Carriage Services, Inc. · NYSE:CSV
Carriage Services — Investor Presentation (April 2015)
28 slides from Carriage Services's investor presentation, Apr 16, 2015
Slide 1: Investor Presentation Q2 2015
1 Investor Presentation Q2 2015
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 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 • 165 funeral homes in 27 states – 75% of revenue • 32 cemeteries in 11 states
Slide 4: Geographic Diversification in Attractive Markets
4 Geographic Diversification in Attractive Markets 4
Slide 5: Attractive Industry Trends
5 Attractive Industry Trends Source: Center for Disease Control and Prevention, U.S. Census Bureau Large Market Highly Fragmented Secular Trend 5 Source: National Funeral Directors Association • Funeral home revenue in the U.S. is expected to grow to $17.2 billion by 2019. • Highly fragmented indust
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: Strategic Acquisition Model
7 CSV goal is to acquire over the next ten years larger and higher margin funeral home and cemetery businesses in strategic markets leading to incremental increases in the growth profile and sustainable earnings power of CSV. Target large strategic markets and assess acquisition candidates based on
Slide 8: Recent Acquisitions at a Glance
8 8 Recent Acquisitions at a Glance DATE NAME 2/25/2015 Neal Tarpley Parchman (Clarksville, TN) 5/15/2014 Everly Community Funeral Care (Falls Church, VA) 5/15/2014 Everly Wheatley Funeral Home (Alexandria, VA.) 5/15/2014 Garden of Memories (Metairie, LA) 5/15/2014 Garden of Memories Funeral Home (M
Slide 9: Hillier Funeral Home, College Station, TX
9 Hillier Funeral Home 4080 State Highway TEXAS 6 College Station, TX - OPENING Q1 - 2015 One of the Fastest Growing Cities in US** (2014) Home to Texas A-M University Strong Alumni Supported Community with Business and Retirement Communities Bio-Corridor, Research for Medical Devices, Drug and Ther
Slide 10: Schmidt Funeral Home Grand Parkway
10 Schmidt Funeral Home Grand Parkway (Strategic Market) 1344 West Grand Parkway South – Katy, TX – OPENING Q2 - 2015 One of the fastest growing zip codes in the nation ** Population Retail and Service market equal to the size of Pittsburg, PA city limits Accounts for 20% of Population Growth in Ent
Slide 11: Same Store Funeral Homes Quarterly Revenue 2009-2014
11 $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 0 5 10 15 20 25 Same Store Funeral Homes Quarterly Revenue 2009-2014 Note: Dollars in millions.
Slide 12: Same Store Funeral Homes Quarterly EBITDA 2009-2014
12 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 0 5 10 15 20 25 Same Store Funeral Homes Quarterly EBITDA 2009- 2014 Note: Dollars in millions.
Slide 13: Same Store Revenue Cumulative Distribution Function
13 $117.50 $118.00 $118.50 $119.00 $119.50 $120.00 $120.50 $121.00 $121.50 99% Confidence Right Tail $120.94 Mean $119.95 Sample Standard Deviation $.6M 99% Confidence Left Tail $118.97 T-Distribution Same Store Revenue 2009-2014 Cumulative Distribution Function Note: Dollars in millions.
Slide 14: Historical Revenue 2009-2014
14 $- $50.0 $100.0 $150.0 $200.0 $250.0 2009A 2010A 2011A 2012A 2013A 2014 $9.7 $14.1 $14.0 $16.7 $18.7 $19.0 $39.3 $37.8 $36.5 $38.3 $40.5 $42.9 $119.0 $120.9 $120.1 $119.9 $120.2 $119.3 $0.3 $3.3 $11.7 $23.3 $33.7 $44.9 Financial Revenue Cemeteries Same Store FH Acquisitions Historical Revenue 200
Slide 15: Historical Adjusted Consolidated EBITDA 2009-2014
15 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 2009A 2010A 2011A 2012A 2013A 2014 $40.1 $44.3 $48.6 $52.6 $56.0 $61.7 Historical Adjusted Consolidated EBITDA 2009-2014 9.0% Compounded Annual Growth Rate Note: Dollars in millions.
