Carriage Services, Inc. · NYSE:CSV
Carriage Services — Investor Presentation (November 2013)
20 slides from Carriage Services's investor presentation, Nov 21, 2013
Slide 1: Carriage Services Investor Presentation November 2013
Carriage Services Investor Presentation November 2013
Slide 2: Forward-looking statements
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, a
Slide 3: Who is Carriage Services Inc.?
Who is Carriage Services Inc.? • A national funeral home and cemetery operating company • Founded in 1991 by Mel Payne and headquartered in Houston, TX • Funeral home and cemetery field operations drives success under a decentralized operating framework • 165 funeral homes in 26 states – 80% of reve
Slide 4: Geographic Diversification in Attractive Markets
Geographic Diversification in Attractive Markets 4
Slide 5: Attractive Industry Trends
Industry wide funeral home revenues of $13.4 billion representing 1.5% CAGR since 2010 Industry wide cemetery revenue of $4 billion representing a -3.7% CAGR since 2010 Attractive Industry Trends Market share concentration in the industry is low, with the top four consolidators (Carriage, SCI, Stewa
Slide 6: Our Growth Strategy
Our Growth Strategy • Adopt a pro-growth business model within an industry that is characterized by its low growth • Implement Standards Operating Model for modest growth in same store sales and improving and maintaining margins • Operating Leverage allows for modest increases in Same Store Sales an
Slide 7: Three strategic models: Standards Operating Model
• Same Store Sales & Improving Operating Performance • Cemetery Sales including Preneed Sales Growth & Improving Operating Performance • Acquisitions • Financial Revenue Differentiation in Stable Funeral & Cemetery Industry • Carriage’s success has and will continue to be defined by three strategic
Slide 8: Standards Operating Model and 4E Leadership Model
• Our Operating Plan: Standards Operating Model • Focuses on growing market share and employing high performance people which together drive long term operating and financial performance • Designed to achieve modest same store revenue growth and strong and sustainable Field EBITDA Margins at the loc
Slide 9: Acquisition Plan: Strategic Acquisition Model
Acquisition Plan: Strategic Acquisition Model Our Goal is to acquire $15-$16 million new annual revenue through acquisitions • Target leading performers with the strongest heritage in their local markets • Comprehensive analysis of a candidate’s financial profile and market demographics • Focus on
Slide 10: Pricing Discipline: 2-Stage Valuation Model
Pricing Discipline • Value of business under Normalized Earnings vs. Value as a CSV business • Discipline of staying within investment hurdle rate to ensure value addition 2-Stage Valuation Model Forecasts Forecast call volume and average revenue utilizing both regressions and the CAGR on historical
Slide 11: Historical Trust Performance Q2 2009 – 3Q 2013
Historical Trust Performance Q2 2009 – 3Q 2013 $- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00 $200.00 Mar- 09 2009 2010 2011 2012 2013 Discretionary $79.40 $149.80 $182.90 $159.70 $177.50 $173.40 Non-Discretionary $37.20 $43.90 $50.50 $51.70 $54.20 $46.00 Trust Growth In $'s
Slide 12: Financial Overview
Financial Overview These 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 $40 million in assets per year for each of the next five years (including
Slide 13: Model Revenue Growth at Assumed $40M Acquisition Level
13 $- $50,000.0 $100,000.0 $150,000.0 $200,000.0 $250,000.0 $300,000.0 $350,000.0 2011A 2012A 2013E 2014E 2015E 2016E 2017E Funeral Acquisition Revenue $14,210.0 $25,802.0 $35,454.1 $58,369.4 $74,369.4 $90,369.40 $106,369.40 Same Store Funeral $118,801.0 $118,572.0 $120,207.2 $122,832.9 $124,061.3 $
Slide 14: Field EBITDA & Margins at Assumed $40M Acquisitions
14 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% $30.00 $20,030.00 $40,030.00 $60,030.00 $80,030.00 $100,030.00 $120,030.00 $140,030.00 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E Field EBITDA % of Revenue Field EBITDA & Margins at Assumed $40M Acquisitions ($'s millions) Improving Opera
Slide 15: Model Free Cash Flow at Assumed $40M Acquisition Level
15 1 2 3 4 5 GAAP Net Income $14.7 $21.9 $24.9 $27.8 $30.6 D&A & NCSC $15.6 $18.1 $20.4 $23.2 $26.5 Tax Adjustment $9.3 $6.6 $- $- $- Deferred Rev (WTI) + Sale Of Business $6.4 $1.3 $1.3 $1.3 $1.3 Maintenance Capex $(6.0) $(6.4) $(6.8) $(7.2) $(7.6) $(10.0) $(5.0) $- $5.0 $10.0 $15.0 $20.0 $25.0 $30
Slide 16: Model Capital Structure at Assumed $40M Acquisitions
16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012A 2013E 2014E 2015E 2016E 2017E 44% 43% 41% 40% 37% 33% 22% 21% 20% 18% 17% 16% 33% 36% 39% 42% 46% 50% 2012A 2013E 2014E 2015E 2016E 2017E Stockholders' equity 33% 36% 39% 42% 46% 50% Convertible junior subordinated debenture 22% 21% 20% 18% 17% 16
Slide 17: Mechanics of Earnings Growth at Assumed $40M Acquisitions
17 47% 50% 50% 51% 52% 8% 10% 10% 11% 11% 4% 5% 5% 5% 6% 12% 14% 13% 13% 13% 6% 13% 19% 27% 35% 3.0 2.7 2.5 2.3 2.1 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 0% 10% 20% 30% 40% 50% 60% 2013E 2014E 2015E 2016E 2017E Mechanics of Earnings Growth at Assumed $40M Acquisitions Asset Turnover (Sales/Assets) Profit
Slide 18: Appendix
Appendix The forward looking numbers in the following 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 $40 million in assets per year for each of th
Slide 19: Historical Performance and Model Growth Assuming $40M Acquisition Level
19 Carriage Services Inc ($'s in 000's) Historical Performance Model Growth Assuming $40M Acquisition Level 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E Same Store Funeral $ 120,310 $ 119,799 $ 118,801 $ 118,572 $ 120,207 $ 122,833 $ 124,061 $ 125,302 $ 126,555 Funeral Acquisition Revenue $
Slide 20: Reconciliation
Reconciliation 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E Consol EBITDA from Continuing Ops $ 40,326.00 $ 41,165.00 $ 39,542.00 $ 48,806.00 $ 52,268.66 $ 65,399.42 $ 73,047.33 $ 80,815.76 $ 88,730.42 Special Items Affecting EBITDA Withdrawable Trust Income(loss) $ 236.00 $ 3,438.00 $ 4,51
Carriage Services — Investor Presentation (November 2013) on 6ix