SCI - Earnings call transcript Q2 2022 | Service Corporation International

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

Operator

Good morning and welcome to the SCI Shared Second Quarter 2022 Earnings Call. All participants will be in 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

good Investor and an is Young, second Debbie of Thank Today, morning. we're of quarter. the for Relations. business providing going Director our you, results This to overview be

earnings to go remarks. are state forward-looking the those prepared are call, A made results appropriate our at our our In tables available to remarks, quickly are on subject that also I'll and in the beliefs, comments usual, our to cover Safe risks or before Any to differ team Harbor These in management in to risks our from hand begin Events. those our these forward-looking not factors be and our found I end we'll financial under measures. discuss Chairman but sections, future actual the expectations, that are statements identified prepared today's statements. certain our will on earnings Tom reconciliation could by non-GAAP plans, These the it of measures can website the the and language Webcast measures materially that for filings with Ryan. GAAP CEO, As To in uncertainties contemplated to, over and SEC include, of release statements. also and website. such our and Investors the cause uncertainties release limited projections

Tom Ryan

us for the you Thanks today. everyone joining on thank Debbie. and Hello call

we quarter. thanks is our perseverance positioned your us the First that of want my posted SCI entire and all, I this It team. express results to to commitment heartfelt for

we and and client in continued the of healing to our stay communities remembrance, what do helping best. our closure we've families grieving, More through process gain celebration. relentlessly focused importantly, on

solid some further funeral begin performance our with results. including followed for the some my Now, morning, quarter, business high going of overview quarter, hand. This a by detail on remarks the our color level at to and I'm around cemetery to the business

second prior quarter, generated earnings we pandemic experienced per over $X.XX, adjusted quarter the share $X.XX, year significant the which of decrease more For of impact. an $X.XX a

of XXXX XXXX delivered earnings above pre-pandemic see were of Compared performance, For per second to a our XXXX we quarter's well share quarter, as with strong XX% a average. quarter. relatively XX% to and the above funeral levels continue ahead the better perspective our growth but second flat, of elevated funeral services results expectations funeral we this

XXXX down prior still as On versus X% the production, the was below about sales cemetery cemetery side, second preneed strong, very year quarter. profitability was while historically

was Fund Additionally, declined declines as during Cemetery the markets the Trust and second it income in quarter. impacted equity by steep debt

higher we earnings ups quarter, comparable a higher by and as primarily count. per decline share of and somewhat $X.XX impacted from lower below operations, general $X.XX the the saw for tax line acquisitions incentive costs, rate, share administrative the impact both favorable timing a the decline a of a and offset and by So, in accruals were

an average. or core about deeper funeral funeral for the revenues in million as prior our expectations, over core $X revenues Comparable grew slightly revenue agency general in offset led revenue. million funeral sale in by comparable reduction recognized in preneed by over X% were impressive grew increase the X% quarter. the Now, results look Total let's nearly exceeding comparable a take the revenues quarter, into year $XX funeral growth

increase gross point the and of basis we X% $X about second drove Our as above beyond XX.X%. over XXX in average. quarter, despite which year We're families funeral profit. velocity is achieved of upgraded have with pre-COVID $XX rate. mind, catering, a from second team. to over XXXX. increased core the return grew COVID or Lower compared has positive of conjunction was X% From and XX% May. our Life percentage well commentary flowers flowers. funerals reduced as consistent In with points increase the a the Comparable higher percentage million $X slightly seen and our talented volume the leads of catering higher costs, our within levels and XXXX increased strategy million million gross pre-COVID SCI around perspective, to to preneed average Celebration increased of million, essentially the merchandise and profitability. prior Life increased about while impact services this families Celebrations propensity presentation still than funeral more growth initiative, client or selecting almost selecting million volume basis a rollout during $X of direct incremental in topic Day mail the Keep growth Recognized levels. profit quarter as revenue of X% $X have digital quarter. XXXX and our facilities in deaths, of slightly more nearly to higher the to in second sales successfully expected families Revenue to select is cremation Preneed contract Investor funeral continuing our offsetting in profit general declined production of over Direct elevated sales profit core XX effective resulted quarter margin the This serve over

over as more velocity production strong, digital contract seminar the Direct leads Increased programs, well almost of posting increased strategy a growth. were mail year and by targeting increase direct drivers effective our of XX% primary driven our prior for quarter. new particularly was as the Our an SCI and

