SCI - Earnings call transcript Q4 2020 | Service Corporation International

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Operator

Good morning, and welcome to the Service Corporation International Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to SCI Management. ahead. go Please

Debbie Young

XXXX. Good Investor Andrew. company’s is Young, quarter Debbie of Thank for morning. SCI. of of fourth the Relations results our Welcome Director business you, for This today review to

to uncertainties will statements. statements uncertainties differ to, Before in are our that the prepared team with our results and from made some future materially let risks projections me filings SEC to that comments limited forward-looking our in are the could state cause statements on These Any These our website. actual that beliefs, earnings those contemplated are be in expectations available for release that those today. or remind forward-looking not include, by such factors making you remarks, identified and subject we forward-looking and management our risks but statements. plans, the are

that non-GAAP these GAAP During provided Webcast discuss we A under the also X-K certain press to also Events me appropriate the measures. Chairman it now our issued yesterday. of to Investor earnings way, section of this release pass on and that will let measures our measures website Tom CEO, in financial Ryan. and reconciliation our the With on call, and out were is non-GAAP

Tom Ryan

a and the the pandemic, Then provide Debbie. guidance families that remains our outlook I'll change are understanding XXXX the of you significantly. and the and there first on color COVID-XX quarter. for surrounding uncertainty, with performance you offer I'll This thank We business could commentary some during which Hello, substantial morning, hope your the effects everyone, call staying Thanks, joining on us today. on healthy. our safe little

of certainly say one any begin, I like challenging would can has the this about before remember. However, past periods of most year. that XXXX us and a few uncertain been to words I

are is not result increased cremation annual which does rate of preferences perform needed that of were more our a a than of in proud do back proud the relentlessly I'm closure or families avoid client focused for that our became clear We did incredibly and priority. consumer process that in the team's and our on family extremely our any testament a bonuses power able were incredible healing not associates for this able with the XXXX, special with number and we services our of incentive reductions The and One to every resilience to our can layoffs, shift ever, our what efforts XXXX call hard only the remembrance of thing without certainty of we able and XX the we to was of work We associate business. business results hero in to significantly stayed wellbeing top team in COVID-XX. the services I changed. last the In entire plan. say As highlights business, underlying I beyond throughout disruptions difficult our to remains bonuses best, SCI through helping as of In months, into provide and we XXXX. our I’m impact not fundamental wholesale and has our on were reflect recognize that mandatory period, a our our our scale. the duty of that frontline gain participate above health, stable. going safety furloughs And not of see celebration. were any pay the grieving, SCI

drive-through their and in ability they loud memorialize Virtual consumers lives to still our have arrangements, desire our large that are enhanced industry. of services, of a streaming have celebration outdoor of to ideas of XXXX, innovation of visitations, in more in a life heard of have highlighted success many gatherings restricted memorialization to and our and service and part live offerings ones. from importance graveside acceleration we transmitted what and loved celebrate were normal these services we the now we unique radio services, the do. Although, clear The

continue technologies enhancing the to a We arrangement [Audio will while also and interact that invest customer enhance contact efficiencies digitally, we our how operations. consumers to conference experience better beyond providing in with in Dip]

technology tools, meetings sale other down growth to took management yielded of making our cost relationship in instead program and utilize our efficiencies. we noncustomer-facing system significant the mail more drive direct force record our year digital As response labor and leads using the in-person effectively customer We drove travel-related to limitations, unfolded, costs. training, actions of our to per lead growth. We incurring by accelerating improvements virtual

All forward. of going company the this will us year many learnings make better a from

we're As result, and a company. post world positioned as the agile to efficient pandemic a more enter

some with experienced late in the quarter. spoke did in U.S. you provide When October, in projections we last and tremendous our forecast late and the December. mortality not shift about the let's that color November surge Now COVID

cadence growth Just in all same-store XX% the year. volumes our November unprecedented an grew you up highest funeral experienced which the little to and monthly a rate were give X% December, in in we Then XX% to color of on the October. quarter, is

cost a margin in funeral points, October. Both more percentage quarter, to to late improvement As line per a by provided range earnings driven quarter over we this the we in above had the and the of in adjusted well result efficient $X.XX year, fourth applied double-digit the prior top with basis XXX $X.XX segments structure. cemetery finished you growth surge, of share of compared against

