SCI - Earnings call 4 2023 | Service Corporation International

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Operator

Good day, and welcome to the SCI Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to SCI management. Please go ahead.

Debbie Young

Good morning. Young. Debbie is This our earnings to fourth today call. quarter Welcome prepared the for quarter going year to well about some have moment. outlook We're as remarks as just a in this our over before the But me let quickly safe language. that, harbor go

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

financial release we at also our also reconciliation and found this A certain can Tom Ryan, earnings non-GAAP tables website. CEO. in with it these I'll the Chairman During our and discuss of of measures now measures turn be that, over on to And end will the call,

Thomas Ryan

and business detail the I for everyone, XXXX and will some Thanks, on some joining about high-level outlook. us with remarks I'm thoughts today. on results. begin This you our around financial morning, color our our for solid Hello, and going quarter, with greater thank the to Debbie. provide cemetery call some my performance funeral then close

more anticipated overcame funeral preneed share compares increase decline. cemetery in in funeral the quarter, the earnings of a over from in For sales $X.XX cemetery effects which as X% average per growth a adjusted a able by operations. the per year the share driven higher $X.XX, strong We per sales in Resulting $X.XX earnings the volume of increase than together fourth in prior were prior generate to we earnings generated in to revenues year. share

expense increased a rate debt and Below the rates a on lower basis of variable interest balance a point lower $X.XX. our by reducing the This and share partially earnings rate count. line, share in per interest interest our offset debt by XXX was rate the impact tax favorable expense, higher rise higher

As accelerated some shares average at above million $XX. million utilizing cadence $XXX price our during we share repurchase the X.X of quarter, an to fourth just repurchase

take expected let's million for $XX or the look a quarter. comparable primarily deeper the quarter, decrease Now funeral over funeral core prior into X% the in volume. declined to funeral an year about due Total revenues results

due effects. volume were what funeral XXXX Notably, core quarter X% believe Volumes the COVID the to fourth we in declined Although line were pull-forward than XX% year higher funeral to compared with about quarter, volumes prior levels. anticipated. we'd

impact negative incentive channels quarter and production quarter, XXXX. impressive the funeral of impressive Both production core an XX%. decline. sales compensation Lower or grew prior expense million the slightly the the X% from costs the year growth. reduced the increase sales core negative perspective, point to funeral a gross absorbing average basis revenue XXX profit percentage of year declined quarter even by by grew mix. prior a effects per Our and the X% about $X information the profit in points after gross over negated SCI fourth the about revenue decreased service Direct million and over fixed impressive Preneed while basis XX $XX modest From an over by profit experienced

quarter. over or prior more million of Now than the fourth compared the X% $XX growth or impressive or year $XX shifting is increased prior $XX revenue to accounted year for about by growing the million growth cemetery. an the to primarily increase sales preponderance Comparable XX%. production Recognized of the preneed revenue to quarter. This cemetery due in cemetery X% by preneed million

averages revenue the as generated increased We merchandise prior quarter. saw and year service contract and compared higher to units also preneed from delivered

million each both from of cemetery about large $XX and sales the preneed half cemetery from production, increase core generated production The contributing growth. was production preneed sales in cemetery sales

While quarter, are is than effective and smaller, higher being X% was team. year the by more generated we contract down efficient levels XXXX prior over still velocity sales a production slightly sales and

XX% gross $XX the the in due XXX profits revenue. quarter in points Cemetery and the profit to to by by basis percentage increase increased gross million cemetery grew primarily over and

to discussion shift about XXXX. a outlook let's our Now for

earnings release, share for we $X.XX range earnings guidance you $X.XX or saw As provided XXXX midpoint normalized to of per in $X.XX. our a of

provided the unanticipated slightly material accounting debt. we at we rate and X% assumed projections in plot time. interest and would time, rate of increase based XXXX our the the ahead is in our last As XXXX. the Day Fed rates in quarter, Investor variable X.X% that May After to At explained this the into for dot had continue on we at XXXX grow our on

Our X.X%. current rate approximates

did a company. of we have were we wrong, So lot but very

historical our expectations think to expectation. the midpoint closer per to are versus XXXX growth As standard we normalized comparing the XXXX about XX% midpoint X% we earnings is guiding share, to

