Service Corporation International (SCI) 18 Feb 202019 Q4 Earnings call transcript

Good day and welcome to Service Corporation International Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to SCI management. Please go ahead.

morning. Good O'Connor, Reporting. Allie of Director is Financial This quarter Debbie of language going today, so about with Eric. the honor I have the remarks over prepared before begin is Tom we and out you with from the safe harbor

to team that our materially These are limited cause forward-looking. will factors include are our actual that our from include, could on projections. but subject our expectations to results Comments release not management identified statements and differ our historical made These today uncertainties press not by uncertainties and in and to filings are risks are with statements that are website. risks those and in the SEC available and

as cash In flow, measures in operating is today’s release on comments, A may flow. calculated refer GAAP provided we measurements, website this filed such EPS, our and in adjusted cash also the free to morning. of measurements reconciliation and were and these adjusted with X-K appropriate that press accordance non-GAAP our certain

now I CEO. Tom to SCI's Ryan, that, call over turn and With Chairman the will

thank followed and detailed at call with usual, then and our our for high-level us and on remarks outlook on the begin everyone morning. more XXXX. Today, Allie, Thanks, as for this I’ll of overview operations, cemetery a by my you a quarter joining the funeral look finally comment

overview with begin an the of quarter. let’s So,

strong, per This earnings $X.XX share. reporting As primary that coupled with of you $X.XX share impressive performance year quarter. $X.XX solid prior expenses saw led adjusted from on segment the year to lower a was funeral headwind were an rate. the a a yesterday, administrative higher A tax per our effective press XX% general finished drivers and the over increase in adjusted release or despite we in earnings

payments operating or more interest comparing cash in things year On almost tax results. flow highlight. million our more Eric and a higher quarter, than as year cash details the over flow. flow remarks of I provide adjusted results When we prior in front, the decrease] these are will prior cash his cash [X.X $XXX of cash operating there generated offset increase to the couple would related to quarter,

we’re XXXX. favorable First, core improved all as an cremation we on change locations in the funeral services in average quarter, hitting comparable cylinders mix it in our previous saw this funeral more a sales compared quarters increase performed of three to as

in operating of All which increase to XX% a profits. comparable funeral led

to while compared to construction million, we’re to cemetery returned our used quarter. or prior in digit somewhat projects, completing In segment, preneed comparable the sales to growth $XX rate X.X% into mid-single velocity the due the quarter, as revenues reported well over the production timing of as increasing sales year projects needed were our seeing, fourth that unconstructive the

not our continuing market well and for influence the production we on enhancing by grow sales backlog a results Finally, value share. over XX% current capture the our major future earnings, of preneed funeral future grew the preneed to quarter,

line increases service. home revenue growth year. in From a quarter. period same Now to line funeral funeral we a this solid core Comparable the average compared around very top over increase per $XX or revenue than little of performance to million more healthy and quarter. some the last or shifting performed A both million increased detail we strong an our more funeral perspective, services half $XX the to top attributable in as is X%, saw for had revenue

increased X.X%, the Core same services year. period performed compared to last comparable

some I’m average of made in markets. [having we funeral pricing during lapped] sorry, revenue per cremation very in Additionally, strategic pleased XXXX core were report to the this X% adjustments certain – increase case, a pricing

down offset growth year, basis by point cremation and at range mix to shift. tapper able see we for anticipate XXXX. the X.X% shift you basis point the rate were believe This mix was sell cremation pricing to point should that as has XXX partially organic we a shift basis XXX customer XXX throughout continued to which We achieve the the mix back in level,

remaining driven our in contract, growth SCI reported The average non-funeral or contract almost increases Direct, home of was preneed channel XX%. increase which or revenue in revenue revenue million per strong and both $X.X in resulting by solid recognized

that the a from represents revenue recognition. independent of this a as to temporary lower primarily SCI time status, created sales was reported contractor status resulting preneed are production. during slowdown year, products SCI Recall, the Direct at sale, fourth Last you transitioning in basis, in by which solid we immediate quarter, employee recall results, Direct that on SCI delivered advisors may preplanning

I think better safe for are Tim their we is to extraordinary you we’ve that been. it leadership back say this ever and and than to team the transition. Thank during

