HOUSTON, Aug. 4, 2015 /PRNewswire/ -- (NYSE: CSV)
Melvin C. Payne, Chief Executive
Officer, stated, "We achieved record second quarter results with
Adjusted Net Income of $6.4 million
equal to Adjusted Diluted EPS of $0.34 and Adjusted Net Income Margin of 10.8% on
record revenue of $59.3
million. While the second quarter revenue and earnings
increases over last year were all modest in the 3% - 5% range, the
large increases comprising our record high performance for the
first six months continues to reflect the maturity and
effectiveness of Carriage as an operating and consolidation
platform that has also become a superior value creation investment
platform. We are producing record amounts of Adjusted Free Cash
Flow, i.e. $13.9 million for the
second quarter and $25.4 million for
the first six months, primarily a function of our increasing cash
earning power as reflected by our historically high Adjusted
Consolidated EBITDA Margin of 30.1% for the first six months of
2015. Shown below are the highlights of our three and six months
performance (in millions):
Three Months ended June 30,
2015
- Total Revenue of $59.3 million,
an increase of 4.9%;
- Adjusted Consolidated EBITDA of $17.2
million, an increase of 5.4%;
- Adjusted Consolidated EBITDA Margin increased 10 basis points
to 29.0%;
- Adjusted Diluted Earnings Per Share of $0.34, an increase of 3.0%;
- Adjusted Net Profit Margin up 10 basis points to 10.8%;
and
- Adjusted Free Cash Flow of $13.9
million.
Six Months ended June 30, 2015
- Total Revenue of $122.5 million,
an increase of 9.2%;
- Adjusted Consolidated EBITDA of $36.9
million, an increase of 17.3%;
- Adjusted Consolidated EBITDA Margin up 210 basis points to
30.1%;
- Adjusted Diluted Earnings Per Share of $0.76, an increase of 18.8%;
- Adjusted Net Profit Margin up 130 basis points to 11.8%;
and
- Adjusted Free Cash Flow of $25.4
million, an increase of 30.9%.
Since launching the first five year phase of our Good To
Great Journey at the beginning of 2012, our goal has been to
create a high performance culture driven by a strong and uniquely
collaborative leadership team dynamic in our Houston home office. We initially created the
Operations and Support Leadership Team (OSLT) that has since
evolved into the Operations and Strategic Growth Leadership Team
(OSGLT), a small group of leaders representing all major functional
areas of Carriage. We have gone through several
organizational structure and responsibility changes within OSGLT
since January 1, 2012, each of which
was designed to raise and accelerate the high and sustainable
financial performance required by the Carriage Good To
Great Journey. We recently completed another leadership
reorganization, as our OSGLT members were reduced from fifteen
active members to ten and a significant number of department or
functional groups were placed under new leadership within the
OSGLT. A primary by-product of these organizational
changes will be much less overhead and improved execution of our
three models in the future.
In May we announced that Bill
Heiligbrodt will officially retire as a full time employee
of Carriage on March 4, 2016, after
which he will serve as a consultant for two more years to me and
other members of our Operations and Strategic Growth Leadership
Team. While Bill has officially transitioned his executive officer
roles to Viki Blinderman and
Ben Brink as Co-CFO's, he continues
to actively serve as an advisory member of our OSGLT and Board of
Directors.
Our revised Strategic Acquisition Model methodologies are being
actively implemented both by Dave
DeCarlo's Corporate Development Team and by the various
support teams in Houston. We
remain highly optimistic that our focus on the best remaining
independent businesses in the best strategic markets and areas will
result in long-term high single digit annual compound revenue
growth with much higher rates of growth in Adjusted Diluted EPS and
Free Cash Flow over time because of the highly efficient leveraging
dynamics of Carriage as a deathcare operations and consolidation
platform.
We have concluded that allocation of our increasing Adjusted
Free Cash Flow should 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. Accordingly, we recently announced that our Board approved a
$25 million common share repurchase
program. We will repurchase shares under this plan from time
to time as long as we can buy our shares at prices under what we
consider 'fair value', a capital allocation strategy option that
was initiated in the second quarter with the repurchase of 125,000
shares for $3.1 million. We will
continue to prioritize the allocation of our Adjusted Free Cash
Flow toward the goal of acquiring the best remaining independent
funeral and cemetery businesses in the best strategic markets in
the country and on exceptional internal growth projects.
To reflect primarily the overhead benefits of recent
organizational changes, we are raising our Rolling Four Quarter
Outlook of Adjusted Diluted Earnings per share to $1.57 – $1.61 from
$1.55 – $1.59 at the end of the first quarter," concluded
Mr. Payne.
FIELD OPERATIONS
Three Months Ended June 30, 2015
compared to Three Months Ended June 30,
2014
- Total Field Revenue increased 4.9% to $59.3 million;
- Total Field EBITDA increased 5.3% to $23.6 million;
- Total Field EBITDA Margin increased 10 basis points to
39.7%;
- Total Funeral Operating Revenue increased 6.2% to $42.3 million;
- Same Store Funeral Revenue increased 1.8% with same store
volume increasing 0.1%;
- Acquisition Funeral Revenue increased 21.9% with acquisition
volume increasing 18.9%;
- Total Funeral Field EBITDA increased 9.2% to $15.3 million;
- Total Funeral Field EBITDA Margin increased 100 basis points to
36.2%;
- Total Cemetery Operating Revenue increased 4.1% to $12.2 million;
- Cemetery pre-need property sale contracts decreased 4.6% to
2,110;
- Preneed property revenue recognized increased 0.4% and At-need
revenue increased 5.6%;
- Total Cemetery Field EBITDA increased 3.3% to $3.8 million;
- Total Cemetery Field EBITDA Margin decreased 20 basis points to
31.4%;
- Total Financial Revenue decreased 3.7% to $4.8 million;
- Funeral Financial Revenue decreased 6.5% to $2.2 million;
- Cemetery Financial Revenue decreased 1.2% to $2.6 million;
- Total Financial EBITDA decreased 4.8% to $4.4 million;
- Total Financial EBITDA Margin decreased 100 basis points to
92.3%.
Six Months Ended June 30, 2015
compared to Six Months Ended June 30,
2014
- Total Field Revenue increased 9.2% to $122.5 million;
- Total Field EBITDA increased 13.1% to $51.1 million;
- Total Field EBITDA Margin increased 140 basis points to
41.7%;
- Total Funeral Operating Revenue increased 10.5% to $89.9 million;
- Same Store Funeral Revenue increased 4.2% with same store
volume increasing 2.5%;
- Acquisition Funeral Revenue increased 35.4% with acquisition
volume increasing 33.5%;
- Total Funeral Field EBITDA increased 16.4% to $34.8 million;
- Total Funeral Field EBITDA Margin increased 200 basis points to
38.7%;
- Total Cemetery Operating Revenue increased 8.4% to $23.3 million;
- Cemetery pre-need property sale contracts increased 10.2% to
4,250;
- Preneed property revenue recognized increased 11.6% and At-need
revenue increased 6.0%;
- Total Cemetery Field EBITDA increased 17.5% to $7.7 million;
- Total Cemetery Field EBITDA Margin increased 260 basis points
to 33.0%;
- Total Financial Revenue decreased 0.1% to $9.4 million;
- Funeral Financial Revenue decreased 1.6% to $4.8 million;
- Cemetery Financial Revenue increased 1.6% to $4.6 million;
- Total Financial EBITDA decreased 1.3% to $8.6 million;
- Total Financial EBITDA Margin decreased 110 basis points to
92.4%.
