SCI - Earnings call transcript Q4 2024 | Service Corporation International

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Operator

Good morning, and welcome to the Service Corporation International Fourth Quarter 2024 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.

Alanna O'Connor

Good morning. AVP Relations O'Connor, Financial Allie is of and Investor Reporting. This call. our fourth to quarter Welcome earnings

We remarks before have language. in quickly will prepared over just and from go a Eric Tom moment. safe But the that, me about let harbor the quarter

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

discuss that of also tables in found non-GAAP to release and our certain can it and turn A also of earnings Tom financial I the measures these over Ryan, reconciliation CEO. our out might Chairman on we the With Today, way, of will be now at end the measures. website.

Thomas Ryan

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

resulting a per higher line, both offset $X.XX and while prior and favorable earnings growth, which impact general comparable Revenues, segments, and For the lower to a contributed the per interest gross tax combined the from and growth of fourth quarter, the expense in slightly effective in adjusted expense lower $X.XX by $X.XX administrative earnings to cemetery share the percentages a of operating generated income. we year. lower funeral Below increased earnings was contributing margin additional a an rate. share compared count per share share share, adjusted $X.XX in per $X.XX, profit

into decreased the strong results X% primarily in other $X X%, revenue was revenues achieved for This let's a service. Direct by general prior core Total exceeded as nonfuneral revenue due in which a Comparable of per despite the quarter was agency or million SCI core look funeral revenue. deeper Now growth increased rate. XXX funeral revenue take and core $X revenue modest about comparable a core the X.X% over year points decrease the or core by about growth cremation funeral average over revenues core services offset X.X% a funeral to average in healthy growth performed, preneed the quarter. home and million somewhat sales in core basis increase declines

from over a over healthy the from growth per This the net average backlog. agency in that insurance-funded revenue the travel to time from these of of effect in service contracts process are This switching decreased revenue, of SCI deliveries. preneed Direct more home revenue maturing was by average trust contracts the million improvement revenue Certain backlog. This contracts of years. offset a merchandise more driven million, should we the was $X now nonfuneral and effect into general merchandise partially $X as as changes in include travel merchandise was decline protection in by XX% growth $X recently negative of mature primarily value an sales result by sale by continue revenue sales deferred with as nonfuneral the slightly service increase home nonfuneral higher in a anticipated the at by decline coming model. per of or defer protection preneed a generated from commissions, a home to offset operational million revenue preneed

$XX grew derived higher agency selling from product. as the preneed an non-underwritten insurance general as by our which larger revenue new by insurance a due rates versus commission a revenue, in other and marketing of impressive rates primarily million, a to growth agreement commission agency products, underwritten or average effect carry well higher Core general of percentage driven flex

the gross the while million revenue $XX Core a combined modest to $X decreased by the fourth General about quarter. to of million This fixed points percentage of Preneed increase increase million, the a profit basis transition by due the to or our to about the new $XX by costs XX quarter over increase, provider sales managing increased increased for with was gross insurance profit funeral result XX%. by about primarily production X% just sales half or XXXX. back decreased about XXXX. during preneed X% production of funeral preneed X%,

as We underwritten later on insurance the a awareness core benefits of insured early our the to sales counselors to normalize increased raising anticipate or focus spring to months. fully product. summer production production We expect in continue customer product sales of comparable see preneed

our for sales a Nonfuneral temporary through and all transitions training of their obtain change and $XX SCI counselors million decreased XX% or from as contributed the customers insurance preneed to to This sale preneed, sales. terms go required payment many trust financing Direct transition licenses production home contracts. sales slowdown in which insurance-funded extensive the of of preneed to

made XX% have we of markets production. in our transition today, that the represent of As

over months to the So of this, grow begin stabilize should again, and the in next probably beginning XXXX. too, half few second

by higher preneed higher preneed the for $XX it of in rates increase, recognition sales fourth quarter. prior revenue construction a cemetery completed cemetery cemetery $XX as was for million projects million of responsible prior generated revenue million production this Now as sales and sales preneed of recognized primarily shifting accounted to revenues the period the grew Core recognition combination triggered $XX year quarter. property over increase, Higher the Comparable by or X%. increased by about cemetery.

backlog $X by revenue as additional growth, been an backlog. of value has trust service average Recognized million for cumulative are preneed out revenue core delivered with of enhanced merchandise The being on contracts higher of or primarily sales large core a the and life X%, accounted cemetery Comparable our to was production sales flat. million increase preneed sales, increased due earnings while relatively about the in production merchandise the by an over $X contract.

