Carriage Services posts record 3Q revenue and EBITDA

October 30, 2020/Finance/

Earlier this week funeral home and cemetery consolidator Carriage Services, based in Houston, Texas, produced their 3rd Quarter 2020 report and in it they recognized the quarter as record breaking for revenue and EBITDA. According to Chairman and CEO Mel Payne the company blew through milestones which they did not expect to reach until sometime in 2022.

Here’s some of what CEO Payne had to say, “The last six months have been a remarkably historic performance period for Carriage, as indeed we did not achieve our 2020 “Roughly Right Ranges” but instead accelerated into 2020 many of the much higher transformative performance milestones from 2021 and even 2022.”

You can read the 3rd Quarter report from Carriage here on their website or here as presented by Globe Newswire.

Some of the milestones CEO Payne may be talking about include:

Revenue of $84.4 million for 3Q 2020 as compared to revenue of $66.1 million for the same quarter in 2019. That’s an increase of 27.6%.
EBITDA of $37.3 million for 3Q 2020 as compared to EBITDA of $25.7 million for the same quarter in 2019. That’s an increase of over 45%.
Debt reduction taking place of $37.5 million for the quarter.
Total debt of $471 million as of September 30, 2020 as compared to total debt of $508.5 million on June 30, 2020.
Net Income of $5.5 million for the quarter
The company’s dividend to shareholders was also raised by $0.05 per year

Here are some of the service performance related numbers that Carriage Services recorded in 3Q 2020:

A “Same store” case volume increase of 15.5%. Service contracts for 3Q 2020 were 8,923 in number as compared to 7,725 in number for 3Q 2019.
The company’s cremation rate moved up to 57.6% for the quarter as compared to 54.9% for 3Q 2019. That’s an increase of 3.3%
Carriage Services average revenue per contract moved down from $5,285 in 3Q 2019 to $4,981 in this quarter. That’s a decline of about 5.8% per case.

Funeral Director Daily also noticed a statistic named “Funeral Same Store Preneed Ratio” which stayed approximately the same — 17.3% in 3Q 2020 compared to 17.7% in 3Q 2019.

Funeral Director Daily take: This reminds me a little bit of being an elementary school aged child and hoping I would have this kind of report card to bring home to my parents. It is hard to find any great fault with this report. . . especially when you think of what it took by the front line employees of the company to accomplish it.

We noted a couple of items mentioned in the report that gives way to Carriage Services philosophy of using what they call “Managing Partners” in their facilities. Here’s a couple of quotes from their 3Q report which we believe gives credence to the methods that helped with this success:

“Coronavirus accelerated adaptation, entrepreneurialism and innovation across our portfolio by our Managing Partners and Sales Managers, who created high value uniquely customized personal services and sales in hugely adverse local environments. . .”
“Innovation in business practices and rapid and broad acceptance of technological and digital tools to meet and communicate with client families served as an accelerator of Transformative High Performance . . .”;

Like any report card, we noticed a couple of things that we will look for improvement on also. Those included:

Average revenue per contract dropping by 5.8%. That’s better than what Carriage reported in their 2nd Quarter, so it is improving. However, it does show that they have a ways to go to catch up with some of their public company competitors who have been able to minimize that number as they have moved forward.

We will also point out that Carriage’s revenue per cremation contract dropped from $3,365 in 3Q 2019 to $3,233 in 3Q 2020. . .that is a drop of about 4%. And, as cremation is growing as a percentage of their business, it is incumbent on the sales managers to figure out a way to raise that cremation revenue per case moving forward. To be fair to Carriage. ..they did show an increase from the first COVID quarter this year in that category, but still lag a year ago numbers.

We will continue to look at the numbers, dissect the Earnings Call, and try to give you some more of our analysis in the next week to ten days.

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