ADJUSTED FREE CASH FLOW
We produced Adjusted Free Cash Flow from operations for the
three and six months ended June 30,
2015 of $13.9 million and
$25.4 million, respectively, compared
to Adjusted Free Cash Flow from operations of $13.9 million and $19.4
million for the corresponding periods in 2014. A
reconciliation of Cash Flow Provided by Operations to Adjusted Free
Cash Flow for the three and six months ended June 30, 2014 and 2015 is as follows (in
millions):
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Cash flow provided by
operations
|
$
|
14.9
|
|
|
$
|
15.7
|
|
|
$
|
13.3
|
|
|
$
|
28.3
|
|
Cash used for
maintenance capital expenditures
|
(1.7)
|
|
|
(3.0)
|
|
|
(2.6)
|
|
|
(4.8)
|
|
Free Cash
Flow
|
$
|
13.2
|
|
|
$
|
12.7
|
|
|
$
|
10.7
|
|
|
$
|
23.5
|
|
|
|
|
|
|
|
|
|
Plus: Incremental
Special Items:
|
|
|
|
|
|
|
|
Adjustment for tax
benefit from Good to Great stock awards
|
—
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
Acquisition and
divestiture expenses
|
0.3
|
|
|
—
|
|
|
1.0
|
|
|
0.5
|
|
Severance
costs
|
0.4
|
|
|
0.5
|
|
|
0.7
|
|
|
0.6
|
|
Consulting
fees
|
—
|
|
|
0.7
|
|
|
0.3
|
|
|
0.8
|
|
Other incentive
compensation
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
Premium paid for the
redemption of convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
Adjusted Free Cash
Flow
|
$
|
13.9
|
|
|
$
|
13.9
|
|
|
$
|
19.4
|
|
|
$
|
25.4
|
|
ROLLING FOUR QUARTER OUTLOOK
The Rolling Four Quarter Outlook ("Outlook") reflects
management's opinion on the performance of the portfolio of
existing businesses, including performance of existing trusts, plus
likely acquisitions for the Rolling Four Quarter Outlook period
ending June 30, 2016. This Outlook is not intended to be
management estimates or forecasts of our future performance, as we
believe such precise rolling estimates will be precisely wrong all
the time. Rather our intent and goal is to reflect a "roughly right
range" most of the time of future Rolling Four Quarter Outlook
performance as we execute our Standards Operating, Strategic
Acquisition and 4E Leadership Models over time.
ROLLING FOUR QUARTER OUTLOOK – Period Ending June 30, 2016
|
|
Range (in
millions, except per share amounts)
|
Revenues
|
|
$250 -
$254
|
Adjusted Consolidated
EBITDA
|
|
$71 - $75
|
Adjusted Net
Income
|
|
$29 - $31
|
Adjusted Diluted
Earnings Per Share(1)
|
|
$1.57 -
$1.61
|
Factors affecting our analysis include, among others, number,
size and timing of closing of acquisitions, funeral contract
volumes, average revenue per funeral service, cemetery interment
volumes, preneed cemetery sales, capital expenditures, execution of
our funeral and cemetery Standards Operating Model, Strategic
Acquisition Model, Withdrawable Trust Income and changes in Federal
Reserve monetary policy. Revenues, Adjusted Consolidated EBITDA,
Adjusted Net Income and Adjusted Diluted Earnings Per Share for the
four quarter period ending June 30, 2016 are expected to
improve relative to the trailing four quarter period ending
June 30, 2015 for the following
reasons:
- Increases in Acquired Funeral Revenue and Acquired Funeral
Field EBITDA;
- Increases in Acquired Cemetery Revenue and Acquired Cemetery
Field EBITDA;
- Modest increases in Same Store Funeral Revenue and Same Store
Funeral Field EBITDA;
- Increases in Same Store Cemetery Revenue and Same Store
Cemetery Field EBITDA;
- Incremental increases in Financial Revenue and Financial EBITDA
from trust funds; and
- Modest decreases in Overhead as a percentage of Revenue.
(1)
|
The Rolling Four
Quarter Outlook on Adjusted Diluted Earnings Per Share does not
include any changes to our fully diluted share count that could
occur related to a stock price increase and EPS dilution
calculations related to our convertible notes and outstanding and
exercisable stock options.
|
TRUST FUND PERFORMANCE
For the six months ended June 30,
2015, Carriage's discretionary trust funds gained 3.6%
compared to our 70/30 index benchmark of 2.1%. The current
yield on Carriage's discretionary fixed income portfolio, which
comprises 65% of discretionary trust assets, is 7.3% and the
estimated annual income for the discretionary portfolio is
approximately $10.3 million.
Shown below are consolidated performance metrics for the
combined trust fund portfolios (preneed funeral, cemetery
merchandise and services and cemetery perpetual care) at key
dates.
Investment
Performance
|
|
|
Investment
Performance(1)
|
|
Index
Performance
|
|
|
Discretionary
|
Total
Trust
|
|
S&P 500 Stock
Index
|
High Yield
Index
|
70/30 index
Benchmark(2)
|
|
|
|
|
|
|
|
|
6 months ended
6/30/15
|
|
3.6%
|
3.2%
|
|
1.2%
|
2.5%
|
2.1%
|
1 year ended
12/31/14
|
|
8.3%
|
7.9%
|
|
13.7%
|
2.5%
|
5.8%
|
2 years ended
12/31/14
|
|
23.8%
|
22.7%
|
|
50.4%
|
10.1%
|
22.2%
|
3 years ended
12/31/14
|
|
48.9%
|
43.7%
|
|
74.5%
|
27.5%
|
41.6%
|
4 years ended
12/31/14
|
|
44.6%
|
41.0%
|
|
78.1%
|
33.8%
|
47.1%
|
5 years ended
12/31/14
|
|
74.5%
|
66.6%
|
|
105.0%
|
54.1%
|
69.3%
|
|
|
(1)
|
Investment
performance includes realized income and unrealized appreciation
(depreciation).
|
(2)
|
The 70/30 Benchmark
is 70% weighted to the High Yield Index and 30% weighted to the
S&P 500 Stock Index.
|
Asset Allocation as
of June 30, 2015 (in
thousands)
|
|
|
|
Discretionary Trust Funds
|
|
Total
Trust Funds
|
Asset
Class
|
|
|
MV
|
%
|
|
MV
|
%
|
Cash
|
|
|
$
|
19,703
|
10
|
%
|
|
$
|
35,203
|
15
|
%
|
Equities
|
|
|
47,146
|
24
|
%
|
|
55,245
|
24
|
%
|
Fixed
Income
|
|
|
128,478
|
64
|
%
|
|
140,959
|
59
|
%
|
Other/Insurance
|
|
|
3,476
|
2
|
%
|
|
3,668
|
2
|
%
|
Total
Portfolios
|
|
|
$
|
198,803
|
100
|
%
|
|
$
|
235,075
|
100
|
%
|
CONFERENCE CALL AND INVESTOR RELATIONS CONTACT
Carriage Services has scheduled a conference call for tomorrow,
August 5, 2015 at 9:30 a.m. central time. To participate in the
call, please dial 866-516-3867 (ID-76057989) and ask for the
Carriage Services conference call. A replay of the conference
call will be available through August 9, 2015 and may be
accessed by dialing 855-859-2056 (ID-76057989). The conference call
will also be available at www.carriageservices.com. For any
investor relations questions, please contact Ben Brink at 713-332-8441.