The trust the generating profits to basis in fund by quarter. growth, increase of gross in Cemetery revenue margin income, disasters service increased increased includes at costs, an by the impacted increase X% percentage impacted an by X% fixed in quarter $XX and million, a XXX increased by profit higher-margin natural incurred gross the XX%. which and points, percentage our merchandise locations maintenance by slightly was during primarily due damages offset costs operating

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

As release, provided for $X.XX. a normalized would will effective midpoint range you anticipate some be XXXX tax that midpoint. XXXX. rate points XXXX XXXX basis a for we of share XXX earnings our saw per range guidance to a for the with $X the We XX% at earnings XX.X%, The of growth higher growth, X% than be to in $X.XX X% about

be midpoint of XX% our current tax the by neutralizing growth, of we versus guidance So would at range, the midpoint guiding a the to X%. effect,

higher points. revenue favorable to should rates, slightly see for do the modest volume XXXX, cremation XX of Within to from slightly our expect by down drive increase. to flat funeral We compared the the our expect a per effect with revenue funeral by negated segment, mix agency insurance to average at healthy case percentage new growth general basis XXX segment, agreement, funeral we of increasing margin the generated inflationary impact profit which the gross growing

We insurance our expect production to channel. product be as sales in increasing preneed and core continue as Direct of underwritten slightly lower we transition in SCI on the the focus we funeral XXXX

the XX% X% sales perspective, this of for last While $X.X the year, growth for the or over preneed billion X higher down years. rate is than production year compounded some funeral XXXX,

As we to percentage preneed XXXX, would expect to to mid-single-digit growth low to sales think rate. funeral return out production we

cemetery cemetery X% that segment, revenue can mid-single-digit the we cemetery X%. percentage in production about in of growth the anticipate low to grow we range, to preneed For resulting sales

Continued interest line, favorable XXXX. result compared gross our segment focus maintaining costs expect inflationary as impressive benefits impacts from tax on lower count be will rate by should exercise. tax effective from excess slightly the to percentages that reasonable growth in of option and while higher profit lower the of Below caused share expense by stock negated deductibility a we dollar the managing margin loss

commitment In and want I to our SCI for the acknowledge another. to communities daily their our one customers, and entire conclusion, team thank to

the a for you Thank operator, day. turn it of every Your is now dedication With our difference success. that, over to Eric. foundation I'll making

Eric Tanzberger

dedicated moment a Tom what I'm to I'm our deepest by each to and Sequentially, taking my to start going exactly everyone. going morning, associates. really Good of XX,XXX-plus just gratitude to did, extend do

their of unwavering as delivering arrangements. serve. a excellence service commitment lives preneed Thank dedication you well of tireless for through make continued most as to service for year challenging communities. exceptional customers, life the during our as mind our moments, the peace cared provide Your and families some to families your our well almost on profound of team to as XXXX, we This in XXX,XXX a last impact

that atlag [ investments, going to of and of quarter. recap position. about the update in investments cash our performance to this capital capital results So the ] and financial those overall cash shift then flow a with then an on XXXX conclude provide financial going I'm of and that, our I'm our for flow full part we'll talk fourth follow in by with an year XXXX, to

impressive at quarter, quarter. our for our an range fourth the high adjusted This guidance of end expectations in of we So did is and operating flow million. generated exceed the cash the $XXX

little a these just with a Tom bit. time cash resulting from associated So the year this use time of $XX September. finance Adjusted with strength also the current of cemetery funeral compared quarter. discussed, operations cash that the bond higher bit happens our give we million funding. is operating that impacts little million to let during a in about cycle was $XX by million. was our year. and an issue Again, $XX color really in past me impacted additional from a the timing and lower the this this payroll by completed positively payroll This prior was about interest operating Offsetting to timing income of of underlying favorable down flow highlighting Cash you just break quarter

