Service Corporation International (SCI) 2 Nov 222022 Q3 Earnings call transcript

Good morning and welcome to the SCI Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

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

about good will and results is Young. year some Debbie the quarter the Thank for and providing morning. an we next thoughts as well be quarter, well. business outlook overview Today, for third fourth you, as as This our of for our

expectations, prepared the uncertainties to go that made and that and filings comments with contemplated uncertainties by our are management team those available cause me As Safe These in are language Any to, usual, quickly that forward-looking risks let for are in before in our and on subject remarks. but identified could release Harbor our limited or not actual differ materially plans, are forward-looking statements. to website. beliefs, state earnings SEC our include, These the future over we projections begin with those statements our results such statements. factors from our risks

discuss end measures measures can non-GAAP also and session. Investors, GAAP in tables the Webcast under Today financial found website our appropriate and reconciliation the earnings our at and of measures also release the be we'll the certain of these to on Events a

hand will Chairman over With of way, for opening that out I to Ryan, CEO Tom it and remarks.

thank on and the call you us everyone for joining Hello today.

results us the It SCI First continued of for all, I posted commitment, that want heartfelt thanks is your team. positioned and to our entire this express to my dedication, quarter. execution we

of and arrangements. grieving by on and celebration, final helping through our client closure atneed relentlessly and have healing gain preneed their You client securing helping continued of process families stay what peace our we best, focused mind do to the gain remembrance

XXXX with our provide our Then, preliminary begin performance of for baseline for on including quarter, I'm that my and year-to-date our level on by around followed the XXXX. cemetery solid some a morning, thoughts I overview This some business will some establish further funeral color a about results. to high going observations quarter, detail the remarks

from $X.XX, per as well decline earnings as For earnings impact. reduced internal line, impacted operating as results count the generated from of share third outperformed which on equity interest also expense offset quarter, higher impact anticipated fixed in the from our Higher can COVID, the both of and the as be markets. in declines impact quarter, $X.XX Below Most adjusted significant performance. global pandemic share the compared income fund a the decrease which in higher lower attributable rate. to quarter's analyst to a consensus trust prior income year in fixed well a benefited we a the inflationary forecast slightly of favorable and lower cost the tax

above quarter, growth rate in per XX% For a period. better this perspective a the we per resulting three-year quarter's delivered earnings impressive performance, earnings an compounded share pre-pandemic XX% of XXXX in third share of annual growth over

ahead of from down on the were results levels expectations funeral continued elevated prior of well funeral While our services. year,

cemetery cemetery expectations. side, profits were with line overall our On in the

and strong our very ahead Our were sales preneed of results production expectations.

trust results and strong those fund rates However, by were recognition lower lower tempered income.

Now deeper results quarter. a the the into let's funeral take for look

$XX This prior year year revenues comparable funeral total the benefited core includes over million $XX revenues. prior a funeral As in X% against decline about quarter pandemic significant a reduction or that comparable from anticipated, million impact. quarter declined a of

over the XX% the volume higher to is about than still period. year Although, growth XX% pre-COVID quarter over comparable quarter, three-year the the declined compounded funeral resulting in prior annual third impressive XXXX third XXXX an core quarter, X% volume compared rate

Day beyond client presentation commentary families during is around this elevated with consistent to COVID continuing serve topic Investor levels our deaths, we're of above our So and in which May.

to continued X.X%. grow service growth average quarter core an for was prior over impressive X.X%. per year the the Our Organic quarter by revenue

basis it in negatively decline our in rate, core Canadian the to operations. in trust a translation by fund extent, cremation XXX point a increase impacted currency lesser However, from was income, and

gross XX% decreased profit the a revenue the profit lower decline. gross decline funeral while $XX of accounted in XXXX million, The perspective, XX% prior declined percentage from due quarter. versus the volumes profit From preponderance year profit to the to for

the historical We related due also in employee current pressures fuel well compared experience in and higher utilities as increases to cost, as prior inflationary than to year.

marketing several seeing of highly last costs, technology both slightly we've and our depreciation impactful higher the functions and from are we years. maintenance the Additionally, over around sales systems developed

$X Preneed production the XXXX. X% million third over or over grew funeral sales quarter of

production direct in the driven contract strong, leads and velocity an Increased was prior was year almost SCI by increase for direct over as from shift focus quarter. targeting posting new of strategies community our a particularly generated programs, Our digital well mail elite. as seminar XX% on

Now, cemetery. shifting to

year As the against quarter. expected, cemetery also prior revenue COVID effective decreased

revenue preneed expectations. $XX million in cemetery the exceeded quarter. our X% decreased production about sales However, Comparable third cemetery or

In terms were prior core by to million compared year. breakdown, the down of a revenues $XX

$XX care Recognized about gains was and endowment and $X in quarter impacted negatively year by million revenue the higher fund revenues revenue for million recognized before merchandise accounting preneed as million of million accounted this in capital was income. over an actually $X trust by accounted losses. decline for decline service for trust preneed Atneed $X Other $X changes income and by decreased prior million.

third production Even growth the we solid production X% three-year rate in quarter. preneed so million over cemetery quarter XX% Preneed consider you of growing a when are higher a sales annual period. grew than at compounded the third impressive or $XX XX% is more XXXX, sales the

our Day sales Investor marketing cemetery believe the sales and effectiveness presentation, and our pandemic. in in reference productivity we learnings we during have we achieved As from enhanced

