HOUSTON, May 21, 2015 /PRNewswire/ -- Carriage
Services, Inc. (NYSE: CSV) announced today that its Board of
Directors has approved the repurchase of up to an aggregate of
$25 million of its common
stock. The repurchase plan calls for the repurchases to be
made in the open market or in privately negotiated transactions
from time-to-time in compliance with applicable laws, rules and
regulations, including Rule 10b-18 under the Securities Exchange
Act of 1934, as amended.
Commenting on the announcement, Melvin
C. Payne, Chief Executive Officer, stated "I am pleased to
announce that our Board has approved a $25
million common share repurchase program, effective
immediately. As I discussed in our recent first quarter press
release, our goal for Capital Allocation is to invest our recurring
Adjusted Free Cash Flow among various options to achieve returns in
excess of our cost of capital in order to create maximum
shareholder value "per share" over long periods of time while
judiciously managing our diluted share count.
We have recently begun to invest more of our Free Cash Flow on
internal growth projects in select large strategic markets where we
have strong competitive brands and highly favorable future market
demographics. We will continue to be active and highly
selective in our acquisition strategy using our updated Strategic
Acquisition Model and Methodologies. However, we do not
believe it is wise or necessary to rely primarily on acquisitions
for growth in our performance metrics that lead to shareholder
value creation.
We have concluded that allocation of our Free Cash Flow should
also include repurchasing common shares when the price does not
fully reflect the cash earning power and intrinsic value of our
company, which we believe is currently the case. When we
launched Carriage Services 2012- A New BEGINNING! as the
first year theme of a Five Year Good to Great Journey, our
goal was to produce high and sustainable operating and financial
performance that over time would lead to a premium equity valuation
of our common shares.
As fully explained in our recently released Carriage Investor
Reference Book and our Company Investment Profile, both of which
are available on our website, we believe that Carriage as a
consolidation and operating platform for the funeral and cemetery
industry has evolved into a superior value creation investment
platform. We are the right size with the right models and the
right capital structure in a historically low rate environment to
leverage 6-8% annual revenue increases into much larger increases
in Adjusted Diluted EPS and Adjusted Free Cash Flow over time.
Notwithstanding that our price per common share has increased about
350% from $5.60 per share on
December 31, 2011 to $25.17 per share on May
15, 2015, an annualized return of 56%, we believe that our
common shares remain materially undervalued.
We are currently trading at a significant performance valuation
discount to our sector peer group as to Adjusted EPS and normalized
recurring Free Cash Flow. Carriage's Rolling Four Quarter
Outlook reflects a "roughly right" range of $1.55 to $1.59 Adjusted EPS and $42 to $44 million Adjusted Free Cash Flow whose
midpoints reflect an earnings per share multiple of about 16 and a
recurring equity Free Cash Flow yield of approximately 9%,
valuation performance metrics which we believe do not fully reflect
the intrinsic value of Carriage.
We will repurchase shares under our $25
million approved plan from time to time as long as we can
buy our shares at prices under what we consider "fair value". We
will continue to prioritize the allocation of our internally
generated capital on acquiring the best remaining independent
funeral and cemetery businesses in the country and on internal
growth projects that generate rates of return well in excess of our
cost of capital.
Our company goal remains the creation of long term value for our
shareholders and improvement of our credit profile over time
consistent with our high and sustainable performance through 4E
Leadership execution of our three models since beginning the
Carriage Good To Great Journey in 2012", concluded
Mr. Payne.
Carriage Services is a leading provider of deathcare services
and merchandise in the United
States. Carriage operates 166 funeral homes in 27 states and
32 cemeteries in 11 states.
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. These statements are
based on assumptions that the Company believes are reasonable;
however, many important factors, as discussed under
"Forward-Looking Statements and Cautionary Statements" in the
Company's Annual Report and Form 10-K for the year ended
December 31, 2014, could cause the
Company's results in the future to differ materially from the
forward-looking statements made herein and in any other documents
or oral presentations made by, or on behalf of, the Company. The
Company assumes no obligation to update or publicly release any
revisions to forward-looking statements made herein or any other
forward-looking statements made by, or on behalf of, the Company. A
copy of the Company's Form 10-K, and other Carriage Services
information and news releases, are available at
http://www.carriageservices.com.
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SOURCE Carriage Services, Inc.