HOUSTON, July 26, 2017 /PRNewswire/ -- Carriage
Services, Inc. (NYSE: CSV) today announced results for the second
quarter ended June 30, 2017.
Mel Payne, Chief Executive
Officer, stated, "After over five outstanding years of Good To
Great Journey performance records, we had a relatively weak
earnings performance in the second quarter of 2017, i.e. GAAP
Diluted EPS of $0.24 (down 20.0% from
prior year) and Adjusted Diluted EPS of $0.30 (down 18.9%) on record revenue of
$63.9 million (up 3.2%). Adjusted
Free Cash Flow also decreased $9.8
million in the first half of 2017 compared to last year. Our
earnings underperformance in the second quarter was primarily
related to a 460 basis point decline in our Acquisition Funeral
Field EBITDA Margin to 38.0%, a continuation from the first quarter
of weak same store cemetery sales and margin performance, a 16.0%
increase in Total Overhead comparative quarter over quarter and a
one million increase (6.0%) in the diluted share count for the
second quarter calculated under our convertible subordinated debt
formula because of the share price increase this year versus
last.
We view specific areas of concentrated operational weakness,
i.e. integration of recent funeral home acquisitions and same store
cemetery sales and margins, as "glass half full" opportunities for
improvement toward our goal of maximizing the long term intrinsic
value of Carriage. Moreover, we have taken the opportunity to
selectively increase our investment in quality people within our
Corporate Development, Operational Support and Information
Technology teams in order to support what we believe will be an
increased level of industry consolidation over the next five years.
These specific people investments combined with higher than
expected severance and public company costs led to the $1.2 million increase in Total Overhead Expenses
in the second quarter of this year versus last.
As part of Carriage's continued evolution, we previously made
the commitment to only report Non-GAAP items if they were truly
'non-recurring.' This reporting change has decreased our year to
date 2017 Adjusted Diluted EPS by $0.05 compared to the first half of 2016. The
increase in our diluted share count has also negatively impacted
our 2017 Adjusted Diluted EPS by $0.05.
We are only two quarters into the second five year timeframe of
our Good To Great Journey and have the view that the next
five to ten years will produce performance trends that confirm the
superiority of Carriage's High Performance Culture Framework as an
operating, consolidating and value creation platform for the
funeral and cemetery industries.
Second quarter highlights are shown below:
Three Months Ended June 30, 2017
compared to Three Months Ended June 30,
2016
- Record Total Revenue of $63.9
million, an increase of 3.2%;
- Net Income of $4.4 million, a
decrease of 15.2%;
- GAAP Diluted Earnings Per Share of $0.24, a decrease of 20.0%;
- Record Total Field EBITDA of $25.3
million, an increase of 0.7%;
- Total Field EBITDA Margin down 100 basis points to 39.6%;
- Adjusted Consolidated EBITDA of $16.5
million, a decrease of 7.1%;
- Adjusted Consolidated EBITDA Margin down 280 basis points to
25.9%;
- Adjusted Net Income of $5.5
million, a decrease of 13.1%; and
- Adjusted Diluted Earnings Per Share of $0.30, a decrease of 18.9%.
Six Months Ended June 30, 2017
compared to Six Months Ended June 30,
2016
- Record Total Revenue of $132.0
million, an increase of 5.4%;
- Record Net Income of $11.5
million, an increase of 17.6%;
- Record GAAP Diluted Earnings Per Share of $0.63, an increase of 10.5%;
- Record Total Field EBITDA of $54.8
million, an increase of 3.8%;
- Total Field EBITDA Margin down 70 basis points to 41.5%;
- Adjusted Consolidated EBITDA of $37.1
million, a decrease of 1.6%;
- Adjusted Consolidated EBITDA Margin down 200 basis points to
28.1%;
- Adjusted Net Income of $13.6
million, a decrease of 4.8%; and
- Adjusted Diluted Earnings Per Share of $0.75, a decrease of 10.7%.
Listed below are High Performance Hero Managing Partners leading
us during the second quarter on our Good To Great Journey,"
concluded Mr. Payne.
Dave
DeRubeis
|
Cody-White Funeral
Home; Milford, CT
|
Patrick
Schoen*
|
Jacob Schoen &
Son Funeral Home; New Orleans, LA
|
Jason
Higginbotham
|
Lakeland Funeral
Home; Lakeland, FL
|
Heather
Simons
|
Hubbard Funeral Home;
Baltimore, MD
|
Randy
Valentine
|
Dieterle Memorial
Home & Cremation Ceremonies; Montgomery, IL
|
Bob Thomas
|
Malone Funeral Home;
Grayson, KY
|
Pam
Parramore
|
Baker-Stevens-Parramore Funeral Homes; Middletown,
OH
|
Cliff
Pope*
|
Havenbrook Funeral
Home; Norman, OK
|
Scott
Glover
|
Alsip & Persons
Funeral Chapel; Nampa, ID
|
|
|
* Notes High
Performance Heroes from First Quarter 2017.
|
TRUST FUND PERFORMANCE
Shown below are consolidated performance metrics for the
combined trust fund portfolios (preneed funeral, cemetery
merchandise and services and cemetery perpetual care) at key
dates.
Investment
Performance
|
|
|
Investment
Performance(1)
|
|
Index
Performance
|
|
|
Discretionary
|
Total
Trust
|
|
S&P 500
Stock Index
|
High Yield
Index
|
70/30
index
Benchmark(2)
|
|
|
|
|
|
|
|
|
6 months ended
06/30/2017
|
|
4.6%
|
4.3%
|
|
9.3%
|
4.9%
|
6.2%
|
1 year ended
12/31/2016
|
|
19.7%
|
18.3%
|
|
12.0%
|
17.6%
|
15.9%
|
2 years ended
12/31/2016
|
|
16.0%
|
15.1%
|
|
13.5%
|
12.0%
|
12.4%
|
3 years ended
12/31/2016
|
|
25.7%
|
24.2%
|
|
28.9%
|
14.8%
|
19.0%
|
4 years ended
12/31/2016
|
|
43.6%
|
41.2%
|
|
70.6%
|
23.4%
|
37.6%
|
5 years ended
12/31/2016
|
|
72.8%
|
65.4%
|
|
97.8%
|
42.6%
|
59.2%
|
|
|
|
|
|
|
|
|
(1) Investment
performance includes realized income and unrealized
appreciation.
|
(2) The 70/30
Benchmark is 70% weighted to the High Yield Index and 30% weighted
to the S&P 500 Stock Index.
|
Asset Allocation as
of June 30, 2017 (in thousands)
|
|
|
|
Discretionary Trust Funds
|
|
Total
Trust Funds
|
Asset
Class
|
|
|
MV
|
%
|
|
MV
|
%
|
Cash
|
|
|
$
|
13,951
|
7%
|
|
$
|
29,296
|
12%
|
Equities
|
|
|
60,894
|
31%
|
|
63,433
|
28%
|
Fixed
Income
|
|
|
119,057
|
60%
|
|
130,442
|
58%
|
Other/Insurance
|
|
|
3,279
|
2%
|
|
3,472
|
2%
|
Total
Portfolios
|
|
|
$
|
197,181
|
100%
|
|
$
|
226,643
|
100%
|
For the six months ended June 30,
2017, Carriage's discretionary trust funds returned 4.6%
versus 6.2% for the 70/30 index benchmark. The performance of our
preneed trust fund portfolio in the second quarter was in line with
our expectations and reflected no change in our overall portfolio
strategy.