SCI the We are to our very as family. official councilors happy members of have

deferring preneed XX% the and sales higher with compensation. just Shifting year-over-year, smaller to revenue upon we generated base costs a sales operating new were I production which partially and percentage profit $X $XX Selling more to increased take XX.X%. little includes million in basis structure, described, partially of to XXX it, the because sales increase compensation under a over points funeral profit, growth margins of million funeral a we than SCI overall we’re an grew operating Direct

over funeral growing the of Direct double contracts in this locations increase was preneed quarter, production by growth for was or million Speaking fueled written sales a our true both core highlight number digit SCI of XX%. channel. the $XX This our sales, and of

of the production X%. of at preneed grew our is range we just X% under full-year, the guidance end to top X%, which sales funeral For

sales will to of with the continue invest in development move XXXX, organization we tools As technology. our best-in-class and into we

cemetery to turning Now, operations.

were cemetery performance we sales increased This about During preneed atneed X.X%. grew a was the and on million flat comparable fourth sales essentially both or was quarter, or million solid cemetery preneed total comparable nearly X.X%. Core revenue cemetery our revenue $X an despite basis. preneed $XX.X

late revenue above in fourth well year. experienced were in recognized the as of have the XXX% unconstructed a rates quarters were as we quarter, completed property previous recognition sales preneed projects Historically, cemetery

did While it much sales sold occur additionally, this property a this unconstructive some that quarter, higher not we fourth fourth as did. during quarter. proportion And of of

While profit revenues we points with fourth benefit gross quarter during XX.X%, line did this our not benefit quarter. cemetery preneed sales million a dropped rates, based the the receive the are XXXX anticipated on a flat increases for margins by From basis the the quarter, incurred production caused cemetery lower $X.X and coupled projects constructing. recognition to cost XXX that inflationary primarily will perspective, growth the comparable during profits decreased when profit

shift XXXX. let’s about a to discussion Now,

XXXX, approximate compared per increase adjusted approximately per in rate in share This for over absorbing share. adjusted increase share. guidance to per earnings $X.XX we the we earnings is per be mid-point a XX%, range reported $X.XX, to $X.XX XXXX tax X.X% Our a headwind. of approximately is rate earnings XXXX share XX% share estimate per to were The projected higher of represents an $X.XX which effective earnings that

growth target. the effect XX% from historically and buybacks as of Normalizing come of earnings in will well for mid-point additional per share annual the share X% businesses, range in X% as We towards operational is has it tax earnings of recently organic share share the the an X% rate, to contributing X% businesses contributing our XXXX upper as of growth. perspective roughly growth with from to per the growth this acquired X% to earnings earnings the XXXX projecting contributions per an per share, more believe our increase guidance

to me for discuss briefly Allow assumptions growth the the regarding base underlying business XXXX.

in the First, range. core grow funeral X% to to anticipated revenues are X%

funeral comparison back to to both relatively with to quarters, the performed be half. expect We for sales easier and year services averages the slightly reflecting two first the flat up

SCI million. in the their revenues single Direct X% operating growing production million to We anticipate to funeral in profit to preneed sales by expect for We and year. total digits, grow mid-to-high grow to $X X% expanding the profit $X range the percentage their

for and expect margins industry celebration, trends strategic operating the with with will XXXX, the delivering Next, relevant in capital with to to profit a on we XX% operating the consumer, would simplicity return year. and mid-single-digit and to transparency. cemetery our growing revenues cemetery emphasis impressive challenging we exceeding sales on range, growth perspective, productions cemetery a staying be percentage after in related growth focusing From an

well Our client customers. trust the ability to online to in customer as a deliver well create new deepen as our potential experience seamless as on engaging and interactions, earned personal these with families, as further both only we will have

conference and enhancing will operation from experience customer first digitally, cyber the continue efficiencies technologies appropriate interact point contact to with while providing security. our a to and consumers the of with invest around controls beyond, enhance how in We better the also in arrangement we

homes. flexible spending an new our in and well increase to built facilities These construction development, with of are appeal design of that slightly development array cemetery a for modern on as Look customer broadening desires. funeral a around as inventory emphasis

With larger and debt share throughout to go discount The repurchases. timing level, on cash we of our would our cadence a fair increasing and to share expect the perceived current EBITDA flow to free value year. based

possible all our that To that XXXX. this for wrap and I for it of XX,XXX in appreciate was none up, overall realized you our without and of I’m very team’s proud SCI. my families progress teammates do

enter am XXXX, I excited our so As about we company’s future.

