros turn So to it finish another we I to to quarter, you, over able how disasters. adversity. with to deliver like again, call And team in could wrap natural look a our up, extra With fourth of the that, they reacted the strong innings. Thank quarter forward kind I'll the

Eric Tanzberger

going our to our other morning, remainder the similar Thanks, specifically financial And XXXX. our flow the today Tom. capital for everybody. on quarter. and quarters. for some And and our details going very remarks outlook position touch Good performance are then cash address of deployment third I'm for you of my I'm to to

let's with the for cash So start third quarter. our performance flow

That flow. or during So amount of $XXX quarter million. operating an $XX versus about we million quarter, of reported prior million increase adjusted year cash this $XXX of adjusted XX% the was

of However, deferral most due is cash increase of the payment. tax this to timing

talk let's about that. So

for taxes the the pay the the deferral the During cash Hurricane IRS affected businesses of Harvey. federal quarter, by granted year of remainder in for

XXXX. deferred As have it third paid into fourth of a result, we about that million of we payments cash quarter the deferred would've $XX during and tax quarter, the been

benefited $XX the work we federal on Additionally, taxes for well as true-up our by this tax as the return. cash the reduction initiatives to hard tax quarter. ongoing tax total with a in associated our as also favorable prior $XX of that the I'd businesses a million million I now $XX of cash of finalization reduced of taxes, that $XXX $XXX million in around planning through just team primarily produced like result our flow that payments reduction cash about Neutralizing math. million of for from walk paid from This tax year of total million is you XXXX described, the cash

payments three $XX cash during profits growth, as contributed to the $X.XX operating Our cash partially This which items, is equate of had Tom earnings to payments, this mentioned, quarter. One, growth higher we million was about flow growth first half of strong of flow by compensation our about just $X million offset positive field million $X results. we field midyear to quarter. bonus higher due field operating during from summing the and

interest about best up cash course, that we Additionally, its return we to continue $X highest the shareholder our and and was credit to borrowings facility maintain ratio to our drive deployed to on leverage of increased target revolving as capital returns. million

of two payments insurance that's are more received, net with working we the nature. $X hurricanes. Finally, to $XX summing in remaining to million of cash operating capital of associated than $X believe, million, million important had we by The temporary offset was flow note, items, cash about expenses

due million we the had impacts $X attributable late quarter. of of third cash the lower primarily receipts, in use the to to a First, hurricanes

We expect in the receipts quarter. fourth these rebound cash to

payables We compared as $XX prior capital the of also had of million the working a use quarter, of around to during timing due year. to

with year adjusted net quarter, operating let's where we So after million decrease these cover now probably cash increase taxes the far. of step generated good, back flow, $XXX cash to is over in be cash revenues underlying which has capital preneed $XX results have on for XXXX the $XX you. I compared When Year-to-date, versus and in to flow operating receipts our of by about flow cash stand to discussing account $XX of we expect about into line where temporary third year, is when right year-to-date, uses the increased prior which of so cash XXXX, our it's XXXX. flow million the described just and cash cemetery we we recognition an acceleration million the of working for versus taken the neutralized it of the million quarter

CapEx development So million in prior as about quarter. about cash for This free higher define CapEx our which are the million we is calculation, maintenance cemetery the $XX in at quarter. year came that and CapEx, two than flow $XX components the

third in million XXXX, quarter. down primarily slightly in year, increase $XX expected year was the half remember, first CapEx in our the which for about occurred a full the While to prior of the CapEx we

cash other believe CapEx about continue life for and which invest for flow, The higher our declined prior type service to be free from quarter Deducting by the driver cash is from flow catering ops, the a spending with our million in generated use to and about to deferral of million, $XX offerings. in than we $XX million of again, prudent million. adjusted cash the this these $XX cash primary And QX offer capital taxes to would've year. due $XXX to $XXX being the relevant which as the of flow continue adjusting to of we We free items during again, temporary increase through are uses able customer increased we calculate the flow flow I in our maintenance cash that of reduction this our million, facilities third is celebration and update is $XX capital, the free to CapEx noted. believe of our working the more just our for more remain million in quarter cash

cash in So to moving free flow on quarter. the deployment

acquisitions, builds roughly to location during significant deployed and $XX shareholders capital new the quarter, to million. Our totaling was

