Carriage Services, Inc. · NYSE:CSV
Carriage Services — Investor Presentation (November 2014)
28 slides from Carriage Services's investor presentation, Nov 3, 2014
Slide 1: Investor Presentation Q4 2014
1 Investor Presentation Q4 2014
Slide 2: Forward-looking statements
2 Confidential 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,
Slide 3: Who is Carriage Services Inc.?
3 $3,080 $246 $214 Service Corp International Stonemor Carriage Who is Carriage Services Inc.? • A national funeral home and cemetery operating company founded by Mel Payne in 1991 • Funeral home and cemetery field operations drives success under a decentralized operating framework • 164 funeral hom
Slide 4: Geographic Diversification in Attractive Markets
4 Geographic Diversification in Attractive Markets 4
Slide 5: Attractive Industry Trends
5 Attractive Industry Trends 2006 2013 Consolidators Independent Source: Center for Disease Control and Prevention, U.S. Census Bureau Large Market Highly Fragmented Secular Trend 5 88.2% 11.8% 88.0% 12.0% Source: Center for Disease Control and Prevention, U.S. Census Bureau. • In 2013, the deathcar
Slide 6: Differentiation in Funeral & Cemetery Industry
6 Differentiation in Funeral & Cemetery Industry • Carriage’s success has and will continue to be defined by three strategic models: • Standards Operating Model • Focuses on growing market share and employing high performance people which together drive long term operating and financial performance
Slide 7: Stable Funeral Home Same Store Sales
7 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 0 5 10 15 20 25 Stable Funeral Home Same Store Sales Quarterly Revenue 2009 – Q3 2014 with Seasonality
Slide 8: Funeral Home Same Store Quarterly Field EBITDA
8 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 0 5 10 15 20 25 Funeral Home Same Store Quarterly Field EBITDA 2009-Q3 2014 With Seasonality
Slide 9: Our Growth Strategy
9 Our Growth Strategy • Adopt a pro-growth business model within an industry that is characterized by its low growth, low technology, and stable earnings • Modest growth in sales of our base businesses resulting in improved margins • Relatively fixed regional and corporate overhead allows for modest
Slide 10: Disciplined and Targeted Acquisition Strategy
10 Disciplined and Targeted Acquisition Strategy 10 • Our Goal is to acquire $16-$18 million in new annual revenue through acquisitions • Target leading performers with strong heritage in their local markets • Comprehensive analysis of a candidate’s market demographics and financial profile • Only c
Slide 11: SCI Acquisition closed May 15, 2014
11 SCI Acquisition closed May 15, 2014 • On May 15, 2014, we closed the acquisition of six businesses from Service Corporation International (“SCI”) • Entered two new large strategic markets • New Orleans • Acquired 4 businesses • Improving demographics • Low cremation rates compared to industry ave
Slide 12: Historical Revenue 2009 - Roll 4Q to Q3 2014
12 $- $50.0 $100.0 $150.0 $200.0 $250.0 2009A 2010A 2011A 2012A 2013A Roll 4Q -Q3 2014 $9.7 $14.1 $14.0 $16.7 $18.7 $18.7 $39.3 $37.8 $36.5 $38.3 $40.5 $41.4 $119.0 $120.9 $120.1 $119.9 $120.2 $118.3 $0.3 $3.3 $11.7 $23.3 $33.7 $41.0 Financial Revenue Cemeteries Same Store FH Acquisitions SCI proper
Slide 13: Historical Adjusted Consolidated EBITDA
13 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2009A 2010A 2011A 2012A 2013A Roll 4Q 2014 $40.1 $44.3 $48.6 $52.6 $56.0 $57.9 Historical Adjusted Consolidated EBITDA 2009 - Roll 4 Q to Q3 2014
Slide 14: Historical Adjusted Diluted EPS
14 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2009A 2010A 2011A 2012A 2013A Roll 4Q 2014 $0.35 $0.50 $0.64 $0.80 $0.98 $1.19 Historical Adjusted Diluted EPS 2009 - Roll 4Q to Q3 2014
Slide 15: Strong and Improving Capitalization Profile