in capital other million and working resulted in use of about combined preneed a $XX the quarter. Additionally,

range, million, So $XXX in finished above strong $XXX cash was most operating of the flow XXXX over to recent again, is of guidance annual million. just which high our end $XXX very which, total, we adjusted with million

invested We fourth the We estate. in current capital new growth other invested $XXX our business million million into and of locations, businesses, $XXX on with maintenance current million digital valuable into our into allocated and cemetery continuing acquisitions our So funeral quarter. back into same opportunities, $XX investments. amount, development $XX cemetery our to strategy million and $XX corporate the projects, million, locations about real and

which For and cash CapEx, we both million of into high $XXX the reinvestment year, and was total of dedicated of invested prior portion cemetery the quarter maintenance range up strong this million year we the $XX our full as end the our flow of during businesses. a funeral toward the a maintenance guidance of from

capital funeral real of homes of We cemeteries. million growth the invested funeral the also purchase in of expansion homes $XX new towards existing and quarter the of and construction estate, about

just the total million over greenfield about to brought year, capital as meaningful growth projects. funeral For to we $XXX opportunities million, identified XXXX this up $X cemetery which in spend invest and the from was full

about a talk bit acquisitions. Let's little

business total, year $XX full the invested we $XXX of we million impressive spend. finished So million with acquisitions In in acquisition fourth quarter. into an the

family. are acquisition to year million, As associates these cemeteries range of I happy November $XXX high-quality call, our about earnings our our these joining annual spend funeral we we of $XX noted thrilled and SCI has new to outpaced million company, in the to homes are guidance and this all and welcome

dividends quarter returned an through capital to Let's the repurchased million X on shareholders of average of capital quarter. shares repurchases. and just investments. share $XX We $XX million to million $XX during of We million price move $XXX of under in the at

have to at million and $XXX $XXX repurchases returned number share This under completed of brings the at shares million of over average of repurchases. the the XXX million $XXX year. dividends of outstanding we of year, million end full we through to just the so of shares during $XX shareholders our price far an million $XX just Subsequently, XXXX. For share

still timing about we the reserve in average to brief there, declined go primarily quarter-over-quarter, of during quarter. in primarily the expenses $XX million $XX expense before $XX this plans some there decreased make made $XX above us I a quarter. result particular variability I'd the about long-term to the may that quarter about So California million in of could we in resulting comment prior period quarter. $XX be impact, reducing forward want push fourth XXXX look a in expenses to our to differences about corporate to the like year. a outlook. shift compensation million expense this incentive our during $XX as quarter. and million. I during or mind, range quarterly million about the our But keep the will a But just due that quarter XXXX compensation G&A expect to G&A we Year-over-year compared to is exclude claim to this G&A million expired This by G&A When When long-term incentive of XXXX, corporate was legal primary corporate below

talk XXXX Let's about detail. in more

million cemetery by discussed guidance As and accounting times of But with received midpoint fully has a press we disclosed of a we normalize expect in growth midpoint full which to and the this assumes the time. range of flat generally million, The range revenue in operations. $XXX over benefit expect we a is last of property cash in point this been about underlying our our the for our the quarter several method year $XXX XXXX. cash release, cemetery flow midpoint range grow change have were the guidance recognition million, realized funeral following: $XX adjusted the $XXX in as $XX related EPS about in to $XXX operating in the to we at million earnings we at our quarters, XXXX million, of fourth million. as the taxes cash taxes Cash X reflects tax on XXXX timing only about the to

are taxes the with $XXX earnings, we along will projecting XXXX. Therefore, total expectation during million about higher of increase to cash

as about us. an benefits to which prior exercises tax tax We stock available to of XX%, XX% compensation no executive also option that basis years we will higher rate related longer than from effective points XXX anticipate to expect is excess be

normalized the we timing expense $X XXXX the expect on we September lower of And partially net and of associated this a in to driven this sales during and a semiannual then anticipate interest offset $XX by in with year. growth modest interest around of capital payments payments we finally, the interest decline While bond transaction timing our compensation year anticipate by timing use million of probably having cash in result rates, also impact payroll of preneed incentive million, about working XXXX. payables, of higher primarily