XX% profits in grows in cemetery We over quarter. by saw bottom trust declined The remained inflationary year falls the growing decline core a to robust prior Large that average. the XX% quarter, velocity from in straight profit sales declined and revenues sales the the slight line. the offset $XX which quarter. in $XX decline was million $XX than as decline further increases million the income, more impacted gross about profit year the to sales have prior was was from million percentage of Though from

pressures costs. drove historical than Inflationary employee cemetery in and higher maintenance increases

associated experienced with such slightly costs. higher amortization also We systems as costs technology and maintenance

$X.XX As This a you the saw $X.XX. we earnings our XXXX XXXX $X.XX. $X.XX at adjusted fourth a range to of increased per $X.XX midpoint quarter range or our compared a to earning in fourth COVID by release, $X.XX of share impacted quarter of to to implies $X.XX

in and voluntary lockdowns, once model around in uncertainty mandatory XXXX You business turned very consumer was COVID, the predictable down know, with and changes sentiment. predictable, wallets upside beginning

at were to our best what we So an where you Investor thought might we made May, impacts attempt COVID be Day platform, forward. what operating we from for to and going in our expect outline

learnings per base, we during base through new we been non-recurring for communicated XXXX. XXXX, $X.XX actions per accelerated and described We for pandemic. had earnings the COVID anticipated impact The an new incremental for $X.XX that guidance midpoint and which of total of share established a taking was $X.XX share a from

would half levels. back a compared volumes of to assumptions pronounced as levels normalize pre-COVID base and second particularly towards that revenues cemetery these anticipated the in XXXX. XXXX, funeral XXXX atneed We projected in decline Our

slightly increasing We Fed the we variable sales aggressively from sheet. debt anticipated XXXX expense also balance cemetery to would preneed interest assume that rates our up on relatively versus rate and levels pretty the levels, the raise would be the flat

more of funeral of seen Based over non-COVID than $X.XX pandemic, nature certain with believe five these developed we've market anticipated as higher our on levels assumption excess well XXXX, as demographics, what like under the geographic we six combination for share be We cemetery months that would the gains. services atneed risk, more or services are higher of $X.XX. believe last a during revenues aging now base healthy lifestyles less we original permanent in

strong equity markets share. were fund May. with back the in in both share fixed tracking not will and base income for May historic we Preneed that XXXX would combined assumed XXXX. This reduce Unfortunately, cemetery an downturn for by in in what in per $X.XX about per back $X.XX income originally we result anticipate did the of earnings trust sales

to we results a of $X.XX in the So which when increased the you from add midpoint $X.XX. non-recurring in it original May, $X.XX revised XXXX discussed impact, COVID

determining utilize our of earning preliminary we in $X.XX assumptions, growth expense, share $X.XX higher per for for to per $X.XX earnings fund guidance historical guidance determining as range trust the share In factoring slightly interest XXXX, per results our lower share our XXXX earnings in as base, slightly share. applied well income

my want our thanks that families. say day to to more do than teammates thank I all for every all -- for you of XX,XXX

are You makes what company this great.

to Eric Financial I'll operator, Chief that turn now With Officer. Tanzberger, call over our the

I thank Kind to again. associates. before us first Thanks really it Thanks want really care I Tom. Tom the funeral address personal joining crematory you of morning Good just plus everybody. how want just quarter, center left to XX,XXX homes, say cemetery, off our for to all of

the of communities. important, have are our that Now all results. clearly. these care what's and families that And your to these associates client produced most go of very financial are efforts. and truly We turn, impressive work Please who this tirelessly take appreciate continue make to these the work and company our hard in hear people

will our balance in and results I going said, cash that our some and outlook kicking year morning. cash investments some off flows. on for our my for give business preliminary the at to flow and provide you the effects quarter comments thoughts into hand, of funds. of this cash the XXXX trust financial with on then market I'm the and terms So flow also comments increased this XXXX, for capital get discuss

adjusted the than the the of divestitures by well way favorable offset sales with about excludes prior third This in $XX the million of $XX million the lower as as than year, result heavily This quarter-over-quarter receipts of know the $XX generated from compared of flow the So declining working quarter. million was is activity. revenue but expectations, discussed pandemic lower million related cash million flow by which capital recognition. timing about cash first we've net impacted quarter starting operating of higher source production in to cemetery $XXX cash preneed gains a operating aligned strong earnings which the was and income, during we the correspondent quarter. as our capital somewhat with on a it in working positive was as as and decline $XXX taxes in The the of was lower quarter, to cash

Act. of working Secondly, favorably year the quarter $XX allowed roughly in of million impacted third under prior taxes CARES the the the deferred as payroll by was capital of payment

the million, memory, $XX that $XX Act second quarter, of last year the CARES the we So, amount, this be remember remaining quarter million we'll under XXXX. this $XX taxes just and in Then the approximately payroll paying defer of full we're the totaling quarterly for year fourth third of half to repaid this first your quarter refresh able to year, million next XXXX. the of

