Carriage Services, Inc. : Carriage Services Announces 2012 Second Quarter Results
08/02/2012| 04:20pm US/Eastern
Recommend:
HOUSTON, Aug. 2, 2012 /PRNewswire/ -- Carriage Services, Inc. (NYSE: CSV) today announced results for the quarter ending June 30, 2012.
Mel Payne, Chief Executive Officer, stated, "We are halfway through what we believe will be another record year for our Company. Our operating leadership and performance plans are targeted and focused to position us for a strong finish to 2012. While death rates continued to be weak in the second quarter, we were able to increase earnings per share as a result of substantially higher revenues and Field EBITDA and Field EBITDA Margins from recent high quality acquisitions and higher trust fund financial revenue and earnings."
HIGHLIGHTS OF THE 2012 SECOND QUARTER:
-- Record second quarter Total Revenue of $50.1 million, an increase of
5.1%;
-- Record second quarter Total Acquisition Funeral Field EBITDA of $1.8
million, an increase of 154%;
-- Total Acquisition Funeral Field EBITDA Margin of 30.1%, an increase of
790 basis points;
-- Record second quarter Total Funeral Field EBITDA of $12.2 million, an
increase of 8.0%;
-- Total Field EBITDA of $18.7 million, an increase of 5.1%;
-- Record second quarter Total GAAP EPS of $0.15, an increase of 7.1%; and
-- Total Adjusted EPS of $0.16, a decrease of 27.3%.
"After the major management reorganization last November, we were able to quickly update and implement a new Funeral Standards Operating Model and Strategic Acquisition Model, the successful execution of which contributed to our strong first half results. During the second quarter we focused on three major areas with the most upside potential in the fourth quarter and thereafter, i.e. rebuilding a new cemetery leadership organization and operating framework (less decentralized); structural changes and major modifications to management and compensation arrangements for our trust funds; and development of a capital structure refinancing strategy that could exploit the current historically low rate environment. All three of these programs were finalized during the second quarter, are being implemented in the third quarter and should be completed by the fourth quarter which in combination will substantially increase the sustainable earning power of Carriage starting with the full year 2013."
"After establishing a theme of Carriage Services 2012 - A NEW BEGINNING, Bill and I empowered our new teams of leaders and employees to come up with ideas to increase sustainable earnings across all departments and field operations, including leadership competencies and organizational structure and reporting. We have been overwhelmed by the collaboration, teamwork and results, which has enabled us to find meaningful buckets of earnings potential that were already existing but previously not obvious or defined with a plan of achievement. We are now moving boldly and rapidly to realize all of our earnings potential, both as an operating company and consolidation platform. As a result, we are raising our Four Quarter Outlook ending June 30, 2013."
CARRIAGE SERVICES, INC.
NON- GAAP UNAUDITED INCOME STATEMENT
($000's)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2011 2012 2011 2012
---- ---- ---- ----
Same Store Contracts
Atneed Contracts 4,691 4,476 9,853 9,387
Preneed Contracts 1,222 1,157 2,656 2,436
----- ----- ----- -----
Total Same Store Funeral
Contracts 5,913 5,633 12,509 11,823
Acquisition Contracts
Atneed Contracts 709 1,139 1,425 2,379
Preneed Contracts 136 202 275 390
--- ---
Total Acquisition Funeral
Contracts 845 1,341 1,700 2,769
