Carriage Services(US:CSV)2023-02-23 20:20Financial Data and Key Metrics Changes - For Q4 2022, adjusted diluted EPS was $0.64, a decrease of $0.14 per share compared to the previous year, while full year adjusted diluted EPS was $2.61, down $0.41 per share [66] - Total revenue for Q4 2022 was $93.9 million, a decrease of 2.1% from the previous year, and for the full year, total revenue reached $370.2 million, a decrease of 1.5% [82] - Net income for the year was $41.4 million, representing a 24.8% increase over the prior year, with a compounded annual growth rate of 41.7% from the 2019 base year [83] Business Line Data and Key Metrics Changes - Funeral operating revenue for Q4 was $64 million, with a slight decrease of 1.4%, while the number of funeral contracts decreased by 5% to 11,811 contracts [66] - Cemetery operating revenue for Q4 was $23.2 million, an increase of 3.2%, with a compounded annual growth rate of 22.2% since 2019 [75] Market Data and Key Metrics Changes - The company reported a decrease in COVID-related contracts, with 1.9% in Q4 2022 compared to 13.4% in the previous year, indicating a significant normalization in the market [82] - The company expects preneed cemetery sales to grow above 2022 levels by low double digits [75] Company Strategy and Development Direction - The company is focused on digital transformation through the Trinity platform, aimed at enhancing customer engagement and operational efficiency [4][68] - The strategy includes a disciplined approach to capital allocation, prioritizing debt reduction while maintaining investment in cemetery inventory [51][67] - The company aims to integrate recent acquisitions effectively to realize their potential and drive growth [85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving normalized performance post-COVID, with expectations for Q1 2023 to be the last challenging comparable period [67] - The company anticipates total revenue for 2023 in the range of $375 million to $385 million, projecting year-over-year growth in adjusted consolidated EBITDA [93] Other Important Information - The company plans to maintain a leverage ratio of around 4.7 times net debt-to-EBITDA by the end of 2023, focusing on debt reduction in the following year [94] - The new preneed funeral strategy aims for a 30% to 40% increase in insurance sales within the first year of launch [88] Q&A Session Summary Question: Progress on the direct cemetery sales team - Management acknowledged ongoing efforts to enhance the sales team and expressed optimism about future performance [13] Question: Changes to 2024 goals - Management confirmed commitment to 2024 goals, aligning them closely with 2023 expectations [28] Question: Specifics on tech initiatives and revenue opportunities - Management detailed the Trinity platform's potential to enhance customer experiences and drive additional revenue through improved operational efficiencies [31][33] Question: CapEx plans for the year - Management indicated a target for CapEx at $20 million, focusing on maintaining a balance between growth and maintenance investments while prioritizing debt reduction [51] Question: Same-store numbers reporting - Management explained the decision to adjust the reporting of same-store numbers to align with industry standards and provide a fair comparison [56]