Finally, debt. cash to due and were target, interest an floating interest payments our rate rate increasing expected in of balance the $X on million increases

to I markets shifting everyone our our understands term but longer comments funds bears sure I make trust term cash flows. now the funds. financial think near to So, the trust quarter, last some on made our repeating and about it of impact

on funds, As term financial muted cash market the our and earnings market trust effect a near past, of again the in has but value influences volatility we've discussed flows. of the our

the X% in of on each XX-year contract life in market value about the or the any contracts, the backlog really X% about those our fund XX-year really cash over Therefore, period reduction and flows a trust to of reflected mature the individual is year. average given per effect XX underlying So, to in trust earnings to only contracts given allocated customer year.

currently So, the billion began about said, in end this the balances $X.X $X.X slightly billion about you. let's and trust today, quarter balances. assets, with that higher about talk the to of than the year billion, that We we at total that with $X.X reported

each sales months deposits offset other year. the generally this from and maturities the withdrawals first have The new nine during of on

the Central with decline XX.X% those the have call in in and impacted last where And So, reflects the have declines the is the market space. in by inflation, trust historical swan both which led has value been associated in what of of performance again, in black XX% this uncertainty change the year-to-date, million change $XXX we at XX income tightening Bank is XX% trust the primarily not seen we geopolitical assets. and fixed markets, of equity years. to This the event, has we to seen which something somewhat a speed least

in and $XX a our finance the talked considered which all guidance to cash of flow earnings million is increase and trust morning in headwind in press this result full our XXXX the to of in in decline is This expected balances flow $XX about year our we million for about XXXX, release. that cash

that, slightly and higher corporate compensation as next, G&A and general to touch cost to were quarter and increases. million as $XX and expectations workers' salary expenses, shift with So, wage due insurance pressures gears which some inflationary current like in than liability I'd on well the our

Looking we to XXXX, corporate due million inflationary ballpark trend quarter. $XX bit forward a to expect labor to in of pressures these per G&A higher be to $XX and little million the

I'd our capital like to now So, investment upon touch activity.

million our and we $XXX accretive we funerals, into our shareholders. returned new to So, acquisitions, quarter also capital during the and invested opportunities cemeteries, build

Let's talk about the breakdown.

capital, businesses. our maintenance which prior year. in investments these as We of and had expectations higher relates First, $XX million both was to than it our

and accelerated and locations both cemetery funeral infrastructure, this in third that developed our chain the for create costs of at of technology quarter, These hardware During and constraints also these home associated facing non-customer for with contemporary cost we to being pressures a supply prepares the is customer our utilization all to and our locations. more higher installed were currently technology all involved. being really due investments inflationary the experience

This future million the pandemic year, $XX the related is to as following trended we development meet replenish as and during consumer quarter. selling inventory slightly to invested has year demand expectations experienced than continue also last as elevated customer activity we prior into the Additionally, our primarily to delays well preneed projects above cemetery due opportunities. the higher

million Considering we in recurring development release. reflected press which discussed, updated that for and cemetery infrastructure you $XX higher believe guidance was increased gave CapEx investments I XXXX, in in technology we range just be the our will the about

and real construction to across shifting new estate, $XX of We towards and existing homes the cemeteries now million of expansion our So, of footprint. facilities capital. invested growth purchase funeral

front, funeral transactions million. Coast acquisition home East the the and West On we on $XX closed totaling about two

the cemetery and Subsequent multiple about the million. locations to $XX funeral home quarter, on we Coast for purchased West

targeted all this about $XX year-to-date million. range closed million including our spend optimistic our year is So, to $XX believe acquisitions, again and about usual IRRs. done acquisition which at we'll the transactions, of were recently $XXX of for well We end million, the pipeline our remain into

opportunistic first of demonstrate we really these returned that returning Finally, year-to-date, two $XXX nearly repurchases. we about to returning quarter, did towards business spend full of about dividends with our topic this the years. invested each in million already capital in $XX These and commitment to strategy months our continue share the the million nine we the last million. and shareholders. in year shareholders And million $XXX that share repurchases has And exceeded close which in to investments investments is confidence on have full we have of and this our value year to $XXX

position. financial our to quickly shifting So,

with of almost have available We million, cash liquidity the robust debt of million which continue our facility. $XXX the profile, credit approximately of which consisted a a end $XXX at was of to bank strong on maturity $XXX long-term balance hand, on favorable plus quarter, million sheet

Our leverage three of debt was the end quarter just the to at EBITDA. times above net

program. opportunities We builds coming new the invest will and the such share capital over quarters in return high as repurchase acquisitions, continue to

pandemic currently that prior normalizing is by EBITDA year our addition, was activity. In from impacted the the

targeted that of range and expect of of XXXX X.X low -- expect to leverage we the to of end that targeted end So, end our four at the low times of low be in we enter XXXX. the to at range below ratio leverage our range end our

an XXXX cash remainder outlook fourth million a to shift $XXX to for our of year million. implies for just and million release, to we range the by the of million of our $XX XXXX. in let's $XXX to midpoint talk operating $XXX $XXX into about million and $XXX the of In now the million increased This range a flow quarter. press So, guidance adjusted full or