to over turn I’ll Eric. call the that, With

for did. fourth cash quarter flow by details by results, for Good then year the our and of morning. providing as followed full some Today the of which I’d will the XXXX outlook capital I’ll Tom begin by like for our then year be and deployment just activities to our end XXXX addressing

discussion primarily and than quarter. cash was cash from funeral and cash reported strong operating flow XXX release our let’s million cemetery operating from our of So, better a funds. yesterday’s the flow the which we segment higher quarter, for results with strong sales receipts installment trust press begin expectations, of from both for In

the When year, by of was the headwinds about payments $X million. by of million compared but from cash million. quarter quarter this X flow payments to by the X cash in Increases higher in higher for gross decreased about million, operating tax and up earnings offset profit cash expected XX cash drove prior interest

calculation from year, Maintenance This items lower cash generally that Deducting free with but CapEx and development recall cash is our for expectations. $X components million. in year. prior we just be cemetery flow, prior recurring $XX million flow in CapEx the CapEx which these cash again quarter, generally approximately in-line the with were two to are free than $XXX flow as which million, our define calculate in-line the the over we quarter was our the

generated earnings This adjusted which the to cash XXX that compares and XX was XXXX. of full-year, higher working midpoint around of flow million $XXX also million offset of cash in prior capital and partially cash year the million. adjusted guidance tax throughout million resulted impacts our range favorable the higher interest by The cash operating higher we for the provided flow, increase cash For year, exceeding over payments. XXX from operating were

driven of cash not to So, be will that on are planning approximately This in we’re taxes, cash as reoccur the earnings a $XXX tax the higher increase and anticipate occurred XXXX is million benefits XXXX. headwind increase our ahead we taxes exercises. by which decrease topic XXXX $XX from stock by in XXXX, expected flow in about that benefits option to taxable significant cash for in expected to look we million, in to modeling XXXX

tax represents than we an $XXX aligns our million is a always, cash minimize expectations prior which approximate rate the to normalized so taxes, approximately XXXX. cemetery of we XXX believe way cash that combined year, guidance which but to for good target will hundred development CapEx XXX Maintenance higher million. by XX% the also flat, our was with were try a number rate, and tax As XXXX, for little compared effective million

increase at important our for are Deducting a recurring flow rate year that flow, expenditure you X% adjusted speak should higher going I’m these spend at to cash we or to prior investments expect our see to year. to $XXX in in from the These free calculate XXXX capital healthy over and slightly us million moment. business the a cash a adjusted

In value delivered deploying we new acquisitions, So, for location now than more capital let’s towards the discuss repurchases. XXXX, year. dividends our builds, deployment and $XXX by million share

through you walk me let components. So the

with $XXX million let’s approximately We million, First, $XX million. which acquisitions. target of our $XXX deployed start to range exceeded

funeral three point to for $XX that high cemeteries, was Angeles invested as XX in homes. purpose million in The remaining in Los in one land Texas, and acquisitions building purchased million this new states invested was U.S. Canadian in the like would the business I six in area in two quality and of provinces. amount of as So, one out for land the other well

generally after-tax of be a in to continue use low-to-mid Acquisitions our a as IRR. teen resolved best capital

we acquisition as XXXX. we enter pipeline into remain optimistic the Additionally, about

In year, of the increase provide of invested on XXXX expect homes totaled returns we addition builds funeral which prior XXXX over million, in million. in to expansion XXX an several forward. we to going XX to us acquisitions, new XXX and million X% positive the Dividend of during the year which was payments

to to we as as income. we continue recurring the expect company's to grow of XX% forward, reminder earnings in of dividend payout Going the a target net increase a ratio XX% and

million XXXX During in higher and the the to by our of reduce year, which $X.X notes some rate XX open of manage our around million. we our also repurchased XXXX almost debt, benefited interest market leverage