ADJUSTED FREE CASH FLOW
We produced Adjusted Free Cash Flow from operations for the
three and six months ended June 30,
2017 of $9.2 million and
$15.5 million, respectively, compared
to Adjusted Free Cash Flow from operations of $13.2 million and $25.4
million for the corresponding periods in 2016. The year over
year decrease in Adjusted Free Cash Flow was due to weak operating
performance, the reduction of Non-GAAP "cash items" and timing of
maintenance capital expenditures and federal tax payments during
the first half of the year.
A reconciliation of Cash Flow Provided by Operations to Adjusted
Free Cash Flow for the three and six months ended June 30, 2017 and 2016 is as follows (in
thousands):
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Cash Flow Provided by
Operations
|
$
|
14,753
|
|
|
$
|
12,087
|
|
|
$
|
24,986
|
|
|
$
|
20,246
|
|
Cash Used for
Maintenance Capital Expenditures
|
(1,755)
|
|
|
(2,929)
|
|
|
(3,373)
|
|
|
(4,702)
|
|
Free Cash
Flow
|
$
|
12,998
|
|
|
$
|
9,158
|
|
|
$
|
21,613
|
|
|
$
|
15,544
|
|
|
|
|
|
|
|
|
|
Plus: Incremental
Special Items:
|
|
|
|
|
|
|
|
Acquisition and
Divestiture Expenses
|
—
|
|
|
—
|
|
|
516
|
|
|
—
|
|
Severance
Costs
|
—
|
|
|
—
|
|
|
2,759
|
|
|
—
|
|
Consulting
Fees
|
228
|
|
|
—
|
|
|
496
|
|
|
—
|
|
Adjusted Free Cash
Flow
|
$
|
13,226
|
|
|
$
|
9,158
|
|
|
$
|
25,384
|
|
|
$
|
15,544
|
|
ROLLING FOUR QUARTER OUTLOOK
The Rolling Four Quarter Outlook ("Outlook") reflects
management's opinion on the performance of the portfolio of
existing businesses, including performance of existing trusts, and
excludes size and timing of acquisitions for the Rolling Four
Quarter Outlook period ending June 30,
2018 unless we have a signed Letter of Intent and high
likelihood of a closing within 90 days. This Outlook is not
intended to be management estimates or forecasts of our future
performance, as we believe precise estimates will be precisely
wrong all the time. Rather our intent and goal is to reflect a
"roughly right range" most of the time of future Rolling Four
Quarter Outlook performance as we execute our Standards Operating,
Strategic Acquisition and 4E Leadership Models over time.
Similarly, we self-publish a Company and Investment Profile,
available on our website, that includes a Five Year "Roughly Right
Scenario" of our future performance which together with our Five
Year Trend Report provides investors a ten year past and future
profile of our financial value creation dynamics and condition,
making it easier to judge whether our "trends will continue to be
the friend" of long term investors.
In light of current operating trends and increased Overhead
expenses, we are lowering our Rolling Four Quarter Outlook of
Adjusted Diluted Earnings Per Share by $0.08 to a range of $1.65
- $1.69 for the period ending June
30, 2018.
ROLLING FOUR QUARTER OUTLOOK – Period Ending June 30, 2018
|
|
Range
(in millions, except
per share amounts)
|
Revenues
|
|
$262 -
$266
|
Adjusted Consolidated
EBITDA
|
|
$77 - $81
|
Adjusted Net
Income
|
|
$29 - $31
|
Adjusted Basic
Earnings Per Share
|
|
$1.76 -
$1.80
|
Adjusted Diluted
Earnings Per Share(1)
|
|
$1.65 -
$1.69
|
Factors affecting our analysis include, among others, funeral
contract volumes, average revenue per funeral service, cemetery
interment volumes, preneed cemetery sales, capital expenditures,
execution of our funeral and cemetery Standards Operating Model,
market volatility and changes in Federal Reserve monetary policy.
Revenues, Adjusted Consolidated EBITDA, Adjusted Net Income,
Adjusted Basic Earnings Per Share and Adjusted Diluted Earnings Per
Share for the four quarter period ending June 30, 2018 are expected to improve relative to
the trailing four quarter period ended June
30, 2017 due to increases in our existing Funeral Home and
Cemetery operating portfolio.
(1)
|
The Rolling Four
Quarter Outlook on Adjusted Diluted Earnings Per Share does not
include any changes to our fully diluted share count that could
occur related to additional share repurchases or a stock price
increase and EPS dilution calculations related to our convertible
subordinated notes and outstanding and exercisable stock
options.
|
CONFERENCE CALL AND INVESTOR RELATIONS CONTACT
Carriage Services has scheduled a conference call for tomorrow,
July 27, 2017 at 9:30 a.m. central time. To participate in the
call, please dial 866-516-3867 (ID-55235237) and ask for the
Carriage Services conference call. A replay of the conference
call will be available through July 31,
2017 and may be accessed by dialing 855-859-2056
(ID-55235237). The conference call will also be available at
www.carriageservices.com.
For any investor relations questions, please contact
Viki Blinderman at 713-332-8568 or
Ben Brink at 713-332-8441 or email
InvestorRelations@carriageservices.com.
CARRIAGE SERVICES,
INC.