quarter. preneeds in down million, revenue compared must to core production XXXX in $XX sales revenue XX% sales million declined Preneed as decline. we're mind, Endowment another the year $XX by or or Trust second cemetery were flat, second to in quarter was so decreased a X% the against by Fund quarter shifting income second sales quarter Atneed the comparing $X year by grew breakdown, that decreased about impacted cemetery revenues pre-COVID Care prior prior XXXX quarter. production that million prior year. Now, cemetery. not recognized distributions for negatively about by is accounted XX%. Comparable revenue of the cemetery second by over Said in XXXX terms revenues $XX Other did X% was way, capital gains production. million our second keep above quarter We our about reoccur. the

most slightly but prior by by sales core million in average. that $X being have decline Day sales for velocity, is pandemic. As productivity the the believe we robust, from down we as increases our learnings part experiencing and the referenced in cemetery year. in achieved a have offset remained presentation, sales to marketing Investor sales the our Large we enhanced during compared sales We're slight and

Trust these margin million points percentage accounted decline. lost, bode for production. to income Cemetery but this We this opportunities and XX.X%. in the well in good $XX should news after high travel quarter merchandise gross not diverted and rates their dropped in by improve relationship and discretionary a the are attention is year-over-year with also management rather gross sales impact appointments about Care our XXX profit Fund of for declined strength most decline customer have the seen close slight the continue of increase and basis the deferred to societal and held engagements to system, our pressures. Eternal profits Declines and of post-COVID-related gross lockdown year felt service team future general as and sales inflationary The our consumer consumer both profit

a volumes range As the you $X.XX. bit. XXXX inflation with as continued inflationary range that had pressure very discretionary for earnings share We're most in slightly experiencing $X.XX part slowing some in pricing. we're remain per funeral wage above recovering average confident that we've or our earnings consumer a adjusted we below of we a Preneed our you. expectations our to the to segment, and saw with strong release, seems are our down We be revenue per anticipated, provided [indiscernible] see reaffirmed to $X.XX, of case. are trending the expectations, continuing midpoint

expectations On atneed trending our than volumes. is to the stronger cemetery due segment, higher revenue

to have preneed of we diverted very occur and a revenue consumer good quarter, pressures. be is have expectations, velocity. as attributable recognized slightly that construction a particularly inflationary our in quite attention backlog We will sales to completed is of general to news While that slight production decline our in believe behind due is a scheduled completion. that bit sales upon healthy fourth the The

in We costs also maintenance with some internally our elevated both cemeteries, vendors. are labor third-party and experiencing

and for continue interest not incurred and to these The However, pricing. saw variable a the are the the financial do back sharp are tax markets, that Tanzberger. earnings material per share. This had not quarter to inflationary company to the operator, call incremental expense Below most this expect the move recovered associated of the we reoccurring Eric rate line, anticipate in second now with up. to in negative rates being as in whole turn on year. $X.XX decline the with over we I'll so the With a impact half the part, was

Eric Tanzberger

Tom. most everybody. really plus in this our results that while communities associates have you want these the that's these to continue circumstances, our beyond thing era. impressive taking and start Good also to us exceptional customer the quarter. managing Thanks the families field helped XX,XXX important with financial I all of and morning us really through thanking as era provide COVID that during our and Everybody produce to exceptional service

for everything that clear, do So, our hear me and very you you loud company. thank for

cash said, being cash to our year. like the some of market remainder I'd of our on and of then flow effects discuss that rest on provide this our the quarter, color; capital for So, results, funds, some with for the investments the comments outlook flow trust

year, similar results such the the higher second So, flow levels, It in $XX $XX This COVID-driven current in second we again activity line is expectations. cash our was per we generated last in that earnings the $XXX was of with the generated as flow lower cash quarter to of activity in quarter million adjusted of about than XXXX. flow share. are by adjusted operating cash second quarter. impacted These pre-COVID million million positive our significantly

though, in on interest decline $XX as which in year, second year, $XX floating working of of cash target or of The were divestitures $XX cash did taxes, increases associated quarter in the as impact smaller interest for excludes of of an So, restructuring versus as operating quarter million, quarter, million debt last reflective predominantly with a last second so was higher cash our debt. transactions, about well million we in expected gains rate this which payments well the income, use on flow $XX from capital. increase as our increasing million