count rate. a from lower a share benefited lower also tax and We

a comparable minimal in XX% points home both well a revenues moderate look funeral and in a a quarter. in by slightly XX% respect pre-need channels approximately be some of our gatherings, and I of million a cases on driven by had described level the due million, funeral sales increase was COVID-XX quarter-over-quarter as decline. numbers production XXX to lesser decline performed the a time direct on decline prior funeral funeral partially can of predominant in offset increase in non-funeral operations a December. funeral reimposing funeral very to the November the to the agency tremendous of for X.X% caused you quarter, sales The mix appreciation The the restrictions cremation of a X.X% cases funeral insurance earlier grew number basis our and a by sales the results heroic. Premium the lower in decline by such average general was extent, at in and This which impact for due provided of revenues for was frontline average. shift local X.X% the reason services and the Core number take in such the Words team. improvement Total the overdose, healthcare Thank offset to an down and performed jurisdictions, quarters with were our drug during increase consequence a service. non-COVID you. access Let's to care $XX in cannot the a production. have revenues The average quarter XXXX. of during of client posted impact stressful versus year, or only decline in related deaths, families core given and significant this grew surge record was convey the suicide, $XX is year. perhaps of disease, sales during as resulted my heart of stroke, in lack deaths The funded cancer,

decline core profit from gross our profit slight our XX.X% in production While And to business, our margin gatherings in a realizing a restaurants. to gross profit we pre-planning in consumer basis in XX% the continue percentage on funeral million. local we leads, streams. Growth digital a and by growth a margin record to hampered restrictions incremental growth. XXX From saw on more reluctance high than offset, direct due lower mail perspective, increased in seminars our increased declines and revenue in-person $XX incremental revenue be points margin

services, benefit in fewer to continue marketing promotional as also non-customer the hours with expenses. certain costs reductions as facing labor well and of We management and and efficient smaller by

increased due for or accounted primarily with performed in of Now growth, grew or shifting burials large remaining driven $XX by the higher by of cemetery to lead sales million of fourth the mainly contracts quarter. the Recognized was cemetery pre-need higher of sales preponderance driven due growth, $XX the performed. and effects million, increase $XX $XX during a growth million in The cemetery associated At-need to $XX of velocity activity. the sources more quarter. services due The XX% about revenue at-need cemetery, a of with the from fourth comparable to Pre-need million COVID-XX. about revenue production burials or XX% XX% which million revenues cemetery sales pre-need growth, increased number for in sold. $XX the million quarter XX% accounted production to

continue mail efforts to direct a discussion having We the want tremendous to team. customer with and lead productive a a of remains and force our management high. very sales see our digital and take consumer better from our relationship to utilization of conversion campaigns, efficient recognize improve reception, to moment rates more I system pre-planning sales

they a production. year more record. billion new XXXX, is than cemetery in For company the wrote This sales pre-need full $X

increased gross levels. $XX grew profits million. the off in to quarter organization. profit normalized hats percentage to beyond to and margins So And approximately combined XXX basis cost drive reductions points sales Cemetery strategic gross the Growth XX%. revenues entire in by the incremental

a the an kind A share For reported year in the XXXX, of $X.XX. XXXX full of of adjusted per one we year. XX% over increase earnings

spread the speed of rollout on pulled XXXX, that XXXX a consumer no have ahead, look of year. a may of significant the is unknowns with material Obviously, the doubt efficacy in on the the facing we XXXX. impact that transact service As willingness the ultimately a deaths combined have forward There on were the number deaths. are virus, effect from could that pre-need This vaccine there we acknowledge and results. to many hospitalizations and we on basis future of a our

accurately the pull that impossible timing know the is to we While of predict. forward

factors XXXX We will accelerated are on IHME believe Based by current the by per models based how trends by likely and all $X.XX historical per by range what share CBC, comorbidity from deaths and earnings on years which COVID-related and determining in impacted assumptions, and the share. in these between we group, future $X.XX have adjusted data well developed much. age as as incorporate deaths

the We COVID-XX. than wider on based surrounding provided normal of impact a the have range uncertainties