CARRIAGE SERVICES,
INC.
|
OPERATING AND
FINANCIAL TREND REPORT
|
FROM CONTINUING
OPERATIONS (IN THOUSANDS - EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2014
|
2015
|
%
Change
|
|
2014
|
2015
|
%
Change
|
|
|
|
|
|
|
|
|
Same Store
Contracts
|
|
|
|
|
|
|
|
Atneed
Contracts
|
4,892
|
|
4,911
|
|
0.4
|
%
|
|
10,228
|
|
10,455
|
|
2.2
|
%
|
Preneed
Contracts
|
1,227
|
|
1,217
|
|
-0.8
|
%
|
|
2,540
|
|
2,630
|
|
3.5
|
%
|
Total Same Store
Funeral Contracts
|
6,119
|
|
6,128
|
|
0.1
|
%
|
|
12,768
|
|
13,085
|
|
2.5
|
%
|
Acquisition
Contracts
|
|
|
|
|
|
|
|
Atneed
Contracts
|
1,248
|
|
1,442
|
|
15.5
|
%
|
|
2,366
|
|
3,085
|
|
30.4
|
%
|
Preneed
Contracts
|
230
|
|
315
|
|
37.0
|
%
|
|
438
|
|
658
|
|
50.2
|
%
|
Total Acquisition
Funeral Contracts
|
1,478
|
|
1,757
|
|
18.9
|
%
|
|
2,804
|
|
3,743
|
|
33.5
|
%
|
Total Funeral
Contracts
|
7,597
|
|
7,885
|
|
3.8
|
%
|
|
15,572
|
|
16,828
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
Funeral Operating
Revenue
|
|
|
|
|
|
|
|
Same Store
Revenue
|
$
|
31,199
|
|
$
|
31,769
|
|
1.8
|
%
|
|
$
|
64,863
|
|
$
|
67,604
|
|
4.2
|
%
|
Acquisition
Revenue
|
8,621
|
|
10,513
|
|
21.9
|
%
|
|
16,442
|
|
22,262
|
|
35.4
|
%
|
Total Funeral
Operating Revenue
|
$
|
39,820
|
|
$
|
42,282
|
|
6.2
|
%
|
|
$
|
81,305
|
|
$
|
89,866
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
Cemetery Operating
Revenue
|
|
|
|
|
|
|
|
Same Store
Revenue
|
$
|
11,382
|
|
$
|
11,266
|
|
-1.0
|
%
|
|
$
|
21,094
|
|
$
|
21,534
|
|
2.1
|
%
|
Acquisition
Revenue
|
334
|
|
930
|
|
178.4
|
%
|
|
389
|
|
1,752
|
|
350.4
|
%
|
Total Cemetery
Operating Revenue
|
$
|
11,716
|
|
$
|
12,196
|
|
4.1
|
%
|
|
$
|
21,483
|
|
$
|
23,286
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
Financial
Revenue
|
|
|
|
|
|
|
|
Preneed Funeral
Commission Income
|
$
|
563
|
|
$
|
370
|
|
-34.3
|
%
|
|
$
|
1,127
|
|
$
|
725
|
|
-35.7
|
%
|
Preneed Funeral Trust
Earnings
|
1,809
|
|
1,849
|
|
2.2
|
%
|
|
3,725
|
|
4,047
|
|
8.6
|
%
|
Cemetery Trust
Earnings
|
2,276
|
|
2,176
|
|
-4.4
|
%
|
|
3,860
|
|
3,817
|
|
-1.1
|
%
|
Preneed Cemetery
Finance Charges
|
320
|
|
388
|
|
21.3
|
%
|
|
657
|
|
773
|
|
17.7
|
%
|
Total Financial
Revenue
|
$
|
4,968
|
|
$
|
4,783
|
|
-3.7
|
%
|
|
$
|
9,369
|
|
$
|
9,362
|
|
-0.1
|
%
|
Total
Revenue
|
$
|
56,504
|
|
$
|
59,261
|
|
4.9
|
%
|
|
$
|
112,157
|
|
$
|
122,514
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
Field
EBITDA
|
|
|
|
|
|
|
|
Same Store Funeral
Field EBITDA
|
$
|
10,878
|
|
$
|
11,415
|
|
4.9
|
%
|
|
$
|
23,768
|
|
$
|
25,953
|
|
9.2
|
%
|
Same Store Funeral
Field EBITDA Margin
|
34.9
|
%
|
35.9
|
%
|
100 bp
|
|
36.6
|
%
|
38.4
|
%
|
180 bp
|
Acquisition Funeral
Field EBITDA
|
3,142
|
|
3,898
|
|
24.1
|
%
|
|
6,108
|
|
8,811
|
|
44.3
|
%
|
Acquisition Funeral
Field EBITDA Margin
|
36.4
|
%
|
37.1
|
%
|
70 bp
|
|
37.1
|
%
|
39.6
|
%
|
250 bp
|
Total Funeral
Field EBITDA
|
$
|
14,020
|
|
$
|
15,313
|
|
9.2
|
%
|
|
$
|
29,876
|
|
$
|
34,764
|
|
16.4
|
%
|
Total Funeral
Field EBITDA Margin
|
35.2
|
%
|
36.2
|
%
|
100
bp
|
|
36.7
|
%
|
38.7
|
%
|
200
bp
|
|
|
|
|
|
|
|
|
Same Store Cemetery
Field EBITDA
|
$
|
3,568
|
|
$
|
3,537
|
|
-0.9
|
%
|
|
$
|
6,408
|
|
$
|
7,087
|
|
10.6
|
%
|
Same Store Cemetery
Field EBITDA Margin
|
31.3
|
%
|
31.4
|
%
|
10 bp
|
|
30.4
|
%
|
32.9
|
%
|
250 bp
|
Acquisition Cemetery
Field EBITDA
|
134
|
|
288
|
|
114.9
|
%
|
|
125
|
|
588
|
|
370.4
|
%
|
Acquisition Cemetery
Field EBITDA Margin
|
40.1
|
%
|
31.0
|
%
|
-910 bp
|
|
32.1
|
%
|
33.6
|
%
|
150 bp
|
Total Cemetery
Field EBITDA
|
$
|
3,702
|
|
$
|
3,825
|
|
3.3
|
%
|
|
$
|
6,533
|
|
$
|
7,675
|
|
17.5
|
%
|
Total Cemetery
Field EBITDA Margin
|
31.6
|
%
|
31.4
|
%
|
-20
bp
|
|
30.4
|
%
|
33.0
|
%
|
260
bp
|
|
|
|
|
|
|
|
|
Funeral Financial
EBITDA
|
$
|
2,079
|
|
$
|
1,925
|
|
-7.4
|
%
|
|
$
|
4,305
|
|
$
|
4,196
|
|
-2.5
|
%
|
Cemetery Financial
EBITDA
|
2,556
|
|
2,489
|
|
-2.6
|
%
|
|
4,454
|
|
4,453
|
|
—
|
%
|
Total Financial
EBITDA
|
$
|
4,635
|
|
$
|
4,414
|
|
-4.8
|
%
|
|
$
|
8,759
|
|
$
|
8,649
|
|
-1.3
|
%
|
Total Financial
EBITDA Margin
|
93.3
|
%
|
92.3
|
%
|
-100
bp
|
|
93.5
|
%
|
92.4
|
%
|
-110
bp
|
|
|
|
|
|
|
|
|
Total Field
EBITDA
|
$
|
22,357
|
|
$
|
23,552
|
|
5.3
|
%
|
|
$
|
45,168
|
|
$
|
51,088
|
|
13.1
|
%
|
Total Field EBITDA
Margin
|
39.6
|
%
|
39.7
|
%
|
10
bp
|
|
40.3
|
%
|
41.7
|
%
|
140
bp
|
|
|
|
|
|
|
|
|
OPERATING AND
FINANCIAL TREND REPORT
|
FROM CONTINUING
OPERATIONS (IN THOUSANDS - EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2014
|
2015
|
%
Change
|
|
2014
|
2015
|
%
Change
|
|
|
|
|
|
|
|
|
Overhead
|
|
|
|
|
|
|
|
Total Variable
Overhead
|
$
|
1,411
|
|
$
|
1,766
|
|
25.2
|
%
|
|
$
|
5,274
|
|
$
|
4,196
|
|
-20.4
|
%
|
Total Regional Fixed
Overhead
|
781
|
|
884
|
|
13.2
|
%
|
|
1,567
|
|
1,707
|
|
8.9
|
%
|
Total Corporate Fixed
Overhead
|
5,085
|
|
5,260
|
|
3.4
|
%
|
|
10,659
|
|
10,613
|
|
-0.4
|
%
|
Total
Overhead
|
$
|
7,277
|
|
$
|
7,910
|
|
8.7
|
%
|
|
$
|
17,500
