Carriage Services Announces Record 2015 Annual Results, Record Field Operating Results And Record Managing Partner Bonuses, Raises Rolling Four Quarter Outlook
Year Ended
- Total Revenue of
$242.5 million , an increase of 7.2%; - Adjusted Consolidated EBITDA of
$71.1 million , an increase of 15.4%; - Adjusted Consolidated EBITDA Margin up 200 basis points to 29.3%;
- Adjusted Diluted Earnings Per Share of
$1.48 , an increase of 10.4%; - Adjusted Net Profit Margin up 30 basis points to 11.3%; and
- Adjusted Free Cash Flow of
$43.7 million , an increase of 13.0%.
Three Months Ended
- Total Revenue of
$61.6 million , an increase of 3.7%; - Adjusted Consolidated EBITDA of
$17.8 million , an increase of 4.6%; - Adjusted Consolidated EBITDA Margin up 30 basis points to 29.0%;
- Adjusted Diluted Earnings Per Share of
$0.39 , an increase of 2.6%; - Adjusted Net Profit Margin down 60 basis points to 11.1%; and
- Adjusted Free Cash Flow of
$4.9 million , a decrease of 33.4%.
Our cash earning power per dollar of revenue, which we define as Adjusted Consolidated EBITDA Margin, increased dramatically by 200 basis points to 29.3%, primarily due to a record Field EBITDA performance which increased 12.4% or
We believe that the achievement of an Adjusted Consolidated EBITDA Margin of 29.3% in 2015 is a level that has never been reached in the over fifty year history of deathcare consolidation by any mature, public company using current accounting methodology, confirming our conviction that Carriage has evolved over the last twelve years into a superior consolidation, operating and value creation platform for the funeral and cemetery industry.
Our record 2015 performance reflected outstanding execution of our three models, particularly our Standards Operating Model for funeral homes and cemeteries, made possible by high performance 4E Leaders and employees in our portfolio of businesses and home office support teams. The outstanding execution of our operating models produced record financial performance which was fueled by substantial contributions from both the
Our Adjusted Free Cash Flow of $43.7 million for 2015 rose 13.0% over 2014 and was equivalent to
Based on the acceleration of our earnings and Adjusted Free Cash Flow growth in 2015 and a materially lower share count for 2016, we are raising our Rolling Four Quarter Outlook of Adjusted Diluted Earnings Per Share by
Because of the historically high Field EBITDA performance in the fourth quarter (up
The key driver under our unique decentralized high performance culture framework and Being The Best / Good To Great Managing Partner incentive programs is full year Being The Best Standards Achievement, determined in
We ended 2015 with nine members on our Operations and Strategic Growth Leadership Team (OSGLT) compared to fifteen as recently as
In November, we announced the acquisition of
A week ago we finalized our 7th amendment to our bank Credit Facility which resulted in reducing our LIBOR based variable interest rate 37.5 basis points, extending maturity another 5 years to 2021 which coincides with the maturity of our Convertible Notes, resetting the term loan to
As we entered 2012, we established extraordinarily challenging goals over the five year period ending with 2016, consistent with the five year theme of taking Carriage from a Good company in 2012 to one considered Great by 2016 based on total equity market value growth and total shareholder returns over time, which including dividends has been 342% over the last four years ending
Carriage Good To Great Journey | |||||||||||||||||||||||
Years Ending |
|||||||||||||||||||||||
(in Millions Except Per Share and Percentage Amounts) |
CAGR | ||||||||||||||||||||||
2011 |
2012 |
2013 |
2014 |
2015 |
% | ||||||||||||||||||
Total Revenue |
$ |
182.3 |
$ |
198.2 |
$ |
213.1 |
$ |
226.1 |
$ |
242.5 |
7.4 |
% | |||||||||||
Adjusted Consolidated EBITDA |
$ |
48.6 |
$ |
52.6 |
$ |
56.0 |
$ |
61.7 |
$ |
71.1 |
10.0 |
% | |||||||||||
Adjusted Consolidated EBITDA Margin |
26.6 |
% |
26.5 |
% |
26.3 |
% |
27.3 |
% |
29.3 |
% |
2.4 |
% | |||||||||||
Adjusted Diluted Earnings Per Share |
$ |
0.64 |
$ |
0.80 |
$ |
0.98 |
$ 1.24(1) |
$ |
1.48 |
23.3 |
% | ||||||||||||
Adjusted Free Cash Flow |
$ |
29.1 |
$ |
22.9 |
$ |
36.2 |
$ |
38.6 |
$ |
43.7 |
10.7 |
% | |||||||||||
Share Price at |
$ |
5.60 |
$ |
11.87 |
$ |
19.53 |
$ |
20.95 |
$ |
24.10 |
44.0 |
% | |||||||||||
(1) Adjusted for one time tax benefit of |
Our yearly theme for 2016, "
Become recognized by institutional investors and those in our industry as a superior Consolidation, Operating and Value Creation Investment Platform by consistently allocating our precious capital, especially our growing Free Cash Flow, with disciplined savviness and flexibility among various investment options so as to maximize the intrinsic value of Carriage per share over the next ten years.