The a higher X% atneed about share dampening backdrop, the per cemetery only coupled early including to and volume our we as expectation earnings effect reduces have with return funeral will for rate quarter. of excess revenue production a our preneed expectations effect year-over-year but slightly sales believe growth year, per growth annual normalized last waning growth interest XX%. deaths, on earnings share in XXXX, of in talked COVID that not cemetery particularly in of should expectation to we the impacts XXXX. normalized part the We This,

We our margins cemetery by XXXX into both our the opportunities segments scale further in XXXX and expect funeral enhance on utilizing beyond. should and during that to capitalize

excited We're network. to our also grow to about invest continuing capital

we diverse locations, increasingly customer an and casketed create We new values cemeteries North inventory a with good and base new contemporary are in share options very point, in acquisition increasing new investing due increase market We're our that establish venues in unique instances, variety existing our and funeral and setting. to pipeline our to continue celebratory construction both existing funeral facilities offerings. modernizing more areas memorialization America. high-growth a across opportunities home renovating consumer certain and to to our of The cemetery cremation the at accommodate this of looks

to value to sheet leverage maturity expect while and base, our our through balance and debt continue to equity we enhance dividend our the growing opportunistic shareholder strong Finally, profile our continuing ratios. shrinking approach by managing protecting

other. entire the I'd team like for continue thank do you customers, each for conclusion, every our In to to and that all communities our day SCI

company I'll to operator, You are With now call over that, makes great. our what turn Eric. the

Eric Tanzberger

where associates. in to remarks difficult as provide off the times and service left and do start during by you trying all customers my XXXX you usually you superior all customer's our that expressing each do to situations. gratitude going gratitude begin I'm to our you outstanding our of for over served Tom. really for company XX,XXX-plus Thank of just and our to XXX,XXX our most both I service Thanks, providing in Thank families client that these communities. our to my

we quarter capital on good outlook cash of flow year conclude will first on prepared XXXX full results So as and capital with for include flow and I'll and morning to the then XXXX. our our investment the our provide position comments our some usual, discuss the details remarks. as financial to Today, call. and I'd cash that, I'll investments everyone like say

the So finish million cash strong cash $XXX enabled $XXX million and of period increase in than was $XXX the our range This sales our the million. year of includes end quarter, $XX installment on to the of prior flow favorable we million. this payables. most the fourth quarter, $XXX to capital, recent stronger with and factors working us guidance year. above associated high driving generated operating the for exceeded The higher primarily This prior receipts timing million largest of adjusted expectations annual certain of about year-over-year just

in million million cash Also that is which Act XXXX over the to of $XX $XX the timing resulted tax a in occurred CARES flow. if a remember, of benefit payroll payment the to this year year, included, related just you last though,

quarters. Cash due the a accounting also year method $X than prior $XX expected I've million, that million lower we quarter during to tax by about our total of tax sources million cash higher of of interest more that. that's by flow again, payments rate of offset primarily were floating These $XX the And payments, than in portion caused the debt. higher prior interest discussed rates on

year than the touch and we on $XXX $XX ended also a year. now basis, flow XXXX into was So shareholders, which cash This million company, return higher reinvested cash million full on. to flow X% additional adjusted our I'll at of our prior operating or with

million we So invested in a growth new our into facilities, estate. quarter, $XXX opportunities current and the of real fourth total

million businesses cemetery and into We down. this into break investments. and $XX of cemetery of ahead million development, strategies capital locations current million $XX go digital $XX back and our funeral maintenance corporate let's So and our other invested into million with $X our

in development high-return this enter cemetery to accelerated position really we For end guidance the high down full last fourth inventory that expected as the the cemeteries above we with higher of $XXX some which range million, spend spend And so million as year, but of million about about total during $XX because relevant than fourth a we prior $XX invested occurred was this our quarter was our quarter XXXX. from the year, quarter. or talked the we

from $XX homes for the we funeral cemetery We capital identified and total as to spend also funeral million to well This the construction about future. of of growth the future XXXX million, capital homes purchase of new million growth existing as in which towards and up projects expansion meaningful cemeteries. invested estate quarter the XXXX as was our brought $XX in of real opportunities $XX funeral greenfield invest

acquisitions. to Turning

fourth believe did investments we in the any again make quarter, While the remains we not robust. pipeline