|
OPERATING AND
FINANCIAL TREND REPORT
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2016
|
2017
|
%
Change
|
|
2016
|
2017
|
%
Change
|
|
|
|
|
|
|
|
|
Same Store
Contracts
|
|
|
|
|
|
|
|
Atneed
Contracts
|
5,867
|
|
5,825
|
|
(0.7%)
|
|
|
12,165
|
|
12,323
|
|
1.3%
|
|
Preneed
Contracts
|
1,379
|
|
1,384
|
|
0.4%
|
|
|
2,883
|
|
2,880
|
|
(0.1%)
|
|
Total Same Store
Funeral Contracts
|
7,246
|
|
7,209
|
|
(0.5%)
|
|
|
15,048
|
|
15,203
|
|
1.0%
|
|
Acquisition
Contracts
|
|
|
|
|
|
|
|
Atneed
Contracts
|
769
|
|
1,015
|
|
32.0%
|
|
|
1,489
|
|
2,204
|
|
48.0%
|
|
Preneed
Contracts
|
127
|
|
198
|
|
55.9%
|
|
|
266
|
|
430
|
|
61.7%
|
|
Total Acquisition
Funeral Contracts
|
896
|
|
1,213
|
|
35.4%
|
|
|
1,755
|
|
2,634
|
|
50.1%
|
|
Total Funeral
Contracts
|
8,142
|
|
8,422
|
|
3.4%
|
|
|
16,803
|
|
17,837
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
Funeral Operating
Revenue
|
|
|
|
|
|
|
|
Same Store
Revenue
|
$
|
38,583
|
|
$
|
38,561
|
|
(0.1%)
|
|
|
$
|
79,935
|
|
$
|
81,278
|
|
1.7%
|
|
Acquisition
Revenue
|
5,745
|
|
8,119
|
|
41.3%
|
|
|
11,307
|
|
17,364
|
|
53.6%
|
|
Total Funeral
Operating Revenue
|
$
|
44,328
|
|
$
|
46,680
|
|
5.3%
|
|
|
$
|
91,242
|
|
$
|
98,642
|
|
8.1%
|
|
|
|
|
|
|
|
|
|
Cemetery Operating
Revenue
|
|
|
|
|
|
|
|
Same Store
Revenue
|
$
|
12,494
|
|
$
|
11,935
|
|
(4.5%)
|
|
|
$
|
23,626
|
|
$
|
22,774
|
|
(3.6%)
|
|
Acquisition
Revenue
|
625
|
|
700
|
|
12.0%
|
|
|
1,334
|
|
1,609
|
|
20.6%
|
|
Total Cemetery
Operating Revenue
|
$
|
13,119
|
|
$
|
12,635
|
|
(3.7%)
|
|
|
$
|
24,960
|
|
$
|
24,383
|
|
(2.3%)
|
|
|
|
|
|
|
|
|
|
Financial
Revenue
|
|
|
|
|
|
|
|
Preneed Funeral
Commission Income
|
$
|
356
|
|
$
|
333
|
|
(6.5%)
|
|
|
$
|
777
|
|
$
|
636
|
|
(18.1%)
|
|
Preneed Funeral Trust
Earnings
|
1,783
|
|
1,726
|
|
(3.2%)
|
|
|
3,750
|
|
3,672
|
|
(2.1%)
|
|
Cemetery Trust
Earnings
|
1,831
|
|
2,028
|
|
10.8%
|
|
|
3,597
|
|
3,744
|
|
4.1%
|
|
Preneed Cemetery
Finance Charges
|
448
|
|
450
|
|
0.4%
|
|
|
870
|
|
932
|
|
7.1%
|
|
Total Financial
Revenue
|
$
|
4,418
|
|
$
|
4,537
|
|
2.7%
|
|
|
$
|
8,994
|
|
$
|
8,984
|
|
(0.1%)
|
|
Total
Revenue
|
$
|
61,865
|
|
$
|
63,852
|
|
3.2%
|
|
|
$
|
125,196
|
|
$
|
132,009
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
Field
EBITDA
|
|
|
|
|
|
|
|
Same Store Funeral
Field EBITDA
|
$
|
14,314
|
|
$
|
14,448
|
|
0.9%
|
|
|
$
|
31,225
|
|
$
|
32,173
|
|
3.0%
|
|
Same Store Funeral
Field EBITDA Margin
|
37.1%
|
|
37.5%
|
|
40 bp
|
|
|
39.1%
|
|
39.6%
|
|
50 bp
|
|
Acquisition Funeral
Field EBITDA
|
2,449
|
|
3,082
|
|
25.8%
|
|
|
4,862
|
|
7,096
|
|
45.9%
|
|
Acquisition Funeral
Field EBITDA Margin
|
42.6%
|
|
38.0%
|
|
(460 bp)
|
|
|
43.0%
|
|
40.9%
|
|
(210 bp)
|
|
Total Funeral
Field EBITDA
|
$
|
16,763
|
|
$
|
17,530
|
|
4.6%
|
|
|
$
|
36,087
|
|
$
|
39,269
|
|
8.8%
|
|
Total Funeral
Field EBITDA Margin
|
37.8%
|
|
37.6%
|
|
(20
bp)
|
|
|
39.6%
|
|
39.8%
|
|
20
bp
|
|
|
|
|
|
|
|
|
|
Same Store Cemetery
Field EBITDA
|
$
|
4,098
|
|
$
|
3,343
|
|
(18.4%)
|
|
|
$
|
7,941
|
|
$
|
6,638
|
|
(16.4%)
|
|
Same Store Cemetery
Field EBITDA Margin
|
32.8%
|
|
28.0%
|
|
(480 bp)
|
|
|
33.6%
|
|
29.1%
|
|
(450 bp)
|
|
Acquisition Cemetery
Field EBITDA
|
91
|
|
190
|
|
108.8%
|
|
|
312
|
|
543
|
|
74.0%
|
|
Acquisition Cemetery
Field EBITDA Margin
|
14.6%
|
|
27.1%
|
|
1,250 bp
|
|
|
23.4%
|
|
33.7%
|
|
1,030 bp
|
|
Total Cemetery
Field EBITDA
|
$
|
4,189
|
|
$
|
3,533
|
|
(15.7%)
|
|
|
$
|
8,253
|
|
$
|
7,181
|
|
(13.0%)
|
|
Total Cemetery
Field EBITDA Margin
|
31.9%
|
|
28.0%
|
|
(390
bp)
|
|
|
33.1%
|
|
29.5%
|
|
(360
bp)
|
|
|
|
|
|
|
|
|
|
Funeral Financial
EBITDA
|
$
|
1,921
|
|
$
|
1,787
|
|
(7.0%)
|
|
|
$
|
4,118
|
|
$
|
3,830
|
|
(7.0%)
|
|
Cemetery Financial
EBITDA
|
2,220
|
|
2,418
|
|
8.9%
|
|
|
4,323
|
|
4,505
|
|
4.2%
|
|
Total Financial
EBITDA
|
$
|
4,141
|
|
$
|
4,205
|
|
1.5%
|
|
|
$
|
8,441
|
|
$
|
8,335
|
|
(1.3%)
|
|
Total Financial
EBITDA Margin
|
93.7%
|
|
92.7%
|
|
(100
bp)
|
|
|
93.9%
|
|
92.8%
|
|
(110
bp)
|
|
|
|
|
|
|
|
|
|
Total Field
EBITDA
|
$
|
25,093
|
|
$
|
25,268
|
|
0.7%
|
|
|
$
|
52,781
|
|
$
|
54,785
|
|
3.8%
|
|
Total Field EBITDA
Margin
|
40.6%
|
|
39.6%
|
|
(100
bp)
|
|
|
42.2%
|
|
41.5%
|
|
(70
bp)
|
|
|
|
|
|
|
|
|
|
OPERATING AND
FINANCIAL TREND REPORT
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2016
|
2017
|
%
Change
|
|
2016
|
2017
|
%
Change
|
|
|
|
|
|
|
|
|
Overhead
|
|
|
|
|
|
|
|
Total Variable
Overhead
|
$
|
2,186
|
|
$
|
2,542
|
|
16.3%
|
|
|
$
|
7,586
|
|
$
|
4,708
|
|
(37.9%)
|
|
Total Regional Fixed
Overhead
|
844
|
|
826
|
|
(2.1%)
|
|
|
1,719
|
|
1,893
|
|
10.1%
|
|
Total Corporate Fixed
Overhead
|
4,510
|
|
5,381
|
|
19.3%
|
|
|
9,573
|
|
11,113
|
|
16.1%
|
|
Total
Overhead
|
$
|
7,540
|
|
$
|
8,749
|
|
16.0%
|
|
|
$
|
18,878
|
|
$
|
17,714
|
|
(6.2%)
|
|
Overhead as a
Percentage of Revenue
|
12.2%
|
|
13.7%
|
|
150
bp
|
|
|
15.1%
|
|
13.4%
|
|
(170
bp)
|
|
|
|
|
|
|
|
|
|
Consolidated
EBITDA
|
$
|
17,553
|
|
$
|
16,519
|
|
(5.9%)
|
|
|
$
|
33,903
|
|
$
|
37,071
|
|
9.3%
|
|
Consolidated
EBITDA Margin
|
28.4%
|
|
25.9%
|
|