We're Let's to through take versus expected few the volume share assumptions impact per the guidance. a the deeper first XXXX of increases dive very we trend higher to funeral Then modeling percentage on is to but final XXXX year-over-year as for compared impact months funeral into predict XXXX from volumes the mid-single while comparable we the to March. rest COVID-XX be expect volumes due than of percentage of XXXX. active We digit the nine XXXX, the associated our down months earnings for to deaths, with levels COVID-XX. anticipate in double-digit continue year, to lower

to and percentages down funeral trends be as compare in low see to months a average the expect to XXXX. single-digit favorable early and begin January the outbreak We back February, in of COVID we

While believe growth XXXX still will we we to we back levels. struggle get anticipate year-over-year, to

many As to reluctant large to we people be groups. gather will believe continue in

significant atneed begin We the in results. cemetery of hurdle followed as XXXX in half the to the year from sales year last growth revenues full high should quarters, three rebound the we grow to back a mid decline first the to expect the to for faced comparable by preneed percentage see significant in production the and quarter, funeral range. year-over-year single-digit in

still grew to but we For that growth into momentum back half be down revenue pre-COVID will over versus the Cemetery in cemetery XXXX, XXXX, an rate year, carry over in and show half sales of we production levels. the first unprecedented XXXX expect XXXX. preneed atneed of the believe significant

months percentage double-digit expect first growth year-over-year comparisons May. the for in the year, challenging four of We beginning before confronting

delivering be compared we to be year, single-digit anticipate the growth full preneed to production in versus mid sales XXXX, range but the percentage solid down levels. still as XXXX our cemetery For

before in most our and an my SCI example We the and closing, experiencing rose an heartfelt to people thanks and in of great the been environment, entire spite to with challenges honor continued work agility. have company commitment, meet never you professionalism sincere such extraordinary to So of family. It's to team our faced deliver. challenging by

revenues, cemetery the I'm the expected ahead, should we extremely Therefore, future, belief and while look impact therefore earnings and and anticipate the effect volume XXXX. XXXX. our pull we case effects away, flow it As for XXXX decline forward and a COVID we optimistic not results our in from of cash completely to on see is muted about on go that atneed do more associated the our from we

that knowledge leaner to share in enhanced $X competitive growth a resulting more produce sales operating experience years technology Therefore, earnings per anticipated combination profitable gained from share, predict infrastructure, efficient share, an in the COVID However, is from platform this to a structure. for more leveraging market a per awful we we impressive approaching XXXX, the come. of a and

to With I'll that to pull the wanes, clients acceleration baby more As technology offerings remain our to enter experience service and turn Eric. to continuing serve forward and it longer-term, customers. the allow operator, in their over effectively eyes earnings With impact late new with digital the in our begin further that us efficiently we growth. and expect enhance relevant consumers, and XXs, now our boomers our a of we're invest

Eric Tanzberger

good past through by and many you an And Tom; the going I'm on our few like over I've update strength with anticipated morning, by done of the financial providing followed But today, full address what of some cash our to that flow times. our has results quarters, Thanks, times providing everybody. a of start reporting deployment than any we year. the of for be with I as XXXX I earnings supported And before facing begin as have us by these position volatile were then fourth year activities will XXXX the year on very would quarter, move XXXX. that, well then to I'll during capital for of details I when outlook could we importantly XXXX. the almost that, we think more don't think any our end our ago in exactly us

During and our than was coronavirus. and across moving this are COVID together in day, sacrificing But to the to colleagues and home, deal helped our there poise our more in from year, were virus broader as even with speculation the communities rapidly their their when with all unparalleled particularly being who communities, managing this coming facts earlier personal time, on our frontline year teams hotspots. network well, there about their are dignity, current available associates away support

pandemic continue this the to cannot words communities and proud resolve, am they how help faced and with our So have thankful I virus. of and XX,XXX associates these we'll how of capture adversity to this of terrible through the end

morning please clearly very all associates. me to hear our So something SCI this you. of say Thank

the I'll Now shift to financial update.