these for of pleased acquisitions note invested for million to cash our the past, on funeral deployment over acquisition our invested future $XX Midwest. exchange generate pipeline priority we've after-tax the us that of homes goal quarters. optimistic are said we remain impressive several accretive an available to $XX remain million Year-to-date, investments. capital continue million, we opportunities to against have of as Remember, XXXX including we $XX and acquisition due the in returns to the in million $XXX funds, the we We significant in highest to about

several construction construction almost in spend that we funeral million $XX the the shareholders homes just to We our or the positive yield million brings to of dividend quarter. on investments to year-to-date return have and also capital these us. expansion invested over million Shifting returns $X quarter, on will during during to payments. This expansion paid $XX

an year-to-date, end, at currently of on share over but million least, dividends nearly repurchase average of shares, average about impressive Looking $XXX an about just the $XX we remaining million $XX share. Subsequent total over XXXX, We X.X million we have to per to of just beginning have authorization. just under about million repurchase shares $X.X our And shareholders. of $XX investment million Since $XXX million per buy of back a for $XX.XX price and outstanding $XX million shares XXX continue investing to not repurchase an invested shares. to the quarter million certainly paid we we share. price shares at in repurchased last,

the quarter, we're while to shift for now forward, the to we comparables, the When let's fourth of cash quarter prior as large the the year. the to Vancouver in expect to earnings due year. flat in So expecting look rest completion of cemetery a outlook a noted, of flow last we tough result year of the the strong projects be Tom as down do slightly to fourth

more we expenses, an the fourth believe could which have to Additionally, hurricane-related quarter. we expect impact in have additional

As that we will of now due I Harvey, mentioned previously, million be in relief deferred payment the $XX the to Hurricane taxes with tax third quarter quarter. paid IRS fourth

of initiatives, $XXX year. quarter, our the from just tax the for guidance. other about previously payments expectations at the our operating you note to range previous reduced by adjusted of $XXX or less are results. happy million is the tax $XXX timing million to the about of guidance first that million midpoint. midpoint in approximately the think the year, this benefited we to than original million cash $XXX increased planning our $XXX guidance When on $XX during quarter, cash third seen] million strong [remarks million flow guided primarily we at about our to has the for half So be projecting $XX million the beginning I'm last at our year the we And million $XX

Our unchanged we revised range million XXXX remains to $XXX midpoint to at the guidance million. of adjusted this $XXX have $XXX cash flow but tightened million, endpoints

capital the to flow for from adjusted from calculate guidance spending unchanged midpoint free million. a million and for year. full XXXX cemetery at recurring these CapEx with cash in $XXX cash the maintenance XXXX for development, you million ranging flow $XXX remains operations items $XXX $XXX million you'll expectations, from of in Our our also deduct XXXX And when

on close $XXX some and We the quarter. account as believe million with million threshold, view our hand unencumbered to view provide we million of into that in revolver. well of $XXX on fact and of let we position and at being is high-level approximately cash our long-term our our before out availability which quarter, financial we the goals. our of end me Taking in finished minimum close, lastly the a cash So Canada the due we of encumbered about excess liquidity to flow favorably our of cash internal be operating $XXX is

September X.Xx to was net leverage, line which with with X.XXx our of is in calculated debt-to-EBITDA updated well credit Our as accordance leverage XX, at which is in Xx. approximately our range target facility,

to So finish the lastly, performance, thus of far our and the we we year are strongly. expect proud year, very in

constantly for of and for our track plan execute shareholders, for looking to our this record maximize value to we As ways has are the remainder year. shown, we accordingly

So I, prepared remarks with concludes for remainder the go Tom and to turn to we'll and questions call. that, and operator, ahead of you the the over from generate call the that

Operator

from Thank first Chris Instructions] from you. Bank. [Operator And Deutsche our Rigg is question

Adam Chaim

is how in taking stepping for This Adam Rigg. for you are doing? Chaim my Chris Thanks question. Hey

in Regarding the atneed same-store quarter? revenue provide color preneed matured on in the the growth some funeral drivers results, divergence you volume and can of the and

Tom Ryan

Sure.

far and So, preneed volume Yes. as atneed goes? matured said, as you

drivers… the So

Adam Chaim

Volume and revenue, right?