(250
bp)
|
|
|
27.1%
|
|
28.1%
|
|
100
bp
|
|
|
|
|
|
|
|
|
|
Other Expenses and
Interest
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
$
|
3,957
|
|
$
|
4,025
|
|
1.7%
|
|
|
$
|
7,691
|
|
$
|
7,872
|
|
2.4%
|
|
Non-Cash Stock
Compensation
|
1,006
|
|
773
|
|
(23.2%)
|
|
|
1,964
|
|
1,609
|
|
(18.1%)
|
|
Interest
Expense
|
2,968
|
|
3,206
|
|
8.0%
|
|
|
5,819
|
|
6,235
|
|
7.1%
|
|
Accretion of Discount
on Convertible Subordinated Notes
|
954
|
|
1,066
|
|
11.7%
|
|
|
1,881
|
|
2,103
|
|
11.8%
|
|
Loss on Early
Extinguishment of Debt
|
—
|
|
—
|
|
|
|
567
|
|
—
|
|
|
Other, Net
|
—
|
|
—
|
|
|
|
(305)
|
|
(3)
|
|
|
Pretax
Income
|
$
|
8,668
|
|
$
|
7,449
|
|
(14.1%)
|
|
|
$
|
16,286
|
|
$
|
19,255
|
|
18.2%
|
|
Provision for Income
Taxes
|
3,468
|
|
2,980
|
|
|
|
6,515
|
|
7,702
|
|
|
Tax Adjustment
Related to Certain Discrete Items
|
—
|
|
59
|
|
|
|
—
|
|
59
|
|
|
Total Tax
Provision
|
$
|
3,468
|
|
$
|
3,039
|
|
|
|
$
|
6,515
|
|
$
|
7,761
|
|
|
GAAP Net
Income
|
$
|
5,200
|
|
$
|
4,410
|
|
(15.2%)
|
|
|
$
|
9,771
|
|
$
|
11,494
|
|
(17.6%)
|
|
|
|
|
|
|
|
|
|
Special Items, Net
of Tax except for **
|
|
|
|
|
|
|
|
Acquisition and
Divestiture Expenses
|
$
|
—
|
|
$
|
—
|
|
|
|
$
|
336
|
|
$
|
—
|
|
|
Severance and
Retirement Costs
|
—
|
|
—
|
|
|
|
1,794
|
|
—
|
|
|
Consulting
Fees
|
148
|
|
—
|
|
|
|
323
|
|
—
|
|
|
Accretion of Discount
on Convertible Subordinated Notes **
|
954
|
|
1,066
|
|
|
|
1,881
|
|
2,103
|
|
|
Loss on Early
Extinguishment of Debt
|
—
|
|
—
|
|
|
|
369
|
|
—
|
|
|
Gain on Sale of
Assets
|
—
|
|
—
|
|
|
|
(198)
|
|
—
|
|
|
Sum of Special
Items, Net of Tax
|
$
|
1,102
|
|
$
|
1,066
|
|
(3.3%)
|
|
|
$
|
4,505
|
|
$
|
2,103
|
|
(53.3%)
|
|
Adjusted Net
Income
|
$
|
6,302
|
|
$
|
5,476
|
|
(13.1%)
|
|
|
$
|
14,276
|
|
$
|
13,597
|
|
(4.8%)
|
|
Adjusted Net
Profit Margin
|
10.2%
|
|
8.6%
|
|
(160 bp)
|
|
|
11.4%
|
|
10.3%
|
|
(110
bp)
|
|
|
|
|
|
|
|
|
|
Adjusted Basic
Earnings Per Share
|
$
|
0.38
|
|
$
|
0.33
|
|
(13.2%)
|
|
|
$
|
0.86
|
|
$
|
0.82
|
|
(4.7%)
|
|
Adjusted Diluted
Earnings Per Share
|
$
|
0.37
|
|
$
|
0.30
|
|
(18.9%)
|
|
|
$
|
0.84
|
|
$
|
0.75
|
|
(10.7%)
|
|
|
|
|
|
|
|
|
|
GAAP Basic Earnings
Per Share
|
$
|
0.31
|
|
$
|
0.26
|
|
(16.1%)
|
|
|
$
|
0.59
|
|
$
|
0.69
|
|
16.9%
|
|
GAAP Diluted Earnings
Per Share
|
$
|
0.30
|
|
$
|
0.24
|
|
(20.0%)
|
|
|
$
|
0.57
|
|
$
|
0.63
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
Weighted Average
Basic Shares Outstanding
|
16,516
|
|
16,652
|
|
|
|
16,488
|
|
16,625
|
|
|
Weighted Average
Diluted Shares Outstanding
|
17,075
|
|
18,093
|
|
|
|
16,862
|
|
18,083
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
Adjusted Consolidated EBITDA
|
|
|
|
|
|
|
|
Consolidated
EBITDA
|
$
|
17,553
|
|
$
|
16,519
|
|
(5.9%)
|
|
|
$
|
33,903
|
|
$
|
37,071
|
|
9.3%
|
|
Acquisition and
Divestiture Expenses
|
—
|
|
—
|
|
|
|
516
|
|
—
|
|
|
Severance and
Retirement Costs
|
—
|
|
—
|
|
|
|
2,759
|
|
—
|
|
|
Consulting
Fees
|
228
|
|
—
|
|
|
|
496
|
|
—
|
|
|
Adjusted
Consolidated EBITDA
|
$
|
17,781
|
|
$
|
16,519
|
|
(7.1%)
|
|
|
$
|
37,674
|
|
$
|
37,071
|
|
(1.6%)
|
|
Adjusted
Consolidated EBITDA Margin
|
28.7%
|
|
25.9%
|
|
(280
bp)
|
|
|
30.1%
|
|
28.1%
|
|
(200
bp)
|
|
CARRIAGE SERVICES,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share data)
|
|
|
|
|
(unaudited)
|
|
December 31,
2016
|
|
June 30,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
3,286
|
|
|
$
|
435
|
|
Accounts receivable,
net
|
18,860
|
|
|
17,015
|
|
Inventories
|
6,147
|
|
|
6,327
|
|
Prepaid
expenses
|
2,640
|
|
|
1,096
|
|
Other current
assets
|
2,034
|
|
|
594
|
|
Total current
assets
|
32,967
|
|
|
25,467
|
|
Preneed cemetery
trust investments
|
69,696
|
|
|
70,176
|
|
Preneed funeral trust
investments
|
89,240
|
|
|
88,503
|
|
Preneed receivables,
net
|
30,383
|
|
|
31,584
|
|
Receivables from
preneed trusts
|
14,218
|
|
|
15,077
|
|
Property, plant and
equipment, net
|
235,113
|
|
|
235,468
|
|
Cemetery property,
net
|
76,119
|
|
|
76,995
|
|
Goodwill
|
275,487
|
|
|
275,487
|
|
Intangible and other
non-current assets
|
14,957
|
|
|
14,745
|
|
Cemetery perpetual
care trust investments
|
46,889
|
|
|
47,539
|
|
Total
assets
|
$
|
885,069
|
|
|
$
|
881,041
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt and capital lease obligations
|
$
|
13,267
|
|
|
$
|
15,237
|
|
Accounts
payable
|
10,198
|
|
|
6,446
|
|
Other
liabilities
|
717
|
|
|
775
|
|
Accrued
liabilities
|
20,091
|
|
|
14,312
|
|
Total current
liabilities
|
44,273
|
|
|
36,770
|
|
Long-term debt, net
of current portion
|
137,862
|
|
|
129,627
|
|
Revolving credit
facility
|
66,542
|
|
|
61,081
|
|
Convertible
subordinated notes due 2021
|
119,596
|
|
|
121,955
|
|
Obligations under
capital leases, net of current portion
|
2,630
|
|
|
2,560
|
|
Deferred preneed
cemetery revenue
|
54,631
|
|
|
55,093
|
|
Deferred preneed
funeral revenue
|
33,198
|
|
|
34,756
|
|
Deferred tax
liability
|
40,555
|
|
|
43,216
|
|
Other long-term
liabilities
|
2,567
|
|
|
2,430
|
|
Deferred preneed
cemetery receipts held in trust
|
69,696
|
|
|
70,176
|
|