on financial continue on approximately well So while we we and entered hand million the pandemic profile, liquidity anchored at by of debt significant a of available be very bank the million cash consistent roughly $XXX $XXX end positioned a the a position of year, long-term of plus of to strong with $XXX facility. our credit favorable amount million

beyond as times in higher this low leverage of results year. leverage pandemic, to a the of times we we net still about On these end resulting times at look the QX intend the range remains EBITDA And manage today, impacts X.X to the our X strong debt-to-EBITDA. at from we're talking of X.XX

remember earnings in on late which COVID has mentioned XXXX. Cash to of higher the of as million by positive that the under well and about throughout deferral move with quarter which the the flow decrease as $XX we of Also on million in benefited increase quarter, as allowed tax for by to net continue transactions. payments a use fourth million about of than $XX higher in growth related cash sales These CARES property particularly of earnings, in on recent we We interest at prior much year, as November capital, the for operating This resilient of of let's the over well working cash growth inflows partially million payments primarily debt a million over expected finish from is of basis. preneed by and $XXX year. as all And during to an the stronger deaths, the cash an predominantly about the have generated refinancing million of generated the increase the as outperformance in flow December. benefit just installment payments look seen preneed million, year. So in flow cemetery surge $XX tax Tom the the to result $XX been year related the cash flow, in year we were supported step we million. XX% quarter, the and payroll or cash earnings quarter the offset associated by as $XX a representing operating full Act, over full which marked on year us back sold cash increase representing an prior $XXX the $XXX

let's we flow. cash about free this deployed So how talk

program had businesses, very grow reinvest shareholders. as we million to quarter, value nearly of the our robust During our $XXX deploying a capital return as capital to in well and

million, the So stages spend, during million our cemetery or deferred with million but businesses we than pandemic, expectations. we line Full as through quarter about a in which spend regarding approximately invested year very which later prior in XXXX decline year, more in development expect $XXX we certain capital was and up our to which of expenditures the prior maintenance year X% my the breakdown, represents remarks. make $XX $X I'll early as in COVID-XX was address the from curtailed the

the activity acquisitions, the During deployed and which at end we the million a quarter, was of year. nice about towards pickup $XX

opportunity $XXX With nearly our and and million the of homes. deployed dividends share of both construction we the and liquidity healthy CapEx form our finally repurchases. cash For to our returned a in the deploy we funeral took favorable we of strong new the for to along acquisitions full about growth the million just Then shares, about $XXX to over bringing profile, shareholders in back year the outstanding of In backdrop, we quarter, XXXX, a in in XXXX. amount reduction shares full quarter, with year of X%. leverage bought to repurchases share as flow outstanding X% capital fourth in

outcomes in our where to press the ever in severity Tom release will in EPS outlook you for for of to in on in our a cash XXXX. deployment. land in challenge based adjusted There shift from from with let's our $XXX duration of and like some and noted items forecasts making with expect flow ops Now million cash capital precision terms just involved results million from gave XXXX. the flow color XXXX operations our adjusted on range COVID, flow into that cash but and we range XXXX, to remaining of associated few the are $XXX thinking I’d highlight about when pandemic, a to

We as what I full able of payroll taxes $XX regular Act. incur about XXXX million, allowed defer the we're three will consider to quarters under in CARES which of

Additionally, tax tax From expected be range rate effective to to XXXX associated standpoint, to about These two XX% pay the to will we the impact continue million and in XXXX. timing higher taxes increase we cash you required of XX% tax to stronger when our million remainder be in related cash and in flow compare are taxes. tax be paid associated than an financials about due or is $XX of with in in payments the Federal mostly early $XX will XXXX $XX these together half state XXXX, than in items with model a XXXX. QX also This payments at XXXX to third cash about payroll XXXX. in $XXX the be then payments of of also quarter million collectively create million payroll XXXX. XXXX that to deferred anticipated will

thoughts moving move deployment, to So capital forward. some as on about we

last and XXXX projects which for we million, expectation spend certain development million higher $XX Our is with capital cemetery level about is in year. proceed million our spending differed $XXX pre-COVID maintenance $XXX to from than as

in expenditures at after drive to in funeral new million million $XX million capital. deploy In tax home acquisitions opportunities, roughly million of to low $XXX well expect these internal million return, we $XX our recurring of to and capital of towards mid-teen addition together the construction to excess which $XXX to cost midpoint, rates $XX of

far difficult a XXXX to regard remarks in backdrop long closing, with most So by we very time. was the faced in those

dedication it extremely strong stays that and unforeseen of challenges, to occurred, this many with the of balance Fortunately, managing unexpected year we through and this I'd like been And again, of it to has possible and during a for be an everything duration. XXXX each associates us, into went for without superior thank trial you. sheet the year. successful again, while none has resolve, Despite our passion

turn now with concludes for And we'll it that So that operator, I'd questions. like the over you to call back and prepared remarks. to our open up

Operator

Please Joanna comes of question Thank Instructions] Bank ahead. you. [Operator from of The first go Gajuk America.