$XX interest also has million updated anticipate cash in this in floating costs debt, quarter, considered from We the fourth could guidance. flow also $XX to pressure continued which cash rising been rate million be which our flow on headwind

ahead to looking XXXX. So,

working in flow, models working and more which we'll capital our is what currently give guidance cash are We through our February, you better and our taxes do. normally cash specifically we

to I did morning want to as give it flow expectations. cash this mention a to items XXXX few some this direction relates

Included $X.XX million higher from levels floating is change XXXX about million will of in which in higher about higher our the midpoint we $X.XX interest in net $XX guidance when million for net EPS associated of was to interest costs cash from of $XX difference think than the So, flows range mentioned, more $XX be result is XXXX, rates offset Tom EBITDA first, the that in that about a growth operations XXXX. just debt. expected at our decrease this by with this expected cemetery on rate adjusted

XXXX of expect working incentive as XXXX really could capital payments the of a to as cash we Additionally, flow, couple items cemetery as that on be in timing preneed But recognition and have XXXX cash well items to to strong temporary revenue would to cash cash and the for compensation working compared these receipts related pressure a be correspondent beyond not normalized should more flows year-over-year. remember, expected affect capital considered level.

for So, of us in joining year-to-date. this proud morning. closing, this performance We're thanks

strong are quarter. fourth XXXX to expectations very now finish Our a with

prepared open up to back operator, remarks and And I'll and call and to with questions. I's shift that that, the it concludes Tom you

begin session. now Instructions] the will [Operator We question-and-answer

comes first Suisse. go Credit Please Rice A.J. from of The question ahead.

ask. questions Hi, couple if everybody. could a I Maybe of

comments final there. your on up following Just

to in can like capital. that to you impacting the and further called But working I why are other of as in and flavor you you some XXXX? give magnitude? XXXX? those refine there want in flow cash and what's out to about know items You -- unusual consider be comp it refer one-time order back them us some the would then those And incentive Is items

going be targeted even in Yeah. to exact entire get you cash directionally is across would That ultimately, to very outflows some to what occurring we models obviously That's sharpen is numbers we've ICP But related question, do. It's performance to the strong have payments good we'll XXXX. ranges. A.J. times to February, the two Again, such and February. company to in a had like in close revert the always

you of capital, be income XXXX probably during if onetime so, large we'll working in and paying think at kind and And accruing of the payment. statement on unusually February

be And to going during XXXX on could to payment actual on doing so that's the flip just the drag what that's accrual working versus create flow XXXX That in February. be It looks like income statement going during the of then to that capital more how pretty paid normalized. and in we're strong, again February. that's cash depends timing the

price level Jerry the the entry did do $XX preneed a I during of to lower the customer $XX that you portion cemetery, other relates teams really CARES the quarter. the -- this working of spectrum, really some talked entry is Act that's level and the we other at year capital Tidwell really the Steve point and to positive it with of talked things is and happened about which really million a that sales think last The of kind mentioned about and million tailwind saw I payroll. kind drive and that thing million to or of But a $XX as end has their of

to had of Some with incentives. that customer do

with down do that lowering of had payments. Some to

going you're And you recognize XX% that don't get down, so, if not revenue. to

year is year. we're next half I'm recognition this the may So, receiving saying this back and revenue essentially, cash come what of

as a bit like a to year the timing may little cash capital as source end we're this will of flip there's the to where working year of this well. revenue So, have have difference going of lot and of working late this come recognition that use capital at a comes, the onetime where a of

So, more come to on that.

capital $XX think could cash be million. that the as flow. Working maybe that be bonus much as much $XX million, that could I as as

be $XX think the million flip to working $XX I capital could million.

in think kind So, should directionally just up $XX XXXX that pop capital you kind be right and giving I'm of some back somewhere considered that working of ballpark in nature. will temporary million I of in

won't that Okay. We're just think you had don't death baby-boomers where in a haven't Do think else looking Great. something There's the up you're COVID XXXX. a growth It it's hit you one you start this Also at atneed will can what Is normal step. is anymore. fully you deaths on? in curve. a of and related bell year. Tom, see just rate seeing? to XX maybe a stair going step this assuming that I'll big the be all ask, Is mentioned normalized? maybe think Is it to be obviously in from excess that period here? we there issue, I'm we sort normalized

Yeah. A.J, there are of I that three identified my in kind comments. things

it was it, like what see continue relates a think to what's right, is demographic steadily you're happening. I and to as And component anticipate you would one said, beginning it's that we exactly that of first call we're kind curve of more believe the to a I The lift climb. baby-boomers. bell to do

think more I I'm category pandemic more I that the probably deaths mean is to get all. was a describe way the it, more is lot one more more the and And And from disruption. people I this, I I seeing of I almost would overdoses, mentioned but what murders, it it we're it we cancer second by And pushback I call called car in seeing death. guess, every drug of being say We're accidents, on impacted suicides, deaths. going The lifestyle. trickiest of

of for society we what heals going away? and that better. think does I happen belief when that my that's now go itself into at point, conclusion we It's so, is don't to And time. come kind some get some

or physical I hard think when health, health these people quickly. mental are their are to by reverse impacted trends

your point, five soon. a four, I we're time subside think But I but it's from to any think now I years hope of that. seeing bit, don't So, will three, some