Slide 16: Historical Adjusted Diluted EPS 2009-2014
16 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 2009A 2010A 2011A 2012A 2013A 2014 $0.35 $0.50 $0.64 $0.80 $0.98 $1.34 Historical Adjusted Diluted EPS 2009 - 2014 30.8% Compounded Annual Growth Rate
Slide 17: Strong Capital Structure
17 Strong Capital Structure Note: Dollars in 000’s $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2010 2011 2012 2013 2014 $119,673 $126,778 $134,818 $155,973 $179,875 $143,750 $92,858 $89,770 $89,700 $89,770 $130,000 $130,000 $7,268 $9,783 $178,772 $163,
Slide 18: Total Debt to Adjusted EBITDA
18 Total Debt to Adjusted EBITDA Adjusted EBITDA 0.0 1.0 2.0 3.0 4.0 5.0 6.0 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 2010 2011 2012 2013 2014 Adjusted EBITDA Total Debt/ Adj EBITDA$’s in 000’s
Slide 19: Historical Trust Performance
19 Historical Trust Performance Adjusted EBITDA 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 1 Yr ended 12/31/14 2 Yr ended 12/31/14 3 Yr ended 12/31/14 4 Yr ended 12/31/14 5 Yr ended 12/31/14 Discretionary Total Trust S&P500 HYB Index 70% HYB/30% Equity
Slide 20: Convertible Security - Interest Expense Benefit
20 0% 5% 10% 15% 20% 25% Convertible Bond Issue March 2014 2.75% Coupon, 32.5% Conversion Premium, 7 Year Subordinated % D ilu ti o n S Slow & Limited Dilution Impact Repayment in Cash & Shares or all Cash $- $2.00 $4.00 $6.00 $8.00 TIDES Cash Interest New Convert Cash Interest Interest $6.30 $3.95
Slide 21: CSV Performance vs S&P 500, Russell 3000
21 CSV Performance vs S&P 500, Russell 3000 Total Return 2010- 2014: Carriage Services (CSV): 451.9% Russell 3000 Index (RAY): 106.4% S&P 500 (SPX): 104.7% 5 Yr Sharpe Ratios 2010-2014: Carriage Services (CSV): 1.48 Russell 3000 Index (RAY): 1.17 S&P 500 (SPX): 1.19 Source: Bloomberg, Bloomberg data
Slide 22: Forward looking model disclaimer
22 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) $41.6 million in assets in 2015 (ii) $46.8 million in assets per year fo
Slide 23: Valuation = Function of Acquisitions
23 $- $50 $100 $150 $200 $250 $300 $350 2013 2014 2015 2016 2017 2018 2019 Model Revenue at Assumed $18M Annual Revenue in Acquisitions Acquisitions Same Store Cemetery Financial $’s in Millions Valuation = Function of Acquisitions
Slide 24: Model Leverage and Adjusted EBITDA
24 2.8 2.6 2.4 2.3 2.2 2.1 2.2 4.4 4.9 4.4 4.2 3.9 3.7 3.6 2013 2014 2015 2016 2017 2018 2019 Model Leverage at assumed $18M Annual Revenue in Acquisitions Senior Secured Total Leverage $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 2013 2014 2015 2016 2017 2018 2019 Model Adjusted EBITDA at assumed $18M
Slide 25: Capital Structure at Assumed $18M Annual Acquisitions
25 2015 2016 2017 2018 2019 40% 42% 44% 47% 49% 27% 25% 24% 22% 20% 22% 19% 15% 12% 11% 10% 14% 17% 19% 20% Equity Convert LT Debt Revolver Capital Structure at Assumed $18M Annual Revenue in Acquisitions
Slide 26: Appendix
26 Appendix
Slide 27: GAAP Reconciliation To Adjusted EBITDA
27 GAAP Reconciliation To Adjusted EBITDA 2009A 2010A 2011A 2012A 2013A 2014A Same Store Funeral $ 118,983 $ 120,882 $ 120,139 $ 119,891 $ 120,191 $ 119,322 Funeral Acquisition $ 310 $ 3,282 $ 11,720 $ 23,317 $ 33,660 $ 44,930 Cemeteries $ 39,316 $ 37,797 $ 36,481 $ 38,279 $ 40,479 $ 42,856 Financia
Slide 28: GAAP Reconciliation To Adjusted Net Income
28 GAAP Reconciliation To Adjusted Net Income 2009A 2010A 2011A 2012A 2013A 2014A GAAP Net Income $ 6,136 $ 7,170 $ 6,019 $ 10,317 $ 15,120 $ 15,446 Special Items, Net of Tax Withdrawable Trust Income $ 156 $ 2,269 $ 2,979 $ 1,265 $ 960 $ 1,181 Acquisition/Divestiture Expenses $ - $ 440 $ 816 $ 884
Carriage Services — Investor Presentation (April 2015) on 6ix