XX Over shareholders achieved repurchases this about quarter, in repurchasing repurchases. half fourth in finally, an ratio, capital of of million XXX these more occurred then form a we And $XX.XX. share our returned we of the at to of opportunity capital or of and value XXXX shares million desired amount share actually to X.X leverage here as the during average deploy to saw by million price

average million. repurchased additional full-year, will approximately about investment share reducing at Subsequent share to shares of a has shares in the program this resulted $XX.XX, the we which $XX XXX,XXX repurchase we year-end, for of about number million being outstanding shares. for an price Ultimately, outstanding X.X million our shares count by total of continue XXX an

cash our offset for and press deployment. million expected you $XXX provided benefiting by XXXX of cash operating cash that cash flow cash terms capital flow Now, higher expected of just in mentioned. XXXX, see can In I million higher range, let’s have shift earnings release, flow guidance we to outlook taxes our $XXX being our that in our

you by did midpoint equates $X.XX a in So, the million cash to incremental point increase earnings of operating million starting cash cash million you to flow, which $XXX base XXXX our range. $XX million $XXX the normalizing gets to million. guidance of growth, about of to This million by of of adjusted benefits about which XXXX flow expected gets taxes normalized $XX $XXX $XX

unique and spending Moving of capital CapEx, XX about platform more aimed at superior expectations cemetery our million increase This investment and experience. maintenance cemetery development for or million is customer XXXX increase, building on out the and $XX help inventory to improving to $XX than development Of at The to cemetery remaining increased us XXXX this million to continue will we help preneed spend. go drive and million our about new drive differentiate $XXX developing technology expect towards returns. cemetery production. capital continues and

deploy home tax In acquisitions in capital low in and including our addition well we to return growth to $XXX XXX capital. other together million cost which of recurring opportunities, expect funeral excess rates to million new to $XXX million, expenditures construction these after mid-teen of initiatives, to to drive internal

for other and XX these modeled for growth currently XX million acquisitions have We million initiatives.

well to the capital and continue from flexibility XXXX, of approach, have end the strategy financial the our year, deployment strategy as forward years. as our relative many have look you shareholders. stable which strategy follow we the is for debt same a designed of flow, to we seen yield capital million highest favorable feel as XXX in we us for to successful nearly based free profile. This at balanced So, much was deployment cash We disciplined our the on maturity robust value liquidity, our our

our associates to for their comments of hard XXXX have Tom's this flow none in dedicated good us. work appreciate we I us. be of a possible would strength conclusion, Cash highlight all of and without that efforts. for a the been So, continues was year echo

that prepared So, concludes with remarks go up questions. we’ll that, and operator and for our the call now ahead open

will Instructions] you. Thank of today go come A.J. [Operator And Rice question ahead. our Please Credit from Suisse. first

everybody. Thanks. Hi,

you which request the know the made it’s that timeframe. is Have a than number First certain you when they that of the sense in gotten any to some comment out to funeral prepared will like what you that they be all, and that on to anything have gave re-evaluate that thinking, for the in be this? review remarks, the maybe but mention just that in did material I to you were for they obviously, what would ask put any comments – amount – something need about limited highlight comment, the FTC you rule. of different to feel the beyond process notification time, you will

Sure A.J. Eric, This is good morning.

mentioned, FTC on on is comment seeking do There a they the comment so and rule. you April will period As the funeral [XX-day] is XX.

of the available, nothing questions the they all comment which us. surprised that, think are of is on, asked punch-line I us your to really question publicly

You been know, a we’ve this over for now year. expecting

it I about for talking over think, been a we’ve year.

but ask timing in other crematory, to about somewhat things questions and They figure expected did review. is again tough out. cemetery's, that, pretty like their was last The that

comments in years that I no at to was responded later was with FTC funeral that to, a time. and view to the many think the late XXs we ultimately back changes point it that submitted many, there in that

So, to for we're very we have what days know well prepared XX do we that. is comment,

real not of comment, players, know that all exactly what from once they of from will is to Trade price one we that described in the timing public industry before but this feel comment of open happen wants previous strongly receive will there April thereafter the know the there just for Commission meet the which you don't the the XX, the fellow the and you discussion. on we is just any most of exist For surprises transparency, but industry, calls deadline so to is I’ve no then we part about

great. Okay,

you on the initial you particularly consumer, of guys the in what Asian hand, thought, bit tensions with what production, what behind related any those more nice either Vancouver any in to one right that two recognition the you’re habits think people or you have seeing drill to down anything reacting you, time-to-time in and cemetery seeing is rate do the like markets not easing you of out a or you the what’s and purchasing fourth any if relative was hand of trade of of the coronavirus for preneed terms you attribute know on had do their in the other if a large recognition and to which moderate the how little sales is quarter? what I from pickup the especially On happening called – you're LA are

this Tom. is A.J.

