Carriage Services(US:CSV)2023-05-04 16:00Business Operations - Carriage Services operates 173 funeral homes and 32 cemeteries across 26 and 11 states respectively, with Funeral Home Operations accounting for approximately 70% of total revenue[126]. - The company acquired three funeral homes, two cemeteries, and a cremation-focused business for $44.0 million on March 22, 2023[132]. - The overall death rate remains slightly higher than pre-pandemic levels, affecting revenue and margins compared to Q1 2022[134]. - Carriage Services' business strategy focuses on sustainable long-term growth through local leadership and a decentralized operating model[141]. Financial Performance - During Q1 2023, net cash provided by operating activities increased to $25.9 million from $15.8 million in Q1 2022[151]. - Revenue for the three months ended March 31, 2023, decreased to $95.5 million, down $2.6 million from $98.2 million in the same period of 2022, reflecting an 8.1% decrease in funeral contract volume[177]. - Gross profit for the three months ended March 31, 2023, decreased to $31.1 million, down $3.4 million from $34.5 million in the same period of 2022[178]. - Net income for the three months ended March 31, 2023, was $8.8 million, compared to $16.4 million in the same period of 2022[177]. - Net income for the three months ended March 31, 2023, decreased by $7.6 million compared to the same period in 2022, primarily due to a $3.4 million decrease in gross profit and a $3.0 million increase in interest expense[179]. - Operating profit for the Funeral Home segment decreased to $28.97 million in Q1 2023 from $33.74 million in Q1 2022, a decline of 14.1%[183]. - Cemetery operating revenue increased by $1.1 million to $25.43 million for the three months ended March 31, 2023, compared to $23.81 million in the same period of 2022, representing a growth of 4.6%[195]. Cash Flow and Investments - The company ended Q1 2023 with $1.3 million in cash, up from $1.2 million at the beginning of the year[151]. - Net cash outflow from investing activities was $47.3 million for the three months ended March 31, 2023, compared to $7.8 million in the same period of 2022, an increase of $39.5 million[153]. - Capital expenditures totaled $5.0 million for the three months ended March 31, 2023, down from $6.9 million in the same period of 2022, a decrease of $1.9 million[155]. Debt and Interest - Borrowings on the Credit Facility increased to $213.6 million as of March 31, 2023, compared to $190.7 million at December 31, 2022[151]. - The company had outstanding borrowings under the Credit Facility of $213.6 million as of March 31, 2023[167]. - Interest expense increased significantly to $8.54 million in Q1 2023 from $5.54 million in Q1 2022, an increase of 54.1%[203]. - A 100 basis points change in the borrowing rate would result in a change in income before taxes of $2.1 million[213]. - The Senior Notes bear interest at a fixed annual rate of 4.25%, with a carrying value of $395.4 million and a fair value of $328.2 million as of March 31, 2023[214]. - The company has not entered into interest rate hedging arrangements in the past but continually evaluates their cost and potential benefits[213]. Operational Costs - Carriage Services experienced modest cost increases due to inflation, impacting various operational costs including utilities and funeral supplies[137]. - General, administrative, and other expenses rose to $10.2 million in Q1 2023, an increase of $1.6 million compared to the same period in 2022[201]. Dividends and Shareholder Returns - The company declared dividends of $0.1125 per share, totaling $1.7 million for the three months ended March 31, 2023[161].