And share. measure increase then got And we seeing that. impacts in combo big that it It's perfect, of mentioned last is we the not and believe but over time. again, probably facilities particularly piece we market markets track to that in us, our we've share I where a variety try we're and as

things So, at about. don't I one that the away the comment unhealthy think, that is years. only talked that I impacting couple think go really three of over that some point, that I've next diminishes And America

your function you somewhat that as quarter, Okay. decisions. Maybe somewhat the say cautious production, would affecting interesting it that more were was is question. second on one plots final In the be Or second backdrop, sluggish Any cemetery the increase Obviously, preneed sold? purchasing Was whether some well. you about production rebounded macro quarter. nicely a after production dynamic maybe Can plots? price of the in color still there? average a the on

A.J. Sure,

it, hasn't So, as let's is, large call was really it and area that one relates robust sale. to changed the that, the

up quarter. $XX a year-over-year were against by sales last large impacted So, pandemic million pretty

we're us high continuing don't little track surprising. seeing think end correlate although, end sales And housing So slowdown, would again, at that even to the down, yet. back to with I as we've a go seen spectrum. is It's better which that of say, I you But markets high tells time, with the probably shine back the prices. some consumer

guess too us So, surprise shouldn't it. much we that about good feel I and really

can what some leadership sat upon customers, getting have a pay we other to relates touched velocity. a over Jerry, consumer closing and we income our going And selling feedback with got do about a happen for down as deals. Steve would think from team, concerns, Eric with point was But not to have price to about concerned was said, impression fixed this. resistance were it what that our and consumer to happen would sales have when our what we and thing that's time, that you these The we

transaction that up with inventory then things some more they be for price down points interest identifying a about consumer. may that payments, And reasonable also so, lowering came some some and

things So, -- want to we we're we can move. those that took going inventory three give and said, take you maybe we that to

you that payment. reasonable and it finance rate to at down for as Let's relief your some you also a give relates

that, is the third was had velocity, the doing saw by in second what And quarter, So, slightly we quarter. trends. only flat, more for disturbing seen we almost down, it some

And things time. like And to it. that -- So, is like assure try the the us I'd worked in time that. worked I working things we a first see really again cancellations a shouldn't to getting that well. in or it fourth quarter automatic we to those that payments big our like that that we and know do that is dip tie sales belief What we see so think, anything something in at this we've moment isn't third saw just done It's the and say quarter continue far. we

Great. a lot. Thanks Okay.

from Please ahead. go comes Truist. question next of Tobey The Sommer

you. Thank

higher of the direct in the bit And other maybe than death but in we COVID deaths? sales And in then, Thanks. quarter us ongoing, level sort the pandemic the a actually higher refresh expected lower of the If if math, little you is offshoots dig related of as you about factors more? events into other drive and categories? funeral that the what get questions could could

kind It A.J.'s it builds Tobey. Sure, put me of but longer this. on upon question, in let term some perspective

accuracy a year over big was pretty or And X% with deaths If SCI, what to you year-to-year, this footprint a like ours, and in you going predict probably numbers seasonal of good could be in would X% you probably which X% you or year, see and it's up one you're X% flu. down industry the particularly the year, next happen. over impacted go may by back in with

lot a heavy way comparable live and up got a industry. with you be of might as a that an down then season be in you tough you've flu slightly. We So, deaths, and that's forever might

point COVID before. game-changer, a one say, do right? a which is comes to of let's probably unheard or XX% at more funerals, XXXX two along, happened year We're in year versus,

-- that's And believe we is what know should we so continue we're diminish. that to let's maybe we growth is, to identify would carve why is so say, expect expected very we back go COVID And would XXXX, towards, we diminished I or X% that. of level, a wouldn't what what can and so you now XXXX get have and you and trying out

be would reasonable we And that's stabilize. of we that think what that a anticipated. So level would kind

that to I'm third that's you we what call, this is you why telling going back we're quarter a guess, year, is to I just not third What we calls did the the the did more telling is of what at XX% look in very quarter XXXX. And compare That XXXX. of anybody de deaths. minimis anticipated. has COVID than have And amount we would

that So, sustainable? to is think we're then is, you I don't I guess Well, XXXX. think I'm back But going what telling I you don't XX%. say,

-- is getting which that baby-boomers There's well and impact this, way it, be dragging. issues, reason an things is And these dying. probably for and more truth access takes diabetes, as long-term things unhealthy all go get is, it mental from say to are help. issues I'd the And best out going to issues. love health to America time it call many the work and going so tomorrow physical and as believe again, doctor But really -- think concept, is, would there's everybody I to we're we healthy. lack are health is screenings, that the from take to that to

that having an is impact. So,

reacted. people. made with communities. think favor identified, We gained We company, and through a the a lot way this as And our pandemic -- contact then gave because teams local with of a finally, our of I lot of

consumers, our geographic about If as just higher I in you share, we've doing has some digital a with we're allowed us think what think that on certain interactive gain higher markets. preneed to side to on profile, mode it the leveraging relates been particularly communications

saying those go not think going So, is we I'm I aha We're what big and I going think that from out levels, be here, anticipated. that's I guess, we're the to moment trending higher back there. don't XXXX significantly to

momentum gain? sustainable that track to there in a double-click video. machine Perfect. behind of that And that market VHS we'll that Could you is of some share down on Thanks. have watch opinion? concentrated? all And your go geographic of Kind is where sort kind to

