Carriage Services, Inc. · NYSE:CSV
Carriage Services — Investor Presentation (August 2015)
23 slides from Carriage Services's investor presentation, Aug 25, 2015
Slide 1: Investor Presentation August 2015
1 Investor Presentation August 2015
Slide 2: Forward-looking statements and non-GAAP disclosure
2 Certain statements made herein or elsewhere by, or on behalf of, the Company that are not historical facts are intended to be forward‐looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Slide 3: Who is Carriage Services? Our History
3 Who is Carriage Services? Our History • Founded in 1991 as a funeral home consolidator within the highly fragmented funeral industry. • IPO August 1996. • Rapidly grew by acquisition of funeral homes and cemeteries post IPO. • Participated in consolidation mania driven by cheap equity/debt during
Slide 4: Who is Carriage Services? Our Present and Future
4 Who is Carriage Services? Our Present • January 1, 2012 launched Five Year Carriage Good To Great Journey with the theme of Carriage Services 2012 — A NEW BEGINNING! • Evolved since 2012 into a High Performance Culture company that just happens to be in the funeral and cemetery industry. • Operati
Slide 5: Carriage's Learning Journey
5 Carriage’s Learning Journey $28.44 $1.50 $10.67 $1.53 Founded as an acquisition company to consolidate fragmented Funeral & Cemetery industry 1991 Public in ‘96, participated in EPS driven acquisition mania fueled by cheap equity/debt Conviction that Carriage had to become a good operating company
Slide 6: Carriage Good To Great New Beginning in 2012
6 Carriage Good To Great New Beginning in 2012
Slide 7: Standards Operating Model
7 Standards Operating Model “Being The Best” Funeral and Cemetery Operating Company Eight Funeral and six Cemetery operating performance standards that when achieved lead to high and sustainable financial performance. Decentralized Entrepreneurial Operating Model places operational control with loca
Slide 8: Strategic Acquisition Model
8 Strategic Acquisition Model Growth by Buying and Building a Portfolio Ten Year Vision: Affiliate with the best remaining independently owned funeral home and cemetery businesses in demographically attractive, large strategic markets. Carriage is an attractive succession planning option for owners
Slide 9: Carriage's Good To Great Journey: Valuation Remains Compelling
9 Carriage’s Good To Great Journey Valuation Remains Compelling • CSV trades at 14.4x Estimated Rolling 4 quarter Year EPS • CSV current Adjusted Free Cash Flow Yield ~10% November 4, 2011 Transition Date
Slide 10: Revenue, Adjusted EBITDA and EPS growth 2011 – Q2 2015
10 Carriage Services, Inc. A Value Creation Investment Platform Demonstrated ability to leverage single digit Revenue growth rates into larger increases in Adjusted Consolidated EBITDA and Adjusted Diluted Earnings Per Share. 2011 – Q2 2015 Revenue CAGR: 7.7% Adj. Consolidated EBITDA CAGR: 9.6% Adj.
Slide 11: Growing Adjusted Free Cash Flow
11 Growing Adjusted Free Cash flow allows Carriage to fund the majority of acquisition activity or allocate to other investment options to generate returns for shareholders (internal growth capital expenditures, share repurchases, dividends). Carriage Services, Inc. A Value Creation Investment Platf
Slide 12: Relatively fixed overhead structure
12 Relatively Fixed Overhead structure ensures Total Overhead growth at a slower rate versus Total Revenue so that most of acquired Field EBITDA falls to Adjusted Consolidated EBITDA. Carriage Services, Inc. A Value Creation Investment Platform $28.9 $30.3 $33.0 $34.1 $33.1 15.8% 15.3% 15.5% 15.1% 1
Slide 13: Improved Credit Metrics
13 Carriage Services, Inc. A Value Creation Investment Platform $48.6 $52.6 $56.0 $61.7 $67.1 4.7 5.1 4.5 5.0 4.7 2.8 3.4 2.9 2.7 2.5 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 2011 2012 2013 2014 LTM Q2 2015 Adj. Consolidated EBITDA Total Debt/Adj.
Slide 14: History of Share Count Management
14 Carriage Services, Inc. A Value Creation Investment Platform History of Share Count Management • Repurchased 15% shares outstanding for $10 million in 2008–2009. • Repurchased 3.5% shares outstanding for $5.3 million in 2011–2012. • Recently announced new $25 million share repurchase program. • L
Slide 15: Preneed Trust Funds: Trust Investment Strategy
15 Preneed Trust Funds Trust Investment Strategy • Individual security analysis and selection with a focus on high yield fixed income and large cap equity investments. • Long term (3 - 5 year) investment horizon to match preneed liabilities and cemetery income requirements. • Investment discretion a
Slide 16: Preneed Trust Funds: Discretionary Trust Net Income
16 (4.3) 36.7 25.8 19.7 12.0 13.7 7.1 10.2 14.8 14.7 17.0 18.8 19.0 9.4 110.7 (20.0) 0.0 20.0 40.0 60.0 80.0 100.0 120.0 (10.0) (5.0) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 2009 2010 2011 2012 2013 2014 2015 Discretionary Trust Net Income Carriage GAAP Financial Revenue Cumulative Discretionary
Slide 17: Carriage Discretionary Trust Characteristics
17 Preneed Trust Funds Carriage Discretionary Trust Characteristics • Trust investment partnership structure allows for greater flexibility and simplified investment management. • SEC registered investment advisor subsidiary allows Carriage to receive fee from trusts for investment management ($1.4
Slide 18: CEO commitment and succession planning
18 • CEO Commitment: Mel Payne remains committed to long term leadership of Carriage. • As one of the Founders and only CEO in Carriage’s history, Mel recently announced a 10 year plan to remain CEO at least 5 years then Executive Chairman and has never been more excited about the future of our busi
Slide 19: Convertible note dilution and elevated 2015 capital expenditures
19 • GAAP Share Count Dilution from Convertible Notes: • Dilution occurs slowly — Full 20% at CSV share price of $53. • Flexibility of conversion settlement allows Carriage to manage actual shares outstanding. • Low cash interest cost, including syndicated bank debt, is accretive to Free Cash Flow,
Slide 20: Five Year Growth Scenario
20 Carriage Services, Inc. A Value Creation Investment Platform Five Year Growth Scenario • Intention to provide investors with a “roughly right” range of future results as we execute our Strategic Acquisition and Standards Operating Models. • Not intended to be a management forecast or a prediction
Slide 21: 5 Year Scenario - Revenue
21 Carriage Services, Inc. A Value Creation Investment Platform $226,124 $277,254 $351,425 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2014 2015 2016 2017 2018 2019 2020 5 Year Scenario - Revenue (in 00 0’ s)
Slide 22: 5 Year Scenario - Adjusted Consolidated EBITDA
22 Carriage Services, Inc. A Value Creation Investment Platform $61,653 $83,989 $111,954 26.0% 27.0% 28.0% 29.0% 30.0% 31.0% 32.0% 33.0% $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 2014 2015 2016 2017 2018 2019 2020 5 Year Scenario - Adjusted Consolidated EBITDA Adjusted Consolidated EBITDA
Slide 23: 5 Year Scenario - Adjusted Net Income
23 Carriage Services, Inc. A Value Creation Investment Platform $24,794 $33,639 $46,594 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2014 2015 2016 2017 2018 2019 2020 5 Year Scenario - Adjusted Net Income Adjusted
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