--- ----- ----- -----
Total Funeral Contracts 6,758 6,974 14,209 14,592
===== ===== ====== ======
Funeral Operating Revenue
Same Store Revenue $30,122 $29,621 $64,208 $62,046
Acquisition Revenue 3,173 5,948 6,249 12,352
Total Funeral Operating
Revenue $33,295 $35,569 $70,457 $74,398
Cemetery Operating
Revenue
Same Store Revenue $10,538 $10,392 $20,094 $19,796
Acquisition Revenue - - - -
--- --- ---
Total Cemetery Operating
Revenue $10,538 $10,392 $20,094 $19,796
Financial Revenue
Preneed Funeral
Commission Income $414 $450 $887 $901
Preneed Funeral Trust
Earnings 1,856 1,382 3,329 3,101
Cemetery Trust Earnings 1,221 1,795 2,878 3,311
Preneed Cemetery Finance
Charges 331 478 679 846
--- --- --- ---
Total Financial Revenue $3,822 $4,105 $7,773 $8,159
------ ------ ------ ------
Total Revenue $47,655 $50,066 $98,324 $102,353
======= ======= ======= ========
Field EBITDA
Same Store Funeral Field
EBITDA $10,616 $10,437 $22,843 $23,457
Same Store Funeral Field
EBITDA Margin 35.2% 35.2% 35.6% 37.8%
Acquisition Funeral Field
EBITDA 704 1,791 1,516 4,282
Acquisition Funeral Field
EBITDA Margin 22.2% 30.1% 24.3% 34.7%
---- ---- ---- ----
Total Funeral Field
EBITDA $11,320 $12,228 $24,359 $27,739
Total Funeral Field
EBITDA Margin 34.0% 34.4% 34.6% 37.3%
Total Cemetery Field
EBITDA $3,063 $2,748 $5,690 $4,970
Total Cemetery Field
EBITDA Margin 29.1% 26.4% 28.3% 25.1%
Funeral Financial EBITDA 1,879 1,483 3,482 3,302
Cemetery Financial EBITDA 1,552 2,273 3,557 4,157
----- ----- ----- -----
Total Financial EBITDA $3,431 $3,756 $7,039 $7,459
Total Financial EBITDA
Margin 89.8% 91.5% 90.6% 91.4%
---- ---- ---- ----
Total Field EBITDA $17,814 $18,732 $37,088 $40,168
Total Field EBITDA Margin 37.4% 37.4% 37.7% 39.2%
Overhead
Total Variable Overhead $1,159 $1,236 $2,695 $3,426
Total Regional Fixed
Overhead 1,092 1,047 1,998 1,830
Total Corporate Fixed
Overhead 3,906 3,867 7,846 8,067
----- ----- ----- -----
Total Overhead $6,157 $6,150 $12,539 $13,323
12.9% 12.3% 12.8% 13.0%
Other Income $357 - $364 -
---- --- ---- ---
Consolidated EBITDA $12,014 $12,582 $24,913 $26,845
Consolidated EBITDA
Margin 25.2% 25.1% 25.3% 26.2%
GAAP Diluted EPS $0.14 $0.15 $0.32 $0.38
Special Items
Withdrawable Trust Income $2,249 $77 $3,581 $771
Gain on Repurchase of
Convertible Junior
Subordinated Debentures (357) - (364) -
Securities Transactions
Expenses 323 - 461 -
Acquisition Expenses 157 238 245 615
Severance Costs - 8 117 490
Non-recurring Legal Fees - - - 135
Litigation Settlements - 60 - 60
Total of Special Items $2,372 $383 $4,040 $2,071
Adjusted Consolidated
EBITDA $14,386 $12,965 $28,953 $28,916
Adjusted Consolidated
EBITDA Margin 30.2% 25.9% 29.4% 28.3%
Property Depreciation &
Amortization $2,522 $2,622 $4,919 $5,050
Non Cash Stock
Compensation 648 781 1,095 1,183
Interest Expense 4,509 4,538 9,063 9,111
Interest Income (1) (17) (22) (34)
--- --- --- ---
Pretax Income $6,708 $5,042 $13,898 $13,606
Income tax $2,717 $2,152 $5,628 $5,500
Adjusted Net Income $3,991 $2,890 $8,270 $8,106
====== ====== ====== ======
8.4% 5.8% 8.4% 7.9%
Adjusted Diluted EPS $0.22 $0.16 $0.45 $0.44
Diluted Shares Outstanding 18,407 18,153 18,340 18,237
ACQUISITIONS
Carriage acquired a business during the second quarter of 2012 consisting of two funeral homes and one cemetery; the Lawton Ritter Gray Funeral Home, Gray Funeral Home and Sunset Memorial Gardens in Lawton, Oklahoma. On an annualized basis, these businesses are expected to serve approximately 400 families and generate revenue of approximately $2.0 million. Carriage has acquired twelve funeral homes and one cemetery during the trailing twelve months.