Joanna Gajuk

much for kind here. you very of question Thank the

on So first, EPS, a so of the close to XXXX things, guess I appreciate guess couple I comment the $X.

sound great. So about frame I should previously – context this how we for it of you X% maybe of, your about XX%, because kind so be like guess can those around will to use targets, think made kind be us? higher to frame should of targets had metrics think that you'll talked you in long-term you us, kind That because growth

Tom Ryan

Sure, Joanna.

company more the an to XX%. challenging a and X% think out believe powerful as X% things, more And are us we've COVID a given we've of be I to it's of what you I historically, this recently, think XX% tended taught bit I coming couple we're has I more been range, to mentioned, think really know, more I and think I a that. of because

the preneeds at in of services, coordinated. consistent a think versus all, We've going gain the ability had number we've are preneed the going numbers atneeds those providing typically to look atneed today of share which atneed, We versus if forward. you atneed. the an true I can as increase example, seen we're going First look pretty

than we So it typically tells people would. more us servicing we're that

services, we to ability to deeper ability our it's perform scale a many because of aren't competitors to with marketplaces relationships that I of think just unfortunately of people, deliver acquire to has advantage have people and so that things a consumers. our with cemeteries, able that opportunity our can do ability And services. taking because refrigeration that scale our again, we're have and to take to our lot outdoor lot nature, our of and in overwhelming in to of

The other think I digital thing in that our prevalent preneed us feed and funeral pretty is is, our program, atneed leads website, our for volume. both which footprint, digital

leads achieved advancement at has as goodwill from and to the about it span forward, But I our think of the So be increase direct time control, that company families, and time, I traveling our technology a gained, think we had have to and mail a think and more finding expand how more we've of that this reduced the sharing the efficient, resources of way with that by you same things. we it a that out produce are cemeteries, efficient look clearly we days like and at a utilizing as think allowed services it technology that better we're visit sales. this footprint with effective I we to if people particularly our people. before, nimble more serving more the perspective, on, us look more has serve allows get effective the us of we you forward, it. that think And sales the in did us way customers now we we control share. should have The we outdoor market programs believe, digital as programs capture for better that span heritage over goes and combine I we period, as when should need afford And during a effective we be dramatically and going forward. we'll to region And

would my closer that push towards, end upper opinion, in Joanna. the range, So of our to probably us long-term

Joanna Gajuk

there a sense. That $XX I makes last savings million is to last on talked million cost And pre point, the about pandemic Okay. cost versus, quarter you $XX so guess the structure.

guess is cost of kind same when a is number. it more see still than talk because kind structure, you it there of kind you I So leaner point even that efficiencies the forward, you or about be indicated could that of additional going range at

I any too. will So be guess number color, that great on

Tom Ryan

identified, – think I think whatever the normalize I is might numbers of is, to think this sticks we that is Yes, it as again, it it's as post-pandemic determine now, to Joanna, how bigger going it's what those lot more a shakes a to consumer. be the out still it's but I safe, are And what preferences $XX also I little to and cost structure, that million million be as than a relates very think bit $XX had say think but we normalize about safe that into we've to world. I there still go little in of

Joanna Gajuk

what saying, on bit seems open with guess, question, guess this so me but it I helpful, guess, spend I money I it's were acquisitions, it kind quarter. you which is more, good. in did still for excuse of you you fourth Okay. line leave a the last That's And some

play going point competitors market out, during done might people forward? asset too might smaller are do it so this they to much the – small. gains, pandemic, about also might been have and So you to pretty the the there How overwhelmed, sounds they they because has kind assets of, struggle some expect that acquired how be feeling or your share are to like

too? you. be any the would So acquisition great outlook color of on kind Thank

Tom Ryan

XXXX. look fourth and closings, XXXX have quarter pretty a we nice We into pipeline, out as it did Joanna. of at looks active the Sure, as and look we

impact lot do surely want about to good decisions, I lives. think – a say, think feel something hard So It's they think opportunities. with think those I we very people their makes going what people's it's timing this about to the things like of twice through I of can

of could an robust that. it as have seeing a relates expect opportunity amount probably on Eric for increase And the impact funeral construct spend we most set then pretty but to cemeteries land think we're constructed certain it I we I part, markets. recently as new homes. think also is on So people, will what in to We've mentioned, the now, what continue to purchased right new

it'll be hybrid to new through approach new increasing growing a and think acquisition I builds cemeteries. So investment and our in

Joanna Gajuk

I'll you. back queue. Thank Thanks. the go Great. to

Tom Ryan

Thank you.