between increase in of about total the taxes $XX only expectation our was the Additionally, about with the of related increase year, million. this quarter year to really quarter for of quarter this working over and of payable cash a line of net is really the this which was first in quarter the second The year. use capital million slightly prior outflows the timing some $X and in

that of timing. think as So, really just

shift gears Obviously, I'd our and most of to everybody effect has in a support that talk funds. Now, near-term tied of impacted you've contracts the our trust preneed our future markets near-term that our remind trust seen about revenues of the cash is impacts funds financial backlog. earnings and this the like let's market value muted to volatility the on importantly, as flows.

a and reflected XX-year net given funds in I'm market ended So, XX% contract trust the XX-year in totality the to average at unrealized the and X% referencing. customer those in on our fund year-to-date, effect about about muted cash the really contracts and More any of mature this hence, individual Therefore, XXth, of loss XX value trust or that the decreased each the June to effect $XX backlog is the over specifically allocated X% trust year, had earnings given the a with about our contracts, per life reduction of in funds. billion only quarter flows year. period,

$XXX the significantly funds June currently of a this recovered net after are just month and have XXth trust million. However, unrealized over in the we position quarter, since gain

year currently in down the percentage modeling trust are mid-single-digit range. our the to We

to want capital our activity. investment Now, about touch

our opportunities, our returning into and million capital the new accretive businesses, we acquisitions, to quarter, During as $XXX as well build existing invested shareholders.

which the by technology about and year, into of infrastructure we projects this expectations million quarter. talk Let's field higher field prior We way several $XX and accelerated completion invested really our the businesses maintenance was capital, as than into about other of million both breakdown. the $XX the a consisting of our

cemetery annual cemetery development year of levels across COVID-related higher into maintenance higher investment view Additionally, This and million we the of maintenance of development invested perspective, prior guidance during and cemeteries $XXX XXXX. than capital and funeral just new are million our year. $XX quarter. the over million as we year both the in deployed towards we development existing a today delays to were due primarily million these reiterating experienced to facilities, for projects growth timing-related that construction real last was We the the cemetery $XX purchase From of full our investment footprint. estate, $XXX homes and and expansion

region the small front, a $X acquisition Mid-Atlantic in about the for On million. we transaction had close only

investment activity of believe accretive year end pleased we our June a will we on what this closed the of robust to XXth, million of transaction the another we various pipeline, million transactions Coast. stages of very Currently, acquisitions. and we year. with range after have we $XX anticipate we remain We several acquisition in acquisition call would on West half end second and pending However, higher the having and though, the at $XXX

returning being repurchases. returned Finally, quarter through $XXX we share nearly continue with alone million shareholders, and to capital this dividends to

I'd position. a our Now, like few comments shift about to financial

of We almost just $XXX with million of sheet on end our That favorable the at million strong maturity the available debt plus over credit bank consisted over quarter. about of on have just and million liquidity facility. $XXX continue to long-term $XXX hand, of a cash balance great profile

Additionally, end at was debt the to leverage net EBITDA. under just of X.X our quarter times the

continue second just as capital will invest high We mentioned, the acquisitions in program. half our new and repurchase to return builds, and such share opportunities the I

and from to The comp is impacted leverage times. targeted were in to four and year the today three our increase for from the also result that positively activity. expectation quarters of We to COVID ratio will by this level a end leverage end higher EBITDA XXXX prior lower half range our a

annual guidance remain $XXX let's for our the cash Now, flow to the we the flow annual full by adjusted in XXXX. towards operating cash We've comfortable target of of million first for million and year outlook partially million boosted of quarter. talk half alone, this already XXXX. activity the COVID about adjusted for first generated $XXX the of in very remainder $XXX the We again reiterate

cash prior decrease this cash incorporates this previous this mentioned, lower flows standpoint, a while taxes, the well range remainder both of $XXX year on to half compared full million as Included second guidance annual XX%. year, for an momentum XX% in tax compared from million an the slight resulting adjustment I COVID-related XX% of to estimate the for now million. of year. guidance $XXX in be tax to of of previous as payment $XXX XX% first of now is Our to anticipated when just in rate in confirmed activities expect our a we're And to we guidance range of the the half a to topic to effective