TRUST FUND PERFORMANCE
During the second quarter of 2012, Carriage's discretionary trust fund performance was flat compared to a decline of (2.7%) for the S&P 500 Index and a gain of 1.8% for the Barclay's High Yield Bond Index. Through the first half of 2012, Carriage's discretionary portfolio gained 9.5% compared to 9.5% for the S&P 500 and 7.3% for the High Yield Index. The foundation for this excellent performance was the major asset reallocation from equities to fixed income during the second half of 2011 which continued through the first half of 2012. Carriage was able to match the performance of the S&P 500 in the first half even though we had an 83% allocation to fixed income securities and only a 13% allocation to equities in the discretionary portfolio as of June 30, 2012.
Carriage has continued into the third quarter to reduce the allocation to large cap cyclical equities and increase the allocation to fixed income and cash equivalents. The current yield as of July 31, 2012 on the fixed income discretionary portfolio (85% fixed income versus 11% equity) is 8.9%, and this large current annual income of about $12.7 million (up from $7.9 million on August 8, 2011) will be used to continue to grow the fixed income portfolio and selectively increase a group of seven core large cap growth equities.
Carriage's investment strategy to emphasize current income in the discretionary trust fund portfolio will continue to benefit preneed funeral and cemetery contracts that will mature in the future, but more importantly, a large share of the growing income can be recognized and reported on a monthly basis as GAAP financial revenue and earnings from our cemetery perpetual care trusts. The major shift in allocation toward fixed income away from equities has resulted in a lower volatility portfolio with less risk of significant losses, but also less potential for large Non-GAAP withdrawable amounts as a result of large, realized equity gains as in 2010 and the first half of 2011. Carriage has already realized substantial capital appreciation from many of the core fixed income positions in high yield corporate bonds and "Too Big To Fail" preferred stocks that were purchased during the second half of 2011 and 2012, with realized gains of $6.5 million in the first six months of 2012 and unrealized gains of another $7.3 million currently available at the end of July.
Shown below are consolidated performance metrics for the combined trust fund portfolios (preneed funeral, cemetery merchandise and services, and cemetery perpetual care) at key dates.
Investment Performance
----------------------
Investment
Performance(1) Index Performance
--------------- -----------------
Timeframe Discretionary Total Trust DJIA S&P 500 50/50 index
Benchmark
--- ---------
5 years ended
12/31/11 40.5% 40.4% 12.4% (1.2)% 0.9%
3 years ended
12/31/11 82.3% 70.5% 51.7% 48.6% 32.0%
1 year ended
12/31/11 (2.9)% (1.9)% 8.3% 2.1% 5.0%
6 months ended
6/30/12 9.5% 8.1% 6.8% 9.5% 5.9%
(1) Investment performance includes
realized income and unrealized
appreciation (depreciation).
Asset Allocation as of June 30, 2012
------------------------------------
Discretionary Trust Funds Total Trust Funds
------------------------- -----------------
Asset Class MV % MV %
----------- --- --- --- ---
Equities $21,241 13% $36,644 16.5%
Fixed Income 140,952 83% 163,511 73.5%
Cash 7,389 4% 22,448 10%
---- ----- --- ------ ---
Total Portfolios $169,582 100% $222,603 100%
---------------- -------- --- -------- ---
FREE CASH FLOW
Carriage generated Free Cash Flow from continuing operations in the second quarter of 2012 of $8.5 million compared to Free Cash Flow from continuing operations of $10.1 million for the corresponding period in 2011. The sources and uses of cash for the first six months of 2011 and 2012 consisted of the following (in millions):
2011 2012
---- ----
Cash flow provided by continuing operations $15.6 $13.4
Cash used for maintenance capital expenditures (3.4) (2.3)
---- ----
Free Cash Flow $12.2 $11.1
Cash at beginning of year 1.3 1.1
Acquisitions (5.1) (16.4)
Net (payments) borrowings under credit facility (0.6) 14.2
Cash used for growth capital expenditures (1.3) (3.7)
Cash dividends paid (0.5) (0.9)
Cash used for the repurchase of convertible junior (1.0) -
subordinated debenture
Repurchase of common stock - (4.5)
Other investing and financing activities - 0.1
Cash provided by discontinued operations 0.2 -
Cash at June 30th $5.2 $1.0
==== ====
Credit Facility borrowings at June 30th $ - $17.3
=============== =====
FOUR QUARTER OUTLOOK RAISED
The Four Quarter Outlook reflects management's current opinion on the performance of the portfolio of businesses for the rolling four quarter period ending June 30, 2013, and the performance of the trusts as well as our view of the financial markets. Factors affecting our analysis include, among others, funeral contract volumes, average revenue per funeral service, cemetery interment volumes, preneed cemetery sales, capital expenditures, execution of our funeral Standards Operating Model, acquisitions and Withdrawable Trust Income. The Four Quarter Outlook includes the Lawton Ritter Gray acquisition that closed in June.