Operator

A.J. The ahead. go of Credit next comes Suisse. Please question Rice

A.J. Rice

cemetery a just talk post XX% savings try I Hi range of cost the because of XX% pre-COVID is to COVID to worth or returned and and in we everybody. XX% it come be – from being when that adjustments the is sort Maybe XX% range. always in it environment, gross where at of to higher perspective, margins that? cost so guess, the than or is sort I about normal margins so we land we'd possible to to comment and the funeral wonder, Thanks. forth talk being the might different about

Tom Ryan

predict, another think talked pandemic to this all or exactly continue think Yes, we through on points noise, belief our have ranges long working will right. be to A.J., pull a I impact as how XXX don't points you the occurred raise to to of XXX again, probably probably it the It's you forward I the depends you pull be we to numbers the get that ability basis because deaths. forward it's going talk those about that margins an hard But on to from years normalized this basis about. know which stage,

the and margins XXXX ought both look we quoted. you and let's feel so funeral points ones XXXX, cemetery yes, basis XXX say be to as that than better or we out, to So margins confident

A.J. Rice

the know the was you And in pricing did on and parts across those increase there, returning in I in little pricing pricing step back the Canada, California fourth in of constrained been a markets? activity country of mentioned pretty two the the tardy impact COVID had Okay. a challenges it much still lot other quarter, or to

Tom Ryan

event. think, reluctance pretty because It really in to effect think an markets, pronounced markets I Canada of a market, have different have California other a I but outbreak people effect have reluctance a a a A.J. limited, have Seattle, we're big certain a had you even to the and people an lot anytime gather, in in of a but regulated restrictions again, government like more had

you and So see big consistently kind it when we did see outbreak. surges COVID these of

is better really lot way it then occur. December was through getting October we saw and that a So November, the when all impact

you you continue very, as the receptions go imagine first average be to more money quarter. hospitalizations little life. And So down, you'll and to down, with expect bigger we're this in people then bit I still spend that think the busy a to see infections the go right begin now, in as very see can would

A.J. Rice

tracking all? been from in new And FTC last administration perspective the we've Is and role. there the I with on any with happening to guess background, update there sort and of the what's your funeral the what's question as going

Eric Tanzberger

really A.J., that at We changeover going changeover the know There administration, in that be is to with I’ll good take time. in the morning. point no in update this is commissioners. there

on Some some commissioners to are moved well. other had positions, there the of as resignations

best what put cases, GPLs interest our no at testing as sites tell to important at And we it think as in the way service to prices consistent move we know of you even what different be itself out reason is a to and there that's So very, our plan, point very and good we in the in been news regardless year we've we're is, to think very the consistent from than with well, that don't the put strategy the a this that in continue lend forward is to that's continue momentum that's to for another time. been enhanced forward. products with we out consumers. a going we what some that was we're want we've pricing that's is needs than on to those Certainly, there going change may more And funeral. of forward an a makeup move our foot itself outcome probably Federal going over where meet moving digital to starting than there. something as I more lot to very, or going premium forward issues what in as of in means of all our our Commission some other to one commissioner The continue type that or anticipate best framework going. is terms not that's country do using Too things that change before. then, early will to But Trade our

A.J. Rice

a Thanks great. Okay, lot.