FIELD OPERATIONS
For the Year Ended
- Total Field Revenue increased 7.2% to
$242.5 million ; - Total Field EBITDA increased 12.4% to
$101.5 million ; - Total Field EBITDA Margin increased 190 basis points to 41.9%;
- Total Funeral Operating Revenue increased 7.4% to
$176.4 million ; - Same Store Funeral Revenue increased 3.3% with same store volume increasing 0.9%;
- Acquisition Funeral Revenue increased 21.4% with acquisition volume increasing 15.6%;
- Total Funeral Field EBITDA increased 13.0% to
$68.3 million ; - Total Funeral Field EBITDA Margin increased 190 basis points to 38.7%;
- Total Cemetery Operating Revenue increased 8.9% to
$46.7 million ; - Cemetery preneed property sale contracts increased 9.6% to 8,121;
- Preneed property revenue recognized increased 13.3% and At-need revenue increased 4.2%;
- Total Cemetery Field EBITDA increased 24.1% to
$15.1 million ; - Total Cemetery Field EBITDA Margin increased 390 basis points to 32.4%;
- Total Financial Revenue increased 2.4% to
$19.5 million ; - Funeral Financial Revenue remained flat at
$9.5 million ; - Cemetery Financial Revenue increased 5.2% to
$10.0 million ; - Total Financial EBITDA increased 2.3% to
$18.1 million ; - Total Financial EBITDA Margin decreased 10 basis points to 92.9%.
Three Months Ended
- Total Field Revenue increased 3.7% to
$61.6 million ; - Total Field EBITDA increased 10.6% to
$27.2 million ; - Total Field EBITDA Margin increased 280 basis points to 44.1%;
- Total Funeral Operating Revenue increased 2.8% to
$44.7 million ; - Same Store Funeral Revenue increased 2.0% with same store volume decreasing 0.4%;
- Acquisition Funeral Revenue increased 5.1% with acquisition volume decreasing 1.7%;
- Total Funeral Field EBITDA increased 8.8% to
$18.2 million ; - Total Funeral Field EBITDA Margin increased 220 basis points to 40.8%;
- Total Cemetery Operating Revenue increased 6.1% to
$11.9 million ; - Cemetery pre-need property sale contracts increased 1.7% to 1,930;
- Preneed property revenue recognized increased 8.3% and At-need revenue increased 3.2%;
- Total Cemetery Field EBITDA increased 22.8% to
$4.2 million ; - Total Cemetery Field EBITDA Margin increased 480 basis points to 35.2%;
- Total Financial Revenue increased 6.2% to
$5.0 million ; - Funeral Financial Revenue increased 3.0% to
$2.4 million ; - Cemetery Financial Revenue increased 9.4% to
$2.6 million ; - Total Financial EBITDA increased 7.9% to
$4.7 million ; - Total Financial EBITDA Margin increased 140 basis points to 93.6%.
ADJUSTED FREE CASH FLOW
We produced Adjusted Free Cash Flow from operations for the three months and years ended
Three Months Ended |
Years Ended | ||||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Cash flow provided by operations |
$ |
8,915 |
$ |
6,916 |
$ |
36,565 |
$ |
49,904 |
|||||||
Cash used for maintenance capital expenditures |
(1,904) |
(2,795) |
(7,212) |
(9,735) |
|||||||||||
Free Cash Flow |
$ |
7,011 |
$ |
4,121 |
$ |
29,353 |
$ |
40,169 |
|||||||
Plus: Incremental Special Items: |
|||||||||||||||
Adjustment for tax benefit from Good To Great stock awards |
— |
— |
4,815 |
— |
|||||||||||
Acquisition and divestiture expenses |
74 |
37 |
1,158 |
614 |
|||||||||||
Severance costs |
153 |
151 |
1,056 |
959 |
|||||||||||
Consulting fees |
62 |
555 |
419 |
1,913 |
|||||||||||
Other incentive compensation |
— |
— |
1,000 |
— |
|||||||||||
Premium paid for the redemption of convertible junior subordinated debentures |
— |
— |
847 |
— |
|||||||||||
Adjusted Free Cash Flow |
$ |
7,300 |
$ |
4,864 |
$ |
38,648 |
$ |
43,655 |
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, and excludes size and timing of acquisitions for the Rolling Four Quarter Outlook period ending
ROLLING FOUR QUARTER OUTLOOK - Period Ending
Range (in millions, except per share amounts) | ||
Revenues |
| |
Adjusted Consolidated EBITDA |
| |
Adjusted Net Income |
| |
Adjusted Diluted Earnings Per Share(1) |
|
Factors affecting our analysis include, among others, 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, Withdrawable Trust Income, market volatility and changes in