effective on to caused increase in financial rate our tax non-deductible surrender quarter. from returns This insurance rate policies change cash to negative we Our of the expectations due primarily losses value certain life the hold. incurred percentage

our comments higher of have linked healthy. annual our result well ICP results, current a long-term in operating return plans been run corporate half first than G&A rate make during year. This trending of our normal G&A increases shareholder Finally, the would our that some pretty that also has accruals as like are corporate higher quarterly on total I to to as tied been the compensation to as

back this with the expect talked look As to and normal year, of revert February per that of to $XX million do about G&A million we call quarter $XX you year. this the our half trajectory on to to discussed earlier quarterly we I

this about continued first our back year. we the financial as results all and to Most also very to closing and year, with families this half helping look excited results we're client pleased again importantly, I'd in associates momentum that the thank SCI well. our to half do you for the are like achieve of so XX,XXX great plus serving our So, of of through these

with We'll and it the Tom questions. and that prepared I. for and So, ends I'll go -- pass ahead back operator, you up call from to our remarks that open

Operator

is Instructions] Please the begin first [Operator of of ahead. question-and-answer We session. Joanna will Gajuk America. Our now go Bank question from

Joanna Gajuk

Thanks so for questions morning. here. picking much Good

year, sales guess, the running over pre-pandemic So, you preneed declining I pretty rate mentioned but versus the levels. cemetery healthy still

two when price? levels, how guess above from pandemic think I due much pre-coronavirus the high how I talk average you and is about number, first, questions, for a So, velocity XX% guess to to way breakdown the high is is the there about this much

Tom Ryan

Yes, the from Joanna, approximations, favorable. have I very look -- using broken think I think don't three speaking -- down, all we're compared I trends from but just

We've bit our healthy And double-digit sales a is single-digits. average Our as property cemetery in higher, activity higher. quite percentages sales cemeteries. velocity in than probably the in high again, more we've some upgraded increases invested is the seen large and

all So, was we knew year is the really I probably think COVID lot And activity. you firing I out cylinders. right, that of had on was one thing a peak, the last just pointing

all consumer intents two, seen down anywhere of, and haven't of occurring was, a and had You not for purposes, the signs kind inflation in that any go. And really economy. you to locked

payment electricity. and settle out, like that's are is, So, that is good that we're relationships some then beginning the particularly cemetery I'd good the speculating it's of to leads with. these Is bit. difference it the maintain again, things the news speculation consumers we're three-year time economic not, we're what prices point for a Probably on a bottom to me world. pull that's back a gas see we to demographic a property? trying at start The in out. and the perfect seeing we're some of see little only and middle the is this And of socio our And see

going company to contracts. and really go doing COVID out the people counselors with out, in are one you the vacation, too, means close mean, as traveling, those that's to lost with some airports stuff, things you've like, shows doing know sales in sales And and I got Europe. or got we We've resurface. and it. different so XX% that either I COVID. but on out our had, seeing But they're settle unique expect things just we our a also consumer, And seen think back COVID, say, of the customers region of you're want region, things. we'll I luggage not I

difficulty So, we I for, a work think want begin of. propensity we -- a get just of to a very of to still to high expect out we had bit that a little of a We for have once in of front them. customers

company. rates the close they've are the Our been in highest ever

So, in wanted last out, this We very attendance second consumer to really we to compared a feel are of attentive year bit seeing point a quarter. a strong. just little we in

Joanna Gajuk

preneed And last question dynamic for for talking to I some that also -- there. sales, were cemetery guess time, the about you down actually very comps. pre-cemetery comps, up was tough increase single-digits the terms in terms guess maybe, sales low in the in the quarter of obviously sufficient impacts of And was I but my despite year-over-year tough year

still year? So, is full the this sufficient for

Eric Tanzberger

year really the going still a slightly around we Yes, or we're solid first right year positive for you had feel about the look good at for quarter mean, to because the levels I to to as I pretty you'll surely, back cumulative remember. there. we whole believe getting when think back effect, get

at eat going We're to I up that. over think we're away XX%

I you be probably the of XXXX or think same back that thereabouts. year cumulative as level down, a half the achieves but year, think if we'll slightly