Deferred preneed
funeral receipts held in trust
|
89,240
|
|
|
88,503
|
|
Care trusts'
corpus
|
46,290
|
|
|
47,015
|
|
Total
liabilities
|
707,080
|
|
|
693,182
|
|
Commitments and
contingencies:
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $.01
par value; 80,000,000 shares authorized; 22,490,855 and 22,569,361
shares issued at December 31, 2016 and June 30, 2017,
respectively
|
225
|
|
|
226
|
|
Additional paid-in
capital
|
215,064
|
|
|
215,694
|
|
Retained
earnings
|
22,966
|
|
|
32,205
|
|
Treasury stock, at
cost; 5,849,316 shares at December 31, 2016 and June 30, 2017
|
(60,266)
|
|
|
(60,266)
|
|
Total stockholders'
equity
|
177,989
|
|
|
187,859
|
|
Total liabilities and
stockholders' equity
|
$
|
885,069
|
|
|
$
|
881,041
|
|
CARRIAGE SERVICES,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited and in
thousands, except per share data)
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Funeral
|
$
|
46,467
|
|
|
$
|
48,739
|
|
|
$
|
95,769
|
|
|
$
|
102,950
|
|
Cemetery
|
15,398
|
|
|
15,113
|
|
|
29,427
|
|
|
29,059
|
|
|
61,865
|
|
|
63,852
|
|
|
125,196
|
|
|
132,009
|
|
Field costs and
expenses:
|
|
|
|
|
|
|
|
Funeral
|
27,783
|
|
|
29,422
|
|
|
55,564
|
|
|
59,851
|
|
Cemetery
|
8,989
|
|
|
9,162
|
|
|
16,851
|
|
|
17,373
|
|
Depreciation and
amortization
|
3,571
|
|
|
3,647
|
|
|
6,907
|
|
|
7,118
|
|
Regional and
unallocated funeral and cemetery costs
|
2,715
|
|
|
2,954
|
|
|
5,764
|
|
|
5,908
|
|
|
43,058
|
|
|
45,185
|
|
|
85,086
|
|
|
90,250
|
|
Gross
profit
|
18,807
|
|
|
18,667
|
|
|
40,110
|
|
|
41,759
|
|
Corporate costs and
expenses:
|
|
|
|
|
|
|
|
General,
administrative and other
|
5,831
|
|
|
6,568
|
|
|
15,078
|
|
|
13,415
|
|
Home office
depreciation and amortization
|
386
|
|
|
378
|
|
|
784
|
|
|
754
|
|
|
6,217
|
|
|
6,946
|
|
|
15,862
|
|
|
14,169
|
|
Operating
income
|
12,590
|
|
|
11,721
|
|
|
24,248
|
|
|
27,590
|
|
Interest
expense
|
(2,968)
|
|
|
(3,206)
|
|
|
(5,819)
|
|
|
(6,235)
|
|
Accretion of discount
on convertible subordinated notes
|
(954)
|
|
|
(1,066)
|
|
|
(1,881)
|
|
|
(2,103)
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
(567)
|
|
|
—
|
|
Other, net
|
—
|
|
|
—
|
|
|
305
|
|
|
3
|
|
Income before income
taxes
|
8,668
|
|
|
7,449
|
|
|
16,286
|
|
|
19,255
|
|
Provision for income
taxes
|
(3,468)
|
|
|
(2,980)
|
|
|
(6,515)
|
|
|
(7,702)
|
|
Tax adjustment
related to certain discrete items
|
—
|
|
|
(59)
|
|
|
—
|
|
|
(59)
|
|
Total provision for
income taxes
|
(3,468)
|
|
|
(3,039)
|
|
|
(6,515)
|
|
|
(7,761)
|
|
Net income
|
$
|
5,200
|
|
|
$
|
4,410
|
|
|
$
|
9,771
|
|
|
$
|
11,494
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share:
|
$
|
0.31
|
|
|
$
|
0.26
|
|
|
$
|
0.59
|
|
|
$
|
0.69
|
|
Diluted earnings per
common share:
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
0.57
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share:
|
$
|
0.025
|
|
|
$
|
0.050
|
|
|
$
|
0.050
|
|
|
$
|
0.100
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common and common equivalent shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
16,516
|
|
|
16,652
|
|
|
16,488
|
|
|
16,625
|
|
Diluted
|
17,075
|
|
|
18,093
|
|
|
16,862
|
|
|
18,083
|
|
CARRIAGE SERVICES,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited and in
thousands)
|
|
|
For the Six
Months
Ended June 30,
|
|
2016
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
9,771
|
|
|
$
|
11,494
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
7,691
|
|
|
7,872
|
|
Provision for losses
on accounts receivable
|
1,052
|
|
|
1,112
|
|
Stock-based
compensation expense
|
2,303
|
|
|
1,609
|
|
Deferred income tax
expense
|
1,116
|
|
|
406
|
|
Amortization of
deferred financing costs
|
420
|
|
|
408
|
|
Accretion of discount
on convertible subordinated notes
|
1,881
|
|
|
2,103
|
|
Loss on early
extinguishment of debt
|
567
|
|
|
—
|
|
Net (gain) loss on
sale and disposal of other assets
|
(67)
|
|
|
311
|
|
|
|
|
|
Changes in operating
assets and liabilities that provided (required) cash:
|
|
|
|
Accounts and preneed
receivables
|
(2,271)
|
|
|
(468)
|
|
Inventories and other
current assets
|
1,303
|
|
|
2,804
|
|
Intangible and other
non-current assets
|
300
|
|
|
211
|
|
Preneed funeral and
cemetery trust investments
|
4,941
|
|
|
(1,252)
|
|
Accounts
payable
|
(1,148)
|
|
|
(3,750)
|
|
Accrued and other
liabilities
|
1,735
|
|
|
(5,102)
|
|
Deferred preneed
funeral and cemetery revenue
|
(669)
|
|
|
2,020
|
|
Deferred preneed
funeral and cemetery receipts held in trust
|
(3,939)
|
|
|
468
|
|
Net cash provided by
operating activities
|
24,986
|
|
|
20,246
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions and land
for new construction
|
(9,406)
|
|
|
(625)
|
|
Purchase of land and
buildings previously leased
|
(6,258)
|
|
|
—
|
|
Net proceeds from the
sale of other assets
|
555
|
|
|
—
|
|
Capital
expenditures
|
(7,830)
|
|
|
(8,790)
|
|
Net cash used in
investing activities
|
(22,939)
|
|
|
(9,415)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings from the
revolving credit facility
|
27,100
|
|
|
36,800
|
|
Payments against the