(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 additional share repurchases or a stock price increase and EPS dilution calculations related to our convertible subordinated notes and outstanding and exercisable stock options. |
TRUST FUND PERFORMANCE
For the year ended
This underperformance led to approximately
The long term average life of our preneed funeral and cemetery trust contracts, 11 and 15 years respectively, along with our repositioning strategy will mitigate the negative impact to our financial revenue in future years. Based on our analysis, even after this repositioning strategy, our trust funds will remain in an overfunded position and the average revenue per preneed trust contract will still be higher than our current averages. This is due to approximately
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 |
|
S&P 500 |
High Yield |
70/30 index | |||
1 year ended |
(3.1)% |
(2.7)% |
1.4% |
(4.7)% |
(2.9)% | ||
2 years ended |
5.0% |
5.0% |
15.2% |
(2.3)% |
3.0% | ||
3 years ended |
20.0% |
19.4% |
52.5% |
5.0% |
19.3% | ||
4 years ended |
44.4% |
39.9% |
76.9% |
21.4% |
38.0% | ||
5 years ended |
40.2% |
37.2% |
80.6% |
26.7% |
42.8% |
(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 | |||||||||||||
Discretionary |
Total | ||||||||||||
Asset Class |
MV |
% |
MV |
% | |||||||||
Cash |
$ |
22,352 |
12 |
% |
$ |
38,431 |
18 |
% | |||||
Equities |
47,235 |
26 |
% |
49,820 |
24 |
% | |||||||
Fixed Income(1) |
108,135 |
60 |
% |
119,157 |
56 |
% | |||||||
Other/Insurance |
3,420 |
2 |
% |
3,612 |
2 |
% | |||||||
Total Portfolios |
$ |
181,142 |
100 |
% |
$ |
211,020 |
100 |
% |
(1) |
|
Industry/Sector |
% | |
Communications |
9.5% | |
Consumer |
11.1% | |
Energy |
7.1% | |
Financial |
48.3% | |
Government |
1.0% | |
Industrial |
0.8% | |
Media |
10.5% | |
Technology |
3.2% | |
Utilities |
8.5% | |
Total |
100% |
CONFERENCE CALL AND INVESTOR RELATIONS CONTACT
| |||||||||||||||||
OPERATING AND FINANCIAL TREND REPORT | |||||||||||||||||
FROM CONTINUING OPERATIONS (IN THOUSANDS - EXCEPT PER SHARE AMOUNTS) | |||||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||||
2014 |
2015 |
% Change |
2014 |
2015 |
% Change | ||||||||||||
Same Store Contracts |
|||||||||||||||||
Atneed Contracts |
5,056 |
5,082 |
0.5 |
% |
20,046 |
20,223 |
0.9 |
% | |||||||||
Preneed Contracts |
1,287 |
1,238 |
-3.8 |
% |
4,994 |
5,047 |
1.1 |
% | |||||||||
Total Same Store Funeral Contracts |
6,343 |
6,320 |
-0.4 |
% |
25,040 |
25,270 |
0.9 |
% | |||||||||
Acquisition Contracts |
|||||||||||||||||
Atneed Contracts |
1,601 |
1,566 |
-2.2 |
% |
5,347 |
6,076 |
13.6 |
% | |||||||||
Preneed Contracts |
293 |
296 |
1.0 |
% |
1,015 |
1,281 |
26.2 |
% | |||||||||
Total Acquisition Funeral Contracts |
1,894 |
1,862 |
-1.7 |
% |
6,362 |
7,357 |
15.6 |
% | |||||||||
Total Funeral Contracts |
8,237 |
8,182 |
-0.7 |
% |
31,402 |
32,627 |
3.9 |
% | |||||||||
Funeral Operating Revenue |
|||||||||||||||||
Same Store Revenue |
$ |
32,623 |
$ |
33,278 |
2.0 |
% |
$ |
127,487 |
$ |
131,740 |
3.3 |
% | |||||
Acquisition Revenue |
10,837 |
11,393 |
5.1 |
% |
36,765 |
44,628 |
21.4 |
% | |||||||||
Total Funeral Operating Revenue |
$ |
43,460 |
$ |
44,671 |
2.8 |
% |
$ |
164,252 |
$ |
176,368 |
7.4 |
% | |||||
Cemetery Operating Revenue |
|||||||||||||||||
Same Store Revenue |
$ |
10,624 |
$ |
11,076 |
4.3 |
% |
$ |
41,257 |
$ |
43,336 |
5.0 |
% | |||||
Acquisition Revenue |
565 |
795 |
40.7 |
% |
1,599 |
3,321 |
107.7 |
% | |||||||||
Total Cemetery Operating Revenue |
$ |
11,189 |
$ |
11,871 |
6.1 |
% |
$ |
42,856 |
$ |
46,657 |
8.9 |
% | |||||
Financial Revenue |
|||||||||||||||||
Preneed Funeral Commission Income |
$ |
400 |
$ |
413 |
3.3 |
% |
$ |
2,036 |
$ |
1,484 |
-27.1 |
% | |||||
Preneed Funeral Trust Earnings |
1,949 |
2,007 |
3.0 |
% |
7,447 |
7,966 |
7.0 |
% | |||||||||
Cemetery Trust Earnings |
2,051 |
2,238 |
9.1 |
% |
8,123 |
8,440 |
3.9 |
% | |||||||||
Preneed Cemetery Finance Charges |
370 |
410 |
10.8 |
% |
1,410 |
1,587 |
12.6 |
% | |||||||||
Total Financial Revenue |
$ |
4,770 |
$ |
5,068 |
6.2 |
% |
$ |
19,016 |
$ |
19,477 |
2.4 |
% | |||||
Total Revenue |
$ |
59,419 |
$ |
61,610 |
3.7 |
% |
$ |
226,124 |
$ |
242,502 |
7.2 |
% | |||||
Field EBITDA |
|||||||||||||||||
Same Store Funeral Field EBITDA |
