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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2008
Carriage Services, Inc.
(Exact name of registrant as specified in is charter)
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Delaware
(State or other jurisdiction
of incorporation)
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1-11961
(Commission
File Number)
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76-0423828
(IRS Employer
Identification No.) |
3040 Post Oak Boulevard, Suite 300
Houston, Texas 77056
(Address, including zip code, of principal executive offices)
Registrants telephone number, including area code:
(713) 332-8400
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 5.02 |
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS |
(b) Departure of Chief Financial Officer
On February 4, 2008, Carriage Services, Inc. (the Company) announced that Joseph Saporito,
Executive Vice President and Chief Financial Officer of the Company will be leaving at the end of
April 2008.
On February 4, 2008, the Company issued a News Release announcing, among other things, that
Joseph Saporito, Chief Financial Officer of the Company has informed the Board of Directors that he
will be leaving the Company at the end of April 2008 to pursue other opportunities. A copy of the
News Release is attached to this Form 8-K as Exhibit 99.
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ITEM 9.01. |
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FINANCIAL STATEMENTS AND EXHIBITS. |
(d) The exhibits are listed in the Exhibit Index set forth on the final page of this
Current Report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Carriage Services, Inc.
has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CARRIAGE SERVICES, INC.
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Dated: February 5, 2008 |
By: |
/s/ Terry E. Sanford
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Terry E. Sanford |
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Senior Vice President, Chief Accounting Officer
and Treasurer |
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-3-
INDEX TO EXHIBITS
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Exhibit |
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Description |
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99
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News release dated February 4, 2008. |
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exv99
Exhibit 99
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Press Release |
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Contacts:
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Mel Payne, Chairman & CEO |
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Joe Saporito, CFO |
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Carriage Services, Inc. |
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713-332-8400 |
FOR IMMEDIATE RELEASE
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Ken Dennard / ksdennard@drg-e.com |
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Kip Rupp / krupp@drg-e.com |
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DRG&E |
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713-529-6600 |
CARRIAGE PROVIDES 2008 OUTLOOK
and 2007 Preliminary Results
Company begins search for new CFO as Saporito to leave in late April
FEBRUARY 4, 2008 HOUSTON Carriage Services, Inc. (NYSE: CSV) today announced managements
Outlook for 2008 and preliminary selected results for 2007.
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Revenues of $178 million to $184 million for 2008
compared to preliminary revenues of $167.8 million for 2007 from continuing operations. |
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Consolidated EBITDA of $43 million to $45 million for 2008
compared to preliminary Consolidated EBITDA of $39.3 million for 2007 from continuing
operations. |
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Consolidated EBITDA Margin of 24% to 25% for 2008
compared to preliminary Consolidated EBITDA Margin of 23.4% for 2007 from continuing
operations |
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Diluted earnings per share of $0.48 to $0.52 for 2008
compared to preliminary diluted earnings per share of $0.39 for 2007 from continuing
operations. |
Melvin C. Payne, Chairman and Chief Executive Officer, stated, Based on our preliminary
review, we are very pleased to report that we made significant progress during 2007 in all areas of
our company and began to realize the potential earning power of our portfolio of businesses. While
the transformation of Carriage continues, we have passed the tipping point on our goal of
sustainable revenue, Consolidated EBITDA and EPS growth. During 2007 we achieved broadly
effective execution of both our Standards Operating Model and Strategic Portfolio Optimization
Model which was reflected in excellent financial results compared to historical trends. We expect
the momentum of 2007 to continue into 2008 and beyond.
2008 Outlook
Carriages 2008 Outlook is intended to estimate results from continuing operations.
Management believes it is appropriate to present a range of outcomes because of the uncertainties
in estimating volumes, preneed sales, average revenue per service, Field EBITDA Margins and other
key factors. Management expects to use Free Cash Flow (cash flow from operations less maintenance
capital expenditures) to acquire additional businesses if and when available on acceptable terms
and to invest in internal projects that will result in revenue and earnings growth and that provide
a ROIC in excess of our cost of capital. In our 2008 Outlook, we have assumed no additional
acquisitions. Although we are in the market reviewing candidates, we do not plan to close an
acquisition in the first half of 2008 and will follow our policy of updating our Outlook when the
closing of a transaction is certain. We do expect to invest more heavily during 2008 in internal
growth projects, especially in cemetery inventory.
2008 Outlook
(in millions, except per share amounts)
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% Midpoint |
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Range |
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Range Midpoint |
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Revenue |
Revenues |
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$ |
178$ 184 |
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$ |
181 |
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100 |
% |
Field EBITDA |
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$ |
66$ 68 |
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$ |
67 |
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37.0 |
% |
Total Overhead |
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$ |
22.523.5 |
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$ |
23 |
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12.7 |
% |
Consolidated EBITDA |
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$ |
43$ 45 |
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$ |
44 |
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24.3 |
% |
Net earnings from
continuing operations |
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$ |
9.510.5 |
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$ |
10 |
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5.5 |
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Diluted earnings per share |
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$ |
0.48$0.52 |
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$ |
0.50 |
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NA |
2
The primary drivers of the improved year over year financial results will be full year
performance in 2008 Field EBITDA from businesses acquired during 2007 and broader and improved
execution of our Standards Operating Model in our same store portfolio.