revolving credit facility
|
(59,700)
|
|
|
(42,400)
|
|
Borrowings from the
term loan
|
39,063
|
|
|
—
|
|
Payments against the
term loan
|
(5,625)
|
|
|
(5,625)
|
|
Payments on other
long-term debt and obligations under capital leases
|
(689)
|
|
|
(723)
|
|
Payments on
contingent consideration recorded at acquisition date
|
—
|
|
|
(101)
|
|
Proceeds from the
exercise of stock options and employee stock purchase plan
contributions
|
457
|
|
|
544
|
|
Taxes paid on
restricted stock vestings and exercise of non-qualified
options
|
(528)
|
|
|
(509)
|
|
Dividends paid on
common stock
|
(831)
|
|
|
(1,668)
|
|
Payment of loan
origination costs related to the credit facility
|
(717)
|
|
|
—
|
|
Excess tax deficiency
of equity compensation
|
(229)
|
|
|
—
|
|
Net cash used in
financing activities
|
(1,699)
|
|
|
(13,682)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
348
|
|
|
(2,851)
|
|
Cash and cash
equivalents at beginning of period
|
535
|
|
|
3,286
|
|
Cash and cash
equivalents at end of period
|
$
|
883
|
|
|
$
|
435
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
This press release uses Non-GAAP financial measures to present
the financial performance of the Company. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported operating results or cash flow from
operations or any other measure of performance as determined in
accordance with GAAP. We believe the Non-GAAP results are
useful to investors because such results help investors compare our
results to previous periods and provide insights into underlying
trends in our business. The Company's GAAP financial statements
accompany this release. Reconciliations of the Non-GAAP
financial measures to GAAP measures are provided in this press
release.
The Non-GAAP financial measures include "Special Items",
"Adjusted Net Income", "Consolidated EBITDA", "Adjusted
Consolidated EBITDA", "Adjusted Consolidated EBITDA Margin",
"Adjusted Free Cash Flow", "Funeral, Cemetery and Financial
EBITDA", "Total Field EBITDA", "Total Field EBITDA Margin",
"Adjusted Basic Earnings Per Share" and "Adjusted Diluted Earnings
Per Share" in this press release. These financial
measurements are defined as similar GAAP items adjusted for Special
Items and are reconciled to GAAP in this press release. In
addition, the Company's presentation of these measures may not be
comparable to similarly titled measures in other companies'
reports. The definitions used by the Company for our internal
management purposes and in this press release are as follows:
- Special Items are defined as charges or credits included in our
GAAP financial statements that can vary from period to period and
are not reflective of costs incurred in the ordinary course of our
operations. Special Items are taxed at the federal statutory rate
of 35 percent for both the three and six months ended June 30, 2016 and 2017, except for the accretion
of the discount on the Convertible Notes as this is a non-tax
deductible item.
- Adjusted Net Income is defined as net income plus adjustments
for Special Items and other non-recurring expenses or credits.
- Consolidated EBITDA is defined as net income before income
taxes, interest expenses, non-cash stock compensation, depreciation
and amortization, and interest income and other, net.
- Adjusted Consolidated EBITDA is defined as Consolidated EBITDA
plus adjustments for Special Items and non-recurring expenses or
credits.
- Adjusted Consolidated EBITDA Margin is defined as Adjusted
Consolidated EBITDA as a percentage of revenue.
- Adjusted Free Cash Flow is defined as net cash provided by
operations, adjusted by Special Items as deemed necessary, less
cash for maintenance capital expenditures.
- Funeral Field EBITDA is defined as Funeral Gross Profit, which
is funeral revenue minus funeral field costs and expenses, less
depreciation and amortization, regional and unallocated funeral
costs and Funeral Financial EBITDA.
- Cemetery Field EBITDA is defined as Cemetery Gross Profit,
which is cemetery revenue minus cemetery field costs and expenses,
less depreciation and amortization, regional and unallocated
cemetery costs and Cemetery Financial EBITDA.
- Funeral Financial EBITDA is defined as Funeral Financial
Revenue less Funeral Financial Expenses.
- Cemetery Financial EBITDA is defined as Cemetery Financial
Revenue less Cemetery Financial Expenses.
- Total Field EBITDA is defined as Gross Profit less depreciation
and amortization, regional and unallocated funeral and cemetery
costs.
- Total Field EBITDA Margin is defined as Total Field EBITDA as a
percentage of revenue.
- Adjusted Basic Earnings Per Share is defined as GAAP Basic
Earnings Per Share, adjusted for Special Items.
- Adjusted Diluted Earnings Per Share is defined as GAAP Diluted
Earnings Per Share, adjusted for Special Items.
Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of certain financial
measures that are not GAAP measures. The Non-GAAP financial
measures are presented for additional information and are
reconciled to their most comparable GAAP measures below.