$ |
12,442 |
$ |
13,513 |
8.6 |
% |
$ |
46,707 |
$ |
50,563 |
8.3 |
% | |||||
Same Store Funeral Field EBITDA Margin |
38.1 |
% |
40.6 |
% |
250 bp |
36.6 |
% |
38.4 |
% |
180 bp |
|||||||
Acquisition Funeral Field EBITDA |
4,319 |
4,727 |
9.4 |
% |
13,767 |
17,750 |
28.9 |
% | |||||||||
Acquisition Funeral Field EBITDA Margin |
39.9 |
% |
41.5 |
% |
160 bp |
37.4 |
% |
39.8 |
% |
240 bp |
|||||||
Total Funeral Field EBITDA |
$ |
16,761 |
$ |
18,240 |
8.8 |
% |
$ |
60,474 |
$ |
68,313 |
13.0 |
% | |||||
Total Funeral Field EBITDA Margin |
38.6 |
% |
40.8 |
% |
220 bp |
36.8 |
% |
38.7 |
% |
190 bp |
|||||||
Same Store Cemetery Field EBITDA |
$ |
3,290 |
$ |
3,892 |
18.3 |
% |
$ |
11,845 |
$ |
14,045 |
18.6 |
% | |||||
Same Store Cemetery Field EBITDA Margin |
31.0 |
% |
35.1 |
% |
410 bp |
28.7 |
% |
32.4 |
% |
370 bp |
|||||||
Acquisition Cemetery Field EBITDA |
112 |
285 |
154.5 |
% |
351 |
1,088 |
210.0 |
% | |||||||||
Acquisition Cemetery Field EBITDA Margin |
19.8 |
% |
35.8 |
% |
1,600 bp |
22.0 |
% |
32.8 |
% |
1,080 bp |
|||||||
Total Cemetery Field EBITDA |
$ |
3,402 |
$ |
4,177 |
22.8 |
% |
$ |
12,196 |
$ |
15,133 |
24.1 |
% | |||||
Total Cemetery Field EBITDA Margin |
30.4 |
% |
35.2 |
% |
480 bp |
28.5 |
% |
32.4 |
% |
390 bp |
|||||||
Funeral Financial EBITDA |
$ |
2,041 |
$ |
2,161 |
5.9 |
% |
$ |
8,348 |
$ |
8,339 |
-0.1% |
||||||
Cemetery Financial EBITDA |
2,358 |
2,585 |
9.6 |
% |
9,341 |
9,754 |
4.4 |
% | |||||||||
Total Financial EBITDA |
$ |
4,399 |
$ |
4,746 |
7.9 |
% |
$ |
17,689 |
$ |
18,093 |
2.3 |
% | |||||
Total Financial EBITDA Margin |
92.2 |
% |
93.6 |
% |
140 bp |
93.0 |
% |
92.9 |
% |
-10 bp |
|||||||
Total Field EBITDA |
$ |
24,562 |
$ |
27,163 |
10.6 |
% |
$ |
90,359 |
$ |
101,539 |
12.4 |
% | |||||
Total Field EBITDA Margin |
41.3 |
% |
44.1 |
% |
280 bp |
40.0 |
% |
41.9 |
% |
190 bp |
|||||||
OPERATING AND FINANCIAL TREND REPORT | |||||||||||||||||
FROM CONTINUING OPERATIONS (IN THOUSANDS - EXCEPT PER SHARE AMOUNTS) | |||||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||||
2014 |
2015 |
% Change |
2014 |
2015 |
% Change | ||||||||||||
Overhead |
|||||||||||||||||
Total Variable Overhead |
$ |
2,425 |
$ |
4,109 |
69.4 |
% |
$ |
10,764 |
$ |
10,878 |
1.1 |
% | |||||
Total Regional Fixed Overhead |
758 |
886 |
16.9 |
% |
3,136 |
3,435 |
9.5 |
% | |||||||||
Total Corporate Fixed Overhead |
4,902 |
5,081 |
3.7 |
% |
20,227 |
20,354 |
0.6 |
% | |||||||||
Total Overhead |
$ |
8,085 |
$ |
10,076 |
24.6 |
% |
$ |
34,127 |
$ |
34,667 |
1.6 |
% | |||||
Overhead as a percent of sales |
13.6 |
% |
16.4 |
% |
280 bp |
15.1 |
% |
14.3 |
% |
-80 bp |
|||||||
Consolidated EBITDA |
$ |
16,477 |
$ |
17,087 |
3.7 |
% |
$ |
56,232 |
$ |
66,872 |
18.9 |
% | |||||
Consolidated EBITDA Margin |
27.7 |
% |
27.7 |
% |
0 bp |
24.9 |
% |
27.6 |
% |
270 bp |
|||||||
Other Expenses and Interest |
|||||||||||||||||
Depreciation & Amortization |
$ |
3,142 |
$ |
3,656 |
16.4 |
% |
$ |
11,923 |
$ |
13,780 |
15.6 |
% | |||||
Non-Cash Stock Compensation |
920 |
996 |
8.3 |
% |
3,832 |
4,444 |
16.0 |
% | |||||||||
Interest Expense |
2,593 |
2,888 |
11.4 |
% |
10,308 |
10,559 |
2.4 |
% | |||||||||
Accretion of Discount on Convertible Subordinated Notes |
805 |
900 |
2,452 |
3,454 |
|||||||||||||
Loss on Early Extinguishment of Debt |
— |
— |
1,042 |
— |
|||||||||||||
Loss on Redemption of Convertible Junior Subordinated Debentures |
— |
— |
3,779 |
— |
|||||||||||||
Other, Net |
571 |
(9) |
195 |
45 |
|||||||||||||
Pretax Income |
$ |
8,446 |
$ |
8,656 |
2.5 |
% |
$ |
22,701 |
$ |
34,590 |
52.4 |
% | |||||
Net Tax Provision |
3,079 |
3,222 |
7,255 |
13,737 |
|||||||||||||
GAAP Net Income |
$ |
5,367 |
$ |
5,434 |
1.2 |
% |
$ |
15,446 |
$ |
20,853 |
35.0 |
% | |||||
Special Items, Net of tax except for** |
|||||||||||||||||
Withdrawable Trust Income |
$ |
198 |
$ |
— |
$ |
1,181 |
$ |
366 |
|||||||||
Acquisition and Divestiture Expenses |
49 |
24 |
764 |
405 |
|||||||||||||
Severance Costs |
101 |
100 |
697 |
633 |
|||||||||||||
Consulting Fees |
41 |
367 |
277 |
1,265 |
|||||||||||||
Other Incentive Compensation |
— |
— |
660 |
— |
|||||||||||||
Accretion on Convertible Subordinated Notes** |
805 |