with coming already first this We ended we're with SCI spend the to acquisition in more the investments that year new With $XX months. and anticipate pleased been joined January, of we investing businesses family. of SCI have million and investments the our have quality actively and we welcomed importantly, total, have many these million XXXX in in in $XX In acquisition quarter. associates very more

of the dividends investments we of quarter. to brought million This capital the number In just average million purchased in shares we share just of returned shares during shareholders million XXX over $XX the shares. about, addition an X.X And to mentioned, already talked million acquisitions Tom $XXX above as through quarter the $XX of just to price just about $XXX CapEx and at that and outstanding in we million repurchases. of

about was G&A This million. $XX specifically of expense total compensation was XXXX So before $XX which to million comment relative to I $XX range are peer outlook, again, our shift expense our make than that, by of to higher during to to based I higher long-term tied shareholder expected on about a quarter want driven the million, group. primarily corporate brief the returns designated compensation incentive plans our a

shifting saw press So XXXX, to and this release. the you in

of more with as million our flow in is million midpoint flow over cemetery between capital higher sales, headwind just offset The decrease Our million. million million treated $XXX from payments the cash $XX base increase to a an XXXX range of balances to $XX is flows; having anticipated working about adjusted funeral our $XX guidance partially operations of interest and this we $XX we impact timing underlying reduced but cash a the normalized to from incentive grow $XX of driven offset to anticipate use cash expense by about guidance payables, and expect $XX $XX midpoint by growth million, million use, and in $XXX our of which continue a and about of million, following: operating rates lower by comprised to $XX cemetery cash million growth normalized earnings or than flows levels. expect midpoint XXXX, of from of of million case of cash taxes assumes compensation at $XXX million range we million, XXXX; range $XXX

of discussed rate over between of This, XX% as effective last result tax in accounting XX% couple a I've quarters; the an we again, tax and also XXXX. anticipate the change is

So during investments shifting the to year. upcoming capital

that return investments. break strategy color, We corporate CapEx our a development projects and million cemetery To $XX give bit $XXX expect little expect some more at into funeral digital to high invest million. you into cemetery and our million in $XXX facilities, maintenance remain flat million in and $XXX about we to investments down, other

opportunities, funeral which In addition home is to $XX $XX of and estate maintenance of construction return, which $XXX CapEx, drive again cost invest in well after-tax new million low million to expect real together, rates of this our to acquisitions towards and to excess capital. $XX in million you, million we to to roughly remind internal mid-teen

shareholders Finally, a buyback as absent disciplined opportunities seen other over continue through capital consistent years. will our share we returning manner and us our high the to retirement you've do in program

So position. I'll financial now our conclude by comments making on few a

have approximately very available around liquidity on We plus approximately $XXX have of long-term maturity cash a of and on our right favorable hand, of at $XXX $XXX the profile credit facility. debt consisted million the of million quarter, end million bank now

X.XXx Our quarter EBITDA. the net leverage the debt remained with quarter at the to that' end at of consistent somewhat third

to We exactly the range and to rates here. the of near target X.Xx towards call more until our interest have have from continue usual to lower term we bias will a go where in of that as end Xx, clarity I

our to to high-return us deployment on investment our So opportunities. strong continues underpin approach, which sheet execute gives capital closing, in balance flexibility

very team, are the way our of finished proud importantly, and most XXXX. We we

sheet, our and As opportunities maximize and use again shareholder we enter the XXXX, to to best solid and cash liquidity flows strong value. ultimately, highest provide to capital predictable great balance and invest will

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

Operator

Instructions] A.J. [Operator The Rice question UBS. of first comes from

Albert Rice

Maybe a here. questions couple of quick

sort I some earnings all, exactly you half, what of quarter? of maybe looking the the just are other that see want and what over you factors. Any progression some specifically seasonality, skew I maybe think would leave the the of first you're at, to First quarterly that mentioning to second guys progression maybe comment make sure year? half, how we first play out a on knowing call you

Thomas Ryan

Sure, A.J.

