CSV - Carriage Services Announces Fourth Quarter and Full Year 2023 Results | Benzinga

February, 21 2024 10:58 PM Carriage Services Inc.

HOUSTON, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Carriage Services, Inc. (NYSE:CSV) today announced results for the fourth quarter and year ended December 31, 2023.

Company Highlights:

Exceeded full year 2023 guidance ranges for total revenue, adjusted consolidated EBITDA and adjusted earnings per share, driven by strong fourth quarter performance;
5.2% growth in total revenue over the prior year quarter and 3.3% growth over the prior full year;
Preneed sales deliver 16.1% growth in cemetery operating revenue over the prior year quarter and 13.5% growth over the prior full year;
41.6% increase in GAAP net income and 41.5% increase in diluted earnings per share over the prior year quarter;
Founder and Executive Chairman, Mel Payne, to transition to special advisor to the Board of Directors;
The Board of Directors concludes the previously announced review of strategic alternatives; and
Management announces 2024 outlook.

Carlos Quezada, Vice Chairman and CEO, stated, "We are pleased to announce our strong fourth quarter and full year 2023 results. Total revenue grew by 5.2% in the fourth quarter and 3.3% for the full year, despite the COVID "pull forward" impact resulting in modest declines in funeral contract volume experienced during the year. This success in growing our top line stems from our targeted efforts to better leverage our pricing power, which drove improved average revenue per contract, in addition to our preneed cemetery sales team's exceptional performance, which resulted in a surge in preneed cemetery sales production of 25.0% for the fourth quarter and 19.6% for the full year. This increase in revenue, coupled with disciplined cost management, resulted in a year-over-year increase in adjusted consolidated EBITDA of 3.5%, and a significant 13.2% growth over the prior year quarter, which also included margin expansion of 230 basis points. This momentum, marking four out of five consecutive quarters of solid performance, instills confidence and excitement in our core initiatives as we advance into 2024 and focus on fulfilling our new purpose statement, which is ‘Creating premier experiences through innovation, empowered partnership, and elevated service.' For those interested in learning more, we invite you to explore our newly launched website and discover our refreshed Carriage image, which aligns with our vision of the Carriage of the future," concluded Mr. Quezada.

FINANCIAL HIGHLIGHTS



Three Months Ended December 31,

Years Ended December 31,
(in millions except margins and EPS)


2022



2023



2022



2023










GAAP Metrics:








Total revenue

$
93.9


$
98.8


$
370.2


$
382.5

Operating income

$
19.6


$
23.9


$
79.7


$
81.0

Operating income margin


20.9
%


24.2
%


21.5
%


21.2
%
Net income

$
8.2


$
11.6


$
41.4


$
33.4

Diluted EPS

$
0.53


$
0.75


$
2.63


$
2.14

Cash provided by operating activities

$
11.0


$
13.7


$
61.0


$
75.6










Non-GAAP Metrics⁽¹⁾:








Adjusted consolidated EBITDA

$
28.7


$
32.4


$
109.3


$
113.2

Adjusted consolidated EBITDA margin


30.5
%


32.8
%


29.5
%


29.6
%
Adjusted diluted EPS

$
0.64


$
0.77


$
2.61


$
2.19

Adjusted free cash flow

$
8.9


$
12.8


$
49.8


$
55.1

⁽¹

⁾

^{We present both GAAP and Non-GAAP measures to provide investors with additional information and to allow for the increased comparability of our ongoing performance from period to period. The most comparable GAAP measures to the Non-GAAP measures presented in this table can be found in the Reconciliation of Non-GAAP Financial Measures section of this earnings release.}

Revenue for the three months ended December 31, 2023 increased $4.9 million compared to the three months ended December 31, 2022, primarily as a result of a 23.6% increase in the number of preneed interment rights (property) sold, a 1.2% increase in the average price per interment right sold and a 0.7% increase in the average revenue per funeral contract, offset by a 3.3% decrease in the funeral contract volume.
Revenue for the year ended December 31, 2023 increased $12.3 million compared to the year ended December 31, 2022, primarily as a result of a 9.4% increase in the average price per preneed interment right sold, an 8.6% increase in the number of preneed interment rights (property) sold and a 0.9% increase in the average revenue per funeral contract, offset by a 2.4% decrease in the funeral contract volume.
Net income for the three months ended December 31, 2023 increased $3.4 million compared to the three months ended December 31, 2022, primarily due to a $3.2 million increase in profit contribution from our businesses and a $2.9 million decrease in loss on divestitures, disposals and impairment charges, offset by a $1.4 million increase in interest expense and a $1.1 million increase in general, administrative and other expenses.
Net income for the year ended December 31, 2023 decreased $8.0 million compared to the year ended December 31, 2022, as the $5.1 million increase in profit contribution from our businesses was offset by a $10.4 million increase in interest expense and a $4.7 million increase in general, administrative and other expenses.