Let's about year. this capital talk investing

target invest funeral spend, about $XXX into actually to this and into Of with into seen levels our maintenance standard XXXX. decrease rates development million other million the and the expect loans this $XXX of returns $XX high we improving investments. cemeteries, digital CapEx and projects corporate our cemetery expect million $XXX strategy to We higher investments million in from year to

that also expect acquisition This target before. with million $XX invest annual our spend line many towards $XXX We in about to times talked to acquisition. we've million is normal

acquisition of roughly and estate to home after-tax on [ targets, mid-teen CapEx which we invest In funeral real maintenance $XX capital construction to addition together new million [ low and ] to drive plan IRR. opportunities, ] also growth

manner, our absent over done dividends we higher and to other shareholders to we've our and a plan last program consistent investment XX buyback share capital years, disciplined in opportunities. return through as the returning Finally, continue

you going I comments few the remarks, on financial our give before conclude So I'm to position. a

available of debt have bank $X.X with on We $X.X long-term on tremendous billion $XXX over end of a XXXX, and billion, very liquidity. maturity about of little consisting liquidity profile plus our hand, attractive manageable approximately a At credit totaled the facility. million cash

fourth leverage just of long-term in our of began at lower is X.XXx about the range the under of target XXXX, declining leverage quarter to at Xx. the X.Xx X.Xx, which end Our end to

balance In to continues the invest program, cash us to and our investments conclusion, long-term our in investment predictable capital flow of benefit remarkable of which gives SCI, opportunistically enhanced these position liquidity strong sheet, all our total stream support flexibility for our and associates capital shareholders.

I'd their again, year which Lastly, again are like proud to greatest need, way for our most of we serve the future of we in the SCI this into team. thank and the entire customers time

you that, period. prepared to So operator, question-and-answer concludes like our turn to it our I'd over for And with this back remarks.

Operator

[Operator Ransom James. first John from Raymond Instructions] The question comes of

John Ransom

between seeing Tom, look, you is are down, to a dangerous, -- couple I'm of those the $XX in year, forward The $XX we're the to disappointed. then from do something going to and guy -- -- general million the a getting so spending timing, two. 'XX this might pretax million getting some in Eric but the year, guys like Looking agency Orlando, but be you weeks we're which acquisition that good to next try in ballpark? might teacups Is math, always benefit

Thomas Ryan

off. at look think probably numbers, higher our had not John, at a little high, it's but than midpoint. I Probably dramatically we what a little the

John Ransom

stuff the cremation you And Okay. -- -- were, is you to coming were that a other implying got mix, mix some is price this starting the point, that And just out of maybe you effect net into long-term all is increase when little taper you you a backlog know don't at bit? CPI-like but I -- off together? pricing stuff higher kind and seeing that sign settling at are there looking just I algo, you've Is you've cremation then of funeral mean stuff. got got price a that the

Thomas Ryan

rate, a saying? higher you're in off Take

John Ransom

is still at long much a Meaning, to a XXX hit of XXX drag? Or term? -- going isn't doesn't it is some it point that that as bps it ceiling where to

Thomas Ryan

think Yes, could I years. be is fair closer I question, think think of that's And that I as is they agency CPI now of yes, the what probably we're in step to pricing it think a last of preneed XXX. to it a backlog likely -- little say. for us opportunity is at gas the mean, how And pricing ability It's [indiscernible]. fair bit a way a basis on I will an definitely to way real of your that's we're selling kind begin more we future I But do with the the than again, from to same, couple profitability. experiencing look on slow. the the commission perspective. XXX are points drive that more to And general

John Ransom

Right.

that so kind X%. and preneed I against funeral your it, revenue just step call look And of to lastly, probably, back call It's CPI, at let's and growth.