Joanna Gajuk

this also guess to linked the cemetery is revenue. recognized And I

$XX the last across next XX expect maybe mentioned and the you million year and rest early year. country, have the this that you that of revenue into over So, projects been record developed quarter

when of, schedule, kind these timing revenues time through, you expecting might to tracking is come last as it? about are on were you when expect we So, these for talk it, things

Tom Ryan

think having my comments, those. like And the construction quarter, in been a selling of lot Yes, of completed Joanna, referencing projects. hard in we anticipate I fourth I we kind was really particularly into

pretty your point, the significant that So, -- fourth going when think revenue on quarter. recognized impact is think you to preneed to I about be

So, again, too. probably a will third, fourth more going in dynamic have but by in quarter bit. we sell to the quite same in we than the third the contracts the Probably recognize some completed quarter not

Joanna Gajuk

Okay.

other So, guess terms and in -- I are--. sounds delay no of but like things, are you there just these some mentioned

Tom Ryan

You're right.

good this. feel about on all we timing think I the

Joanna Gajuk

very Okay. I -- And if question. last just might

because, So, mentioned, things you virus on also also like they I mentioned I whatnot. because down labor guess sales around services, and vacation, was so healthcare lot talk the out thinking in -- the a I delays people and about I shortages, the you covered and just guess, or actually with the

available your can I you what work, people see inflationary Thank just So, what then on of in also that issues? increases, And there create you the -- about does guess on are for talk any either wage given you labor terms front not in? seeing you. just we're environment

Tom Ryan

Sure.

So, funeral seeing bifurcated of we're front, wage X.X% the the overall by X% levels. to if increases probably I in type funeral,

two of general we this last funeral little that not call a different celebratory second robust you composed because a it, and things. have year, more, I'll One level. had still as lockdown of remember, versus bit quarter, what effect, services, on is, quarter Now,

think teams particularly led sitting down we overtime philosophy, also local a that said, Waring, little wage in got Chief servicing about give But hours have is And those, I probably certain things So, issues, Jay cases. by inflation, these our wage of are experience like our we've when and we're our similar let's like before, as we'll markets. Operating saying Officer, increases. and you seeing labor more a of level

we to able and for list. we let's a a great rates fantastic our way want be put on people. charge appropriate again, Now, to the this find to do price Because job,

as the you're is a say little than inflation seeing normal, So, managing I'd probably same but away, that it about, hearing into we're higher we're creeping is not level, that.

little a bit more. the it's cemetery side, probably On

quarters, brand in seeing those they're as pricing. And inflation we're We've absorbed, higher cemetery that it to now And and the annualized single-digit. higher a we've range, we're as And is definitely inflationary for Some pass internal some contracts. fronts, the some trying of, of costs can. probably again, along again, consumer had go couple the through of our we and isn't new. best so third-party both we manage those maintenance our kind to increases on is

feel to comments, and a So, able creep material good but through of anticipate. about again, that nothing it's in like would little cover seeing those I we -- we being my not a do. pricing, as you in mentioned we're But bit event for what

Joanna Gajuk

all. Thank Thanks you.

Tom Ryan

Joanna. you, Thank

Operator

John Instructions] Raymond [Operator Please The ahead. next is James. question of Ransom from go

John Ransom

Houston? Good voice morning. guess. Hope Sorry, in all is COVID well I

it's So, do one or M&A? structural -- Tom, Eric those there be it a pickup do think could you good there years? of in think Or you is possible just

Tom Ryan

Obviously, XX is window window to not be be John, a we I can excited our probably get month excited it either, because about think, or XX that could about.

family presented, particularly, post-COVID going do by transitions. not gives significant on aging we but we'll an boomers, idea we it things the which upped say been Day as tend the I you I XX would new to if your that. believe we of, And XX the to able I kind -- is I I out. excited belief what months do remember you annualized in first you on, think still think in And think, be basis, we've are Investor part think to that that and John regulatory comment, a era. amount, I telling think when think an our about we've been of of baby we're to

about So, out we're I'd it's -- there there and pipeline. say good today, we're working hard believe the very we we feel out and

John Ransom

at SEC? Okay. And have I but probably the you answer anything the from this know heard to all question,

Tom Ryan

curve, to their I again guess, So, on of that just that that in And heard we to going response. there be going which -- have issue effect, the of main yet the John, we're back and don't not hear of necessarily happens, is to ways. out a to business. SEC related from whatever SEC, we're probably No, really waiting want we I different have testing yes, Is any to to long-term response, the ahead was different and right? levels But think we pricing this have are anything reiterate XXXX. in our health on -- still it continue material

John Ransom

what but like, a And you novos, than of of I you've needle? little you're higher a the then, number doing done did this, there do ever move is what future And bit know, where a de now?