I when combo of Well, in of inviting to we want noticeable I again, places But more just go and grounds. to to really have And it's to COVID, in our the gained We in more share probably I'd got and people were a fact and do have beautiful pronounced -- some facilities. and market believe in cemeteries I'll didn't saw people right? again, different generalize, to say about service, a do they with areas. the has a that you west, of lot we pronounced We markets. our had think think see more Tobey, different we it places lot because inside to

like And believe was I And people so, got beautiful. that a glimpse that triggered that I boy, some consumers to of as is. what that to a lot good. Those identification places. say, were

over the were New families I like by impacted really lot people and extraordinary client were And in where the and us in that certain so with needed you and us we -- And inundated think that again, had build allowed California we that two country. markets. that ways regions across country, think people shipped of situations And families I both York, people to a it's things your reputation our brand client able That help, serve death from relationships allowed last and more had we shine. were unique in the pivot years. to develop and

you and say where have like those we So, I'd outdoor a surely it great in Arizona, it's saw in but bit California, weather little Texas. places everywhere, facilities Nevada,

very market we about to it So, good as share. position feel relates our

Thank housing sort To you. the that correlation could is prices? How of, prices? question. historically, within lagging high it with you And that, of look in cemetery sales? expand with changes you or third big could upon preneed coincident sort sneak when end say in If at a is I leading,

think, you you're think, preneed. probably to we're we've seen particularly relates example company, about it is a an consumer because staple I'll people I cemetery lagging preneed, as a they think -- consumer think discretionary oh, before. they of what times about it's give forget I our No, business. lot

low was XXXX, they and go the of to April quarter what in XXXX, XXXX, So, stayed concerned us. the quarter our concerned -- the of and first it In happened, go if us. point and sales you we XXXX, that comparable March. third you'll was Then back Tobey, and in down XXXX of it saw down, remember,

were Our sales up XX%.

large were business. of sales. they Now taking weren't care They customers

we're of by the economy, these learned they and we buy big what but but so, And TV, types family we're of consumer, impacted their insurance and They is things people screen deals. the turn our the take first one of back care don't on.

correlated my of a and wealth. large took because longer then back struggled, in think, sales What of XXXX into even XXXX, again that I with was feeling really time bit

I boy, me at a little of well. there's -- XX% market going I'm feel spend $XX,XXX, doesn't if So, particularly make But bigger could end more than end end, guess, going it to high stock buying the and regional, correlation I'm houses? bit down, the buying inventory, if probably be houses, national. cemetery high are be they're buying it the high that they're could people Because end high is,

And And happen. a lag. it. have So could sales again, that's the way component I'd think become that We'll sales. significant our correlate large manage it's I of a But it. slightly through

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

that to just a can taking really Or all after something the Thanks did want question you on delve second stay are measures sales you're on that strong in are to A.J.'s very growth. the more like And A this quarter that believe effect? the you bit what Thanks. these you strong. Good wasn't more? can sounds morning. that preneed third third of it And persist the touched that next quarter in as a quarter year? little fourth. I short-term Is just cemetery in in you with just invigorate much. on bit Could that topic salesforce -- through into and quarter? persist fourth

Yeah. assist temporary Scott, great for as we consumer. I view question. the do these of think more a

are we're can don't that I yet. growing said, going found and was a is up. utility there from actually it I going afford now. people that the prices Gasoline we ask of I is a up. portion with feedback families is out what just getting interacting think this there families. big right And My are that looking know I'm but interested,

think this what to way that's get is a what I to you really let's say And So, find response you a this want. was.

higher as these types as, a you don't to we've a rate. got points, that again, that we I back don't to it's you So, -- to do bit of cancellation -- we they the a going and to more going you're going what are significant. little we of I lower of as because need it's to it conditions going things get family don't satisfied and to economic that these believe won't happen. view be modeled you it, It's some have traditional, wanted. go anticipate better entry want, we to back gets But pull think

these would are things improves, a feel point maybe So, turn comfortable that you're are months, and probably XX accommodate talking real those I about tell XX but finding these cases, with. And sales back. endgame. that -- a that we are the you economy they less way that than the in it pays to over $XX,XXX And would that's the months, as price --

you're lines anticipate fourth that be achieve large as to XXXX about the on the share can cemetery is single Thanks. It those Is of sales say production, that change you the Okay. some like I outlook with you about dropoff some mid what a maybe full would in for we down By value any that how end if more question. velocity? to trending year? you mid and lines, positive there that sales go? And Just digits, dropoff this should your looks just guess, commentary Thanks. up expecting think which, math, in are growth easily quarter in quarter preneed with should we slightly we guidance year. any should digits. you along my And along single final the

the think, way I don’t you like optimistic Scott. Yeah.

right. you're If a think before little We don't probably at trends know, little -- we like we to than you don't victory anticipate. of end we declare know. I We're higher a further So, just could the continue, it be want XXXX. get

you're of lead the the will kind as about COVID it now And a XXXX, would to again, first only growth year, go a have think I say this really going quarter you off was And rates the not heavily go great impacted, can more back perspective, that back that we be may base. if believe little tough quarter you'd generation. of a think that we level which of compare, I there anticipate was we to we generate and probably quarter. that had last to leads -- same from new

first it. we going in is comp. grow grow to be we're going we digits. digits the quarter it We're the that. is the tough But think as mid single we to XXXX, I single So, might a way If we're probably about about think low lucky, think

think done and very what we're what sales our for got we've teams we're our off and families and of going we -- ops pleased So, very, it plateau, for SCI. with they've they've and and to done to this grow