grow margins, seeing at do you're Is to X% how work. to So little EBIT that have it? a more

Thomas Ryan

Yes.

we think, that you are on tip into as is front the have and growth, I the again, incremental the in growth demographics volume profit we side impact us, to X% expect of big. you'll funeral X% and that revenue from revenue pretty that see the that begin when the incremental X%, X% know,

funeral percentages about takes future occur go next we of see up. the see -- continue that hold. as we demographic that to So talked impact would would we a expect margins we And I year, like think

John Ransom

Yes.

obviously, way, that is year, said year think and another the more it kind obvious 'XX? of for you COVID normalized can't So 'XX and gets make the too you last is me, next of starting just pull-through it

Thomas Ryan

some still demographics there's a market because over things preneed the And just will pull-through factors COVID impact take what will I amount. other there'll offset little diminishing -- hangover continue think it's have. that to be those think I share,

Operator

comes question Rice The A.J. of next UBS. from

Albert Rice

I wondered if of a ask maybe couple could I questions here.

that of and flow again in been some You sounds like slightly now and down flat month saw your well. -- on volatility that you've quarter ebb there to second to And this flat Is a cases and backed expectation in if I 'XX going able comparable funeral on to volumes just maybe to had year? is we've from growth Or off the drill and up. versus year-to-year, the you wonder is there? for the this as get month? case seen because it you little down what of sort anything to bit slightly we

Thomas Ryan

Yes.

ripple going the correct. The of the COVID. just a everybody United up. for that's are the We're back seeing call impact, good I I'll lessened what expectation life think effect is States news and numbers

were thank suicide, of affected, goodness. the the way, And all so going are lot numbers categories indirectly to other those going overdose, desks, driving a back that

a that so definitely I thinking residual little that's a could And for there's also achieve -- we there's a down. volume effect probably still has us But XXXX. think slightly got good could got flat good be to expectation pretty

It So we kind we some it. volatility month-to-month and changed that's -- a months. of have within is see

fourth think is year, I some I a it I that less And quarters. as disruption you think these if right? [ November was COVID this think the ]. through from you get in December has was been like get quarter factor it predictable So down X, take continued this October of little than that's we lumpiness actually makes X. down down circle you a just -- were X,

Albert Rice

you out -- trust that's sales question. preneed that to guess insurance make with to Is switching And into being from know. ultimately I settle you'll the threw I out funeral that delve preneed XX%. of this as transition? your insurance sales. Okay. you you this XX% want think didn't I related

Thomas Ryan

Yes, A.J.

we've I that talking I XXX% that So production, confused Direct produced to probably And XX% Direct. was trust. historically we're XX% is by related selling by time. this. SCI what specifically our is that states the the now have We're bit converting XX% remember, converted. you And not state meant state on SCI of over this -- Because a about

having back insurance producing quarter. converted, to compare we're beginning so by And against

production of perspective, from kind we're and think I out, sense going up. So if a any bottoming that back makes

over convert the this And need coming you was year, I And stabilize. why months, to think still get SCI saying, year. I production. as continue we the the see XX% it Now of Direct that's to Those grow. half the states see back you to still you'll of do have should

is Now to new on things historically, although product, of our vendor. a we too, have one trust core that increase the product, the production, we to or that We've underwritten the number doesn't consumer. selling sold number say, I do new insurance insurance sell partner, of product it you sales Because it's the we've you should were but of And do could we is to a the when different. been flex contracts products. could side, slightly predominantly, some have what converted trying protection trust the but remember, or provide a

the consumer And because they the may product, was a but form product. not of they in production, thinks it sometimes it's flex insurance an have

that a people that of that to mix to levels production. climb that again up. actually the And So We'll write have insurance could anticipate eliminate we're mix need happen of but trying to at higher production see growing and And we're underwritten probably probably some get can some insurance begin component. sold. historically success. back of time again, confusion trust, those we seeing we We're than

channels, kind the sorry different reasons, explanation. X So and long for X of

Albert Rice

at puts a that When million about you think Or and do number about that because Is over than did you I all takes? I think misunderstand $XXX the annual would that now the potentially business you bigger in this that's this point? new made move still having it's conversion business. the number think I No, it. contract, you with good talked

