Carriage Services(US:CSV)2022-03-01 16:00Revenue Growth - The company experienced a high growth rate in funeral home revenue during the latter half of 2021, driven by elevated funeral volumes and an increase in average revenue per funeral contract [26]. - Total revenue for 2021 reached $375.886 million, a 14% increase from $329.448 million in 2020 [209]. - Service revenue increased to $180.572 million in 2021, up from $164.984 million in 2020, representing a growth of 9.6% [209]. - Revenue from services in 2021 was $164.082 million, while merchandise revenue was $92.023 million, contributing to the overall revenue growth [353]. Financial Performance - Net income for 2021 was $33.159 million, a significant increase of 106.4% compared to $16.090 million in 2020 [209]. - Basic earnings per share rose to $1.90 in 2021, up from $0.90 in 2020, marking an increase of 111.1% [209]. - Gross profit for 2021 was $129.516 million, reflecting a 22.2% increase from $105.923 million in 2020 [209]. - Operating income for the Funeral segment in 2021 was $88,591, compared to $57,622 in 2020, representing a 53% increase [358]. - Income before income taxes for 2021 was $44,304, compared to $24,642 in 2020, representing an increase of approximately 80% [358]. Assets and Liabilities - Total assets increased to $1,178.631 million in 2021, compared to $1,145.825 million in 2020, showing a growth of 2.9% [207]. - Total liabilities rose to $1,050.616 million in 2021, up from $905.323 million in 2020, indicating an increase of 16% [207]. - Cash and cash equivalents increased to $1,148 million in 2021, compared to $889 million in 2020, representing a growth of 29.2% [207]. - Current liabilities increased to $60.787 million in 2021, up from $48.367 million in 2020, reflecting a rise of 25.7% [207]. Employee and Talent Management - The company employs 2,657 individuals as of December 31, 2021, with 1,139 full-time and 1,518 part-time employees, all of whom are licensed as required by regulatory agencies [46]. - The company utilizes short-term and long-term incentive performance programs to attract and retain talent in critical positions [46]. - The company employs a 4E Leadership Model emphasizing Energy, Energizing others, Edge for decision-making, and Execution to foster entrepreneurial growth and high-performance culture [37]. Strategic Initiatives - The company’s capital structure allows for financial flexibility, enabling investments in growth opportunities such as business acquisitions [28]. - The Strategic Acquisition Model is designed to drive long-term increases in market share, revenue, earnings, and cash flow through strategic ranking criteria for acquisition candidates [38]. - The company aims to acquire larger, higher-margin strategic businesses as part of its growth strategy [38]. Regulatory and Compliance - The company’s operations are subject to extensive regulations, including the Federal Trade Commission's Funeral Rule, which mandates accurate pricing disclosures and prohibits deceptive practices [43]. - The company maintains effective internal control over financial reporting as of December 31, 2021, based on COSO criteria [199]. Investment and Trust Management - The company relies on trust investments to fund contractual obligations arising from preneed contracts, emphasizing the importance of long-term investment strategies [271]. - Preneed cemetery trust investments increased from $89,081 thousand on December 31, 2020, to $103,808 thousand on December 31, 2021, reflecting a growth of approximately 16.5% [272]. - The market value of preneed cemetery trust investments as a percentage of cost was 106.2% as of December 31, 2021, indicating a positive return on investment [272]. Debt and Interest Management - As of December 31, 2021, the company had outstanding borrowings under the Credit Facility of $155.4 million [186]. - The company issued $400.0 million in aggregate principal amount of 4.25% Senior Notes due 2029, with a net proceeds of $395.5 million after a 1.125% debt discount [306]. - The effective interest rate on the Senior Notes for the year ended December 31, 2021 was 4.42% [308]. Shareholder Returns - The company declared an annual dividend increase of $0.05 per share, bringing the total annual dividend to $0.45 per share starting from Q4 2021 [346]. - The share repurchase program was authorized for a total of $190 million, with $8.1 million remaining available for repurchase as of December 31, 2021 [349]. - The average price paid per share for repurchases in 2021 was $49.01, with a total dollar value of shares repurchased amounting to $142.469 million [347].