Operator

of The Scott ahead. Schneeberger next Please question comes go Oppenheimer. from

Scott Schneeberger

indirect much. very certainly I'm Thanks Good important like of morning, to condition. workforce, Eric everyone. and lot a hard I'd Tom, your And thanks work echo your doing in to

the the for a but something as anticipating is like to give a just contribution in It in I’d the of annual your we you're business question XXXX. from first an cadence quarterly you prepared or similar? first feel maybe of each of think on lot The about sounds Thanks. quarter, should quarters remarks cadence us could like probably activity how ask

Tom Ryan

Sure, Scott.

impact the I my bit I it hard thing. a of XXXX monthly in give it's remarks, tried back really for to about comparing But a to clearly is think you.

of couple I think and has that XXXX of continued surge seeing part we're of from a last months early XXXX. the the

and said, percentage even we growth like really April. and throughout cemetery expect the double-digit funeral So occurring in quarter first into we'd

in quarter. the pretty difficult and – As the got April, a in while the pre-need average down going really you was of saw had dramatically. into out began tale late last increase the March April. case second there, sales up you as you year, We in And volume really we cemetery rebound two early to we on things remember of sales, really get we went a but quarter big happening if a dried

as comp to second being then going a get you of a tough at-need a volumes quarter think as as not a of the – the is you're because the really back big the tough And cemetery year, I part and it's hump of the to So half see challenges in pre-need comparison it. well. case of first because cemetery

is contained. a comp piece normal. the to get half but be very this expect get more virus this as the for you financial back you second performance And quarter. quarter. it's the going that to kind is to of a then we solid year, pretty And half going be to again, of overall, in I'd company. That'll the tough So in back a the comparison of expect then a first would I hope of the be big the as year

Scott Schneeberger

cemetery, you your forward and XXXX. – But you In it's consideration thank and XXXX, pull just of I'm just for for How cemetery thoughts Thanks. XXXX curious what pre-need, difficult and kind with those, run alone, about multi-year as XXXX thank been expect, elevated. you just on quite should a that thinking of for that well. rate, curious we cadence it's but specifically pre-need on about are sales, forget

You've touched hear upon a it, commentary more on that. to bit Thanks. but little maybe curious of the

Tom Ryan

healthy but because we'd we we like feel think XXXX, to happen. for it XXXX, performed level I Scott, be that slightly a expect think of we over as I we XXXX. And that things said Sure. the of below again, couple it good at come very about a clip out

that You're sell into more spread thinking kind developing again, you're of you to opportunities, that more have. heritage connecting influence you trees, cemeteries. And out as those of to family families, within

seeing lot people we the doing so think I we're cemetery see. more in a more gaining into what outdoor lot our familiarity, grounds, cemetery, The other a is thing we're services bringing

things digital as it lot I ability a to convert positive to those. see it our that, relates and to as relates leads So of

more less homes, would And of through drag the a which that environment. with and again to goodwill them high we've levels grow sales normalized with gained, just better in the word technology in I the can a more that new single-digits a limit force, that to return a have. leads going bit we this we and be percentages expect forward so thing can where and efficient the cemeteries of forward, coming you again, the contacts fact think only pull in is funeral But people that number the you'll have

Scott Schneeberger

I'm it's going separate sneak going in, Thanks, be two one parts. to to more Tom,

first project buying sell And in something if you've we high cemetery, land, offset serving I'm contribution past. update well is The active like might in and pass could – move buying curious, cemetery have Thanks. going I'm been heard areas that to stands. on say that Beacon just I'll you see do don't activity, that's the you you of as might on to kind it doing just see I areas where that. been curious an think land or too in I with also we that were on a be something which as of happen? sure is provide you're then consideration if where of some

Eric Tanzberger

really trying that, get the of because say diligently results, same credible I but Cemetery, a of see of the bit at like like time, and most sale. was some as everybody have still just not our pandemic of think to to work so XX% little we've way favorable decrease cemetery average movement the continue were well we've I don't to the our very out or a with believe everything is kind growth this good rate we're that particularly we did to cemetery there. positive going with as very type activity a the to issues just rolled isolate expectations in specifically to or around we're progress to out, caution favorable during previously hurricane I able afternoon Beacon. probably about know get I we the Canada remembers process it that like kind it's in our had, in think to rolled that that, out discount through of would And our is I'll the funeral of all some I and segment, take had rolling just It but analogy, sales With as the breeze we're in places attributed pleased that. our difficult measure we've the seeing seen. well, our Beacon Beacon it this, first, Tom. during and pandemic, been segment.

to it's it in continuing continues our that helping long-term to we'll step on but direct excited work and and that be cemetery as meet our segment we're on during It be caveat, to reduce And wanted very funeral the say well. as probably moving to XXXX. comment I of continue property on about well our as clearly continuing with well, in brands. Tom, of average SCI to that discounts working opinion, the finalized terms cemeteries, as out. rolled me for then. say you grow So sale in to very hear expectations continues purchase next that And well. is the to The