MEL PAYNE TRANSITIONS TO ADVISORY ROLE

After 32 years of founding and building Carriage, Mel Payne, has chosen to step down from his role as Executive Chairman of the Board and transition to a new role as special advisor to the Board of Directors, which will allow him to be available and share his wealth of knowledge and insights with the Board of Directors and the senior leadership team. Mel will continue as a member of the Board until his current term expires at the May 2024 annual meeting of stockholders.

Mel, who served as Carriage's only CEO and Chairman of the Board for the Company's first 32 years, started with a vision in 1991 that was born out of a very personal and impactful experience he had following the loss of a loved one. He turned that experience and vision into a team of more than 2,700 employees and 200 businesses, all driven by a collective mission of serving families during the most challenging time of their lives.

"Next to my family, Carriage has been and continues to be, the greatest love of my life. The friendships I have made over the years are priceless, and watching the growth and development of so many wonderful leaders throughout the organization has been a true highlight of my career. I have complete confidence in Carlos' vision and ability to lead Carriage into its next chapter of growth, and, as still a large shareholder, I will be cheering on the team and offering support," stated Mr. Payne.

"Mel has built a special company and is one of the true pioneers in this profession. He has handpicked an incredibly talented senior leadership team, and the Board is excited for the future of Carriage and our stockholders," stated Lead Independent Director, Don Patteson.

CONCLUSION OF REVIEW OF STRATEGIC ALTERNATIVES

The Board of Directors (the "Board") has concluded the Company's strategic review process, first announced on June 29, 2023, which was overseen by the Board with assistance from experienced financial and legal advisors. The Board has unanimously determined that continuing to execute on the Company's strategic plan as an independent, public company is in the best interests of the Company and its stockholders at this time. In this regard, the Board's determination took into account positive trends described above in the Company's financial and operating results toward the end of 2023. The Board remains committed to maximizing stockholder value.

While the Company received a number of proposals for transactions involving the Company in the course of the strategic review process, following a thorough review and evaluation of the proposals and alternatives available to the Company, the Board concluded that none of those proposals would be in the best interests of the Company's stockholders. The Board endorsed the Company's continued execution of its standalone business plans as an independent publicly held company under the leadership of Carlos Quezada as CEO, Steve Metzger as President and Kian Granmayeh as CFO, as well as leadership from the Company's Board, which added three talented new directors during the summer of 2023.

OUTLOOK FOR 2024

The Company's 2024 outlook incorporates previously stated organic growth initiatives around preneed sales, both in the cemetery and funeral businesses, and expected cost discipline while the Company continues to deleverage the balance sheet. Additionally, in the first quarter of 2024, the Company expects to close two transactions to divest certain non-core businesses, reducing 2024 revenue and field EBITDA by ~$5.5 million and $1.5 million, respectively – the 2024 Outlook reflects the expected impact of these two divestitures.


2024 Outlook⁽¹⁾
*(in millions - except per share amounts)*



Total revenue
$380 - $390
Adjusted consolidated EBITDA
$112 - $118
Adjusted diluted EPS
$2.20 - $2.30
Adjusted free cash flow
$55 - $65

⁽¹

⁾

^{Includes two transactions to divest certain non-core businesses.}

CALL AND INVESTOR RELATIONS CONTACT

Carriage Services has scheduled a conference call for tomorrow, February 22, 2024 at 9:30 a.m. central time. To participate in the call, please dial 888-208-1711 (Conference ID - 1315299) or live over the Internet via webcast click link. An audio archive of the call will be available on demand via the Company's website at www.carriageservices.com. For any investor relations questions, please email InvestorRelations@carriageservices.com.