900 |
2,452 |
3,454 |
|||||||||||||
Costs Related to Credit Facility |
— |
— |
688 |
— |
|||||||||||||
Loss on Redemption of Convertible Junior Subordinated Debentures |
— |
— |
2,493 |
— |
|||||||||||||
Loss (Gain) on Asset Purchase/Sale |
379 |
— |
(367) |
— |
|||||||||||||
Other Special Items |
— |
14 |
503 |
244 |
|||||||||||||
Tax Adjustment from Prior Period** |
— |
— |
— |
141 |
|||||||||||||
Sum of Special Items, Net of tax |
$ |
1,573 |
$ |
1,405 |
-10.7 |
% |
$ |
9,348 |
$ |
6,508 |
-30.4 |
% | |||||
Adjusted Net Income |
$ |
6,940 |
$ |
6,839 |
-1.5 |
% |
$ |
24,794 |
$ |
27,361 |
10.4 |
% | |||||
Adjusted Net Profit Margin |
11.7 |
% |
11.1 |
% |
-60 bp |
11.0 |
% |
11.3 |
% |
30 bp |
|||||||
Adjusted Basic Earnings Per Share |
$ |
0.38 |
$ |
0.40 |
5.3 |
% |
$ |
1.35 |
$ |
1.52 |
12.6 |
% | |||||
Adjusted Diluted Earnings Per Share |
$ |
0.38 |
$ |
0.39 |
2.6 |
% |
$ |
1.34 |
$ |
1.48 |
10.4 |
% | |||||
GAAP Basic Earnings Per Share |
$ |
0.29 |
$ |
0.32 |
10.3 |
% |
$ |
0.84 |
$ |
1.16 |
38.1 |
% | |||||
GAAP Diluted Earnings Per Share |
$ |
0.29 |
$ |
0.31 |
6.9 |
% |
$ |
0.83 |
$ |
1.12 |
34.9 |
% | |||||
Weighted Average Basic Shares Outstanding |
18,170 |
16,828 |
18,108 |
17,791 |
|||||||||||||
Weighted Average Diluted Shares Outstanding |
18,358 |
17,499 |
18,257 |
18,313 |
|||||||||||||
Reconciliation to Adjusted Consolidated EBITDA |
|||||||||||||||||
Consolidated EBITDA |
$ |
16,477 |
$ |
17,087 |
3.7 |
% |
$ |
56,232 |
$ |
66,872 |
18.9 |
% | |||||
Withdrawable Trust Income |
300 |
— |
1,788 |
555 |
|||||||||||||
Acquisition and Divestiture Expenses |
74 |
37 |
1,158 |
614 |
|||||||||||||
Severance Costs |
153 |
151 |
1,056 |
959 |
|||||||||||||
Consulting Fees |
62 |
555 |
419 |
1,913 |
|||||||||||||
Other Incentive Compensation |
— |
— |
1,000 |
— |
|||||||||||||
Other Special Items |
— |
20 |
— |
220 |
|||||||||||||
Adjusted Consolidated EBITDA |
$ |
17,066 |
$ |
17,850 |
4.6 |
% |
$ |
61,653 |
$ |
71,133 |
15.4 |
% | |||||
Adjusted Consolidated EBITDA Margin |
28.7 |
% |
29.0 |
% |
30 bp |
27.3 |
% |
29.3 |
% |
200 bp |
| |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except share data) | |||||||
| |||||||
2014 |
2015 | ||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
413 |
$ |
535 |
|||
Accounts receivable, net |
19,264 |
18,181 |
|||||
Inventories |
5,294 |
5,654 |
|||||
Prepaid expenses |
4,590 |
4,684 |
|||||
Other current assets |
7,144 |
4,707 |
|||||
Total current assets |
36,705 |
33,761 |
|||||
Preneed cemetery trust investments |
71,972 |
63,291 |
|||||
Preneed funeral trust investments |
97,607 |
85,553 |
|||||
Preneed receivables, net |
26,284 |
27,998 |
|||||
Receivables from preneed trusts |
12,809 |
13,544 |
|||||
Property, plant and equipment, net |
186,211 |
214,874 |
|||||
Cemetery property |
75,564 |
75,597 |
|||||
|
257,442 |
264,416 |
|||||
Deferred charges and other non-current assets |
14,264 |
15,192 |
|||||
Cemetery perpetual care trust investments |
48,670 |
43,127 |
|||||
Total assets |
$ |
827,528 |
$ |
837,353 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Current portion of long-term debt and capital lease obligations |
$ |
9,838 |
$ |
12,236 |
|||
Accounts payable |
6,472 |
7,917 |
|||||
Other liabilities |
1,437 |
524 |
|||||
Accrued liabilities |
15,203 |
16,541 |
|||||
Total current liabilities |
32,950 |
37,218 |
|||||
Long-term debt, net of current portion |
111,887 |
103,854 |
|||||
Revolving credit facility |
40,500 |
92,600 |
|||||
Convertible subordinated notes due 2021 |
114,542 |
117,996 |
|||||
Obligations under capital leases, net of current portion |
3,098 |
2,875 |
|||||
Deferred preneed cemetery revenue |
56,875 |
56,721 |
|||||
Deferred preneed funeral revenue |
31,265 |
31,748 |
|||||
Deferred tax liability |
36,414 |
39,956 |
|||||
Other long-term liabilities |
2,401 |
5,531 |
|||||
Deferred preneed cemetery receipts held in trust |
71,972 |
63,291 |
|||||
Deferred preneed funeral receipts held in trust |
97,607 |
85,553 |
|||||
Care trusts' corpus |
48,142 |
42,416 |
|||||
Total liabilities |
647,653 |
679,759 |
|||||
Commitments and contingencies: |
|||||||
Stockholders' equity: |
|||||||
Common stock, |
224 |