Tom Ryan

The just de novos stating to as first kind or obvious, brand have, building of you're just know, three as are all business. return, because new you're a EBITDA, It's as going possible. years we the less the building up the two you're slightly for

and with nicer having be share with conditions, management in other alone. to to to being I and have and think the purchased, XX% with just So, an to range, said, in consolidation be businesses well. universe, call entire the effect businesses, kind it's we've able the of year that to lucrative. us we'll are EBITDA the last Ultimately, established continue John, there always novo and that opportunity be market only XX%, out continue to continues in ramp up subject that's just XX% place owners more streams, some wonderful That the the go market to spend, advantageous that of, we bit teams most there continued just for do going not to a and partnering only just well are acquisitions and little established example, that well importantly, as de in and the that

John Ransom

-- the my then question. I mind, well, forgot never just Okay. And

Appreciate Thanks, time. the old. getting probably Just guys.

Tom Ryan

Thanks John.

Operator

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

Scott Schneeberger

morning Thanks Good very much. all.

this the closed? second year you following already to quarter, just give being M&A? West closing this Could in a Just something curious that us up on John's sense and large Coast how end of then is after question Eric, M&A. of acquisition on you mentioned to strong guide that on the a you illusion

Eric Tanzberger

that it The acquisition, we're things are tremendously very we're terms acquisition million the excitement of of right is that close that not spend. in we the was a less now in large than expect that pipeline $XX we about. closed was the to What excited talking about

So, more that, on come to Scott.

Scott Schneeberger

this I growth inflation that. which late, right. in think if missed you curious that's I and just came said on, my the works flowers on Thanks. services pricing And apologies been funeral Appreciate when All I'm that. soft. the being the numbers. into came strong covered. little flies to bit I a has strength pretty But And I remains and something the, about part contrary ancillary how

Is you is just it to is backwards? costs? could that I go cover the way something may elaborate forward? pricing or guess that to up that that Or even see you steady from to do Thanks. just funeral So, on going growth? address How state here going step

Tom Ryan

think, we we few standard that you talked in and are do costs what can we a things I Scott, a pass about theme earlier, happening believe differently. along Yes, inflationary missed

recall you the access a decline initially, lockdown, part say to we real saw the funeral especially and full because I'd vaccines, service COVID, with things. all and types those of was of If that

let's smaller doing reawakening facilities -- putting on, one charges. upgrading of into strategies of seeing having rooms, so were What of place rooms ceremonies, think that. lot robust say, our And we differential or we're is about smaller that all the people a have some what's of opportunities So, to catering. you for, going no were a or a facility flowers lot is not buying already

more as up price, into people go of you the you room, seeing third-party people incredibly lower into you get have services. we're for specific one premium working more the a good room lot flower or in room that get the an buying job middle done teams we're We've flowers, could of So, a lot place, premium our I'll their call, on what catering sales. room, a seeing buying

through lot partnership that we average. more is of friends our believe click time, they you all sell same pieces to working along drive inflationary flowers obviously, website, at the So, the more the pass we obituary on, so we're the a to too, flowers are differential And can and together family, go all pricing. to there about but think the and -- the family if and we these driving selling

Gamble, dollar, average. so cost probably Canadian be to & that strong The it, nice bigger too. headwind. about impact pressure of into I about a big I pricing is it seeing, compared as this a cremation for to looked but year and us dollars, bit -- or to convert One Now, as dollar the impact we thing puts probably through because Procter continue. That's not, believe and on mix others, conversions on the quarter is you it's Colgate that or going I And you at the of every noticed than we're the about one Canada, as think a even immaterial change. us anticipate unique mix thing thing when cremation that thought an

bottom-line. So, didn't drop you hurt it to the really to

and we pricing life, pass flowers, catering, feel continue good of special. to our celebration So, about and improving utilizing life inflationary great more with that robust celebrations will want combine and make along of that other to drive things facilities we and and a