ROLLING FOUR QUARTER OUTLOOK - Period Ending June 30, 2013
(amounts in millions, except per share amounts)
Range
-----
Revenues $206 - $208
Consolidated EBITDA $51.5 - $52.5
Net Income $12.5 - $13.5
GAAP Diluted EPS $0.70 - $0.73
Non-GAAP EPS $0.83 - $0.85
Cash Flow from Operations $26 - $28
Free Cash Flow $22 - $24
Revenues, Consolidated EBITDA and Net Income for the four quarter period ending June 30, 2013 are expected to improve relative to the same period ended June 30, 2012, for the following reasons:
-- Increases in Acquired Funeral Revenue and Acquired Funeral Field EBITDA
from the 2011 and 2012 acquisitions;
-- Modest increases in Same Store Funeral Revenue averages;
-- Increases in Same Store Funeral Field EBITDA Margins;
-- Improvement in Cemetery Revenue and Cemetery Field EBITDA Margins; and
-- Increases in Financial Revenue from the trust funds.
The Outlook also includes the Company's new policy of withdrawing realized gains and income in excess of regulatory mandated amounts on a monthly basis from certain cemetery merchandise and services trust funds, which are estimated to be approximately $1.2 million for the rolling four quarter period.
CONFERENCE CALL
Carriage Services has scheduled a conference call for tomorrow, August 3, 2012 at 10:30 a.m. eastern time. To participate in the call, please dial 800-860-2442 at least ten minutes before the conference call begins and ask for the Carriage Services conference call. A telephonic replay of the conference call will be available through August 17, 2012 and may be accessed by dialing 877-344-7529 and using pass code 10016846. An audio archive will also be available on the company's website at www.carriageservices.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Bill Heiligbrodt at bill.heiligbrodt@carriageservices.com or 713-332-8553.
Carriage Services is a leading provider of death care services and products. Carriage operates 164 funeral homes in 26 states and 33 cemeteries in 11 states.
NON-GAAP FINANCIAL MEASURES
This press release uses Non-GAAP financial measures to present the financial performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP. The Company's GAAP financial statements accompany this release. Reconciliations of the Non-GAAP financial measures to GAAP measures are provided at the end of the press release.
Certain state regulations allow the withdrawal of financial income from preneed cemetery merchandise and services trust funds when realized in the trust. Under current generally accepted accounting principles, trust income is only recognized in the Company's financial statements at a later time when the related merchandise and services sold on the preneed contract is delivered at the time of death. Carriage has provided financial income from the trusts, termed Withdrawable Trust Income (loss) and reported on a Non-GAAP proforma basis within Special Items in the accompanying Non-GAAP Unaudited Income Statement, to reflect the current cash results. Management believes that the Withdrawable Trust Income provides useful information to investors because it presents income and cash flow when earned by the trusts.
The Non-GAAP financial measures include "Free Cash Flow", "Funeral and Cemetery Field EBITDA", "Total Field EBITDA", "Consolidated EBITDA", and "Adjusted Consolidated EBITDA" are reflected in this press release. Both Free Cash Flow and Adjusted Consolidated EBITDA are used by investors to value common stock. The Company considers Free Cash Flow to be an important indicator of its ability to generate cash for acquisitions and other strategic investments. The Company has included Non-GAAP Consolidated EBITDA in this press release because it is widely used by investors to compare the Company's financial performance with the performance of other death care companies. Adjusted Consolidated EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the funds actually available for capital expenditures. In addition, the Company's presentation of Adjusted Consolidated EBITDA may not be comparable to similarly titled measures in other companies' reports.
FORWARD-LOOKING STATEMENTS
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. These statements are based on assumptions that the Company believes are reasonable; however, many important factors, as discussed under "Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, could cause the Company's results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by, or on behalf of, the Company. The Company assumes no obligation to update or publicly release any revisions to forward-looking statements made herein or any other forward-looking statements made by, or on behalf of, the Company. A copy of the Company's Form 10-K, and other Carriage Services information and news releases, are available at www.carriageservices.com.