Tom Ryan

Yes.

sales one on relates focused different way, of the of that remember our imminent a drivers the things, that it terminally as with So contracts those, interacting to approaching we in force.

seeing imminent. volume for So that through potential now is do has that what more category you're terminally we're with to right the year-over-year, seeing

that The service. become grown we're other time, say contracts time, that of over because over I is over preneed larger that would we a going preneed thing the to larger we've forcing we're years, and those would matured the expect will that portion

we So to you as - handling imminent. atneed process people impacted, longer the continue because serve locking more we're contracts, every again, as preneed we're we're believe percentage year that the And people up. a by through going we is term, will, is of getting temporarily, to we terminally write number up if which go

and about year and year up comparably As volume we're below overall, it the that. back, up very is our step you this X%, but is think and with pleased

this we're business it margin as of most consumer. we less that primary the probably clearly field trying in to the on year that has which market really that, with on that's we've pricing relates more the is and focus great think our I seen, But markets least business, we're markets done where that think That job. a operate, little think, a issue to is I they've capture interact. a we competitive With of from taken in pricing share certain a I being at more more perspective, our leadership competing than the effectively.

Adam Chaim

you. thank Great,

Operator

next Bank our Gajuk from from of question America. is And Joanna

Joanna Gajuk

you. morning, Good thank

there's which the call $X.XX in first just but at benefit midpoint changes right? accounting on does right? $X.XX is So headwind the right? the So $X.XX, higher you expectation you you're guidance, So your the impacts, $X.XX, by what's from the then essentially compensation, that saying driving core from include stock the the it raising then by you're from from And more there what you that means it's hurricanes, about when raised think outlook So So that if about about storm guidance like if to it, improving? excluding the it, that, kind and is, $X.XX, then it of $X.XX I right? confirm way think whether correct? taxes can that core business for

Eric Tanzberger

that to business, the the Yes. the earnings. And that really in lastly terms related expect of say. right, Generally, earlier interrupted was nature then our to what fourth had. to And core we will those in some also in hurricane, of in the say also will the quarter, Neptune quarter we've happening revenue, and our in we is is described Joanna. math growth generate would should business fourth year, be sales think are the temporary during your part during I that I expect both preneed cemetery that General cash the which pause sales And funeral which you related is they momentum as Agency we pre-arranged the

recognize funeral preneed Direct. momentum some benefit generate from which is, revenues, SCI I revenues revenues in quarter will and sales the fourth think expect General we the from so the preneed Agency organization, And cemetery

Joanna Gajuk

those that of So rebounding were you're markets in seeing already these the impacted? in some saying sales you're that

Eric Tanzberger

Yes.

We Rico are I seeing to let's Puerto side. it and think put

think going good was for I the that to think momentum, seeing into it's and in yes, I going But, it about not our that safe devastated, in we rebound say month. feel first we're yet. October,

the about our good make in doesn't month first we yes, But The feel momentum areas. those quarter.

Joanna Gajuk

And the of this fourth it strong in lot in the because related deaths about hemisphere. are that flu resulting influenza year activity for was what flu seems quarter, just actually, to talking expectations in quite Australia, like your a against

the Hemisphere in that happen the what's some during happened in implies going And Australia Northern to flu people season. believe what

So guidance think flu and how I activities you for there? unrelated, expectations? guess, what your you in are do assume about do What you business your that there for and

Tom Ryan

not work We've in in and that correlation the correlation that seen seen work the past. we've past

So built that influenza our for to question, increase we've we answer in number would in your anything fourth services outbreak that quarter segment of the funeral not are incremental the performing.

with that possible a but we have we crystal built don't ball, I to guess correlation in. it's try so don't that think at

similar you've of Our seen year, funeral in the volumes terms are outlook. rest to what the our of

Joanna Gajuk

Okay. then, because that the around, the playing properties margins segment, be sold. very And dynamic may, of the I that revenues cemetery at if you've looking on the this right, continue been of impressive to you

still new keep you So production where how But Because I guess, reverse. should rather, have, you and I developing in cemetery on say, QX, recognition margins, the rate as you're point, it's investing the guess could versus rate we anniversary think going of about to some reverse guess, you I at or have these going to you the might properties. forward? going sort recognition

margins of how we in year the next about So should for terms business? in think it cemetery

