Carriage Services, Inc. Q1 FY2026 earnings call

Carlos mentioned being pleased with first quarter performance against a strong comparison to Q1 2025, with steady execution, discipline, and focus on controllables. Recognized managing partners, field teams, and Houston Support Center. Discussed three key phases of the journey: what we were, what we are today, and where we are going. John walked through financial details including cash from operating activities, balance sheet strength, capital expenditures, overhead, and at-the-market offering program. Carlos also spoke about strengthening the balance sheet, reducing leverage, institutionalizing processes, investing in systems, and building a culture of operational excellence. John discussed consolidated adjusted EBITDA, adjusted diluted EPS, cash from operating activities, free cash flow, bank leverage ratio, capital expenditures, and overhead expenses.

For the first quarter, revenue was $106.1 million, a 0.9% decrease from the same period last year. Funeral comparable revenue was $63.3 million, down 4.2% from the previous year, with a 1.6% increase in comparable average revenue per contract. Comparable cemetery revenue was $29.6 million, an increase of 1.7 million or 6% versus the prior year quarter, driven by a 9% increase in comparable pre-need cemetery self-production and a 15.3% increase in average revenue per property contract. Financial revenue for the quarter was $8.5 million, up 15.7% year-over-year. Adjusted consolidated EBITDA for the first quarter was $33.8 million, an increase of $805,000 or 2.4%, with an adjusted consolidated EBITDA margin of 31.8%, up 100 basis points from the prior year quarter. Adjusted diluted EPS for the first quarter was 86 cents per share, compared to 96 cents per share in the prior year quarter, representing a decrease of 10 cents per share, or 10.4%.

Maintaining previously disposed four-year outlook. Revenues expected to be in the $440 to $450 million range. Adjusted consolidated EBITDA expected to be in the range of $135 to $140 million. Adjusted EBITDA margins between 30.5 and 31.5%. Adjusted diluted EPS of $3.35 to $3.55. Overhead expenses to be between 13.5% to 14.5% of revenue. Adjusted free cash flow in the range of $40 to $50 million. Leverage ratio in 2026 between 3.5 to 4 times. Also, established an at-the-market equity offering program (ATM program) as a prudent enhancement to capital markets toolkits.

First question from Alex Paris with Barrington Research about funeral results, acquisitions integration, M&A pipeline. Second question from Laura Marr with E-Riley Securities about burial to cremation mix and funeral home divestitures. Third question from Parker Snur with Raymond James about funeral volumes progression and early days of second quarter. Fourth question from George Kelly with Roth Capital Partners about status of Trinity, funeral home efficiencies, and market share gains. Fifth question from Scott Schneeberger with Oppenheimer about what's looked for in M&A