- Financial Statements and Tables to Follow -
CARRIAGE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, June 30,
2011 2012
---- ----
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $1,137 $1,012
Accounts receivable, net of
allowance for bad debts 16,497 16,199
Assets held for sale 1,229 -
Inventories and other
current assets 13,439 12,342
------ ------
Total current assets 32,302 29,553
Preneed cemetery and
funeral trust investments 141,494 150,481
Preneed receivables, net of
allowance for bad debts 22,614 23,250
Receivables from preneed
funeral trusts 22,487 22,366
Property, plant and
equipment, net of
accumulated depreciation 136,467 143,597
Cemetery property 71,515 75,139
Goodwill 193,962 200,852
Deferred charges and other
non-current assets 10,451 8,471
Cemetery perpetual care
trust investments 41,485 44,486
------ ------
Total assets $672,777 $698,195
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-
term debt and obligations
under capital leases $628 $668
Accounts payable and
accrued liabilities 31,735 29,524
Liabilities associated with
assets held for sale 1,868 -
Total current liabilities 34,231 30,192
Senior long-term debt, net
of current portion 131,900 131,858
Line of credit 3,100 17,300
Convertible junior
subordinated debenture due
in 2029 to an affiliated
trust 89,770 89,770
Obligations under capital
leases, net of current
portion 4,155 4,083
Deferred preneed cemetery
and funeral revenue 99,770 100,189
Deferred preneed cemetery
and funeral receipts held
in trust 141,494 150,481
Care trusts' corpus 41,379 44,281
------ ------
Total liabilities 545,799 568,154
------- -------
Commitments and
contingencies
Redeemable preferred stock 200 200
Stockholders' equity:
Common stock 217 220
Additional paid-in capital 201,284 201,760
Accumulated deficit (63,987) (56,872)
Treasury stock (10,736) (15,267)
------- -------
Total stockholders' equity 126,778 129,841
------- -------
Total liabilities and
stockholders' equity $672,777 $698,195
======== ========
CARRIAGE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)
For the three months ended For the six months ended
June 30, June 30,
2011 2012 2011 2012
---- ---- ---- ----
Revenues $47,655 $50,066 $98,324 $102,353
Field costs and expenses 34,143 35,782 69,762 71,141
------ ------ ------ ------
Gross profit 13,512 14,284 28,562 31,212
General and administrative
expenses 5,023 5,105 10,026 10,600
----- ----- ------ ------
Operating income 8,489 9,179 18,536 20,612
Interest expense (4,510) (4,538) (9,064) (9,111)
Other income 358 17 387 34
--- --- --- ---
Income from continuing
operations before income
taxes 4,337 4,658 9,859 11,535
Provision for income taxes (1,756) (1,995) (3,994) (4,663)
------ ------ ------ ------
Net income from continuing
operations 2,581 2,663 5,865 6,872
Net income from
discontinued operations,
net of tax 20 - 21 250
--- --- --- ---
Net income 2,601 2,663 5,886 7,122
Preferred stock dividend (3) (3) (7) (7)
--- --- --- ---
Net income available to
common stockholders $2,598 $2,660 $5,879 $7,115
====== ====== ====== ======
Basic earnings per common
share:
Continuing operations $0.14 $0.15 $0.32 $0.38
Discontinued operations - - - 0.01
--- --- --- ----
Basic earnings per common
share $0.14 $0.15 $0.32 $0.39
===== ===== ===== =====
Diluted earnings per
common share:
Continuing operations $0.14 $0.15 $0.32 $0.38
Discontinued operations - - - 0.01
--- --- --- ----
Diluted earnings per
common share $0.14 $0.15 $0.32 $0.39
===== ===== ===== =====
Dividends declared per
common share $0.025 $0.025 $0.025 $0.05
====== ====== ====== =====
Weighted average number of
common and common
equivalent shares
outstanding:
Basic 18,367 18,077 18,301 18,171
====== ====== ====== ======
Diluted 18,407 18,153 18,340 18,237
====== ====== ====== ======
CARRIAGE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
For the six months ended
June 30,
--------
2011 2012
---- ----
Cash flows from operating activities:
Net income $5,886 $7,122
