CARRIAGE SERVICES INC Q3 FY2024 earnings call

• Carlos thanked employees for their commitment and highlighted progress driven by three strategic objectives. - Total revenue for Q3 was $100.7M, up 11.3% from the prior year. - Preneed cemetery sales growth of 27.1% was noted. - Funeral home operating revenue grew 1.4% due to pricing strategy. - Adjusted consolidated EBITDA increased 26.7%. - 2024 guidance was raised: total revenue expected $395M-$405M, adjusted consolidated EBITDA $120M-$125M, adjusted diluted EPS $2.45-$2.55, adjusted free cash flow $55M-$65M. - Supply chain initiative for urns and caskets is underway. - Search for Chief Financial Officer continues.

For the third quarter, total revenue was $100.7 million, a 11.3% increase from the prior year. Preneed cemetery sales saw a significant jump, rising by $4.9 million to $22.9 million, a 27.1% increase. Funeral home operating revenue was $59.3 million, up $814,000 or 1.4%. General agent commissions ended at $1.6 million, a 415.4% increase. Cemetery operating revenue closed at $33 million, up $8.7 million or 35.7%. Adjusted consolidated EBITDA for the quarter was $30.7 million, an increase of $6.5 million or 26.7%.

• Raised 2024 total revenue guidance to $395M-$405M, adjusted consolidated EBITDA to $120M-$125M, and adjusted diluted EPS to $2.45-$2.55. - Adjusted free cash flow guidance remains $55M-$65M. - Overhead expected to be slightly elevated due to Trinity project, but long-term efficiencies anticipated. - Leverage ratio expected to end 2024 in 4.3x-4.6x range.

• Factors from earnings release and SEC filings, including economic uncertainties, discretionary spending changes, and potential impact of COVID pull-forward effects on funeral volumes.

Q: Why would revenue be down sequentially in the fourth quarter?

A: Cautious outlook due to economic data, discretionary spending changes, and October showing a tick up on decline.

Q: Did you close any other divestitures in the third quarter?

A: We closed a real estate-focused transaction in Q3, with a couple of opportunities in Q4, still on target for $20M-$30M range.

Q: Is preneed cemetery sales growth sustainable?

A: Sustainable with low double-digit growth expected over next 4-5 years.

Q: What's the outlook for M&A market?

A: Focused on refining integration playbook, excited to get back to growth in 2025, with a blueprint from past transactions to follow.