Thanks. to there. pretty annual in quarter. Appreciate the you're but you're not think like that. sounds One at like active target M&A, It sneak more sounds spend, here I'm going get your fourth in here. to you'll

some if in you. And M&A? there right pipeline? Thank just So, in thoughts, maybe here there than be higher will quarter, perhaps very some are for fourth comments. Eric, XXXX the a -- Is expected things not year

Yeah.

about that about prior I closed think quarter. quarter-end. good to close would we a after It's Scott. feel year same the last I thought that I -- mentioned was that million it, just said deal quarter-end. thing after $XX to I

to get sellers there situations. It's for by we how can to with work guidance going $XX the always fine. we'll the the the that accelerated being that year it. timings believe answer to million as So, robust pushed end weeks still feel your in We is that important that as But timings given and pipeline. to I'm that best still and and us in describe question it, in is out get $XXX those it's we there's that's million a think we you we've

So, telegraphing you quarter. fourth a I good clearly to

XXXX sell-side Thanks. on And anything XXXX that buy and approach to Thanks. M&A? policy-wise, regulation-wise, different make the than would

perspective. policy a about from know No. we that Nothing

Okay. Thank Thanks. it over. turn will I you.

Yeah.

Ransom from go ahead. Please Raymond comes James. of question next The John

XXXX. So, Tom, saying workout what at haven't is a looked you're you since media

I caught. guess, I got Yes.

know I video. own my You why make because

and subscribe month pay with $X money. might I [indiscernible]. a

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No.

high Thanks. range. XXXX low you And end guide on give income kind you're I the the Yeah. could with assumptions? know not. versus trust You're us ready what's of contemplating But year help full you're kind XXXX? of just the versus kind not end the XXXX to then, full factor swing of

Sure.

kind assumptions. of with start I'll So, the

I'd probably quarter, to As where you volumes the And probably you digits year, the that's into quarter still first volumes in have XXXX. say, to COVID a as through that, happen we maybe down, to compares call little low going second think bit the see single to predominantly even some expect again it next of numbers. mid of impacted it,

to So, overall, XXXX again, But XXXX comparison, back down. that well above slightly trends.

of to growth feel sales it, that expect, the expect growth we think side, would good. would year-over-year. as digit back us to normal able we're you call mid levels, really On what to you be, type We do single which be would

then this wage way And tried the I'd that locally manage we've some And Because is is, again, cost and will along saying, the I again, about, We've one company and of seen consumers. service it, to right seeing clearly our thing year. managed people let's back pass -- fix if those call business and other to us, by in to say then we assisted as is our have if every I'll our pricing. which be we wage pressures, to it inflation. know more, to the think services get we're it a let's way and a find get able those

with feel we've and sides. so, about that do to pleased And on pricing very both ability our been good

has have not we've rates rate some It's variable got a aggressively. up but pretty identified, significant variable headwinds Eric the gone component, that so, debt. And already

in -- we've to combined seen in. look equity a fixed got before, unique And your back in declines what's XX% that factor history, income never you point, with we really decline markets if but about market. go So, in XX% this, to

a So, dip unique down. very very, it's

you getting will. income whacked if trust So, down,

XXXX, accelerate that at any may expect maybe that XXXX, we back. look or point, would you at some if be and of it cycle, we Now XXXX other some get

do we XXXX trust that's we way the I the would want we'll we returns about and think don't year being to I a play a anticipate timing. our on guidance. -- So, favorable for guess XXXX think But think

fund your what's trust So, best -- this for what year guess year? for full and estimate the the drag was

concept that I the said time, we $X.XX the And long was a income is is XX a income, trust think for those cumulative -- yeah, really decline as this haven't of it, it describe it's we call we impacted years. year is $X.XX, us around difficult, year-over-year. who income by, been on because over that trust you when contract

income. always So, generating we're market. because happened lower a It's trust what it's -- of just to level the

that's the it. so way And we think about

And So, of didn't early probably other right, because what the by -- of have a quarter, bit of would quarter. in you that anticipate what little contracts base. the I by for XXXX? third starting or second happened in indigestion also part XXXX, lower get the I impacted XXXX, from Well, didn't I'm

unfavorable So, going that impact have you're to rollout.

a bit XXXX, about face. roll maybe another $X.XX wind little a that's could or think $X.XX So, in our into of that

Thank you.

go America. of question next Bank of Please comes The ahead. Joanna from Gajuk

Thanks taking Thank question here. for you.