consumers. As first you look it had the particularly as because some sales, versus saw relates year-over-year comparisons, you predominantly last actually to that it the Asian quarter around we quarter if and we consumer, called fourth and in parks again third quarter comparisons seasonality at look the favorable quarter there’s out quarter Asian fourth we fourth service this at particular the the drops

Particularly, road very, I’d out successful performance. drove point a great fourth that quarter very shows and had

consumer rates. both growth mid look you the of in single at digit to relative they about the kind Asian grew this So, population

as look seen it trade we're that with what’s fourth as very pleased we it sales. driving very, as said into you things if now it has or or to apprehension will So, says, know cemetery to anything quarter gone see that the settlement to and but away great and I saw don't that relates that visibility to Having virus, pretty good consumer apprehension I the it, haven’t talks have relates we and relates we in what any tell different that. the

that? is your over is different to this there few Beacon with I to Or bit Beacon, of be been lot program the as this on more new consumer this a question flush initiative, last years little a Okay. out would And this talk last something completely then on around, what’s update happening my know there of as initiative? and improve the have well is about experience. little investment related IT any maybe

we that Why bifurcated don’t question.

marketing are another obviously first as The spending websites mobile we’re relates system way. of interaction now, basis an specifically allow the such. it when is talking thing And to atneed digital as because in called through is development experience much to a the is with about more the we’re this with out money applications the digital part what consumer effective referencing capital that’s on A.J. going and interact on us a to

related development directly Beacon to anything It about or and process, in with communicate data further the private the as as of as relates way initial that capture all the ability with consumer really It’s taking is to the the interacts family else. really and portal, client really not a end us about to arrangement online the to us the the it you – entire think contact, process. and then

of drive favorable this to the result interaction we the developing is with a is beginning So, believe revenues. which more that, consumer in going and

relates more in It also fleets of that you integrating system to be when allows scheduling all our about think information to it efficient as vehicles.

So, to. it’s really step it’s that in a approach developing that referring first

Beacon let I’ll Eric part to talk question. of And the your

an On the much that is A.J., sure of really I’m Beacon not the there of development we’re continuing the application. because update part

recall, be on time business to XX% of Canada application, very some it’s you continues that, last funeral are I If and the well funeral about said there being know but call the states for that not from Beacon yet you is, open utilized. certain well-utilized are can

lot I are quarter a drivers the with sales. of related double-digit causing example think funeral reason fourth to the some of that that growth for in that to preneed our

for to that us. So, be very effective something that’s continues

cemetery it’s On the side, of same. the more

property have each We’re weakness cemeteries. the each record, the continuing that within be we XXX the but vendors numbers a area, as of as the it’s application merchandise not by of and individual different develop in and the to to of cemetery broken well complicated products

that cemetery. late as in to update it and a this probably develop year help to we maybe to relates continue XXXX have, during So, better

thanks a lot. Alright,

of today will Our Bank question Joanna from of next Please go Gajuk come America. ahead.

Good the for morning. taking questions. Thanks

topics. other of couple So,

easier specifically mentioned pieces repricing mean talk in the average, the about guess I terms strong quarter, obviously can segment was different you so the business comps and the, organic the on I very reclamation you funeral the the in the past. this of So, sales in

kind it sense we way is X.X%, of get a the pretty the to, know probably it how quarter think organic was that that because I'm so going normalize printed by of had expecting to forward we numbers, is on forward or way just going strong So, sales this should should should below, you about average? trying you be that

It’s Joanna. hear you. Good Hi, Tom. to from

As we think about good about really average, feel think I we XXXX.