call for that. the last is growth. part, got the about most rate most as interest quarter around I our from that first think somewhere as challenging impressive be somewhere, think on it, historically there's you'd think be the $X.XX two level. comparison $X.XX, quarters that and would of probably it, the you the the you you headwind one to year-over-year most it's must It's expense the you overcome. challenging think going for -- an expectations when The again, of depends the quarter, to I see about But year, X interest reasons

on of effect cemetery. quarter, anticipate, versus because comparison to of last construction thing And be other you'll would we this The that should when and you think we're recall quarter first that completed that completed negative have going the projects project first a year's less revenue.

are So get comparison. cause those challenging quarter are the two things think that quarter-over-quarter. to I X going as you good looks really to last think a I it And first the more quarters,

And kind funeral are the impressive impacts in slightly And we again, interest of for some higher effect some pull-forward think, which continued things this cemetery I year, if segments. factoring growth mentioned of before, the both expense. the slightly that and

Albert Rice

this that share contracts drive of the doing maybe preneed in that coming and of arranged looks increasing in think atneed. like there even do well, as It maturing. percentage that on in that funeral to than some lengthy atneed getting starting preneed if last over in these maturings Is just I'm an preneed volumes decade -- been you've some ask to people the you're is better Wanted at you the are indication market Okay. trend in have hand? versus preneed year-to-year looking hang investment

Thomas Ryan

your do, We metric, thoughts. that A.J, watch that exactly. and exact believe same represents we We

Albert Rice

arrangement what pickup deals going can you years with you I do XX-year the did Okay. with you the you agreement the that wonder Stewart that FTC like Maybe the deals is the standstill sounds one is know that And FTC last when understand of started creates on sort when question that front. see closed size opportunity? deal year acquisition I you pacing spring. the I we'll then. think it some on out expire in an a in to ago -- expires? standstill when

Thomas Ryan

do, We A.J.

amount significant by in in the it but last X precluded size those agreements, think for been hard is to we've participating that expire I from it, notice markets prior it's May. a which really years of

we're when to or more those markets. and of We get as very a But So to some acquisitions what. back involved in be about predict excited us active it little of do relates it. think it's to allows kind difficult it

it create So it. deals when we're momentum. I come about again, deals excited think We will some think But come.

it's So timing and glad predict but hard to we're it's an the the coming to size, end.

Albert Rice

Can to much then have to you how it's how you constraint exploration a discussions? just us markets wait And have or been? involves or exploration and -- it to remind markets discussions have in for can the you many prior the those of

Thomas Ryan

can you go a you contract. think when about possibly have closing I always Well, to discussions could

So their in these to much always the relationships people, the sense plans to getting so again, what markets and getting know been are. we've active not know but developing in deal, of around

like the begin isn't talk to for to people. been out neighbor. first it So a being We've we're good just going there to time, we

be me, again, I too interested the XX So we've relates them had probably numbers really in to don't as acquisitions. XX in to have growing think is there them guess it front that in through we'd markets are as but not type my of of mainly that of out and heavily of markets ability markets, major being somewhere as to some think far that as

Operator

comes question of Tobey from And the next Sommer Truist.

Tobey Sommer

about atneed remains and any, of wanted headwind if post ask sort to characterize you the mostly having you how what, normalized activity but business? I think and think COVID about in the of entirely kind rate it of not maybe you

Eric Tanzberger

that X%, facial that's see I now down we're the just America. mid-single There it COVID, funeral fact really or be better continues explanation. it this of down calling the it's call let's to the the were in digits. getting headwind you're could to you North relates year, volumes Tobey, as is guidance Eric. is What total and flat purposes flat. And a but this every think to relatively in it growth the positive flat is X% I for occurring natural mean that seeing

growth the population industry. call in X% so population agent can of particular the per of or services that this that just that year You of needing terms in population and

account funeral also particular acquisitions, X,XXX funeral you acquisitions. on call related heavy our it of But particular to could whether full year, year are heavy acquisitions it, Specific acquisitions. into have you or company, to cemetery. a our a to X,XXX amount depends the take to add, have ultimately, services in In

So you that effect. natural have

You specific have company being the situation, acquisition in the [indiscernible] effect which what is specifically our is is this effect to to and related XXXX COVID. in pull-forward