225 |
|||||
Additional paid-in capital |
212,386 |
214,250 |
|||||
Retained earnings (deficit) |
(17,468) |
3,385 |
|||||
|
(15,267) |
(60,266) |
|||||
Total stockholders' equity |
179,875 |
157,594 |
|||||
Total liabilities and stockholders' equity |
$ |
827,528 |
$ |
837,353 |
| |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(unaudited) |
|||||||||||||||
For the Three Months |
For the Years | ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Revenues: |
|||||||||||||||
Funeral |
$ |
45,809 |
$ |
47,091 |
$ |
173,735 |
$ |
185,818 |
|||||||
Cemetery |
13,610 |
14,519 |
52,389 |
56,684 |
|||||||||||
59,419 |
61,610 |
226,124 |
242,502 |
||||||||||||
Field costs and expenses: |
|||||||||||||||
Funeral |
27,007 |
26,690 |
104,913 |
109,166 |
|||||||||||
Cemetery |
7,850 |
7,757 |
30,852 |
31,797 |
|||||||||||
Depreciation and amortization |
2,801 |
3,220 |
10,545 |
12,034 |
|||||||||||
Regional and unallocated funeral and cemetery costs |
2,834 |
4,252 |
9,806 |
11,997 |
|||||||||||
Gross profit |
18,927 |
19,691 |
70,008 |
77,508 |
|||||||||||
Corporate costs and expenses: |
|||||||||||||||
General and administrative costs and expenses |
6,171 |
6,820 |
28,915 |
27,114 |
|||||||||||
Home office depreciation and amortization |
341 |
436 |
1,378 |
1,746 |
|||||||||||
6,512 |
7,256 |
30,293 |
28,860 |
||||||||||||
Operating income |
$ |
12,415 |
$ |
12,435 |
$ |
39,715 |
$ |
48,648 |
|||||||
Interest expense, net |
(2,593) |
(2,888) |
(10,308) |
(10,559) |
|||||||||||
Accretion of discount on convertible subordinated notes |
(805) |
(900) |
(2,452) |
(3,454) |
|||||||||||
Loss on early extinguishment of debt and other costs |
— |
— |
(1,042) |
— |
|||||||||||
Loss on redemption of convertible junior subordinated debentures |
— |
— |
(3,779) |
— |
|||||||||||
Other, net |
(571) |
9 |
567 |
(45) |
|||||||||||
Income from continuing operations before income taxes |
$ |
8,446 |
$ |
8,656 |
$ |
22,701 |
$ |
34,590 |
|||||||
Provision for income taxes |
(3,079) |
(3,222) |
(8,995) |
(13,737) |
|||||||||||
Income tax benefit related to uncertain tax provisions |
— |
— |
1,740 |
— |
|||||||||||
Net provision for income taxes |
(3,079) |
(3,222) |
(7,255) |
(13,737) |
|||||||||||
Net income from continuing operations |
$ |
5,367 |
$ |
5,434 |
$ |
15,446 |
$ |
20,853 |
|||||||
Net income from discontinued operations, net of tax |
11 |
— |
392 |
— |
|||||||||||
Net income available to common stockholders |
$ |
5,378 |
$ |
5,434 |
$ |
15,838 |
$ |
20,853 |
|||||||
Basic earnings per common share: |
|||||||||||||||
Continuing operations |
$ |
0.29 |
$ |
0.32 |
$ |
0.84 |
$ |
1.16 |
|||||||
Discontinued operations |
— |
— |
0.02 |
— |
|||||||||||
Basic earnings per common share |
$ |
0.29 |
$ |
0.32 |
$ |
0.86 |
$ |
1.16 |
|||||||
Diluted earnings per common share: |
|||||||||||||||
Continuing operations |
$ |
0.29 |
$ |
0.31 |
$ |
0.83 |
$ |
1.12 |
|||||||
Discontinued operations |
— |
— |
0.02 |
— |
|||||||||||
Diluted earnings per common share |
$ |
0.29 |
$ |
0.31 |
$ |
0.85 |
$ |
1.12 |
|||||||
Dividends declared per common share |
$ |
0.025 |
$ |
0.025 |
$ |
0.100 |
$ |
0.100 |
|||||||
Weighted average number of common and common equivalent shares outstanding: |
|||||||||||||||
Basic |
18,170 |
16,828 |
18,108 |
17,791 |
|||||||||||
Diluted |
18,358 |
17,499 |
18,257 |
18,313 |
| ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
For the Years Ended | ||||||||
2014 |
2015 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
15,838 |
$ |
20,853 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
11,945 |
13,780 |
||||||
Gain on sale of businesses and purchase of assets |
(2,150) |
(49) |
||||||
Impairment of goodwill |
1,180 |
— |
||||||
Loss on early extinguishment of debt and other costs |
1,042 |
— |
||||||
Amortization of deferred financing costs |
908 |
921 |
||||||
Accretion of discount on convertible subordinated notes |
2,452 |
3,454 |
||||||
Provision for losses on accounts receivable |
2,877 |
1,679 |
||||||
Stock-based compensation expense |
4,622 |
4,444 |
||||||
Deferred income tax expense |
5,295 |
3,035 |
||||||
Loss on redemption of convertible junior subordinated debentures |
2,932 |