Scott Schneeberger

just quarter, a little Thanks. in bit comments ticked covered Appreciate if already in release cremation answer that. that Thanks. a or rate And sustainability was if you it's done the that up blip? but it, just quick on the a

Tom Ryan

think pre-COVID it we up year first Scott a we think and to even year. last XXX was as basis in last we a for it thought little went XXX, XXX trend you I quarters saw back of the saw cremation many the bit rate was always year, a the And basis points bit less we I remember, than quarter. of points,

excitement I we getting you're But XXX do think quarter, think just to we cremation for XX% what that wouldn't opportunity customer get reversion of is think so the real in XXX little that's a today of And to this I anticipate bit customers. of more have our annual future the mean, and the back So, to offer that. excited now trend we a much to it's I seeing is about XXX. a our

we're we serve them about just can it. get So, can we thinking do better, and excited more? about how How

Scott Schneeberger

premium call flattish just, some because looking? to and But unique maybe a expect. and half any last it next positive than was maybe with this second the year, pretty if one. Tom. we just Is second consumer that more of and you achieving, think I slowdown sounds still how on year a in little year in as cemetery it leads little preneeds. a this, are add commentary but you What could just was a well. kind of you gives bit bit and that questions saw for to confidence could the cadence to And Thanks. the in you Because premium quarter, It like maybe delay overview cemetery? from Understood color of you're a confident cemetery. of it Joanna's trying smooth summarize let's sound It, I just you think of, I regard items, slightly provided your one full good to -- the

understand want reversion to how feel Just potential pull-forward? the a handling on you Thanks. comfortable from

Tom Ryan

I we good. Yes, feel think still very

try there's answer, of a questions, I'll lot a so summarize. lot And to to of but

When think right seeing we're a down. healthy, it about still high now, consumer very you call, the break end let's I'll So, consumer.

back in Hopefully markets first got the stock half So, down there. sales Even little the have with of that's We July. large in hung being year. bump the in a there.

So, there. the is confidence

us real I even is for average way, outside the of too. sale, think the very there in by the good issue hanging and that

front, talking we're their Well, appointments had, still leads. doing least bill or and do, you appointment, or holding. that. something do we're their that gas velocity. going In to -- or a got happening a I'll the we to amount about are those what's really significant of they're with they great, is, at we're go, get we've perspective, vacation, leads because So, If not tell temporarily seeing an still somebody set then I'm cancels are going on and is people else from

little because bit distraction, have a do. other inflation, So, to believe I of a bit there's of little things we

seen an still appointment, The we've consumers go again, as to I to counselor deadly is, COVID, a amongst people can't and, other is COVID outbreak but or it's and thing probably back of that and -- going an take follow-up. not mentioned not you you're sick,

these good. as our So, will our rates are close hold we better, fight through really this, rates get appointment our counselors back, is, will belief

So, absent more inflationary very very problems, cause going good, our there, that counselors believe to people We leads. leads have may effective. are not actually want to we're pull the the are feel trigger, are because we still

And good. may is if And now, guys, to that think the game, because you us inflation are out, to there'll -- back the got going subsides, months, our things So, I you're you in go if thing an and out the off. the and you has buy belief crept And to down in point I be read cover monthly this back and so your channel. to get are you're to news do, to XX budget, going gas put bill right maybe over a in. is, people continue really I I'd isn't I'll saying be for opportunity sitting news, only this think I like sales to and you're

Scott Schneeberger

Got Tom. it. Appreciate that summary. Thanks

Tom Ryan

Scott. Thanks

Operator

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

A.J. Rice

Hi, everybody.

talked it got year-over-year, you still down that's cases where going being elevated, sure of sort and we're say -- you've to sort you would sort -- or month think shake know, million out, know, relative that, Just quarter things somewhat make to I of approaching I where this or XX I to I about normalcy, you COVID-related of this right. like settle feel think out? they're