And the further boomers, point had natural some on with really. in any pull-forward to COVID. of not this you that's kind years acquisitions out There's effect there make of that. with data debt couple But coming calling us excess and to the of progression impossible comment pull-forward excess noise our washing COVID well the of the kind as at out deaths the effect, of is baby coupled last remember, And flattish. differentiate

better net year. seeing years. that's comment the last future than little That digits. morning year mid-single you'll it as an drove as described bit that And a and were down I move us in you they forward as this you those give we'll factors to of start a think we I in particular volumes, uptick hope, better progresses we

Tobey Sommer

some to or Is observable that the the really acquisition fleshing and those on not markets small little you on that that would would What active If been firm? entrance after And be to do something would influence? contours you bit you focusing as markets so mentioned a attractive, front have what more an sort recently. but into at that find haven't be those to profitability standstill the that able the of agreement. really are out, of would

Eric Tanzberger

looking of to the about that and inorganic we've it's growth sales be and that at being think Well, acquisitions maybe growth currently at built I and into of preneed driven framework. homes years rest you're think could to funeral lately over share growth. the earnings The up the half the X% significant by the XX% importantly, length. When repurchases share some you seen growth per average better that being most talked we've at for cemetery

I've time statistic that already you and funeral per volumes depends that any X,XXX year, X,XXX growing the of of the kind such. we're of on year to for you acquisitions full add said cases could a load given

changer. is SCI new that long-term I don't the Of where the is is this with very it's situation we have relationships. to situation Stewart we material? So markets but going an material, be it course, expires game think a mean after absolute

long-term management with would has job a that independents love very field to. done operations, our good Our relationships certainly having to we here talk

planning just they said, for And to And event Tom in when is an talk and now. trust them SCI. what FTC is not we that idea, for to want their mandate be their a due going my me, decision any have It their just reiterate, don't or to opinion, for they coming particular liquidity family. due generational whether coming

Thomas Ryan

competitive Tobey, think because way was would a get asked at are be we situation at know a business to better have we to what's a competitive to that maybe we look about is prior would permission. disadvantage the the happened where the it in is seller it past

because a the more deal May of transaction that we that that's we to to our is date. competitive maybe introduced move about should behind think didn't the have were through into as [indiscernible] better with. this way kind risk And it So we become competitors

Tobey Sommer

pace just And anything any of touch base increasing that. of about? of adoption then to that me. there Or in sort helpful. Very change last the think thing is state, for to Is on cremation, steady

Thomas Ryan

Yes.

to going quarterly saw I by rate, state. still contraction steady stick point Again, XXX to but basis We you have the look of the XXX think we but of time, I a long it's if over periods fluctuations, think you're expectation.

Operator

Raymond Ransom James. from comes John question next The of

John Ransom

rate for to your production about and just you guidance. XXXX? to talk expectations cemetery recognition turning Just your Could preneed compared

Thomas Ryan

Yes.

there's cemetery -- you range. think the, it, sales to call could said So I of That's we've X% back, range. think if we There's cemetery John, same-store. steady-state times that we preneed X% been kind on production we have side, Obviously, grow we projection range. times think the above that that went in historically below

to next think bit, to it think instead call X%, just we're a year a about X% down the way is it of to X% I dial tiny X%.

funeral reason traffic through cemeteries. did that for And traffic is the and lot the volume through a we leads of

about as effect, on. think pull-forward So follow you into numbers. up leads factoring the that's slightly to going we're less have what we're And to our

we can if sense. year But the again, get Now to the understand think makes to to surprise we through need I so. upside, are better where that we

Eric Tanzberger

And we mid-XXs John, it well, the the from and know, thought about rate. a on you as full call kind in talked was. last we XXs the we from fourth in recognition be a now recognition it rate a right year perspective, that the of Generally, and as look quarter, upper at would for

end as the So Remember we that. the projects its starts low quarter complete and quarter, fall, towards high XXX. way months ZIP fourth can you as the where XXs even saw the works during light off be from move in the could what that though, code the the summer over as XX% of in or usually somewhat it it XX% and

statement somewhat about come in the income cemetery. the think now I XX%-ish where it's and should stabilized we're think for But -- point the I period modeling, a you're full generally, when through year to we it's think it's of production

John Ransom

think you about had been what would to way you M&A a -- So the about hadn't think just that? the CAGR volumes CAGR X from funeral XXXX Is you the And What you XX% this another, about effect M&A, the of do any easy funeral point XXXX. that what's but do to since little if may too in it? year? Is Great. think a talked XXXX? be wonky, have that

