Service International(US:SCI)2022-08-03 20:33Financial Performance - Total revenue for Q2 2022 was $990.855 million, a slight increase from $987.535 million in Q2 2021, representing a growth of 0.3%[31] - Net income attributable to common stockholders for Q2 2022 was $132.670 million, down from $157.705 million in Q2 2021, reflecting a decrease of 15.9%[31] - Basic earnings per share for Q2 2022 was $0.84, compared to $0.94 in Q2 2021, indicating a decline of 10.6%[31] - Gross profit for the first half of 2022 was $643.558 million, down from $655.767 million in the same period of 2021, a decrease of 1.9%[31] - Operating income for the six months ended June 30, 2022, was $556.916 million, down from $587.877 million in 2021, reflecting a decline of approximately 5.3%[90] - The company reported a net income of $132.670 million for the three months ended June 30, 2022, compared to $157.705 million in 2021, a decrease of about 16%[101] - Consolidated net income attributable to common stockholders for the first six months of 2022 was $352.2 million ($2.17 per diluted share), down from $386.6 million ($2.25 per diluted share) in the same period of 2021, primarily due to a decline in gross profit and increased expenses[170] Revenue Breakdown - Core funeral revenue for the six months ended June 30, 2022, reached $1,000.055 million, up from $970.044 million in 2021, representing a growth of approximately 3.1%[90] - Consolidated funeral revenue increased by $17.1 million to $548.8 million in Q2 2022, driven by $8.7 million from acquired and newly constructed properties and a $9.7 million increase in comparable revenue[158] - Comparable revenue from funeral operations rose by $9.7 million, or 1.8%, to $539.7 million in Q2 2022, attributed to growth in core funeral revenue and recognized preneed revenue[159] - Consolidated revenue from funeral operations increased by $46.8 million, or 4.1%, to $1,197.9 million for the six months ended June 30, 2022, driven by $21.7 million from acquired properties and a $27.8 million increase in comparable revenue[172] - Comparable revenue from funeral operations rose by $27.8 million, or 2.4%, to $1,175.3 million for the same period, attributed to higher average revenue per service despite a 2.2% decline in comparable services performed[173] Assets and Liabilities - Total assets as of June 30, 2022, were $14.702 billion, a decrease from $15.691 billion at the end of 2021, representing a decline of 6.3%[33] - Long-term debt increased to $3.954 billion as of June 30, 2022, compared to $3.901 billion at the end of 2021, an increase of 1.4%[33] - Current liabilities decreased to $715.111 million from $728.261 million at the end of 2021, a reduction of 1.9%[33] - Total debt as of June 30, 2022, was $4.0 billion, up from $3.97 billion at December 31, 2021[75] Cash Flow and Investments - Cash flow from operating activities was $472.9 million for the first six months of 2022, a decrease of $16.9 million compared to the same period in 2021[122] - Cash and cash equivalents as of June 30, 2022, were $206.242 million, down from $268.626 million at the end of 2021, a decrease of 23.2%[33] - Trust investments at market value decreased to $5,547,990 thousand as of June 30, 2022, down from $6,536,851 thousand at December 31, 2021, representing a decline of about 15.1%[57] - The company reported a total of $4,092,115 thousand in preneed trust investments as of June 30, 2022, down from $4,771,542 thousand at December 31, 2021, a decrease of approximately 14.2%[57] Tax and Interest - The effective tax rate for the three months ended June 30, 2022, was 25.3%, up from 22.6% in 2021, primarily due to non-deductible losses[72] - Interest expense increased by $3.1 million to $40.6 million in Q2 2022, primarily due to refinancing and higher interest on floating rate debt[167] - The weighted average interest rate on consolidated debt was 3.94% as of June 30, 2022, compared to 3.70% at December 31, 2021[76] Shareholder Actions - The company repurchased 5,648,791 shares of common stock for $360.1 million during the six months ended June 30, 2022, averaging $63.75 per share[86] - As of June 30, 2022, the remaining dollar value of shares authorized for repurchase was $534.1 million[86] - Total shares repurchased during the three months ended June 30, 2022, amounted to 1,544,557 shares[201] - Average price paid per share for repurchases in June 2022 was $66.97[201] Strategic Focus - The company continues to focus on expanding its service offerings and enhancing operational efficiencies to drive future growth[40] - The company is focusing on strategic acquisitions and building new funeral service locations to enhance growth opportunities[118] - The company has a backlog of $13.3 billion in future revenue from trust and insurance-funded preneed sales as of June 30, 2022, which is expected to enhance revenue stability[107] Miscellaneous - No changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected internal controls[196] - No material changes in risk factors as of the fiscal year ended December 31, 2021[200] - No defaults upon senior securities reported[202] - No legal proceedings reported that materially affect the company[199] - No mine safety disclosures applicable[203] - No other significant information reported[204] - The report was signed on August 3, 2022, by the Vice President and Corporate Controller[207]