Tom Ryan

just national cases periods but of numbers. I basis, going that's A.J., that, our deaths to XXX a a day. time. some if very I It's to COVID now XXX like it think think, right, not -- are I for continue probably the COVID, remember, would relative I to expect material on it's low

with to too smoking deaths, can health. correlate bit, much, too we're we healthcare, like, we you'd think experiencing, to -- Day, think of elevated driving access consumers. is lack too we think of mental numbers And point say, people a excess that, we've what probably we there's I okay, mentioned it Tom? tried still an drinking we're out much, fast, servicing Well, So, little depression, Investor

the that those -- The as in because a perfect share isn't see it's at tough, board, Arizona, like probably other decent the market we we're and across look a Nevada, we in and data. gains, seeing but of this kind to But it what acutely be is markets. of Colorado, California, kind gaining we we thing West, share more amount are appear -- of states believe really

support deaths healthier, hope few gets years. here that occur over reasons the will are going hope thesis. to the those healthcare market an deeper believe better, But yes, think the are why we to have I got we share and we've near-term think in sit what gets penetrations continue access excess but don't combined is impact. that next I the I So, with COVID to trends the say, we not probably country

A.J. Rice

pre-arranged funerals. about for on time, Now, there's some been your discussion emphasis

you're the is really drive credit As is would is some post share that it you crisis, driving ramping started else book what gains, that and seeing? up that that share that something matures think Or gains? those you market market

Tom Ryan

think contributes facility because about that they of think the combination just it, I one mentioned, A.J., things the to I you that high markets if are market.

Nevada, we've Phoenix, hard, ball more great those markets. you cemeteries, L.A., really knocking and I they've we've sales places, those got Las -- California up as Denver, where are places believe all so the Colorado, and do got Arizona, we're penetrated down more that about Vegas, at look great again, specifically, So, really you think probably where forces, those

we've but out things. contributing all do surely not So, strategically set why of factor a those that's it, to

A.J. Rice

more was -- what on how Have thoughts you try give sense is from thoughts just you as long-term? passing have way? revisited And been updated this And Any of of throughout Okay. next any updated -- time is how number that the imply good any much a in COVID near-term? pull-forward of of deaths that much sort years? on forward guys to pull

Tom Ryan

this to and medical got A.J. professional He's demographer Well, been Eric him. pass a studying degree, I'm that he's has to going a

Eric Tanzberger

we is ish same Yes, XX,XXX just that at the that we drops I Investor XXXX somewhere pull-forward what Day. that probably thought short cases the in talked no was there answer really is in about some that data A.J., there were what of and out We range really the numbers off. XXXX, put in

those little we we've as have least at look we're at to are gone The probably, a in is off decide visibility that for So, and the bit we? pretty try estimates, now. and how answer it close far to

really to change report the no answer. -- material change no as So,

A.J. Rice

there on whether make ebbs obviously, about competition optimism pipeline potential And it for there you can that, is any I deals that uptick you're of if bit on Okay. or any? seems flows, anything anything to your and an acquisition but that a and there driving commented stable seeing? you activity? around is the be pricing relatively on deals, moving in is or And comments is know,

Tom Ryan

Yes.

succession without to first a owned I we the combination aging think by sell more do baby of I Because are trying there the boomers, it's out think owners So, right. these plan. of of think a are all, people most of

I'd year, bit have every and more have liquidity more, a time little event. So, free they like a to get

that people of I COVID, so a people which backdrop against. that Combine two really working issues. three having just think natural staffing deal a to to having with frenzy, And year with and work a has we're and that's been hard kind half,

I that puts think on of lot a reason So, sell. pressure a to

an expectation, it's I probably we've imagine, numbers, as you -- As goes, that. I'd come paid to here's like good. it's, be people price think say in my can pretty far XXXX for with I'd held as

pace try but obviously numbers that's And realistically opinion of at we business. -- conversation aren't to what's start higher to sustainable this a say, a going is, expectation. so the and those Our

think we materially I I end, get process say So, answer. it's and would that's different, but good I do to part the not think of a the at

So, probably groups more pressure That's a John acquisition as the but -- clock pipeline. rare. out there. don't as a entrants, disagree same back there's lot John, of did [indiscernible] as I competitive see the you with we of five competitors little a little activity think if me. agrees see years, you about the that roll more the really it's new go, far people you

down. that write So,

A.J. Rice

a Thanks lot. Okay.

Tom Ryan

you. Thank

Operator

SCI to for This session. turn like conference remarks. I question-and-answer management would over to closing concludes the back our

Tom Ryan

October, again, November. call Talk believe, Thank I We the you, appreciate late you and to look to you early forward in being speaking we on today. everybody, soon. to for you

Operator

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

disconnect. now may You

Service Corporation International (SCI) 3 Aug 222022 Q2 Earnings call transcript