Thomas Ryan

Yes.

it's acquisition organic. think that of say fair of I X% is that to X% the to rest maybe and it's

John Ransom

Right.

growth. therefore, So X%

over a CAGR. So year X% a little

that's not So crazy.

are that tag pull COVID the underscores end the of guess we I So probably forward. at

'XX funeral. that you 'XX single get you'll digit 'XX, low for to way maybe kind minus from in single some Is up to of that so and it? a digit think think small And growth about go low fair

Thomas Ryan

That's kind of right our yes. John, expectation now,

John Ransom

again, Any just about I then weather Ming, early read the the weather? think ones. And Okay. Ching two on you yes. talk last but

Thomas Ryan

think was of about to weather understand inventory, potential had from year the it the And of basically that destroyed. things we I year, had repurposed. had that is problem -- of this we possibility any you to until that year, delayed And the months last one we a where was any inventory the by our real not destroying again that. last event knowledge, of matter get kind sale range have for inventory like

have there that the may think we'll to of in I you show belief the customers our few our days a base. out while So it's market, got inventory of and are we've had get great and customer front them,

last So as because we had pronounced yes, as an weather. of we don't anticipate effect year the

John Ransom

You guys year would put tarps in the CapEx budget this for Blue Tarps.

Thomas Ryan

We did...

Tobey Sommer

and correlated basket in thought kind the of that close pretty definitely to your of we basket the correlated. the it was Okay. And but third preneed stocks, consumer comps we you lastly then All quarter, cemetery outperformed right. of

what in So we do to the do preneed outperformance But why you great got volume, in cemetery back of in work that. and great not comps quarter? consumer to fourth led to even on the go think funeral you think not face the

Thomas Ryan

the matter timing. force it's our teams. of credit a the got I But our sales fabulous best world. the to Sometimes, and the think, I John, credit to sell force again, to inventory inventory give sales We've give to in

where the credit is due. I So give credit

John Ransom

your What's force the size of now? sales

Thomas Ryan

X,XXX. X,XXX, from pre-COVID salespeople about think I We're X,XXX down now

to... able So we're

John Ransom

of off Are the people COVID the bottom from the post you bottom, the had off you bottom? drop up bottom.

Thomas Ryan

got to adapted less Actually, I we're at you the we've during kind same. COVID around mean about the see we results, XX% maybe head I'd growth up rates count. but say of slightly, XX%. And compounded

throughput, technology, of use great So very leadership. great efficient

Operator

from next of The Schneeberger question Oppenheimer. Scott comes

Scott Schneeberger

cemetery, Guys, it sounds you're a of getting on nice preneed like lot pricing.

address products. it just growth the with I'm And please. that, follow driver. to nice that. a up Is to like could what velocity. about curious developed something seems And in magnitude? be contract XXXX to going on if I'll lot going You've of But negative that's you and that remain

Thomas Ryan

Sure, Scott.

I think as XX%. actually the year-over-year an our flat back if fourth again, velocity up velocity, levels this to But we're a is for in if basis, take slightly quarter you you a on go year, year. example, XXXX

So get I believe so flattened and I we velocity we think out. sometimes has caught this up got

a to to about I as now better correlate think velocity we future. grow flat think should slightly little

And pricing, what next sales X% probably and can think march the to velocity in to you X% we you years. X% in so got if about in forward do way we got X% cemetery over as the to that's few

grow from growth So yes, stabilizes I are from levels in that that to continues XXXX and off that, we here this today. would anticipate operating XX%

Scott Schneeberger

-- X-parter. cemetery, on a preneed And kind on of still

how you mid, behavior qualify range? of XXXX. Just cemetery margin low on end, end consumer high follow-up And of the in that the would question is then kind

there. your Just thoughts

Thomas Ryan

Yes.