Adjustments to reconcile net income to net cash provided by operating
activities:
Income from discontinued operations (21) (250)
Depreciation and amortization 4,920 5,050
Amortization of deferred financing costs 362 348
Gain on repurchase of convertible junior subordinated debentures (366) -
Provision for losses on accounts receivable 2,024 1,102
Stock-based compensation expense 1,095 1,183
Deferred income taxes (2,257) 2,096
Other (26) (10)
Changes in operating assets and liabilities that provided (required) cash:
Accounts and preneed receivables (60) (1,413)
Inventories and other current assets 54 740
Deferred charges and other (35) (38)
Preneed funeral and cemetery trust investments 3,397 (146)
Accounts payable and accrued liabilities 3,891 (2,402)
Deferred preneed funeral and cemetery revenue (44) (176)
Deferred preneed funeral and cemetery receipts held in trust (3,237) 168
------ ---
Net cash provided by continuing operating activities 15,583 13,374
Net cash provided by discontinued operating activities 178 -
--- ---
Net cash provided by operating activities 15,761 13,374
Cash flows from investing activities:
Acquisitions (5,100) (16,399)
Capital expenditures (4,608) (5,981)
------ ------
Net cash used in investing activities (9,708) (22,380)
Cash flows from financing activities:
Net borrowings from (payments against) the bank credit facility (600) 14,200
Payments on senior long-term debt and obligations under capital leases (315) (342)
Proceeds from the exercise of stock options and employee stock 199 440
purchase plan
Stock option benefit 7 24
Dividends paid on common stock (460) (903)
Dividends on redeemable preferred stock (7) (7)
Repurchase of convertible junior subordinated debentures (972) -
Purchase of treasury stock - (4,531)
--- ------
Net cash provided by (used in) financing activities (2,148) 8,881
------ -----
Net increase (decrease) in cash and cash equivalents 3,905 (125)
Cash and cash equivalents at beginning of period 1,279 1,137
----- -----
Cash and cash equivalents at end of period $5,184 $1,012
====== ======
CARRIAGE SERVICES, INC.
Selected Financial Data
December 31, June 30,
2011 2012
---- ----
Selected Balance Sheet
Data: (unaudited)
Cash and short-term
investments $1,137 $1,012
Total Senior Debt (a) 139,783 153,909
Days sales in funeral
accounts receivable 19.1 18.1
Senior Debt to total
capitalization 39.2 40.9
Senior Debt to EBITDA
(rolling twelve months) 3.3 3.5
Senior Debt to Adjusted
Consolidated EBITDA
(rolling 12 mos.) 2.8 3.0
a) - Senior debt does not
include the convertible junior
subordinated debentures.
Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of certain financial measures that are not GAAP measures. The Non-GAAP financial measures are presented for additional information and are reconciled to their most comparable GAAP measures below.
Reconciliation of Net Income from continuing operations to Non-GAAP Net Income from continuing operations for the three and six months ended June 30, 2011 and 2012:
Three months
ended Six months ended
June 30, June 30,
--------
2011 2012 2011 2012
---- ---- ---- ----
Net Income from continuing
operations $2,581 $2,663 $5,865 $6,872
Special items, net of tax 1,410 227 2,405 1,234
Non-GAAP Net Income from
continuing $3,991 $2,890 $8,270 $8,106
operations
Reconciliation of Diluted EPS from continuing operations to Non-GAAP Diluted EPS from continuing operations for the three and six months ended June 30, 2011 and 2012:
Three months Six months
ended ended
June 30, June 30,
2011 2012 2011 2012
---- ---- ---- ----
Diluted EPS from continuing
operations $0.14 $0.15 $0.32 $0.38
Effect of special items 0.08 0.01 0.13 0.06
---- ---- ---- ----
Non-GAAP Diluted EPS from
continuing $0.22 $0.16 $0.45 $0.44
operations
Reconciliation of Non-GAAP Financial Measures (unaudited), Continued:
Reconciliation of Net Income from continuing operations to Adjusted Consolidated EBITDA from continuing operations and Adjusted Consolidated EBITDA from continuing operations for the three and six months ended June 30, 2011 and 2012 and the estimated rolling four quarters ended June 30, 2013 (in 000's):