Thomas Ryan

running Well, $X.X annual add at if SCI you clip. in billion we're Direct, a

that from before. $XXX I from think Direct. Remember, SCI write as core SCI and insurance $XXX million Direct of million didn't

on to the that lot going of sold. write we're And type rates again, commission vary insurance. depending more products So a in regard, the

way So is And to if we've sell got that our commission to But higher overall, hard them going sell worked if were. what better commissions, predict to you get exactly lower commissions older, people, general should insurance we products it's you're again, be to to agency going younger commission the be. favor. to rates it's rates better

Albert Rice

Okay. for me. And maybe comment just one one the deal. on The final

of So acquisitions you're XX XXX for guiding year. to this

last year, into is target I there came still XX quite at Is a the up robust? you see you remember which XXX right XXX, comment positive. to think pipeline ended with pipeline? any in Is what similar now? Or really but is right, the a pipeline reflective about of I obviously the that if

Eric Tanzberger

say you of the pipeline if deals that robust. this and kind of we've been remember, And ebb continues to coming be Hey A.J., flow. would I really COVID. out is saying Eric. these But

event. have that it's family for a is make organization to a their You raise with the situation to hand wants ready and independent sure that and win-win liquidity

and Sometimes situations. you have a start those stop in

Sometimes it third, accordingly, takes align liquidity are and to the families a to lot create longer. need fourth-generation that event. These sometimes want second, all

I with said on up year And closing strong. this just pipeline. strong that. year the been the going last as has am but terms based flow pipeline that as fruition the timing of terms just end closing, the in as -- So of strength in the still coming it's of deals, and to But excited to I of ebb

pipeline, in again it to on you and this of right initial could flows based So we're going If we like the did hope that XX last the exceed strength guidance direction to the I an of year. ebbs give year XXX. we

But ducks row is have to We're excited people and and their force a a again, in situation. family situation to about We not sell. be joining going to that bit want a us to we are ready. a win-win we that where all little -- very and of organization in this want

Albert Rice

That much. right. so good. All sounds Thanks

Operator

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

Joanna Gajuk

So a couple -- of topics. same

still more to I funeral you give lumpy month-to-month. might volume very outlook. little I on how able like guess, in January? bit color But is maybe I this like us but year, guess, could but month, January year might Because a a first, terms appreciate any So sounds then, November was December down little be weak I a comments trending? of it be guess it be over

Thomas Ryan

a tough volume wasn't far which January, our comparison. on about expectation, honestly, expected the off side is Joanna. down X%, quite very we Sure, just funeral but

that's So [indiscernible] to early too are, where we and tell.

Joanna Gajuk

some look such these from into it November glean some said, going also and think right. a is just pull It macro the of to like why terms be able that other factors sound Because it headwind this of be higher you All Or But could bigger this in you it effect. stop might is at was when of like sort you don't the is weak like some forward? volatility? month sort pull-forward numbers or you more a like on. like made you else the anything there like is

Thomas Ryan

Yes.

I forward think couldn't a extended technically And it's I maybe of not deaths say longer that forward. I screenings, when people And things, not pull different all right? these other knew of -- mental it's occurred saw there are categories explain anticipated. just could excess -- like these of deaths it's we I you be guess, a pull the periods down, health had it be said, why, cancer issues. little You than had you could overdose,

saying data which kind the looking categorically, country is of thing. And I now all is the a that that is we're healing, think at good

to aging and less less talking growth, go things again. preneed a the that us just normalizing factors to those we'll maybe see is piece in a the hey, that's be little be that's COVID forward, and to contribute we say, And market markets which more in begin the position things bit share. would will and And back. the our strong would that way, general to less the America, we conversation. our And those anticipate so And are normalizing point good grow excess deaths of probably competitive X to less as moved our then impact, backlog, dominant now

say, of be down, it hadn't but it really we it's impact I seen are. flu lot to about kind we we And from slightly are. hear our a right think slightly, it, We where And numbers. but pretty up where pretty could So We good feel that's about mean, surprise season hard it flu, again, seen haven't the to yet. be now. may we I'd the could in be flat. us a real predict

Joanna Gajuk

year-over-year a guess about we'll hospitals higher, -- what mean, guess activity the business. so lower see from your talk that I Right, flu, is like yes. tracking on for was Because the hearing but generally QX means I I

Los topic, Rose QX, lingering in the those location in when comes just California, that I another it specifically for Do you around assume your to wildfires impact in -- outside the So wildfires from guess, Angeles. of Hills around any communities?

