Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carriage Services Inc reported a significant revenue increase to $103.5 million, marking an 8.4% rise and surpassing the $100 million mark for the first time in a single quarter.
- The company achieved a record first quarter in preneed cemetery sales, with a 29.4% increase in cemetery operating revenue to $27.6 million.
- Adjusted consolidated EBITDA rose by 20.9% to $33.6 million, reflecting effective cost management and higher average revenue per contract.
- Carriage Services Inc successfully integrated its recent acquisition, Greenland, contributing positively to the financial results.
- The company's strategic pricing initiatives led to a 4% increase in total funeral operating average per contract, enhancing profitability.
Negative Points
- Total funeral operating volume decreased by 1.9%, indicating a post-pandemic normalization which could signal a downward trend in service demand.
- Corporate overhead costs increased by $6.1 million, largely due to nonrecurring expenses related to executive separation agreements.
- Despite overall revenue growth, the funeral segment saw only a modest increase of 1.8% in operating revenue, coupled with a decline in contract volume.
- Interest rates remained high, impacting the cost of borrowing despite efforts to reduce debt levels.
- The company noted that seasonality and normalization post-pandemic may continue to impact service volumes in the near term, requiring careful monitoring and adjustment of business strategies.
Q & A Highlights
Q: What's the difference between the 1.9% and 2.6% decline in funeral contract volumes mentioned?
A: Carlos R. Quezada, CEO & Vice Chairman of Carriage Services, explained that the 1.9% figure includes a consolidated view, while the 2.6% figure is post-divestitures, reflecting an operating revenue perspective.
Q: How does the increase in average revenue per funeral contract break out between traditional funeral and cremation?
A: Carlos R. Quezada stated that there was a 3.2% increase in burial contracts and a 4.5% increase in cremation contracts, contributing to a total 4% improvement in pricing.
Q: Can you provide insights into the expected trend in funeral volumes for the rest of the year?
A: Carlos R. Quezada mentioned that they anticipate a gradual decline in volume throughout the year, estimating a decrease to around 1% by December, while also focusing on market share gains to offset volume losses from post-COVID normalization.
Q: What are the financial impacts of the divestitures completed in the first quarter?
A: L. Kian Granmayeh, Executive VP, CFO & Treasurer, confirmed that the impact was as expected, with $5.5 million less in revenue and $1.5 million less in EBITDA, which were already accounted for in the 2024 guidance.
Q: What is the status of the sales force for preneed sales, and do you expect further momentum?
A: Carlos R. Quezada believes that sustainable momentum will continue, supported by strong leadership and strategic marketing efforts, despite seasonal fluctuations.
Q: What are the company's plans regarding real estate divestitures?
A: Steven D. Metzger, President & Secretary, mentioned they occasionally evaluate valuable real estate for potential sale, with one significant transaction potentially yielding seven-figure proceeds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