|
|
$
|
16,516
|
|
-5.6
|
%
|
Overhead as a
percent of sales
|
12.9
|
%
|
13.3
|
%
|
40
bp
|
|
15.6
|
%
|
13.5
|
%
|
-210
bp
|
|
|
|
|
|
|
|
|
Consolidated
EBITDA
|
$
|
15,080
|
|
$
|
15,642
|
|
3.7
|
%
|
|
$
|
27,668
|
|
$
|
34,572
|
|
25.0
|
%
|
Consolidated
EBITDA Margin
|
26.7
|
%
|
26.4
|
%
|
-30
bp
|
|
24.7
|
%
|
28.2
|
%
|
350
bp
|
|
|
|
|
|
|
|
|
Other Expenses and
Interest
|
|
|
|
|
|
|
|
Depreciation &
Amortization
|
$
|
3,029
|
|
$
|
3,365
|
|
11.1
|
%
|
|
$
|
5,785
|
|
$
|
6,687
|
|
15.6
|
%
|
Non-Cash
Stock Compensation
|
1,263
|
|
1,287
|
|
1.9
|
%
|
|
1,993
|
|
2,376
|
|
19.2
|
%
|
Interest
Expense
|
2,691
|
|
2,492
|
|
-7.4
|
%
|
|
5,536
|
|
5,042
|
|
-8.9
|
%
|
Accretion of Discount
on Convertible Subordinated Notes
|
694
|
|
851
|
|
22.6
|
%
|
|
865
|
|
1,678
|
|
94.0
|
%
|
Loss on Early
Extinguishment of Debt
|
1,042
|
|
—
|
|
-100.0
|
%
|
|
1,042
|
|
—
|
|
-100.0
|
%
|
Loss on Redemption of
Convertible Junior Subordinated Debentures
|
—
|
|
—
|
|
|
|
3,779
|
|
—
|
|
-100.0
|
%
|
Other, Net
|
(5)
|
|
(13)
|
|
160.0
|
%
|
|
(373)
|
|
106
|
|
-128.4
|
%
|
Pretax
Income
|
$
|
6,366
|
|
$
|
7,660
|
|
20.3
|
%
|
|
$
|
9,041
|
|
$
|
18,683
|
|
106.6
|
%
|
Net Tax
Provision
|
2,483
|
|
3,103
|
|
25.0
|
%
|
|
3,526
|
|
7,708
|
|
118.6
|
%
|
GAAP Net
Income
|
$
|
3,883
|
|
$
|
4,557
|
|
17.4
|
%
|
|
$
|
5,515
|
|
$
|
10,975
|
|
99.0
|
%
|
|
|
|
|
|
|
|
|
Special Items, Net
of tax except for **
|
|
|
|
|
|
|
|
Withdrawable Trust
Income
|
$
|
366
|
|
$
|
230
|
|
|
|
$
|
515
|
|
$
|
230
|
|
|
Acquisition and
Divestiture Expenses
|
168
|
|
19
|
|
|
|
659
|
|
354
|
|
|
Severance
Costs
|
268
|
|
323
|
|
|
|
477
|
|
407
|
|
|
Consulting
Fees
|
6
|
|
445
|
|
|
|
165
|
|
521
|
|
|
Other Incentive
Compensation
|
—
|
|
—
|
|
|
|
660
|
|
—
|
|
|
Accretion of Discount
on Convertible Subordinated Notes **
|
694
|
|
851
|
|
|
|
865
|
|
1,678
|
|
|
Costs Related to
Credit Facility
|
688
|
|
—
|
|
|
|
688
|
|
—
|
|
|
Loss on Redemption of
Convertible Junior Subordinated Debentures
|
—
|
|
—
|
|
|
|
2,493
|
|
—
|
|
|
Gain on Asset
Purchase
|
—
|
|
—
|
|
|
|
(746)
|
|
—
|
|
|
Other Special
Items
|
—
|
|
—
|
|
|
|
503
|
|
98
|
|
|
Tax Adjustment from
Prior Period **
|
—
|
|
—
|
|
|
|
—
|
|
141
|
|
|
Sum of Special
Items, Net of tax
|
$
|
2,190
|
|
$
|
1,868
|
|
-14.7
|
%
|
|
$
|
6,279
|
|
$
|
3,429
|
|
-45.4
|
%
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
$
|
6,073
|
|
$
|
6,425
|
|
5.8
|
%
|
|
$
|
11,794
|
|
$
|
14,404
|
|
22.1
|
%
|
Adjusted Net
Profit Margin
|
10.7
|
%
|
10.8
|
%
|
10
bp
|
|
10.5
|
%
|
11.8
|
%
|
130
bp
|
|
|
|
|
|
|
|
|
Adjusted Basic
Earnings Per Share
|
$
|
0.33
|
|
$
|
0.35
|
|
6.1
|
%
|
|
$
|
0.64
|
|
$
|
0.78
|
|
21.9
|
%
|
Adjusted Diluted
Earnings Per Share
|
$
|
0.33
|
|
$
|
0.34
|
|
3.0
|
%
|
|
$
|
0.64
|
|
$
|
0.76
|
|
18.8
|
%
|
|
|
|
|
|
|
|
|
GAAP Basic Earnings
Per Share
|
$
|
0.21
|
|
$
|
0.25
|
|
19.0
|
%
|
|
$
|
0.30
|
|
$
|
0.59
|
|
96.7
|
%
|
GAAP Diluted Earnings
Per Share
|
$
|
0.21
|
|
$
|
0.24
|
|
14.3
|
%
|
|
$
|
0.30
|
|
$
|
0.57
|
|
90.0
|
%
|
|
|
|
|
|
|
|
|
Weighted Average
Basic Shares Outstanding
|
18,123
|
|
18,268
|
|
|
|
18,054
|
|
18,238
|
|
|
Weighted Average
Diluted Shares Outstanding
|
18,247
|
|
18,880
|
|
|
|
18,195
|
|
18,844
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
Adjusted Consolidated EBITDA
|
|
|
|
|
|
|
|
Consolidated
EBITDA
|
$
|
15,080
|
|
$
|
15,642
|
|
3.7
|
%
|
|
$
|
27,668
|
|
$
|
34,572
|
|
25.0
|
%
|
Withdrawable Trust
Income
|
554
|
|
348
|
|
|
|
779
|
|
348
|
|
|
Acquisition and
Divestiture Expenses
|
255
|
|
29
|
|
|
|
999
|
|
537
|
|
|
Severance
Costs
|
406
|
|
489
|
|
|
|
723
|
|
616
|
|
|
Consulting
Fees
|
9
|
|
673
|
|
|
|
250
|
|
788
|
|
|
Other Incentive
Compensation
|
—
|
|
—
|
|
|
|
1,000
|
|
—
|
|
|
Adjusted
Consolidated EBITDA
|
$
|
16,304
|
|
$
|
17,181
|
|
5.4
|
%
|
|
$
|
31,419
|
|
$
|
36,861
|
|
17.3
|
%
|
Adjusted
Consolidated EBITDA Margin
|
28.9
|
%
|
29.0
|
%
|
10
bp
|
|
28.0
|
%
|
30.1
|
%
|
210
bp
|
CARRIAGE SERVICES,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands,
except share data)
|
|
|
|
|
(unaudited)
|
|
December 31,
2014
|
|
June 30,
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
413
|
|
|
$
|
558
|
|
Accounts receivable,
net
|
19,264
|
|
|
16,909
|
|
Inventories
|
5,294
|
|
|
5,502
|
|
Prepaid
expenses
|
4,590
|
|
|
3,451
|
|
Other current
assets
|
7,144
|
|
|
2,539
|
|
Total current
assets
|
36,705
|
|
|
28,959
|
|
Preneed cemetery
trust investments
|
71,972
|
|
|
71,894
|
|
Preneed funeral trust
investments
|
97,607
|
|
|
96,002
|
|
Preneed receivables,
net
|
26,284
|
|
|
26,448
|
|
Receivables from
preneed trusts, net
|
12,809
|
|
|
12,939
|
|
Property, plant and
equipment, net
|
186,211
|
|
|
205,332
|
|
Cemetery property,
net
|
75,564
|
|
|
75,516
|
|
Goodwill
|
257,442
|
|
|
261,291
|
|
Deferred charges and
other non-current assets
|
14,264
|
|
|
14,899
|
|
Cemetery perpetual
care trust investments
|
48,670
|
|
|
48,620
|
|