CARRIAGE SERVICES, INC.
CONDENSED OPERATING AND FINANCIAL TREND REPORT
(in thousands - except per share amounts)














2019



2020



2021



2022



2023

Funeral operating revenue

$
196,475


$
226,819


$
252,926


$
251,396


$
249,180

Cemetery operating revenue


49,317



69,083



91,330



90,033



102,216

Financial revenue


15,878



19,689



22,708



22,452



26,259

Ancillary revenue


748



4,661



4,437



4,193



4,588

Divested revenue


11,689



9,196



4,485



2,100



277

Total revenue

$
274,107


$
329,448


$
375,886


$
370,174


$
382,520












Funeral operating EBITDA

$
75,553


$
93,480


$
109,204


$
101,951


$
94,949

Funeral operating EBITDA margin


38.5
%


41.2
%


43.2
%


40.6
%


38.1
%











Cemetery operating EBITDA


17,164



26,627



42,158



37,509



41,096

Cemetery operating EBITDA margin


34.8
%


38.5
%


46.2
%


41.7
%


40.2
%











Financial EBITDA


14,272



18,357



21,156



20,767



24,561

Financial EBITDA margin


89.9
%


93.2
%


93.2
%


92.5
%


93.5
%











Ancillary EBITDA


298



1,186



1,006



841



455

Ancillary EBITDA margin


39.8
%


25.4
%


22.7
%


20.1
%


9.9
%











Divested EBITDA


2,480



2,292



1,117



293



15

Divested EBITDA margin


21.2
%


24.9
%


24.9
%


14.0
%


5.4
%
Total EBITDA

$
109,767


$
141,942


$
174,641


$
161,361


$
161,076

Total EBITDA margin


40.0
%


43.1
%


46.5
%


43.6
%


42.1
%











Total overhead

$
37,554


$
40,514


$
54,282


$
53,848


$
50,086

Overhead as a percentage of revenue


13.7
%


12.3
%


14.4
%


14.5
%


13.1
%











Consolidated EBITDA

$
72,213


$
101,428


$
120,359


$
107,513


$
110,990

Consolidated EBITDA margin


26.3
%


30.8
%


32.0
%


29.0
%


29.0
%











Other expenses and interest










Depreciation & amortization

$
17,771


$
19,389


$
20,520


$
19,799


$
21,117

Non-cash stock compensation


2,153



3,370



5,513



5,959



7,703

Interest expense


25,522



32,515



25,445



25,895



36,266

Loss on extinguishment of debt


—



6



23,807



190



—

Other


4,351



21,506



770



(1,524
)


(525
)
Pretax income

$
22,416


$
24,642


$
44,304


$
57,194


$
46,429

Net tax expense


7,883



8,552



11,145



15,813



13,016

Net income

$
14,533


$
16,090


$
33,159


$
41,381


$
33,413

Special items⁽¹⁾

$
9,821


$
25,579


$
30,607


$
(200
)

$
1,003

Tax effect on special items


1,822



7,986



8,503



95



285

Adjusted net income

$
22,532


$
33,683


$
55,263


$
41,086


$
34,131

Adjusted net income margin


8.2
%


10.2
%


14.7
%


11.1
%


8.9
%











Adjusted basic earnings per share

$
1.26


$
1.88


$
3.17


$
2.76


$
2.29

Adjusted diluted earnings per share

$
1.25


$
1.86


$
3.02


$
2.61


$
2.19












GAAP basic earnings per share

$
0.81


$
0.90


$
1.90


$
2.78


$
2.24

GAAP diluted earnings per share

$
0.80


$
0.89


$
1.81


$
2.63


$
2.14












Weighted average shares o/s - basic


17,877



17,872



17,409



14,857



14,803

Weighted average shares o/s - diluted


18,005



18,077



18,266



15,710



15,455












Reconciliation of Consolidated EBITDA to Adjusted consolidated EBITDA










Consolidated EBITDA

$
72,213


$
101,428


$
120,359


$
107,513


$
110,990

Special items⁽¹⁾


4,374



2,822



5,802



1,799

Full story available on Benzinga.com

Company Name:	Carriage Services Inc.
Stock Symbol:	CSV
Market:	NYSE
Website:	carriageservices.com

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