Three months ended Six months ended
June 30, June 30,
2011 2012 2011 2012
---- ---- ---- ----
Net income from continuing operations $2,581 $2,663 $5,865 $6,872
Provision for income taxes 1,756 1,995 3,994 4,663
----- ----- ----- -----
Pre-tax earnings from continuing operations 4,337 4,658 9,859 11,535
Interest expense, including loan cost 4,509 4,538 9,063 9,111
amortization
Interest income (2) (17) (23) (34)
Noncash stock compensation 648 781 1,095 1,183
Depreciation & amortization 2,522 2,622 4,919 5,050
Special items 2,372 383 4,040 2,071
----- --- ----- -----
Adjusted Consolidated EBITDA from $14,386 $12,965 $28,953 $28,916
continuing operations
Revenue from continuing operations $47,655 $50,066 $98,324 $102,353
Adjusted EBITDA Margin 30.2% 25.9% 29.4% 28.2%
Rolling
Four Quarter
Outlook
-------
June 30, 2013 E
---------------
Net income from continuing
operations $13,200
Provision for income taxes 9,000
-----
Pre-tax earnings from continuing
operations 22,200
Net interest expense, including
loan cost amortization 18,200
Depreciation & amortization,
including stock compensation 11,700
------
Consolidated EBITDA from
continuing operations $52,100
=======
Reconciliation of Non-GAAP Financial Measures (unaudited), Continued:
Reconciliation of Field income from continuing operations before income taxes to field EBITDA from continuing operations for the three and six months ended June 30, 2011 and 2012:
Funeral Home
Three months ended Six months ended
June 30, June 30,
--------
2011 2012 2011 2012
---- ---- ---- ----
Income from continuing operations $10,407 $10,696 $22,236 $24,799
before income taxes
Depreciation & amortization 1,457 1,491 2,857 2,945
Regional & unallocated costs 1,334 1,524 2,748 3,297
Net financial income (1,878) (1,483) (3,482) (3,302)
------ ------ ------ ------
Funeral Home EBITDA $11,320 $12,228 $24,359 $27,739
======= ======= ======= =======
Funeral Home Revenue $33,295 $35,569 $70,457 $74,398
Funeral Home EBITDA Margin 34.0% 34.4% 34.6% 37.3%
Cemetery
Three months ended Six months ended
June 30, June 30,
--------
2011 2012 2011 2012
---- ---- ---- ----
Income from continuing operations $3,105 $3,588 $6,326 $6,414
before income taxes
Depreciation & amortization 823 877 1,567 1,597
Regional & unallocated costs 688 556 1,354 1,116
Net financial income (1,553) (2,273) (3,557) (4,157)
------ ------ ------ ------
Cemetery EBITDA $3,063 $2,748 $5,690 $4,970
====== ====== ====== ======
Cemetery Revenue $10,538 $10,392 $20,094 $19,796
Cemetery EBITDA Margin 29.1% 26.4% 28.3% 25.1%
Reconciliation of cash provided by continuing operating activities to Free Cash Flow from continuing operations (in 000's) for the three and six months ended June 30, 2011 and 2012:
Three months ended
June 30,
------------------
2011 2012
---- ----
Cash provided by continuing
operating activities $12,163 $9,851
Less maintenance capital
expenditures (2,028) (1,312)
------ ------
Free Cash Flow from continuing
operations $10,135 $8,539
======= ======
Six months ended
June 30,
-----------------
2011 2012
---- ----
Cash provided by continuing
operating activities $15,583 $13,374
Less maintenance capital
expenditures (3,363) (2,250)
------ ------
Free Cash Flow from continuing
operations $12,220 $11,124
======= =======
Reconciliation of Non-GAAP Financial Measures (unaudited), Continued:
Reconciliation of Consolidated EBITDA from continuing operations to Free Cash Flow from continuing operations for the estimated rolling four quarters ending June 30, 2013 (in 000's):
Rolling
Four Quarter
Outlook
-------
June 30, 2013 E
---------------
Consolidated EBITDA from
continuing operations $52,100
Interest paid (17,500)
Cash Income taxes (7,400)
Maintenance capital expenditures (4,500)
Withdrawable trust income 1,200
Free Cash Flow from continuing
operations $23,900
=======
SOURCE Carriage Services, Inc.
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