Total
assets
|
$
|
827,528
|
|
|
$
|
841,900
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt and capital lease obligations
|
$
|
9,838
|
|
|
$
|
10,705
|
|
Accounts
payable
|
6,472
|
|
|
6,639
|
|
Other
liabilities
|
1,437
|
|
|
3,698
|
|
Accrued
liabilities
|
15,203
|
|
|
12,942
|
|
Total current
liabilities
|
32,950
|
|
|
33,984
|
|
Long-term debt, net
of current portion
|
111,887
|
|
|
110,571
|
|
Revolving credit
facility
|
40,500
|
|
|
46,400
|
|
Convertible
subordinated notes due 2021
|
114,542
|
|
|
116,220
|
|
Obligations under
capital leases, net of current portion
|
3,098
|
|
|
2,989
|
|
Deferred preneed
cemetery revenue
|
56,875
|
|
|
56,298
|
|
Deferred preneed
funeral revenue
|
31,265
|
|
|
31,028
|
|
Deferred tax
liability
|
36,414
|
|
|
36,353
|
|
Other long-term
liabilities
|
2,401
|
|
|
3,601
|
|
Deferred preneed
cemetery receipts held in trust
|
71,972
|
|
|
71,894
|
|
Deferred preneed
funeral receipts held in trust
|
97,607
|
|
|
96,002
|
|
Care trusts'
corpus
|
48,142
|
|
|
48,154
|
|
Total
liabilities
|
647,653
|
|
|
653,494
|
|
Commitments and
contingencies:
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $.01
par value; 80,000,000 shares authorized; 22,434,000 and 22,449,000
shares issued at December 31, 2014 and June 30,
2015
|
224
|
|
|
224
|
|
Additional paid-in
capital
|
212,386
|
|
|
213,024
|
|
Accumulated
deficit
|
(17,468)
|
|
|
(6,493)
|
|
Treasury stock, at
cost; 3,922,000 and 4,047,000 shares at December 31, 2014 and
June 30, 2015
|
(15,267)
|
|
|
(18,349)
|
|
Total stockholders'
equity
|
179,875
|
|
|
188,406
|
|
Total liabilities and
stockholders' equity
|
$
|
827,528
|
|
|
$
|
841,900
|
|
CARRIAGE SERVICES,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
For the Three
Months Ended June 30,
|
|
For the Six
Months Ended June
30,
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
56,504
|
|
|
$
|
59,261
|
|
|
$
|
112,157
|
|
|
$
|
122,514
|
|
Field costs and
expenses
|
38,515
|
|
|
41,013
|
|
|
76,152
|
|
|
82,057
|
|
Gross
profit
|
$
|
17,989
|
|
|
$
|
18,248
|
|
|
$
|
36,005
|
|
|
$
|
40,457
|
|
General and
administrative expenses
|
7,201
|
|
|
7,258
|
|
|
16,877
|
|
|
14,948
|
|
Operating
income
|
$
|
10,788
|
|
|
$
|
10,990
|
|
|
$
|
19,128
|
|
|
$
|
25,509
|
|
Interest expense,
net
|
(2,686)
|
|
|
(2,479)
|
|
|
(5,531)
|
|
|
(5,148)
|
|
Accretion of discount
on convertible subordinated notes
|
(694)
|
|
|
(851)
|
|
|
(865)
|
|
|
(1,678)
|
|
Loss on early
extinguishment of debt
|
(1,042)
|
|
|
—
|
|
|
(1,042)
|
|
|
—
|
|
Loss on redemption of
convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
(3,779)
|
|
|
—
|
|
Other
income
|
—
|
|
|
—
|
|
|
1,130
|
|
|
—
|
|
Income from
continuing operations before income taxes
|
$
|
6,366
|
|
|
$
|
7,660
|
|
|
$
|
9,041
|
|
|
$
|
18,683
|
|
Provision for income
taxes
|
(2,483)
|
|
|
(3,103)
|
|
|
(3,526)
|
|
|
(7,708)
|
|
Net income from
continuing operations
|
3,883
|
|
|
4,557
|
|
|
5,515
|
|
|
10,975
|
|
Loss from
discontinued operations, net of tax
|
(637)
|
|
|
—
|
|
|
(51)
|
|
|
—
|
|
Net income available
to common stockholders
|
$
|
3,246
|
|
|
$
|
4,557
|
|
|
$
|
5,464
|
|
|
$
|
10,975
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.21
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.59
|
|
Discontinued
operations
|
(0.03)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Basic earnings per
common share
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
$
|
0.30
|
|
|
$
|
0.57
|
|
Discontinued
operations
|
(0.04)
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Diluted earnings per
common share
|
$
|
0.17
|
|
|
$
|
0.24
|
|
|
$
|
0.29
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.025
|
|
|
$
|
0.025
|
|
|
$
|
0.050
|
|
|
$
|
0.050
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common and common equivalent shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
18,123
|
|
|
18,268
|
|
|
18,054
|
|
|
18,238
|
|
Diluted
|
18,247
|
|
|
18,880
|
|
|
18,195
|
|
|
18,844
|
|
CARRIAGE SERVICES,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited and in
thousands)
|
|
|
For the Six Months
Ended June
30,
|
|
2014
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
5,464
|
|
|
$
|
10,975
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Gain on sale of
businesses and purchase of other assets
|
(2,039)
|
|
|
—
|
|
Impairment of
goodwill
|
1,180
|
|
|
—
|
|
Loss on early
extinguishment of debt
|
1,042
|
|
|
—
|
|
Depreciation and
amortization
|
5,801
|
|
|
6,687
|
|
Amortization of
deferred financing costs
|
456
|
|
|
460
|
|
Accretion of discount
on convertible subordinated notes
|
865
|
|
|
1,678
|
|
Provision for losses
on accounts receivable
|
1,338
|
|
|
833
|
|
Stock-based
compensation expense
|
2,782
|
|
|
2,376
|
|
Deferred income tax
(benefit) expense
|
(1,884)
|
|
|
1,452
|
|
Loss on redemption of
convertible junior subordinated debentures
|
2,932
|
|
|
—
|
|
Other
|
(8)
|
|
|
—
|
|
Changes in operating