Reconciliation of Net Income to Adjusted Net Income for
the three and six months ended June 30, 2016 and 2017 (in
thousands):
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Net Income
|
$
|
5,200
|
|
|
$
|
4,410
|
|
|
$
|
9,771
|
|
|
$
|
11,494
|
|
Special Items, Net of
Tax except for **
|
|
|
|
|
|
|
|
Acquisition and
Divestiture Expenses
|
—
|
|
|
—
|
|
|
336
|
|
|
—
|
|
Severance and
Retirement Costs
|
—
|
|
|
—
|
|
|
1,794
|
|
|
—
|
|
Consulting
Fees
|
148
|
|
|
—
|
|
|
323
|
|
|
—
|
|
Accretion of Discount
on Convertible Subordinated Notes **
|
954
|
|
|
1,066
|
|
|
1,881
|
|
|
2,103
|
|
Loss on Early
Extinguishment of Debt
|
—
|
|
|
—
|
|
|
369
|
|
|
—
|
|
Gain on Sale of
Assets
|
—
|
|
|
—
|
|
|
(198)
|
|
|
—
|
|
Total Special Items
affecting Net Income
|
$
|
1,102
|
|
|
$
|
1,066
|
|
|
$
|
4,505
|
|
|
$
|
2,103
|
|
Adjusted Net
Income
|
$
|
6,302
|
|
|
$
|
5,476
|
|
|
$
|
14,276
|
|
|
$
|
13,597
|
|
Reconciliation of Net Income to Consolidated EBITDA and
Adjusted Consolidated EBITDA for the three and six months ended
June 30, 2016 and 2017 (in thousands):
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Net Income
|
$
|
5,200
|
|
|
$
|
4,410
|
|
|
$
|
9,771
|
|
|
$
|
11,494
|
|
Total Tax
Provision
|
3,468
|
|
|
3,039
|
|
|
6,515
|
|
|
7,761
|
|
Pretax
Income
|
$
|
8,668
|
|
|
$
|
7,449
|
|
|
$
|
16,286
|
|
|
$
|
19,255
|
|
Interest
Expense
|
2,968
|
|
|
3,206
|
|
|
5,819
|
|
|
6,235
|
|
Accretion of Discount
on Convertible Subordinated Notes
|
954
|
|
|
1,066
|
|
|
1,881
|
|
|
2,103
|
|
Loss on Early
Extinguishment of Debt
|
—
|
|
|
—
|
|
|
567
|
|
|
—
|
|
Non-Cash Stock
Compensation
|
1,006
|
|
|
773
|
|
|
1,964
|
|
|
1,609
|
|
Depreciation &
Amortization
|
3,957
|
|
|
4,025
|
|
|
7,691
|
|
|
7,872
|
|
Other, Net
|
—
|
|
|
—
|
|
|
(305)
|
|
|
(3)
|
|
Consolidated
EBITDA
|
$
|
17,553
|
|
|
$
|
16,519
|
|
|
$
|
33,903
|
|
|
$
|
37,071
|
|
Adjusted
For:
|
|
|
|
|
|
|
|
Acquisition and
Divestiture Expenses
|
—
|
|
|
—
|
|
|
516
|
|
|
—
|
|
Severance and
Retirement Costs
|
—
|
|
|
—
|
|
|
2,759
|
|
|
—
|
|
Consulting
Fees
|
228
|
|
|
—
|
|
|
496
|
|
|
—
|
|
Adjusted Consolidated
EBITDA
|
$
|
17,781
|
|
|
$
|
16,519
|
|
|
$
|
37,674
|
|
|
$
|
37,071
|
|
Revenue
|
$
|
61,865
|
|
|
$
|
63,852
|
|
|
$
|
125,196
|
|
|
$
|
132,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Consolidated
EBITDA Margin
|
28.7%
|
|
|
25.9%
|
|
|
30.1%
|
|
|
28.1%
|
|
Reconciliation of Funeral and Cemetery Gross Profit to
Field EBITDA for the three and six months ended June 30, 2016
and 2017 (in thousands):
Funeral Field
EBITDA
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Gross Profit
(GAAP)
|
$
|
14,388
|
|
|
$
|
14,412
|
|
|
$
|
31,356
|
|
|
$
|
33,381
|
|
Depreciation &
Amortization
|
2,138
|
|
|
2,529
|
|
|
4,216
|
|
|
4,898
|
|
Regional &
Unallocated Costs
|
2,158
|
|
|
2,376
|
|
|
4,633
|
|
|
4,820
|
|
Funeral Financial
EBITDA
|
(1,921)
|
|
|
(1,787)
|
|
|
(4,118)
|
|
|
(3,830)
|
|
Funeral Field
EBITDA
|
$
|
16,763
|
|
|
$
|
17,530
|
|
|
$
|
36,087
|
|
|
$
|
39,269
|
|
Cemetery Field
EBITDA
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Gross Profit
(GAAP)
|
$
|
4,419
|
|
|
$
|
4,255
|
|
|
$
|
8,754
|
|
|
$
|
8,378
|
|
Depreciation &
Amortization
|
1,433
|
|
|
1,118
|
|
|
2,691
|
|
|
2,220
|
|
Regional &
Unallocated Costs
|
557
|
|
|
578
|
|
|
1,131
|
|
|
1,088
|
|
Cemetery Financial
EBITDA
|
(2,220)
|
|
|
(2,418)
|
|
|
(4,323)
|
|
|
(4,505)
|
|
Cemetery Field
EBITDA
|
$
|
4,189
|
|
|
$
|
3,533
|
|
|
$
|
8,253
|
|
|
$
|
7,181
|
|
Total Field
EBITDA
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Funeral Field
EBITDA
|
$
|
16,763
|
|
|
$
|
17,530
|
|
|
$
|
36,087
|
|
|
$
|
39,269
|
|
Cemetery Field
EBITDA
|
4,189
|
|
|
3,533
|
|
|
8,253
|
|
|
7,181
|
|
Funeral Financial
EBITDA
|
1,921
|
|
|
1,787
|
|
|
4,118
|
|
|
3,830
|
|
Cemetery Financial
EBITDA
|
2,220
|
|
|
2,418
|
|
|
4,323
|
|
|
4,505
|
|
Total Field
EBITDA
|
$
|
25,093
|
|
|
$
|
25,268
|
|
|
$
|
52,781
|
|
|
$
|
54,785
|
|
Reconciliation of GAAP Basic Earnings Per Share to
Adjusted Basic Earnings Per Share for the three and six months
ended June 30, 2016 and 2017:
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
GAAP Basic Earnings
Per Share
|
$
|
0.31
|
|
|
$
|
0.26
|
|
|
$
|
0.59
|
|
|
$
|
0.69
|
|
Special Items
Affecting Net Income
|
0.07
|
|
|
0.07
|
|
|
0.27
|
|
|
0.13
|
|
Adjusted Basic
Earnings Per Share
|
$
|
0.38
|
|
|
$
|
0.33
|
|
|
$
|
0.86
|
|
|
$
|
0.82
|
|
Reconciliation of GAAP Diluted Earnings Per Share to
Adjusted Diluted Earnings Per Share for the three and six months
ended June 30, 2016 and 2017:
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
GAAP Diluted Earnings
Per Share
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
0.57
|
|
|
$
|
0.63
|
|
Special Items
Affecting Net Income
|
0.07
|
|
|
0.06
|
|
|
0.27
|
|
|
0.12
|
|
Adjusted Diluted
Earnings Per Share
|
$
|
0.37
|
|
|
$
|
0.30
|
|
|
$
|
0.84
|
|
|
$
|
0.75
|
|
On page three of this press release, we present the Rolling Four
Quarter Outlook ("Outlook") which reflects management's opinion on
the performance of the portfolio of existing businesses, including
performance of existing trusts, and excludes size and timing of
acquisitions for the Rolling Four Quarter Outlook period ending
June 30, 2018 unless we have a signed
Letter of Intent and high likelihood of a closing within 90 days.