adjustments we by about XXX it pricing in it’s those from felt call on And markets, we like trajectory. the particularly we to but in think, referred stages, is the resulted level, them I we one-time pricing particular funeral believe made revenues certain of by we where we to volumes changes was expect and big will able inflationary think said making in sales preponderance market what pricing. consumer we that be the guidance lower between believe my of the we good grow that I locations capture then and I a pricing are have those X% somewhat a to there. share, into in good and and made in we cremation When trajectory and We comments adjusted, which on offset markets new X%. a I’ll where that that average went simple on the what from

in was you flowing had that So, what you that through the pricing average. saw fact XXXX the pressure

quarter the year good – particularly so quarter we’re fourth this XXXX, particularly feel now quarter, showed in in but him, would into competitively about look then we it what with expect of about maybe that feel we expected and in call the happen consumer. good simple little trend the it and us average, these cremation first priced John average. gets good at saw very tougher, we fourth really he where markets third I’ll up time believed And of to like the would we where none continue very talked in think the half for that we and a pretty we our I if and a the expected assured first So,

at On as the volumes volume are front, good very year. this look we feeling we for

a history flat. and to If you be if holds last don’t down quarter, and bad we first recall worry down said, out X% had X% year, sure the hey relatively enough really turned we

capturing a push too I the as effectively So, don’t because again seasons been things company seeing we get about like don’t for but incredible shares really preneed, digital effectively is good just we’re today shares job and to a leadership competing market our capturing doing have flu business. in much the about more more for we year too we through offensive also interactions the they excited, get feel that market through local the that excited and tend quarter,

to anything efforts else, are comes or changes that final it you do from the see to making there Or first And specifically the maybe I you platform about experience, come planning so, been potential rule? FTC terms appreciate as prepare investments and you to improve anything where to guess but or the the terms in out? I in is those Okay. for and of I consumer are you interaction of going that try you’ve mentioned then the the wait comment heard thinking the and in how might you’re are going

sometimes Hi, Joanna, guys, Eric that’s like you transparency great got important and to and important. customer, a us feedback, or definition related said, feel price we’ve the right you We Federal good we but talk consumer, with our Eric we what’s this part we deal do fully funeral And want without the good we to the survey of consumer about transparency isn’t to question. with for get want price. because me, to pointed like for for industry a ruling, lot Commission, to the between We'll of our said, Trade to a out the process. as a is is very I what’s think be

cremation you particularly very price and pricing look at if already consumer. important that very simple lot a to SCI have this is online example, of And our important. because consumer, an As available very, Direct others we

price to locations. facility, consumer the Dignity I or are now starting at and our you educating finds really our if XXX XXX going that and not consumer you're confuse – quality of the the concerns with to along you to what But value consumer are that. are to pricing Our conveying providing you you're reputation, now think the then doing not we concern if is, the level going are more

attributes our of emphasizing I do and convey we So, way that’s do, the important strategy you transparent talk know know now in how the the about reputation, consumer, that is, we what to we’re are one a our you and things stars, beginning Jamie wasn’t think to is, X.X are and do really been try we’re for that all that that ago when a I our Pierce to about pretty half us focus And a tremendous which feedback. reputation it’s and impressive up on and think and to that. I now, came got until and focus think is online seeing a you’re year ratings

get be. you’ve instances whatever reviews – you're case X.X because a people the we stars, and lot We may X.X have you saying, are stars I selected where of you’re

our particularly on, to little going time as things capture goes people utilize competition. a we’re to these are in it relates be to as going to these more, that, So, tools place

to effectively. So, continue those up are compete last little to that the things add more

it. Appreciate color. Good

number quick Just questions. a

the G&A, flagged adjust still of for insurance year-over-year because good was were million was XXX those So, you're pretty but to number. that it you it process, down that going

and is, kind the they D&A how going for is XX rate their as have a about think CapEx, quarter forward, So, you we should numbers full-year good run the million question increase per of question XXXX? I have

that an expect big D&A, I of increase. don't

million. I So, it’s $XXX was of million, D&A the probably around just south $XXX think

moving million that it goes between maybe don't $XXX that So, area, much. but that I $XXX to see in and million somewhere

as return saw, million, million significantly, plan. you unit total anomaly down really you which accruals is down in the to $XX really in year, performance plan was the maybe G&A a to the shareholder that had As do about pretty $XXX related to with It that about mentioned, was make to – prior had we year. but Joanna prior the or

of a one-time of bump can in have think true the as the all to last that had and million year kind as north those you really And to we accruals really shares in plus $XXX in that and we accrual see last G&A XXXX, year. up of so moved it

do what a obviously think bit little all think I it’s in So, increases of year? this those type know, You more, I inflationary maybe costs.

a that XXX in it’s you maybe for of million maybe ballpark million XXX, G&A. XXX in XXXX a to So, terms got not

the I appreciate. I'll queue. in hop Great. back Thanks.