assets and liabilities that provided (required) cash:
|
|
|
|
Accounts and preneed
receivables
|
(1,783)
|
|
|
1,358
|
|
Inventories and other
current assets
|
818
|
|
|
4,062
|
|
Deferred charges and
other
|
(174)
|
|
|
117
|
|
Preneed funeral and
cemetery trust investments
|
(10,057)
|
|
|
1,603
|
|
Accounts
payable
|
(871)
|
|
|
167
|
|
Accrued and other
liabilities
|
(2,117)
|
|
|
(953)
|
|
Deferred preneed
funeral and cemetery revenue
|
345
|
|
|
(814)
|
|
Deferred preneed
funeral and cemetery receipts held in trust
|
9,229
|
|
|
(1,671)
|
|
Net cash provided by
operating activities
|
13,319
|
|
|
28,330
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions and land
for new construction
|
(54,850)
|
|
|
(4,250)
|
|
Purchase of land and
buildings previously leased
|
(4,100)
|
|
|
(6,080)
|
|
Net proceeds from the
sale of businesses and other assets
|
200
|
|
|
—
|
|
Capital
expenditures
|
(5,593)
|
|
|
(15,285)
|
|
Net cash used in
investing activities
|
(64,343)
|
|
|
(25,615)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net borrowings on the
revolving credit facility
|
5,500
|
|
|
5,900
|
|
Net borrowings
(payments) on the term loan
|
8,000
|
|
|
(4,688)
|
|
Proceeds from the
issuance of convertible subordinated notes
|
143,750
|
|
|
—
|
|
Payment of debt
issuance costs related to the convertible subordinated
notes
|
(4,650)
|
|
|
—
|
|
Payments on other
long-term debt and obligations under capital leases
|
(542)
|
|
|
(401)
|
|
Redemption of
convertible junior subordinated debentures
|
(89,748)
|
|
|
—
|
|
Payments for
performance-based stock awards
|
(16,150)
|
|
|
—
|
|
Proceeds from the
exercise of stock options and employee stock purchase plan
contributions
|
863
|
|
|
410
|
|
Dividends on common
stock
|
(917)
|
|
|
(925)
|
|
Payment of loan
origination costs related to the credit facility
|
(797)
|
|
|
(13)
|
|
Purchases of treasury
stock
|
—
|
|
|
(3,082)
|
|
Excess tax benefit of
equity compensation
|
5,069
|
|
|
229
|
|
Net cash provided by
(used in) financing activities
|
50,378
|
|
|
(2,570)
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(646)
|
|
|
145
|
|
Cash and cash
equivalents at beginning of period
|
1,377
|
|
|
413
|
|
Cash and cash
equivalents at end of period
|
$
|
731
|
|
|
$
|
558
|
|
CARRIAGE SERVICES,
INC.
|
CALCULATION OF
EARNINGS PER SHARE
|
(UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
For the Three
Months Ended June 30,
|
|
For the Six
Months Ended June
30,
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Numerator for
basic and diluted earnings per share:
|
|
|
|
|
|
|
|
Numerator from
continuing operations
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
3,883
|
|
|
$
|
4,557
|
|
|
$
|
5,515
|
|
|
$
|
10,975
|
|
Less: Earnings
allocated to unvested restricted stock
|
(76)
|
|
|
(53)
|
|
|
(115)
|
|
|
(146)
|
|
Income
attributable to continuing operations
|
$
|
3,807
|
|
|
$
|
4,504
|
|
|
$
|
5,400
|
|
|
$
|
10,829
|
|
|
|
|
|
|
|
|
|
Numerator from
discontinued operations
|
|
|
|
|
|
|
|
Loss from
discontinued operations
|
$
|
(637)
|
|
|
$
|
—
|
|
|
$
|
(51)
|
|
|
$
|
—
|
|
Less: Earnings
allocated to unvested restricted stock
|
13
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Loss
attributable to discontinued operations
|
$
|
(624)
|
|
|
$
|
—
|
|
|
$
|
(50)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
Denominator for basic
earnings per common share - weighted average shares
outstanding
|
18,123
|
|
|
18,268
|
|
|
18,054
|
|
|
18,238
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
Stock
options
|
124
|
|
|
261
|
|
|
141
|
|
|
255
|
|
Convertible
subordinated notes
|
—
|
|
|
351
|
|
|
—
|
|
|
351
|
|
Denominator for
diluted earnings per common share - weighted average shares
outstanding
|
18,247
|
|
|
18,880
|
|
|
18,195
|
|
|
18,844
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.21
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.59
|
|
Discontinued
operations
|
(0.03)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Basic earnings per
common share
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
$
|
0.30
|
|
|
$
|
0.57
|
|
Discontinued
operations
|
(0.04)
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Diluted earnings per
common share
|
$
|
0.17
|
|
|
$
|
0.24
|
|
|
$
|
0.29
|
|
|
$
|
0.57
|
|
NON-GAAP FINANCIAL MEASURES
This press release uses Non-GAAP financial measures to present
the financial performance of the Company. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported operating results or cash flow from
operations or any other measure of performance as determined in
accordance with GAAP. We believe the Non-GAAP results are
useful to investors because such results help investors compare our
results to previous periods and provide insights into underlying
trends in our business. The Company's GAAP financial statements
accompany this release. Reconciliations of the Non-GAAP
financial measures to GAAP measures are provided in this press
release.
