Carriage Services, Inc. · NYSE:CSV
Carriage Services — UBS Global Healthcare Services Conference 2006
20 slides from Carriage Services's conference presentation, Feb 13, 2006
Slide 1: Carriage Services UBS Global Healthcare Services Conference February 2006
Carriage Services (NYSE: CSV) UBS Global Healthcare Services Conference February 2006
Slide 2: Forward-Looking Statements
Forward-Looking Statements The statements in this presentation that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words that convey
Slide 3: Guiding Principles
Guiding Principles Honesty, Integrity and Quality in all that we do Hard work, pride of accomplishment and shared success through employee ownership Belief in the power of people though individual initiative and teamwork Outstanding service and profitability go hand-in-hand Growth of the Company is
Slide 4: Key Investment Considerations
Key Investment Considerations Dominant Market Presence - Carriage has #1 or #2 market share positions in over 70% of its mostly suburban markets Superior Profitability - Carriage has high gross profit and EBITDA margins Substantial Free Cash Flow Strong and Flexible Capital Structure - With low cost
Slide 5: Carriage History
Founded in 1991; initial public offering in 1996 Aggressive growth, spending $400 million at peak of market to acquire businesses Carriage History Acquisitions curtailed and Corporate Development activities ceased Fresh Start -financial restructuring Improved or disposed of under performing business
Slide 6: Market Presence
Market Presence Operations in 28 states Focus on attractive suburban markets 133 Funeral Homes 29 Cemeteries (includes 5 Combos) Market leader (#1 or #2) in over 70% of locations 2nd most profitable funeral and cemetery operations among public companies Carriage Services is the 4th largest funeral a
Slide 7: Progress and Superior Profitability
Progress and Superior Profitability* 2003* 2004* 2005E Revenue 146.6 149.9 155 Gross Profit 33.3 35.3 37 Income from Ops (EBIT) 22.4 24.1 25.7 FCF 4.5 10.5 9.5 Revenue, Gross Profit, EBIT and FCF from Continuing Operations Carriage has historically generated some of the highest margins in the indust
Slide 8: Business Strategy - Focus on Leadership and Entrepreneurial Principles
Business Strategy - Focus on Leadership and Entrepreneurial Principles Entrepreneurial Spirit "Being the Best" Decentralized Management Disciplined Acquisition Strategy Standards not Budgets Variable Compensation Upgrade People and Systems Increase Market Share Increase Profits and Cash Flow Decentr
Slide 9: Funeral Operations - "Being the Best" Standards
Funeral Operations - "Being the Best" Standards Market Share Increase families served over time 30% Take away market share from competitors 5% Quality and Structure of Staff Right quality personnel 10% Upgrade staff continuously 10% Manage salary and benefits costs 12% Financial and Operating Grow a
Slide 10: Funeral Home Operations
2003* 2004* 2005E Revenue 112.588 112.8 116 EBITDA 34.1 34.5 36.5 EBITDA Margin 0.303 0.306 0.315 Funeral Home Operations Funeral EBITDA and margins growing Average revenue increased 2% Operating costs controlled Flat organization Future upside from operating model implemented 2004 Increasing market
Slide 11: Cemetery Operations
Cemetery Operations Stable cemetery EBITDA Declining EBITDA margins focus of recent realignment of operations Focus on core businesses and leadership Strengthen ties between our cemeteries and funeral homes Interment rights approximate 50% of revenues Maximize current heritage Commission structure a
Slide 12: Strong and Flexible Capital Structure
Strong and Flexible Capital Structure
Slide 13: Term Income Deferrable Equity Securities (TIDES)
Term Income Deferrable Equity Securities (TIDES) Carriage Issued $93.75 million of 7% convertible preferred securities in 1999 Matures in 2029 Subordinated to all indebtedness Distributions may be deferred for up to 5 years at Carriage's option By bringing distributions current, deferral period can
Slide 14: New Five Year Goals 2005-2009
New Five Year Goals 2005-2009 2005-2006 Continue to improve existing portfolio free cash flow Build cash to $36 - $40 million by December 2006 assuming no acquisitions Using cash, acquire new operating assets selectively and cautiously 2007-2009 Accelerate acquisition pace if quantity and quality of
Slide 15: Disciplined Growth Strategy
Disciplined Growth Strategy No meaningful acquisitions for the last five years Inventory of potential sellers with succession issues is building Sellers are extremely wary of operating style and reputation of buyer Carriage Services - excellent reputation re: operating style Smaller size and new ope
Slide 16: Peer Free Cash Flow Yield Comparison
16 Equity 2005E FCF FCF Symbol Market ©: FCF Yield Multiple Alderwoods Group" AWGL Dee. $697.9 $56.2 8.1% 12.4% Service Corp. Intl. SCI Dee, 92,4400 $162.5 6.7% 150% Stewart Enterprises ® STEI Oct. $602.0 $440 7.3% 137% Peer Average GE 24664 73% TRE (2) 2005 FCF estimate from Johnson Rice de Company
Slide 17: Carriage Services February 2006
Carriage Services (NYSE: CSV) February 2006
Slide 18: Disclosure of Non-GAAP Performance Measures
Disclosure of Non-GAAP Performance Measures We report our financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP performance measures and ratios, which management uses in managing our business, may provide users of t
Slide 19: Disclosure of Non-GAAP Performance Measures
Disclosure of Non-GAAP Performance Measures
Slide 20: Disclosure of Non-GAAP Performance Measures
Disclosure of Non-GAAP Performance Measures We define free cash flow as cash provided by continuing operating activities less capital expenditures for property, plant and equipment. Additionally, to remove the impact from the deferrals and payment of interest on the convertible junior subordinated d
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