You're welcome.

Our Scott will from come next of question go ahead. Oppenheimer. Schneeberger Please

for guess, do of very you XXXX. you're about the I you guidance, sounds you in know cadence, Thanks. outlook the appreciate but mid-single-digit it up quarterly sales I Thanks and preneed like Good of if in looking don't growth think for cemetery remarks the segments curious how morning. much. for both recognition for could give with follow Guys, particularly prepared consideration some revenue? preneed, that

hear to Good Scott. Sure, from you.

this the I into I first you about important on A think books of times of is, got I recognition inventory. side, lot on think construct the these all, what because love to to plans as understand. to cemetery it’s get think for rate we’ve people happens

because into And so, here that can different early I’m unconstructed. in you’re year. generalizing of selling times in happen the the it quarters

and recognition XX% rounding typically please hold range me between so it rates and first the call literally. And again will your for too XX% don't I’m is so quarter, what here, occurs

tends unconstructed quarter, you're XXX% completing the by period second rate still sales quarter and closer pattern, follow of projects then too. selling recognition third from these gets you’re some In your to you’re our recognizing the that actually obviously and prior because to some into

have with it quarters and you construction country you know cushioned you XXX%. winter. recognition in about rate historically, XXX% fourth XXX% an in you you to get you because this, though call are, is – of the now maybe hard certain quarter So that's when two And quarter project, parts lot remember them. into into And a unconstructive do of selling the complete three of to to

a flat in lot so the fall as XXs the months, low activity months, and a higher quarter in We seen. cadence. So, in lowest in around is typical in a part of summer of the earlier ended that’s were I probably recall we’ve year. you the at What lot saw rate we first XXX, year was the the I activity the, think XXXX the of a which in fourth the recognition

sold stuff, the as happened we inventory to unconstructed had of quarter. didn't think what really the was a the sell much available that So, didn't again ground, fourth of is, constructive and we that, sell therefore and flow was on that I lot that and through we

a I about – the we to and history, as XX, high two, but speaking and the back the recognition you year, saw XXX% On be and would so you year more think can expect look, next me. approaching between forgive than little emphasis I'm on the of XXs year rates. little the comparisons, from more probably in go part first this a fourth the probably quarter

the easier. think I comp of year middle think little is the recall, I the the is quarter as and tough I first a

way to going of tougher may may parks March tale the consumers. to about the month be So, for some quarter our whatever comparison told and think one honestly I big the that the you particularly comparisons. be quite Asian that of in of think be, have first sales that’s quarter the the of is first that’s think as a that And us

sales we’ll again, lot the the parts coming side crossover of into think of We is right of our on I preneed So a now both There out on cemetery good on really feel well. the and gate about funeral. the do April.

Okay.

Thanks. of the not factors what good, just consider concerned high-end thanks. next good most bit of Sounds you and or then at have the a would looking be I’m you're swing question. or low-end confidence? this segue to guidance a do year, may my where curious, you for what you have range May the when

that. I funeral bit average the like very a little going a we’ve predict. of be competing factor and any pretty funeral non-flu’s I That cemetery is, than to at good seen we’ve one feel excited better is execution. biggest momentum years. think year think give last less is of and over think We're toughest on get I’m probably we when I is There concerned think about So, you we truth cemetery, effectively. sales. do we’re the should got the of us flu’s lot about probably result – couple over to in the predicting the swing Again, this This preneed volume. year.

then could significant I to that have thing a are to ones. preneed way the and were those sales, that be change a again an So, think cemetery in big impact

a cash We’re going derail lot flow. of to

We’re going to deploy it wisely.