The Non-GAAP financial measures include "Adjusted Net
Income", "Adjusted Basic Earnings Per Share", "Adjusted Diluted
Earnings Per Share", "Consolidated EBITDA", "Adjusted Consolidated
EBITDA", "Adjusted Free Cash Flow", "Funeral, Cemetery and
Financial EBITDA", "Total Field EBITDA" and "Special Items"
in this press release. These financial measurements are
defined as similar GAAP items adjusted for Special Items and are
reconciled to GAAP in this press release. In addition, the
Company's presentation of these measures may not be comparable to
similarly titled measures in other companies' reports. The
definitions used by the Company for our internal management
purposes and in this press release are as follows:
- Adjusted Net Income is defined as net income from continuing
operations plus adjustments for special items and other
non-recurring expenses or credits.
- Consolidated EBITDA is defined as net income from continuing
operations before income taxes, interest expenses, non-cash stock
compensation, depreciation and amortization, and interest income
and other, net.
- Adjusted Consolidated EBITDA is defined as Consolidated EBITDA
plus adjustments for special items and non-recurring expenses or
credits.
- Adjusted Free Cash Flow is defined as net cash provided by
operations, adjusted by special items as deemed necessary, less
cash for maintenance capital expenditures.
- Funeral Field EBITDA is defined as Funeral Gross Profit less
depreciation and amortization, regional and unallocated overhead
expenses and net financial income.
- Cemetery Field EBITDA is defined as Cemetery Gross Profit less
depreciation and amortization, regional and unallocated overhead
expenses and net financial income.
- Financial EBITDA is defined as Financial Revenue less Financial
Expenses.
- Total Field EBITDA is defined as Gross Profit less depreciation
and amortization and regional and unallocated overhead
expenses.
- Special Items is defined as charges or credits that are deemed
as Non-GAAP items such as withdrawable trust income, acquisition
and divestiture expenses, severance costs, loss on early retirement
of debt and other costs, discrete tax items and other non-recurring
amounts. Special items are taxed at the federal statutory rate of
34 percent for the three and six months ended June 30, 2014 and 2015, except for the accretion
of the discount on Convertible Notes as this is a non-tax
deductible item and the tax adjustment from prior period.
- Adjusted Basic Earnings Per Share is defined as GAAP Basic
Earnings Per Share, adjusted for special items.
- Adjusted Diluted Earnings Per Share is defined as GAAP Diluted
Earnings Per Share, adjusted for special items.
Certain state regulations allow the withdrawal of financial
income from preneed cemetery merchandise and services trust funds
when realized in the trust. Under current generally accepted
accounting principles, trust income is only recognized in the
Company's financial statements at a later time when the related
merchandise and services sold on the preneed contract is delivered
at the time of death. Carriage has provided financial income
from the trusts, termed "Withdrawable Trust Income" and reported on
a Non-GAAP proforma basis within Special Items in the accompanying
Operating and Financial Trend Report (a Non-GAAP Unaudited Income
Statement), to reflect the current cash results. Management
believes that the Withdrawable Trust Income provides useful
information to investors because it presents income and cash flow
when earned by the trusts.
Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of certain financial
measures that are not GAAP measures. The Non-GAAP financial
measures are presented for additional information and are
reconciled to their most comparable GAAP measures below.
Reconciliation
of Net Income from continuing operations to Adjusted Net Income for
the three and six months ended June 30, 2014 and 2015 (in
thousands):
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Net Income from
continuing operations
|
$
|
3,883
|
|
|
$
|
4,557
|
|
|
$
|
5,515
|
|
|
$
|
10,975
|
|
Special items, net of
tax except for **
|
|
|
|
|
|
|
|
Withdrawable Trust
Income
|
$
|
366
|
|
|
$
|
230
|
|
|
$
|
515
|
|
|
$
|
230
|
|
Acquisition and
Divestiture Expenses
|
168
|
|
|
19
|
|
|
659
|
|
|
354
|
|
Severance
Costs
|
268
|
|
|
323
|
|
|
477
|
|
|
407
|
|
Consulting
Fees
|
6
|
|
|
445
|
|
|
165
|
|
|
521
|
|
Other Incentive
Compensation
|
—
|
|
|
—
|
|
|
660
|
|
|
—
|
|
Accretion of Discount
on Convertible Subordinated Notes **
|
694
|
|
|
851
|
|
|
865
|
|
|
1,678
|
|
Costs Related to the
Credit Facility
|
688
|
|
|
—
|
|
|
688
|
|
|
—
|
|
Loss on Redemption of
Convertible Junior Subordinated Debentures
|
—
|
|
|
—
|
|
|
2,493
|
|
|
—
|
|
Gain on Asset
Purchase
|
—
|
|
|
—
|
|
|
(746)
|
|
|
—
|
|
Other Special
Items
|
—
|
|
|
—
|
|
|
503
|
|
|
98
|
|
Tax Adjustment from
Prior Period **
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Total Special items
affecting net income
|
$
|
2,190
|
|
|
$
|
1,868
|
|
|
$
|
6,279
|
|
|
$
|
3,429
|
|
Adjusted Net
Income
|
$
|
6,073
|
|
|
$
|
6,425
|
|
|
$
|
11,794
|
|
|
$
|
14,404
|
|
Reconciliation
of Net Income from continuing operations to Consolidated EBITDA and
Adjusted Consolidated EBITDA for the three and six months ended
June 30, 2014 and 2015 (in thousands):
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Net income from
continuing operations
|
$
|
3,883
|
|
|
$
|
4,557
|
|
|
$
|
5,515
|
|
|
$
|
10,975
|
|
Net provision for
income taxes
|
2,483
|
|
|
3,103
|
|
|
3,526
|
|
|
7,708
|
|
Pre-tax earnings from
continuing operations
|
$
|
6,366
|
|
|
$
|
7,660
|
|
|
$
|
9,041
|
|
|
$
|
18,683
|
|
Depreciation &
amortization
|
3,029
|
|
|
3,365
|
|
|
5,785
|
|
|
6,687
|
|
Non-cash stock
compensation
|
1,263
|
|
|
1,287
|
|
|
1,993
|
|
|
2,376
|
|
Interest
expense
|
2,691
|
|
|
2,492
|
|
|
5,536
|
|
|
5,042
|
|
Accretion of discount
on convertible subordinated notes
|
694
|
|
|
851
|
|
|
865
|
|
|
1,678
|
|
Loss on early
extinguishment of debt
|
1,042
|
|
|
—
|
|
|
1,042
|
|
|
—
|
|
Loss on redemption of
convertible junior subordinated debentures
|
—
|
|
|
—
|
|
|
3,779
|
|
|
—
|
|
Other, net
|
(5)
|
|
|
(13)
|
|
|
(373)
|
|
|
106
|
|
Consolidated
EBITDA
|
$
|
15,080
|
|
|
$
|
15,642
|
|
|
$
|
27,668
|
|
|
$
|
34,572
|
|
Adjusted
For:
|
|
|
|
|
|
|
|
Withdrawable Trust
Income
|
$
|
554
|
|
|
$
|
348
|
|
|
$
|
779
|
|
|
$
|
348
|
|
Acquisition and
Divestiture Expenses
|
255
|
|
|
29
|
|
|
999
|
|
|
537
|
|
Severance
Costs
|
406
|
|
|
489
|
|
|
723
|
|
|
616
|
|
Consulting
Fees
|
9
|
|
|
673
|
|
|
250
|
|
|
788
|
|
Other Incentive
Compensation
|
—
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