Tom Ryan

for velocity Sure. very Scott, high in us. about generally the is talking markets cemetery property we're

and So expand to a got larger it's city. places marketing where big the places sales into different for and presence us parts in best like of we it interest long-term felt was we've strategic where of

have I'd of to develop to these land some But So there's say cemeteries and sell. really I'll give no is begin big Houston Houston, and as selling. begin example, we're a just expect immediately going pretty that presence to it's of we out West to you're with of of if cases, not did you familiar and an going as lot Southwest isolated – one, to and it out We these, in all the fund growth in it. South. a is

all this prudent was ourselves was. area it so in And to position just we where felt that growth

the to the West age for it but Houston a an I of to do. opportunity different us side us of example, think in it ideal an Now, And affords have it's and you but that's I got don't not us, think see a just of for all is of we've kind lot important to way, ready. that but manage it,

Scott Schneeberger

Thanks for guys. all color, the

Tom Ryan

Scott. Thanks

Operator

ahead. question next go Raymond Ransom James. Please comes from of The John

John Ransom

morning, everybody. good Hey,

what a count? was what the Eric, was couple Just year-end the of share – cleanups,

Eric Tanzberger

Year-end was XXX right million. share count around

John Ransom

what how think your terms an maybe do of that and half and And that versus about percentage I comparison? as volume from you detrimental funeral half, would your first And margin at-need assuming think are Okay. versus helpful. guide the EPS in self half about kind be earnings also, of cap decline we second first and half, second

Eric Tanzberger

two-thirds basis, of I the looked first first half but from staff the I third of the in it looking, when general half way the as quarter out the is of kind in a lot half, about you played pre-COVID, first at as it you think the XXXX, I you're Yes, really was second at and one more back a year. $X.XX, think when of obviously a look John, think statement as

year. would logic would a it the us normal type on tell you, probably So, in flip

looking half the in year being you you're ballpark one-third of the the in something like And guidance, of year. at, if the looking of at the first back and probably of so two-thirds $X.XX, you're center of, somewhere half the in think the

We the it very real think know, it the logical range. what components you modeling question on is starting ease. going. speak. insight, going said, now bit where certainly XX% speed in volume volume, you January, when but it's the efficacy know, very When to pretty it's the are low doesn't to of to to the COVID is, vaccines, So, speak funeral of right as give we easily when's what all type see the much in vaccines, But back into of down difficult I all-in, the we related that's And just seeing something we're too going and of you to depends ease. into you down little trickle that February. is pandemic as could as high-teens, that kind Again, half even in mid-teens, a maybe

John Ransom

the and this wasn't about if excess versus COVID death death, the if talked you about to guess, way know interesting, they're I before, had a that in know, And it's at of same, COVID guess, you've the but you look excess XXXX we morbid I in the XXX% as death.

are the depression, that in cancer lack guess, to about, whatnot. other talked excess death we of things had truly you suicide, stats, percent think versus if COVID screenings do and what you So

Eric Tanzberger

you guess, to grab ahead go don't want how a that? venture you if know I Tom, to

Tom Ryan

of impact death, to of we'll and of looked just about which CBC John, a I'm lack causing say – of call And to somewhere nature. excess things the around I that COVID number, going it directly at the would what the deaths, two-thirds coronavirus drugs not are that the I've that with deaths, of related access, but off healthcare leaves third data. this lack maybe Yes, the of happening what's

say or years access health drug on without that think to that, probably our So, to mental yes, doctors of harder the model what's regimen. little I our or it's you'd because was going appropriate and physical a and long-term screenings health impact

bit got to them treat a you differently. little So kind of

John Ransom

it Thank me. you. Sure. for That's

Tom Ryan

Okay, thanks John.

Operator

more appears over like It this are any no turn questions. would Therefore, the for back remarks. SCI session. conference question-and-answer closing Management there concludes our to to I

Tom Ryan

being please be late We We thank the first in April. everybody look of will on to which want again at the call the you safe. stay to quarter, a speaking you today, for to forward end

careful. be Talk to soon. So you

Operator

conference presentation. concluded. Thank for you The now attending today's has

now disconnect. may You

Service Corporation International (SCI) 16 Feb 212020 Q4 Earnings call transcript