— |
||||||
Changes in operating assets and liabilities that provided (required) cash: |
||||||||
Accounts and preneed receivables |
(4,146) |
(2,310) |
||||||
Inventories and other current assets |
(2,590) |
2,582 |
||||||
Deferred charges and other |
(165) |
150 |
||||||
Preneed funeral and cemetery trust investments |
(203) |
25,543 |
||||||
Accounts payable |
(562) |
1,445 |
||||||
Accrued and other liabilities |
(1,529) |
509 |
||||||
Deferred preneed funeral and cemetery revenue |
303 |
329 |
||||||
Deferred preneed funeral and cemetery receipts held in trust |
(1,484) |
(26,461) |
||||||
Net cash provided by operating activities |
36,565 |
49,904 |
||||||
Cash flows from investing activities: |
||||||||
Acquisitions and land for new construction |
(57,874) |
(9,725) |
||||||
Purchase of land and buildings previously leased |
(7,600) |
(6,080) |
||||||
Net proceeds from sale of businesses and other assets |
2,192 |
65 |
||||||
Capital expenditures |
(16,075) |
(29,744) |
||||||
Net cash used in investing activities |
(79,357) |
(45,484) |
||||||
Cash flows from financing activities: |
||||||||
Net borrowings on the revolving credit facility |
3,600 |
52,100 |
||||||
Net borrowings (payments) on the term loan |
3,313 |
(9,375) |
||||||
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 long-term debt and obligations under capital leases |
(840) |
(1,014) |
||||||
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 |
1,228 |
758 |
||||||
Dividends on common stock |
(1,840) |
(1,819) |
||||||
Payment of loan origination costs |
(825) |
(13) |
||||||
Excess tax benefit of equity compensation |
3,990 |
64 |
||||||
Purchase of treasury stock |
— |
(44,999) |
||||||
Net cash provided by (used in) financing activities |
41,828 |
(4,298) |
||||||
Net increase (decrease) in cash and cash equivalents |
(964) |
122 |
||||||
Cash and cash equivalents at beginning of year |
1,377 |
413 |
||||||
Cash and cash equivalents at end of year |
$ |
413 |
$ |
535 |
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, regional and unallocated overhead expenses.
- Special Items are defined as charges or credits 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 months and years ended
December 31, 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 months and years ended | |||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Net Income from continuing operations |
$ |
5,367 |
$ |
5,434 |
$ |
15,446 |
$ |
20,853 |
|||||||
Special items, net of tax except for ** |
|||||||||||||||
Withdrawable Trust Income |
$ |
198 |
$ |
— |
$ |
1,181 |
$ |
366 |
|||||||
Acquisition and Divestiture Expenses |
49 |
24 |
764 |
405 |
|||||||||||
Severance Costs |
101 |
100 |
697 |
633 |
|||||||||||
Consulting Fees |
41 |
367 |
277 |
1,265 |
|||||||||||
Other Incentive Compensation |
— |
— |
660 |
— |
|||||||||||
Accretion of Discount on Convertible Subordinated Notes ** |
805 |
900 |
2,452 |
3,454 |
|||||||||||
Costs Related to the Credit Facility |
— |
— |
688 |
— |
|||||||||||
Loss on Redemption of Convertible Junior Subordinated Debentures |
— |
— |
2,493 |
— |
|||||||||||
Loss (Gain) on Asset Purchase/Sale |
379 |
— |
(367) |
— |
|||||||||||
Other Special Items |
— |
14 |
503 |
244 |
|||||||||||
Tax Adjustment from Prior Period ** |
— |
— |
— |
141 |
|||||||||||
Total Special items affecting net income |
$ |
1,573 |
$ |
1,405 |
$ |
9,348 |
$ |
6,508 |
|||||||
Adjusted Net Income |
$ |
6,940 |
$ |
6,839 |
$ |
24,794 |
$ |
27,361 |
Reconciliation of Net Income from continuing operations to Consolidated EBITDA and Adjusted Consolidated EBITDA for the three months and years ended | |||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Net income from continuing operations |
$ |
5,367 |
$ |
5,434 |
$ |
15,446 |
$ |
20,853 |
|||||||
Net provision for income taxes |
3,079 |
3,222 |
7,255 |
13,737 |
|||||||||||
Pre-tax earnings from continuing operations |
$ |
8,446 |
$ |
8,656 |
$ |
22,701 |
$ |
34,590 |
|||||||
Interest expense |
2,593 |
2,888 |
10,308 |
10,559 |
|||||||||||
Accretion of discount on convertible subordinated notes |
805 |
900 |
2,452 |
3,454 |
|||||||||||
Loss on early extinguishment of debt and other costs |
— |
— |
1,042 |