15 Strong and Improving Capitalization Profile Historical Total Capitalization Note: Dollars in millions. Total Capitalization $339 $350 $356 $403 $405 31.9% 34.2% 35.6% 33.4% 38.5% 27.7% 26.5% 25.2% 22.3% 22.1% 40.4% 39.2% 39.2% 44.3% 39.4% 0% 25% 50% 75% 100% 2009A 2010A 2011A 2012A 2013A Sharehol
Slide 16: Strong Cash Flow and Balance Sheet
16 Strong Cash Flow and Balance Sheet Adj. Consol. EBITDA / Interest Coverage (2) Free Cash Flow (1) Adjusted EBITDA Note: Dollars in millions. Net Debt / Adj. Consol. EBITDA Debt / Adj. Consol. EBITDA Note: Dollars in millions. (1) Defined as cash flow from continuing operations less maintenance ca
Slide 17: Historical Trust Performance
17 Historical Trust Performance Trust Growth in $’s Compounded Returns Adjusted EBITDA Note: Dollars in millions. Gains & Income (3/31/09 – 2013) Asset Allocation Fixed Income 50% 50% 82% 87% 75% Equity 48% 47% 16% 11% 20% Cash / Other 2% 3% 2% 2% 5% 50% 50% 82% 87% 75% 48% 47% 16% 11% 20% 2% 3% 2%
Slide 18: Convertible Bond Issue March 2014
18 0% 5% 10% 15% 20% 25% Convertible Bond Issue March 2014 Repayment in Cash & Shares or all Cash 2.75% Coupon, 32.5% Conversion Premium, 7 Year Subordinated Slow & Limited Dilution Impact % D ilu ti o n
Slide 19: New 2.75% Cash Coupon Convert March 2014
19 $- $50.00 $100.00 $150.00 TIDES New Convert Purchased Acquisition $54.85 Instruments $90.00 $143.75 $90.00 New 2.75% Cash Coupon Convert March 2014 - TIDES Refinanced, SCI Acquisition Financed ($ millions) $90M $143.75 $90M SCI Acquisition $54.85 $144.85 $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.
Slide 20: CSV Performance vs S&P 500, Russell 3000
20 CSV Performance vs S&P 500, Russell 3000
Slide 21: Forward-looking model disclaimer
21 The forward looking slides are solely intended to demonstrate the possible impact on our financial results of the successful implementation of our growth strategy by the hypothetical acquisition of businesses aggregating (i) $26 million in assets in 2014 (in addition to the successful integration
Slide 22: Model Revenue at assumed $45M Acquisitions
22 - 50 100 150 200 250 300 350 2013 2014 2015 2016 2017 2018 Model Revenue at assumed $45M Acquisitions Acquisitions $ 36 Same Store $119 Cemetery $40 Financial $19 $300M+ Combination of Stability & Growth
Slide 23: Model Leverage and Adjusted EBITDA
23 2.8 2.6 2.5 2.4 2.3 2.2 4.4 5.0 4.5 4.3 4.0 3.8 2013 2014 2015 2016 2017 2018 Model Leverage at assumed $45M Acquisitions Senior Secured Total Leverage - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 2013 2014 2015 2016 2017 2018 Model Adjusted EBITDA at assumed $45M Acquisitions
Slide 24: Modeled Earnings Growth Impact
24 44% 44% 11% 12% 5% 5% 13% 14% 2.8 2.6 2.6 2.6 2.7 2.7 2.8 2.8 2.9 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2014 2015 Asset Turnover (Sales/Assets) Profit Margin (Earnings/Sales) Return on Assets Return on Equity Leverage (Assets/Book) Modeled Earnings Growth Impact at Assumed $45M Acquisitions
Slide 25: Capital Structure at assumed $45M Acquisitions
25 2014 2015 2016 2017 2018 38% 40% 42% 44% 46% 30% 27% 25% 24% 22% 26% 22% 18% 15% 12% 7% 11% 14% 17% 19% Capital Structure at assumed $45M Acquisitions Equity Convert LT Debt Revolver
Slide 26: Appendix
26 Appendix
Slide 27: GAAP Reconciliation To Adjusted EBITDA
27 GAAP Reconciliation To Adjusted EBITDA 2009A 2010A 2011A 2012A 2013A Roll 4Q Q3 2014 Same Store Funeral $ 118,983 $ 120,882 $ 120,139 $ 119,891 $ 120,191 $ 118,266 Funeral Acquisition $ 310 $ 3,282 $ 11,720 $ 23,317 $ 33,660 $ 40,969 Cemeteries $ 39,316 $ 37,797 $ 36,481 $ 38,279 $ 40,479 $ 41,42
Slide 28: GAAP Reconciliation To Adjusted Net Income
28 GAAP Reconciliation To Adjusted Net Income 2009A 2010A 2011A 2012A 2013A Roll 4Q Q3 2014 GAAP Net Income $ 6,136 $ 7,170 $ 6,019 $ 10,317 $ 15,120 $ 14,311 Special Items, Net of Tax Withdrawable Trust Income $ 156 $ 2,269 $ 2,979 $ 1,265 $ 960 $ 1,264 Acquisition/Divestiture Expenses $ - $ 440 $
Carriage Services — Investor Presentation (November 2014) on 6ix