So, as I think it. about risk probably factors that’s

seeing, kind Great, I curious might this flu, you way seeing one like you Tom, mean thanks. just just question of mortality season? this activity around one, think is ebbs domestic, just of that the and early you obviously half of want just address headlines it a it and you're the year, and lot you’re impacting last about perhaps brought flows, could in but this but and international of flu going, what And up seems lower we how how rate, a year, it’s what lot to and a the particularly

mom My be to doctor, going to a always Scott. one now. right and I’m wanted play me

on impacts about beginning influenza off. a actually develops or harder bit So, first strain. I've learned again usually in of these to, differences. the this kids a the cycle, and year, immunity which that influenza of strain surge B back but fully the and this B all there earlier the it systems flu little than like cycle tends later around to began impact be little gets usual the in was The versus two

So, hardest kids on it’s XX. and people under

mortality the a incident saw, of rate the low even climbs. hospitalization incidence is higher are you what and rates actually flue, pretty while as So, there rates

What’s in I last time well. this hospital happened is unusual the about was think that in see this XXXX. number as really you

So, come kind so it’s been really, really this years influenza it’s had strain since unusual. we and B first, almost XX of

So, the is prevalent. flue

hard We’re number. not I comparing the remember, we’re not necessarily And in rate. seeing it deaths against the

to and expected be something is flue obviously severe, the fine at and probably more have the that influence we upon on those strain that influenza A to probably result far, prevalent but more becomes not based hospitalization you relates as flu could seeing result debt. are not volume, would little it season that an So, over, we’re so elderly, more more if least doing of more would a on and have tends but therefore

now right of So, kind we’re seeing watching what we're these but things, Scott. that’s

color. Right, great, it Appreciate the I’ll thanks. turn over.

next James. today Raymond go Our question Please from of will John come Ransom ahead.

Good morning. always wanted a director. mother funeral to My home be

weird. that’s So,

still for There’s you. time

a of Just on now and are performing maybe seeing you material in funeral core outside life, celebration your the trend a party location? that services are third you’re and of homes

Okay, John.

answer that. me Let

capturing that traditional call a use is I’ll what say here little I’ll more more. into, lot that around I we think we’re celebration we’re seeing a a bit both. of I’d little and term a break celebrators,

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follow kind Okay curious, year me. use the a urns, and to a we XXX Beacon of a well to what rolling you plus last on simplify could as for cemetery, and excuse bit offering maybe just the but need pick and some I line? we’re we function here probably streamline think complexity Beacon say, complicated, maybe in that behind one blue If can do just will don't little you I on you’re an of, the form a it’s terms out of in know cemetery

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okay. longer. That’s It is take to going

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think do of I we’ll that. some

Great. That's Thank it me. you. from

ahead. Brown come Fargo. Please Wells Duncan will Our from go next question today of

Hi, good morning.

guidance Just in from little the us the over the One, if a for year? two M&A clarity the in any XXXX, like a that there wonder divestiture what like then there outlook quick anything of would ones seeing, give on quarter, changes on appreciate was And into you any rest color helpful. multiples, looks you're could more be you’re me. as headed

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sale. a as we had was strategy gain it a have but think as relates one just had location about significant through it capture take. to multiples the we that we pretty you So, to business, that Again, a

generation So, can cash nice it’s a for of and we redeploy. us,

a still today, acquisitions to relates we’re of it As seeing activity. lot

ownership, expect certain to to face premiums. out so, more continue or as seen to opportunities the competitive year willing wanting price and think are people competitors I of cremation relates some in in of sell. it’s we’ve probably and will think see creep pretty are we starting and because we the significant of last and because gotten the I again the to little some a demographic little see there, it that a changes I you, tell

you competitive. want, ones we get that we tell on really very would I the

limited, FTC that previously. restraints are done around we’ve we but the Sometimes transactions by and restricted

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a beginning to think lot more cases a I you’re our So, in seeing lot of us locations. build

flexible want markets year and take, XX you XX, and that of it buying facility John the this $XX to that see million facilities in a need buildings the us are because celebration, that’s spend to some going you’re concept this to, more it reasons XX, consumers these you was referring as old. We're years allows on to allows locations us of again and compete one

them. been the way haven’t rooms They are want you remodeled, set the

want a I build the highest seeing to we’re to compete us think what shareholders. that the So, from and we buy for you’re and think things value going shift let’s say, we are

but deals had activity first I more We a pricey, a of lot we quarter. lot the a activity. close little activity in of So, in that still of think quarter, will the got and fourth seeing lot in

Great, thank you.

I’d At conference any conclude like time, to back this for gentlemen, the SCI our question-and-answer remarks. management Ladies over this turn will closing to and session.

forward much at great to April. so everybody for being of the end Have look on Thank you week. a call the today. to you speaking again We

thank conference now may We for presentation your is you today's now lines. disconnect concluded. The you and attending