So if end, on behavior, strong. to consumer continue we see end take you the the high high I going think

And some that XXX of in averaged We've that you about -- era. remember, to of But are XXXX number those back almost probably we sales. over sale, around these $XXX,XXX of give doubled some average had $XX,XXX the perspective, price and call that it, contracts. around,

XXX average the contracts that XXX, to at So level X%. going from on slightly up

and probably look always some growth correlates And strong. seems pretty market. best we've again, housing that stock said so to continues with And that and significant

activities same think may we attractive that And that or into anywhere a other in access retailers their we're end. about discretionary correlates that or may not not robust seeing a think you that as not savings lot at the when And of dipping there may to seeing it is I'd lower a credit, with particularly at stall a be that of are higher, I say out not there's again, rates. that little consumer bit like, little may have

think as far margins And are. to about, think as grow. we margins, you asked where that's I Scott, continue I our So

this And think continue to of kind in I those operating think you about XXXX. to up been when we've we'll year-over-year think range. mid-XX% expect I slightly push

XX% range I it's to XX% weren't think there.

Scott Schneeberger

one last me. for One

CapEx, Just year on digital lower bit this than last. little investment, the a

-- what occurred? investments you're the if end? to you just the these regarding going Just curious -- Has start garnered? benefit to realizing to have speak that wane? have -- is been benefits could of brunt maybe how tail are you we what may the that the And on And Eric and

Eric Tanzberger

digital cemeteries. at our along are investments, customer-facing Scott, homes that better, also efficient are we're to we've more all and some us and making going help technology. We've become technology huge that that more investments customer-facing been funeral effective especially in believers said not

what And So last us really of that pushed range. the really million, the up CapEx $XX push million saw is years. couple into through that you $XX what that's digital

move I think I million range, better as a could this $XX and but flow, think number ebb we it forward. it's

that's to the cemetery and come inventory just cemeteries from And mentioned, going do You're what from always force development sell. first? need that sales to perspective maintenance homes because a CapEx needs capital offsetting cemeteries what with funeral a the our because Tom that do need perspective great

always come that So will first.

us But I end as terms I more little efficient up that and it's and probably investments bit combination think that to a with both make going technology wane some of move way. this we do we to million better CapEx $XX think forward. will million be and forward, $XX processes around as being that in that noncustomer replaced this But digital customer-facing move is of systems a will

Operator

question comes Joanna of Gajuk The Bank from America. next of

Joanna Gajuk

numbers. just some follow-up a So first on

So progression? G&A $XX of this quarter we down. number, Is think kind million to this higher. so it's 'XX going come elevated G&A about the How should

Eric Tanzberger

Yes.

I the months TCR group. had a compensation plans during the It's obviously, think imply Joanna. conference $XX which peer was the elevated. versus the of to price long-term We year. of remarks, return call total is a And in based on some the share I that more million or what in movement, last little few adjusts are shareholder trying

$XX for framework the for perspective, $XX we up particular fourth other And million $XX quarter. from a that think quarter the normally absent $XX million $XX new quarter, are call expense. fourth million G&A, in any a the should which be had the and catch to those some speak, made we to it, so like to million-ish quarter G&A to still information, million the, mid-XXs related But I to accruals, that so a to into corporate

Joanna Gajuk

QX, follow-up, talking and single this full preneed digits. year, expectations production growing, And much on better 'XX, the another for you're than for low cemetery guess, of rate quarter, about I I sales the guess,

just I here. sure want make understand to So that I

kind you still growth transactions based there of that of were that for that any QX forward that step sort the pulled the was sort Or So into experienced of is in QX? seems on from conservative maybe QX? look year

Thomas Ryan

Yes.

it's to so I think hard Joanna. predict,

that we're think sources activity. come from lead a is all noticing our of I lot

sales have you when some generate put So force. have leads and number less the our to can the activity funeral the on to of side home it on and give the that burials and pressure you cemeteries,

acknowledging So source. somewhat that on believe if that effect fact we're that a have lead pull-forward still a little of effect may it just dampening we bit there's the a

the the said up. that, digital and very are not that rates closing leads funeral Having traffic growth leads that a cemeteries. in different, going getting coming homes are at we're big that We're off in

So want that again, to we very have cemetery strong optimistic. a very I possible sales. It's could preneed be

about and that activity just expect and feel sell. great be think to We come growth, cemeteries we're We lead leads feel acknowledging this traditional we got digital about to activity the I have the we've the that slightly great fact from our inventory down. in sales force.