Eric Tanzberger

Joanna. Yes,

to long-term cemetery grow have think year. would to margins in relates our could first that way as we months, it the, call year-to-date, it, points look about the the XX guidance a we think sense if nine basis I the you it surprise to So upside in say XXX is,

the three the think expect. year, We've very about you we'd activity. I for first still of lot quarters significantly, Think and was for that what reason on sell outperformed before. is year-to-date the and than that of recognize a In And touching then achievable years, what pretty we'd see we'd more is selling I that previous going and we recognizing three influx the the have money particularly What's get developing a of you product, in quarter the production. huge now we're it relative this and construction, the then lot high-end spent fourth year. and get to stuff big happens to all because we've quicker well the recognition a year, to and exceed selling reversal happened of that's quarters. prior

year's you've fourth year-over-year it the you the that have we're get again, quarter, acceleration a of to but think going for, should then the And diminishment fourth great margins quarter, to think, see we back what to margins. of So is I year. more last normalized an will entire seen in margins compared you growth

in I that we nine see this continue accelerate 'XX available be is there will quarter again, new seen haven't we've yet, think that think 'XX that of ability readily where pretty of the my kind what comparable perfected our more will as the for be got early of fourth to the months you've then in 'XX. and same happens recognize sale year, first inventory So those to belief a revenues. in thing we'll and but That of therefore would I recognition the and to dynamic

Joanna Gajuk

thank the queue, Great, so much. I'll back you. go thanks to

Eric Tanzberger

Joanna. Thanks

Operator

Instructions] Schneeberger from question your is Scott next [Operator And Oppenheimer. from

Daniel Hultberg

stepping is morning. Scott. Good for This Daniel in

start outlook funeral. and we cost know you you there, Can selling discuss efficiencies think with the how for about margin should Let's the funeral?

Tom Ryan

willing a up I very it When sell driven business. operations what look I to relates it is to we selling to actually we've the constant expense step the as they're performance is third at we a coupled anticipated, to in good far people that so But have if and funeral think believe until the really diminishment the on And that better we're again, we be management, they're talking is months, we're think, than quarter, the think, and about selling gets impact pay margin. for you the it. of year, slight And, back you the with, you back again, slight funeral there's acceleration. going year-over-year. the one about nine seen again, year our this to incenting long-term margins, slight bit. little of as that What volume demographic we're dip a changes, may in a to believe by changes guidance, business generally relates what

this where that. So do and I as sell an We've in to little imminent we with salesforce.com. able a bit we're you be got our the call family's home. to people in will example, a we're targets the contracts also to on what us side again, commission allow stages raising invested. - in for side of put right the our generate beacon and have contemporary sales the the terminally We're we're paying cemetery contract force the And certain to the technology we consumers accordance and of of to a again field, a going collection think, early interface there that paying going technology out if project, we're that technology initiate has more, rolling on with utilize with lot gate. got the technology presentations We've to into procedures funeral at will,

is lot So doing more with to new is raising sales. what of our this ability technology a we're generate

designed place, that in were And so in efficiencies today we're so the that with seeing way do program in and the really, we those the changes it.

that The lot other generating interesting we're thing through been more a the Internet. has leads is

than is selling of utilized methodologies form lead And cheaper procurement lot cost. in a so that some we've that historical

generate that's to expect continue website it to So roll out project efficiently, to XXXX. able we leads and be to more as particularly going relates our effectively in to

our to beginning selling the So be we're and in see we're efficient to front margins find to XXXX. more in continuing ways show that up on

Daniel Hultberg

appreciate There's transparency for online and the an you Got to impact in industry? effect, about been the of increase to and that think do what funeral probability think it for the discussions it. happening the went pricing industry. the if about How FTC with rule you do for potential respect I the color. the

Tom Ryan

that right and that a the don't be We we again, and across this that, would U.S. we're of the have it significant said not in faced believe think, changes with that's It that, with process of markets Having likely afraid not at administration expensive of would deal it. these a just priority to time. now, to variety be a a are I really rule change, make because, hearings it's occur. to our long held belief

complicating what catering online benefits or the the of the about do. is factor that cremation the burial, personalized services facilities, or can of be additional vary think provided or depending just I videos. we can uniqueness quality Prices on tribute like greatly

convey pricing Internet So example, that a to we're each as Inn, hard dramatically, to terribly against easy Ritz-Carlton with pricing. It's it's an hard compare It's to and right? experience selling to mechanisms. other. two be different I going unique a Holiday and have that altered caskets They're price really can think

at you're stay you price, well, And you've do. are got that the Holiday lower of a Inn a shouting and want still in to so course people there's But if Ritz-Carlton.

we would were be the that's good we So and way required, compliant really think It's think about it. If surely be that I complicated. at we'd it.