— |
|||||||||||
Loss on redemption of convertible junior subordinated debentures |
— |
— |
3,779 |
— |
|||||||||||
Non-cash stock compensation |
920 |
996 |
3,832 |
4,444 |
|||||||||||
Depreciation & amortization |
3,142 |
3,656 |
11,923 |
13,780 |
|||||||||||
Other, net |
571 |
(9) |
195 |
45 |
|||||||||||
Consolidated EBITDA |
$ |
16,477 |
$ |
17,087 |
$ |
56,232 |
$ |
66,872 |
|||||||
Adjusted For: |
|||||||||||||||
Withdrawable Trust Income |
$ |
300 |
$ |
— |
$ |
1,788 |
$ |
555 |
|||||||
Acquisition and Divestiture Expenses |
74 |
37 |
1,158 |
614 |
|||||||||||
Severance Costs |
153 |
151 |
1,056 |
959 |
|||||||||||
Consulting Fees |
62 |
555 |
419 |
1,913 |
|||||||||||
Other Incentive Compensation |
— |
— |
1,000 |
— |
|||||||||||
Other Special Items |
— |
20 |
— |
220 |
|||||||||||
Adjusted Consolidated EBITDA |
$ |
17,066 |
$ |
17,850 |
$ |
61,653 |
$ |
71,133 |
|||||||
Revenue |
$ |
59,419 |
$ 61,610 |
$ |
226,124 |
$ |
242,502 |
||||||||
Adjusted Consolidated EBITDA Margin |
28.7 |
% |
29.0 |
% |
27.3 |
% |
29.3 |
% |
Reconciliation of funeral and cemetery income before income taxes to Field EBITDA for the three months and years ended | |||||||||||||||
Funeral Field EBITDA |
Three Months Ended |
Years Ended | |||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Gross Profit (GAAP) |
$ |
14,537 |
$ |
14,885 |
$ |
54,102 |
$ |
59,434 |
|||||||
Depreciation & amortization |
1,782 |
2,038 |
6,841 |
7,614 |
|||||||||||
Regional & unallocated costs |
2,483 |
3,478 |
7,879 |
9,604 |
|||||||||||
Net financial income |
(2,041) |
(2,161) |
(8,348) |
(8,339) |
|||||||||||
Funeral Field EBITDA |
$ |
16,761 |
$ |
18,240 |
$ |
60,474 |
$ |
68,313 |
|||||||
Cemetery Field EBITDA |
Three Months Ended |
Years Ended | |||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Gross Profit (GAAP) |
$ |
4,390 |
$ |
4,806 |
$ |
15,906 |
$ |
18,074 |
|||||||
Depreciation & amortization |
1,019 |
1,182 |
3,704 |
4,420 |
|||||||||||
Regional & unallocated costs |
351 |
774 |
1,927 |
2,393 |
|||||||||||
Net financial income |
(2,358) |
(2,585) |
(9,341) |
(9,754) |
|||||||||||
Cemetery Field EBITDA |
$ |
3,402 |
$ |
4,177 |
$ |
12,196 |
$ |
15,133 |
|||||||
Total Field EBITDA |
Three Months Ended |
Years Ended | |||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
Funeral Field EBITDA |
$ |
16,761 |
$ |
18,240 |
$ |
60,474 |
$ |
68,313 |
|||||||
Cemetery Field EBITDA |
3,402 |
4,177 |
12,196 |
15,133 |
|||||||||||
Funeral Financial EBITDA |
2,041 |
2,161 |
8,348 |
8,339 |
|||||||||||
Cemetery Financial EBITDA |
2,358 |
2,585 |
9,341 |
9,754 |
|||||||||||
Total Field EBITDA |
$ |
24,562 |
$ |
27,163 |
$ |
90,359 |
$ |
101,539 |
Reconciliation of GAAP basic earnings per share to Adjusted basic earnings per share for the three months and years ended | |||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
GAAP basic earnings per share from continuing operations |
$ |
0.29 |
$ |
0.32 |
$ |
0.84 |
$ |
1.16 |
|||||||
Special items affecting net income |
0.09 |
0.08 |
0.51 |
0.36 |
|||||||||||
Adjusted basic earnings per share |
$ |
0.38 |
$ |
0.40 |
$ |
1.35 |
$ |
1.52 |
Reconciliation of GAAP diluted earnings per share to Adjusted diluted earnings per share for the three months and years ended | |||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||
|
| ||||||||||||||
2014 |
2015 |
2014 |
2015 | ||||||||||||
GAAP diluted earnings per share from continuing operations |
$ |
0.29 |
$ |
0.31 |
$ |
0.83 |
$ |
1.12 |
|||||||
Special items affecting net income |
0.09 |
0.08 |
0.51 |
0.36 |
|||||||||||
Adjusted diluted earnings per share |
$ |
0.38 |
$ |
0.39 |
$ |
1.34 |
$ |
1.48 |
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, but are not limited to, statements regarding 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 ability to find and retain skilled personnel;
- the effects of competition;
- 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;
- our ability to generate preneed sales;
- 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;
- 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
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.
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