and So get and 'XX. about as 'XX into we're more we so optimistic 'XX even

Joanna Gajuk

And And are to locations the rule guess been guess, of I faring I that to comes have sense guess give locations funeral compliant? And potential hear of it of I the waiting, are many the on the to when comes these a the to front, changes trend training compliance your different a there a us there's on locations those compliant? topic, some it guess average, some requirements that's guess, funeral been FTC rule other has those the still I where we're when on over required. on how, seeing last time kind can or been of elements [indiscernible] from on discussion rule. you're I of you the a of more fines funeral how with and fewer around years And

changes the only -- guess the because do about changes would potentially I could So also those funeral requirement, happen to funeral price that to assumption elements is the any that other expect rule of rule. expect going to you you other base but that the be case base

Eric Tanzberger

like It's changed base in to you're with online create I situations that Nothing situations. I our it's GPLs assumption right. those the from going think has is Joanna, that. perspective on think

that. through work to continue We

We to test that. continue

and or in online. in I X,XXX at time. point think any we Of have our that and something X,XXX about ballpark X,XXX homes GPLs funeral

lot match that it. and We're a I've calls. mix described and We previous of that tiered before on ways test

a pricing as from starting tiers hopefully digital that's prices starting of we're premium terms well experience pricing with in markets, and now well sites. to at that particular pull playing as In the full cemetery in to on

So no there. change

to our negative From going extremely from that's perspective the If to think even forward. again, we're we expectation preneed any to to think anyway. take and maybe I seriously. perspective, occurs, going If And flat a be compliance that's we it's anything, don't that that's effect there slightly there we out a that business. move as positive have

you a have consumer. on good list training when already price funeral up it. beefed intricacies compliance and a We really and all of the and to place give the in rule such with

time company. industry their Let's families what dire as particular lives. start, do we a at in do though, an serve about a We and what as we real

element in second the there's compassionate caring And when that you the none have to and industry for particular take our nature touch situation. first that in with the you're a time family to human our of and first into so account obviously being associates

play. GPL. out to be well, area So compliance where is little proud of subjectively training. very therefore, and a the subjected that's you're if start bit to then And of as when our it's bit figure subjective a into with little going gray to comes introduce starting We're the to the

we'll want of We're continue it part supportive at time. we the the comes FTC, the very the of to particular more funeral. has recently to our anything rule, the to look very that entire else If compliance following of comment at we'll from proud that. and compliance the nothing or industry But to to it appropriately, mentioned been we're do new the particular related new asked and of that as something on side and FTC, funeral haven't down rule us been relates

Joanna Gajuk

[indiscernible] industry pose about that's we there over that. that talk changed your provide I how, of that to I you many guess, kind Yes, yours on things fined to like question of and you're like a compliant guess is the on bigger of the I we point. quantify But locations how on average, about found fines This way over to the fair changes any average, guess, years, or get it associates. training very of has or point proud it the

Eric Tanzberger

perspective, you're talking the small. if FTC mean, I from very Yes. about it's

well, into we're well I think compliance.

to particular I of degree, are may form we for to think going Again, what locations be for-most X the that emphasize look some and period family. that, at out that trying any I'm associates some in to of you X that our to year when itself, compassionate is X, be may X,XXX rule compliance. have care of subjective and X not to because the do first in

that. doing get So when complicated you're can it

And the X such GPL at time But kicks into of of funeral it's that to if rule the price is set. when or and and equation. and then, in is at consumer course, some And point, any you're X,XXX perspective. I'm particular sample the particular about years. introducing introducing XX long at pretty you XX, out from time, that locations talking take a the X

say tone very, should those move that will training, culture you with compliance think will are results we to very and be much the our top, funeral to our at continue rule I we continue and our operationally, as in forward. the have

Joanna Gajuk

helpful. it. I so Yes, very platform. it's I That's a large want appreciate

one that when the X note, FTC on there? indication locations we from And high of just or mentioned meaningful. out really hear timing the you Any not will this it's there's last at even it. if one. That's nothing even So

Eric Tanzberger

would on their be That don't court. in any particular timing. have update I their

Operator

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

Thomas Ryan

to call great being We results. everyone, today. to forward for talking Have a on with you, our quarter the you look again first week. Thank

Operator

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

You disconnect. may now

Service Corporation International (SCI) 13 Feb 242023 Q4 Earnings call transcript