Daniel Hultberg

about how we the color Got think Appreciate it. from one me, production? there. Agency revenue should and Final for General the outlook preneed insurance

Tom Ryan

the our I insurance particularly that to good 'XX, grow into it, product side. about relates feel ability think, and very roll we we on as as think to we it

worked year-over-year I challenges a and got So we've think yes, in some compensation plan. selling we've stable 'XX through

we things I kind low pattern, in mid-single-digit a to those so expect more relates versus two it 'XX, of place, normalized which guide growth. growth we of And to typically as XXXX with think would

Daniel Hultberg

and good you thank quarter. it, a on congratulations Got

Tom Ryan

very Daniel. appreciate much. it you Thank I

Operator

our Duncan from Wells we questions And have Fargo. Brown next from

Duncan Brown

Harvey running on Hey, I or an question. you all with guys it you in stand? the good disasters, morning. you for I've give about in my or Thanks us headquarters, guys if and up taking that been fully the particular, wonder thinking with office update where obviously does could is home

Tom Ryan

getting We're really It's Duncan. close. close, getting really

been in have grid We construction, it corporate second first. displaced, normal that. electrical of start we've is, the to the of come asking. which of truth building the of moving the We've there. just was the despite a headquarters. like early getting one it One been of back but towards that then lot that primarily buildings flooded And is November. it think finishing November infrastructure is rent we'll of just been, space and And We two we've going of the itself be to the little bit with building but back thanks do rest come, just up and with operating been to there. company will to running, the the larger A is were that's has probably end able for has a going connectivity,

the who and bit back is out little office, to as were facing employees, that we're corporate could. in lot soon out a we've the work get funeral at really really reality impacted that but where customer We to concerned of as And homes personal been of possibly of but field effects that trying corporate truly to people most the think I not in well. the their with families, had their and in that's as them front that a customer. we the the was support were

Duncan Brown

dollars Then, I quarter. some expect of so more got $X.X insurance guess, million in we Should in the QX? or

Eric Tanzberger

would I hope Yes, so.

in we've we million, it It out, that by somewhere set is million $X.XX say what a million $X.X hurricane insurance. be are that's spending fourth to is of right $X.XX hands includes the were as covered of You up payment will a million ultimately know that hurricane going expense still this operations. number we offset range quarter to what But but when million insurance, about that from there. think field around, $X.X headwind $XX the about And in again, stuff we're you're quarter, $X-ish of because the see ultimately ultimately, I by that. complex. expenses is now maybe majority is the expenses our deductibles it's cover the Rican everything. us. $X.X we all by We majority is the was the $X net getting had in insurance not insurance $X.X to vast grasping, maybe And referring the in of total and covered vast news That $XX situation end But, proceeds. could the affect to that Puerto believe, the will we of going million related range in or good to about to growing of million

Duncan Brown

disclose for Puerto help or us total company you in you revenue Rico? it, maybe mentioned some Rico, metrics like revenue disclose size And the or you would Great. for can Puerto to percentage of

Eric Tanzberger

significant things. very the of not big in picture It's

Duncan Brown

last fair. And in and that? I then, rolling new out on mentioned, you think, I us wonder Tom, can one. website if 'XX give That's just you've color project more

Tom Ryan

Yes.

is So problem with this color designed the and our a have, mind. lot companies designed originally, a is really websites of desktop a in were were

you people right a way. compete about and weren't geared searching way world, search So as to were in the the deal for ability our think to mobile us with we

changes nutshell, search. there's a to say to dynamic. get it to in think in a us be very more to to lot a compete that relates we nutshell, as of allows mobile solution are But I'd So effectively that that I a going had

compete relates the in websites, as that's effectively it what so this customer is more the upgrade is to Again, have search world. more designed And to to interactivity. do position to be a

Duncan Brown

you. thank Great,

Operator

have further time, call turn this back over to questions. at no And I'll management. SCI we the

Tom Ryan

the our a thank get look lot being will everybody, be challenging office next home your back you you to on for employees. We for you back we call, of want February. this Thank and for to of our in we'll to and so much. talk again, forward building We through time in our in call. so support Thanks our again

Operator

you concludes participating and may and conference. you ladies today's now gentlemen. you, for This disconnect. Thank Thank

Service Corporation International (SCI) 27 Oct 172017 Q3 Earnings call transcript