Thomas Ryan

Yes.

So first normalization some is primary safety employees them are form concern some and whatever back our health and and been had this, we've of getting impacted all, of can that that's by to occur. their

an getting say the during impact #X. is been sales, distraction that's I'd like. displaced had as the So relates month, And homes from to a temporarily people surely it and just and think, mission I it their all

deferral relates our cemetery, to are, So sale. as preneed as that it a it's lost not heals, thoughts and a

some February, people in some we'll and things bring there event. California. and think normalcy But a disruptive should January some of thoughts be more and have to we'll while our see with incredibly that they beautiful to are opening up deal normalize, there return it opportunity to everybody we this So have relates growth impact sections that probably continue is and as as into an again, with as our to the year

Joanna Gajuk

guess XXX,XXX I Yes. like dislocated. people there Right. was

there some talked being but access when So you about time. developed, opening because that's there, hopefully, comes preparations kind up But some takes other that new a section I to last was blocked your sections. to maybe time so guess, of mentioned sections off it that you

up that are is ready and Like, open you for traffic everything where now to So on through? the front? of kind come

Thomas Ryan

yet, it's to open and have that new to think open some have sections our up to of consumers. schedule I but be. everything I would those allow great to anticipate up and there sections the we -- opportunity is think on don't

happen, I So still to that's yes, think there. have will don't scheduled the disruption fire any

Joanna Gajuk

if And may the Okay. last one. I squeeze

restructuring you like So there the bit Can And happening? the charge of for in now? us little was what a was give driver exactly it color doing was quarter. a what

Eric Tanzberger

over little $XX is The was million. This Joanna. Thanks, charge a Eric. restructuring

before starting the that seen to manage have to cost the inflationary in trying thing And environment. the that a you high culturally, this numbers. past is fixed realize to structure really you're that the think years see is over as and us in you've past I

side over start finally the our out and the really to home primarily there our the is restructuring the see office has As managed past cemetery margins the costs years are it. funeral on well. several fixed corporate coming charge COVID, trying to to you nothing It field. the you really manage on and of and This fixed see related back-office functions. the do to with costs fruits labor side, of the be And

always restructuring kind to less and get through Any more And and those we some try be which to crescendoed introduce more this charge. a things it one we looking time caused is better technology it were quarter, better, opportunities X to and particular go strive to into that or get efficient. to where of of at

could based You quarter, process but and to big type under things did. on the sum but our radar, mentality, just continuous call restructuring it improvement these enough charge they're see it together this not a

XX% of it, savings And cash so million, that cash. describe is I'd And probably how in some XX% XXXX. the say half call to that $XX would it. would I And of I that's

Joanna Gajuk

That's helpful. Great. very

Operator

comes next of from Schneeberger question Oppenheimer. The Scott

Daniel Hultberg

the for on terms you volume sales elaborate preneed large in little activity Daniel sales bit, versus the on a Scott. think for outlook It's component? about how Could cemetery please, of you

Thomas Ryan

Sure.

what I to think single-digit sales hard percentage to been predict, the of are large looking you again, that is as And we're for the guided kind next low we'd anticipate growth. way at, that year, about we've know. this thinking we've

compared So would is be prior relatively flat those our to the anticipation year.

really is to from sales. the growth come core And production of going so the component cemetery

Daniel Hultberg

on the for think looks speak perspective bit a how XXXX the it. as you to in well you And quarter. in some about fourth margins accelerated year? cemetery next Got Could rate as that recognition