So, in one I topic last the actually on of guess, returns. the follow-up fund terms trust lower

Like think average X.X% this average? the segment. So, is there for the same-store the sales way to any to quarter headwind about up only Funeral was

there? headwind the quantify to way a there is So,

I'm funeral me. our Yeah. doing Thank you, X.X% reported so a little Joanna. We average. In by bit my estimation, in this forgive remarks, a of and

a what pointed out on year-over-year pretty the beat. think mean comments I I big robust, increase X.X%. was was actual I our

call, a mix funerals, is in, happens a rate right? have XXX burial what change. point cremation you It's decline I'll basis what Now,

So that on pressure you. bps XXX puts XXX of or so or

income, that line The second the to correctly. identified thing, trust It's going flow you've item. through

the in is impact So to income that decline going trust average.

at doesn't translate when We strength translate it dollar, $XX, puts average the impact really Canadian $XX operations. out the And with into worth it. profits I it's the when -- call the it's happened was U.S. last you when do one, it calling have you of back And I what's think, the but looking results. another, on it of much, very pressure

those And go I will knocked point. that things three had improve XX. other trends think we I will the the some think again, market back So, down way. at do to XX

But I had U.S. looking everything at unusually high rate if And it basis dollar think point was back is numbers to less we than small, change. stop Jay XXX the was at point an said, it a go will railing some year, really the cremation change. you against and last else.

think and XXX is basis ebb a change. to think year cremation going about to changed. way We still is this probably good I the think flow. XXX anything's a to mix don't points So,

terms cremation. Okay. my second you. of was that Because the in Thank follow-up

a as terms people dynamic you burials? dynamics view the in of in more it change just year-over-year So, over cremation a of market kind versus choosing

It flows. Exactly. It really unusual. of and was kind ebbs

highly you really XXXX, couple actually if and a the it the other way. quarters of went again had think I And is we XXXX unusual. cremation where at looked that

So, pandemic I guess, XXX-year disrupt every tradition.

here. a Sure. Yeah. Thank you. And if might I just squeeze different topic

FCC timing changes also, hosted, the that they are they list a additional on of the seeking consider specific And on Or advanced long be when modify them including proposed how what the the rule considering your session this but where the what comments from There here? So, no back on that public sense of including might to does of and is questions, change was hear specific there of issued it funeral where proposal? it making only actually views front, might notice sense? they there. was your Does change anything? they any included proposals around the they rule, we actually

morning. Joanna. I'll take Good that,

look or of We continue. it of refresh funeral questions public well. the information, as continue. continue call at and years June because everybody's not go believe we rule terms it's working, in of new those that's whether Just ago memory, on people done what was should the on some two there's we to and believe a back submission can in submitted should lot and you Initial

of independent part comments as is But what's customer know submitted that, Power we important feedback. to J.D. and

of we years submitted fact, XXX,XXX five per each. In year

everybody's memory, higher customers the about pricing. And to rank these clarity in responding on customers individual or Powers XXX,XXX nine of refresh topics. of submitted of out XX% we to XX J.D. So,

message at first and our June submission in point our So, that was in exists. pricing transparency

our Secondly, the than were high the of believe met point lower prices expectations. was probably customers XX%

October, the place, that's want to just to of forward groundwork Fast the funeral advanced issued keep of notice to want rule the it and the have part FTC not, ANPR questions. which So believe proposed they've asked this lay morning, proposed as actually sense. or the they rulemaking. It rulemaking, you. they They in That of XX to makes was Federal for that published Register.

January ends they're So, online going today what list and starts they price very questions XX-day really is you such. be they're go Xrd. period should and And and format but be I similar. line what mean, are, in the see the should GPLs, where comment can the and online

happening. have need something something damage thing one Powers is it guess, codification, that to in disappointed. in we data or just is appears we bit to consumers The a I say and different regulate think that that a our independently And where to rule submitted the that going. to under J.D. through it And change you we're from telling little that story they're disappointed customers that's that, would to the you

size just fits a we And don't believe simply that commodity. it's one all

that's In where customized opposite. life such. highly we is business trend and the customized. Celebrations getting funeral The the going and fact, is even for more of think it's

does data. respond And have appear doesn't we with like accordingly that before it we'll simply but this so, It any solve problem? does,

SCI, are kind We We we to In of before. is We've what terms terms effect the do -- spending. lot our question. our our changed of of which online. of in things A of great funeral homes well said a tier customers. as tiered different thoughts haven't

type homes XXX-plus have I funeral our of prices. think we online over that starting at have

probably our have experiences tiers homes. of premium We as for well. high That's end our another more XXX funeral

XXX XXX online between somewhere have We ourself. to GPLs

already this going path. down we're So,

of most be form thing it funeral them And which and consider is, all those giving giving transparency the that consumers, want celebration of individual customize such, the us our of to different. for meeting them that important. we in material. they The just type that importantly, to believe with important is homes is tiers of based the to very strongly could but their this, on course, in clarity, would But most of haven't punchline effect life help seen we any we

our effect for today, we that's So, and along think lines Joanna. went to an consistent if or a material effect flow market believe EPS we've cash we of or anything into years. that went forward I it don't this a to business that from ANPR continue path, down couple those been And think just perspective, share, fast-forward going

the Appreciate thanks comments the and for No. taking questions.

This I question-and-answer our session. management for like over concludes SCI would to conference remarks. back the closing turn to

I full fourth for want Have you today. great And and being we quarter of talk year to to there. about to out February year. next XXXX thank everybody a results. Thanks. our end in Be forward seeing the year look here careful

presentation. thank The attending today’s you conference now has concluded and

may You disconnect. now