Preliminary Fourth Quarter 2007 Versus Fourth Quarter 2006 Selected Results
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Revenues totaled $43.2 million in 2007 versus $37.4 million in 2006. |
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Consolidated EBITDA totaled $10.1 million in 2007 versus $9.0 million in 2006. |
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Consolidated EBITDA Margin was 23.3% in 2007 versus 24.1% in 2006. |
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Diluted EPS from continuing operations of $0.10 versus $0.07 in 2006. |
Departure of CFO
Mr. Payne continued, Joe Saporito, our CFO, has informed us that he will be leaving Carriage
at the end of April to pursue opportunities outside the death care industry. I want to thank Joe
for his hard work, dedication and loyalty over the past five years while we have made tremendous
changes to transform and position Carriage for success in the future. He is a man of impeccable
integrity who has made many friends within Carriage, so he will be missed. We have begun a search
for his replacement and look forward to naming his successor in due course.
Carriage Services will release final results for the quarter and year ended December 31, 2007
in early March with more detailed discussions of earnings, cash flow and financial position once
the Companys independent public accounting firm has completed its audit and report for those
periods.
Carriage Services is a leading provider of death care services and merchandise in the United
States. As of February 4, 2008, Carriage operates 139 funeral homes in 25 states and 32 cemeteries
in 11 states.
Certain statements made herein or elsewhere by, or on behalf of, the Company that are not
historical facts are intended to be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements are based on assumptions that the Company believes are reasonable;
however, many important factors, as discussed under Cautionary Note, Risk Factors and
Forward-Looking Statements in the Companys Annual Report and Form 10-K for the year ended
December 31, 2006, could cause the Companys results in the future to differ materially from the
forward-looking statements made herein and in any other documents or oral presentations made by, or
on behalf of, the Company. The Company assumes no obligation to update or publicly release any
revisions to forward-looking statements made herein
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or any other forward-looking statements made by, or on behalf of, the Company. A copy of the
Companys Form 10-K, and other Carriage Services information and news releases, are available at
www.carriageservices.com.
Disclosure of Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles
(GAAP). However, management believes the presentation of non-GAAP financial measures provides
useful information to management and investors regarding various financial and business trends
relating to the Companys financial condition and results of operations, and that when GAAP
financial measures are viewed in conjunction with the non-GAAP financial measures, investors are
provided with a more meaningful understanding of the Companys ongoing operating performance. In
addition, these non-GAAP financial measures are among the primary indicators management uses as a
basis for evaluating performance, allocating resources, and planning and forecasting future
periods. To the extent this release contains historical and certain forward-looking non-GAAP
financial measures, we have also provided corresponding GAAP financial measures for comparative
purposes.
Continuing operations refers to the businesses that are owned and not held for sale as of the
most recent reported results for all periods and will differ from the results for the period as
previously reported. Businesses sold, disposed or held for sale are reported in discontinued
operations for all periods presented.
We refer to the term EBITDA and free cash flow in various places of our financial
discussion. EBITDA is defined by us as net income from continuing operations before interest
expense and other financing costs, income tax expense, and depreciation and amortization expense.
Free cash flow is defined by us as cash provided by operations less capital expenditures. EBITDA
and free cash flow are not measures of operating performance under generally accepted accounting
principles, or GAAP, and should not be considered in isolation nor construed as an alternative to
operating profit, net income (loss) or cash flows from operating, investing or financing
activities, each as determined in accordance with GAAP. You should also not consider EBITDA or
free cash flow as measures of liquidity. Moreover, since EBITDA and free cash flow are not
measures determined in accordance with GAAP and thus are susceptible to varying interpretations and
calculations, EBITDA and free cash flow are as presented, may not be comparable to similarly titled
measures presented by other companies.
4
Reconciliation of Net Income from continuing operations to EBITDA from continuing operations for
the following periods (in 000s) presented at the midpoint of the range identified:
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Preliminary |
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Three months |
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Three months |
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ended |
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ended |
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12/31/2006 |
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12/31/2007 |
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Net income from continuing operations |
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$ |
1,381 |
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$ |
1,949 |
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Provision for income taxes |
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$ |
943 |
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$ |
1,272 |
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Pre-tax earnings from continuing operations |
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$ |
2,324 |
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$ |
3,221 |
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Net interest expense, including loan cost amortization |
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$ |
4,188 |
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$ |
4,513 |
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Depreciation & amortization |
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$ |
2,153 |
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$ |
2,346 |
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Special charges |
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$ |
368 |
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EBITDA from continuing operations |
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$ |
9,033 |
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$ |
10,080 |
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Revenue from continuing operations |
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$ |
37,427 |
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$ |
43,235 |
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EBITDA margin from continuing operations |
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24.13 |
% |
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23.31 |
% |
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Preliminary |
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Year ended |
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Year ended |
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12/31/07 |
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12/31/08 E |
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Net income from continuing operations |
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$ |
7,588 |
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$ |
10,000 |
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Provision for income taxes |
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$ |
4,953 |
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$ |
6,000 |
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Pre-tax earnings from continuing operations |
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$ |
12,541 |
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$ |
16,000 |
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Net interest expense, including loan cost amortization |
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$ |
17,233 |
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$ |
18,000 |
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Depreciation & amortization |
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$ |
9,526 |
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$ |
10,000 |
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EBITDA from continuing operations |
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$ |
39,300 |
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$ |
44,000 |
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Revenue from continuing operations |
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$ |
167,824 |
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$ |
181,000 |
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EBITDA margin from continuing operations |
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23.42 |
% |
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24.31 |
% |
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