Death care consolidator Carriage Services issued preliminary 2018 results on Wednesday. You can read a press release from the company here.
In those results the company announced that they had grown revenue year over year from $258.1 million in 2017 to an an unaudited estimate of $268.0 million in 2018. That would be an increase of about 3.8%. However, they also announced that they expect their 2018 profit to fall to about $11.9 million which is down from $37.2 million in 2017.
On an adjusted earnings per share basis the profit would come in at $1.19 per share as compared to last year’s $1.39 per share.
In a statement from the company’s press release CEO Mel Payne stated, “Over the course of the past four months Carriage has embarked on a rapid and transformative High Performance and Value Creation Trends Restoration Program. Our goal was to first identify the root causes of the declining performance trends over the last two years in too many of our portfolio businesses and then to quickly make the necessary changes to restore positive performance trends beginning in the first quarter of 2019 and continuing thereafter for a five year time frame ending in 2023.”
Carriage Services also had a question and answer call in with analysts yesterday. You can read a transcript of that call here. Here are a few quotes from CEO Mel Payne’s responses to questions that were asked:
- On Acquisitions: “I think the updating and rebooting, the elimination of the problem on leadership, we will update our strategic criteria for acquisitions. We haven’t done that yet. That will be next. It will be so easy now that we have these rebooted standards, and we will look back at the history of every business that we have an opportunity to acquire over 10 years and look at their compounded revenue growth, and whether it’s declining or accelerating over the last 10 years, because that’s going to be, along with all the other work we do on demographics, competitive standing and so on, and mixed changes, that is going to be something that really differentiates the valuation of what we buy, even more clearly and precisely than we’ve done before.”
- On Funeral Service and the Guest Experience: “I mean we’ve got some fantastic entrepreneurial innovative people in our businesses and they weren’t being listened to. They weren’t being empowered. That’s not true anymore. . . . “
- On Possible Property Moves: “And in terms of positioning our portfolio, I mean there are a lot of people out there who are new in some of the businesses that have been declining and I am hearing from them. I’ve heard from them and they don’t want to be sold. They want to make a comeback. They want to be a hero. They want to perform. They want to grow. And that’s why when we went into this, we weren’t sure how many dispositions we might make and what the size of the write-down would be. Now I’m going wow! I can’t believe the response. And the response on these rebooted standards has been overwhelming.”
Funeral Director Daily take: While their 3rd quarter financial report probably was a jolt to Carriage Services and how Wall Street looked at the company, it appears that, even while their year end profits are dipping, Wall Street is impressed by the way that Carriage has acknowledged their problems and are working on a comeback plan. Following their analyst Q & A yesterday Carriage Services closed up $2.26 per share which is over 13%.