This Outlook is not intended to be management estimates or
forecasts of our future performance, as we believe precise
estimates will be precisely wrong all the time. The following
four reconciliations are presented at the midpoint of the range in
this Outlook.
Reconciliation of Net Income to Consolidated EBITDA and
Adjusted Consolidated EBITDA for the estimated Rolling Four
Quarters ending June 30, 2018 (in
thousands):
|
Rolling Four
Quarter Outlook
|
|
|
June 30,
2018E
|
|
Net Income
|
|
|
$
|
25,700
|
|
|
|
Total Tax
Provision
|
|
|
17,200
|
|
|
|
Pretax
Income
|
|
|
$
|
42,900
|
|
|
|
Net Interest Expense,
including Accretion of Discount on Convertible Subordinated
Notes
|
|
|
16,500
|
|
|
|
Depreciation &
Amortization, including Non-cash Stock Compensation
|
|
|
19,600
|
|
|
|
Consolidated
EBITDA
|
|
|
$
|
79,000
|
|
|
|
Adjusted for Special
Items
|
|
|
—
|
|
|
|
Adjusted Consolidated
EBITDA
|
|
|
$
|
79,000
|
|
|
|
Reconciliation of Net Income to Adjusted Net Income for
the estimated Rolling Four Quarters ending June 30, 2018 (in thousands):
|
Rolling Four
Quarter Outlook
|
|
|
June 30,
2018E
|
|
Net Income
|
|
|
$
|
25,700
|
|
|
|
Special
Items
|
|
|
4,200
|
|
|
|
Adjusted Net
Income
|
|
|
$
|
29,900
|
|
|
|
Reconciliation of GAAP Basic Earnings Per Share to
Adjusted Basic Earnings Per Share for the estimated Rolling Four
Quarters ending June 30,
2018:
|
Rolling Four
Quarter Outlook
|
|
|
June 30,
2018E
|
|
GAAP Basic Earnings
Per Share
|
|
|
$
|
1.53
|
|
|
|
Special Items
Affecting Net Income
|
|
|
0.25
|
|
|
|
Adjusted Basic
Earnings Per Share
|
|
|
$
|
1.78
|
|
|
|
Reconciliation of GAAP Diluted Earnings Per Share to
Adjusted Diluted Earnings Per Share for the estimated Rolling Four
Quarters ending June 30,
2018:
|
Rolling Four
Quarter Outlook
|
|
|
June 30,
2018E
|
|
GAAP Diluted Earnings
Per Share
|
|
|
$
|
1.43
|
|
|
|
Special Items
Affecting Net Income
|
|
|
0.23
|
|
|
|
Adjusted Diluted
Earnings Per Share
|
|
|
$
|
1.66
|
|
|
|
Supplemental Information:
Funeral homes and cemeteries purchased after
December 31, 2012 are referred to as "Acquired" in our
Trend Report. This classification of acquisitions has been
important to management and investors in monitoring the results of
these businesses and to gauge the leveraging performance
contribution that a selective acquisition program can have on total
company performance.
The presentation below highlights the impact of our 2012
Acquired Portfolio that moved from Acquired to Same Store beginning
January 1, 2017 (in thousands):
|
For the Three
Months
Ended June 30, 2016
|
|
For the Six
Months
Ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
EBITDA
|
|
Revenue
|
|
EBITDA
|
2012 Acquired
Portfolio
|
$
|
3,728
|
|
|
$
|
1,460
|
|
|
$
|
7,843
|
|
|
$
|
3,219
|
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements made herein or elsewhere by, or on behalf of,
the Company that are not historical facts are intended to be
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In addition to
historical information, this Press Release contains certain
statements and information that may constitute forward-looking
statements within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements include,
but are not limited to, statements regarding any projections of
earnings, revenues, asset sales, cash flow, debt levels or other
financial items; any statements of the plans, strategies and
objectives of management for future operations; any statements
regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the
foregoing and are based on our current expectations and beliefs
concerning future developments and their potential effect on us.
The words "may", "will", "estimate", "intend", "believe", "expect",
"seek", "project", "forecast", "foresee", "should", "would",
"could", "plan", "anticipate" and other similar words or
expressions are intended to identify forward-looking statements,
which are generally not historical in nature. While management
believes that these forward-looking statements are reasonable as
and when made, there can be no assurance that future developments
affecting us will be those that we anticipate. All comments
concerning our expectations for future revenues and operating
results are based on our forecasts for our existing operations and
do not include the potential impact of any future acquisitions. Our
forward-looking statements involve significant risks and
uncertainties (some of which are beyond our control) and
assumptions that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to, those summarized below:
- our ability to find and retain skilled personnel;
- our ability to execute our growth strategy;
- the effects of competition;
- the execution of our Standards Operating, 4E Leadership and
Strategic Acquisition Models;
- changes in the number of deaths in our markets;
- changes in consumer preferences;
- our ability to generate preneed sales;
- the investment performance of our funeral and cemetery trust
funds;
- fluctuations in interest rates;
- our ability to obtain debt or equity financing on satisfactory
terms to fund additional acquisitions, expansion projects, working
capital requirements and the repayment or refinancing of
indebtedness;
- the timely and full payment of death benefits related to
preneed funeral contracts funded through life insurance
contracts;
- the financial condition of third-party insurance companies that
fund our preneed funeral contracts;
- increased or unanticipated costs, such as insurance or
taxes;
- effects of the application of applicable laws and regulations,
including changes in such regulations or the interpretation
thereof;
- consolidation of the deathcare industry; and
- other factors and uncertainties inherent in the deathcare
industry.
For additional information regarding known material factors that
could cause our actual results to differ from our projected
results, please see "Risk Factors" in our most recent Annual Report
on Form 10-K. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise. A copy of
the Company's Form 10-K, other Carriage Services information and
news releases are available at www.carriageservices.com.
This press release includes the use of certain financial
measures that are not GAAP measures. The Non-GAAP financial
measures are presented for additional information and are
reconciled to their most comparable GAAP measures in the tables
presented above.
View original
content:http://www.prnewswire.com/news-releases/carriage-services-announces-second-quarter-2017-results-and-revises-rolling-four-quarter-outlook-300494860.html
SOURCE Carriage Services, Inc.