Eric Tanzberger

tends quarter, months higher little you're at during certain higher. capital Sure, network, of started get done that bit in the bit peak does Daniel. summer to It a get it was a quarter, in see XXX% to traditionally spend fourth going always it time. But have kind equally. tend entire to projects and the and than as -- across the try seen We to the the our projects and of that's little you why periods

entire the the like basis frankly, for that the guide, high year, XXs. XXXX. mid- for in I it's to On global

more it's think same. of I the

are about those high the I will return I the think And or projects. in rate think recognition mid-XXs. spend XXX% development projects. They maybe be we're million the and We $XXX going somewhere love to cemetery area. between XX%

we maintenance type flat, sales maybe in years seen. a digits, of of going because cemetery better little going low, bit bit low- kind for probably above, of a in that we've going bit managing XXXX area time margin to back In maybe we to couple see margins, terms I lot mid-single But next over little as to a that it's think levels growing preneed a inflationary still doing you're XX% That some although come mid-XXs job to especially in the over, some expansion see see still you're to continues maybe of little get But cemetery a low-ish, still you're XXXX, the generally, have approaching the to cemetery. that. pressure, above area. we're of

Daniel Hultberg

so you much. Great. Thank

Operator

Securities. question next Tobey Our Truist Sommer comes from of

Tobey Sommer

and funeral us you just your you're rule what kind government an expectations people? from the your of update Can on hearing for give

Eric Tanzberger

know the so out quite administration. there's don't volatility is right rule anything that situation happening will Well, anything tell we specific don't change heard the there's say. of with or I know of now out know don't the Washington. much in What you since that that's what November you on going to change world, I the I -- in the since related funeral haven't to with the

the you are material think way the way not a prices business to some to we're we lot certain value are of continue and what is and things and implementing by have proposition well funeral to effect of we any experiences company. were think think a things good practices uniquely we And be as our supportive on intelligently the based think that do of on rule, the online online. know, those proposed going We perhaps, but of in the for market

if on experience do the maximizing as think something so. materially And model focus business the is the good practice, FTC And changes move we still And that. and the customers' digital to does going and is forward. customer. it's we'll affect our continue our Our focus that, on to don't that business I that's

Tobey Sommer

you year-over-year? cemetery, that how your us your headwind? particular, a expenses that, trending, sort do Is -- comps Within think in that tell labor? tailwind are And how of or

Eric Tanzberger

$XXX labor, of that cemetery labor trying out associates over and couple the that seen with benefits years than all A years. of XX,XXX for XX,XXX which that talked always, came You're cemetery of to in have. lot going our the would to have of COVID particularly acres labor of we've coming the the pressure labor a across take about definitely market, we the million lower years COVID property pressure of to have. but you operationally the impact in past and we us the about tiers care $XXX and When think pressure spend all less it's it's million during company

And so we that was some of the pressure that saw.

more quarters ago years than mid-single-digit better the funeral ago lot and are of see described lower labor right did percentage now. side, of to on out in side they it's several you. of you're of on continuing think cemetery kind percentage pressure COVID the feel those a to a couple -- a both coming I that single-digit or But we

Tobey Sommer

I incremental in fold sneak to If you forecast one into to starts last trend And From in. a what's baby a do perspective, P&L? when likely think your that service it of could volumes? what is the boomer best terms do for

Thomas Ryan

baby year. boomers turn first XX next the Well,

the the about X to see difficult incremental the out. next the with of stair to it's kind that's step, And I really thinking within, consideration. to X we're trends going a window that's years. impact, roll think to way next about time years, into as few think how But historical you'll say, a step we you I'd stair But that think slow over it to an predict XX of so do begin taking

Operator

Our Snure next Parker Raymond from question comes James. of

Thomas Ryan

I think we Parker. lost

Operator

lost yes. Q&A? want lost Did We to up Well, we we Parker, the just Parker. wrap

Thomas Ryan

to great speaking forward weekend. I to participating call want you in today. thank look a the We week again April. That Sure. great. on Have and everybody be to for would

Operator

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

disconnect. You may now

Service Corporation International (SCI) 13 Feb 252024 Q4 Earnings call transcript