Adjusted Consolidated
EBITDA
|
$
|
16,304
|
|
|
$
|
17,181
|
|
|
$
|
31,419
|
|
|
$
|
36,861
|
|
Revenue
|
$
|
56,504
|
|
|
$
|
59,261
|
|
|
$
|
112,157
|
|
|
$
|
122,514
|
|
|
|
|
|
|
|
|
|
Adjusted Consolidated
EBITDA Margin
|
28.9
|
%
|
29.0
|
|
%
|
28.0
|
%
|
|
30.1
|
%
|
Reconciliation
of funeral and cemetery income before income taxes to Field EBITDA
for the three and six months ended June 30, 2014 and 2015 (in
thousands):
|
|
Funeral Field
EBITDA
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Gross Profit
(GAAP)
|
$
|
13,214
|
|
|
$
|
13,644
|
|
|
$
|
27,735
|
|
|
$
|
31,640
|
|
Depreciation &
amortization
|
1,683
|
|
|
1,876
|
|
|
3,297
|
|
|
3,665
|
|
Regional &
unallocated costs
|
1,202
|
|
|
1,718
|
|
|
3,149
|
|
|
3,655
|
|
Net financial
income
|
(2,079)
|
|
|
(1,925)
|
|
|
(4,305)
|
|
|
(4,196)
|
|
Funeral Field
EBITDA
|
$
|
14,020
|
|
|
$
|
15,313
|
|
|
$
|
29,876
|
|
|
$
|
34,764
|
|
|
|
|
|
Cemetery Field
EBITDA
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Gross Profit
(GAAP)
|
$
|
4,775
|
|
|
$
|
4,604
|
|
|
$
|
8,270
|
|
|
$
|
8,817
|
|
Depreciation &
amortization
|
992
|
|
|
1,117
|
|
|
1,793
|
|
|
2,130
|
|
Regional &
unallocated costs
|
491
|
|
|
593
|
|
|
924
|
|
|
1,181
|
|
Net financial
income
|
(2,556)
|
|
|
(2,489)
|
|
|
(4,454)
|
|
|
(4,453)
|
|
Cemetery Field
EBITDA
|
$
|
3,702
|
|
|
$
|
3,825
|
|
|
$
|
6,533
|
|
|
$
|
7,675
|
|
|
|
|
|
Total Field
EBITDA
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
Funeral Field
EBITDA
|
$
|
14,020
|
|
|
$
|
15,313
|
|
|
$
|
29,876
|
|
|
$
|
34,764
|
|
Cemetery Field
EBITDA
|
3,702
|
|
|
3,825
|
|
|
6,533
|
|
|
7,675
|
|
Funeral Financial
EBITDA
|
2,079
|
|
|
1,925
|
|
|
4,305
|
|
|
4,196
|
|
Cemetery Financial
EBITDA
|
2,556
|
|
|
2,489
|
|
|
4,454
|
|
|
4,453
|
|
Total Field
EBITDA
|
$
|
22,357
|
|
|
$
|
23,552
|
|
|
$
|
45,168
|
|
|
$
|
51,088
|
|
Reconciliation
of GAAP basic earnings per share to Adjusted basic earnings per
share for the three and six months ended June 30, 2014 and
2015:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
GAAP basic earnings
per share from continuing operations
|
$
|
0.21
|
|
|
$
|
0.25
|
|
|
$
|
0.30
|
|
|
$
|
0.59
|
|
Special items
affecting net income
|
0.12
|
|
|
0.10
|
|
|
0.34
|
|
|
0.19
|
|
Adjusted basic
earnings per share
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
0.64
|
|
|
$
|
0.78
|
|
|
Reconciliation
of GAAP diluted earnings per share to Adjusted diluted earnings per
share for the three and six months ended June 30, 2014 and
2015:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
GAAP diluted earnings
per share from continuing operations
|
$
|
0.21
|
|
|
$
|
0.24
|
|
|
$
|
0.30
|
|
|
$
|
0.57
|
|
Special items
affecting net income
|
0.12
|
|
|
0.10
|
|
|
0.34
|
|
|
0.19
|
|
Adjusted diluted
earnings per share
|
$
|
0.33
|
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
0.76
|
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
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. In addition to
historical information, this Press Release contains certain
statements and information that may constitute forward-looking
statements within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements include
statements regarding the consummation of the SCI acquisition, any
projections of earnings, revenues, asset sales, cash flow, debt
levels or other financial items; any statements of the plans,
strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; any
statements of belief; and any statements of assumptions underlying
any of the foregoing and are based on our current expectations and
beliefs concerning future developments and their potential effect
on us. The words "may", "will", "estimate", "intend", "believe",
"expect", "project", "forecast", "foresee", "should", "would",
"could", "plan", "anticipate" and other similar words or
expressions are intended to identify forward-looking statements,
which are generally not historical in nature. While management
believes that these forward-looking statements are reasonable as
and when made, there can be no assurance that future developments
affecting us will be those that we anticipate. All comments
concerning our expectations for future revenues and operating
results are based on our forecasts for our existing operations and
do not include the potential impact of any future acquisitions. Our
forward-looking statements involve significant risks and
uncertainties (some of which are beyond our control) and
assumptions that could cause actual results to differ materially
from our historical experience and our present expectations or
projections. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to, those summarized below:
- the execution of our Standards Operating, 4E leadership and
Standard Acquisition Models;
- changes in the number of deaths in our markets;
- changes in consumer preferences;
- ability to find and retain skilled personnel;
- the effects of competition;
- the investment performance of our funeral and cemetery trust
funds;
- fluctuations in interest rates;
- our ability to obtain debt or equity financing on satisfactory
terms to fund additional acquisitions, expansion projects, working
capital requirements and the repayment or refinancing of
indebtedness;
- death benefits related to preneed funeral contracts funded
through life insurance contracts;
- our ability to generate preneed sales;
- the financial condition of third-party insurance companies that
fund our preneed funeral contracts;
- increased or unanticipated costs, such as insurance or
taxes;
- effects of the application of applicable laws and regulations,
including changes in such regulations or the interpretation
thereof;
- consolidation of the deathcare industry; and
- other factors and uncertainties inherent in the deathcare
industry.
For additional information regarding known material factors that
could cause our actual results to differ from our projected
results, please see "Risk Factors" in our most recent Annual Report
on Form 10-K. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise. A copy of
the Company's Form 10-K, other Carriage Services information and
news releases are available at www.carriageservices.com.
This press release includes the use of certain financial
measures that are not GAAP measures. The Non-GAAP financial
measures are presented for additional information and are
reconciled to their most comparable GAAP measures in the tables
presented above.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/carriage-services-announces-record-results-for-second-quarter-2015-and-raises-rolling-four-quarter-outlook-300123542.html
SOURCE Carriage Services, Inc.